Florida Senate - 2015 SB 242
By Senator Brandes
1 A bill to be entitled
2 An act relating to publicly funded retirement plans;
3 amending s. 112.63, F.S.; requiring that actuarial
4 reports for certain retirement plans include mortality
5 tables; amending s. 112.664, F.S.; revising
6 information to be included in a defined benefit system
7 or plan’s annual report to the Department of
8 Management Services; providing a declaration of
9 important state interest; providing an effective date.
11 Be It Enacted by the Legislature of the State of Florida:
13 Section 1. Subsection (1) of section 112.63, Florida
14 Statutes, is amended to read:
15 112.63 Actuarial reports and statements of actuarial
16 impact; review.—
17 (1) Each retirement system or plan subject to the
18 provisions of this act shall have regularly scheduled actuarial
19 reports prepared and certified by an enrolled actuary. The
20 actuarial report shall consist of, but is
shall not be limited
21 to, the following:
22 (a) Adequacy of employer and employee contribution rates in
23 meeting levels of employee benefits provided in the system and
24 changes, if any, needed in such rates to achieve or preserve a
25 level of funding deemed adequate to enable payment through the
26 indefinite future of the benefit amounts prescribed by the
27 system, which shall include a valuation of present assets, based
28 on statement value, and prospective assets and liabilities of
29 the system and the extent of unfunded accrued liabilities, if
31 (b) A plan to amortize any unfunded liability pursuant to
32 s. 112.64 and a description of actions taken to reduce the
33 unfunded liability.
34 (c) A description and explanation of actuarial assumptions.
35 (d) A schedule illustrating the amortization of unfunded
36 liabilities, if any.
37 (e) A comparative review illustrating the actual salary
38 increases granted and the rate of investment return realized
39 over the 3-year period preceding the actuarial report with the
40 assumptions used in both the preceding and current actuarial
42 (f) Mortality tables that use mortality methodology
43 consistent with the most recently published actuarial valuation
44 report of the Florida Retirement System.
45 (g) (f) A statement by the enrolled actuary that the report
46 is complete and accurate and that in his or her opinion the
47 techniques and assumptions used are reasonable and meet the
48 requirements and intent of this act.
50 The actuarial cost methods utilized for establishing the amount
51 of the annual actuarial normal cost to support the promised
52 benefits shall only be those methods approved in the Employee
53 Retirement Income Security Act of 1974 and as permitted under
54 regulations prescribed by the Secretary of the Treasury.
55 Section 2. Subsection (1) of section 112.664, Florida
56 Statutes, is amended to read:
57 112.664 Reporting standards for defined benefit retirement
58 plans or systems.—
59 (1) In addition to the other reporting requirements of this
60 part, within 60 days after receipt of the certified actuarial
61 report submitted after the close of the plan year that ends on
62 or after June 30, 2014, and thereafter in each year required
63 under s. 112.63(2), each defined benefit retirement system or
64 plan, excluding the Florida Retirement System, shall prepare and
65 electronically report the following information to the
66 Department of Management Services in a format prescribed by the
68 (a) Annual financial statements that comply are in
69 compliance with the requirements of the Governmental Accounting
70 Standards Government Accounting and Standard Board’s Statement
71 No. 67, titled Financial Reporting for Pension Plans, and
72 Statement No. 68, titled Accounting and Financial Reporting for
73 Pensions, using mortality tables that use mortality methodology
74 consistent with the most recently published actuarial valuation
75 report of the Florida Retirement System RP-2000 Combined Healthy
76 Participant Mortality Tables, by gender, with generational
77 projection by Scale AA.
78 (b) Annual financial statements similar to those required
79 under paragraph (a), but which use an assumed rate of return on
80 investments and an assumed discount rate that are equal to 200
81 basis points less than the plan’s assumed rate of return.
82 (c) Information indicating the number of months or years
83 for which the current market value of assets are adequate to
84 sustain the payment of expected retirement benefits as
85 determined in the plan’s latest valuation and under the
86 financial statements prepared pursuant to paragraphs (a) and
88 (d) Information indicating the recommended contributions to
89 the plan based on the plan’s latest valuation, and the
90 contributions necessary to fund the plan based on financial
91 statements prepared pursuant to paragraphs (a) and (b), stated
92 as an annual dollar value and a percentage of valuation payroll.
93 Section 3. The Legislature finds that a proper and
94 legitimate state purpose is served when employees and retirees
95 of the state and its political subdivisions, and the dependents,
96 survivors, and beneficiaries of such employees and retirees, are
97 extended the basic protections afforded by governmental
98 retirement systems that provide fair and adequate benefits and
99 that are managed, administered, and funded in an actuarially
100 sound manner as required by s. 14, Article X of the State
101 Constitution and part VII of chapter 112, Florida Statutes.
102 Therefore, the Legislature determines and declares that this act
103 fulfills an important state interest.
104 Section 4. This act shall take effect July 1, 2015.