HB 685

1
A bill to be entitled
2An act relating to the Florida Retirement System; amending
3s. 121.051, F.S.; revising criteria for participation in
4the State Community College System Optional Retirement
5Program by employees of public community colleges or
6charter technical career centers sponsored by public
7community colleges; amending s. 121.35, F.S.; authorizing
8certain employees who are members of the Florida
9Retirement System to elect membership in the State
10University System Optional Retirement Program; authorizing
11a one-time opportunity to transfer from the State
12University System Optional Retirement Program to the
13defined benefit program of the Florida Retirement System
14or to the Public Employee Optional Retirement Program;
15providing for transfer of retirement contributions,
16interest, and earnings; providing employees with service
17credit upon transferring into a new program; providing
18requirements for the calculation of service credit;
19requiring employees to transfer funds upon moving into a
20new program; amending s. 121.4501, F.S.; revising the
21definition of "eligible employee" for purposes of the
22Public Employee Optional Retirement Program; authorizing
23eligible employees to elect to participate in the Public
24Employee Optional Retirement Program in lieu of retaining
25their participation in the State University System
26Optional Retirement Program; providing an effective date.
27
28Be It Enacted by the Legislature of the State of Florida:
29
30     Section 1.  Paragraph (c) of subsection (2) of section
31121.051, Florida Statutes, is amended to read:
32     121.051  Participation in the system.--
33     (2)  OPTIONAL PARTICIPATION.--
34     (c)  Employees of public community colleges or charter
35technical career centers sponsored by public community colleges,
36as designated in s. 1000.21(3), who are members of the Regular
37Class of the Florida Retirement System and who comply with the
38criteria set forth in this paragraph and in s. 1012.875 may
39elect, in lieu of participating in the Florida Retirement
40System, to withdraw from the Florida Retirement System
41altogether and participate in an optional retirement program
42provided by the employing agency under s. 1012.875, to be known
43as the State Community College System Optional Retirement
44Program. Pursuant thereto:
45     1.  Through June 30, 2001, the cost to the employer for
46such annuity shall equal the normal cost portion of the employer
47retirement contribution which would be required if the employee
48were a member of the Regular Class defined benefit program, plus
49the portion of the contribution rate required by s. 112.363(8)
50that would otherwise be assigned to the Retiree Health Insurance
51Subsidy Trust Fund. Effective July 1, 2001, each employer shall
52contribute on behalf of each participant in the optional program
53an amount equal to 10.43 percent of the participant's gross
54monthly compensation. The employer shall deduct an amount to
55provide for the administration of the optional retirement
56program. The employer providing the optional program shall
57contribute an additional amount to the Florida Retirement System
58Trust Fund equal to the unfunded actuarial accrued liability
59portion of the Regular Class contribution rate.
60     2.  The decision to participate in such an optional
61retirement program shall be irrevocable for as long as the
62employee holds a position eligible for participation, except as
63provided in subparagraph 3. Any service creditable under the
64Florida Retirement System shall be retained after the member
65withdraws from the Florida Retirement System; however,
66additional service credit in the Florida Retirement System shall
67not be earned while a member of the optional retirement program.
68     3.  An employee who has elected to participate in the
69optional retirement program shall have one opportunity, at the
70employee's discretion, to choose to transfer from the optional
71retirement program to the defined benefit program of the Florida
72Retirement System or to the Public Employee Optional Retirement
73Program, subject to the terms of the applicable optional
74retirement program contracts.
75     a.  If the employee chooses to move to the Public Employee
76Optional Retirement Program, any contributions, interest, and
77earnings creditable to the employee under the State Community
78College System Optional Retirement Program shall be retained by
79the employee in the State Community College System Optional
80Retirement Program, and the applicable provisions of s.
81121.4501(4) shall govern the election.
82     b.  If the employee chooses to move to the defined benefit
83program of the Florida Retirement System, the employee shall
84receive service credit equal to his or her years of service
85under the State Community College Optional Retirement Program.
86     (I)  The cost for such credit shall be an amount
87representing the present value of that employee's accumulated
88benefit obligation for the affected period of service. The cost
89shall be calculated as if the benefit commencement occurs on the
90first date the employee would become eligible for unreduced
91benefits, using the discount rate and other relevant actuarial
92assumptions that were used to value the Florida Retirement
93System defined benefit plan liabilities in the most recent
94actuarial valuation. The calculation shall include any service
95already maintained under the defined benefit plan in addition to
96the years under the State Community College Optional Retirement
97Program. The present value of any service already maintained
98under the defined benefit plan shall be applied as a credit to
99total cost resulting from the calculation. The division shall
100ensure that the transfer sum is prepared using a formula and
101methodology certified by an enrolled actuary.
102     (II)  The employee must transfer from his or her State
103Community College System Optional Retirement Program account and
104from other employee moneys as necessary, a sum representing the
105present value of that employee's accumulated benefit obligation
106immediately following the time of such movement, determined
107assuming that attained service equals the sum of service in the
108defined benefit program and service in the State Community
109College System Optional Retirement Program.
110     4.  Participation in the optional retirement program shall
111be limited to those employees who satisfy the following
112eligibility criteria:
113     a.  The employee must be otherwise eligible for membership
114or renewed membership in the Regular Class of the Florida
115Retirement System, as provided in s. 121.021(11) and (12) or s.
116121.122.
117     b.  The employee must be employed in a full-time position
118classified in the Accounting Manual for Florida's Public
119Community Colleges as:
120     (I)  Instructional; or
121     (II)  Executive Management, Instructional Management, or
122Institutional Management, if a community college determines that
123recruiting to fill a vacancy in the position is to be conducted
124in the national or regional market, and:
125     (A)  The duties and responsibilities of the position
126include either the formulation, interpretation, or
127implementation of policies; or
128     (B)  The duties and responsibilities of the position
129include the performance of functions that are unique or
130specialized within higher education and that frequently involve
131the support of the mission of the community college.
132     c.  The employee must be employed in a position not
133included in the Senior Management Service Class of the Florida
134Retirement System, as described in s. 121.055.
135     5.  Participants in the program are subject to the same
136reemployment limitations, renewed membership provisions, and
137forfeiture provisions as are applicable to regular members of
138the Florida Retirement System under ss. 121.091(9), 121.122, and
139121.091(5), respectively.
140     6.  Eligible community college employees shall be
141compulsory members of the Florida Retirement System until,
142pursuant to the procedures set forth in s. 1012.875, a written
143election to withdraw from the Florida Retirement System and to
144participate in the State Community College Optional Retirement
145Program is filed with the program administrator and received by
146the division.
147     a.  Any community college employee whose program
148eligibility results from initial employment shall be enrolled in
149the State Community College Optional Retirement Program
150retroactive to the first day of eligible employment. The
151employer retirement contributions paid through the month of the
152employee plan change shall be transferred to the community
153college for the employee's optional program account, and,
154effective the first day of the next month, the employer shall
155pay the applicable contributions based upon subparagraph 1.
156     b.  Any community college employee whose program
157eligibility results from a change in status due to the
158subsequent designation of the employee's position as one of
159those specified in subparagraph 4. or due to the employee's
160appointment, promotion, transfer, or reclassification to a
161position specified in subparagraph 4. shall be enrolled in the
162program upon the first day of the first full calendar month that
163such change in status becomes effective. The employer retirement
164contributions paid from the effective date through the month of
165the employee plan change shall be transferred to the community
166college for the employee's optional program account, and,
167effective the first day of the next month, the employer shall
168pay the applicable contributions based upon subparagraph 1.
169     7.  Effective July 1, 2003, any participant of the State
170Community College Optional Retirement Program who has service
171credit in the defined benefit plan of the Florida Retirement
172System for the period between his or her first eligibility to
173transfer from the defined benefit plan to the optional
174retirement program and the actual date of transfer may, during
175his or her employment, elect to transfer to the optional
176retirement program a sum representing the present value of the
177accumulated benefit obligation under the defined benefit
178retirement program for such period of service credit. Upon such
179transfer, all such service credit previously earned under the
180defined benefit program of the Florida Retirement System during
181this period shall be nullified for purposes of entitlement to a
182future benefit under the defined benefit program of the Florida
183Retirement System.
184     Section 2.  Paragraph (a) of subsection (2) and paragraphs
185(e) and (g) of subsection (3) of section 121.35, Florida
186Statutes, are amended, and paragraph (i) is added to subsection
187(3) of that section, to read:
188     121.35  Optional retirement program for the State
189University System.--
190     (2)  ELIGIBILITY FOR PARTICIPATION IN OPTIONAL PROGRAM.--
191     (a)  Participation in the optional retirement program
192provided by this section shall be limited to persons who are
193otherwise eligible for membership or renewed membership in the
194Florida Retirement System and who are employed in one of the
195following State University System positions:
196     1.  Positions classified as instructional and research
197faculty which are exempt from the career service under the
198provisions of s. 110.205(2)(d).
199     2.  Positions classified as administrative and professional
200which are exempt from the career service under the provisions of
201s. 110.205(2)(d).
202     3.  The Chancellor and the university presidents.
203     (3)  ELECTION OF OPTIONAL PROGRAM.--
204     (e)  The election by an eligible employee to participate in
205the optional retirement program shall be irrevocable for so long
206as the employee continues to meet the eligibility requirements
207specified in subsection (2), except as provided in paragraphs
208paragraph (h) and (i). In the event that an employee
209participates in the optional retirement program for 90 days or
210more and is subsequently employed in an administrative or
211professional position which has been determined by the
212department, under subparagraph (2)(a)2., to be not otherwise
213eligible for participation in the optional retirement program,
214the employee shall continue participation in the optional
215program so long as the employee meets the other eligibility
216requirements for the program, except as provided in paragraphs
217paragraph (h) and (i).
218     (g)  An eligible employee who is a member of the Florida
219Retirement System at the time of election to participate in the
220optional retirement program shall retain all retirement service
221credit earned under the Florida Retirement System, at the rate
222earned. No additional service credit in the Florida Retirement
223System shall be earned while the employee participates in the
224optional program, nor shall the employee be eligible for
225disability retirement under the Florida Retirement System. An
226eligible employee may transfer from the Florida Retirement
227System to his or her accounts under the optional retirement
228program a sum representing the present value of the employee's
229accumulated benefit obligation under the defined benefit program
230of the Florida Retirement System for any service credit accrued
231from the employee's first eligible transfer date to the optional
232retirement program through the actual date of such transfer, if
233such service credit was earned between July 1, 1984, and
234December 31, 1992. Upon such transfer, all service credit
235previously earned under the defined benefit program of the
236Florida Retirement System during this period shall be nullified
237for purposes of entitlement to a future benefit under the
238defined benefit program of the Florida Retirement System, except
239as provided in paragraph (i).
240     (i)  An employee who has elected to participate in the
241State University System Optional Retirement Program shall have
242one opportunity, at the employee's discretion, to choose to
243transfer from this program to the defined benefit program of the
244Florida Retirement System or to the Public Employee Optional
245Retirement Program, subject to the terms of the applicable State
246University System Optional Retirement Program contracts.
247     1.  If the employee chooses to transfer to the Public
248Employee Optional Retirement Program, any contributions,
249interest, and earnings creditable to the employee under the
250State University System Optional Retirement Program shall be
251retained by the employee in the State University System Optional
252Retirement Program, and the applicable provisions of s.
253121.4501(4) shall govern the election.
254     2.  If the employee chooses to transfer to the defined
255benefit program of the Florida Retirement System, the employee
256shall receive service credit equal to his or her years of
257service under the State University System Optional Retirement
258Program.
259     a.  The cost for the service credit shall be an amount
260representing the actuarial accrued liability for the affected
261period of service. The cost shall be calculated as if the
262benefit commencement occurs on the first date the employee would
263become eligible for unreduced benefits, using the discount rate
264and other relevant actuarial assumptions that were used to value
265the Florida Retirement System defined benefit plan liabilities
266in the most recent actuarial valuation. The calculation shall
267include any service already maintained under the defined benefit
268plan in addition to the years under the State University System
269Optional Retirement Program. The actuarial accrued liability of
270any service already maintained under the defined benefit plan
271shall be applied as a credit to the total cost resulting from
272the calculation. The division shall ensure that the transfer sum
273is prepared using a formula and methodology certified by an
274enrolled actuary.
275     b.  The employee must transfer from his or her State
276University System Optional Retirement Program account, and from
277other employee moneys as necessary, a sum representing the
278actuarial accrued liability immediately following the time of
279such movement, determined assuming that attained service equals
280the sum of service in the defined benefit program and service in
281the State University System Optional Retirement Program.
282     Section 3.  Paragraph (f) of subsection (2) and paragraph
283(a) of subsection (4) of section 121.4501, Florida Statutes, are
284amended to read:
285     121.4501  Public Employee Optional Retirement Program.--
286     (2)  DEFINITIONS.--As used in this part, the term:
287     (f)  "Eligible employee" means an officer or employee, as
288defined in s. 121.021(11), who:
289     1.  Is a member of, or is eligible for membership in, the
290Florida Retirement System, including any renewed member of the
291Florida Retirement System; or
292     2.  Participates in, or is eligible to participate in, the
293Senior Management Service Optional Annuity Program as
294established under s. 121.055(6), or the State Community College
295Optional Retirement Program as established under s.
296121.051(2)(c),; or
297     3.  Is eligible to participate in, but does not participate
298in, the State University System Optional Retirement Program
299established under s. 121.35.
300
301The term does not include any member participating in the
302Deferred Retirement Option Program established under s.
303121.091(13) or any employee participating in an optional
304retirement program established under s. 121.35.
305     (4)  PARTICIPATION; ENROLLMENT.--
306     (a)1.  With respect to an eligible employee who is employed
307in a regularly established position on June 1, 2002, by a state
308employer:
309     a.  Any such employee may elect to participate in the
310Public Employee Optional Retirement Program in lieu of retaining
311his or her membership in the defined benefit program of the
312Florida Retirement System. The election must be made in writing
313or by electronic means and must be filed with the third-party
314administrator by August 31, 2002, or, in the case of an active
315employee who is on a leave of absence on April 1, 2002, by the
316last business day of the 5th month following the month the leave
317of absence concludes. This election is irrevocable, except as
318provided in paragraph (e). Upon making such election, the
319employee shall be enrolled as a participant of the Public
320Employee Optional Retirement Program, the employee's membership
321in the Florida Retirement System shall be governed by the
322provisions of this part, and the employee's membership in the
323defined benefit program of the Florida Retirement System shall
324terminate. The employee's enrollment in the Public Employee
325Optional Retirement Program shall be effective the first day of
326the month for which a full month's employer contribution is made
327to the optional program.
328     b.  Any such employee who fails to elect to participate in
329the Public Employee Optional Retirement Program within the
330prescribed time period is deemed to have elected to retain
331membership in the defined benefit program of the Florida
332Retirement System, and the employee's option to elect to
333participate in the optional program is forfeited.
334     2.  With respect to employees who become eligible to
335participate in the Public Employee Optional Retirement Program
336by reason of employment in a regularly established position with
337a state employer commencing after April 1, 2002:
338     a.  Any such employee shall, by default, be enrolled in the
339defined benefit retirement program of the Florida Retirement
340System at the commencement of employment, and may, by the last
341business day of the 5th month following the employee's month of
342hire, elect to participate in the Public Employee Optional
343Retirement Program. The employee's election must be made in
344writing or by electronic means and must be filed with the third-
345party administrator. The election to participate in the optional
346program is irrevocable, except as provided in paragraph (e).
347     b.  If the employee files such election within the
348prescribed time period, enrollment in the optional program shall
349be effective on the first day of employment. The employer
350retirement contributions paid through the month of the employee
351plan change shall be transferred to the optional program, and,
352effective the first day of the next month, the employer shall
353pay the applicable contributions based on the employee
354membership class in the optional program.
355     c.  Any such employee who fails to elect to participate in
356the Public Employee Optional Retirement Program within the
357prescribed time period is deemed to have elected to retain
358membership in the defined benefit program of the Florida
359Retirement System, and the employee's option to elect to
360participate in the optional program is forfeited.
361     3.  With respect to employees who become eligible to
362participate in the Public Employee Optional Retirement Program
363pursuant to s. 121.051(2)(c)3. or s. 121.35(3)(i), any such
364employee may elect to participate in the Public Employee
365Optional Retirement Program in lieu of retaining his or her
366participation in the State Community College Optional Retirement
367Program or the State University System Optional Retirement
368Program. The election must be made in writing or by electronic
369means and must be filed with the third-party administrator. This
370election is irrevocable, except as provided in paragraph (e).
371Upon making such election, the employee shall be enrolled as a
372participant of the Public Employee Optional Retirement Program,
373the employee's membership in the Florida Retirement System shall
374be governed by the provisions of this part, and the employee's
375participation in the State Community College Optional Retirement
376Program or the State University System Optional Retirement
377Program shall terminate. The employee's enrollment in the Public
378Employee Optional Retirement Program shall be effective the
379first day of the month for which a full month's employer
380contribution is made to the optional program.
381     4.  For purposes of this paragraph, "state employer" means
382any agency, board, branch, commission, community college,
383department, institution, institution of higher education, or
384water management district of the state, which participates in
385the Florida Retirement System for the benefit of certain
386employees.
387     Section 4.  This act shall take effect July 1, 2007.


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