HB 657

1	A bill to be entitled
2	An act relating to the Florida Retirement System; amending
3	s. 121.091, F.S.; revises calculation of retirement
4	benefits payable to Regular Class members; providing for
5	funding benefit increases for Regular Class members;
6	providing a finding of important state interest; providing
7	an effective date.
8
9	Be It Enacted by the Legislature of the State of Florida:
10
11	Section 1.  Subsection (1) of section 121.091, Florida
12	Statutes, is amended to read:
13	121.091  Benefits payable under the system.--Benefits may
14	not be paid under this section unless the member has terminated
15	employment as provided in s. 121.021(39)(a) or begun
16	participation in the Deferred Retirement Option Program as
17	provided in subsection (13), and a proper application has been
18	filed in the manner prescribed by the department. The department
19	may cancel an application for retirement benefits when the
20	member or beneficiary fails to timely provide the information
21	and documents required by this chapter and the department's
22	rules. The department shall adopt rules establishing procedures
23	for application for retirement benefits and for the cancellation
24	of such application when the required information or documents
25	are not received.
26	(1)  NORMAL RETIREMENT BENEFIT.--Upon attaining his or her
27	normal retirement date, the member, upon application to the
28	administrator, shall receive a monthly benefit which shall begin
29	to accrue on the first day of the month of retirement and be
30	payable on the last day of that month and each month thereafter
31	during his or her lifetime. The normal retirement benefit,
32	including any past or additional retirement credit, may not
33	exceed 100 percent of the average final compensation. The amount
34	of monthly benefit shall be calculated as the product of A and
35	B, subject to the adjustment of C, if applicable, as set forth
36	below:
37	(a)1.  For creditable years of Regular Class service, A is
38	3.00 1.60 percent of the member's average final compensation, up
39	to the member's normal retirement date. Upon completion of the
40	first year after the normal retirement date, A is 1.63 percent
41	of the member's average final compensation.  Following the
42	second year after the normal retirement date, A is 1.65 percent
43	of the member's average final compensation. Following the third
44	year after the normal retirement date, and for subsequent years,
45	A is 1.68 percent of the member's average final compensation.
46	2.  For creditable years of special risk service, A is:
47	a.  Two percent of the member's average final compensation
48	for all creditable years prior to October 1, 1974;
49	b.  Three percent of the member's average final
50	compensation for all creditable years after September 30, 1974,
51	and before October 1, 1978;
52	c.  Two percent of the member's average final compensation
53	for all creditable years after September 30, 1978, and before
54	January 1, 1989;
55	d.  Two and two-tenths percent of the member's final
56	monthly compensation for all creditable years after December 31,
57	1988, and before January 1, 1990;
58	e.  Two and four-tenths percent of the member's average
59	final compensation for all creditable years after December 31,
60	1989, and before January 1, 1991;
61	f.  Two and six-tenths percent of the member's average
62	final compensation for all creditable years after December 31,
63	1990, and before January 1, 1992;
64	g.  Two and eight-tenths percent of the member's average
65	final compensation for all creditable years after December 31,
66	1991, and before January 1, 1993;
67	h.  Three percent of the member's average final
68	compensation for all creditable years after December 31, 1992;
69	and
70	i.  Three percent of the member's average final
71	compensation for all creditable years of service after September
72	30, 1978, and before January 1, 1993, for any special risk
73	member who retires after July 1, 2000, or any member of the
74	Special Risk Administrative Support Class entitled to retain the
75	special risk normal retirement date who was a member of the
76	Special Risk Class during the time period and who retires after
77	July 1, 2000.
78	3.  For creditable years of Senior Management Service Class
79	service after January 31, 1987, A is 2 percent.;
80	4.  For creditable years of Elected Officers' Class service
81	as a Supreme Court Justice, district court of appeal judge,
82	circuit judge, or county court judge, A is 31/3 percent of the
83	member's average final compensation, and for all other
84	creditable service in such class, A is 3 percent of average
85	final compensation.;
86	(b)  B is the number of the member's years and any
87	fractional part of a year of creditable service earned
88	subsequent to November 30, 1970.; and
89	(c)  C is the normal retirement benefit credit brought
90	forward as of November 30, 1970, by a former member of an
91	existing system.  Such normal retirement benefit credit shall be
92	determined as the product of X and Y when X is the percentage of
93	average final compensation which the member would have been
94	eligible to receive if the member had attained his or her normal
95	retirement date as of November 30, 1970, all in accordance with
96	the existing system under which the member is covered on
97	November 30, 1970, and Y is average final compensation as
98	defined in s. 121.021(25).  However, any member of an existing
99	retirement system who is eligible to retire and who does retire,
100	become disabled, or die prior to April 15, 1971, may have his or
101	her retirement benefits calculated on the basis of the best 5 of
102	the last 10 years of service.
103	(d)  A member's average final compensation shall be
104	determined by formula to obtain the coverage for the 5 highest
105	fiscal years' salaries, calculated as provided by rule.
106	Section 2.  It is the intent of the Legislature that costs
107	attributable to benefit increases for Regular Class members of
108	the Florida Retirement System be funded by recognition of lump
109	sums from the excess actuarial assets of the Florida Retirement
110	System Trust Fund as follows:
111	(1)  For the 2007-2008 fiscal year, the lump sum to be
112	recognized shall be the lesser of:
113	(a)  The amount available under the rate stabilization
114	mechanism described in s. 121.031, Florida Statutes; or
115	(b)  The amount needed to pay the annual cost attributable
116	to the increased benefit accrual rate for Regular Class members.
117	The annual cost shall consist of the increase in normal cost for
118	Regular Class members plus payment of the 30-year amortization
119	amount of the increase in the actuarial accrued liability
120	attributable to the increase, equal to 2.04 percent of the
121	Regular Class member payroll. If, after the recognition of
122	excess actuarial assets pursuant to this subsection, there
123	remains an unfunded cost, the contribution rate applicable to
124	Regular Class members shall be increased by the difference
125	between the annual cost and the amount provided by the excess
126	actuarial assets, unless the Legislature provides an alternate
127	funding mechanism.
128	(2)  For fiscal years beginning with 2008-2009, the
129	Legislature shall, as provided in subsection (1), continue to
130	fund on an ongoing basis the annual cost attributable to the
131	formula improvements.
132	Section 3.  The Legislature finds that a proper and
133	legitimate state purpose is served when employees and retirees
134	of the state and of its political subdivisions, and the
135	dependents, survivors, and beneficiaries of such employees and
136	retirees, are extended the basic protections afforded by
137	governmental systems that provide fair and adequate benefits
138	that are managed, administered, and funded in an actuarially
139	sound manner, as required by s. 14, Art. X of the State
140	Constitution and part VII of chapter 112, Florida Statutes.
141	Therefore, the Legislature determines and declares that this act
142	fulfills an important state interest.
143	Section 4.  This act shall take effect July 1, 2007.

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