Florida Senate - 2016                                    SB 7042
       
       
        
       By the Committee on Governmental Oversight and Accountability
       
       585-01991-16                                          20167042__
    1                        A bill to be entitled                      
    2         An act relating to state-administered retirement
    3         systems; amending s. 121.4501, F.S.; correcting a
    4         reference to the trust fund to which certain employer
    5         assessments are transferred; amending s. 121.71, F.S.;
    6         revising required employer retirement contribution
    7         rates for each membership class and subclass of the
    8         Florida Retirement System; amending s. 121.74, F.S.;
    9         revising the employer assessment rate for offsetting
   10         administrative and educational costs related to the
   11         Florida Retirement System; providing a declaration of
   12         important state interest; providing an effective date.
   13          
   14  Be It Enacted by the Legislature of the State of Florida:
   15  
   16         Section 1. Paragraph (c) of subsection (5) of section
   17  121.4501, Florida Statutes, is amended to read:
   18         121.4501 Florida Retirement System Investment Plan.—
   19         (5) CONTRIBUTIONS.—
   20         (c) The state board, acting as plan fiduciary, must ensure
   21  that all plan assets are held in a trust, pursuant to s. 401 of
   22  the Internal Revenue Code. The fiduciary must ensure that such
   23  contributions are allocated as follows:
   24         1. The employer and employee contribution portion earmarked
   25  for member accounts shall be used to purchase interests in the
   26  appropriate investment vehicles as specified by the member, or
   27  in accordance with paragraph (4)(d).
   28         2. The employer contribution portion earmarked for
   29  administrative and educational expenses shall be transferred to
   30  the state board’s Administrative Florida Retirement System
   31  Investment Plan Trust Fund.
   32         3. The employer contribution portion earmarked for
   33  disability benefits shall be transferred to the Florida
   34  Retirement System Trust Fund.
   35         Section 2. Subsections (4) and (5) of section 121.71,
   36  Florida Statutes, are amended to read:
   37         121.71 Uniform rates; process; calculations; levy.—
   38         (4) Required employer retirement contribution rates for
   39  each membership class and subclass of the Florida Retirement
   40  System for both retirement plans are as follows:
   41  
   42  Membership Class            Percentage ofGrossCompensation,EffectiveJuly 1, 2016 2015
   43  
   44  Regular Class                             2.97% 2.91%              
   45  Special Risk Class                          11.35%                 
   46  Special Risk Administrative Support Class              3.87% 3.71%              
   47  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders              6.63% 6.48%              
   48  Elected Officers’ Class— Justices, Judges             11.68% 11.39%             
   49  Elected Officers’ Class— County Elected Officers              8.55% 8.48%              
   50  Senior Management Class                   4.38% 4.32%              
   51  DROP                                      4.17% 4.10%              
   52         (5) In order to address unfunded actuarial liabilities of
   53  the system, the required employer retirement contribution rates
   54  for each membership class and subclass of the Florida Retirement
   55  System for both retirement plans are as follows:
   56  
   57  
   58  Membership Class            Percentage ofGrossCompensation,EffectiveJuly 1, 2016 2015
   59  
   60  Regular Class                             2.83% 2.65%              
   61  Special Risk Class                        8.92% 8.99%              
   62  Special Risk Administrative Support Class             22.47% 27.54%             
   63  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders             33.75% 37.62%             
   64  Elected Officers’ Class— Justices, Judges             23.30% 22.62%             
   65  Elected Officers’ Class— County Elected Officers             32.20% 32.09%             
   66  Senior Management Service Class             15.67% 15.41%             
   67  DROP                                      7.10% 7.12%              
   68         Section 3. Section 121.74, Florida Statutes, is amended to
   69  read:
   70         121.74 Administrative and educational expenses.—In addition
   71  to contributions required to fund member accounts under ss.
   72  121.71 and 121.73, effective July 1, 2010, through June 30,
   73  2014, employers participating in the Florida Retirement System
   74  shall contribute an employer assessment amount equal to 0.03
   75  percent of the payroll reported for each class or subclass of
   76  Florida Retirement System membership. Effective July 1, 2014,
   77  the employer assessment is 0.04 percent of the payroll reported
   78  for each class or subclass of membership. Effective July 1,
   79  2016, the employer assessment is 0.06 percent of the payroll
   80  reported for each class or subclass of membership. The amount
   81  assessed shall be transferred by the Division of Retirement from
   82  the Florida Retirement System Contributions Clearing Trust Fund
   83  to the State Board of Administration’s Administrative Trust Fund
   84  to offset the costs of administering the investment plan and the
   85  costs of providing educational services to members of the
   86  Florida Retirement System. Approval of the trustees is required
   87  before the expenditure of these funds. Payments for third-party
   88  administrative or educational expenses shall be made only
   89  pursuant to the terms of the approved contracts for such
   90  services.
   91         Section 4. The Legislature finds that a proper and
   92  legitimate state interest is served when employees, officers,
   93  and retirees of the state and its political subdivisions, and
   94  the dependents, survivors, and beneficiaries of such employees,
   95  officers, and retirees, are extended the basic protections
   96  afforded by governmental retirement systems. These persons must
   97  be provided benefits that are fair and adequate and that are
   98  managed, administered, and funded in an actuarially sound
   99  manner, as required by s. 14, Article X of the State
  100  Constitution and part VII of chapter 112, Florida Statutes.
  101  Therefore, the Legislature determines and declares that this act
  102  fulfills an important state interest.
  103         Section 5. This act shall take effect July 1, 2016.