HB 1149

1	A bill to be entitled
2	An act relating to the Florida Retirement System; amending
3	s. 121.091, F.S.; revising the calculation of retirement
4	benefits payable to Regular Class members; providing
5	retroactive applicability; providing for funding of
6	benefit increases to Regular Class members; providing a
7	finding of important state interest; providing an
8	effective date.
9
10	Be It Enacted by the Legislature of the State of Florida:
11
12	Section 1.  Subsection (1) of section 121.091, Florida
13	Statutes, is amended to read:
14	121.091  Benefits payable under the system.--Benefits may
15	not be paid under this section unless the member has terminated
16	employment as provided in s. 121.021(39)(a) or begun
17	participation in the Deferred Retirement Option Program as
18	provided in subsection (13), and a proper application has been
19	filed in the manner prescribed by the department. The department
20	may cancel an application for retirement benefits when the
21	member or beneficiary fails to timely provide the information
22	and documents required by this chapter and the department's
23	rules. The department shall adopt rules establishing procedures
24	for application for retirement benefits and for the cancellation
25	of such application when the required information or documents
26	are not received.
27	(1)  NORMAL RETIREMENT BENEFIT.--Upon attaining his or her
28	normal retirement date, the member, upon application to the
29	administrator, shall receive a monthly benefit which shall begin
30	to accrue on the first day of the month of retirement and be
31	payable on the last day of that month and each month thereafter
32	during his or her lifetime. The normal retirement benefit,
33	including any past or additional retirement credit, may not
34	exceed 100 percent of the average final compensation. The amount
35	of monthly benefit shall be calculated as the product of A and
36	B, subject to the adjustment of C, if applicable, as set forth
37	below:
38	(a)1.a.  Prior to July 1, 2006, for creditable years of
39	Regular Class service, A is 1.60 percent of the member's average
40	final compensation, up to the member's normal retirement date.
41	Upon completion of the first year after the normal retirement
42	date, A is 1.63 percent of the member's average final
43	compensation. Following the second year after the normal
44	retirement date, A is 1.65 percent of the member's average final
45	compensation. Following the third year after the normal
46	retirement date, and for subsequent years, A is 1.68 percent of
47	the member's average final compensation.
48	b.  Beginning July 1, 2006, for all creditable years of
49	Regular Class service including service years prior to July 1,
50	2006, A is 2.00 percent of the member's average final
51	compensation.
52	2.  For creditable years of special risk service, A is:
53	a.  Two percent of the member's average final compensation
54	for all creditable years prior to October 1, 1974;
55	b.  Three percent of the member's average final
56	compensation for all creditable years after September 30, 1974,
57	and before October 1, 1978;
58	c.  Two percent of the member's average final compensation
59	for all creditable years after September 30, 1978, and before
60	January 1, 1989;
61	d.  Two and two-tenths percent of the member's final
62	monthly compensation for all creditable years after December 31,
63	1988, and before January 1, 1990;
64	e.  Two and four-tenths percent of the member's average
65	final compensation for all creditable years after December 31,
66	1989, and before January 1, 1991;
67	f.  Two and six-tenths percent of the member's average
68	final compensation for all creditable years after December 31,
69	1990, and before January 1, 1992;
70	g.  Two and eight-tenths percent of the member's average
71	final compensation for all creditable years after December 31,
72	1991, and before January 1, 1993;
73	h.  Three percent of the member's average final
74	compensation for all creditable years after December 31, 1992;
75	and
76	i.  Three percent of the member's average final
77	compensation for all creditable years of service after September
78	30, 1978, and before January 1, 1993, for any special risk
79	member who retires after July 1, 2000, or any member of the
80	Special Risk Administrative Support Class entitled to retain the
81	special risk normal retirement date who was a member of the
82	Special Risk Class during the time period and who retires after
83	July 1, 2000.
84	3.  For creditable years of Senior Management Service Class
85	service after January 31, 1987, A is 2 percent;
86	4.  For creditable years of Elected Officers' Class service
87	as a Supreme Court Justice, district court of appeal judge,
88	circuit judge, or county court judge, A is 31/3 percent of the
89	member's average final compensation, and for all other
90	creditable service in such class, A is 3 percent of average
91	final compensation;
92	(b)  B is the number of the member's years and any
93	fractional part of a year of creditable service earned
94	subsequent to November 30, 1970; and
95	(c)  C is the normal retirement benefit credit brought
96	forward as of November 30, 1970, by a former member of an
97	existing system. Such normal retirement benefit credit shall be
98	determined as the product of X and Y when X is the percentage of
99	average final compensation which the member would have been
100	eligible to receive if the member had attained his or her normal
101	retirement date as of November 30, 1970, all in accordance with
102	the existing system under which the member is covered on
103	November 30, 1970, and Y is average final compensation as
104	defined in s. 121.021(25). However, any member of an existing
105	retirement system who is eligible to retire and who does retire,
106	become disabled, or die prior to April 15, 1971, may have his or
107	her retirement benefits calculated on the basis of the best 5 of
108	the last 10 years of service.
109	(d)  A member's average final compensation shall be
110	determined by formula to obtain the coverage for the 5 highest
111	fiscal years' salaries, calculated as provided by rule.
112	Section 2.  It is the intent of the Legislature that costs
113	attributable to benefit increases for Regular Class members of
114	the Florida Retirement System shall be funded by recognition of
115	lump sums from the excess actuarial assets of the Florida
116	Retirement System Trust Fund as follows:
117	(1)  For fiscal year 2006-2007, the lump sum to be
118	recognized shall be the lesser of:
119	(a)  The amount available under the rate stabilization
120	mechanism described in s. 121.031, Florida Statutes; or
121	(b)  The amount needed to pay the annual cost attributable
122	to the increased benefit accrual rate for Regular Class members.
123	The annual cost shall consist of the increase in normal cost for
124	Regular Class members plus payment of the 30-year amortization
125	amount of the increase in the actuarial accrued liability
126	attributable to the increase, equal to 4.59 percent of the
127	Regular Class member payroll.
128
129	If, after the recognition of excess actuarial assets pursuant to
130	this subsection, there remains an unfunded cost, the
131	contribution rate applicable to Regular Class members shall be
132	increased by the difference between the annual cost and the
133	amount provided by the excess actuarial assets, unless the
134	Legislature provides an alternate funding mechanism.
135	(2)  For fiscal years beginning with 2007-2008, the
136	Legislature shall, as provided in subsection (1), continue to
137	fund on an ongoing basis the annual cost attributable to the
138	formula improvements.
139	Section 3.  The Legislature finds that a proper and
140	legitimate state purpose is served when employees and retirees
141	of the state and of its political subdivisions, and the
142	dependents, survivors, and beneficiaries of such employees and
143	retirees, are extended the basic protections afforded by
144	governmental retirement systems that provide fair and adequate
145	benefits that are managed, administered, and funded in an
146	actuarially sound manner, as required by s. 14, Art. X of the
147	State Constitution and part VII of chapter 112, Florida
148	Statutes. Therefore, the Legislature determines and declares
149	that this act fulfills an important state interest.
150	Section 4.  This act shall take effect July 1, 2006.

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