HB 1079

A bill to be entitled

An act relating to the Florida Retirement System; amending

s. 121.021, F.S.; defining the term "public school member"

for purposes of the system; amending s. 121.091, F.S.;

providing retirement benefits payable to public school

members; providing retroactive applicability; providing

for funding of the revision of the Florida Retirement

System by this act; providing a finding of important state

interest; providing an effective date.

Be It Enacted by the Legislature of the State of Florida:

Section 1. Subsection (62) is added to section 121.021,

Florida Statutes, to read:

121.021 Definitions.--The following words and phrases as

used in this chapter have the respective meanings set forth

unless a different meaning is plainly required by the context:

(62) "Public school member" means a member of the Florida

Retirement System Regular Class who is employed by a district

school system, a public charter school, or the Florida School

for the Deaf and the Blind.

Section 2. Subsection (1) of section 121.091, Florida

Statutes, is amended to read:

121.091 Benefits payable under the system.--Benefits may

not be paid under this section unless the member has terminated

employment as provided in s. 121.021(39)(a) or begun

participation in the Deferred Retirement Option Program as

provided in subsection (13), and a proper application has been

filed in the manner prescribed by the department. The department

may cancel an application for retirement benefits when the

member or beneficiary fails to timely provide the information

and documents required by this chapter and the department's

rules. The department shall adopt rules establishing procedures

for application for retirement benefits and for the cancellation

of such application when the required information or documents

are not received.

(1) NORMAL RETIREMENT BENEFIT.--Upon attaining his or her

normal retirement date, the member, upon application to the

administrator, shall receive a monthly benefit which shall begin

to accrue on the first day of the month of retirement and be

payable on the last day of that month and each month thereafter

during his or her lifetime. The normal retirement benefit,

including any past or additional retirement credit, may not

exceed 100 percent of the average final compensation. The amount

of monthly benefit shall be calculated as the product of A and

B, subject to the adjustment of C, if applicable, as set forth

below:

(a)1.a. For creditable years of Regular Class service, A

is 1.60 percent of the member's average final compensation, up

to the member's normal retirement date. Upon completion of the

first year after the normal retirement date, A is 1.63 percent

of the member's average final compensation. Following the

second year after the normal retirement date, A is 1.65 percent

of the member's average final compensation. Following the third

year after the normal retirement date, and for subsequent years,

A is 1.68 percent of the member's average final compensation.

b. For creditable years of Regular Class service, public

school members shall have A determined under the provisions of

sub-subparagraph 1.a. for service up to the "applicability

date," and according to the following table for service earned

after the "applicability date":

Years of Regular Class Service

Benefit Accrual Rate

0-6

1.60%

7-12

1.75%

13-18

1.90%

Over 18

2.10%

As used in this sub-subparagraph, the term "applicability date"

means July 1, 2005, adjusted as follows: for each year of

creditable service as a public school member earned after the

applicability date, 2 years will be subtracted from the

applicability date up to a maximum adjustment of 18 years.

2. For creditable years of special risk service, A is:

a. Two percent of the member's average final compensation

for all creditable years prior to October 1, 1974;

b. Three percent of the member's average final

compensation for all creditable years after September 30, 1974,

and before October 1, 1978;

c. Two percent of the member's average final compensation

for all creditable years after September 30, 1978, and before

January 1, 1989;

d. Two and two-tenths percent of the member's final

monthly compensation for all creditable years after December 31,

1988, and before January 1, 1990;

e. Two and four-tenths percent of the member's average

final compensation for all creditable years after December 31,

1989, and before January 1, 1991;

f. Two and six-tenths percent of the member's average

final compensation for all creditable years after December 31,

1990, and before January 1, 1992;

g. Two and eight-tenths percent of the member's average

final compensation for all creditable years after December 31,

1991, and before January 1, 1993;

h. Three percent of the member's average final

compensation for all creditable years after December 31, 1992;

and

i. Three percent of the member's average final

compensation for all creditable years of service after September

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30, 1978, and before January 1, 1993, for any special risk

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member who retires after July 1, 2000, or any member of the

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Special Risk Administrative Support Class entitled to retain the

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special risk normal retirement date who was a member of the

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Special Risk Class during the time period and who retires after

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July 1, 2000.

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3. For creditable years of Senior Management Service Class

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service after January 31, 1987, A is 2 percent;

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4. For creditable years of Elected Officers' Class service

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as a Supreme Court Justice, district court of appeal judge,

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circuit judge, or county court judge, A is 3 1/3 percent of the

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member's average final compensation, and for all other

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creditable service in such class, A is 3 percent of average

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final compensation;

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(b) B is the number of the member's years and any

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fractional part of a year of creditable service earned

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subsequent to November 30, 1970; and

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forward as of November 30, 1970, by a former member of an

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existing system. Such normal retirement benefit credit shall be

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determined as the product of X and Y when X is the percentage of

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average final compensation which the member would have been

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eligible to receive if the member had attained his or her normal

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retirement date as of November 30, 1970, all in accordance with

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the existing system under which the member is covered on

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November 30, 1970, and Y is average final compensation as

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defined in s. 121.021(25). However, any member of an existing

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retirement system who is eligible to retire and who does retire,

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become disabled, or die prior to April 15, 1971, may have his or

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her retirement benefits calculated on the basis of the best 5 of

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the last 10 years of service.

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(d) A member's average final compensation shall be

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determined by formula to obtain the coverage for the 5 highest

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fiscal years' salaries, calculated as provided by rule.

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Section 3. It is the intent of the Legislature that costs

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attributable to benefit increases for public school members of

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the Florida Retirement System Regular Class shall be funded by

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recognition of lump sums from the excess actuarial assets of the

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Florida Retirement System Trust Fund as follows:

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(1) For fiscal year 2005-2006, the lump sum to be

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recognized shall be the lesser of:

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(a) The amount available under the rate stabilization

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mechanism described in section 121.031, Florida Statutes; or

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(b) The amount needed to pay the annual cost attributable

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to the increased benefit accrual rate for public school members.

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The annual cost shall consist of the increase in normal cost for

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public school members, plus payment of the 30-year amortization

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amount of the increase in the actuarial accrued liability

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attributable to the increase, equal to 2.51 percent of the

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public school member payroll or $212 million for the fiscal year

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2005-2006.

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If, after the recognition of excess actuarial assets pursuant to

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this subsection, there remains an unfunded cost, the

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contribution rate applicable to public school members shall be

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increased by the difference between the annual cost and the

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amount provided by the excess actuarial assets, unless the

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Legislature provides an alternate funding mechanism.

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(2) For fiscal years starting 2006-2007 and thereafter,

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the Legislature shall, as provided in subsection (1), continue

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to fund on an ongoing basis the annual cost attributable to the

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formula improvements.

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Section 4. The Legislature finds that a proper and

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legitimate state purpose is served when employees and retirees

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of the state and of its political subdivisions, and the

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dependents, survivors, and beneficiaries of such employees and

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retirees, are extended the basic protections afforded by

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governmental retirement systems that provide fair and adequate

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benefits that are managed, administered, and funded in an

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actuarially sound manner, as required by Section 14, Article X

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of the State Constitution and part VII of chapter 112, Florida

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Statutes. Therefore, the Legislature determines and declares

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that this act fulfills an important state interest.

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Section 5. This act shall take effect July 1, 2005.

CODING: Words ~~stricken~~ are deletions; words underlined are additions.