CODING: Words stricken are deletions; words underlined are additions.
HOUSE AMENDMENT
Bill No. HB 2393
Amendment No. (for drafter's use only)
CHAMBER ACTION
Senate House
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5 ORIGINAL STAMP BELOW
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11 Representative(s) Pruitt offered the following:
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13 Amendment (with title amendment)
14 On page 89, between lines 27 and 28 of the bill
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17 Section 36. Paragraph (a) of subsection (3) of section
18 121.031, F.S., is amended to read:
19 121.031 Administration of system; appropriation;
20 oaths; actuarial studies; public records.--
21 (3) The administrator shall cause an actuarial study
22 of the system to be made at least annually once every 2 years
23 and shall report the results of such study to the Legislature
24 by December 31 February 1 prior to the next legislative
25 session.
26 (a) The study shall, at a minimum, conform to the
27 requirements of s. 112.63, with the following exceptions and
28 additions:
29 1. The valuation of plan assets shall be based on a
30 5-year averaging methodology such as that specified in the
31 United States Department of Treasury Regulations, 26 C.F.R. s.
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hap0008 10:20 pm 02393-0081-603139
HOUSE AMENDMENT
Bill No. HB 2393
Amendment No. (for drafter's use only)
1 1.412(c)(2)-1, or a similar accepted approach designed to
2 attenuate fluctuations in asset values.
3 2. The study shall include a narrative explaining the
4 changes in the covered group over the period between actuarial
5 valuations and the impact of those changes on actuarial
6 results.
7 3. When substantial changes in actuarial assumptions
8 have been made, the study shall reflect the results of an
9 actuarial assumption as of the current date based on the
10 assumptions utilized in the prior actuarial report.
11 4. The study shall include an analysis of the changes
12 in actuarial valuation results by the factors generating those
13 changes. Such analysis shall reconcile the current actuarial
14 valuation results with those results from the prior valuation.
15 5. The study shall include measures of funding status
16 and funding progress designed to facilitate the assessment of
17 trends over several actuarial valuations with respect to the
18 overall solvency of the system. Such measures shall be adopted
19 by the division and shall be used consistently in all
20 actuarial valuations performed on the system.
21 6. The actuarial model used to determine the adequate
22 level of funding for the Florida Retirement System shall
23 include a specific rate stabilization mechanism, as prescribed
24 herein. It is the intent of the Legislature to maintain as a
25 reserve a specific portion of any actuarial surplus, and to
26 use such reserve for the purpose of offsetting future unfunded
27 liabilities caused by experience losses, thereby minimizing
28 the risk of future increases in contribution rates. It is
29 further the intent of the Legislature that the use of any
30 excess above the reserve to offset retirement system normal
31 cost will be in a manner that will allow system employers to
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HOUSE AMENDMENT
Bill No. HB 2393
Amendment No. (for drafter's use only)
1 plan appropriately for resulting cost reductions and
2 subsequent cost increases. The rate stabilization mechanism
3 shall operate as follows:
4 a. The actuarial surplus shall be the value of
5 actuarial assets over actuarial liabilities, as is determined
6 on the preceding June 30 or as may be estimated on the
7 preceding December 31.
8 b. The full amount of any experience loss shall be
9 offset, to the extent possible, by any actuarial surplus.
10 c. If the actuarial surplus exceeds 5 percent of
11 actuarial liabilities, one-half of the excess may be used to
12 offset total retirement system costs. In addition, if the
13 actuarial surplus exceeds 10 percent of actuarial liabilities,
14 an additional one-fourth of the excess above 10 percent may be
15 used to offset total retirement system costs. In addition, if
16 the actuarial surplus exceeds 15 percent of actuarial
17 liabilities, an additional one-fourth of the excess above 15
18 percent may be used to offset total retirement system costs.
19 d. Any surplus amounts available to offset total
20 retirement system costs pursuant to sub-subparagraph c. should
21 be amortized each year over a 10 year rolling period on a
22 level dollar basis.
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26 And the title is amended as follows:
27 On page 2, line 22 after "purpose"
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30 amending s. 121.031, F.S.; requiring an
31 actuarial study of the retirement system at
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HOUSE AMENDMENT
Bill No. HB 2393
Amendment No. (for drafter's use only)
1 least annually; requiring the actuarial model
2 to include a rate stabilization mechanism;
3 defining the mechanism;
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File original & 9 copies 04/25/00
hap0008 10:20 pm 02393-0081-603139