Florida Senate - 2015                   (PROPOSED BILL) SPB 7042
       
       
        
       FOR CONSIDERATION By the Committee on Governmental Oversight and
       Accountability
       
       
       
       
       585-01971-15                                          20157042pb
    1                        A bill to be entitled                      
    2         An act relating to the Florida Retirement System;
    3         amending s. 121.053, F.S.; authorizing renewed
    4         membership in the retirement system for retirees who
    5         are reemployed in a position eligible for the Elected
    6         Officers’ Class under certain circumstances; amending
    7         s. 121.055, F.S.; providing for renewed membership in
    8         the retirement system for retirees of the Senior
    9         Management Service Optional Annuity Program who are
   10         employed on or after a specified date; amending s.
   11         121.122, F.S.; requiring that certain retirees who are
   12         employed on or after a specified date be renewed
   13         members in the investment plan; providing exceptions;
   14         specifying that creditable service does not accrue for
   15         a reemployed retiree during a specified period;
   16         prohibiting certain funds from being paid into a
   17         renewed member’s investment plan account for a
   18         specified period of employment; requiring the renewed
   19         member to satisfy vesting requirements; making a
   20         renewed member ineligible to receive disability
   21         benefits; specifying limitations and requirements;
   22         requiring the employer and the retiree to make
   23         applicable contributions to the renewed member’s
   24         investment plan account; providing for the transfer of
   25         contributions; prohibiting the purchase of past
   26         service in the investment plan; authorizing a renewed
   27         member to receive additional credit towards the health
   28         insurance subsidy under certain circumstances;
   29         providing that a retiree employed on or after a
   30         specified date in a regularly established position
   31         eligible for the State University System Optional
   32         Retirement Program or State Community College System
   33         Optional Retirement Program is a renewed member of
   34         that program; specifying limitations and requirements;
   35         requiring the employer and the retiree to make
   36         applicable contributions; prohibiting the purchase of
   37         past service in the program; providing for renewed
   38         membership in the optional retirement program for
   39         certain retirees initially reemployed on or after a
   40         specified date; making the renewed member ineligible
   41         to receive disability benefits; specifying limitations
   42         and requirements; requiring the employer and the
   43         retiree to make applicable contributions; providing
   44         for the transfer of contributions; prohibiting the
   45         purchase of past service in the optional retirement
   46         program; authorizing a renewed member to receive
   47         additional credit towards the health insurance subsidy
   48         under certain circumstances; amending s. 121.4501,
   49         F.S.; revising the definition of the term “eligible
   50         employee”; conforming a provision to changes made by
   51         the act; providing for employer contribution rate
   52         increases to fund changes made by the act; providing a
   53         directive to the Division of Law Revision and
   54         Information; declaring that the act fulfills an
   55         important state interest; providing an effective date.
   56          
   57  Be It Enacted by the Legislature of the State of Florida:
   58  
   59         Section 1. Paragraph (a) of subsection (3) and subsection
   60  (5) of section 121.053, Florida Statutes, are amended to read:
   61         121.053 Participation in the Elected Officers’ Class for
   62  retired members.—
   63         (3) On or after July 1, 2010:
   64         (a) A retiree of a state-administered retirement system who
   65  is initially reemployed in elected or appointed for the first
   66  time to an elective office in a regularly established position
   67  with a covered employer may not reenroll in the Florida
   68  Retirement System, except as provided in s. 121.122.
   69         (5) Any renewed member, as described in s. 121.122(1), (3),
   70  (4), or (5) subsection (1) or subsection (2), who is not
   71  receiving the maximum health insurance subsidy provided in s.
   72  112.363 is entitled to earn additional credit toward the maximum
   73  health insurance subsidy. Any additional subsidy due because of
   74  such additional credit may be received only at the time of
   75  payment of the second career retirement benefit. The total
   76  health insurance subsidy received from initial and renewed
   77  membership may not exceed the maximum allowed in s. 112.363.
   78         Section 2. Paragraph (f) of subsection (1) and paragraph
   79  (c) of subsection (6) of section 121.055, Florida Statutes, are
   80  amended to read:
   81         121.055 Senior Management Service Class.—There is hereby
   82  established a separate class of membership within the Florida
   83  Retirement System to be known as the “Senior Management Service
   84  Class,” which shall become effective February 1, 1987.
   85         (1)
   86         (f) Effective July 1, 1997:
   87         1. Except as provided in subparagraph 3., an elected state
   88  officer eligible for membership in the Elected Officers’ Class
   89  under s. 121.052(2)(a), (b), or (c) who elects membership in the
   90  Senior Management Service Class under s. 121.052(3)(c) may,
   91  within 6 months after assuming office or within 6 months after
   92  this act becomes a law for serving elected state officers, elect
   93  to participate in the Senior Management Service Optional Annuity
   94  Program, as provided in subsection (6), in lieu of membership in
   95  the Senior Management Service Class.
   96         2. Except as provided in subparagraph 3., an elected
   97  officer of a local agency employer eligible for membership in
   98  the Elected Officers’ Class under s. 121.052(2)(d) who elects
   99  membership in the Senior Management Service Class under s.
  100  121.052(3)(c) may, within 6 months after assuming office, or
  101  within 6 months after this act becomes a law for serving elected
  102  officers of a local agency employer, elect to withdraw from the
  103  Florida Retirement System, as provided in subparagraph (b)2., in
  104  lieu of membership in the Senior Management Service Class.
  105         3. A retiree of a state-administered retirement system who
  106  is initially reemployed in a regularly established position on
  107  or after July 1, 2010, through June 30, 2016, as an elected
  108  official eligible for the Elected Officers’ Class may not be
  109  enrolled in renewed membership in the Senior Management Service
  110  Class or in the Senior Management Service Optional Annuity
  111  Program as provided in subsection (6), and may not withdraw from
  112  the Florida Retirement System as a renewed member as provided in
  113  subparagraph (b)2., as applicable, in lieu of membership in the
  114  Senior Management Service Class. Effective July 1, 2016, a
  115  retiree of the Senior Management Service Optional Annuity
  116  Program who reenters covered employment shall be enrolled as a
  117  renewed member as provided in s. 121.122.
  118         (6)
  119         (c) Participation.—
  120         1. An eligible employee who is employed on or before
  121  February 1, 1987, may elect to participate in the optional
  122  annuity program in lieu of participating in the Senior
  123  Management Service Class. Such election shall must be made in
  124  writing and filed with the department and the personnel officer
  125  of the employer on or before May 1, 1987. An eligible employee
  126  who is employed on or before February 1, 1987, and who fails to
  127  make an election to participate in the optional annuity program
  128  by May 1, 1987, is shall be deemed to have elected membership in
  129  the Senior Management Service Class.
  130         2. Except as provided in subparagraph 6., an employee who
  131  becomes eligible to participate in the optional annuity program
  132  by reason of initial employment commencing after February 1,
  133  1987, may, within 90 days after the date of commencing
  134  employment, elect to participate in the optional annuity
  135  program. Such election shall must be made in writing and filed
  136  with the personnel officer of the employer. An eligible employee
  137  who does not within 90 days after commencing employment elect to
  138  participate in the optional annuity program is shall be deemed
  139  to have elected membership in the Senior Management Service
  140  Class.
  141         3. A person who is appointed to a position in the Senior
  142  Management Service Class and who is a member of an existing
  143  retirement system or the Special Risk or Special Risk
  144  Administrative Support Classes of the Florida Retirement System
  145  may elect to remain in such system or class in lieu of
  146  participating in the Senior Management Service Class or optional
  147  annuity program. Such election shall must be made in writing and
  148  filed with the department and the personnel officer of the
  149  employer within 90 days after such appointment. An eligible
  150  employee who fails to make an election to participate in the
  151  existing system, the Special Risk Class of the Florida
  152  Retirement System, the Special Risk Administrative Support Class
  153  of the Florida Retirement System, or the optional annuity
  154  program is shall be deemed to have elected membership in the
  155  Senior Management Service Class.
  156         4. Except as provided in subparagraph 5., an employee’s
  157  election to participate in the optional annuity program is
  158  irrevocable if the employee continues to be employed in an
  159  eligible position and continues to meet the eligibility
  160  requirements set forth in this paragraph.
  161         5. Effective from July 1, 2002, through September 30, 2002,
  162  an active employee in a regularly established position who has
  163  elected to participate in the Senior Management Service Optional
  164  Annuity Program has one opportunity to choose to move from the
  165  Senior Management Service Optional Annuity Program to the
  166  Florida Retirement System Pension Plan.
  167         a. The election shall must be made in writing and must be
  168  filed with the department and the personnel officer of the
  169  employer before October 1, 2002, or, in the case of an active
  170  employee who is on a leave of absence on July 1, 2002, within 90
  171  days after the conclusion of the leave of absence. This election
  172  is irrevocable.
  173         b. The employee shall receive service credit under the
  174  pension plan equal to his or her years of service under the
  175  Senior Management Service Optional Annuity Program. The cost for
  176  such credit is the amount representing the present value of that
  177  employee’s accumulated benefit obligation for the affected
  178  period of service.
  179         c. The employee shall must transfer the total accumulated
  180  employer contributions and earnings on deposit in his or her
  181  Senior Management Service Optional Annuity Program account. If
  182  the transferred amount is not sufficient to pay the amount due,
  183  the employee shall must pay a sum representing the remainder of
  184  the amount due. The employee may not retain any employer
  185  contributions or earnings from the Senior Management Service
  186  Optional Annuity Program account.
  187         6. A retiree of a state-administered retirement system who
  188  is initially reemployed on or after July 1, 2010, through June
  189  30, 2016, may not renew membership in the Senior Management
  190  Service Optional Annuity Program. Effective July 1, 2016, a
  191  retiree of the Senior Management Service Optional Annuity
  192  Program who reenters covered employment shall be enrolled as a
  193  renewed member as provided in s. 121.122.
  194         Section 3. Subsection (2) of section 121.122, Florida
  195  Statutes, is amended, and subsections (3) through (6) are added
  196  to that section, to read:
  197         121.122 Renewed membership in system.—
  198         (2) A retiree of a state-administered retirement system who
  199  is initially reemployed in a regularly established position on
  200  or after July 1, 2010, through June 30, 2016, may not be
  201  enrolled as a renewed member.
  202         (3) A retiree of a state-administered retirement system
  203  specified in subsection (2) who is employed on or after July 1,
  204  2016, in a regularly established position shall be a renewed
  205  member of the investment plan, regardless of the position held,
  206  unless employed in a position eligible for participation in the
  207  State University System Optional Retirement Program or the State
  208  Community College System Optional Retirement Program as provided
  209  in subsections (4) and (5), respectively. A renewed member must
  210  satisfy the vesting requirements and other provisions of this
  211  chapter.
  212         (a) Creditable service, including credit toward the retiree
  213  health insurance subsidy provided in s. 112.363, does not accrue
  214  for a retiree’s employment in a regularly established position
  215  with a covered employer during the period from July 1, 2010,
  216  through June 30, 2016.
  217         (b) Employer and employee contributions, interest,
  218  earnings, or any other funds may not be paid into a renewed
  219  member’s investment plan account for any employment in a
  220  regularly established position with a covered employer from July
  221  1, 2010, through June 30, 2016, by the renewed member or the
  222  employer on behalf of the member.
  223         (c) To be eligible to receive a retirement benefit, the
  224  renewed member must satisfy the vesting requirements in s.
  225  121.4501(6).
  226         (d) The member is ineligible to receive disability benefits
  227  as provided in s. 121.091(4) or s. 121.591(2).
  228         (e) The member is subject to the reemployment after
  229  retirement limitations provided in s. 121.091(9), as applicable.
  230         (f) The member must satisfy the requirements for
  231  termination from employment provided in s. 121.021(39).
  232         (g) Upon the renewed membership or reemployment of a
  233  retiree, the employer and the retiree shall pay the applicable
  234  employer and employee contributions required under ss. 112.363,
  235  121.71, 121.74, and 121.76. The contributions are payable only
  236  for employment and salary earned in a regularly established
  237  position with a covered employer on or after July 1, 2016. The
  238  employer and employee contributions shall be transferred to the
  239  investment plan and placed in a default fund as designated by
  240  the state board. The retiree may move the contributions once an
  241  account is activated in the investment plan.
  242         (h) The member may not purchase any past service in the
  243  investment plan, including employment in a regularly established
  244  position with a covered employer from July 1, 2010, through June
  245  30, 2016.
  246         (i) A renewed member who is a retiree of the investment
  247  plan or pension plan and who is not receiving the maximum health
  248  insurance subsidy provided in s. 112.363 is entitled to earn
  249  additional credit toward the subsidy. Such credit may be earned
  250  only for employment in a regularly established position with a
  251  covered employer on or after July 1, 2016. Any additional
  252  subsidy due because of additional credit may be received only at
  253  the time of paying the second career retirement benefit. The
  254  total health insurance subsidy received by a retiree receiving
  255  benefits from initial and renewed membership may not exceed the
  256  maximum allowed under s. 112.363.
  257         (4) A retiree of a state-administered retirement system
  258  specified in subsection (2) who is employed on or after July 1,
  259  2016, in a regularly established position eligible for
  260  participation in the State University System Optional Retirement
  261  Program shall become a renewed member of the optional retirement
  262  program. The renewed member must satisfy the vesting
  263  requirements and other provisions of this chapter. Once
  264  enrolled, a renewed member remains enrolled in the optional
  265  retirement program while employed in an eligible position for
  266  the optional retirement program. If employment in a different
  267  covered position results in the retiree’s enrollment in the
  268  investment plan, the retiree is no longer eligible to
  269  participate in the optional retirement program unless employed
  270  in a mandatory position under s. 121.35.
  271         (a) The member is subject to the reemployment after
  272  retirement limitations provided in s. 121.091(9), as applicable.
  273         (b) The member must satisfy the requirements for
  274  termination of employment provided in s. 121.021(39).
  275         (c) Upon renewed membership or reemployment of a retiree,
  276  the employer and the retiree shall pay the applicable employer
  277  and employee contributions required under s. 121.35.
  278         (d) The member, or the employer on behalf of the member,
  279  may not purchase any past service in the optional retirement
  280  program or employment from July 1, 2010, to June 30, 2016, when
  281  renewed membership is not available.
  282         (5) A retiree of a state-administered retirement system
  283  specified in subsection (2) who is employed on or after July 1,
  284  2016, in a regularly established position eligible for
  285  participation in the State Community College System Optional
  286  Retirement Program as provided in s. 121.051(2)(c)4., shall
  287  become a renewed member of the optional retirement program. The
  288  renewed member must satisfy the eligibility requirements of this
  289  chapter and s. 1012.875 for the optional retirement program.
  290  Once enrolled, a renewed member remains enrolled in the optional
  291  retirement program while employed in an eligible position for
  292  the optional retirement program. If employment in a different
  293  covered position results in the retiree’s enrollment in the
  294  investment plan, the retiree is no longer eligible to
  295  participate in the optional retirement program.
  296         (a) The member is subject to the reemployment after
  297  retirement limitations provided in s. 121.091(9), as applicable.
  298         (b) The member must satisfy the requirements for
  299  termination of employment provided in s. 121.021(39).
  300         (c) Upon renewed membership or reemployment of a retiree,
  301  the employer and the retiree shall pay the applicable employer
  302  and employee contributions required under ss. 121.051(2)(c) and
  303  1012.875.
  304         (d) The member, or the employer on behalf of the member,
  305  may not purchase any past service in the optional retirement
  306  program or employment accrued from July 1, 2010, to June 30,
  307  2016.
  308         (6) A retiree of a state-administered retirement system who
  309  is initially reemployed in a regularly established position on
  310  or after July 1, 2016, shall be enrolled in the investment plan
  311  unless eligible for participation in the State University System
  312  Optional Retirement Program as provided in s. 121.35 or in the
  313  State Community College System Optional Retirement Program as
  314  provided in ss. 121.051(2)(c) and 1012.875. A renewed member
  315  must satisfy the vesting requirements and other provisions
  316  provided in this chapter.
  317         (a) The member is not entitled to disability benefits as
  318  provided in s. 121.091(4) or s. 121.591(2).
  319         (b) The member is subject to the reemployment after
  320  retirement limitations as provided in s. 121.091(9), as
  321  applicable.
  322         (c) The member must meet the termination from employment
  323  provisions as provided in s. 121.021(39).
  324         (d) Upon the renewed membership of a reemployed retiree,
  325  the employer and the retiree shall pay the applicable employer
  326  and employee contributions as required by ss. 112.363, 121.71,
  327  121.74, and 121.76. The contributions are payable only for
  328  employment and compensation earned in a regularly established
  329  position with a covered employer on or after July 1, 2016. The
  330  employer and employee contributions shall be transferred to the
  331  investment plan and placed in a default fund as designated by
  332  the state board. The retiree may move the contributions once an
  333  account is activated in the investment plan.
  334         (e) The member or the employer on behalf of the member may
  335  not purchase any past service in the optional retirement program
  336  or employment accrued from July 1, 2010 to June 30, 2016.
  337         (f) A renewed member who is a retiree of the investment
  338  plan or pension plan and is not receiving the maximum health
  339  insurance subsidy provided in s. 112.363 is entitled to earn
  340  additional credit toward the subsidy. Such credit may be earned
  341  only for employment in a regularly established position with a
  342  covered employer on or after July 1, 2016. Any additional
  343  subsidy due because of additional credit may be received only at
  344  the time of paying the second career retirement benefit. The
  345  total health insurance subsidy received by a retiree receiving
  346  benefits from initial and renewed membership may not exceed the
  347  maximum allowable under s. 112.363.
  348         Section 4. Paragraph (e) of subsection (2) and paragraph
  349  (f) of subsection (4) of section 121.4501, Florida Statutes, are
  350  amended to read:
  351         121.4501 Florida Retirement System Investment Plan.—
  352         (2) DEFINITIONS.—As used in this part, the term:
  353         (e) “Eligible employee” means an officer or employee, as
  354  defined in s. 121.021, who:
  355         1. Is a member of, or is eligible for membership in, the
  356  Florida Retirement System, including any renewed member of the
  357  Florida Retirement System initially enrolled before July 1,
  358  2010; or
  359         2. Participates in, or is eligible to participate in, the
  360  Senior Management Service Optional Annuity Program as
  361  established under s. 121.055(6), the State Community College
  362  System Optional Retirement Program as established under s.
  363  121.051(2)(c), or the State University System Optional
  364  Retirement Program established under s. 121.35; or
  365         3. Is a retiree of a state-administered retirement system
  366  employed in a regularly established position on or after July 1,
  367  2016, enrolled as a renewed member as provided under s. 121.122.
  368  
  369  The term does not include any member participating in the
  370  Deferred Retirement Option Program established under s.
  371  121.091(13), a retiree of a state-administered retirement system
  372  initially reemployed in a regularly established position on or
  373  after July 1, 2010, through June 30, 2016, or a mandatory
  374  participant of the State University System Optional Retirement
  375  Program established under s. 121.35.
  376         (4) PARTICIPATION; ENROLLMENT.—
  377         (f)1. A member of the investment plan who takes a
  378  distribution of any contributions from his or her investment
  379  plan account is considered a retiree. A retiree who is initially
  380  reemployed in a regularly established position on or after July
  381  1, 2010, and before June 30, 2016, is not eligible for to be
  382  enrolled in renewed membership, except as provided in s.
  383  121.122.
  384         2. A retiree who is initially reemployed on or after July
  385  1, 2016, shall be a renewed member as provided in s. 121.122.
  386         Section 5. (1) In order to fund the benefit changes
  387  provided for in this act, the required employer contribution
  388  rates of the Florida Retirement System established in 121.71(4),
  389  Florida Statutes, shall be adjusted effective July 1, 2016 as
  390  follows:
  391         (a) The Regular Class is increased by X.XX percentage
  392  points.
  393         (b) The Special Risk Class is increased by X.XX percentage
  394  points.
  395         (c) The Special Risk Administrative Support Class is
  396  increased by X.XX percentage points.
  397         (d) The Elected Officers’ Class—Legislators, Governor, Lt.
  398  Governor, Cabinet Officers, State Attorneys, Public Defenders is
  399  increased by X.XX percentage points.
  400         (e) The Elected Officers’ Class—Justices, Judges is
  401  increased by X.XX percentage points.
  402         (f) The Elected Officer’s Class—County Elected Officers is
  403  increased by X.XX percentage points.
  404         (g) The Senior Management Service Class is increased by
  405  X.XX percentage points.
  406         (h) The DROP is increased by X.XX percentage points.
  407         (2) The adjustments provided in subsection (1) shall be
  408  made in addition to other changes to such contribution rates
  409  which may be enacted into law to take effect on July 1, 2015,
  410  and July 1, 2016. The Division of Law Revision and Information
  411  is requested to adjust accordingly the contribution rates
  412  provided in s. 121.71, Florida Statutes.
  413         Section 6. The Legislature finds that a proper and
  414  legitimate state purpose is served when employees and retirees
  415  of the state and its political subdivisions, and the dependents,
  416  survivors, and beneficiaries of such employees and retirees, are
  417  extended the basic protections afforded by governmental
  418  retirement systems. These persons must be provided benefits that
  419  are fair and adequate and that are managed, administered, and
  420  funded in an actuarially sound manner, as required by s. 14,
  421  Article X of the State Constitution and part VII of chapter 112,
  422  Florida Statutes. Therefore, the Legislature determines and
  423  declares that this act fulfills an important state interest.
  424         Section 7. This act shall take effect July 1, 2015.