Florida Senate - 2012                          SENATOR AMENDMENT
       Bill No. HB 5005
       
       
       
       
       
       
                                Barcode 174806                          
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
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                Floor: 1/R/2R          .                                
             03/09/2012 06:23 PM       .                                
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       Senator Alexander moved the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Paragraph (c) of subsection (2) of section
    6  121.051, Florida Statutes, is amended to read:
    7         121.051 Participation in the system.—
    8         (2) OPTIONAL PARTICIPATION.—
    9         (c) Employees of public community colleges or charter
   10  technical career centers sponsored by public community colleges,
   11  designated in s. 1000.21(3), who are members of the Regular
   12  Class of the Florida Retirement System and who comply with the
   13  criteria set forth in this paragraph and s. 1012.875 may, in
   14  lieu of participating in the Florida Retirement System, elect to
   15  withdraw from the system altogether and participate in the State
   16  Community College System Optional Retirement Program provided by
   17  the employing agency under s. 1012.875.
   18         1.a. Through June 30, 2001, the cost to the employer for
   19  benefits under the optional retirement program equals the normal
   20  cost portion of the employer retirement contribution which would
   21  be required if the employee were a member of the pension plan’s
   22  Regular Class, plus the portion of the contribution rate
   23  required by s. 112.363(8) which would otherwise be assigned to
   24  the Retiree Health Insurance Subsidy Trust Fund.
   25         b. Effective July 1, 2001, through June 30, 2011, each
   26  employer shall contribute on behalf of each member of the
   27  optional program an amount equal to 10.43 percent of the
   28  employee’s gross monthly compensation. The employer shall deduct
   29  an amount for the administration of the program.
   30         c. Effective July 1, 2011, through June 30, 2012, each
   31  member shall contribute an amount equal to the employee
   32  contribution required under s. 121.71(3). The employer shall
   33  contribute on behalf of each program member an amount equal to
   34  the difference between 10.43 percent of the employee’s gross
   35  monthly compensation and the employee’s required contribution
   36  based on the employee’s gross monthly compensation.
   37         d. Effective July 1, 2012, each member shall contribute an
   38  amount equal to the employee contribution required under s.
   39  121.71(3). The employer shall contribute on behalf of each
   40  program member an amount equal to the difference between 8.15
   41  percent of the employee’s gross monthly compensation and the
   42  employee’s required contribution based on the employee’s gross
   43  monthly compensation.
   44         e.d. The employer shall contribute an additional amount to
   45  the Florida Retirement System Trust Fund equal to the unfunded
   46  actuarial accrued liability portion of the Regular Class
   47  contribution rate.
   48         2. The decision to participate in the optional retirement
   49  program is irrevocable as long as the employee holds a position
   50  eligible for participation, except as provided in subparagraph
   51  3. Any service creditable under the Florida Retirement System is
   52  retained after the member withdraws from the system; however,
   53  additional service credit in the system may not be earned while
   54  a member of the optional retirement program.
   55         3. An employee who has elected to participate in the
   56  optional retirement program shall have one opportunity, at the
   57  employee’s discretion, to transfer from the optional retirement
   58  program to the pension plan of the Florida Retirement System or
   59  to the investment plan established under part II of this
   60  chapter, subject to the terms of the applicable optional
   61  retirement program contracts.
   62         a. If the employee chooses to move to the investment plan,
   63  any contributions, interest, and earnings creditable to the
   64  employee under the optional retirement program are retained by
   65  the employee in the optional retirement program, and the
   66  applicable provisions of s. 121.4501(4) govern the election.
   67         b. If the employee chooses to move to the pension plan of
   68  the Florida Retirement System, the employee shall receive
   69  service credit equal to his or her years of service under the
   70  optional retirement program.
   71         (I) The cost for such credit is the amount representing the
   72  present value of the employee’s accumulated benefit obligation
   73  for the affected period of service. The cost shall be calculated
   74  as if the benefit commencement occurs on the first date the
   75  employee becomes eligible for unreduced benefits, using the
   76  discount rate and other relevant actuarial assumptions that were
   77  used to value the Florida Retirement System Pension Plan
   78  liabilities in the most recent actuarial valuation. The
   79  calculation must include any service already maintained under
   80  the pension plan in addition to the years under the optional
   81  retirement program. The present value of any service already
   82  maintained must be applied as a credit to total cost resulting
   83  from the calculation. The division must shall ensure that the
   84  transfer sum is prepared using a formula and methodology
   85  certified by an enrolled actuary.
   86         (II) The employee must transfer from his or her optional
   87  retirement program account and from other employee moneys as
   88  necessary, a sum representing the present value of the
   89  employee’s accumulated benefit obligation immediately following
   90  the time of such movement, determined assuming that attained
   91  service equals the sum of service in the pension plan and
   92  service in the optional retirement program.
   93         4. Participation in the optional retirement program is
   94  limited to employees who satisfy the following eligibility
   95  criteria:
   96         a. The employee is otherwise eligible for membership or
   97  renewed membership in the Regular Class of the Florida
   98  Retirement System, as provided in s. 121.021(11) and (12) or s.
   99  121.122.
  100         b. The employee is employed in a full-time position
  101  classified in the Accounting Manual for Florida’s Public
  102  Community Colleges as:
  103         (I) Instructional; or
  104         (II) Executive Management, Instructional Management, or
  105  Institutional Management and the community college determines
  106  that recruiting to fill a vacancy in the position is to be
  107  conducted in the national or regional market, and the duties and
  108  responsibilities of the position include the formulation,
  109  interpretation, or implementation of policies, or the
  110  performance of functions that are unique or specialized within
  111  higher education and that frequently support the mission of the
  112  community college.
  113         c. The employee is employed in a position not included in
  114  the Senior Management Service Class of the Florida Retirement
  115  System as described in s. 121.055.
  116         5. Members of the program are subject to the same
  117  reemployment limitations, renewed membership provisions, and
  118  forfeiture provisions applicable to regular members of the
  119  Florida Retirement System under ss. 121.091(9), 121.122, and
  120  121.091(5), respectively. A member who receives a program
  121  distribution funded by employer and required employee
  122  contributions is deemed to be retired from a state-administered
  123  retirement system if the member is subsequently employed with an
  124  employer that participates in the Florida Retirement System.
  125         6. Eligible community college employees are compulsory
  126  members of the Florida Retirement System until, pursuant to s.
  127  1012.875, a written election to withdraw from the system and
  128  participate in the optional retirement program is filed with the
  129  program administrator and received by the division.
  130         a. A community college employee whose program eligibility
  131  results from initial employment shall be enrolled in the
  132  optional retirement program retroactive to the first day of
  133  eligible employment. The employer and employee retirement
  134  contributions paid through the month of the employee plan change
  135  shall be transferred to the community college to the employee’s
  136  optional program account, and, effective the first day of the
  137  next month, the employer shall pay the applicable contributions
  138  based upon subparagraph 1.
  139         b. A community college employee whose program eligibility
  140  is due to the subsequent designation of the employee’s position
  141  as one of those specified in subparagraph 4., or due to the
  142  employee’s appointment, promotion, transfer, or reclassification
  143  to a position specified in subparagraph 4., must be enrolled in
  144  the program on the first day of the first full calendar month
  145  that such change in status becomes effective. The employer and
  146  employee retirement contributions paid from the effective date
  147  through the month of the employee plan change must be
  148  transferred to the community college to the employee’s optional
  149  program account, and, effective the first day of the next month,
  150  the employer shall pay the applicable contributions based upon
  151  subparagraph 1.
  152         7. Effective July 1, 2003, through December 31, 2008, any
  153  member of the optional retirement program who has service credit
  154  in the pension plan of the Florida Retirement System for the
  155  period between his or her first eligibility to transfer from the
  156  pension plan to the optional retirement program and the actual
  157  date of transfer may, during employment, transfer to the
  158  optional retirement program a sum representing the present value
  159  of the accumulated benefit obligation under the defined benefit
  160  retirement program for the period of service credit. Upon
  161  transfer, all service credit previously earned under the pension
  162  plan during this period is nullified for purposes of entitlement
  163  to a future benefit under the pension plan.
  164         Section 2. Paragraph (d) of subsection (6) of section
  165  121.055, Florida Statutes, is amended to read:
  166         121.055 Senior Management Service Class.—There is hereby
  167  established a separate class of membership within the Florida
  168  Retirement System to be known as the “Senior Management Service
  169  Class,” which shall become effective February 1, 1987.
  170         (6)
  171         (d) Contributions.—
  172         1.a. Through June 30, 2001, each employer shall contribute
  173  on behalf of each member of the Senior Management Service
  174  Optional Annuity Program an amount equal to the normal cost
  175  portion of the employer retirement contribution which would be
  176  required if the member were a Senior Management Service Class
  177  member of the Florida Retirement System Pension Plan, plus the
  178  portion of the contribution rate required in s. 112.363(8) that
  179  would otherwise be assigned to the Retiree Health Insurance
  180  Subsidy Trust Fund.
  181         b. Effective July 1, 2001, through June 30, 2011, each
  182  employer shall contribute on behalf of each member of the
  183  optional annuity program an amount equal to 12.49 percent of the
  184  employee’s gross monthly compensation.
  185         c. Effective July 1, 2011, through June 30, 2012, each
  186  member of the optional annuity program shall contribute an
  187  amount equal to the employee contribution required under s.
  188  121.71(3). The employer shall contribute on behalf of such
  189  employee an amount equal to the difference between 12.49 percent
  190  of the employee’s gross monthly compensation and the amount
  191  equal to the employee’s required contribution based on the
  192  employee’s gross monthly compensation.
  193         d. Effective July 1, 2012, each member of the optional
  194  annuity program shall contribute an amount equal to the employee
  195  contribution required under s. 121.73. The employer shall
  196  contribute on behalf of such employee an amount equal to the
  197  difference between 9.27 percent of the employee’s gross monthly
  198  compensation and the amount equal to the employee’s required
  199  contribution based on the employee’s gross monthly compensation.
  200         e.d. The department shall deduct an amount approved by the
  201  Legislature to provide for the administration of this program.
  202  Payment of the contributions, including contributions made by
  203  the employee, shall be made by the employer to the department,
  204  which shall forward the contributions to the designated company
  205  or companies contracting for payment of benefits for the member
  206  under the program.
  207         2. Each employer shall contribute on behalf of each member
  208  of the Senior Management Service Optional Annuity Program an
  209  amount equal to the unfunded actuarial accrued liability portion
  210  of the employer contribution which would be required for members
  211  of the Senior Management Service Class in the Florida Retirement
  212  System. This contribution shall be paid to the department for
  213  transfer to the Florida Retirement System Trust Fund.
  214         3. An Optional Annuity Program Trust Fund shall be
  215  established in the State Treasury and administered by the
  216  department to make payments to provider companies on behalf of
  217  the optional annuity program members, and to transfer the
  218  unfunded liability portion of the state optional annuity program
  219  contributions to the Florida Retirement System Trust Fund.
  220         4. Contributions required for social security by each
  221  employer and employee, in the amount required for social
  222  security coverage as now or hereafter may be provided by the
  223  federal Social Security Act shall be maintained for each member
  224  of the Senior Management Service retirement program and are in
  225  addition to the retirement contributions specified in this
  226  paragraph.
  227         5. Each member of the Senior Management Service optional
  228  annuity program may contribute by way of salary reduction or
  229  deduction a percentage amount of the employee’s gross
  230  compensation not to exceed the percentage amount contributed by
  231  the employer to the optional annuity program. Payment of the
  232  employee’s contributions shall be made by the employer to the
  233  department, which shall forward the contributions to the
  234  designated company or companies contracting for payment of
  235  benefits for the member under the program.
  236         Section 3. Paragraph (a) of subsection (4) of section
  237  121.35, Florida Statutes, is amended to read:
  238         121.35 Optional retirement program for the State University
  239  System.—
  240         (4) CONTRIBUTIONS.—
  241         (a)1. Through June 30, 2001, each employer shall contribute
  242  on behalf of each member of the optional retirement program an
  243  amount equal to the normal cost portion of the employer
  244  retirement contribution which would be required if the employee
  245  were a regular member of the Florida Retirement System Pension
  246  Plan, plus the portion of the contribution rate required in s.
  247  112.363(8) that would otherwise be assigned to the Retiree
  248  Health Insurance Subsidy Trust Fund.
  249         2. Effective July 1, 2001, through June 30, 2011, each
  250  employer shall contribute on behalf of each member of the
  251  optional retirement program an amount equal to 10.43 percent of
  252  the employee’s gross monthly compensation.
  253         3. Effective July 1, 2011, through June 30, 2012, each
  254  member of the optional retirement program shall contribute an
  255  amount equal to the employee contribution required in s.
  256  121.71(3). The employer shall contribute on behalf of each such
  257  member an amount equal to the difference between 10.43 percent
  258  of the employee’s gross monthly compensation and the amount
  259  equal to the employee’s required contribution based on the
  260  employee’s gross monthly compensation.
  261         4. Effective July 1, 2012, each member of the optional
  262  retirement program shall contribute an amount equal to the
  263  employee contribution required in s. 121.71(3). The employer
  264  shall contribute on behalf of each such member an amount equal
  265  to the difference between 8.15 percent of the employee’s gross
  266  monthly compensation and the amount equal to the employee’s
  267  required contribution based on the employee’s gross monthly
  268  compensation.
  269         5.4. The payment of the contributions, including
  270  contributions by the employee, shall be made by the employer to
  271  the department, which shall forward the contributions to the
  272  designated company or companies contracting for payment of
  273  benefits for members of the program. However, such contributions
  274  paid on behalf of an employee described in paragraph (3)(c) may
  275  not be forwarded to a company and do not begin to accrue
  276  interest until the employee has executed a contract and notified
  277  the department. The department shall deduct an amount from the
  278  contributions to provide for the administration of this program.
  279         Section 4. Subsections (4) and (5) of section 121.71,
  280  Florida Statutes, are amended to read:
  281         121.71 Uniform rates; process; calculations; levy.—
  282         (4) Required employer retirement contribution rates for
  283  each membership class and subclass of the Florida Retirement
  284  System for both retirement plans are as follows:
  285  
  286  Membership Class               Percentage ofGrossCompensation,EffectiveJuly 1, 2012 2011Percentage ofGrossCompensation,EffectiveJuly 1, 2013 2012
  287                                 
  288  Regular Class                    3.55% 3.28%     3.55% 3.28%   
  289  Special Risk Class              11.01% 10.21%   11.01% 10.21%  
  290  Special Risk Administrative Support Class  3.94% 4.07%     3.94% 4.07%   
  291  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders  6.51% 7.02%     6.51% 7.02%   
  292  Elected Officers’ Class— Justices, Judges  10.02% 9.78%    10.02% 9.78%  
  293  Elected Officers’ Class— County Elected Officers  8.36% 9.27%     8.36% 9.27%   
  294  Senior Management Class          4.84% 4.81%     4.84% 4.81%   
  295  DROP                             4.33% 3.31%     4.33% 3.31%   
  296         (5) In order to address unfunded actuarial liabilities of
  297  the system, the required employer retirement contribution rates
  298  for each membership class and subclass of the Florida Retirement
  299  System for both retirement plans are as follows:
  300  
  301  Membership Class               Percentage ofGrossCompensation,EffectiveJuly 1, 2012 2011Percentage ofGrossCompensation,EffectiveJuly 1, 2013 2012
  302                                 
  303  Regular Class                       0.49%        2.02% 2.16%   
  304  Special Risk Class                  2.75%        7.03% 8.21%   
  305  Special Risk Administrative Support Class     0.83%       27.04% 21.40%  
  306  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders     0.88%       27.18% 21.76%  
  307  Elected Officers’ Class— Justices, Judges     0.77%       16.38% 12.86%  
  308  Elected Officers’ Class— County Elected Officers     0.73%       23.01% 22.05%  
  309  Senior Management Service Class     0.32%       11.25% 10.51%  
  310  DROP                                0.00%        6.21% 6.36%   
  311         Section 5. Subsection (4) of section 121.72, Florida
  312  Statutes, is amended, and subsection (5) is added to that
  313  section, to read:
  314         121.72 Allocations to investment plan member accounts;
  315  percentage amounts.—
  316         (4) Effective July 1, 2002, through June 30, 2012,
  317  allocations from the Florida Retirement System Contributions
  318  Clearing Trust Fund to investment plan member accounts are as
  319  follows:
  320  Membership Class                      Percentage of Gross Compensation
  321                                        
  322  Regular Class                                     9.00%             
  323  Special Risk Class                                20.00%            
  324  Special Risk Administrative Support Class            11.35%            
  325  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders            13.40%            
  326  Elected Officers’ Class— Justices, Judges            18.90%            
  327  Elected Officers’ Class— County Elected Officers            16.20%            
  328  Senior Management Service Class                   10.95%            
  329         (5) Effective July 1, 2012, allocations from the Florida
  330  Retirement System Contributions Clearing Trust Fund to
  331  investment plan member accounts are as follows:
  332  
  333  Membership Class                               Percentage of Gross Compensation
  334                                                 
  335  Regular Class                                       6.30%      
  336  Special Risk Class                                  14.00%     
  337  Special Risk Administrative Support Class           7.95%      
  338  Elected Officers’ Class—Legislators, Governor,Lt. Governor, Cabinet Officers,State Attorneys, Public Defenders     9.38%      
  339  Elected Officers’ Class—Justices, Judges           13.23%     
  340  Elected Officers’ Class—County Elected Officers     11.34%     
  341  Senior Management Service Class                     7.67%      
  342                                                                 
  343         Section 6. Paragraph (a) of subsection (4) of section
  344  1012.875, Florida Statutes, is amended to read:
  345         1012.875 State Community College System Optional Retirement
  346  Program.—Each Florida College System institution may implement
  347  an optional retirement program, if such program is established
  348  therefor pursuant to s. 1001.64(20), under which annuity or
  349  other contracts providing retirement and death benefits may be
  350  purchased by, and on behalf of, eligible employees who
  351  participate in the program, in accordance with s. 403(b) of the
  352  Internal Revenue Code. Except as otherwise provided herein, this
  353  retirement program, which shall be known as the State Community
  354  College System Optional Retirement Program, may be implemented
  355  and administered only by an individual Florida College System
  356  institution or by a consortium of Florida College System
  357  institutions.
  358         (4)(a)1. Through June 30, 2011, each college must
  359  contribute on behalf of each program member an amount equal to
  360  10.43 percent of the employee’s gross monthly compensation.
  361         2. Effective July 1, 2011, through June 30, 2012, each
  362  member shall contribute an amount equal to the employee
  363  contribution required under s. 121.71(3). The employer shall
  364  contribute on behalf of each program member an amount equal to
  365  the difference between 10.43 percent of the employee’s gross
  366  monthly compensation and the employee’s required contribution
  367  based on the employee’s gross monthly compensation.
  368         3. Effective July 1, 2012, each member shall contribute an
  369  amount equal to the employee contribution required under s.
  370  121.71(3). The employer shall contribute on behalf of each
  371  program member an amount equal to the difference between 8.15
  372  percent of the employee’s gross monthly compensation and the
  373  employee’s required contribution based on the employee’s gross
  374  monthly compensation.
  375         4.3. The college shall deduct an amount approved by the
  376  district board of trustees of the college to provide for the
  377  administration of the optional retirement program. Payment of
  378  this contribution must be made directly by the college or
  379  through the program administrator to the designated company
  380  contracting for payment of benefits to the program member.
  381         Section 7. The Legislature finds that a proper and
  382  legitimate state purpose is served when employees and retirees
  383  of the state and its political subdivisions, and the dependents,
  384  survivors, and beneficiaries of such employees and retirees, are
  385  extended the basic protections afforded by governmental
  386  retirement systems. These persons must be provided benefits that
  387  are fair and adequate and that are managed, administered, and
  388  funded in an actuarially sound manner, as required by s. 14,
  389  Article X of the State Constitution and part VII of chapter 112,
  390  Florida Statutes. Therefore, the Legislature determines and
  391  declares that this act fulfills an important state interest.
  392         Section 8. This act shall take effect July 1, 2012.
  393  
  394  ================= T I T L E  A M E N D M E N T ================
  395         And the title is amended as follows:
  396         Delete everything before the enacting clause
  397  and insert:
  398                        A bill to be entitled                      
  399         An act relating to retirement; amending s. 121.051,
  400         F.S.; revising employer contributions for members of
  401         the Florida Retirement System who are employees of
  402         public community colleges or charter technical career
  403         centers sponsored by public community colleges on a
  404         certain date; amending s. 121.055, F.S.; revising
  405         employer contributions for members of the Senior
  406         Management Service Class of the Florida Retirement
  407         System on a certain date; amending s. 121.35, F.S.;
  408         revising employer contributions for members of the
  409         optional retirement program for the State University
  410         System on a certain date; amending s. 121.71, F.S.;
  411         revising the required employer retirement contribution
  412         rates for members of each membership class and
  413         subclass of the Florida Retirement System; amending s.
  414         121.72, F.S.; revising allocations from the Florida
  415         Retirement System Contributions Clearing Trust Fund to
  416         investment plan member accounts on a certain date;
  417         amending s. 1012.875, F.S.; revising employer
  418         contributions for members of the State Community
  419         College System Optional Retirement Program on a
  420         certain date; providing that the act fulfills an
  421         important state interest; providing an effective date.