Senate Bill sb1542

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    Florida Senate - 2004                                  SB 1542

    By Senator Campbell





    32-738-04

  1                      A bill to be entitled

  2         An act relating to the Florida Retirement

  3         System; amending s. 121.021, F.S.; defining the

  4         term "public school member" for purposes of the

  5         system; amending s. 121.091, F.S.; providing

  6         retirement benefits payable to public school

  7         members; providing retroactive applicability;

  8         providing for funding of the revision of the

  9         Florida Retirement System by this act;

10         providing a finding of important state

11         interest; providing an effective date.

12  

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

14  

15         Section 1.  Subsection (62) is added to section

16  121.021, Florida Statutes, to read:

17         121.021  Definitions.--The following words and phrases

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

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

20         (62)  "Public school member" means a member of the

21  Florida Retirement System Regular Class who is employed by a

22  district school system, a public charter school, or the

23  Florida School for the Deaf and the Blind.

24         Section 2.  Subsection (1) of section 121.091, Florida

25  Statutes, is amended to read:

26         121.091  Benefits payable under the system.--Benefits

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

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

29  begun participation in the Deferred Retirement Option Program

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

31  been filed in the manner prescribed by the department. The

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    Florida Senate - 2004                                  SB 1542
    32-738-04




 1  department may cancel an application for retirement benefits

 2  when the member or beneficiary fails to timely provide the

 3  information and documents required by this chapter and the

 4  department's rules. The department shall adopt rules

 5  establishing procedures for application for retirement

 6  benefits and for the cancellation of such application when the

 7  required information or documents are not received.

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

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

10  the administrator, shall receive a monthly benefit which shall

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

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

13  thereafter during his or her lifetime. The normal retirement

14  benefit, including any past or additional retirement credit,

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

16  The amount of monthly benefit shall be calculated as the

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

18  applicable, as set forth below:

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

20  A is 1.60 percent of the member's average final compensation,

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

22  the first year after the normal retirement date, A is 1.63

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

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

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

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

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

28  final compensation.

29         b.  For creditable years of Regular Class service,

30  public school members shall have A determined under the

31  provisions of sub-subparagraph 1.a. for service up to the

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    Florida Senate - 2004                                  SB 1542
    32-738-04




 1  "applicability date," and according to the following table for

 2  service earned after the "applicability date":

 3  

 4    Years of Regular             Benefit Accrual Rate

 5     Class Service

 6          0-6                            1.60%

 7          7-12                           1.75%

 8         13-18                           1.90%

 9        Over 18                          2.10%

10  

11  As used in this sub-subparagraph, the term "applicability

12  date" means July 1, 2005, adjusted as follows: for each year

13  of creditable service as a public school member earned after

14  the applicability date, 2 years will be subtracted from the

15  applicability date up to a maximum adjustment of 18 years.

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

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

18  compensation for all creditable years prior to October 1,

19  1974;

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

21  compensation for all creditable years after September 30,

22  1974, and before October 1, 1978;

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

24  compensation for all creditable years after September 30,

25  1978, and before January 1, 1989;

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

27  monthly compensation for all creditable years after December

28  31, 1988, and before January 1, 1990;

29  

30  

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    Florida Senate - 2004                                  SB 1542
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 1         e.  Two and four-tenths percent of the member's average

 2  final compensation for all creditable years after December 31,

 3  1989, and before January 1, 1991;

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

 5  final compensation for all creditable years after December 31,

 6  1990, and before January 1, 1992;

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

 8  average final compensation for all creditable years after

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

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

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

12  and

13         i.  Three percent of the member's average final

14  compensation for all creditable years of service after

15  September 30, 1978, and before January 1, 1993, for any

16  special risk member who retires after July 1, 2000, or any

17  member of the Special Risk Administrative Support Class

18  entitled to retain the special risk normal retirement date who

19  was a member of the Special Risk Class during the time period

20  and who retires after July 1, 2000.

21         3.  For creditable years of Senior Management Service

22  Class service after January 31, 1987, A is 2 percent;

23         4.  For creditable years of Elected Officers' Class

24  service as a Supreme Court Justice, district court of appeal

25  judge, circuit judge, or county court judge, A is 3 1/3

26  percent of the member's average final compensation, and for

27  all other creditable service in such class, A is 3 percent of

28  average final compensation;

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

30  fractional part of a year of creditable service earned

31  subsequent to November 30, 1970; and

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    Florida Senate - 2004                                  SB 1542
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 1         (c)  C is the normal retirement benefit credit brought

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

 3  existing system.  Such normal retirement benefit credit shall

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

 5  percentage of average final compensation which the member

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

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

 8  in accordance with the existing system under which the member

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

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

11  member of an existing retirement system who is eligible to

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

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

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

15  service.

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

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

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

19         Section 3.  It is the intent of the Legislature that

20  costs attributable to benefit increases for public school

21  members of the Florida Retirement System Regular Class shall

22  be funded by recognition of lump sums from the excess

23  actuarial assets of the Florida Retirement System Trust Fund

24  as follows:

25         (1)  For fiscal year 2005-2006, the lump sum to be

26  recognized shall be the lesser of:

27         (a)  The amount available under the rate stabilization

28  mechanism described in section 121.031, Florida Statutes; or

29         (b)  The amount needed to pay the annual cost

30  attributable to the increased benefit accrual rate for public

31  school members. The annual cost shall consist of the increase

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    Florida Senate - 2004                                  SB 1542
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 1  in normal cost for public school members, plus payment of the

 2  30-year amortization amount of the increase in the actuarial

 3  accrued liability attributable to the increase, equal to 2.51

 4  percent of the public school member payroll or $212 million

 5  for the fiscal year 2005-2006.

 6  

 7  If, after the recognition of excess actuarial assets pursuant

 8  to this subsection, there remains an unfunded cost, the

 9  contribution rate applicable to public school members shall be

10  increased by the difference between the annual cost and the

11  amount provided by the excess actuarial assets, unless the

12  Legislature provides an alternate funding mechanism.

13         (2) For fiscal years starting 2006-2007 and thereafter,

14  the Legislature shall, as provided in subsection (1), continue

15  to fund on an ongoing basis the annual cost attributable to

16  the formula improvements.

17         Section 4.  The Legislature finds that a proper and

18  legitimate state purpose is served when employees and retirees

19  of the state and of its political subdivisions, and the

20  dependents, survivors, and beneficiaries of such employees and

21  retirees, are extended the basic protections afforded by

22  governmental retirement systems that provide fair and adequate

23  benefits that are managed, administered, and funded in an

24  actuarially sound manner, as required by Section 14, Article X

25  of the State Constitution and part VII of chapter 112, Florida

26  Statutes. Therefore, the Legislature determines and declares

27  that this act fulfills an important state interest.

28         Section 5.  This act shall take effect July 1, 2005.

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    Florida Senate - 2004                                  SB 1542
    32-738-04




 1            *****************************************

 2                          SENATE SUMMARY

 3    Increases retirement benefits for members of the Florida
      Retirement System who are employed by a public school
 4    system, a charter school, or the Florida School for the
      Deaf and the Blind.
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