Bill Text: FL S1128 | 2011 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Public Retirement Plans
Spectrum:
Status: (Engrossed - Dead) 2011-05-04 - Ordered enrolled -SJ 851 [S1128 Detail]
Download: Florida-2011-S1128-Introduced.html
Bill Title: Public Retirement Plans
Spectrum:
Status: (Engrossed - Dead) 2011-05-04 - Ordered enrolled -SJ 851 [S1128 Detail]
Download: Florida-2011-S1128-Introduced.html
Florida Senate - 2011 SB 1128 By Senator Ring 32-00962E-11 20111128__ 1 A bill to be entitled 2 An act relating to public retirement plans; amending 3 s. 112.66, F.S.; providing that a local governmental 4 entity may not offer a defined benefit retirement plan 5 to a plan member hired on or after a certain date; 6 providing that local plans must use at least 5 years 7 to determine a plan member’s average final 8 compensation for calculating retirement benefits for 9 members hired on or after a certain date; providing a 10 death benefit for the spouse and minor children of a 11 member hired on or after a certain date who is killed 12 in the line of duty; amending s. 121.051, F.S.; 13 providing that a firefighters’ or police officers’ 14 plan is eligible for participation in the Florida 15 Retirement System, at the discretion of the Department 16 of Management Services; amending s. 175.032, F.S.; 17 clarifying the definition of “compensation” or 18 “salary”; amending s. 175.351, F.S.; revising 19 provisions relating to benefits paid from the premium 20 tax by a municipality or special fire control district 21 that has its own pension plan; amending s. 185.02, 22 F.S.; revising definitions; amending s. 185.35, F.S.; 23 revising provisions relating to benefits paid by a 24 municipality that has its own pension plan; conforming 25 a cross-reference; directing the Department of 26 Financial Services to rate the financial strength of 27 local government defined benefit plans; specifying the 28 factors for assigning the ratings; requiring certain 29 entities to cooperate in providing data for the 30 ratings; requiring the ratings to be posted on the 31 department’s website; creating the Task Force on 32 Public Employee Disability Presumptions; providing for 33 appointment and membership; specifying the issues for 34 the task force to address; providing for a report to 35 be submitted to the Governor, Chief Financial Officer, 36 and Legislature by a certain date; providing for 37 expiration; directing the Department of Financial 38 Services to submit a report on the financial health of 39 local government pension plans to the Governor and 40 Legislature by a certain date; specifying the issues 41 the report must address; providing a declaration of 42 important state interest; providing an effective date. 43 44 Be It Enacted by the Legislature of the State of Florida: 45 46 Section 1. Subsections (11), (12), and (13) are added to 47 section 112.66, Florida Statutes, to read: 48 112.66 General provisions.—The following general provisions 49 relating to the operation and administration of any retirement 50 system or plan covered by this part shall be applicable: 51 (11) A plan sponsor may not offer or provide membership in 52 a defined benefit retirement system or plan to an employee hired 53 on or after July 1, 2011. For those members whose terms and 54 conditions of employment are collectively bargained, this 55 subsection is effective for the first agreement negotiated on or 56 after July 1, 2011. 57 (12) For each member hired on or after July 1, 2011, a plan 58 sponsor may not use less than 5 years to determine the average 59 final compensation used to calculate a member’s retirement 60 benefits. For those members whose terms and conditions of 61 employment are collectively bargained, this subsection is 62 effective for the first agreement negotiated on or after July 1, 63 2011. 64 (13) For each member hired on or after July 1, 2011, a plan 65 sponsor shall provide a death benefit entitlement and payments 66 that meet the following minimum standards: 67 (a) The surviving spouse of a member killed in the line of 68 duty may receive a monthly pension equal to one-half of the 69 monthly salary being received by the member at the time of death 70 for the remainder of the surviving spouse’s lifetime. 71 (b) If the surviving spouse of a member killed in the line 72 of duty dies, the monthly payments that would have been payable 73 to the surviving spouse had such surviving spouse lived shall be 74 paid for the use and benefit of the member’s children under 18 75 years of age and unmarried until the 18th birthday of the 76 member’s youngest unmarried child. 77 (c) If a member killed in the line of duty leaves no 78 surviving spouse but is survived by children under 18 years of 79 age, the benefits normally payable to a surviving spouse shall 80 be paid for the use and benefit of the member’s child or 81 children under 18 years of age and unmarried until the 18th 82 birthday of the member’s youngest unmarried child. 83 84 This subsection does not abrogate other applicable provisions of 85 state or federal law providing death benefits. 86 Section 2. Paragraph (g) is added to subsection (2) of 87 section 121.051, Florida Statutes, to read: 88 121.051 Participation in the system.— 89 (2) OPTIONAL PARTICIPATION.— 90 (g) A firefighters’ pension plan or a municipal police 91 officers’ retirement plan, established in accordance with 92 chapter 175 or chapter 185, is eligible for membership under 93 this chapter at the sole discretion of the department. In order 94 to be eligible, the plan must not have any unfunded actuarial 95 liabilities. 96 Section 3. Subsection (3) of section 175.032, Florida 97 Statutes, is amended to read: 98 175.032 Definitions.—For any municipality, special fire 99 control district, chapter plan, local law municipality, local 100 law special fire control district, or local law plan under this 101 chapter, the following words and phrases have the following 102 meanings: 103 (3) “Compensation” or “salary” means the fixed monthly 104 remuneration paid a firefighter. If; where, as in the case of a105volunteer firefighter,remuneration is based on actual services 106 rendered, as in the case of a volunteer firefighter, the term 107 means the total cash remuneration received yearly for such 108 services, prorated on a monthly basis. Overtime compensation, 109 unused leave, or any other form of compensation beyond base 110 hourly or annual salary may not be included when calculating the 111 member’s compensation or salary. 112 (a) A retirement trust fund or plan may use a definition of 113 salary other than the definition in this subsectionbut onlyif 114 the monthly retirement income payable to each firefighter 115 covered by the retirement trust fund or plan, as determined 116 under s. 175.162(2)(a) and using such other definition, equals 117 or exceeds the monthly retirement income that would be payable 118 to each firefighter if his or her monthly retirement income were 119 determined under s. 175.162(2)(a) and using the definition in 120 this subsection. 121 (b) Any retirement trust fund or plan thatwhich now or122hereaftermeets the requirements of this chapter doesshallnot, 123 solely by virtue of this subsection, reduce or diminish the 124 monthly retirement income otherwise payable to each firefighter 125 covered by the retirement trust fund or plan. 126 (c) The member’s compensation or salary contributed as 127 employee-elective salary reductions or deferrals to any salary 128 reduction, deferred compensation, or tax-sheltered annuity 129 program authorized under the Internal Revenue Code shall be 130 deemed to be the compensation or salary the member would receive 131 if he or she were not participating in such program andshall be132 treated as compensation for retirement purposes under this 133 chapter. 134 (d) For any person who first becomes a member in any plan 135 year beginning on or after January 1, 1996, compensation for 136 thatanyplan year mayshallnot include any amounts in excess 137 of the Internal Revenue Code s. 401(a)(17) limitation,(as 138 amended by the Omnibus Budget Reconciliation Act of 1993), which 139 limitation of $150,000 shall be adjusted as required by federal 140 law for qualified government plans and shall be further adjusted 141 for changes in the cost of living in the manner provided by 142 Internal Revenue Code s. 401(a)(17)(B). For any person who first 143 became a member beforeprior tothe first plan year beginning on 144 or after January 1, 1996, the limitation on compensation may 145shall benot be less than the maximum compensation amount that 146 was allowed to be taken into account under the planasin effect 147 on July 1, 1993, which limitation shall be adjusted for changes 148 in the cost of living since 1989 in the manner provided by 149 Internal Revenue Code s. 401(a)(17)(1991). 150 Section 4. Subsection (1) of section 175.351, Florida 151 Statutes, is amended to read: 152 175.351 Municipalities and special fire control districts 153 having their own pension plans for firefighters.—For any 154 municipality, special fire control district, local law 155 municipality, local law special fire control district, or local 156 law plan under this chapter, in order for municipalities and 157 special fire control districts with their own pension plans for 158 firefighters, or for firefighters and police officers, where 159 included, to participate in the distribution of the tax fund 160 established pursuant to s. 175.101, local law plans must meet 161 the minimum benefits and minimum standards set forth in this 162 chapter. 163 (1) PREMIUM TAX INCOME.—If a municipality has a pension 164 plan for firefighters, or a pension plan for firefighters and 165 police officers if, whereincluded, which in the opinion of the 166 division meets the minimum benefits and minimum standards set 167 forth in this chapter, the board of trustees of the pension 168 plan, as approved by a majority of firefighters of the 169 municipality, shall use the income from the premium tax to pay 170 down any unfunded actuarial liability in the pension plan. After 171 paying down the unfunded actuarial liability, the board of 172 trustees, as approved by a majority of firefighters of the 173 municipality, may: 174 (a) Place the income from the premium tax in s. 175.101 in 175 such pension plan for the sole and exclusive use of its 176 firefighters, or for firefighters and police officers if, where177 included, where it shall become an integral part of that pension 178 plan andshall beused to pay extra benefits to the firefighters 179 included in that pension plan; or 180 (b) Place the income from the premium tax in s. 175.101 in 181 a separate supplemental plan to pay extra benefits to 182 firefighters, or to firefighters and police officers ifwhere183 included, participating in such separate supplemental plan. 184 185 The premium tax provided by this chapter shall in all cases be 186 used in its entirety to provideextrabenefits to firefighters, 187 or to firefighters and police officers if, whereincluded. 188 However, local law plans in effect on October 1, 1998, must 189shall be required tocomply with the minimum benefit provisions 190 of this chapter only to the extent that additional premium tax 191 revenues become available to incrementally fund the cost of such 192 compliance as provided in s. 175.162(2)(a). IfWhena plan is in 193 compliancewith such minimum benefit provisions, as subsequent 194 additional premium tax revenues become available, they must 195shallbe used to provide extra benefits. For the purpose of this 196 chapter, “additional premium tax revenues” means revenues 197 received by a municipality or special fire control district 198 pursuant to s. 175.121 which exceed that amount received for 199 calendar year 1997, and the term “extra benefits” means benefits 200 in addition to or greater than those provided to general 201 employees of the municipality and in addition to those in 202 existence for firefighters on March 12, 1999. Local law plans 203 created by special act before May 23, 1939, shall be deemed to 204 comply with this chapter. 205 Section 5. Subsections (4), (10), and (15) of section 206 185.02, Florida Statutes, are amended to read: 207 185.02 Definitions.—For any municipality, chapter plan, 208 local law municipality, or local law plan under this chapter, 209 the following words and phrases as used in this chapter shall 210 have the following meanings, unless a different meaning is 211 plainly required by the context: 212 (4) “Compensation” or “salary” means the fixed monthly 213total cashremunerationincluding “overtime”paid by the primary 214 employer to a police officer for services rendered, but not 215 including any payments for extra duty oraspecial detail work 216 performed on behalf of a second party employer, any overtime, 217 unused leave, or any other compensation beyond base hourly or 218 annual salary.However, a local law plan may limit the amount of219overtime payments which can be used for retirement benefit220calculation purposes, but in no event shall such overtime limit221be less than 300 hours per officer per calendar year.222(a)Any retirement trust fund or plan which now or223hereafter meets the requirements of this chapter shall not,224solely by virtue of this subsection, reduce or diminish the225monthly retirement income otherwise payable to each police226officer covered by the retirement trust fund or plan.227 (a)(b)The member’s compensation or salary contributed as 228 employee-elective salary reductions or deferrals to any salary 229 reduction, deferred compensation, or tax-sheltered annuity 230 program authorized under the Internal Revenue Code shall be 231 deemed to be the compensation or salary the member would receive 232 if he or she were not participating in such program and shall be 233 treated as compensation for retirement purposes under this 234 chapter. 235 (b)(c)For any person who first becomes a member in any 236 plan year beginning on or after January 1, 1996, compensation 237 for any plan year doesshallnot include any amounts in excess 238 of the Internal Revenue Code s. 401(a)(17) limitation,(as 239 amended by the Omnibus Budget Reconciliation Act of 1993), which 240 limitation of $150,000 shall be adjusted as required by federal 241 law for qualified government plans and shall be further adjusted 242 for changes in the cost of living in the manner provided by 243 Internal Revenue Code s. 401(a)(17)(B). For any person who first 244 became a member beforeprior tothe first plan year beginning on 245 or after January 1, 1996, the limitation on compensation may 246shall benot be less than the maximum compensation amount that 247 was allowed to be taken into account under the plan as in effect 248 on July 1, 1993, which limitation shall be adjusted for changes 249 in the cost of living since 1989 in the manner provided by 250 Internal Revenue Code s. 401(a)(17)(1991). 251 (10) “Local law plan” means a defined benefit pension plan 252 for police officers or for police officers and firefighters if,253whereincluded, as described in s. 185.35, established by 254 municipal ordinance or special act of the Legislature, which 255enactmentsets forth all plan provisions. Local law plan 256 provisions may vary from the provisions of this chapter,257provided that required minimum benefits and minimum standards258are met. Any such variance mustshallprovide a greater benefit 259 for police officers. Actuarial valuations of local law plans 260 shall be conducted by an enrolled actuary as provided in s. 261 185.221(2)(b). 262 (15) “Supplemental plan” means a plan to which deposits of 263 the premium tax moneys as provided in s. 185.08 are made to 264 provideextrabenefits to police officers, or police officers 265 and firefighters ifwhereincluded, under this chapter. Such a 266 plan is an element of a local law plan and exists in conjunction 267 with a defined benefit planthat meets the minimum benefits and268minimum standards of this chapter. 269 Section 6. Subsection (1) and paragraph (a) of subsection 270 (3) of section 185.35, Florida Statutes, are amended to read: 271 185.35 Municipalities having their own pension plans for 272 police officers.—For any municipality, chapter plan, local law 273 municipality, or local law plan under this chapter, in order for 274 municipalities with their own pension plans for police officers, 275 or for police officers and firefighters where included, to 276 participate in the distribution of the tax fund established 277 pursuant to s. 185.08, local law plans must meet the minimum 278 benefits and minimum standards set forth in this chapter: 279 (1) PREMIUM TAX INCOME.—If a municipality has a pension 280 plan for police officers, or for police officers and 281 firefighters ifwhereincluded, which, in the opinion of the 282 division, meets the minimum benefits and minimum standards set 283 forth in this chapter, the board of trustees of the pension 284 plan, as approved by a majority of police officers of the 285 municipality, shall use the income from the premium tax to pay 286 down any unfunded actuarial liability in the pension plan. After 287 paying down the unfunded actuarial liability, the board of 288 trustees, as approved by a majority of police officers of the 289 municipality, may: 290 (a) Place the income from the premium tax in s. 185.08 in 291 such pension plan for the sole and exclusive use of its police 292 officers, or its police officers and firefighters ifwhere293 included, where it shall become an integral part of that pension 294 plan and shall be used to pay extra benefits to the police 295 officers included in that pension plan; or 296 (b) May place the income from the premium tax in s. 185.08 297 in a separate supplemental plan to pay extra benefits to the 298 police officers, or police officers and firefighters ifwhere299 included, participating in such separate supplemental plan. 300 301 The premium tax provided by this chapter shall in all cases be 302 used in its entirety to provide extra benefits to police 303 officers, or to police officers and firefighters if, where304 included. However, local law plans in effect on October 1, 1998, 305 mustshall be required tocomply with the minimum benefit 306 provisions of this chapter only to the extent that additional 307 premium tax revenues become available to incrementally fund the 308 cost of such compliance as provided in s. 185.16(2). IfWhena 309 plan is in compliancewith such minimum benefit provisions, as 310 subsequent additional tax revenues become available, they shall 311 be used to provide extra benefits. For the purpose of this 312 chapter, “additional premium tax revenues” means revenues 313 received by a municipality pursuant to s. 185.10 which exceed 314 the amount received for calendar year 1997, and the term “extra 315 benefits” means benefits in addition to or greater than those 316 provided to general employees of the municipality and in 317 addition to those in existence for police officers on March 12, 318 1999. Local law plans created by special act before May 23, 319 1939, shall be deemed to comply with this chapter. 320 (3) Notwithstanding any other provision, with respect to 321 any supplemental plan municipality: 322 (a) Section 185.02(4) does185.02(4)(a) shallnot apply, 323 and a local law plan and a supplemental plan may continue to use 324 their definition of compensation or salary in existence on March 325 12, 1999the effective date of this act. 326 Section 7. Financial rating of local pension plans.—The 327 Department of Financial Services shall develop standardized 328 ratings for classifying the financial strength of all local 329 government defined benefit pension plans. 330 (1) In assigning a rating to a plan, the department shall 331 consider, but need not be limited to: 332 (a) The plan’s current and future unfunded liabilities. 333 (b) The plan’s net asset value, managed returns, and funded 334 ratio. 335 (c) Metrics related to the sustainability of the plan, 336 including, but not limited to, the percentage that the annual 337 contribution is of the participating employee payroll. 338 (d) Municipal bond ratings for the local government, if 339 applicable. 340 (e) Whether the local government has reduced contribution 341 rates to the plan when the plan has an actuarial surplus. 342 (f) Whether the local government uses any actuarial surplus 343 in the plan for obligations outside the plan. 344 (2) The department may obtain all necessary data to 345 formulate the ratings from all relevant entities, including 346 local pension boards, local governments, and the Division of 347 Retirement, all of which shall cooperate with the department in 348 supplying all necessary information. 349 (3) The ratings shall be posted on the department’s website 350 in a standardized format. 351 Section 8. Task Force on Public Employee Disability 352 Presumptions.— 353 (1) The Task Force on Public Employee Disability 354 Presumptions is created for the purpose of developing findings 355 and issuing recommendations on the disability presumptions in 356 ss. 112.18, 185.34, and 175.231, Florida Statutes. 357 (2) All members of the task force shall be appointed on or 358 before July 15, 2011, and the task force shall hold its first 359 meeting on or before August 15, 2011. The task force shall be 360 composed of nine members as follows: 361 (a) Three members appointed by the President of the Senate, 362 one of whom must be an attorney in private practice who has 363 experience in the relevant laws; one of whom must be a 364 representative of organized labor; and one of whom must be from 365 the Florida Association of Counties. 366 (b) Three members appointed by the Speaker of the House of 367 Representatives, one of whom must be an attorney in private 368 practice who has experience in the relevant laws; one of whom 369 must be a representative of organized labor; and one of whom 370 must be from the Florida League of Cities. 371 (c) A member employed by the Office of the Auditor General 372 who has experience in local government auditing and finances. 373 (d) A member employed by the Department of Management 374 Services’ Division of Retirement who has experience in local 375 government pension plans, appointed by the Governor. 376 (e) A member employed by the Department of Financial 377 Services who has relevant expertise in state risk management, 378 appointed by the Chief Financial Officer. 379 (3) The task force shall address issues, including, but not 380 limited to: 381 (a) Data related to the operation of the statutory 382 disability presumptions. 383 (b) How disability presumptions are handled in other 384 states. 385 (c) Proposals for changes to the existing disability 386 presumptions. 387 (4) The Department of Financial Services shall provide 388 administrative support to the task force. 389 (5) Members of the task force shall serve without 390 compensation while in the performance of their duties, but are 391 entitled to reimbursement for per diem and travel expenses in 392 accordance with s. 112.061, Florida Statutes. 393 (6) The task force may obtain data, information, and 394 assistance from any officer or state agency and any political 395 subdivision thereof. All such officers, agencies, and political 396 subdivisions shall provide the task force with all relevant 397 information and assistance on any matter within their knowledge 398 or control. 399 (7) The task force shall submit a report, including 400 findings and recommendations, to the Governor, the Chief 401 Financial Officer, the President of the Senate, and the Speaker 402 of the House of Representatives by January 1, 2012. The report 403 must include specific recommendations for legislative action 404 during the 2012 Regular Session of the Legislature. 405 (8) The task force is dissolved upon submission of its 406 report. 407 Section 9. By December 1, 2011, the Department of Financial 408 Services shall submit a report and recommendations to the 409 Governor, the President of the Senate, and the Speaker of the 410 House of Representatives on actions to be taken to increase the 411 visibility and transparency of local government pension plans, 412 including, but not limited to, those created pursuant to 413 chapters 175 and 185, Florida Statutes, with the goal of 414 increasing the ability of a taxpayer or policymaker to assess 415 the financial health of the local plans. The report must include 416 specific recommendations for legislative action during the 2012 417 Regular Session of the Legislature. The recommendations must 418 address, but need not be limited to: 419 (1) Whether and what kinds of local pension plan data 420 should be included in the financial audit reports required under 421 s. 218.39, Florida Statutes. 422 (2) Whether the reporting requirements of ss. 175.261 and 423 185.221, Florida Statutes, should be supplemented with other 424 types of financial data in order to give a more complete and 425 transparent picture of a local government’s financial solvency. 426 (3) Proposals for a uniform format for providing pension 427 data, including standard terminology and data and the specific 428 types of data which should be provided, including funding 429 ratios, and whether contributions are sufficient to fund 430 actuarial liabilities. 431 (4) Whether to require local governments to provide pension 432 financial data on local public websites. 433 (5) Other related issues, including insurance benefits, 434 health care benefits, and postemployment plan benefits. 435 (6) Proposals related to the composition of local pension 436 plan boards. 437 Section 10. The Legislature finds that a proper and 438 legitimate state purpose is served when employees and retirees 439 of the state and of its political subdivisions, and the 440 dependents, survivors, and beneficiaries of those employees and 441 retirees, are extended the basic protections afforded by 442 governmental retirement systems that provide fair and adequate 443 benefits and that are managed, administered, and funded in an 444 actuarially sound manner as required by s. 14, Article X of the 445 State Constitution and part VII of chapter 112, Florida 446 Statutes. Therefore, the Legislature determines and declares 447 that this act fulfills an important state interest. 448 Section 11. This act shall take effect July 1, 2011.