Bill Text: FL S0992 | 2020 | Regular Session | Introduced


Bill Title: Florida Retirement System Investment Plan

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2020-03-14 - Died in Governmental Oversight and Accountability [S0992 Detail]

Download: Florida-2020-S0992-Introduced.html
       Florida Senate - 2020                                     SB 992
       
       
        
       By Senator Brandes
       
       
       
       
       
       24-00740A-20                                           2020992__
    1                        A bill to be entitled                      
    2         An act relating to the Florida Retirement System
    3         Investment Plan; amending s. 121.4501, F.S.;
    4         specifying applicability of employee and employer
    5         contribution rates for employees who default into the
    6         investment plan; amending s. 121.571, F.S.;
    7         authorizing investment plan members to make voluntary
    8         contributions to the plan, subject to certain
    9         limitations; amending s. 121.71, F.S.; revising
   10         required employee contribution rates for the
   11         investment plan; conforming provisions to changes made
   12         by the act; amending s. 121.72, F.S.; revising the
   13         percentage of gross compensation allocated to
   14         investment plan member accounts to conform to changes
   15         made by the act; amending ss. 121.051, 121.055,
   16         121.35, and 1012.875, F.S.; conforming cross
   17         references to changes made by the act; revising
   18         required employer retirement contribution rates to
   19         fund the benefit changes made by the act; providing a
   20         directive to the Division of Law Revision; requiring
   21         the State Board of Administration to prepare a report
   22         regarding income annuities; requiring the state board
   23         to submit the report to the board's trustees and the
   24         Legislature by a specified date; providing a
   25         declaration of important state interest; providing an
   26         effective date.
   27          
   28  Be It Enacted by the Legislature of the State of Florida:
   29  
   30         Section 1. Paragraph (b) of subsection (4) of section
   31  121.4501, Florida Statutes, is amended to read:
   32         121.4501 Florida Retirement System Investment Plan.—
   33         (4) PARTICIPATION; ENROLLMENT.—
   34         (b)1. With respect to employees who become eligible to
   35  participate in the investment plan by reason of employment in a
   36  regularly established position commencing on or after January 1,
   37  2018, or who did not complete an election window before January
   38  1, 2018, any such employee shall be enrolled in the pension plan
   39  at the commencement of employment and may, by the last business
   40  day of the eighth month following the employee’s month of hire,
   41  elect to participate in the pension plan or the investment plan.
   42  Eligible employees may make a plan election only if they are
   43  earning service credit in an employer-employee relationship
   44  consistent with s. 121.021(17)(b), excluding leaves of absence
   45  without pay.
   46         2. The employee’s election must be made in writing or by
   47  electronic means and must be filed with the third-party
   48  administrator. The election to participate in the pension plan
   49  or investment plan is irrevocable, except as provided in
   50  paragraph (f).
   51         3.a. Except as provided in subparagraph 4., if the employee
   52  fails to make an election to either the pension plan or the
   53  investment plan during the 8-month period following the month of
   54  hire, the employee is deemed to have elected the investment plan
   55  and shall default into the investment plan retroactively to the
   56  employee’s date of employment. The employee’s option to
   57  participate in the pension plan is forfeited, except as provided
   58  in paragraph (f). The employee and employer shall begin paying
   59  employee and employer contributions at the applicable rate for
   60  investment plan members prescribed in s. 121.71(3) only after
   61  the default has occurred and not retroactively for the initial
   62  8-month period following the date of hire.
   63         b. The amount of the employee and employer contributions
   64  paid through the date of default to the investment plan shall be
   65  transferred to the investment plan and shall be placed in a
   66  default fund as designated by the State Board of Administration.
   67  The employee may move the contributions once an account is
   68  activated in the investment plan.
   69         4. If the employee is employed in a position included in
   70  the Special Risk Class and fails to make an election to either
   71  the pension plan or the investment plan during the 8-month
   72  period following the month of hire, the employee is deemed to
   73  have elected the pension plan and shall default into the pension
   74  plan retroactively to the employee’s date of employment. The
   75  employee’s option to participate in the investment plan is
   76  forfeited, except as provided in paragraph (f).
   77         5. Effective the first day of the month after an eligible
   78  employee makes a plan election of the pension plan or investment
   79  plan, or the first day of the month after default, the employee
   80  and employer shall pay the applicable contributions based on the
   81  employee membership class in the program.
   82         Section 2. Subsection (2) of section 121.571, Florida
   83  Statutes, is amended, and subsection (4) is added to that
   84  section, to read:
   85         121.571 Contributions.—Contributions to the Florida
   86  Retirement System Investment Plan shall be made as follows:
   87         (2) CONTRIBUTION RATES GENERALLY.—Contributions to fund the
   88  retirement, disability, and line-of-duty death benefits provided
   89  under this part must be based on the uniform contribution rates
   90  established by s. 121.71 and on the membership class or subclass
   91  of the member, except for voluntary contributions made pursuant
   92  to subsection (4). Such contributions must be allocated as
   93  provided in ss. 121.72, 121.73, and 121.735.
   94         (4) VOLUNTARY CONTRIBUTIONS.—An employee may elect to
   95  contribute voluntary contributions from his or her compensation,
   96  after the computation of applicable federal taxes, to his or her
   97  investment plan account subject to the applicable contribution
   98  limitations established under s. 415 of the Internal Revenue
   99  Code. The employer shall deduct the voluntary contribution from
  100  the employee’s monthly compensation, and the contribution shall
  101  be submitted to the division and credited to the account of the
  102  employee.
  103         Section 3. Subsections (2) and (3) of section 121.71,
  104  Florida Statutes, are amended to read:
  105         121.71 Uniform rates; process; calculations; levy.—
  106         (2) Based on the uniform rates set forth in subsections
  107  (3), (4), and (5), employees and employers shall make monthly
  108  contributions to the Division of Retirement as required in s.
  109  121.061(1), which shall initially deposit the funds into the
  110  Florida Retirement System Contributions Clearing Trust Fund. A
  111  change in a contribution rate is effective the first day of the
  112  month for which a full month’s employer and employee
  113  contribution may be made on or after the beginning date of the
  114  change. Beginning July 1, 2011, Each employee shall contribute
  115  the contributions required in subsection (3) according to the
  116  employee’s retirement plan and initial date of entry into the
  117  Florida Retirement System. The rates established in subsection
  118  (3) do not include any voluntary contributions that an employee
  119  has contributed to his or her investment plan account. The
  120  employer shall deduct the contribution from the employee’s
  121  monthly salary, and the contribution shall be submitted to the
  122  division. These contributions shall be reported as employer-paid
  123  employee contributions, and credited to the account of the
  124  employee. The contributions shall be deducted from the
  125  employee’s salary before the computation of applicable federal
  126  taxes and treated as employer contributions under 26 U.S.C. s.
  127  414(h)(2). The employer specifies that the contributions,
  128  although designated as employee contributions, are being paid by
  129  the employer in lieu of contributions by the employee. The
  130  employee does not have the option of choosing to receive the
  131  contributed amounts directly instead of having them paid by the
  132  employer to the plan. Such contributions are mandatory, and each
  133  employee is considered to have consented to payroll deductions.
  134  Payment of an employee’s salary or wages, less the contribution,
  135  is a full and complete discharge and satisfaction of all claims
  136  and demands for the service rendered by employees during the
  137  period covered by the payment, except their claims to the
  138  benefits to which they may be entitled under this chapter.
  139         (3)(a) Required employee retirement contribution rates for
  140  each membership class and subclass of the Florida Retirement
  141  System for the pension plan both retirement plans are as
  142  follows:
  143  
  144  Membership Class            Percentage ofGrossCompensation,EffectiveJuly 1, 2011
  145  
  146  Regular Class                                3.00%                 
  147  Special Risk Class                           3.00%                 
  148  Special Risk Administrative Support Class                 3.00%                 
  149  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders                 3.00%                 
  150  Elected Officers’ Class— Justices, Judges                 3.00%                 
  151  Elected Officers’ Class— County Elected Officers                 3.00%                 
  152  Senior Management Service Class                 3.00%                 
  153  DROP                                         0.00%                 
  154  
  155         (b) Effective July 1, 2011, through June 30, 2021, required
  156  employee retirement contribution rates for each membership class
  157  and subclass of the Florida Retirement System for the investment
  158  plan, for members initially enrolled on or after July 1, 2020,
  159  are as follows:
  160  
  161  
  162  Membership Class            Percentage ofGrossCompensation,EffectiveJuly 1, 2011
  163  
  164  Regular Class                                3.00%                 
  165  Special Risk Class                           3.00%                 
  166  Special RiskAdministrativeSupport Class                 3.00%                 
  167  Elected Officers’ Class—Legislators, Governor,Lt. Governor,Cabinet Officers,State Attorneys,Public Defenders                 3.00%                 
  168  Elected Officers’ Class—Justices, Judges                 3.00%                 
  169  Elected Officers’ Class—County Elected Officers                 3.00%                 
  170  
  171  Senior Management Service Class                 3.00%                 
  172  
  173  
  174         (c) Required employee retirement contribution rates for
  175  each membership class and subclass of the Florida Retirement
  176  System for the investment plan, for members initially enrolled
  177  before July 1, 2020, are as follows:
  178  
  179  
  180  Member-ship ClassPercentage ofGrossCompensa-tionEffectiveJuly 1, 2021Percentage ofGrossCompensa-tionEffectiveJuly 1, 2022Percentage ofGrossCompensa-tionEffectiveJuly 1, 2023Percentage ofGrossCompensa-tionEffectiveJuly 1, 2024
  181  
  182  RegularClass      5.00%      5.00%         5.00%         5.00%     
  183  SpecialRisk Class 3.50%      4.00%         4.50%         5.00%     
  184  SpecialRiskAdministra-tiveSupportClass 3.50%      4.00%         4.50%         5.00%     
  185  Elected Officers’ Class—Legislators, Governor,Lt. Governor,Cabinet Officers,State Attorneys,Public Defenders 3.50%      4.00%         4.50%         5.00%     
  186  Elected Officers’ Class—Justices, Judges  3.50%       4.00%          4.50%         5.00%     
  187  Elected Officers’ Class—County Elected Officers  3.50%       4.00%          4.50%         5.00%     
  188  Senior Management Service Class   3.50%      4.00%         4.50%         5.00%     
  189         (d) Required employee retirement contribution rates for
  190  each membership class and subclass of the Florida Retirement
  191  System for the investment plan, for members initially enrolled
  192  on or after July 1, 2020, are as follows:
  193  
  194  Membership Class            Percentage ofGrossCompensation,EffectiveJuly 1, 2020
  195  
  196  Regular Class                                5.00%                 
  197  Special Risk Class                           5.00%                 
  198  Special RiskAdministrativeSupport Class                 5.00%                 
  199  Elected Officers’ Class—Legislators, Governor,Lt. Governor,Cabinet Officers,State Attorneys,Public Defenders                 5.00%                 
  200  Elected Officers’ Class—Justices, Judges                 5.00%                 
  201  Elected Officers’ Class—County Elected Officers                 5.00%                 
  202  
  203  Senior Management Service Class                 5.00%                 
  204  
  205  
  206         Section 4. Subsections (1) and (5) of section 121.72,
  207  Florida Statutes, are amended, and subsections (6) through (9)
  208  are added to that section, to read:
  209         121.72 Allocations to investment plan member accounts;
  210  percentage amounts.—
  211         (1) The allocations established in subsections (4) through
  212  (9) subsection (4) shall fund retirement benefits under the
  213  investment plan and shall be transferred monthly by the Division
  214  of Retirement from the Florida Retirement System Contributions
  215  Clearing Trust Fund to the third-party administrator for deposit
  216  in each participating employee’s individual account based on the
  217  membership class of the participant. Such allocations do not
  218  include any voluntary contributions that an employee has made
  219  toward his or her investment plan account.
  220         (5) Effective July 1, 2012, through June 30, 2021,
  221  allocations from the Florida Retirement System Contributions
  222  Clearing Trust Fund to investment plan member accounts, for
  223  members initially enrolled before July 1, 2020, are as follows:
  224  
  225  Membership Class                  Percentage of Gross Compensation 
  226  
  227  Regular Class                                  6.30%               
  228  Special Risk Class                             14.00%              
  229  Special Risk Administrative Support Class              7.95%               
  230  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders              9.38%               
  231  Elected Officers’ Class— Justices, Judges              13.23%              
  232  Elected Officers’ Class— County Elected Officers              11.34%              
  233  Senior Management Service Class                7.67%               
  234         (6) Effective July 1, 2021, through June 30, 2022,
  235  allocations from the Florida Retirement System Contributions
  236  Clearing Trust Fund to investment plan accounts, for members
  237  initially enrolled before July 1, 2020, are as follows:
  238  
  239  
  240  Membership Class                  Percentage of Gross Compensation 
  241  
  242  Regular Class                                  10.30%              
  243  Special Risk Class                             15.00%              
  244  Special Risk Administrative Support Class              8.95%               
  245  Elected Officers’ Class—Legislators, Governor,Lt. Governor, Cabinet Officers,State Attorneys, Public Defenders              10.38%              
  246  Elected Officers’ Class—Justices, Judges              14.23%              
  247  Elected Officers’ Class—County Elected Officers              12.34%              
  248  Senior Management Service Class                8.67%               
  249  
  250         (7) Effective July 1, 2022, through June 30, 2023,
  251  allocations from the Florida Retirement System Contributions
  252  Clearing Trust Fund to investment plan accounts, for members
  253  initially enrolled before July 1, 2020, are as follows:
  254  
  255  
  256  Membership Class                  Percentage of Gross Compensation 
  257  
  258  Regular Class                                  10.30%              
  259  Special Risk Class                             16.00%              
  260  Special Risk Administrative Support Class              9.95%               
  261  Elected Officers’ Class—Legislators, Governor,Lt. Governor, Cabinet Officers,State Attorneys, Public Defenders              11.38%              
  262  Elected Officers’ Class—Justices, Judges              15.23%              
  263  Elected Officers’ Class—County Elected Officers              13.34%              
  264  Senior Management Service Class                9.67%               
  265  
  266         (8) Effective July 1, 2023, through June 30, 2024,
  267  allocations from the Florida Retirement System Contributions
  268  Clearing Trust Fund to investment plan accounts, for members
  269  initially enrolled before July 1, 2020, are as follows:
  270  
  271  
  272  Membership Class                  Percentage of Gross Compensation 
  273  
  274  Regular Class                                  10.30%              
  275  Special Risk Class                             17.00%              
  276  Special Risk Administrative Support Class              10.95%              
  277  Elected Officers’ Class—Legislators, Governor,Lt. Governor, Cabinet Officers,State Attorneys, Public Defenders              12.38%              
  278  Elected Officers’ Class—Justices, Judges              16.23%              
  279  Elected Officers’ Class—County Elected Officers              14.34%              
  280  Senior Management Service Class                10.67%              
  281  
  282         (9) Effective July 1, 2024, for members initially enrolled
  283  before July 1, 2020, and effective July 1, 2020, for members
  284  initially enrolled on or after July 1, 2020, allocations from
  285  the Florida Retirement System Contributions Clearing Trust Fund
  286  to investment plan accounts are as follows:
  287  
  288  
  289  Membership Class                  Percentage of Gross Compensation 
  290  
  291  Regular Class                                  10.30%              
  292  Special Risk Class                             18.00%              
  293  Special Risk Administrative Support Class              11.95%              
  294  Elected Officers’ Class—Legislators, Governor,Lt. Governor, Cabinet Officers,State Attorneys, Public Defenders              13.38%              
  295  Elected Officers’ Class—Justices, Judges              17.23%              
  296  Elected Officers’ Class—County Elected Officers              15.34%              
  297  Senior Management Service Class                11.67%              
  298  
  299         Section 5. Paragraph (c) of subsection (2) of section
  300  121.051, Florida Statutes, is amended to read:
  301         121.051 Participation in the system.—
  302         (2) OPTIONAL PARTICIPATION.—
  303         (c) Employees of public community colleges or charter
  304  technical career centers sponsored by public community colleges,
  305  designated in s. 1000.21(3), who are members of the Regular
  306  Class of the Florida Retirement System and who comply with the
  307  criteria set forth in this paragraph and s. 1012.875 may, in
  308  lieu of participating in the Florida Retirement System, elect to
  309  withdraw from the system altogether and participate in the State
  310  Community College System Optional Retirement Program provided by
  311  the employing agency under s. 1012.875.
  312         1.a. Through June 30, 2001, the cost to the employer for
  313  benefits under the optional retirement program equals the normal
  314  cost portion of the employer retirement contribution which would
  315  be required if the employee were a member of the pension plan’s
  316  Regular Class, plus the portion of the contribution rate
  317  required by s. 112.363(8) which would otherwise be assigned to
  318  the Retiree Health Insurance Subsidy Trust Fund.
  319         b. Effective July 1, 2001, through June 30, 2011, each
  320  employer shall contribute on behalf of each member of the
  321  optional program an amount equal to 10.43 percent of the
  322  employee’s gross monthly compensation. The employer shall deduct
  323  an amount for the administration of the program.
  324         c. Effective July 1, 2011, through June 30, 2012, each
  325  member shall contribute an amount equal to the employee
  326  contribution required under s. 121.71(3)(a) s. 121.71(3). The
  327  employer shall contribute on behalf of each program member an
  328  amount equal to the difference between 10.43 percent of the
  329  employee’s gross monthly compensation and the employee’s
  330  required contribution based on the employee’s gross monthly
  331  compensation.
  332         d. Effective July 1, 2012, each member shall contribute an
  333  amount equal to the employee contribution required under s.
  334  121.71(3)(a) s. 121.71(3). The employer shall contribute on
  335  behalf of each program member an amount equal to the difference
  336  between 8.15 percent of the employee’s gross monthly
  337  compensation and the employee’s required contribution based on
  338  the employee’s gross monthly compensation.
  339         e. The employer shall contribute an additional amount to
  340  the Florida Retirement System Trust Fund equal to the unfunded
  341  actuarial accrued liability portion of the Regular Class
  342  contribution rate.
  343         2. The decision to participate in the optional retirement
  344  program is irrevocable as long as the employee holds a position
  345  eligible for participation, except as provided in subparagraph
  346  3. Any service creditable under the Florida Retirement System is
  347  retained after the member withdraws from the system; however,
  348  additional service credit in the system may not be earned while
  349  a member of the optional retirement program.
  350         3. An employee who has elected to participate in the
  351  optional retirement program shall have one opportunity, at the
  352  employee’s discretion, to transfer from the optional retirement
  353  program to the pension plan of the Florida Retirement System or
  354  to the investment plan established under part II of this
  355  chapter, subject to the terms of the applicable optional
  356  retirement program contracts.
  357         a. If the employee chooses to move to the investment plan,
  358  any contributions, interest, and earnings creditable to the
  359  employee under the optional retirement program are retained by
  360  the employee in the optional retirement program, and the
  361  applicable provisions of s. 121.4501(4) govern the election.
  362         b. If the employee chooses to move to the pension plan of
  363  the Florida Retirement System, the employee shall receive
  364  service credit equal to his or her years of service under the
  365  optional retirement program.
  366         (I) The cost for such credit is the amount representing the
  367  present value of the employee’s accumulated benefit obligation
  368  for the affected period of service. The cost shall be calculated
  369  as if the benefit commencement occurs on the first date the
  370  employee becomes eligible for unreduced benefits, using the
  371  discount rate and other relevant actuarial assumptions that were
  372  used to value the Florida Retirement System Pension Plan
  373  liabilities in the most recent actuarial valuation. The
  374  calculation must include any service already maintained under
  375  the pension plan in addition to the years under the optional
  376  retirement program. The present value of any service already
  377  maintained must be applied as a credit to total cost resulting
  378  from the calculation. The division must ensure that the transfer
  379  sum is prepared using a formula and methodology certified by an
  380  enrolled actuary.
  381         (II) The employee must transfer from his or her optional
  382  retirement program account and from other employee moneys as
  383  necessary, a sum representing the present value of the
  384  employee’s accumulated benefit obligation immediately following
  385  the time of such movement, determined assuming that attained
  386  service equals the sum of service in the pension plan and
  387  service in the optional retirement program.
  388         4. Participation in the optional retirement program is
  389  limited to employees who satisfy the following eligibility
  390  criteria:
  391         a. The employee is otherwise eligible for membership or
  392  renewed membership in the Regular Class of the Florida
  393  Retirement System, as provided in s. 121.021(11) and (12) or s.
  394  121.122.
  395         b. The employee is employed in a full-time position
  396  classified in the Accounting Manual for Florida’s Public
  397  Community Colleges as:
  398         (I) Instructional; or
  399         (II) Executive Management, Instructional Management, or
  400  Institutional Management and the community college determines
  401  that recruiting to fill a vacancy in the position is to be
  402  conducted in the national or regional market, and the duties and
  403  responsibilities of the position include the formulation,
  404  interpretation, or implementation of policies, or the
  405  performance of functions that are unique or specialized within
  406  higher education and that frequently support the mission of the
  407  community college.
  408         c. The employee is employed in a position not included in
  409  the Senior Management Service Class of the Florida Retirement
  410  System as described in s. 121.055.
  411         5. Members of the program are subject to the same
  412  reemployment limitations, renewed membership provisions, and
  413  forfeiture provisions applicable to regular members of the
  414  Florida Retirement System under ss. 121.091(9), 121.122, and
  415  121.091(5), respectively. A member who receives a program
  416  distribution funded by employer and required employee
  417  contributions is deemed to be retired from a state-administered
  418  retirement system if the member is subsequently employed with an
  419  employer that participates in the Florida Retirement System.
  420         6. Eligible community college employees are compulsory
  421  members of the Florida Retirement System until, pursuant to s.
  422  1012.875, a written election to withdraw from the system and
  423  participate in the optional retirement program is filed with the
  424  program administrator and received by the division.
  425         a. A community college employee whose program eligibility
  426  results from initial employment shall be enrolled in the
  427  optional retirement program retroactive to the first day of
  428  eligible employment. The employer and employee retirement
  429  contributions paid through the month of the employee plan change
  430  shall be transferred to the community college to the employee’s
  431  optional program account, and, effective the first day of the
  432  next month, the employer shall pay the applicable contributions
  433  based upon subparagraph 1.
  434         b. A community college employee whose program eligibility
  435  is due to the subsequent designation of the employee’s position
  436  as one of those specified in subparagraph 4., or due to the
  437  employee’s appointment, promotion, transfer, or reclassification
  438  to a position specified in subparagraph 4., must be enrolled in
  439  the program on the first day of the first full calendar month
  440  that such change in status becomes effective. The employer and
  441  employee retirement contributions paid from the effective date
  442  through the month of the employee plan change must be
  443  transferred to the community college to the employee’s optional
  444  program account, and, effective the first day of the next month,
  445  the employer shall pay the applicable contributions based upon
  446  subparagraph 1.
  447         7. Effective July 1, 2003, through December 31, 2008, any
  448  member of the optional retirement program who has service credit
  449  in the pension plan of the Florida Retirement System for the
  450  period between his or her first eligibility to transfer from the
  451  pension plan to the optional retirement program and the actual
  452  date of transfer may, during employment, transfer to the
  453  optional retirement program a sum representing the present value
  454  of the accumulated benefit obligation under the defined benefit
  455  retirement program for the period of service credit. Upon
  456  transfer, all service credit previously earned under the pension
  457  plan during this period is nullified for purposes of entitlement
  458  to a future benefit under the pension plan.
  459         Section 6. Paragraph (d) of subsection (6) of section
  460  121.055, Florida Statutes, is amended to read:
  461         121.055 Senior Management Service Class.—There is hereby
  462  established a separate class of membership within the Florida
  463  Retirement System to be known as the “Senior Management Service
  464  Class,” which shall become effective February 1, 1987.
  465         (6)
  466         (d) Contributions.—
  467         1.a. Through June 30, 2001, each employer shall contribute
  468  on behalf of each member of the Senior Management Service
  469  Optional Annuity Program an amount equal to the normal cost
  470  portion of the employer retirement contribution which would be
  471  required if the member were a Senior Management Service Class
  472  member of the Florida Retirement System Pension Plan, plus the
  473  portion of the contribution rate required in s. 112.363(8) that
  474  would otherwise be assigned to the Retiree Health Insurance
  475  Subsidy Trust Fund.
  476         b. Effective July 1, 2001, through June 30, 2011, each
  477  employer shall contribute on behalf of each member of the
  478  optional annuity program an amount equal to 12.49 percent of the
  479  employee’s gross monthly compensation.
  480         c. Effective July 1, 2011, through June 30, 2012, each
  481  member of the optional annuity program shall contribute an
  482  amount equal to the employee contribution required under s.
  483  121.71(3)(a) s. 121.71(3). The employer shall contribute on
  484  behalf of such employee an amount equal to the difference
  485  between 12.49 percent of the employee’s gross monthly
  486  compensation and the amount equal to the employee’s required
  487  contribution based on the employee’s gross monthly compensation.
  488         d. Effective July 1, 2012, each member of the optional
  489  annuity program shall contribute an amount equal to the employee
  490  contribution required under s. 121.71. The employer shall
  491  contribute on behalf of such employee an amount equal to the
  492  difference between 9.27 percent of the employee’s gross monthly
  493  compensation and the amount equal to the employee’s required
  494  contribution based on the employee’s gross monthly compensation.
  495         e. The department shall deduct an amount approved by the
  496  Legislature to provide for the administration of this program.
  497  Payment of the contributions, including contributions made by
  498  the employee, shall be made by the employer to the department,
  499  which shall forward the contributions to the designated company
  500  or companies contracting for payment of benefits for the member
  501  under the program.
  502         2. Each employer shall contribute on behalf of each member
  503  of the Senior Management Service Optional Annuity Program an
  504  amount equal to the unfunded actuarial accrued liability portion
  505  of the employer contribution which would be required for members
  506  of the Senior Management Service Class in the Florida Retirement
  507  System. This contribution shall be paid to the department for
  508  transfer to the Florida Retirement System Trust Fund.
  509         3. An Optional Annuity Program Trust Fund shall be
  510  established in the State Treasury and administered by the
  511  department to make payments to provider companies on behalf of
  512  the optional annuity program members, and to transfer the
  513  unfunded liability portion of the state optional annuity program
  514  contributions to the Florida Retirement System Trust Fund.
  515         4. Contributions required for social security by each
  516  employer and employee, in the amount required for social
  517  security coverage as now or hereafter may be provided by the
  518  federal Social Security Act shall be maintained for each member
  519  of the Senior Management Service retirement program and are in
  520  addition to the retirement contributions specified in this
  521  paragraph.
  522         5. Each member of the optional annuity program may
  523  contribute by way of salary reduction or deduction a percentage
  524  amount of the employee’s gross compensation not to exceed the
  525  percentage amount contributed by the employer to the optional
  526  annuity program. Payment of the employee’s contributions shall
  527  be made by the employer to the department, which shall forward
  528  the contributions to the designated company or companies
  529  contracting for payment of benefits for the member under the
  530  program.
  531         Section 7. Paragraph (a) of subsection (4) of section
  532  121.35, Florida Statutes, is amended to read:
  533         121.35 Optional retirement program for the State University
  534  System.—
  535         (4) CONTRIBUTIONS.—
  536         (a)1. Through June 30, 2001, each employer shall contribute
  537  on behalf of each member of the optional retirement program an
  538  amount equal to the normal cost portion of the employer
  539  retirement contribution which would be required if the employee
  540  were a regular member of the Florida Retirement System Pension
  541  Plan, plus the portion of the contribution rate required in s.
  542  112.363(8) that would otherwise be assigned to the Retiree
  543  Health Insurance Subsidy Trust Fund.
  544         2. Effective July 1, 2001, through June 30, 2011, each
  545  employer shall contribute on behalf of each member of the
  546  optional retirement program an amount equal to 10.43 percent of
  547  the employee’s gross monthly compensation.
  548         3. Effective July 1, 2011, through June 30, 2012, each
  549  member of the optional retirement program shall contribute an
  550  amount equal to the employee contribution required in s.
  551  121.71(3)(a) s. 121.71(3). The employer shall contribute on
  552  behalf of each such member an amount equal to the difference
  553  between 10.43 percent of the employee’s gross monthly
  554  compensation and the amount equal to the employee’s required
  555  contribution based on the employee’s gross monthly compensation.
  556         4. Effective July 1, 2012, each member of the optional
  557  retirement program shall contribute an amount equal to the
  558  employee contribution required in s. 121.71(3)(a) s. 121.71(3).
  559  The employer shall contribute on behalf of each such member an
  560  amount equal to the difference between 8.15 percent of the
  561  employee’s gross monthly compensation and the amount equal to
  562  the employee’s required contribution based on the employee’s
  563  gross monthly compensation.
  564         5. The payment of the contributions, including
  565  contributions by the employee, shall be made by the employer to
  566  the department, which shall forward the contributions to the
  567  designated company or companies contracting for payment of
  568  benefits for members of the program. However, such contributions
  569  paid on behalf of an employee described in paragraph (3)(c) may
  570  not be forwarded to a company and do not begin to accrue
  571  interest until the employee has executed a contract and notified
  572  the department. The department shall deduct an amount from the
  573  contributions to provide for the administration of this program.
  574         Section 8. Paragraph (a) of subsection (4) of section
  575  1012.875, Florida Statutes, is amended to read:
  576         1012.875 State Community College System Optional Retirement
  577  Program.—Each Florida College System institution may implement
  578  an optional retirement program, if such program is established
  579  therefor pursuant to s. 1001.64(20), under which annuity or
  580  other contracts providing retirement and death benefits may be
  581  purchased by, and on behalf of, eligible employees who
  582  participate in the program, in accordance with s. 403(b) of the
  583  Internal Revenue Code. Except as otherwise provided herein, this
  584  retirement program, which shall be known as the State Community
  585  College System Optional Retirement Program, may be implemented
  586  and administered only by an individual Florida College System
  587  institution or by a consortium of Florida College System
  588  institutions.
  589         (4)(a)1. Through June 30, 2011, each college must
  590  contribute on behalf of each program member an amount equal to
  591  10.43 percent of the employee’s gross monthly compensation.
  592         2. Effective July 1, 2011, through June 30, 2012, each
  593  member shall contribute an amount equal to the employee
  594  contribution required under s. 121.71(3)(a) s. 121.71(3). The
  595  employer shall contribute on behalf of each program member an
  596  amount equal to the difference between 10.43 percent of the
  597  employee’s gross monthly compensation and the employee’s
  598  required contribution based on the employee’s gross monthly
  599  compensation.
  600         3. Effective July 1, 2012, each member shall contribute an
  601  amount equal to the employee contribution required under s.
  602  121.71(3)(a) s. 121.71(3). The employer shall contribute on
  603  behalf of each program member an amount equal to the difference
  604  between 8.15 percent of the employee’s gross monthly
  605  compensation and the employee’s required contribution based on
  606  the employee’s gross monthly compensation.
  607         4. The college shall deduct an amount approved by the
  608  district board of trustees of the college to provide for the
  609  administration of the optional retirement program. Payment of
  610  this contribution must be made directly by the college or
  611  through the program administrator to the designated company
  612  contracting for payment of benefits to the program member.
  613         Section 9. (1) In order to fund the benefit changes
  614  provided by this act, the required employer contribution rates
  615  for the members of the Florida Retirement System established in
  616  s. 121.71(4), Florida Statutes, are increased as follows:
  617         (a) By X.XX percentage point for the Regular Class.
  618         (b) By X.XX percentage point for the Special Risk Class.
  619         (c) By X.XX percentage point for the Special Risk
  620  Administrative Support Class.
  621         (d) By X.XX percentage point for the Elected Officers’
  622  Class—Legislators, Governor, Lt. Governor, Cabinet Officers,
  623  State Attorneys, Public Defenders.
  624         (e) By X.XX percentage point for the Elected Officers’
  625  Class—Justices, Judges.
  626         (f) By X.XX percentage point for the Elected Officers’
  627  Class—County Elected Officers.
  628         (g) By X.XX percentage point for the Senior Management
  629  Service Class.
  630         (2) In order to fund the benefit changes provided by this
  631  act, the required employer contribution rates for the unfunded
  632  actuarial liability of the Florida Retirement System established
  633  in s. 121.71(5), Florida Statutes, are increased as follows:
  634         (a) By X.XX percentage point for the Regular Class.
  635         (b) By X.XX percentage point for the Special Risk Class.
  636         (c) By X.XX percentage point for the Special Risk
  637  Administrative Support Class.
  638         (d) By X.XX percentage point for the Elected Officers’
  639  Class—Legislators, Governor, Lt. Governor, Cabinet Officers,
  640  State Attorneys, Public Defenders.
  641         (e) By X.XX percentage point for the Elected Officers’
  642  Class—Justices, Judges.
  643         (f) By X.XX percentage point for the Elected Officers’
  644  Class—County Elected Officers.
  645         (g) By X.XX percentage point for the Senior Management
  646  Service Class.
  647         (3) The adjustments provided in subsections (1) and (2) are
  648  in addition to any other changes to such contribution rates
  649  which may be enacted into law to take effect on July 1, 2020.
  650  The Division of Law Revision is directed to adjust accordingly
  651  the contribution rates provided in s. 121.71, Florida Statutes.
  652         Section 10. The State Board of Administration shall prepare
  653  a report that examines the adequacy and use of current income
  654  annuity options available to members of the Florida Retirement
  655  System Investment Plan. The report must contain recommended
  656  strategies on how to further increase access to income annuity
  657  options and any additional options for guaranteed lifetime
  658  income which would assist in providing greater retirement
  659  security for investment plan retirees. The state board shall
  660  propose any legislative changes that are necessary in order to
  661  implement any of the recommendations outlined in its report. By
  662  March 1, 2021, the state board shall submit the report to the
  663  board’s trustees, the President of the Senate, and the Speaker
  664  of the House of Representatives.
  665         Section 11. The Legislature finds that a proper and
  666  legitimate state purpose is served when employees, officers, and
  667  retirees of the state and its political subdivisions, and the
  668  dependents, survivors, and beneficiaries of such employees,
  669  officers, and retirees, are extended the basic protections
  670  afforded by governmental retirement systems. These persons must
  671  be provided benefits that are fair and adequate and that are
  672  managed, administered, and funded in an actuarially sound manner
  673  as required by s. 14, Article X of the State Constitution and
  674  part VII of chapter 112, Florida Statutes. Therefore, the
  675  Legislature determines and declares that this act fulfills an
  676  important state interest.
  677         Section 12. This act shall take effect July 1, 2020.

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