Senate Bill sb2210

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    Florida Senate - 2007                                  SB 2210

    By Senator Villalobos





    38-1861-07

  1                      A bill to be entitled

  2         An act relating to the Florida Retirement

  3         System; amending s. 121.091, F.S.; providing

  4         for calculation of retirement benefits payable

  5         to Regular Class members; providing for funding

  6         benefit increases for Regular Class members;

  7         providing a finding of important state

  8         interest; providing an effective date.

  9  

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

11  

12         Section 1.  Subsection (1) of section 121.091, Florida

13  Statutes, is amended to read:

14         121.091  Benefits payable under the system.--Benefits

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

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

17  begun participation in the Deferred Retirement Option Program

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

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

20  department may cancel an application for retirement benefits

21  when the member or beneficiary fails to timely provide the

22  information and documents required by this chapter and the

23  department's rules. The department shall adopt rules

24  establishing procedures for application for retirement

25  benefits and for the cancellation of such application when the

26  required information or documents are not received.

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

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

29  the administrator, shall receive a monthly benefit which shall

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

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

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    Florida Senate - 2007                                  SB 2210
    38-1861-07




 1  thereafter during his or her lifetime. The normal retirement

 2  benefit, including any past or additional retirement credit,

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

 4  The amount of monthly benefit shall be calculated as the

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

 6  applicable, as set forth below:

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

 8  is 3 1.60 percent of the member's average final compensation,

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

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

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

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

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

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

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

16  final compensation.

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

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

19  compensation for all creditable years prior to October 1,

20  1974;

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

22  compensation for all creditable years after September 30,

23  1974, and before October 1, 1978;

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

25  compensation for all creditable years after September 30,

26  1978, and before January 1, 1989;

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

28  monthly compensation for all creditable years after December

29  31, 1988, and before January 1, 1990;

30  

31  

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    Florida Senate - 2007                                  SB 2210
    38-1861-07




 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 - 2007                                  SB 2210
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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 2.  It is the intent of the Legislature that

20  costs attributable to benefit increases for Regular Class

21  members of the Florida Retirement System be funded by

22  recognition of lump sums from the excess actuarial assets of

23  the Florida Retirement System Trust Fund as follows:

24         (1)  For the 2007-2008 fiscal year, the lump sum to be

25  recognized shall be the lesser of:

26         (a)  The amount available under the rate stabilization

27  mechanism described in s. 121.031, Florida Statutes; or

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

29  attributable to the increased benefit accrual rate for Regular

30  Class members. The annual cost shall consist of the increase

31  in normal cost for Regular Class members plus payment of the

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    Florida Senate - 2007                                  SB 2210
    38-1861-07




 1  30-year amortization amount of the increase in the actuarial

 2  accrued liability attributable to the increase, equal to 2.04

 3  percent of the Regular Class member payroll. If, after the

 4  recognition of excess actuarial assets pursuant to this

 5  subsection, there remains an unfunded cost, the contribution

 6  rate applicable to Regular Class members shall be increased by

 7  the difference between the annual cost and the amount provided

 8  by the excess actuarial assets, unless the Legislature

 9  provides an alternate funding mechanism.

10         (2)  For fiscal years beginning with 2008-2009, the

11  Legislature shall, as provided in subsection (1), continue to

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

13  formula improvements.

14         Section 3.  The Legislature finds that a proper and

15  legitimate state purpose is served when employees and retirees

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

17  dependents, survivors, and beneficiaries of such employees and

18  retirees, are extended the basic protections afforded by

19  governmental systems that provide fair and adequate benefits

20  that are managed, administered, and funded in an actuarially

21  sound manner, as required by s. 14, Art. X of the State

22  Constitution and part VII of chapter 112, Florida Statutes.

23  Therefore, the Legislature determines and declares that this

24  act fulfills an important state interest.

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

26  

27            *****************************************

28                          SENATE SUMMARY

29    Increases the basic benefit for members of the Regular
      Class of the Florida Retirement System and repeals the
30    incremental increase in benefit when a member serves
      beyond his or her normal retirement date.
31  

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