Senate Bill 0354

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    Florida Senate - 1999                                   SB 354

    By the Committee on Governmental Oversight and Productivity





    302-571-99

  1                      A bill to be entitled

  2         An act relating to the Florida Retirement

  3         System; amending s. 121.055, F.S.;

  4         redesignating the Senior Management Service

  5         Class as the Senior Management and Exempt

  6         Service Class; providing for state employees

  7         who are exempt from the Career Service System

  8         to participate in the Senior Management and

  9         Exempt Service Class; authorizing such members

10         to elect to participate in the Senior

11         Management Service Optional Annuity Program;

12         specifying forms of benefit payments that are

13         made under the optional annuity program;

14         providing requirements for electing to

15         participate in the optional annuity program;

16         amending ss. 121.021, 121.051, 121.052,

17         121.091, 121.122, F.S., relating to the Florida

18         Retirement System, the optional annuity

19         program, the Elected State Officers' Class,

20         retirement benefits, and renewed membership in

21         the retirement system; providing an effective

22         date.

23

24  Be It Enacted by the Legislature of the State of Florida:

25

26         Section 1.  Section 121.055, Florida Statutes, 1998

27  Supplement, is amended to read:

28         121.055  Senior Management and Exempt Service

29  Class.--There is hereby established a separate class of

30  membership within the Florida Retirement System to be known as

31

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  1  the "Senior Management and Exempt Service Class," which shall

  2  become effective July 1, 2000 February 1, 1987.

  3         (1)(a)  Participation in the Senior Management and

  4  Exempt Service Class shall be limited to and compulsory for

  5  any member of the Florida Retirement System who holds a

  6  position in the Senior Management Service of the State of

  7  Florida, established by part III of chapter 110, the Selected

  8  Exempt Service System established by part V of chapter 110, or

  9  is otherwise exempt from the Career Service System, unless

10  such member elects, within the time specified in this section

11  herein, to participate in the Senior Management Service

12  Optional Annuity Program as established in subsection (6).

13         (b)1.  Except as provided in subparagraph 2., effective

14  January 1, 1990, participation in the Senior Management and

15  Exempt Service Class shall be compulsory for the president of

16  each community college, the manager of each participating city

17  or county, and all appointed district school superintendents.

18  Effective January 1, 1994, additional positions may be

19  designated for inclusion in the Senior Management and Exempt

20  Service Class of the Florida Retirement System, provided that:

21         a.  Positions to be included in the class shall be

22  designated by the local agency employer.  Notice of intent to

23  designate positions for inclusion in the class shall be

24  published once a week for 2 consecutive weeks in a newspaper

25  of general circulation published in the county or counties

26  affected, as provided in chapter 50.

27         b.  One nonelective full-time position may be

28  designated for each local agency employer reporting to the

29  Division of Retirement; for local agencies with 100 or more

30  regularly established positions, additional nonelective

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  1  full-time positions may be designated, not to exceed 1 percent

  2  of the regularly established positions within the agency.

  3         c.  Each position added to the class must be a

  4  managerial or policymaking position filled by an employee who

  5  is not subject to continuing contract and serves at the

  6  pleasure of the local agency employer without civil service

  7  protection, and who:

  8         (I)  Heads an organizational unit; or

  9         (II)  Has responsibility to effect or recommend

10  personnel, budget, expenditure, or policy decisions in his or

11  her areas of responsibility.

12         2.  In lieu of participation in the Senior Management

13  and Exempt Service Class, members of the Senior Management and

14  Exempt Service Class pursuant to the provisions of

15  subparagraph 1. may withdraw from the Florida Retirement

16  System altogether and participate in a lifetime monthly

17  annuity program that which may be provided by the employing

18  agency.  The cost to the employer for such annuity shall equal

19  the normal cost portion of the contributions required in the

20  Senior Management and Exempt Service Class. The employer

21  providing such annuity shall contribute an additional amount

22  to the Florida Retirement System Trust Fund equal to the

23  unfunded actuarial accrued liability portion of the Senior

24  Management and Exempt Service Class contribution rate. The

25  decision to participate in such local government annuity is

26  shall be irrevocable for as long as the employee holds a

27  position eligible for the annuity.  Any service creditable

28  under the Senior Management and Exempt Service Class shall be

29  retained after the member withdraws from the Florida

30  Retirement System; however, additional service credit in the

31  Senior Management and Exempt Service Class may shall not be

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  1  earned after such withdrawal.  Such members are shall not be

  2  eligible to participate in the Senior Management Service

  3  Optional Annuity Program. Benefits may be payable in the form

  4  of a lifetime annuity, a full or partial cash distribution, or

  5  a full or partial rollover to a tax-qualified account.

  6         (c)1.  Effective January 1, 1990, participation in the

  7  Senior Management and Exempt Service Class shall be compulsory

  8  for up to 75 nonelective positions at the level of committee

  9  staff director or higher or equivalent managerial or

10  policymaking positions within the House of Representatives, as

11  selected by the Speaker of the House of Representatives, up to

12  50 nonelective positions at the level of committee staff

13  director or higher or equivalent managerial or policymaking

14  positions within the Senate, as selected by the President of

15  the Senate, all staff directors of joint committees and

16  service offices of the Legislature, the Auditor General and up

17  to 9 managerial or policymaking positions within his or her

18  office as selected by the Auditor General, and the executive

19  director of the Commission on Ethics.

20         2.  Participation in this class shall be compulsory,

21  except as provided in subparagraph 3., for any legislative

22  employee who holds a position designated for coverage in the

23  Senior Management and Exempt Service Class, and such

24  participation shall continue until the employee terminates

25  employment in a covered position.

26         3.  In lieu of participation in the Senior Management

27  and Exempt Service Class, at the discretion of the President

28  of the Senate and the Speaker of the House of Representatives,

29  such members may participate in the Senior Management Service

30  Optional Annuity Program as established in subsection (6).

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  1         (d)  Effective January 1, 1991, participation in the

  2  Senior Management and Exempt Service Class shall be compulsory

  3  for any member of the Florida Retirement System in a position

  4  that has been designated eligible for inclusion in the

  5  Executive Service of the State University System or who holds

  6  a position as president of a state university, unless such

  7  member elects, pursuant to s. 121.35, to participate in the

  8  optional retirement program.

  9         (e)  Effective January 1, 1991, participation in the

10  Senior Management and Exempt Service Class shall be compulsory

11  for the number of senior managers who have policymaking

12  authority with the State Board of Administration, as

13  determined by the Governor, Treasurer, and Comptroller acting

14  as the State Board of Administration, unless such member

15  elects to participate in the Senior Management Service

16  Optional Annuity Program as established in subsection (6) in

17  lieu of participation in the Senior Management and Exempt

18  Service Class. Such election shall be made in writing and

19  filed with the division and the personnel officer of the State

20  Board of Administration within 90 days after becoming eligible

21  for membership in the Senior Management and Exempt Service

22  Class.

23         (f)  Effective July 1, 1997:

24         1.  Any elected state officer eligible for membership

25  in the Elected State and County Officers' Class under s.

26  121.052(2)(a), (b), or (c) who elects membership in the Senior

27  Management and Exempt Service Class under s. 121.052(3)(c)

28  may, within 6 months after assuming office or within 6 months

29  after this act becomes a law for serving elected state

30  officers, elect to participate in the Senior Management

31  Service Optional Annuity Program, as provided in subsection

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  1  (6), in lieu of membership in the Senior Management and Exempt

  2  Service Class.

  3         2.  Any elected county officer eligible for membership

  4  in the Elected State and County Officers' Class under s.

  5  121.052(2)(d) who elects membership in the Senior Management

  6  and Exempt Service Class under s. 121.052(3)(c) may, within 6

  7  months after assuming office, or within 6 months after this

  8  act becomes a law for serving elected county officers, elect

  9  to participate in a lifetime monthly annuity program, as

10  provided in subparagraph (b)2., in lieu of membership in the

11  Senior Management and Exempt Service Class.

12         (g)  Effective July 1, 1996, participation in the

13  Senior Management and Exempt Service Class shall be compulsory

14  for any member of the Florida Retirement System employed with

15  the Department of Military Affairs in the positions of the

16  Adjutant General, Assistant Adjutant General-Army, Assistant

17  Adjutant General-Air, State Quartermaster, Director of

18  Military Personnel, Director of Administration, and additional

19  directors as designated by the agency head, not to exceed a

20  total of 10 positions.  In lieu of participation in the Senior

21  Management and Exempt Service Class, such members may

22  participate in the Senior Management Service Optional Annuity

23  Program as established in subsection (6).

24         (h)1.  Except as provided in subparagraph 3., effective

25  January 1, 1994, participation in the Senior Management and

26  Exempt Service Class shall be compulsory for the State Courts

27  Administrator and the Deputy State Courts Administrators, the

28  Clerk of the Supreme Court, the Marshal of the Supreme Court,

29  the Executive Director of the Justice Administrative

30  Commission, the Capital Collateral Representative, the clerks

31  of the district courts of appeals, the marshals of the

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  1  district courts of appeals, and the trial court administrator

  2  in each judicial circuit. Effective January 1, 1994,

  3  additional positions in the offices of the state attorney and

  4  public defender in each judicial circuit may be designated for

  5  inclusion in the Senior Management and Exempt Service Class of

  6  the Florida Retirement System, provided that:

  7         a.  Positions to be included in the class shall be

  8  designated by the state attorney or public defender, as

  9  appropriate.  Notice of intent to designate positions for

10  inclusion in the class shall be published once a week for 2

11  consecutive weeks in a newspaper of general circulation

12  published in the county or counties affected, as provided in

13  chapter 50.

14         b.  One nonelective full-time position may be

15  designated for each state attorney and public defender

16  reporting to the Division of Retirement; for agencies with 200

17  or more regularly established positions under the state

18  attorney or public defender, additional nonelective full-time

19  positions may be designated, not to exceed 0.5 percent of the

20  regularly established positions within the agency.

21         c.  Each position added to the class must be a

22  managerial or policymaking position filled by an employee who

23  serves at the pleasure of the state attorney or public

24  defender without civil service protection, and who:

25         (I)  Heads an organizational unit; or

26         (II)  Has responsibility to effect or recommend

27  personnel, budget, expenditure, or policy decisions in his or

28  her areas of responsibility.

29         2.  Participation in this class shall be compulsory,

30  except as provided in subparagraph 3., for any judicial

31  employee who holds a position designated for coverage in the

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  1  Senior Management and Exempt Service Class and such

  2  participation shall continue until the employee terminates

  3  employment in a covered position.

  4         3.  In lieu of participation in the Senior Management

  5  and Exempt Service Class, such members may participate in the

  6  Senior Management Service Optional Annuity Program as

  7  established in subsection (6).

  8         (i)  Except as may otherwise be provided, any member of

  9  the Senior Management and Exempt Service Class may purchase

10  additional retirement credit in such class for creditable

11  service within the purview of the Senior Management and Exempt

12  Service Class retroactive to February 1, 1987, and may upgrade

13  retirement credit for such service, to the extent of 2 percent

14  of the member's average monthly compensation as specified in

15  paragraph (4)(d) for such service. Contributions for upgrading

16  the additional Senior Management and Exempt Service credit

17  pursuant to this paragraph shall be equal to the difference in

18  the contributions paid and the Senior Management and Exempt

19  Service Class contribution rate as a percentage of gross

20  salary in effect for the period being claimed, plus interest

21  thereon at the rate of 6.5 percent a year, compounded annually

22  until the date of payment. This service credit may be

23  purchased by the employer on behalf of the member.

24         (2)(a)  Participation in this class shall cease when

25  the member terminates employment in an eligible position.

26  Once a position is designated as eligible for inclusion in the

27  class, that position shall not be removed from the class

28  unless the duties and responsibilities of the position change

29  substantially and therefore no longer meet the requirements

30  provided in this section for participation in the class,

31  except as provided in paragraph (b).

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  1         (b)  Effective July 1, 1997, each local agency employer

  2  may between July 1, 1997, and December 31, 1997, reassess its

  3  designation of positions for inclusion in the Senior

  4  Management and Exempt Service Class as provided in paragraph

  5  (1)(b), and may request removal from the class of any such

  6  positions that it deems appropriate.  Such removal of any

  7  previously designated positions shall be effective on the

  8  first day of the month following written notification of

  9  removal to the division prior to January 1, 1998.

10         (3)(a)  The following table states the required

11  retirement contribution rates for members of the Senior

12  Management and Exempt Service Class and their employers in

13  terms of a percentage of the member's gross compensation.  A

14  change in the contribution rate is effective with the first

15  salary paid on or after the beginning date of the change.

16  Contributions shall be made for each pay period and are in

17  addition to the contributions required for social security and

18  the Retiree Health Insurance Subsidy Trust Fund.

19

20  Dates of Contribution

21    Rate Changes                          Members   Employers

22

23  February 1, 1987, through

24    December 31, 1988                       0%       13.88%

25  January 1, 1989, through

26    December 31, 1989                       0%       14.95%

27  January 1, 1990, through

28    December 31, 1990                       0%       16.04%

29  January 1, 1991, through

30    December 31, 1991                       0%       18.39%

31  January 1, 1992, through

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  1    December 31, 1992                       0%       19.48%

  2  January 1, 1993, through

  3    December 31, 1993                       0%       20.55%

  4  January 1, 1994, through

  5    December 31, 1994                       0%       23.07%

  6  January 1, 1995, through

  7    December 31, 1995                       0%       23.88%

  8  January 1, 1996, through

  9    June 30, 1996                           0%       24.14%

10  July 1, 1996, through

11    June 30, 1998                           0%       21.58%

12  Effective July 1, 1998                    0%       23.10%

13

14         (b)  The employer paying the salary of a member of the

15  Senior Management and Exempt Service Class shall contribute an

16  amount as specified in this section which shall constitute the

17  entire employer retirement contribution with respect to such

18  member.  The employer shall also withhold one-half of the

19  entire contribution of the member required for social security

20  coverage.

21         (c)  The following table states the required employer

22  contribution on behalf of each member of the Senior Management

23  and Exempt Service Class in terms of a percentage of the

24  member's gross compensation.  Such contribution constitutes

25  the entire health insurance subsidy contribution with respect

26  to the member. A change in the contribution rate is effective

27  with the first salary paid on or after the beginning date of

28  the change.  The retiree health insurance subsidy contribution

29  rate is as follows:

30

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  1  Dates of Contribution                             Contribution

  2    Rate Changes                                        Rate

  3

  4  October 1, 1987, through December 31, 1988             0.24%

  5  January 1, 1989, through December 31, 1993             0.48%

  6  January 1, 1994, through December 31, 1994             0.56%

  7  January 1, 1995, through June 30, 1998                 0.66%

  8  Effective July 1, 1998                                 0.94%

  9

10  Such contributions shall be deposited by the administrator in

11  the Retiree Health Insurance Subsidy Trust Fund.

12         (4)(a)  The definitions set forth in s. 121.021 and all

13  other provisions of this chapter shall apply to the Senior

14  Management and Exempt Service Class, except the definitions

15  and provisions in conflict with, or superseded or modified by,

16  the provisions of this section.

17         (b)  Service in an eligible position prior to February

18  1, 1987, or after January 31, 1987, shall satisfy the

19  requirement of attaining the normal retirement date as defined

20  in s. 121.021(29) for a Senior Management and Exempt Service

21  Class member, provided the employee is a member of the Senior

22  Management and Exempt Service Class after January 31, 1987.  A

23  member of this class who fails to complete 7 years of

24  creditable service in an eligible position shall be required

25  to satisfy the requirements for the normal retirement date for

26  a regular member as provided in s. 121.021(29).

27         (c)  The average final compensation of a member of this

28  class shall be as defined in s. 121.021(24).

29         (d)  A member of the Senior Management and Exempt

30  Service Class shall receive retirement credit at the rate of 2

31

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  1  percent of average final compensation for each year of service

  2  in such class after January 31, 1987.

  3         (5)  A member of the Senior Management and Exempt

  4  Service Class shall retain all rights and creditable service

  5  accumulated in the Florida Retirement System prior to

  6  membership in the Senior Management and Exempt Service Class.

  7         (6)(a)  Senior Management Service Optional Annuity

  8  Program.--The Department of Management Services shall

  9  establish a Senior Management Service Optional Annuity Program

10  under which contracts providing retirement, death, and

11  disability benefits may be purchased for those employees who

12  elect to participate in the optional annuity program.  The

13  benefits to be provided for or on behalf of participants in

14  such optional annuity program shall be provided through

15  individual contracts or individual certificates issued for

16  group annuity contracts, which may be fixed, variable, or a

17  combination thereof, in accordance with s. 401(a) of the

18  Internal Revenue Code.  Any such individual contract or

19  certificate shall state the annuity plan on its face page, and

20  shall include, but not be limited to, a statement of

21  ownership, the contract benefits, annuity income options,

22  limitations, expense charges, and surrender charges, if any.

23  The employing agency shall contribute, as provided in this

24  section, toward the purchase of such optional benefits which

25  shall be fully and immediately vested in the participants.

26         (b)  Retirement service credit.--An eligible employee

27  who is a member of the Florida Retirement System or an

28  existing retirement system at the time of his or her election

29  to participate in the Senior Management Service Optional

30  Annuity Program shall retain all retirement service credit

31  earned under the retirement system from which he or she

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  1  transferred; however, no additional service credit in the

  2  Florida Retirement System or existing retirement system shall

  3  be earned while the employee participates in the optional

  4  annuity program, nor shall the employee be eligible for

  5  disability retirement under the Florida Retirement System or

  6  existing retirement system.

  7         (c)  Participation.--

  8         1.  Any eligible employee who is employed on or before

  9  July 1, 2000 February 1, 1987, may elect to participate in the

10  optional annuity program in lieu of participation in the

11  Senior Management and Exempt Service Class.  Such election

12  shall be made in writing and filed with the department and the

13  personnel officer of the employer on or before June 30, 2000

14  May 1, 1987.  Any eligible employee who is employed on or

15  before July 1, 2000 February 1, 1987, and who fails to make an

16  election to participate in the optional annuity program by

17  June 30, 2000 May 1, 1987, shall be deemed to have elected

18  membership in the Senior Management and Exempt Service Class.

19         2.  Any employee who becomes eligible to participate in

20  the optional annuity program by reason of initial employment

21  commencing after July 1, 2000 February 1, 1987, may, within 90

22  days after the date of commencement of employment, elect to

23  participate in the optional annuity program.  Such election

24  shall be made in writing and filed with the personnel officer

25  of the employer.  Any eligible employee who does not within 90

26  days after commencement of such employment elect to

27  participate in the optional annuity program shall be deemed to

28  have elected membership in the Senior Management and Exempt

29  Service Class.

30         3.  A person who is appointed to a position in the

31  Senior Management and Exempt Service Class and who is a member

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  1  of an existing retirement system or the Special Risk or

  2  Special Risk Administrative Support Classes of the Florida

  3  Retirement System may elect to remain in such system or class

  4  in lieu of participation in the Senior Management and Exempt

  5  Service Class or optional annuity program. Such election shall

  6  be made in writing and filed with the department and the

  7  personnel officer of the employer within 90 days of such

  8  appointment. Any eligible employee who fails to make an

  9  election to participate in the existing system, the Special

10  Risk Class of the Florida Retirement System, the Special Risk

11  Administrative Support Class of the Florida Retirement System,

12  or the optional annuity program shall be deemed to have

13  elected membership in the Senior Management and Exempt Service

14  Class.

15         4.  An employee's election to participate in the

16  optional annuity program is irrevocable as long as such

17  employee continues to be employed in an eligible position and

18  continues to meet the eligibility requirements set forth in

19  this paragraph.

20         (d)  Contributions.--

21         1.  Each employer shall contribute on behalf of each

22  participant in the Senior Management Service Optional Annuity

23  Program an amount equal to the normal cost portion of the

24  employer retirement contribution which would be required if

25  the participant were a Senior Management and Exempt Service

26  Class member of the Florida Retirement System, plus the

27  portion of the contribution rate required in s. 112.363(8)

28  that would otherwise be assigned to the Retiree Health

29  Insurance Subsidy Trust Fund, less an amount approved by the

30  Legislature which shall be deducted by the division to provide

31  for the administration of this program. The payment of the

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  1  contributions to the optional program which is required by

  2  this subparagraph for each participant shall be made by the

  3  employer to the division which shall forward the contributions

  4  to the designated company or companies contracting for payment

  5  of benefits for the participant under the program.

  6         2.  Each employer shall contribute on behalf of each

  7  participant in the Senior Management Service Optional Annuity

  8  Program an amount equal to the unfunded actuarial accrued

  9  liability portion of the employer contribution which would be

10  required for members of the Senior Management and Exempt

11  Service Class in the Florida Retirement System.  This

12  contribution shall be paid to the division for transfer to the

13  Florida Retirement System Trust Fund.

14         3.  An Optional Annuity Program Trust Fund shall be

15  established in the State Treasury and administered by the

16  division to make payments to provider companies on behalf of

17  the optional annuity program participants, and to transfer the

18  unfunded liability portion of the state optional annuity

19  program contributions to the Florida Retirement System Trust

20  Fund.

21         4.  Contributions required for social security by each

22  employer and each participant, in the amount required for

23  social security coverage as now or hereafter may be provided

24  by the federal Social Security Act shall be maintained for

25  each participant in the Senior Management and Exempt Service

26  retirement program and shall be in addition to the retirement

27  contributions specified in this paragraph.

28         5.  Each participant in the Senior Management Service

29  Optional Annuity Program may contribute by way of salary

30  reduction or deduction a percentage amount of the

31  participant's gross compensation not to exceed the percentage

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  1  amount contributed by the employer to the optional annuity

  2  program. Payment of the participant's contributions shall be

  3  made by the employer to the division which shall forward the

  4  contributions to the designated company or companies

  5  contracting for payment of benefits for the participant under

  6  the program.

  7         (e)  Benefits.--

  8         1.  Benefits shall be payable under the Senior

  9  Management Service Optional Annuity Program only to

10  participants in the program, or their beneficiaries as

11  designated by the participant in the contract with a provider

12  company, and such benefits shall be paid by the designated

13  company in accordance with the terms of the annuity contract

14  or contracts applicable to the participant. A participant must

15  be terminated from all employment with all Florida Retirement

16  System employers as provided in s. 121.021(39) to begin

17  receiving the employer-funded benefit. Benefits funded by

18  employer contributions shall be payable only as a lifetime

19  annuity to the participant, his beneficiary, or his estate,

20  except for:

21         a.  A lump-sum payment to the beneficiary upon the

22  death of the participant; or

23         b.  A cash-out of a de minimis account upon the request

24  of a former participant who has been terminated for a minimum

25  of 6 months from the employment that entitled him to optional

26  retirement program participation. A de minimis account is an

27  account with a provider company containing employer

28  contributions and accumulated earnings of not more than $3,500

29  made under the provisions of this chapter. Such cash-out must

30  be a complete liquidation of the account balance with that

31

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  1  company and is subject to the provisions of the Internal

  2  Revenue Code.

  3         2.  The benefits payable to any person under the Senior

  4  Management Service Optional Annuity Program, and any

  5  contribution accumulated under such program, shall not be

  6  subject to assignment, execution, or attachment or to any

  7  legal process whatsoever.

  8         3.  A participant who receives optional annuity program

  9  benefits funded by employer contributions shall be deemed to

10  be retired from a state-administered retirement system in the

11  event of subsequent employment with any employer that

12  participates in the Florida Retirement System.

13         (f)  Administration.--

14         1.  The Senior Management Service Optional Annuity

15  Program authorized by this section shall be administered by

16  the Division of Retirement.  The division shall designate one

17  or more provider companies from which annuity contracts may be

18  purchased under the program and shall approve the form and

19  content of the contracts. The division shall sign a contract

20  with each of the provider companies and shall evaluate the

21  performance of the provider companies on a continuing basis.

22  The division may terminate the services of a provider company

23  for reasons stated in the contract. The division shall adopt

24  rules establishing its responsibilities and the

25  responsibilities of employers in administering the optional

26  annuity program.

27         2.  Effective July 1, 1997, the State Board of

28  Administration shall review and make recommendations to the

29  division on the acceptability of all investment products

30  proposed by provider companies of the optional annuity program

31  before such products are offered through annuity contracts to

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  1  the participants and may advise the division of any changes

  2  deemed necessary to ensure that the optional annuity program

  3  offers an acceptable mix of investment products. The division

  4  shall make the final determination as to whether an investment

  5  product will be approved for the program.

  6         3.  The provisions of each contract applicable to a

  7  participant in the Senior Management Service Optional Annuity

  8  Program shall be contained in a written program description

  9  which shall include a report of pertinent financial and

10  actuarial information on the solvency and actuarial soundness

11  of the program and the benefits applicable to the participant.

12  Such description shall be furnished by the company or

13  companies to each participant in the program and to the

14  division upon commencement of participation in the program and

15  annually thereafter.

16         4.  The division shall ensure that each participant in

17  the Senior Management Service Optional Annuity Program is

18  provided an accounting of the total contribution and the

19  annual contribution made by and on behalf of such

20  participants.

21         (g)  Dual employment.--A participant in the optional

22  annuity program may not participate in more than one

23  state-administered retirement system, plan, or class

24  simultaneously. The following shall apply to a participant who

25  is or becomes dually employed:

26         1.  A participant who is or becomes dually employed in

27  two or more positions covered by the Florida Retirement

28  System, one of which is eligible for the optional annuity

29  program and one of which is not, shall make one of the

30  following choices:

31

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  1         a.  Remain a member of the optional annuity program, in

  2  which case contributions shall be paid as required only on the

  3  salary earned in the position eligible for the optional

  4  annuity program during the period of dual employment;

  5         b.  Elect, within 90 days after becoming dually

  6  employed, membership in the Regular Class of the Florida

  7  Retirement System in lieu of the optional annuity program, in

  8  which case contributions shall be paid as required on the

  9  total salary received for all employment, and, at retirement,

10  the member's average final compensation used to calculate any

11  benefits for which he or she becomes eligible under the

12  Florida Retirement System shall be based on all salary

13  reported for all covered positions during the period of dual

14  employment; or

15         c.  If dually employed in an elected office eligible

16  for the Elected State and County Officers' Class, select,

17  within 6 months after assuming office, membership in the

18  Elected State and County Officers' Class, in which case,

19  participation in the optional annuity program shall cease for

20  the period of dual employment, retirement contributions shall

21  be paid as required only on the salary earned as an elected

22  officer, and, at retirement, the member's benefit under the

23  Florida Retirement System shall be based only on the salary

24  received as an elected officer for the period of dual

25  employment.

26         2.  When such member ceases to be dually employed, he

27  or she shall make one of the following choices:

28         a.  If the position in which he or she remains is a

29  position that is eligible for the optional annuity program, he

30  or she may, within 90 days after ceasing dual employment,

31  elect to remain in the Florida Retirement System class for

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  1  which he or she is eligible or to again become a participant

  2  in the optional annuity program. Failure to elect membership

  3  in the optional annuity program within 90 days shall result in

  4  compulsory membership in the Florida Retirement System; or

  5         b.  If the position in which he or she remains is not a

  6  position that is eligible for the optional annuity program, he

  7  or she shall participate in the Florida Retirement System

  8  class for which he or she is eligible.

  9         Section 2.  Subsection (12) and paragraph (c) of

10  subsection (29) of section 121.021, Florida Statutes, 1998

11  Supplement, are amended to read:

12         121.021  Definitions.--The following words and phrases

13  as used in this chapter have the respective meanings set forth

14  unless a different meaning is plainly required by the context:

15         (12)  "Member" means any officer or employee who is

16  covered or who becomes covered under this system in accordance

17  with this chapter.  On and after December 1, 1970, all new

18  members and those members transferring from existing systems

19  shall be divided into the following classes: "Special Risk

20  Class," as provided in s. 121.0515(2); "Special Risk

21  Administrative Support Class," as provided in s. 121.0515(7);

22  "Elected State and County Officers' Class," as provided in s.

23  121.052; "Senior Management and Exempt Service Class," as

24  provided in s. 121.055; and "Regular Class," which consists of

25  all members who are not in the Special Risk Class, Special

26  Risk Administrative Support Class, Elected State and County

27  Officers' Class, or Senior Management and Exempt Service

28  Class.

29         (29)  "Normal retirement date" means the first day of

30  any month following the date a member attains one of the

31  following statuses:

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  1         (c)  If a Senior Management and Exempt Service Class

  2  member, the member:

  3         1.  Completes 7 years of creditable service in the

  4  Senior Management and Exempt Service Class and attains age 62;

  5  or

  6         2.  Completes 30 years of any creditable service,

  7  regardless of age, which may include a maximum of 4 years of

  8  military service credit as long as such credit is not claimed

  9  under any other system.

10         Section 3.  Paragraph (c) of subsection (2) and

11  subsection (9) of section 121.051, Florida Statutes, 1998

12  Supplement, are amended to read:

13         121.051  Participation in the system.--

14         (2)  OPTIONAL PARTICIPATION.--

15         (c)  Employees of members of the State Community

16  College System or charter technical career centers sponsored

17  by members of the State Community College System, as

18  designated in s. 240.3031, who are members of the Regular

19  Class of the Florida Retirement System and who comply with the

20  criteria set forth in this paragraph and in s. 240.3195 may

21  elect, in lieu of participating in the Florida Retirement

22  System, to withdraw from the Florida Retirement System

23  altogether and participate in a lifetime monthly annuity

24  program, to be known as the State Community College System

25  Optional Retirement Program, which may be provided by the

26  employing agency under s. 240.3195. Pursuant thereto:

27         1.  The cost to the employer for such annuity shall

28  equal the normal cost portion of the employer retirement

29  contribution which would be required if the employee were a

30  member of the Regular Class, plus the portion of the

31  contribution rate required by s. 112.363(8) that would

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  1  otherwise be assigned to the Retiree Health Insurance Subsidy

  2  Trust Fund, and less an amount approved by the employer to

  3  provide for the administration of the optional retirement

  4  program.  The employer providing such annuity shall contribute

  5  an additional amount to the Florida Retirement System Trust

  6  Fund equal to the unfunded actuarial accrued liability portion

  7  of the Regular Class contribution rate.

  8         2.  The decision to participate in such an optional

  9  retirement program shall be irrevocable for as long as the

10  employee holds a position eligible for participation.  Any

11  service creditable under the Florida Retirement System shall

12  be retained after the member withdraws from the Florida

13  Retirement System; however, additional service credit in the

14  Florida Retirement System shall not be earned while a member

15  of the optional retirement program.

16         3.  Participation in an optional annuity program shall

17  be limited to those employees who satisfy the following

18  eligibility criteria:

19         a.  The employee must be otherwise eligible for

20  membership in the Regular Class of the Florida Retirement

21  System, as provided in s. 121.021(11) and (12).

22         b.  The employee must be employed in a full-time

23  position classified in the Accounting Manual for Florida's

24  Public Community Colleges as:

25         (I)  Instructional; or

26         (II)  Executive Management, Instructional Management,

27  or Institutional Management, if a community college determines

28  that recruiting to fill a vacancy in the position is to be

29  conducted in the national or regional market, and:

30

31

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  1         (A)  The duties and responsibilities of the position

  2  include either the formulation, interpretation, or

  3  implementation of policies; or

  4         (B)  The duties and responsibilities of the position

  5  include the performance of functions that are unique or

  6  specialized within higher education and that frequently

  7  involve the support of the mission of the community college.

  8         c.  The employee must be employed in a position not

  9  included in the Senior Management and Exempt Service Class of

10  the Florida Retirement System, as described in s. 121.055.

11         4.  Participants in the program are subject to the same

12  reemployment limitations, renewed membership provisions, and

13  forfeiture provisions as are applicable to regular members of

14  the Florida Retirement System under ss. 121.091(9), 121.122,

15  and 121.091(5), respectively.

16         5.  Eligible community college employees shall be

17  compulsory members of the Florida Retirement System until,

18  pursuant to the procedures set forth in s. 240.3195, the first

19  day of the next full calendar month following the filing of

20  both a written election to withdraw and a completed

21  application for an individual contract or certificate with the

22  program administrator and receipt of such election by the

23  division.

24         (9)  DUAL EMPLOYMENT.--A member may not participate in

25  more than one state-administered retirement system, plan, or

26  class of membership simultaneously. Pursuant thereto:

27         (a)  With respect to any member who is not eligible to

28  participate in the Elected State and County Officers' Class,

29  but who is simultaneously employed in two or more positions

30  covered by different Florida Retirement System classes:

31

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  1         1.  The member must participate in the membership class

  2  for the position in which he or she is employed the majority

  3  of the time: the Regular Class, Senior Management and Exempt

  4  Service Class, Special Risk Class, or Special Risk

  5  Administrative Support Class; or

  6         2.  If the employment is split equally between or among

  7  positions, the member may choose any single class of

  8  membership for which he or she is eligible, whether or not the

  9  positions are full-time positions. The member's choice must be

10  made in writing and remains in effect as long as the member is

11  employed equally in two or more positions.

12         (b)  Contributions shall be made and creditable service

13  shall be determined as follows:

14         1.  If the member is participating in the Regular

15  Class, retirement contributions shall be made on the total

16  salary the member has received for all covered employment, and

17  at retirement the member's average final compensation shall be

18  calculated on the total salary received from all covered

19  employment.

20         2.  If the member is participating in the Senior

21  Management and Exempt Service Class, Special Risk Class, or

22  Special Risk Administrative Support Class, retirement

23  contributions shall be made only on the salary received in the

24  designated class of membership. At retirement, the member's

25  average final compensation shall be based only on the salary

26  received in the designated class of membership for any period,

27  including any period of dual employment.

28         Section 4.  Paragraph (c) of subsection (3) of section

29  121.052, Florida Statutes, 1998 Supplement, is amended to

30  read:

31         121.052  Membership class of elected officers.--

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  1         (3)  PARTICIPATION AND WITHDRAWAL,

  2  GENERALLY.--Effective July 1, 1990, participation in the

  3  Elected State and County Officers' Class shall be compulsory

  4  for elected officers listed in paragraphs (2)(a)-(d) and (f)

  5  assuming office on or after said date, unless the elected

  6  officer elects membership in another class or withdraws from

  7  the Florida Retirement System as provided in paragraphs

  8  (3)(a)-(d):

  9         (c)  Any elected officer may, within 6 months after

10  assuming office, or within 6 months after this act becomes a

11  law for serving elected officers, elect membership in the

12  Senior Management and Exempt Service Class as provided in s.

13  121.055 in lieu of membership in the Elected State and County

14  Officers' Class. Any such election made by a county elected

15  officer shall have no effect upon the statutory limit on the

16  number of nonelective full-time positions that may be

17  designated by a local agency employer for inclusion in the

18  Senior Management and Exempt Service Class under s.

19  121.055(1)(b)1.

20         Section 5.  Subsections (1) and (2) and paragraph (a)

21  of subsection (3) of section 121.091, Florida Statutes, 1998

22  Supplement, are amended to read:

23         121.091  Benefits payable under the system.--Benefits

24  may not be paid under this section unless the member has

25  terminated employment as provided in s. 121.021(39)(a) or

26  begun participation in the Deferred Retirement Option Program

27  as provided in subsection (13), and a proper application has

28  been filed in the manner prescribed by the division. The

29  division may cancel an application for retirement benefits

30  when the member or beneficiary fails to timely provide the

31  information and documents required by this chapter and the

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  1  division's rules. The division shall adopt rules establishing

  2  procedures for application for retirement benefits and for the

  3  cancellation of such application when the required information

  4  or documents are not received.

  5         (1)  NORMAL RETIREMENT BENEFIT.--Upon attaining his or

  6  her normal retirement date, the member, upon application to

  7  the administrator, shall receive a monthly benefit which shall

  8  begin to accrue on the first day of the month of retirement

  9  and be payable on the last day of that month and each month

10  thereafter during his or her lifetime. The normal retirement

11  benefit, including any past or additional retirement credit,

12  may not exceed 100 percent of the average final compensation.

13  The amount of monthly benefit shall be calculated as the

14  product of A and B, subject to the adjustment of C, if

15  applicable, as set forth below:

16         (a)1.  For creditable years of Regular Class service, A

17  is 1.60 percent of the member's average final compensation, up

18  to the member's normal retirement date. Upon completion of the

19  first year after the normal retirement date, A is 1.63 percent

20  of the member's average final compensation.  Following the

21  second year after the normal retirement date, A is 1.65

22  percent of the member's average final compensation. Following

23  the third year after the normal retirement date, and for

24  subsequent years, A is 1.68 percent of the member's average

25  final compensation.

26         2.  For creditable years of special risk service, A is:

27         a.  Two percent of the member's average final

28  compensation for all creditable years prior to October 1,

29  1974;

30

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  1         b.  Three percent of the member's average final

  2  compensation for all creditable years after September 30,

  3  1974, and before October 1, 1978;

  4         c.  Two percent of the member's average final

  5  compensation for all creditable years after September 30,

  6  1978, and before January 1, 1989;

  7         d.  Two and two-tenths percent of the member's final

  8  monthly compensation for all creditable years after December

  9  31, 1988, and before January 1, 1990;

10         e.  Two and four-tenths percent of the member's average

11  final compensation for all creditable years after December 31,

12  1989, and before January 1, 1991;

13         f.  Two and six-tenths percent of the member's average

14  final compensation for all creditable years after December 31,

15  1990, and before January 1, 1992;

16         g.  Two and eight-tenths percent of the member's

17  average final compensation for all creditable years after

18  December 31, 1991, and before January 1, 1993; and

19         h.  Three percent of the member's average final

20  compensation for all creditable years after December 31, 1992;

21         3.  For creditable years of Senior Management and

22  Exempt Service Class service after January 31, 1987, A is 2

23  percent;

24         4.  For creditable years of Elected State and County

25  Officers' Class service as a Supreme Court Justice, district

26  court of appeal judge, circuit judge, or county court judge, A

27  is 3  1/3  percent of the member's average final compensation,

28  and for all other creditable service in such class, A is 3

29  percent of average final compensation.;

30

31

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  1         (b)  B is the number of the member's years and any

  2  fractional part of a year of creditable service earned

  3  subsequent to November 30, 1970.; and

  4         (c)  C is the normal retirement benefit credit brought

  5  forward as of November 30, 1970, by a former member of an

  6  existing system.  Such normal retirement benefit credit shall

  7  be determined as the product of X and Y when X is the

  8  percentage of average final compensation which the member

  9  would have been eligible to receive if the member had attained

10  his or her normal retirement date as of November 30, 1970, all

11  in accordance with the existing system under which the member

12  is covered on November 30, 1970, and Y is average final

13  compensation as defined in s. 121.021(25).  However, any

14  member of an existing retirement system who is eligible to

15  retire and who does retire, become disabled, or die prior to

16  April 15, 1971, may have his or her retirement benefits

17  calculated on the basis of the best 5 of the last 10 years of

18  service.

19         (d)  A member's average final compensation shall be

20  determined by formula to obtain the coverage for the 5 highest

21  fiscal years' salaries, calculated as provided by rule.

22         (2)  BENEFITS PAYABLE FOR DUAL NORMAL RETIREMENT

23  AGES.--If a member accumulates retirement benefits to commence

24  at different normal retirement ages by virtue of having

25  performed duties for an employer which would entitle him or

26  her to benefits as both a member of the Special Risk Class and

27  a member of either the Regular Class, Senior Management and

28  Exempt Service Class, or Elected State and County Officers'

29  Class, the amount of benefits payable shall be computed

30  separately with respect to each such age and the sum of such

31  computed amounts shall be paid as provided in this section.

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  1         (3)  EARLY RETIREMENT BENEFIT.--Upon retirement on his

  2  or her early retirement date, the member shall receive an

  3  immediate monthly benefit that shall begin to accrue on the

  4  first day of the month of the retirement date and be payable

  5  on the last day of that month and each month thereafter during

  6  his or her lifetime.  Such benefit shall be calculated as

  7  follows:

  8         (a)  The amount of each monthly payment shall be

  9  computed in the same manner as for a normal retirement

10  benefit, in accordance with subsection (1), but shall be based

11  on the member's average monthly compensation and creditable

12  service as of the member's early retirement date.  The benefit

13  so computed shall be reduced by five-twelfths of 1 percent for

14  each complete month by which the early retirement date

15  precedes the normal retirement date of age 62 for a member of

16  the Regular Class, Senior Management and Exempt Service Class,

17  or the Elected State and County Officers' Class, and age 55

18  for a member of the Special Risk Class, or age 52 if a Special

19  Risk member has completed 25 years of creditable service in

20  accordance with s. 121.021(29)(b)3.

21         Section 6.  Section 121.122, Florida Statutes, 1998

22  Supplement, is amended to read:

23         121.122  Renewed membership in system.--Except as

24  provided in s. 121.053, effective July 1, 1991, any retiree of

25  a state-administered retirement system who is employed in a

26  regularly established position with a covered employer shall

27  be enrolled as a compulsory member of the Regular Class of the

28  Florida Retirement System or, effective July 1, 1997, any

29  retiree of a state-administered retirement system who is

30  employed in a position included in the Senior Management and

31  Exempt Service Class shall be enrolled as a compulsory member

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  1  of the Senior Management and Exempt Service Class of the

  2  Florida Retirement System as provided in s. 121.055, and shall

  3  be entitled to receive an additional retirement benefit,

  4  subject to the following conditions:

  5         (1)(a)  Such member shall resatisfy the age and service

  6  requirements as provided in this chapter for initial

  7  membership under the system, unless such member elects to

  8  participate in the Senior Management Service Optional Annuity

  9  Program in lieu of the Senior Management and Exempt Service

10  Class, as provided in s. 121.055(6).

11         (b)  Such member shall not be entitled to disability

12  benefits as provided in s. 121.091(4).

13         (c)  Such member must meet the reemployment after

14  retirement limitations as provided in s. 121.091(9), as

15  applicable.

16         (2)  Upon renewed membership, the employer of such

17  member shall pay the applicable employer contributions as

18  required by ss. 121.055(3) and 121.071(1)(a) and (4).

19         (3)  Such member shall be entitled to purchase

20  additional retirement credit in the Regular Class or the

21  Senior Management and Exempt Service Class, as applicable, for

22  any postretirement service performed in a regularly

23  established position as follows:

24         (a)  For regular class service prior to July 1, 1991,

25  by paying the Regular Class applicable employee and employer

26  contributions for the period being claimed, plus 4 percent

27  interest compounded annually from first year of service

28  claimed until July 1, 1975, and 6.5 percent interest

29  compounded thereafter, until full payment is made to the

30  Florida Retirement System Trust Fund; or

31

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  1         (b)  For Senior Management Service Class prior to June

  2  1, 1997, as provided in s. 121.055(1)(h).

  3

  4  The contribution for postretirement service between July 1,

  5  1985, and July 1, 1991, for which the reemployed retiree

  6  contribution was paid, shall be the difference between such

  7  contribution and the total applicable contribution for the

  8  period being claimed, plus interest.  The employer of such

  9  member may pay the applicable employer contribution in lieu of

10  the member. If a member does not wish to claim credit for all

11  of the postretirement service for which he or she is eligible,

12  the service the member claims must be the most recent service.

13         (4)  No creditable service for which credit was

14  received, or which remained unclaimed, at retirement may be

15  claimed or applied toward service credit earned following

16  renewed membership.  However, service earned as an elected

17  officer with renewed membership in the Elected State and

18  County Officers' Class may be used in conjunction with

19  creditable service earned under this section, provided the

20  applicable vesting requirements and other existing statutory

21  conditions required by this chapter are met.

22         (5)  Notwithstanding any other limitations provided in

23  this section, a participant of the State University System

24  Optional Retirement Program or the Senior Management Service

25  Optional Annuity Program who terminated employment and

26  commenced receiving an annuity under the provisions of the

27  optional program, who renews membership in the Regular Class

28  as required by this section upon reemployment after

29  retirement, and who had previously earned creditable Florida

30  Retirement System service that was not included in any

31  retirement benefit may include such previous service toward

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  1  vesting and service credit in the second career benefit

  2  provided under renewed membership.

  3         (6)  Any renewed member who is not receiving the

  4  maximum health insurance subsidy provided in s. 112.363 shall

  5  be entitled to earn additional credit toward the maximum

  6  health insurance subsidy. Any additional subsidy due because

  7  of such additional credit shall be received only at the time

  8  of payment of the second career retirement benefit.  In no

  9  case shall the total health insurance subsidy received by a

10  retiree receiving benefits from initial and renewed membership

11  exceed the maximum allowed in s. 112.363.

12         Section 7.  This act shall take effect July 1, 2000.

13

14            *****************************************

15                          SENATE SUMMARY

16    Renames the Senior Management Service Class as the Senior
      Management and Exempt Service Class. Provides for state
17    employees in the Selected Exempt Service System and other
      employees who are exempt from the Career Service System
18    to participate in the Senior Management and Exempt
      Service Class. Authorizes such members to elect to
19    participate in the Senior Management Service Optional
      Annuity Program.
20

21

22

23

24

25

26

27

28

29

30

31

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