Florida Senate - 2014                        COMMITTEE AMENDMENT
       Bill No. SPB 7046
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: FAV            .                                
                  02/18/2014           .                                

    1         Senate Amendment 
    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.