Florida Senate - 2014 COMMITTEE AMENDMENT Bill No. SPB 7046 Ì3383721Î338372 LEGISLATIVE ACTION Senate . House Comm: FAV . 02/18/2014 . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— following: 1 Senate Amendment 2 3 Between lines 491 and 492 4 insert: 5 (e) Eligible employees may elect to move between plans only 6 if they are earning service credit in an employer-employee 7 relationship consistent with s. 121.021(17)(b), excluding leaves 8 of absence without pay. Such elections are effective on the 9 first day of the month following receipt of the election by the 10 third-party administrator. This paragraph is contingent upon 11 approval by the Internal Revenue Service. 12 1. If the employee chooses to move from the pension plan to 13 the investment plan, s. 121.4501(3) governs the transfer. 14 2. If the employee chooses to move from the pension plan or 15 investment plan to the cash balance plan, subsection (2) governs 16 the transfer. 17 3. If the employee chooses to move from the cash balance 18 plan to the investment plan and establishes one or more 19 individual member accounts, the employee may elect to transfer a 20 sum representing the balance of the member’s cash balance 21 accounts to the investment plan. Upon transfer, all service 22 credit earned under the cash balance plan is nullified for 23 purposes of entitlement to a future benefit under the cash 24 balance plan. 25 4. If an employee participating in the Special Risk Class 26 chooses to move to the pension plan, the employee must transfer 27 from his or her investment plan account or cash balance accounts 28 and from other employee moneys as necessary, a sum representing 29 the present value of the employee’s accumulated benefit 30 obligation immediately following the time of such movement, 31 determined by assuming that attained service equals the sum of 32 service in the pension plan, service in the investment plan, and 33 service in the cash balance plan. Benefit commencement occurs on 34 the first date the employee is eligible for unreduced benefits 35 using the discount rate and other relevant actuarial assumptions 36 that were used to value the pension plan liabilities in the most 37 recent actuarial valuation. For an employee who, at the time of 38 the election, already maintains an accrued benefit amount in the 39 pension plan, the then-present value of the accrued benefit is 40 deemed part of the required transfer amount. The division must 41 ensure that the transfer sum is prepared using a formula and 42 methodology certified by an enrolled actuary. A refund of 43 employee contributions or additional member payments made which 44 exceed the employee contributions that would have accrued had 45 the member remained in the pension plan and not transferred to 46 the investment plan or cash balance plan is not permitted. 47 5. An employee’s ability to transfer from the pension plan 48 to the investment plan or cash balance plan, and the ability of 49 a current employee to have the option to later transfer back 50 into the pension plan, shall be deemed a significant system 51 amendment. Pursuant to s. 121.031(4), any resulting unfunded 52 liability arising from actual original transfers from the 53 pension plan to the investment plan must be amortized within 30 54 plan years as a separate unfunded actuarial base independent of 55 the reserve stabilization mechanism described in s. 56 121.031(3)(f). For the first 25 years, a direct amortization 57 payment may not be calculated for this base. During this period, 58 the separate base shall be used to offset the impact of 59 employees exercising their option to transfer back into the 60 pension plan. The actuarial funded status of the pension plan is 61 not affected by such second program elections in a significant 62 manner after due recognition of the separate unfunded actuarial 63 base. Following the initial 25-year period, any remaining 64 balance of the original separate base shall be amortized over 65 the remaining 5 years of the required 30-year amortization 66 period. 67 6. If an employee participating in the Special Risk Class 68 chooses to transfer from the investment plan or cash balance 69 plan to the pension plan and retains an excess account balance 70 in the investment plan after satisfying the buy-in requirements 71 under this paragraph, the excess may not be distributed until 72 the member retires from the pension plan. The excess account 73 balance may be rolled over to the pension plan and used to 74 purchase service credit or upgrade creditable service in the 75 pension plan.