CS/HB 685

1
A bill to be entitled
2An act relating to state retirement programs; amending s.
3121.051, F.S.; revising conditions for membership in the
4State Community College System Optional Retirement
5Program; amending s. 121.35, F.S.; revising conditions for
6membership in the State University System Optional
7Retirement Program; authorizing transfer of funds for
8specified earned credit between the Florida Retirement
9System and the optional retirement program; authorizing a
10transfer of membership between the State University System
11Optional Retirement Program and the Florida Retirement
12System; providing for transfer of retirement
13contributions, interest, and earnings; providing employees
14with service credit upon transferring into a new program;
15providing requirements for the calculation of service
16credit; requiring employees to transfer funds upon moving
17into a new program; amending s. 121.4501, F.S.; redefining
18the term "eligible employee" for purposes of the Public
19Employee Optional Retirement Program; revising conditions
20for participation in the Public Employee Optional
21Retirement Program; providing an effective date.
22
23Be It Enacted by the Legislature of the State of Florida:
24
25     Section 1.  Paragraph (c) of subsection (2) of section
26121.051, Florida Statutes, is amended to read:
27     121.051  Participation in the system.--
28     (2)  OPTIONAL PARTICIPATION.--
29     (c)  Employees of public community colleges or charter
30technical career centers sponsored by public community colleges,
31as designated in s. 1000.21(3), who are members of the Regular
32Class of the Florida Retirement System and who comply with the
33criteria set forth in this paragraph and in s. 1012.875 may
34elect, in lieu of participating in the Florida Retirement
35System, to withdraw from the Florida Retirement System
36altogether and participate in an optional retirement program
37provided by the employing agency under s. 1012.875, to be known
38as the State Community College System Optional Retirement
39Program. Pursuant thereto:
40     1.  Through June 30, 2001, the cost to the employer for
41such annuity shall equal the normal cost portion of the employer
42retirement contribution which would be required if the employee
43were a member of the Regular Class defined benefit program, plus
44the portion of the contribution rate required by s. 112.363(8)
45that would otherwise be assigned to the Retiree Health Insurance
46Subsidy Trust Fund. Effective July 1, 2001, each employer shall
47contribute on behalf of each participant in the optional program
48an amount equal to 10.43 percent of the participant's gross
49monthly compensation. The employer shall deduct an amount to
50provide for the administration of the optional retirement
51program. The employer providing the optional program shall
52contribute an additional amount to the Florida Retirement System
53Trust Fund equal to the unfunded actuarial accrued liability
54portion of the Regular Class contribution rate.
55     2.  The decision to participate in such an optional
56retirement program shall be irrevocable for as long as the
57employee holds a position eligible for participation, except as
58provided in subparagraph 3. Any service creditable under the
59Florida Retirement System shall be retained after the member
60withdraws from the Florida Retirement System; however,
61additional service credit in the Florida Retirement System shall
62not be earned while a member of the optional retirement program.
63     3.  An employee who has elected to participate in the
64optional retirement program shall have one opportunity, at the
65employee's discretion, to choose to transfer from the optional
66retirement program to the defined benefit program of the Florida
67Retirement System or to the Public Employee Optional Retirement
68Program, subject to the terms of the applicable optional
69retirement program contracts.
70     a.  If the employee chooses to move to the Public Employee
71Optional Retirement Program, any contributions, interest, and
72earnings creditable to the employee under the State Community
73College System Optional Retirement Program shall be retained by
74the employee in the State Community College System Optional
75Retirement Program, and the applicable provisions of s.
76121.4501(4) shall govern the election.
77     b.  If the employee chooses to move to the defined benefit
78program of the Florida Retirement System, the employee shall
79receive service credit equal to his or her years of service
80under the State Community College Optional Retirement Program.
81     (I)  The cost for such credit shall be an amount
82representing the present value of that employee's accumulated
83benefit obligation for the affected period of service. The cost
84shall be calculated as if the benefit commencement occurs on the
85first date the employee would become eligible for unreduced
86benefits, using the discount rate and other relevant actuarial
87assumptions that were used to value the Florida Retirement
88System defined benefit plan liabilities in the most recent
89actuarial valuation. The calculation shall include any service
90already maintained under the defined benefit plan in addition to
91the years under the State Community College Optional Retirement
92Program. The present value of any service already maintained
93under the defined benefit plan shall be applied as a credit to
94total cost resulting from the calculation. The division shall
95ensure that the transfer sum is prepared using a formula and
96methodology certified by an enrolled actuary.
97     (II)  The employee must transfer from his or her State
98Community College System Optional Retirement Program account and
99from other employee moneys as necessary, a sum representing the
100present value of that employee's accumulated benefit obligation
101immediately following the time of such movement, determined
102assuming that attained service equals the sum of service in the
103defined benefit program and service in the State Community
104College System Optional Retirement Program.
105     4.  Participation in the optional retirement program shall
106be limited to those employees who satisfy the following
107eligibility criteria:
108     a.  The employee must be otherwise eligible for membership
109or renewed membership in the Regular Class of the Florida
110Retirement System, as provided in s. 121.021(11) and (12) or s.
111121.122.
112     b.  The employee must be employed in a full-time position
113classified in the Accounting Manual for Florida's Public
114Community Colleges as:
115     (I)  Instructional; or
116     (II)  Executive Management, Instructional Management, or
117Institutional Management, if a community college determines that
118recruiting to fill a vacancy in the position is to be conducted
119in the national or regional market, and:
120     (A)  The duties and responsibilities of the position
121include either the formulation, interpretation, or
122implementation of policies; or
123     (B)  The duties and responsibilities of the position
124include the performance of functions that are unique or
125specialized within higher education and that frequently involve
126the support of the mission of the community college.
127     c.  The employee must be employed in a position not
128included in the Senior Management Service Class of the Florida
129Retirement System, as described in s. 121.055.
130     5.  Participants in the program are subject to the same
131reemployment limitations, renewed membership provisions, and
132forfeiture provisions as are applicable to regular members of
133the Florida Retirement System under ss. 121.091(9), 121.122, and
134121.091(5), respectively.
135     6.  Eligible community college employees shall be
136compulsory members of the Florida Retirement System until,
137pursuant to the procedures set forth in s. 1012.875, a written
138election to withdraw from the Florida Retirement System and to
139participate in the State Community College Optional Retirement
140Program is filed with the program administrator and received by
141the division.
142     a.  Any community college employee whose program
143eligibility results from initial employment shall be enrolled in
144the State Community College Optional Retirement Program
145retroactive to the first day of eligible employment. The
146employer retirement contributions paid through the month of the
147employee plan change shall be transferred to the community
148college for the employee's optional program account, and,
149effective the first day of the next month, the employer shall
150pay the applicable contributions based upon subparagraph 1.
151     b.  Any community college employee whose program
152eligibility results from a change in status due to the
153subsequent designation of the employee's position as one of
154those specified in subparagraph 4. or due to the employee's
155appointment, promotion, transfer, or reclassification to a
156position specified in subparagraph 4. shall be enrolled in the
157program upon the first day of the first full calendar month that
158such change in status becomes effective. The employer retirement
159contributions paid from the effective date through the month of
160the employee plan change shall be transferred to the community
161college for the employee's optional program account, and,
162effective the first day of the next month, the employer shall
163pay the applicable contributions based upon subparagraph 1.
164     7.  Effective July 1, 2003, through December 31, 2008, any
165participant of the State Community College Optional Retirement
166Program who has service credit in the defined benefit plan of
167the Florida Retirement System for the period between his or her
168first eligibility to transfer from the defined benefit plan to
169the optional retirement program and the actual date of transfer
170may, during his or her employment, elect to transfer to the
171optional retirement program a sum representing the present value
172of the accumulated benefit obligation under the defined benefit
173retirement program for such period of service credit. Upon such
174transfer, all such service credit previously earned under the
175defined benefit program of the Florida Retirement System during
176this period shall be nullified for purposes of entitlement to a
177future benefit under the defined benefit program of the Florida
178Retirement System.
179     Section 2.  Paragraph (a) of subsection (2) and paragraphs
180(e) and (g) of subsection (3) of section 121.35, Florida
181Statutes, are amended, and paragraph (i) is added to subsection
182(3) of that section, to read:
183     121.35  Optional retirement program for the State
184University System.--
185     (2)  ELIGIBILITY FOR PARTICIPATION IN OPTIONAL PROGRAM.--
186     (a)  Participation in the optional retirement program
187provided by this section shall be limited to persons who are
188otherwise eligible for membership or renewed membership in the
189Florida Retirement System and who are employed in one of the
190following State University System positions:
191     1.  Positions classified as instructional and research
192faculty which are exempt from the career service under the
193provisions of s. 110.205(2)(d).
194     2.  Positions classified as administrative and professional
195which are exempt from the career service under the provisions of
196s. 110.205(2)(d).
197     3.  The Chancellor and the university presidents.
198     (3)  ELECTION OF OPTIONAL PROGRAM.--
199     (e)  The election by an eligible employee to participate in
200the optional retirement program shall be irrevocable for so long
201as the employee continues to meet the eligibility requirements
202specified in subsection (2), except as provided in paragraph (h)
203or paragraph (i). In the event that an employee participates in
204the optional retirement program for 90 days or more and is
205subsequently employed in an administrative or professional
206position which has been determined by the department, under
207subparagraph (2)(a)2., to be not otherwise eligible for
208participation in the optional retirement program, the employee
209shall continue participation in the optional program so long as
210the employee meets the other eligibility requirements for the
211program, except as provided in paragraph (h) or paragraph (i).
212     (g)  An eligible employee who is a member of the Florida
213Retirement System at the time of election to participate in the
214optional retirement program shall retain all retirement service
215credit earned under the Florida Retirement System, at the rate
216earned. No additional service credit in the Florida Retirement
217System shall be earned while the employee participates in the
218optional program, nor shall the employee be eligible for
219disability retirement under the Florida Retirement System. An
220eligible employee may transfer from the Florida Retirement
221System to his or her accounts under the State University System
222Optional Retirement Program a sum representing the present value
223of the employee's accumulated benefit obligation under the
224defined benefit program of the Florida Retirement System for any
225service credit accrued from the employee's first eligible
226transfer date to the optional retirement program through the
227actual date of such transfer, if such service credit was earned
228in the period from July 1, 1984, through December 31, 1992. The
229present value of the employee's accumulated benefit obligation
230shall be calculated as described in s. 121.4501(3)(c)2. Upon
231such transfer, all such service credit previously earned under
232the defined benefit program of the Florida Retirement System
233during this period shall be nullified for purposes of
234entitlement to a future benefit under the defined benefit
235program of the Florida Retirement System.
236     (i)  Effective January 1, 2008, through December 31, 2008,
237except for an employee who is a mandatory participant of the
238State University System Optional Retirement Program, an employee
239who has elected to participate in the State University System
240Optional Retirement Program shall have one opportunity, at the
241employee's discretion, to choose to transfer from this program
242to the defined benefit program of the Florida Retirement System
243or to the Public Employee Optional Retirement Program, subject
244to the terms of the applicable contracts of the State University
245System Optional Retirement Program.
246     1.  If the employee chooses to move to the Public Employee
247Optional Retirement Program, any contributions, interest, and
248earnings creditable to the employee under the State University
249System Optional Retirement Program shall be retained by the
250employee in the State University System Optional Retirement
251Program, and the applicable provisions of s. 121.4501(4) shall
252govern the election.
253     2.  If the employee chooses to move to the defined benefit
254program of the Florida Retirement System, the employee shall
255receive service credit equal to his or her years of service
256under the State University System Optional Retirement Program.
257     a.  The cost for such credit shall be an amount
258representing the actuarial accrued liability for the affected
259period of service. The cost shall be calculated using the
260discount rate and other relevant actuarial assumptions that were
261used to value the Florida Retirement System defined benefit plan
262liabilities in the most recent actuarial valuation. The
263calculation shall include any service already maintained under
264the defined benefit plan in addition to the years under the
265State University System Optional Retirement Program. The
266actuarial accrued liability of any service already maintained
267under the defined benefit plan shall be applied as a credit to
268the total cost resulting from the calculation. The division
269shall ensure that the transfer sum is prepared using a formula
270and methodology certified by an enrolled actuary.
271     b.  The employee must transfer from his or her State
272University System Optional Retirement Program account, and from
273other employee moneys as necessary, a sum representing the
274actuarial accrued liability immediately following the time of
275such movement, determined assuming that attained service equals
276the sum of service in the defined benefit program and service in
277the State University System Optional Retirement Program.
278     Section 3.  Paragraph (f) of subsection (2) and paragraph
279(a) of subsection (4) of section 121.4501, Florida Statutes, are
280amended to read:
281     121.4501  Public Employee Optional Retirement Program.--
282     (2)  DEFINITIONS.--As used in this part, the term:
283     (f)  "Eligible employee" means an officer or employee, as
284defined in s. 121.021(11), who:
285     1.  Is a member of, or is eligible for membership in, the
286Florida Retirement System, including any renewed member of the
287Florida Retirement System; or
288     2.  Participates in, or is eligible to participate in, the
289Senior Management Service Optional Annuity Program as
290established under s. 121.055(6), or the State Community College
291Optional Retirement Program as established under s.
292121.051(2)(c),; or
293     3.  Is eligible to participate in, but does not participate
294in, the State University System Optional Retirement Program
295established under s. 121.35.
296
297The term does not include any member participating in the
298Deferred Retirement Option Program established under s.
299121.091(13) or a mandatory participant of the State University
300System Optional Retirement Program or any employee participating
301in an optional retirement program established under s. 121.35.
302     (4)  PARTICIPATION; ENROLLMENT.--
303     (a)1.  With respect to an eligible employee who is employed
304in a regularly established position on June 1, 2002, by a state
305employer:
306     a.  Any such employee may elect to participate in the
307Public Employee Optional Retirement Program in lieu of retaining
308his or her membership in the defined benefit program of the
309Florida Retirement System. The election must be made in writing
310or by electronic means and must be filed with the third-party
311administrator by August 31, 2002, or, in the case of an active
312employee who is on a leave of absence on April 1, 2002, by the
313last business day of the 5th month following the month the leave
314of absence concludes. This election is irrevocable, except as
315provided in paragraph (e). Upon making such election, the
316employee shall be enrolled as a participant of the Public
317Employee Optional Retirement Program, the employee's membership
318in the Florida Retirement System shall be governed by the
319provisions of this part, and the employee's membership in the
320defined benefit program of the Florida Retirement System shall
321terminate. The employee's enrollment in the Public Employee
322Optional Retirement Program shall be effective the first day of
323the month for which a full month's employer contribution is made
324to the optional program.
325     b.  Any such employee who fails to elect to participate in
326the Public Employee Optional Retirement Program within the
327prescribed time period is deemed to have elected to retain
328membership in the defined benefit program of the Florida
329Retirement System, and the employee's option to elect to
330participate in the optional program is forfeited.
331     2.  With respect to employees who become eligible to
332participate in the Public Employee Optional Retirement Program
333by reason of employment in a regularly established position with
334a state employer commencing after April 1, 2002:
335     a.  Any such employee shall, by default, be enrolled in the
336defined benefit retirement program of the Florida Retirement
337System at the commencement of employment, and may, by the last
338business day of the 5th month following the employee's month of
339hire, elect to participate in the Public Employee Optional
340Retirement Program. The employee's election must be made in
341writing or by electronic means and must be filed with the third-
342party administrator. The election to participate in the optional
343program is irrevocable, except as provided in paragraph (e).
344     b.  If the employee files such election within the
345prescribed time period, enrollment in the optional program shall
346be effective on the first day of employment. The employer
347retirement contributions paid through the month of the employee
348plan change shall be transferred to the optional program, and,
349effective the first day of the next month, the employer shall
350pay the applicable contributions based on the employee
351membership class in the optional program.
352     c.  Any such employee who fails to elect to participate in
353the Public Employee Optional Retirement Program within the
354prescribed time period is deemed to have elected to retain
355membership in the defined benefit program of the Florida
356Retirement System, and the employee's option to elect to
357participate in the optional program is forfeited.
358     3.  With respect to employees who become eligible to
359participate in the Public Employee Optional Retirement Program
360pursuant to s. 121.051(2)(c)3. or s. 121.35(3)(i), any such
361employee may elect to participate in the Public Employee
362Optional Retirement Program in lieu of retaining his or her
363participation in the State Community College Optional Retirement
364Program or the State University System Optional Retirement
365Program. The election must be made in writing or by electronic
366means and must be filed with the third-party administrator. This
367election is irrevocable, except as provided in paragraph (e).
368Upon making such election, the employee shall be enrolled as a
369participant of the Public Employee Optional Retirement Program,
370the employee's membership in the Florida Retirement System shall
371be governed by the provisions of this part, and the employee's
372participation in the State Community College Optional Retirement
373Program or the State University System Optional Retirement
374Program shall terminate. The employee's enrollment in the Public
375Employee Optional Retirement Program shall be effective the
376first day of the month for which a full month's employer
377contribution is made to the optional program.
378     4.  For purposes of this paragraph, "state employer" means
379any agency, board, branch, commission, community college,
380department, institution, institution of higher education, or
381water management district of the state, which participates in
382the Florida Retirement System for the benefit of certain
383employees.
384     Section 4.  This act shall take effect July 1, 2007.


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