Florida Senate - 2021                        COMMITTEE AMENDMENT
       Bill No. SB 84
       
       
       
       
       
       
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                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/01/2021           .                                
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       The Committee on Appropriations (Rodrigues) recommended the
       following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete lines 196 - 535
    4  and insert:
    5         (3) INVESTMENT PLAN MEMBERSHIP COMPULSORY.—
    6         (a) All eligible employees and officers, except Special
    7  Risk Class members, those employees and officers eligible to
    8  withdraw from the system under s. 121.052(3)(d) or s. 121.055
    9  (1)(b)2., or those employees eligible for optional retirement
   10  programs under s. 121.051(1)(a), s. 121.051(2)(c), or s. 121.35,
   11  initially enrolled on or after July 1, 2022, are compulsory
   12  members of the investment plan, and membership in the pension
   13  plan is not permitted except as provided in s. 121.591(2) and
   14  (4). Employees initially enrolled on or after July 1, 2022, are
   15  not eligible to use the election opportunity specified in s.
   16  121.4501(4)(e).
   17         (b) Employees eligible to withdraw from the system under s.
   18  121.052(3)(d) or s. 121.055(1)(b)2. may choose to withdraw from
   19  the system or to participate in the investment plan as provided
   20  in those sections. Employees eligible for optional retirement
   21  programs under s. 121.051(2)(c) or s. 121.35 may choose to
   22  participate in the optional retirement program or the investment
   23  plan as provided in those sections. Eligible employees required
   24  to participate in the optional retirement program under s.
   25  121.35, pursuant to s. 121.051(1)(a), must participate in the
   26  investment plan when employed in a position not eligible for the
   27  optional retirement program.
   28         Section 2. Paragraph (c) of subsection (3) of section
   29  121.052, Florida Statutes, is amended to read:
   30         121.052 Membership class of elected officers.—
   31         (3) PARTICIPATION AND WITHDRAWAL, GENERALLY.—Effective July
   32  1, 1990, participation in the Elected Officers’ Class shall be
   33  compulsory for elected officers listed in paragraphs (2)(a)-(d)
   34  and (f) assuming office on or after said date, unless the
   35  elected officer elects membership in another class or withdraws
   36  from the Florida Retirement System as provided in paragraphs
   37  (3)(a)-(d):
   38         (c) Before July 1, 2022, an any elected officer may, within
   39  6 months after assuming office, or within 6 months after this
   40  act becomes a law for serving elected officers, elect membership
   41  in the Senior Management Service Class as provided in s. 121.055
   42  in lieu of membership in the Elected Officers’ Class. Any Such
   43  election does not affect made by a county elected officer shall
   44  have no effect upon the statutory limit on the number of
   45  nonelective full-time positions that may be designated by a
   46  local agency employer for inclusion in the Senior Management
   47  Service Class under s. 121.055(1)(b)1.
   48         Section 3. Paragraph (c) of subsection (3) of section
   49  121.35, Florida Statutes, is amended to read:
   50         121.35 Optional retirement program for the State University
   51  System.—
   52         (3) ELECTION OF OPTIONAL PROGRAM.—
   53         (c) An any employee who becomes eligible to participate in
   54  the optional retirement program on or after January 1, 1993,
   55  shall be a compulsory participant of the program unless such
   56  employee elects membership in the Florida Retirement System.
   57  Such election must shall be made in writing and filed with the
   58  personnel officer of the employer. An any eligible employee who
   59  fails to make such election within the prescribed time period
   60  shall be deemed to have elected to participate in the optional
   61  retirement program.
   62         1. An any employee whose optional retirement program
   63  eligibility results from initial employment shall be enrolled in
   64  the program at the commencement of employment. If, within 90
   65  days after commencement of employment, the employee elects
   66  membership in the Florida Retirement System, such membership
   67  shall be effective retroactive to the date of commencement of
   68  employment as provided in s. 121.4501(4).
   69         2. An Any employee whose optional retirement program
   70  eligibility results from a change in status due to the
   71  subsequent designation of the employee’s position as one of
   72  those specified in paragraph (2)(a) or due to the employee’s
   73  appointment, promotion, transfer, or reclassification to a
   74  position specified in paragraph (2)(a) shall be enrolled in the
   75  optional retirement program upon such change in status and shall
   76  be notified by the employer of such action. If, within 90 days
   77  after the date of such notification, the employee elects to
   78  retain membership in the Florida Retirement System, such
   79  continuation of membership shall be retroactive to the date of
   80  the change in status.
   81         3. Notwithstanding subparagraphs 1. and 2. the provisions
   82  of this paragraph, effective July 1, 1997, an any employee who
   83  is eligible to participate in the optional retirement program
   84  and who fails to execute a contract with one of the approved
   85  companies and to notify the department in writing as provided in
   86  subsection (4) within 90 days after the date of eligibility is
   87  shall be deemed to have elected membership in the Florida
   88  Retirement System, except as provided in s. 121.051(1)(a). This
   89  subparagraph provision shall also applies apply to any employee
   90  who terminates employment in an eligible position before
   91  executing the required investment annuity contract and notifying
   92  the department. Such membership shall be retroactive to the date
   93  of eligibility, and all appropriate contributions shall be
   94  transferred to the Florida Retirement System Trust Fund and the
   95  Retiree Health Insurance Subsidy Trust Fund. If a member is
   96  initially enrolled on or after July 1, 2022, and fails to
   97  execute a contract with one of the approved companies and notify
   98  the department in writing within 90 days after the date of
   99  eligibility as provided in subsection (4), the member is deemed
  100  to have elected membership in the Florida Retirement System
  101  Investment Plan and such membership shall be retroactive to the
  102  date of eligibility. All contributions required under s. 121.72
  103  shall be transferred to a default fund in the investment plan as
  104  provided in s. 121.4501(4)(g) and the Retiree Health Insurance
  105  Subsidy Trust Fund.
  106         Section 4. Subsections (1), (4), (8), (10), and (15) of
  107  section 121.4501, Florida Statutes, are amended to read:
  108         121.4501 Florida Retirement System Investment Plan.—
  109         (1) ESTABLISHMENT.—The Trustees of the State Board of
  110  Administration shall establish a defined contribution program
  111  called the “Florida Retirement System Investment Plan” or
  112  “investment plan” for members of the Florida Retirement System
  113  under which retirement benefits will be provided for eligible
  114  employees initially enrolled before July 1, 2022, who elect to
  115  participate in the program, for Special Risk members, regardless
  116  of the date of initial enrollment, who elect to participate in
  117  the program, and for all other eligible employees initially
  118  enrolled on or after July 1, 2022, who are compulsory members of
  119  the investment plan pursuant to paragraph (4)(g). The retirement
  120  benefits shall be provided through member-directed investments,
  121  in accordance with s. 401(a) of the Internal Revenue Code and
  122  related regulations. The employer and employee shall make
  123  contributions, as provided in this section and ss. 121.571 and
  124  121.71, to the Florida Retirement System Investment Plan Trust
  125  Fund toward the funding of benefits.
  126         (4) PARTICIPATION; ENROLLMENT.—
  127         (a)1. Effective June 1, 2002, through February 28, 2003, a
  128  90-day election period was provided to each eligible employee
  129  participating in the Florida Retirement System, preceded by a
  130  90-day education period, permitting each eligible employee to
  131  elect membership in the investment plan. An employee who failed
  132  to elect the investment plan during the election period remained
  133  in the pension plan. An eligible employee who was employed in a
  134  regularly established position during the election period was
  135  granted the option to make one subsequent election, as provided
  136  in paragraph (f). With respect to an eligible employee who did
  137  not participate in the initial election period or who is
  138  initially employed in a regularly established position after the
  139  close of the initial election period but before January 1, 2018,
  140  such employee shall, by default, be enrolled in the pension plan
  141  at the commencement of employment and may, by the last business
  142  day of the 5th month following the employee’s month of hire,
  143  elect to participate in the investment plan. The employee’s
  144  election must be made in writing or by electronic means and must
  145  be filed with the third-party administrator. The election to
  146  participate in the investment plan is irrevocable, except as
  147  provided in paragraph (f).
  148         a. If the employee files such election within the
  149  prescribed time period, enrollment in the investment plan is
  150  effective on the first day of employment. The retirement
  151  contributions paid through the month of the employee plan change
  152  shall be transferred to the investment program, and, effective
  153  the first day of the next month, the employer and employee must
  154  pay the applicable contributions based on the employee
  155  membership class in the program.
  156         b. An employee who fails to elect to participate in the
  157  investment plan within the prescribed time period is deemed to
  158  have elected to retain membership in the pension plan, and the
  159  employee’s option to elect to participate in the investment plan
  160  is forfeited.
  161         2. With respect to employees who become eligible to
  162  participate in the investment plan pursuant to s.
  163  121.051(2)(c)3. or s. 121.35(3)(i), the employee may elect to
  164  participate in the investment plan in lieu of retaining his or
  165  her membership in the State Community College System Optional
  166  Retirement Program or the State University System Optional
  167  Retirement Program. The election must be made in writing or by
  168  electronic means and must be filed with the third-party
  169  administrator. This election is irrevocable, except as provided
  170  in paragraph (f). Upon making such election, the employee shall
  171  be enrolled as a member in the investment plan, the employee’s
  172  membership in the Florida Retirement System is governed by the
  173  provisions of this part, and the employee’s participation in the
  174  State Community College System Optional Retirement Program or
  175  the State University System Optional Retirement Program
  176  terminates. The employee’s enrollment in the investment plan is
  177  effective on the first day of the month for which a full month’s
  178  employer and employee contribution is made to the investment
  179  plan.
  180         (b)1. With respect to employees who become eligible to
  181  participate in the investment plan by reason of employment in a
  182  regularly established position commencing on or after January 1,
  183  2018, through June 30, 2022, or who did not complete an election
  184  window before June 30, 2022, January 1, 2018, or any employee in
  185  the Special Risk Class initially enrolled on or after July 1,
  186  2022, any such employee shall be enrolled in the pension plan at
  187  the commencement of employment and may, by the last business day
  188  of the eighth month following the employee’s month of hire,
  189  elect to participate in the pension plan or the investment plan.
  190  Eligible employees may make a plan election only if they are
  191  earning service credit in an employer-employee relationship
  192  consistent with s. 121.021(17)(b), excluding leaves of absence
  193  without pay.
  194         2. The employee’s election must be made in writing or by
  195  electronic means and must be filed with the third-party
  196  administrator. The election to participate in the pension plan
  197  or investment plan is irrevocable, except as provided in
  198  paragraph (f).
  199         3.a. Except as provided in subparagraph 4., if the employee
  200  fails to make an election to either the pension plan or the
  201  investment plan during the 8-month period following the month of
  202  hire, the employee is deemed to have elected the investment plan
  203  and shall default into the investment plan retroactively to the
  204  employee’s date of employment. The employee’s option to
  205  participate in the pension plan is forfeited, except as provided
  206  in paragraph (f).
  207         b. The amount of the employee and employer contributions
  208  paid through the date of default to the investment plan shall be
  209  transferred to the investment plan and shall be placed in a
  210  default fund as designated by the State Board of Administration.
  211  The employee may move the contributions once an account is
  212  activated in the investment plan.
  213         4. If the employee is employed in a position included in
  214  the Special Risk Class and fails to make an election to either
  215  the pension plan or the investment plan during the 8-month
  216  period following the month of hire, the employee is deemed to
  217  have elected the pension plan and shall default into the pension
  218  plan retroactively to the employee’s date of employment. The
  219  employee’s option to participate in the investment plan is
  220  forfeited, except as provided in paragraph (f).
  221         5. Effective the first day of the month after an eligible
  222  employee makes a plan election of the pension plan or investment
  223  plan, or the first day of the month after default, the employee
  224  and employer shall pay the applicable contributions based on the
  225  employee membership class in the program.
  226         (c) Contributions available for self-direction by a member
  227  who has not selected one or more specific investment products
  228  shall be allocated as prescribed by the state board. The third
  229  party administrator shall notify the member at least quarterly
  230  that the member should take an affirmative action to make an
  231  asset allocation among the investment products.
  232         (d) On or after July 1, 2011, a member of the pension plan
  233  who obtains a refund of employee contributions retains his or
  234  her prior plan choice upon return to employment in a regularly
  235  established position with a participating employer.
  236         (e)1. A member of the investment plan who takes a
  237  distribution of any contributions from his or her investment
  238  plan account is considered a retiree. A retiree who is initially
  239  reemployed in a regularly established position on or after July
  240  1, 2010, through June 30, 2017, is not eligible for renewed
  241  membership, except as provided in s. 121.122.
  242         2. A retiree who is reemployed on or after July 1, 2017,
  243  shall be enrolled as a renewed member as provided in s. 121.122.
  244         (f) After the period during which an eligible employee
  245  initially enrolled before July 1, 2022, had the choice to elect
  246  the pension plan or the investment plan, or the month following
  247  the receipt of the eligible employee’s plan election, if sooner,
  248  the employee shall have one opportunity, at the employee’s
  249  discretion, to choose to move from the pension plan to the
  250  investment plan or from the investment plan to the pension plan.
  251  Eligible employees may elect to move between plans only if they
  252  are earning service credit in an employer-employee relationship
  253  consistent with s. 121.021(17)(b), excluding leaves of absence
  254  without pay. Effective July 1, 2005, such elections are
  255  effective on the first day of the month following the receipt of
  256  the election by the third-party administrator and are not
  257  subject to the requirements regarding an employer-employee
  258  relationship or receipt of contributions for the eligible
  259  employee in the effective month, except when the election is
  260  received by the third-party administrator. This paragraph is
  261  contingent upon approval by the Internal Revenue Service.
  262         1. If the employee chooses to move to the investment plan,
  263  the provisions of subsection (3) govern the transfer.
  264         2. If the employee chooses to move to the pension plan, the
  265  employee must transfer from his or her investment plan account,
  266  and from other employee moneys as necessary, a sum representing
  267  the present value of that employee’s accumulated benefit
  268  obligation immediately following the time of such movement,
  269  determined assuming that attained service equals the sum of
  270  service in the pension plan and service in the investment plan.
  271  Benefit commencement occurs on the first date the employee is
  272  eligible for unreduced benefits, using the discount rate and
  273  other relevant actuarial assumptions that were used to value the
  274  pension plan liabilities in the most recent actuarial valuation.
  275  For any employee who, at the time of the second election,
  276  already maintains an accrued benefit amount in the pension plan,
  277  the then-present value of the accrued benefit is deemed part of
  278  the required transfer amount. The division must ensure that the
  279  transfer sum is prepared using a formula and methodology
  280  certified by an enrolled actuary. A refund of any employee
  281  contributions or additional member payments made which exceed
  282  the employee contributions that would have accrued had the
  283  member remained in the pension plan and not transferred to the
  284  investment plan is not permitted.
  285         3. Notwithstanding subparagraph 2., an employee who chooses
  286  to move to the pension plan and who became eligible to
  287  participate in the investment plan by reason of employment in a
  288  regularly established position with a state employer after June
  289  1, 2002; a district school board employer after September 1,
  290  2002; or a local employer after December 1, 2002, must transfer
  291  from his or her investment plan account, and from other employee
  292  moneys as necessary, a sum representing the employee’s actuarial
  293  accrued liability. A refund of any employee contributions or
  294  additional member payments made which exceed the employee
  295  contributions that would have accrued had the member remained in
  296  the pension plan and not transferred to the investment plan is
  297  not permitted.
  298         4. An employee’s ability to transfer from the pension plan
  299  to the investment plan pursuant to paragraphs (a) and (b), and
  300  the ability of a current employee to have an option to later
  301  transfer back into the pension plan under subparagraph 2., shall
  302  be deemed a significant system amendment. Pursuant to s.
  303  121.031(4), any resulting unfunded liability arising from actual
  304  original transfers from the pension plan to the investment plan
  305  must be amortized within 30 plan years as a separate unfunded
  306  actuarial base independent of the reserve stabilization
  307  mechanism defined in s. 121.031(3)(f). For the first 25 years, a
  308  direct amortization payment may not be calculated for this base.
  309  During this 25-year period, the separate base shall be used to
  310  offset the impact of employees exercising their second program
  311  election under this paragraph. The actuarial funded status of
  312  the pension plan will not be affected by such second program
  313  elections in any significant manner, after due recognition of
  314  the separate unfunded actuarial base. Following the initial 25
  315  year period, any remaining balance of the original separate base
  316  shall be amortized over the remaining 5 years of the required
  317  30-year amortization period.
  318         5. If the employee chooses to transfer from the investment
  319  plan to the pension plan and retains an excess account balance
  320  in the investment plan after satisfying the buy-in requirements
  321  under this paragraph, the excess may not be distributed until
  322  the member retires from the pension plan. The excess account
  323  balance may be rolled over to the pension plan and used to
  324  purchase service credit or upgrade creditable service in the
  325  pension plan.
  326         (g)1. All eligible employees, except Special Risk Class
  327  members, those employees eligible to withdraw from the system
  328  under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those employees
  329  eligible for optional retirement programs under s.
  330  121.051(1)(a), s. 121.051(2)(c), or s. 121.35, initially
  331  enrolled on or after July 1, 2022, are compulsory members of the
  332  investment plan. Employees eligible to withdraw from the system
  333  under s. 121.052(3)(d) or s. 121.055(1)(b)2. may choose to
  334  withdraw from the system or to participate in the investment
  335  plan as provided in those sections. Employees eligible for
  336  optional retirement programs under s. 121.051(2)(c) or s.
  337  121.35, except as provided in s. 121.051(1)(a), may choose to
  338  participate in the optional retirement program or the investment
  339  plan as provided in those sections. Membership in the pension
  340  plan is not authorized except as provided in s. 121.591(2) and
  341  (4).
  342         2. Employees who are compulsory members of the investment
  343  plan may not use the election opportunity specified in paragraph
  344  (f) unless the employee is initially enrolled in a class other
  345  than the Special Risk Class and is employed subsequently in a
  346  position in the Special Risk Class.
  347         3. As required under s. 121.72, the amount of retirement
  348  contributions paid by the employee and employer shall be
  349  transferred to the investment plan and placed in a default fund
  350  designated by the state board.
  351  
  352  ================= T I T L E  A M E N D M E N T ================
  353  And the title is amended as follows:
  354         Delete lines 3 - 6
  355  and insert:
  356         F.S.; providing for compulsory membership in the
  357         Florida Retirement System Investment Plan for
  358         specified employees initially enrolled on or after a
  359         specified date; providing exceptions; conforming
  360         provisions to