Senate Bill sb1488

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    Florida Senate - 2007                                  SB 1488

    By the Committee on Governmental Operations





    585-468-07

  1                      A bill to be entitled

  2         An act relating to the Florida Retirement

  3         System; creating s. 121.047, F.S.;

  4         consolidating the operation of the Institute of

  5         Food and Agricultural Sciences Supplemental

  6         Retirement Program under the Florida Retirement

  7         System; providing for assumption of program

  8         liabilities and obligations; abolishing the

  9         Institute of Food and Agricultural Sciences

10         Supplemental Retirement Trust Fund; barring

11         program participants from membership in the

12         Florida Retirement System; amending s. 121.40,

13         F.S., relating to the establishment and

14         administration of the Institute of Food and

15         Agricultural Sciences Supplemental Retirement

16         Program; conforming provisions to changes made

17         by the act; redefining the term "trust fund"

18         for purposes of administering the program;

19         providing a rate of monthly contributions;

20         removing provisions relating to investments of

21         the program trust fund; providing a legislative

22         finding that the act fulfills an important

23         state interest; providing an effective date.

24  

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

26  

27         Section 1.  Section 121.047, Florida Statutes, is

28  created to read:

29         121.047  Consolidation of liabilities and assets;

30  Institute of Food and Agricultural Sciences Supplemental

31  Retirement Program; restriction.--

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    Florida Senate - 2007                                  SB 1488
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 1         (1)  Effective July 1, 2007, the Institute of Food and

 2  Agricultural Sciences Supplemental Retirement Program, as

 3  established under s. 121.40, shall be consolidated under the

 4  Florida Retirement System and the system shall assume:

 5         (a)  All liabilities related to the payment of

 6  supplemental monthly benefits to retired employees of the

 7  institute and their surviving beneficiaries; and

 8         (b)  All obligations in regard to funding and

 9  administering benefits accrued for the benefit of retired

10  employees of the institute and their surviving beneficiaries.

11         (2)  The administrator shall, as of July 1, 2007, cause

12  to be transferred to the trust fund of the Florida Retirement

13  System all assets of the Institute of Food and Agricultural

14  Sciences Supplemental Retirement Trust Fund, including moneys,

15  securities, and other property accumulated to date, as well as

16  all liabilities and obligations connected therewith. Upon such

17  transfer of assets, liabilities, and obligations, the

18  Institute of Food and Agricultural Sciences Supplemental

19  Retirement Trust Fund shall be abolished and the administrator

20  shall become the trustee of any funds transferred to the

21  Florida Retirement System.

22         (3)  Participation in the Institute of Food and

23  Agricultural Sciences Supplemental Retirement Program does not

24  constitute membership in the Florida Retirement System.

25         Section 2.  Section 121.40, Florida Statutes, is

26  amended to read:

27         121.40  Cooperative extension personnel at the

28  Institute of Food and Agricultural Sciences; supplemental

29  retirement benefits.--

30  

31  

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    Florida Senate - 2007                                  SB 1488
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 1         (1)  SHORT TITLE.--This section shall be known and may

 2  be cited as the "Institute of Food and Agricultural Sciences

 3  Supplemental Retirement Act."

 4         (2)  PURPOSE.--The purpose of this act is to provide a

 5  supplement to the monthly retirement benefits being paid under

 6  the federal Civil Service Retirement System to, or with

 7  respect to, certain retired employees of the Institute of Food

 8  and Agricultural Sciences at the University of Florida, whose

 9  positions were ineligible for coverage under a state-supported

10  retirement system.

11         (3)  DEFINITIONS.--The definitions provided in s.

12  121.021 shall not apply to this program section except when

13  specifically cited.  For the purposes of this section, the

14  following words or phrases have the respective meanings set

15  forth:

16         (a)  "Institute" means the Institute of Food and

17  Agricultural Sciences of the University of Florida.

18         (b)  "Department" means the Department of Management

19  Services.

20         (c)  "Participant" means any employee of the institute

21  who is eligible to receive a supplemental benefit under this

22  program as provided in subsection (4).

23         (d)  "Trust fund" means the Florida Retirement System

24  Institute of Food and Agricultural Sciences Supplemental

25  Retirement Trust Fund.

26         (e)  "Creditable service" means any service subsequent

27  to December 1, 1970, with the institute as a cooperative

28  extension employee holding both state and federal

29  appointments, that is credited for retirement purposes by the

30  institute toward a federal Civil Service Retirement System

31  annuity.

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    Florida Senate - 2007                                  SB 1488
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 1         (4)  ELIGIBILITY FOR SUPPLEMENT.--To be eligible for a

 2  benefit under this program pursuant to the provisions of this

 3  section, a person must meet all of the following eligibility

 4  criteria:

 5         (a)  The person must have held both state and federal

 6  appointments while employed at the institute, and have

 7  completed 10 years of creditable service with the institute,

 8  subsequent to December 1, 1970.

 9         (b)  The person must be participating in the federal

10  Civil Service Retirement System based on service at the

11  institute.

12         (c)  The person must have retired from the institute on

13  or after January 1, 1985, and must have been eligible for

14  benefits under the federal Civil Service Retirement System

15  commencing immediately upon the termination of service with

16  the institute.

17         (d)  The person must have attained the age of 62.

18         (e)  The person must not be entitled to any benefit

19  from a state-supported retirement system or from social

20  security based upon service as a cooperative extension

21  employee of the institute. Participation in the Institute of

22  Food and Agricultural Sciences Supplemental Retirement Program

23  shall not constitute membership in the Florida Retirement

24  System.

25         (f)  The person must have been employed with the

26  institute prior to, and on, July 1, 1983.

27         (5)  SUPPLEMENT AMOUNT.--The supplemental payment shall

28  provide a benefit to the retiree equal to the amount by which

29  the retirement annuity, without a survivor benefit, earned by

30  the employee under the federal Civil Service Retirement System

31  

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    Florida Senate - 2007                                  SB 1488
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 1  with respect to service as a cooperative extension employee of

 2  the institute after December 1, 1970, is inferior to:

 3         (a)  An amount equal to the option one retirement

 4  benefit that the employee would have been entitled to receive

 5  at his or her normal retirement age under the Florida

 6  Retirement System, attributable only to creditable service

 7  after December 1, 1970, as a cooperative extension employee of

 8  the institute, excluding any past or prior service credit, had

 9  such employee been a member of the Florida Retirement System;

10  plus

11         (b)  An amount equal to the primary insurance amount

12  that the individual employee would have been entitled to

13  receive under social security at age 62 had he or she been

14  covered for such employment, such amount to be computed in

15  accordance with the Social Security Act only with respect to

16  employment as a cooperative extension employee of the

17  institute after December 1, 1970.

18         (6)  PAYMENT OF SUPPLEMENT.--Any participant who

19  retires on or after January 1, 1985, from the federal Civil

20  Service Retirement System as a cooperative extension employee

21  of the institute at the University of Florida and who

22  satisfies all of the eligibility criteria specified in

23  subsection (4) shall be entitled to receive a supplemental

24  benefit under this program computed in accordance with

25  subsection (5), to begin July 1, 1985, or the month of

26  retirement, or the month in which the participant becomes age

27  62, whichever is later.  Upon application to the

28  administrator, the participant shall receive a monthly

29  supplemental benefit which shall commence on the last day of

30  the month of retirement and shall be payable on the last day

31  of the month thereafter during his or her lifetime. A

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    Florida Senate - 2007                                  SB 1488
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 1  participant may have federal income tax and health insurance

 2  premiums deducted from his or her monthly supplemental benefit

 3  in the same manner as provided in s. 121.091(14)(a) and (b)

 4  for monthly retirement benefits under the Florida Retirement

 5  System.

 6         (7)  OPTIONAL FORMS OF SUPPLEMENTAL RETIREMENT

 7  BENEFITS.--Prior to the receipt of the first monthly

 8  supplemental retirement payment under this program, a

 9  participant shall elect to receive the supplemental retirement

10  benefits to which he or she is entitled under subsection (6)

11  in accordance with s. 121.091(6).

12         (8)  DEATH BENEFITS.--

13         (a)  If the employment of a participant of this program

14  is terminated by reason of his or her death subsequent to the

15  completion of 10 years of creditable service with the

16  institute but prior to his or her actual retirement, such

17  10-year period having commenced on or after December 1, 1970,

18  it shall be assumed that the participant had met all of the

19  eligibility requirements under this section and had retired

20  from the federal Civil Service Retirement System and under

21  this section as of the date of death, having elected, in

22  accordance with subsection (7), the optional form of

23  supplemental payment most favorable to his or her beneficiary,

24  as determined by the administrator.  The monthly supplemental

25  benefit provided in this paragraph shall be paid to the

26  participant's beneficiary (spouse or other financial

27  dependent) upon such beneficiary's attaining the age of 62 and

28  shall be paid thereafter for the beneficiary's lifetime.

29         (b)  If a participant of this program dies subsequent

30  to his or her actual retirement under the federal Civil

31  Service Retirement System but prior to attaining age 62, and

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    Florida Senate - 2007                                  SB 1488
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 1  such participant was otherwise eligible for supplemental

 2  benefits under this section, it shall be assumed that the

 3  participant had met all of the eligibility requirements under

 4  this section and had retired as of the date of death, having

 5  elected, in accordance with subsection (7), the optional form

 6  of supplemental payment most favorable to his or her

 7  beneficiary, as determined by the administrator.  The monthly

 8  supplemental benefit provided in this paragraph shall be paid

 9  to the participant's beneficiary (spouse or other financial

10  dependent) upon such beneficiary's attaining the age of 62 and

11  shall be paid thereafter for the beneficiary's lifetime.

12         (9)  DESIGNATION OF BENEFICIARIES.--Each participant of

13  this program may designate beneficiaries in accordance with s.

14  121.091(8).

15         (10)  COST-OF-LIVING ADJUSTMENT OF SUPPLEMENTAL

16  BENEFITS.--On each July 1, the supplemental benefit of each

17  retired participant of this program and each annuitant thereof

18  shall be adjusted as provided in s. 121.101.

19         (11)  EMPLOYMENT AFTER RETIREMENT: LIMITATION.--Any

20  person who is receiving a supplemental retirement benefit

21  under this program section may be reemployed by any private or

22  public employer after retirement and receive supplemental

23  retirement benefits pursuant to this section and compensation

24  from his or her employer, without any limitations.  However,

25  if a retired participant who is receiving a supplemental

26  retirement benefit under this section is reemployed at the

27  institute in a position as a cooperative extension employee of

28  the institute, he or she shall forfeit all rights to

29  supplemental retirement benefits in accordance with the

30  eligibility provisions of paragraph (4)(e).

31         (12)  CONTRIBUTIONS.--

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    Florida Senate - 2007                                  SB 1488
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 1         (a)  For the purpose purposes of funding the

 2  supplemental benefits provided by this section, the institute

 3  is authorized and required to pay, commencing July 1, 1985,

 4  the necessary monthly contributions from its appropriated

 5  budget. These amounts shall be paid into the Florida

 6  Retirement System Institute of Food and Agricultural Sciences

 7  Supplemental Retirement Trust Fund, which is hereby created.

 8         (b)  The monthly contributions required to be paid

 9  pursuant to paragraph (a) on the gross monthly salaries, from

10  all sources with respect to such employment, paid to those

11  employees of the institute who hold both state and federal

12  appointments and who participate in the federal Civil Service

13  Retirement System shall be as follows:

14  

15  Dates of Contribution                              Percentage

16    Rate Changes                                        Due

17  July 1, 1985, through December 31, 1988              6.68%

18  January 1, 1989, through December 31, 1993           6.35%

19  January 1, 1994, through December 31, 1994           6.69%

20  January 1, 1995, through June 30, 1996               6.82%

21  July 1, 1996, through June 30, 1998                  5.64%

22  July 1, 1998, through June 30, 2001                  7.17%

23  July 1, 2001, through June 30, 2003                  6.96%

24  July 1, 2003, through June 30, 2005                  13.83%

25  Effective July 1, 2005, through June 30, 2007        20.23%

26  Effective July 1, 2007                               14.23%

27  

28         (13)  INVESTMENT OF THE TRUST FUND.--

29         (a)  The State Board of Administration shall invest and

30  reinvest available funds of the trust fund in accordance with

31  the provisions of ss. 215.44-215.53.  The board shall consider

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    Florida Senate - 2007                                  SB 1488
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 1  investment techniques, such as contingent immunization or the

 2  development of a dedicated portfolio, which are directed

 3  toward developing minimum-risk procedures for supporting a

 4  prescribed liability schedule.

 5         (b)  Costs incurred in carrying out the provisions of

 6  this section shall be deducted from the interest earnings

 7  accruing to the trust fund.

 8         (13)(14)  ADMINISTRATION OF PROGRAM SYSTEM.--

 9         (a)  The department shall make such rules as are

10  necessary for the effective and efficient administration of

11  this program system.  The secretary of the department shall be

12  the administrator of the program system. The funds to pay the

13  expenses for such administration shall be appropriated from

14  the interest earned on investments made for the Florida

15  Retirement System Trust Fund.

16         (b)  The department may is authorized to require oaths,

17  by affidavit or otherwise, and acknowledgments from persons in

18  connection with the administration of its duties and

19  responsibilities under this section.

20         (c)  The administrator shall cause an actuarial study

21  of the system to be made at least once every 2 years and shall

22  report the results of such study to the next session of the

23  Legislature following completion of the study.

24         Section 3.  The Legislature finds that a proper and

25  legitimate state purpose is served when employees and retirees

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

27  dependents, survivors, and beneficiaries of such employees and

28  retirees, are extended the basic protections afforded by

29  governmental retirement systems that provide fair and adequate

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

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

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    Florida Senate - 2007                                  SB 1488
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 1  of the State Constitution and part VII of chapter 112 of the

 2  Florida Statutes. Therefore, the Legislature determines and

 3  declares that this act fulfills an important state interest.

 4         Section 4.  This act shall take effect July 1, 2007.

 5  

 6            *****************************************

 7                          SENATE SUMMARY

 8    Consolidates under the Florida Retirement System the
      operation of the Institute of Food and Agricultural
 9    Sciences Supplemental Retirement Program. Provides for
      the Florida Retirement System to assume the liabilities
10    and obligations of the institute's program. Abolishes the
      Institute of Food and Agricultural Sciences Supplemental
11    Retirement Trust Fund. Provides a rate of contribution.
      (See bill for details.)
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