Florida Senate - 2018 SB 980
By Senator Brandes
24-01027-18 2018980__
1 A bill to be entitled
2 An act relating to publicly funded retirement
3 programs; amending s. 112.63, F.S.; revising minimum
4 requirements for actuarial reports for retirement
5 systems or plans subject to part VII of ch. 112, F.S.;
6 requiring the governing body responsible for the
7 retirement system or plan to review the enrolled
8 actuary’s statement within a specified timeframe;
9 requiring the governing body to provide a written
10 explanation if differing actuarial assumptions are
11 adopted; increasing the frequency by which the
12 Department of Management Services must review and
13 comment on a retirement system’s or plan’s actuarial
14 valuations; requiring each local government retirement
15 system or plan to submit certain information
16 accompanying its actuarial report to the department;
17 amending s. 112.64, F.S.; requiring the unfunded
18 liability of retirement systems or plans established
19 on or after a certain date to be amortized within a
20 specified timeframe; revising requirements for
21 determining payroll growth assumptions for unfunded
22 liability amortization schedules; amending s. 112.664,
23 F.S.; modifying requirements for annual reports
24 prepared by each defined benefit retirement system or
25 plan; amending s. 112.665, F.S.; revising duties of
26 the department as to the oversight of local retirement
27 systems or plans; amending s. 121.031, F.S.; requiring
28 the administrator of the Florida Retirement System to
29 provide the results of the system’s actuarial study to
30 the Governor and the presiding officers of the
31 Legislature annually; revising minimum requirements
32 for the actuarial study; amending s. 121.0312, F.S.;
33 requiring the Governor and the presiding officers of
34 the Legislature to acknowledge and review the
35 actuarial valuation report after receipt; specifying
36 minimum requirements for such review; requiring the
37 department to publish the written acknowledgments in a
38 certain manner; amending ss. 121.4501 and 212.055,
39 F.S.; conforming cross-references; providing a
40 declaration of important state interest; providing
41 effective dates.
42
43 Be It Enacted by the Legislature of the State of Florida:
44
45 Section 1. Section 112.63, Florida Statutes, is amended to
46 read:
47 112.63 Actuarial reports and statements of actuarial
48 impact; review.—
49 (1) Each retirement system or plan subject to the
50 provisions of this part must act shall have regularly scheduled
51 actuarial reports prepared and certified by an enrolled actuary.
52 The actuarial report must include shall consist of, but is not
53 limited to, the following:
54 (a) Adequacy of employer and employee contribution rates in
55 meeting levels of employee benefits provided in the system and
56 changes, if any, needed in such rates to achieve or preserve a
57 level of funding deemed adequate to enable payment through the
58 indefinite future of the benefit amounts prescribed by the
59 system, which shall include a valuation of present assets, based
60 on market and actuarial statement value, and current and
61 prospective assets and liabilities of the system and the extent
62 of unfunded accrued liabilities, if any.
63 (b) A plan to amortize any unfunded liability pursuant to
64 s. 112.64 and a description of actions taken to reduce the
65 unfunded liability.
66 (c) A description and explanation of actuarial assumptions.
67 (d) A schedule illustrating the amortization of unfunded
68 liabilities, if any.
69 (e) A list of preretirement and postretirement benefits
70 provided to employees, including, but not limited to, life
71 insurance; health insurance; dental care; vision care; fitness
72 programs, discounts, or reimbursements; continuing education or
73 tuition credit programs; cost-of-living adjustments; payment for
74 unused leave; disability insurance; and health savings accounts
75 or flexible spending accounts.
76 (f) A comparative review illustrating the actual salary
77 increases granted and The rate of investment return realized
78 over the 3-year period preceding the actuarial report with the
79 assumptions used in both the preceding and current actuarial
80 reports.
81 (g)(f) Effective January 1, 2016, the mortality tables used
82 in either of the two most recently published actuarial valuation
83 reports of the Florida Retirement System, including the
84 projection scale for mortality improvement. Appropriate risk and
85 collar adjustments must be made based on plan demographics. The
86 tables must be used for assumptions for preretirement and
87 postretirement mortality.
88 (h)(g) A statement by the enrolled actuary that the report
89 is complete and accurate and that in his or her opinion the
90 techniques and assumptions used are reasonable and meet the
91 requirements and intent of this part act.
92 1. The statement must include an analysis of the assumed
93 rate of return established by the plan’s governing body. The
94 analysis must include specific recommendations regarding an
95 appropriate assumed rate of return.
96 2. The plan’s governing body shall, within 30 days after
97 receipt, review the statement of the enrolled actuary. If the
98 governing body adopted actuarial assumptions other than those
99 recommended by the enrolled actuary producing the actuarial
100 valuation report, the plan’s governing body must provide a
101 written explanation as to why actuarial assumptions other than
102 those recommended were adopted. The written explanation must be
103 published as an addendum to the report.
104
105 The actuarial cost methods used utilized for establishing the
106 amount of the annual actuarial normal cost to support the
107 promised benefits must shall only be those methods approved in
108 the Employee Retirement Income Security Act of 1974 and as
109 authorized permitted under regulations prescribed by the
110 Secretary of the Treasury.
111 (2) The frequency of actuarial reports must be at least
112 every 3 years commencing from the last actuarial report of the
113 plan or system or October 1, 1980, if no actuarial report has
114 been issued within the 3-year period before prior to October 1,
115 1979. The results of each actuarial report must shall be filed
116 with the plan administrator within 60 days after of
117 certification. Thereafter, the results of each actuarial report
118 must shall be made available for inspection upon request.
119 Additionally, each retirement system or plan covered by this
120 part act which is not administered directly by the Department of
121 Management Services shall furnish a copy of each actuarial
122 report to the Department of Management Services within 60 days
123 after receipt from the actuary. The requirements of this section
124 are supplemental to actuarial valuations necessary to comply
125 with the requirements of s. 218.39.
126 (3) A No unit of local government may not shall agree to a
127 proposed change in retirement benefits unless the administrator
128 of the system, before prior to adoption of the change by the
129 governing body, and before prior to the last public hearing
130 thereon, has issued a statement of the actuarial impact of the
131 proposed change upon the local retirement system, consistent
132 with the actuarial review, and has furnished a copy of such
133 statement to the division. Such statement must shall also
134 indicate whether the proposed changes are in compliance with s.
135 14, Art. X of the State Constitution and with s. 112.64.
136 (4) Upon receipt, pursuant to subsection (2), of an
137 actuarial report, or, pursuant to subsection (3), of a statement
138 of actuarial impact, the Department of Management Services shall
139 acknowledge such receipt, and but shall only review and comment
140 on each retirement system’s or plan’s actuarial valuations at
141 least on a triennial basis.
142 (a) If the department finds that the actuarial valuation is
143 not complete, accurate, or based on reasonable assumptions or
144 otherwise materially fails to satisfy the requirements of this
145 part; requires additional material information necessary to
146 complete its review of the actuarial valuation of a system or
147 plan or material information necessary to satisfy the duties of
148 the department pursuant to s. 112.665(1); or does not receive
149 the actuarial report or statement of actuarial impact, the
150 department shall notify the administrator of the affected
151 retirement system or plan and the affected governmental entity
152 and request appropriate adjustment, the additional material
153 information, or the required report or statement. The
154 notification must inform the administrator and the affected
155 governmental entity of the consequences for failing to comply
156 with the requirements of this subsection.
157 (b) If, after a reasonable period of time, a satisfactory
158 adjustment is not made or the report, statement, or additional
159 material information is not provided, the department may notify
160 the Department of Revenue and the Department of Financial
161 Services of the noncompliance, and the Department of Revenue and
162 the Department of Financial Services shall withhold any funds
163 not pledged for satisfaction of bond debt service which are
164 payable to the affected governmental entity until the adjustment
165 is made or the report, statement, or additional material
166 information is provided to the department. The Department of
167 Management Services shall specify the date such action is to
168 begin and notify the Department of Revenue, the Department of
169 Financial Services, and the affected governmental entity 30 days
170 before the specified date.
171 (c) Within 21 days after receipt of the notice, the
172 affected governmental entity may petition the Department of
173 Management Services for a hearing under ss. 120.569 and 120.57.
174 The Department of Revenue and the Department of Financial
175 Services may not be parties to the hearing, but may request to
176 intervene if requested by the Department of Management Services
177 or if the Department of Revenue or the Department of Financial
178 Services determines its interests may be adversely affected by
179 the hearing.
180 1. If the administrative law judge recommends in favor of
181 the department, the department shall perform an actuarial
182 review, prepare the statement of actuarial impact, or collect
183 the requested material information. The cost to the department
184 of performing the actuarial review, preparing the statement, or
185 collecting the requested material information shall be charged
186 to the affected governmental entity whose employees are covered
187 by the retirement system or plan. If payment is not received by
188 the department within 60 days after the affected governmental
189 entity receives the request for payment, the department shall
190 certify to the Department of Revenue and the Department of
191 Financial Services the amount due, and the Department of Revenue
192 and the Department of Financial Services shall pay such amount
193 to the Department of Management Services from funds not pledged
194 for satisfaction of bond debt service which are payable to the
195 affected governmental entity.
196 2. If the administrative law judge recommends in favor of
197 the affected governmental entity and the department performs an
198 actuarial review, prepares the statement of actuarial impact, or
199 collects the requested material information, the cost to the
200 department shall be paid by the Department of Management
201 Services.
202 (d) In the case of an affected special district, the
203 Department of Management Services shall also notify the
204 Department of Economic Opportunity. Upon receipt of
205 notification, the Department of Economic Opportunity shall
206 proceed pursuant to s. 189.067.
207 1. Failure of a special district to provide a required
208 report or statement, to make appropriate adjustments, or to
209 provide additional material information after the procedures
210 specified in s. 189.067(1) are exhausted shall be deemed final
211 action by the special district.
212 2. The Department of Management Services may notify the
213 Department of Economic Opportunity of those special districts
214 that failed to come into compliance. Upon receipt of
215 notification, the Department of Economic Opportunity shall
216 proceed pursuant to s. 189.067(4).
217 (5) Payments made to the fund as required by this chapter
218 shall be based on the normal and past service costs contained in
219 the most recent actuarial valuation, subject to being state
220 accepted.
221 (6) Beginning October 1, 2018 July 1, 1980, each retirement
222 system or plan of a unit of local government shall maintain and
223 submit to the Department of Management Services along with the
224 actuarial report required under this section, in an accurate and
225 accessible format prescribed by the Department of Management
226 Services form, the following information:
227 (a) For each active and inactive member of the system, a
228 number or other means of identification; date of birth; sex;
229 date of employment; period of credited service, split, if
230 required, between prior service and current service; and
231 occupational classification.
232 (b) For each active member, current pay rate, cumulative
233 contributions together with accumulated interest, if credited,
234 age at entry into system, and current rate of contribution.
235 (c) For each inactive member, average final compensation or
236 equivalent and age at which deferred benefit is to begin.
237 (d) For each retired member and other beneficiary, a number
238 or other means of identification, date of birth, sex, beginning
239 date of benefit, type of retirement and amount of monthly
240 benefit, and type of survivor benefit.
241 Section 2. Present subsections (4) through (7) of section
242 112.64, Florida Statutes, are renumbered as subsections (5)
243 through (8), respectively, a new subsection (4) is added to that
244 section, and subsection (3) and present subsection (5) of that
245 section are amended, to read:
246 112.64 Administration of funds; amortization of unfunded
247 liability.—
248 (3) For a retirement system or plan with its first plan
249 year beginning between October 1, 1980, and October 1, 2018
250 which comes into existence after October 1, 1980, the unfunded
251 liability, if any, shall be amortized within 40 years of the
252 first plan year.
253 (4) For a retirement system or plan that comes into
254 existence after October 1, 2018, the unfunded liability, if any,
255 shall be amortized within 30 years of the first plan year.
256 (6)(5)(a) If the amortization schedule for unfunded
257 liability is to be based on a contribution derived in whole or
258 in part from a percentage of the payroll of the system or plan
259 membership, the assumption as to payroll growth may shall not
260 exceed the average payroll growth for the 3 10 years before
261 prior to the latest actuarial valuation of the system or plan
262 unless a transfer, merger, or consolidation of government
263 functions or services occurs, in which case the assumptions for
264 payroll growth may be adjusted and may be based on the
265 membership of the retirement plan or system subsequent to such
266 transfer, merger, or consolidation.
267 (b) An unfunded liability amortization schedule that
268 includes a payroll growth assumption and is in existence on
269 September 30, 1996, or is established thereafter, may be
270 continued using the same payroll growth assumption, or one not
271 exceeding the payroll growth assumption established at the start
272 of the schedule, regardless of the actual 10-year average
273 payroll growth rate, provided that:
274 1. The assumptions underlying the payroll growth rate are
275 consistent with the actuarial assumptions used to determine
276 unfunded liabilities, including, but not limited to, the
277 inflation assumption; and
278 2. The payroll growth rate is reasonable and consistent
279 with future expectations of payroll growth.
280 (c) An unfunded liability amortization schedule that does
281 not include a payroll growth assumption and is in existence on
282 September 30, 1996, or is established thereafter, may be
283 continued or modified to include a payroll growth assumption,
284 provided that such assumption does not exceed the 10-year
285 average payroll growth rate as of the actuarial valuation date
286 such change in the amortization schedule commences. Such
287 schedule may be continued thereafter, subject to the reasonable
288 and consistent requirements in paragraph (b).
289 Section 3. Paragraph (d) of subsection (1) of section
290 112.664, Florida Statutes, is amended to read:
291 112.664 Reporting standards for defined benefit retirement
292 plans or systems.—
293 (1) In addition to the other reporting requirements of this
294 part, within 60 days after receipt of the certified actuarial
295 report submitted after the close of the plan year that ends on
296 or after December 31, 2015, and thereafter in each year required
297 under s. 112.63(2), each defined benefit retirement system or
298 plan, excluding the Florida Retirement System, shall prepare and
299 electronically report the following information to the
300 Department of Management Services in a format prescribed by the
301 department:
302 (d) Information indicating the recommended contributions to
303 the plan based on the plan’s latest valuation, and the
304 contributions necessary to fund the plan based on financial
305 statements prepared pursuant to paragraphs (a) and (b), stated
306 as an annual dollar value, and a percentage of valuation
307 payroll, and a percentage of the annual revenue of the plan
308 sponsor.
309 Section 4. Subsection (1) of section 112.665, Florida
310 Statutes, is amended to read:
311 112.665 Duties of Department of Management Services.—
312 (1) The Department of Management Services shall:
313 (a) Gather, catalog, publish, and maintain complete,
314 computerized data information on all public employee retirement
315 systems or plans in the state based upon receipt and a review of
316 audits, reports, and other data pertaining to the systems or
317 plans;
318 (b) Receive and comment upon all actuarial reviews of
319 retirement systems or plans maintained by units of local
320 government for compliance with the requirements of this part;
321 (c) Cooperate with local retirement systems or plans on
322 matters of mutual concern and provide technical assistance to
323 units of local government in the assessment and revision of
324 retirement systems or plans;
325 (d) Annually issue, by January 1, a report to the President
326 of the Senate and the Speaker of the House of Representatives,
327 which details division activities, findings, and recommendations
328 concerning all governmental retirement systems. The report may
329 include legislation proposed to carry out such recommendations;
330 (e) Provide a fact sheet for each participating local
331 government defined benefit pension plan which summarizes the
332 plan’s actuarial status. The fact sheet should provide a summary
333 of the plan’s most current actuarial data;, minimum funding
334 requirements stated as a percentage of pay, dollar value, and a
335 percentage of the annual revenue of the plan sponsor; and a 5
336 year history of funded ratios. The fact sheet must include a
337 brief explanation of each element in order to maximize the
338 transparency of the local government plans. The fact sheet must
339 also contain the information specified in s. 112.664(1). These
340 documents shall be posted on the department’s website. Plan
341 sponsors that have websites must provide a link to the
342 department’s website;
343 (f) Annually issue, by January 1, a report to the Special
344 District Accountability Program of the Department of Economic
345 Opportunity which includes the participation in and compliance
346 of special districts with the local government retirement system
347 provisions in s. 112.63 and the state-administered retirement
348 system provisions specified in part I of chapter 121; and
349 (g) Adopt reasonable rules to administer this part.
350 Section 5. Subsections (3) and (4) of section 121.031,
351 Florida Statutes, are amended to read:
352 121.031 Administration of system; appropriation; oaths;
353 actuarial studies; public records.—
354 (3) The administrator shall cause an actuarial study of the
355 system to be made at least annually and shall report the results
356 of such study to the Governor, the President of the Senate, and
357 the Speaker of the House of Representatives Legislature by
358 December 31 before prior to the next regular legislative
359 session. The study must shall, at a minimum, conform to the
360 requirements of s. 112.63, with the following exceptions and
361 additions:
362 (a) The valuation of plan assets must shall be based on a
363 5-year averaging methodology as such as that specified in the
364 United States Department of Treasury Regulations, 26 C.F.R. s.
365 1.412(c)(2)-1 in effect on August 16, 2006, or a similar
366 accepted approach designed to attenuate fluctuations in asset
367 values.
368 (b) The study must shall include a narrative explaining the
369 changes in the covered group over the period between actuarial
370 valuations and the impact of those changes on actuarial results.
371 (c) When substantial changes in actuarial assumptions have
372 been made, the study must shall reflect the results of an
373 actuarial assumption as of the current date based on the
374 assumptions utilized in the prior actuarial report.
375 (d) The study must shall include an analysis of the changes
376 in actuarial valuation results by the factors generating those
377 changes. Such analysis shall reconcile the current actuarial
378 valuation results with those results from the prior valuation.
379 (e) The study must shall include measures of funding status
380 and funding progress designed to facilitate the assessment of
381 trends over several actuarial valuations with respect to the
382 overall solvency of the system. Such measures shall be adopted
383 by the department and shall be used consistently in all
384 actuarial valuations performed on the system.
385 (f) The study must include an analysis of the assumed rate
386 of return adopted by the Florida Retirement System Actuarial
387 Assumption Conference pursuant to s. 216.136(10). The analysis
388 must include specific recommendations regarding an appropriate
389 assumed rate of return.
390 (g) The actuarial model used to determine the adequate
391 level of funding for the Florida Retirement System must shall
392 include a specific rate stabilization mechanism, as prescribed
393 herein. It is the intent of the Legislature to maintain as a
394 reserve a specific portion of any actuarial surplus, and to use
395 such reserve for the purpose of offsetting future unfunded
396 liabilities caused by experience losses, thereby minimizing the
397 risk of future increases in contribution rates. It is further
398 the intent of the Legislature that the use of any excess above
399 the reserve to offset retirement system normal costs must shall
400 be in a manner that will allow system employers to plan
401 appropriately for resulting cost reductions and subsequent cost
402 increases. The rate stabilization mechanism operates shall
403 operate as follows:
404 1. The actuarial surplus must shall be the value of
405 actuarial assets over actuarial liabilities, as is determined on
406 the preceding June 30 or as may be estimated on the preceding
407 December 31.
408 2. The full amount of any experience loss shall be offset,
409 to the extent possible, by any actuarial surplus.
410 3. If the actuarial surplus exceeds 5 percent of actuarial
411 liabilities, one-half of the excess may be used to offset total
412 retirement system costs. In addition, if the actuarial surplus
413 exceeds 10 percent of actuarial liabilities, an additional one
414 fourth of the excess above 10 percent may be used to offset
415 total retirement system costs. In addition, if the actuarial
416 surplus exceeds 15 percent of actuarial liabilities, an
417 additional one-fourth of the excess above 15 percent may be used
418 to offset total retirement system costs.
419 4. Any surplus amounts available to offset total retirement
420 system costs pursuant to subparagraph 3. should be amortized
421 each year over a 10-year rolling period on a level-dollar basis.
422 (4) Notwithstanding the provisions of s. 112.64(5) s.
423 112.64(4) to the contrary, the net increase, if any, in unfunded
424 liability under the system arising from significant system
425 amendments adopted or changes in assumptions must shall be
426 amortized within 30 plan years.
427 Section 6. Effective July 1, 2019, section 121.0312,
428 Florida Statutes, is amended to read:
429 121.0312 Acknowledgment of review; actuarial valuation
430 report; contribution rate determination process.—
431 (1) The Governor, Chief Financial Officer, and Attorney
432 General, sitting as the Board of Trustees of the State Board of
433 Administration, shall review the actuarial valuation report
434 prepared in accordance with the provisions of this chapter. The
435 state board shall review the process by which Florida Retirement
436 System contribution rates are determined and recommend and
437 submit any comments regarding the process to the Legislature.
438 (2) The Governor, the President of the Senate, and the
439 Speaker of the House of Representatives shall, within 30 days
440 after receipt, acknowledge in writing their acceptance and
441 review of the actuarial valuation report prepared in accordance
442 with this chapter and any recommendations regarding actuarial
443 assumptions contained therein. The review must contain an
444 explanation from each principal as to why actuarial assumptions
445 other than those recommended by the enrolled actuary producing
446 the actuarial valuation report were adopted by the Florida
447 Retirement System Actuarial Assumption Conference. The
448 department shall publish the written acknowledgments as addenda
449 to the report.
450 Section 7. Paragraph (f) of subsection (4) of section
451 121.4501, Florida Statutes, is amended to read:
452 121.4501 Florida Retirement System Investment Plan.—
453 (4) PARTICIPATION; ENROLLMENT.—
454 (f) After the period during which an eligible employee had
455 the choice to elect the pension plan or the investment plan, or
456 the month following the receipt of the eligible employee’s plan
457 election, if sooner, the employee shall have one opportunity, at
458 the employee’s discretion, to choose to move from the pension
459 plan to the investment plan or from the investment plan to the
460 pension plan. Eligible employees may elect to move between plans
461 only if they are earning service credit in an employer-employee
462 relationship consistent with s. 121.021(17)(b), excluding leaves
463 of absence without pay. Effective July 1, 2005, such elections
464 are effective on the first day of the month following the
465 receipt of the election by the third-party administrator and are
466 not subject to the requirements regarding an employer-employee
467 relationship or receipt of contributions for the eligible
468 employee in the effective month, except when the election is
469 received by the third-party administrator. This paragraph is
470 contingent upon approval by the Internal Revenue Service.
471 1. If the employee chooses to move to the investment plan,
472 the provisions of subsection (3) govern the transfer.
473 2. If the employee chooses to move to the pension plan, the
474 employee must transfer from his or her investment plan account,
475 and from other employee moneys as necessary, a sum representing
476 the present value of that employee’s accumulated benefit
477 obligation immediately following the time of such movement,
478 determined assuming that attained service equals the sum of
479 service in the pension plan and service in the investment plan.
480 Benefit commencement occurs on the first date the employee is
481 eligible for unreduced benefits, using the discount rate and
482 other relevant actuarial assumptions that were used to value the
483 pension plan liabilities in the most recent actuarial valuation.
484 For any employee who, at the time of the second election,
485 already maintains an accrued benefit amount in the pension plan,
486 the then-present value of the accrued benefit is deemed part of
487 the required transfer amount. The division must ensure that the
488 transfer sum is prepared using a formula and methodology
489 certified by an enrolled actuary. A refund of any employee
490 contributions or additional member payments made which exceed
491 the employee contributions that would have accrued had the
492 member remained in the pension plan and not transferred to the
493 investment plan is not permitted.
494 3. Notwithstanding subparagraph 2., an employee who chooses
495 to move to the pension plan and who became eligible to
496 participate in the investment plan by reason of employment in a
497 regularly established position with a state employer after June
498 1, 2002; a district school board employer after September 1,
499 2002; or a local employer after December 1, 2002, must transfer
500 from his or her investment plan account, and from other employee
501 moneys as necessary, a sum representing the employee’s actuarial
502 accrued liability. A refund of any employee contributions or
503 additional member payments made which exceed the employee
504 contributions that would have accrued had the member remained in
505 the pension plan and not transferred to the investment plan is
506 not permitted.
507 4. An employee’s ability to transfer from the pension plan
508 to the investment plan pursuant to paragraphs (a) and (b), and
509 the ability of a current employee to have an option to later
510 transfer back into the pension plan under subparagraph 2., shall
511 be deemed a significant system amendment. Pursuant to s.
512 121.031(4), any resulting unfunded liability arising from actual
513 original transfers from the pension plan to the investment plan
514 must be amortized within 30 plan years as a separate unfunded
515 actuarial base independent of the reserve stabilization
516 mechanism defined in s. 121.031(3)(g) s. 121.031(3)(f). For the
517 first 25 years, a direct amortization payment may not be
518 calculated for this base. During this 25-year period, the
519 separate base shall be used to offset the impact of employees
520 exercising their second program election under this paragraph.
521 The actuarial funded status of the pension plan will not be
522 affected by such second program elections in any significant
523 manner, after due recognition of the separate unfunded actuarial
524 base. Following the initial 25-year period, any remaining
525 balance of the original separate base shall be amortized over
526 the remaining 5 years of the required 30-year amortization
527 period.
528 5. If the employee chooses to transfer from the investment
529 plan to the pension plan and retains an excess account balance
530 in the investment plan after satisfying the buy-in requirements
531 under this paragraph, the excess may not be distributed until
532 the member retires from the pension plan. The excess account
533 balance may be rolled over to the pension plan and used to
534 purchase service credit or upgrade creditable service in the
535 pension plan.
536 Section 8. Paragraphs (d) and (e) of subsection (9) of
537 section 212.055, Florida Statutes, are amended to read:
538 212.055 Discretionary sales surtaxes; legislative intent;
539 authorization and use of proceeds.—It is the legislative intent
540 that any authorization for imposition of a discretionary sales
541 surtax shall be published in the Florida Statutes as a
542 subsection of this section, irrespective of the duration of the
543 levy. Each enactment shall specify the types of counties
544 authorized to levy; the rate or rates which may be imposed; the
545 maximum length of time the surtax may be imposed, if any; the
546 procedure which must be followed to secure voter approval, if
547 required; the purpose for which the proceeds may be expended;
548 and such other requirements as the Legislature may provide.
549 Taxable transactions and administrative procedures shall be as
550 provided in s. 212.054.
551 (9) PENSION LIABILITY SURTAX.—
552 (d) The local government may use the pension liability
553 surtax proceeds in the following manner:
554 1. If the proceeds of the pension liability surtax have
555 been actuarially recognized as provided in s. 112.64(7) s.
556 112.64(6), the local government must distribute the proceeds to
557 an eligible defined benefit retirement plan or system, not
558 including the Florida Retirement System.
559 2. If the proceeds of the pension liability surtax have not
560 been actuarially recognized, the local government is authorized
561 to distribute the proceeds to an eligible defined benefit
562 retirement plan or system, not including the Florida Retirement
563 System, to pledge the proceeds of the surtax to repay debts
564 incurred for the purpose of making advanced payments toward the
565 unfunded liability of an underfunded defined benefit retirement
566 plan or system, and to reimburse itself from the proceeds of the
567 surtax for any borrowing costs associated with such debts.
568 (e) The ordinance providing for the imposition of the
569 pension liability surtax must specify how the proceeds will be
570 used:
571 1. The ordinance must specify the method of determining the
572 percentage of the proceeds, and the frequency of such payments,
573 distributed to each eligible defined benefit retirement plan or
574 system if the proceeds of the pension liability surtax are
575 actuarially recognized as provided in s. 112.64(7) s. 112.64(6).
576 2. The ordinance must specify the local government’s
577 intention to incur debt for the purpose of making advanced
578 payments toward the unfunded liability of an underfunded defined
579 benefit retirement plan or system if the proceeds of the pension
580 liability surtax are not actuarially recognized as provided in
581 s. 112.64(7) s. 112.64(6).
582 Section 9. The Legislature finds that a proper and
583 legitimate state purpose is served when employees and retirees
584 of the state and its political subdivisions, and the dependents,
585 survivors, and beneficiaries of such employees and retirees, are
586 extended the basic protections afforded by governmental
587 retirement systems that provide fair and adequate benefits and
588 that are managed, administered, and funded in an actuarially
589 sound manner as required by s. 14, Article X of the State
590 Constitution and part VII of chapter 112, Florida Statutes.
591 Therefore, the Legislature determines and declares that this act
592 fulfills an important state interest.
593 Section 10. Except as otherwise expressly provided in this
594 act, this act shall take effect July 1, 2018.