HB 0483

CS

CHAMBER ACTION

1	The Governmental Operations Committee recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to the Florida Retirement System; amending
7	s. 121.055, F.S.; providing a specified period of time for
8	local government employees who are members of the Senior
9	Management Service Class who have withdrawn from the
10	Florida Retirement System to elect to participate in the
11	defined benefit program or the Public Employee Optional
12	Retirement Program of the system; prescribing requirements
13	in making such election; providing for payment of the
14	costs of such membership; amending s. 121.091, F.S.;
15	extending participation in the Deferred Retirement Option
16	Program to members who are employed as faculty or staff at
17	a state university while also being employed as
18	instructional personnel at the developmental research
19	school of that state university, provided the member has
20	received proper authorization; providing an effective
21	date.
22
23	Be It Enacted by the Legislature of the State of Florida:
24
25	Section 1.  Paragraph (b) of subsection (1) of section
26	121.055, Florida Statutes, is amended to read:
27	121.055  Senior Management Service Class.--There is hereby
28	established a separate class of membership within the Florida
29	Retirement System to be known as the "Senior Management Service
30	Class," which shall become effective February 1, 1987.
31	(1)
32	(b)1.  Except as provided in subparagraph 2., effective
33	January 1, 1990, participation in the Senior Management Service
34	Class shall be compulsory for the president of each community
35	college, the manager of each participating city or county, and
36	all appointed district school superintendents. Effective January
37	1, 1994, additional positions may be designated for inclusion in
38	the Senior Management Service Class of the Florida Retirement
39	System, provided that:
40	a.  Positions to be included in the class shall be
41	designated by the local agency employer. Notice of intent to
42	designate positions for inclusion in the class shall be
43	published once a week for 2 consecutive weeks in a newspaper of
44	general circulation published in the county or counties
45	affected, as provided in chapter 50.
46	b.  Up to 10 nonelective full-time positions may be
47	designated for each local agency employer reporting to the
48	Department of Management Services; for local agencies with 100
49	or more regularly established positions, additional nonelective
50	full-time positions may be designated, not to exceed 1 percent
51	of the regularly established positions within the agency.
52	c.  Each position added to the class must be a managerial
53	or policymaking position filled by an employee who is not
54	subject to continuing contract and serves at the pleasure of the
55	local agency employer without civil service protection, and who:
56	(I)  Heads an organizational unit; or
57	(II)  Has responsibility to effect or recommend personnel,
58	budget, expenditure, or policy decisions in his or her areas of
59	responsibility.
60	2.  In lieu of participation in the Senior Management
61	Service Class, members of the Senior Management Service Class
62	pursuant to the provisions of subparagraph 1. may withdraw from
63	the Florida Retirement System altogether. The decision to
64	withdraw from the Florida Retirement System shall be irrevocable
65	for as long as the employee holds such a position. Any service
66	creditable under the Senior Management Service Class shall be
67	retained after the member withdraws from the Florida Retirement
68	System; however, additional service credit in the Senior
69	Management Service Class shall not be earned after such
70	withdrawal. Such members shall not be eligible to participate in
71	the Senior Management Service Optional Annuity Program.
72	3.  Effective January 1, 2006, and terminating June 30,
73	2006, an employee who has withdrawn from the Florida Retirement
74	System pursuant to subparagraph 2. shall have one opportunity to
75	elect to participate in either the defined benefit program of
76	the Florida Retirement System or the Public Employee Optional
77	Retirement Program.
78	a.  If an employee elects to participate in the Public
79	Employee Optional Retirement Program, membership shall be
80	prospective, and the applicable provisions of s. 121.4501(4)
81	shall govern the election.
82	b.  If an employee elects to participate in the defined
83	benefit program of the Florida Retirement System, the employee
84	shall, upon payment to the system trust fund of the amount
85	calculated under sub-sub-subparagraph (I), receive service
86	credit equal to his or her years of service under the local
87	optional retirement program.
88	(I)  The cost for such credit shall be an amount
89	representing the actuarial accrued liability for the affected
90	period of service. The cost shall be calculated using the
91	discount rate and other relevant actuarial assumptions that were
92	used to value the Florida Retirement System defined benefit plan
93	liabilities in the most recent actuarial valuation. The
94	calculation shall include any service previously maintained
95	under the defined benefit plan in addition to the period of
96	withdrawal. The actuarial accrued liability attributable to any
97	service already maintained under the defined benefit plan shall
98	be applied as a credit to total cost resulting from the
99	calculation. The division shall ensure that the transfer sum is
100	prepared using a formula and methodology certified by an
101	enrolled actuary.
102	(II)  The employee must transfer a sum representing the net
103	cost owed for the actuarial accrued liability in sub-sub-
104	subparagraph (I) immediately following the time of such
105	movement, determined assuming that attained service equals the
106	sum of service in the defined benefit program and the period of
107	withdrawal.
108	Section 2.  Paragraphs (a) and (b) of subsection (13) of
109	section 121.091, Florida Statutes, are amended to read:
110	121.091  Benefits payable under the system.--Benefits may
111	not be paid under this section unless the member has terminated
112	employment as provided in s. 121.021(39)(a) or begun
113	participation in the Deferred Retirement Option Program as
114	provided in subsection (13), and a proper application has been
115	filed in the manner prescribed by the department. The department
116	may cancel an application for retirement benefits when the
117	member or beneficiary fails to timely provide the information
118	and documents required by this chapter and the department's
119	rules. The department shall adopt rules establishing procedures
120	for application for retirement benefits and for the cancellation
121	of such application when the required information or documents
122	are not received.
123	(13)  DEFERRED RETIREMENT OPTION PROGRAM.--In general, and
124	subject to the provisions of this section, the Deferred
125	Retirement Option Program, hereinafter referred to as the DROP,
126	is a program under which an eligible member of the Florida
127	Retirement System may elect to participate, deferring receipt of
128	retirement benefits while continuing employment with his or her
129	Florida Retirement System employer. The deferred monthly
130	benefits shall accrue in the System Trust Fund on behalf of the
131	participant, plus interest compounded monthly, for the specified
132	period of the DROP participation, as provided in paragraph (c).
133	Upon termination of employment, the participant shall receive
134	the total DROP benefits and begin to receive the previously
135	determined normal retirement benefits. Participation in the DROP
136	does not guarantee employment for the specified period of DROP.
137	Participation in the DROP by an eligible member beyond the
138	initial 60-month period as authorized in this subsection shall
139	be on an annual contractual basis for all participants.
140	(a)  Eligibility of member to participate in the DROP.--All
141	active Florida Retirement System members in a regularly
142	established position, and all active members of either the
143	Teachers' Retirement System established in chapter 238 or the
144	State and County Officers' and Employees' Retirement System
145	established in chapter 122 which systems are consolidated within
146	the Florida Retirement System under s. 121.011, are eligible to
147	elect participation in the DROP provided that:
148	1.  The member is not a renewed member of the Florida
149	Retirement System under s. 121.122, or a member of the State
150	Community College System Optional Retirement Program under s.
151	121.051, the Senior Management Service Optional Annuity Program
152	under s. 121.055, or the optional retirement program for the
153	State University System under s. 121.35.
154	2.  Except as provided in subparagraph 6., election to
155	participate is made within 12 months immediately following the
156	date on which the member first reaches normal retirement date,
157	or, for a member who reaches normal retirement date based on
158	service before he or she reaches age 62, or age 55 for Special
159	Risk Class members, election to participate may be deferred to
160	the 12 months immediately following the date the member attains
161	57, or age 52 for Special Risk Class members. For a member who
162	first reached normal retirement date or the deferred eligibility
163	date described above prior to the effective date of this
164	section, election to participate shall be made within 12 months
165	after the effective date of this section. A member who fails to
166	make an election within such 12-month limitation period shall
167	forfeit all rights to participate in the DROP. The member shall
168	advise his or her employer and the division in writing of the
169	date on which the DROP shall begin. Such beginning date may be
170	subsequent to the 12-month election period, but must be within
171	the 60-month or, with respect to members who are instructional
172	personnel employed by the Florida School for the Deaf and the
173	Blind and who have received authorization by the Board of
174	Trustees of the Florida School for the Deaf and the Blind to
175	participate in the DROP beyond 60 months, or who are
176	instructional personnel as defined in s. 1012.01(2)(a)-(d) in
177	grades K-12 and who have received authorization by the district
178	school superintendent to participate in the DROP beyond 60
179	months, or who are employed as faculty or staff at a state
180	university while also being employed as instructional personnel
181	as defined in s. 1012.01(2) at the developmental research school
182	of that state university and who have received authorization
183	from both the state university's board of trustees and the
184	developmental research school's director, or, if the school has
185	no director, the school's principal, to participate in the DROP
186	beyond 60 months, the 96-month limitation period as provided in
187	subparagraph (b)1. When establishing eligibility of the member
188	to participate in the DROP for the 60-month or, with respect to
189	members who are instructional personnel employed by the Florida
190	School for the Deaf and the Blind and who have received
191	authorization by the Board of Trustees of the Florida School for
192	the Deaf and the Blind to participate in the DROP beyond 60
193	months, or who are employed as faculty or staff at a state
194	university while also being employed as instructional personnel
195	as defined in s. 1012.01(2) at the developmental research school
196	of that state university and who have received authorization
197	from both the state university's board of trustees and the
198	developmental research school's director, or, if the school has
199	no director, the school's principal, to participate in the DROP
200	beyond 60 months, or who are instructional personnel as defined
201	in s. 1012.01(2)(a)-(d) in grades K-12 and who have received
202	authorization by the district school superintendent to
203	participate in the DROP beyond 60 months, the 96-month maximum
204	participation period, the member may elect to include or exclude
205	any optional service credit purchased by the member from the
206	total service used to establish the normal retirement date. A
207	member with dual normal retirement dates shall be eligible to
208	elect to participate in DROP within 12 months after attaining
209	normal retirement date in either class.
210	3.  The employer of a member electing to participate in the
211	DROP, or employers if dually employed, shall acknowledge in
212	writing to the division the date the member's participation in
213	the DROP begins and the date the member's employment and DROP
214	participation will terminate.
215	4.  Simultaneous employment of a participant by additional
216	Florida Retirement System employers subsequent to the
217	commencement of participation in the DROP shall be permissible
218	provided such employers acknowledge in writing a DROP
219	termination date no later than the participant's existing
220	termination date or the 60-month limitation period as provided
221	in subparagraph (b)1.
222	5.  A DROP participant may change employers while
223	participating in the DROP, subject to the following:
224	a.  A change of employment must take place without a break
225	in service so that the member receives salary for each month of
226	continuous DROP participation. If a member receives no salary
227	during a month, DROP participation shall cease unless the
228	employer verifies a continuation of the employment relationship
229	for such participant pursuant to s. 121.021(39)(b).
230	b.  Such participant and new employer shall notify the
231	division on forms required by the division as to the identity of
232	the new employer.
233	c.  The new employer shall acknowledge, in writing, the
234	participant's DROP termination date, which may be extended but
235	not beyond the original 60-month or, with respect to members who
236	are instructional personnel employed by the Florida School for
237	the Deaf and the Blind and who have received authorization by
238	the Board of Trustees of the Florida School for the Deaf and the
239	Blind to participate in the DROP beyond 60 months, or who are
240	instructional personnel as defined in s. 1012.01(2)(a)-(d) in
241	grades K-12 and who have received authorization by the district
242	school superintendent to participate in the DROP beyond 60
243	months, or who are employed as faculty or staff at a state
244	university while also being employed as instructional personnel
245	as defined in s. 1012.01(2) at the developmental research school
246	of that state university and who have received authorization
247	from both the state university's board of trustees and the
248	developmental research school's director, or, if the school has
249	no director, the school's principal, to participate in the DROP
250	beyond 60 months, the 96-month period provided in subparagraph
251	(b)1., shall acknowledge liability for any additional retirement
252	contributions and interest required if the participant fails to
253	timely terminate employment, and shall be subject to the
254	adjustment required in sub-subparagraph (c)5.d.
255	6.  Effective July 1, 2001, for instructional personnel as
256	defined in s. 1012.01(2), election to participate in the DROP
257	shall be made at any time following the date on which the member
258	first reaches normal retirement date. The member shall advise
259	his or her employer and the division in writing of the date on
260	which the Deferred Retirement Option Program shall begin. When
261	establishing eligibility of the member to participate in the
262	DROP for the 60-month or, with respect to members who are
263	instructional personnel employed by the Florida School for the
264	Deaf and the Blind and who have received authorization by the
265	Board of Trustees of the Florida School for the Deaf and the
266	Blind to participate in the DROP beyond 60 months, or who are
267	instructional personnel as defined in s. 1012.01(2)(a)-(d) in
268	grades K-12 and who have received authorization by the district
269	school superintendent to participate in the DROP beyond 60
270	months, the 96-month maximum participation period, as provided
271	in subparagraph (b)1., the member may elect to include or
272	exclude any optional service credit purchased by the member from
273	the total service used to establish the normal retirement date.
274	A member with dual normal retirement dates shall be eligible to
275	elect to participate in either class.
276	(b)  Participation in the DROP.--
277	1.  An eligible member may elect to participate in the DROP
278	for a period not to exceed a maximum of 60 calendar months or,
279	with respect to members who are instructional personnel employed
280	by the Florida School for the Deaf and the Blind and who have
281	received authorization by the Board of Trustees of the Florida
282	School for the Deaf and the Blind to participate in the DROP
283	beyond 60 months, or who are instructional personnel as defined
284	in s. 1012.01(2)(a)-(d) in grades K-12 and who have received
285	authorization by the district school superintendent to
286	participate in the DROP beyond 60 calendar months, or who are
287	employed as faculty or staff at a state university while also
288	being employed as instructional personnel as defined in s.
289	1012.01(2) at the developmental research school of that state
290	university and who have received authorization from both the
291	state university's board of trustees and the developmental
292	research school's director, or, if the school has no director,
293	the school's principal, to participate in the DROP beyond 60
294	months, 96 calendar months immediately following the date on
295	which the member first reaches his or her normal retirement date
296	or the date to which he or she is eligible to defer his or her
297	election to participate as provided in subparagraph (a)2.
298	However, a member who has reached normal retirement date prior
299	to the effective date of the DROP shall be eligible to
300	participate in the DROP for a period of time not to exceed 60
301	calendar months or, with respect to members who are
302	instructional personnel employed by the Florida School for the
303	Deaf and the Blind and who have received authorization by the
304	Board of Trustees of the Florida School for the Deaf and the
305	Blind to participate in the DROP beyond 60 months, or who are
306	instructional personnel as defined in s. 1012.01(2)(a)-(d) in
307	grades K-12 and who have received authorization by the district
308	school superintendent to participate in the DROP beyond 60
309	calendar months, or who are employed as faculty or staff at a
310	state university while also being employed as instructional
311	personnel as defined in s. 1012.01(2) at the developmental
312	research school of that state university and who have received
313	authorization from both the state university's board of trustees
314	and the developmental research school's director, or, if the
315	school has no director, the school's principal, to participate
316	in the DROP beyond 60 months, 96 calendar months immediately
317	following the effective date of the DROP, except a member of the
318	Special Risk Class who has reached normal retirement date prior
319	to the effective date of the DROP and whose total accrued value
320	exceeds 75 percent of average final compensation as of his or
321	her effective date of retirement shall be eligible to
322	participate in the DROP for no more than 36 calendar months
323	immediately following the effective date of the DROP.
324	2.  Upon deciding to participate in the DROP, the member
325	shall submit, on forms required by the division:
326	a.  A written election to participate in the DROP;
327	b.  Selection of the DROP participation and termination
328	dates, which satisfy the limitations stated in paragraph (a) and
329	subparagraph 1. Such termination date shall be in a binding
330	letter of resignation with the employer, establishing a deferred
331	termination date. The member may change the termination date
332	within the limitations of subparagraph 1., but only with the
333	written approval of his or her employer;
334	c.  A properly completed DROP application for service
335	retirement as provided in this section; and
336	d.  Any other information required by the division.
337	3.  The DROP participant shall be a retiree under the
338	Florida Retirement System for all purposes, except for paragraph
339	(5)(f) and subsection (9) and ss. 112.3173, 112.363, 121.053,
340	and 121.122. However, participation in the DROP does not alter
341	the participant's employment status and such employee shall not
342	be deemed retired from employment until his or her deferred
343	resignation is effective and termination occurs as provided in
344	s. 121.021(39).
345	4.  Elected officers shall be eligible to participate in
346	the DROP subject to the following:
347	a.  An elected officer who reaches normal retirement date
348	during a term of office may defer the election to participate in
349	the DROP until the next succeeding term in that office. Such
350	elected officer who exercises this option may participate in the
351	DROP for up to 60 calendar months or a period of no longer than
352	such succeeding term of office, whichever is less.
353	b.  An elected or a nonelected participant may run for a
354	term of office while participating in DROP and, if elected,
355	extend the DROP termination date accordingly, except, however,
356	if such additional term of office exceeds the 60-month
357	limitation established in subparagraph 1., and the officer does
358	not resign from office within such 60-month limitation, the
359	retirement and the participant's DROP shall be null and void as
360	provided in sub-subparagraph (c)5.d.
361	c.  An elected officer who is dually employed and elects to
362	participate in DROP shall be required to satisfy the definition
363	of termination within the 60-month or, with respect to members
364	who are instructional personnel employed by the Florida School
365	for the Deaf and the Blind and who have received authorization
366	by the Board of Trustees of the Florida School for the Deaf and
367	the Blind to participate in the DROP beyond 60 months, or who
368	are instructional personnel as defined in s. 1012.01(2)(a)-(d)
369	in grades K-12 and who have received authorization by the
370	district school superintendent to participate in the DROP beyond
371	60 months, or who are employed as faculty or staff at a state
372	university while also being employed as instructional personnel
373	as defined in s. 1012.01(2) at the developmental research school
374	of that state university and who have received authorization
375	from both the state university's board of trustees and the
376	developmental research school's director, or, if the school has
377	no director, the school's principal, to participate in the DROP
378	beyond 60 months, the 96-month limitation period as provided in
379	subparagraph 1. for the nonelected position and may continue
380	employment as an elected officer as provided in s. 121.053. The
381	elected officer will be enrolled as a renewed member in the
382	Elected Officers' Class or the Regular Class, as provided in ss.
383	121.053 and 121.22, on the first day of the month after
384	termination of employment in the nonelected position and
385	termination of DROP. Distribution of the DROP benefits shall be
386	made as provided in paragraph (c).
387	Section 3.  This act shall take effect July 1, 2005.

CODING: Words stricken are deletions; words underlined are additions.