| 1 | A bill to be entitled |
| 2 | An act relating to the Florida Retirement System; amending |
| 3 | s. 121.051, F.S.; revising criteria for participation in |
| 4 | the State Community College System Optional Retirement |
| 5 | Program by employees of public community colleges or |
| 6 | charter technical career centers sponsored by public |
| 7 | community colleges; amending s. 121.35, F.S.; authorizing |
| 8 | certain employees who are members of the Florida |
| 9 | Retirement System to elect membership in the State |
| 10 | University System Optional Retirement Program; authorizing |
| 11 | a one-time opportunity to transfer from the State |
| 12 | University System Optional Retirement Program to the |
| 13 | defined benefit program of the Florida Retirement System |
| 14 | or to the Public Employee Optional Retirement Program; |
| 15 | providing for transfer of retirement contributions, |
| 16 | interest, and earnings; providing employees with service |
| 17 | credit upon transferring into a new program; providing |
| 18 | requirements for the calculation of service credit; |
| 19 | requiring employees to transfer funds upon moving into a |
| 20 | new program; amending s. 121.4501, F.S.; revising the |
| 21 | definition of "eligible employee" for purposes of the |
| 22 | Public Employee Optional Retirement Program; authorizing |
| 23 | eligible employees to elect to participate in the Public |
| 24 | Employee Optional Retirement Program in lieu of retaining |
| 25 | their participation in the State University System |
| 26 | Optional Retirement Program; providing an effective date. |
| 27 |
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| 28 | Be It Enacted by the Legislature of the State of Florida: |
| 29 |
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| 30 | Section 1. Paragraph (c) of subsection (2) of section |
| 31 | 121.051, Florida Statutes, is amended to read: |
| 32 | 121.051 Participation in the system.-- |
| 33 | (2) OPTIONAL PARTICIPATION.-- |
| 34 | (c) Employees of public community colleges or charter |
| 35 | technical career centers sponsored by public community colleges, |
| 36 | as designated in s. 1000.21(3), who are members of the Regular |
| 37 | Class of the Florida Retirement System and who comply with the |
| 38 | criteria set forth in this paragraph and in s. 1012.875 may |
| 39 | elect, in lieu of participating in the Florida Retirement |
| 40 | System, to withdraw from the Florida Retirement System |
| 41 | altogether and participate in an optional retirement program |
| 42 | provided by the employing agency under s. 1012.875, to be known |
| 43 | as the State Community College System Optional Retirement |
| 44 | Program. Pursuant thereto: |
| 45 | 1. Through June 30, 2001, the cost to the employer for |
| 46 | such annuity shall equal the normal cost portion of the employer |
| 47 | retirement contribution which would be required if the employee |
| 48 | were a member of the Regular Class defined benefit program, plus |
| 49 | the portion of the contribution rate required by s. 112.363(8) |
| 50 | that would otherwise be assigned to the Retiree Health Insurance |
| 51 | Subsidy Trust Fund. Effective July 1, 2001, each employer shall |
| 52 | contribute on behalf of each participant in the optional program |
| 53 | an amount equal to 10.43 percent of the participant's gross |
| 54 | monthly compensation. The employer shall deduct an amount to |
| 55 | provide for the administration of the optional retirement |
| 56 | program. The employer providing the optional program shall |
| 57 | contribute an additional amount to the Florida Retirement System |
| 58 | Trust Fund equal to the unfunded actuarial accrued liability |
| 59 | portion of the Regular Class contribution rate. |
| 60 | 2. The decision to participate in such an optional |
| 61 | retirement program shall be irrevocable for as long as the |
| 62 | employee holds a position eligible for participation, except as |
| 63 | provided in subparagraph 3. Any service creditable under the |
| 64 | Florida Retirement System shall be retained after the member |
| 65 | withdraws from the Florida Retirement System; however, |
| 66 | additional service credit in the Florida Retirement System shall |
| 67 | not be earned while a member of the optional retirement program. |
| 68 | 3. An employee who has elected to participate in the |
| 69 | optional retirement program shall have one opportunity, at the |
| 70 | employee's discretion, to choose to transfer from the optional |
| 71 | retirement program to the defined benefit program of the Florida |
| 72 | Retirement System or to the Public Employee Optional Retirement |
| 73 | Program, subject to the terms of the applicable optional |
| 74 | retirement program contracts. |
| 75 | a. If the employee chooses to move to the Public Employee |
| 76 | Optional Retirement Program, any contributions, interest, and |
| 77 | earnings creditable to the employee under the State Community |
| 78 | College System Optional Retirement Program shall be retained by |
| 79 | the employee in the State Community College System Optional |
| 80 | Retirement Program, and the applicable provisions of s. |
| 81 | 121.4501(4) shall govern the election. |
| 82 | b. If the employee chooses to move to the defined benefit |
| 83 | program of the Florida Retirement System, the employee shall |
| 84 | receive service credit equal to his or her years of service |
| 85 | under the State Community College Optional Retirement Program. |
| 86 | (I) The cost for such credit shall be an amount |
| 87 | representing the present value of that employee's accumulated |
| 88 | benefit obligation for the affected period of service. The cost |
| 89 | shall be calculated as if the benefit commencement occurs on the |
| 90 | first date the employee would become eligible for unreduced |
| 91 | benefits, using the discount rate and other relevant actuarial |
| 92 | assumptions that were used to value the Florida Retirement |
| 93 | System defined benefit plan liabilities in the most recent |
| 94 | actuarial valuation. The calculation shall include any service |
| 95 | already maintained under the defined benefit plan in addition to |
| 96 | the years under the State Community College Optional Retirement |
| 97 | Program. The present value of any service already maintained |
| 98 | under the defined benefit plan shall be applied as a credit to |
| 99 | total cost resulting from the calculation. The division shall |
| 100 | ensure that the transfer sum is prepared using a formula and |
| 101 | methodology certified by an enrolled actuary. |
| 102 | (II) The employee must transfer from his or her State |
| 103 | Community College System Optional Retirement Program account and |
| 104 | from other employee moneys as necessary, a sum representing the |
| 105 | present value of that employee's accumulated benefit obligation |
| 106 | immediately following the time of such movement, determined |
| 107 | assuming that attained service equals the sum of service in the |
| 108 | defined benefit program and service in the State Community |
| 109 | College System Optional Retirement Program. |
| 110 | 4. Participation in the optional retirement program shall |
| 111 | be limited to those employees who satisfy the following |
| 112 | eligibility criteria: |
| 113 | a. The employee must be otherwise eligible for membership |
| 114 | or renewed membership in the Regular Class of the Florida |
| 115 | Retirement System, as provided in s. 121.021(11) and (12) or s. |
| 116 | 121.122. |
| 117 | b. The employee must be employed in a full-time position |
| 118 | classified in the Accounting Manual for Florida's Public |
| 119 | Community Colleges as: |
| 120 | (I) Instructional; or |
| 121 | (II) Executive Management, Instructional Management, or |
| 122 | Institutional Management, if a community college determines that |
| 123 | recruiting to fill a vacancy in the position is to be conducted |
| 124 | in the national or regional market, and: |
| 125 | (A) The duties and responsibilities of the position |
| 126 | include either the formulation, interpretation, or |
| 127 | implementation of policies; or |
| 128 | (B) The duties and responsibilities of the position |
| 129 | include the performance of functions that are unique or |
| 130 | specialized within higher education and that frequently involve |
| 131 | the support of the mission of the community college. |
| 132 | c. The employee must be employed in a position not |
| 133 | included in the Senior Management Service Class of the Florida |
| 134 | Retirement System, as described in s. 121.055. |
| 135 | 5. Participants in the program are subject to the same |
| 136 | reemployment limitations, renewed membership provisions, and |
| 137 | forfeiture provisions as are applicable to regular members of |
| 138 | the Florida Retirement System under ss. 121.091(9), 121.122, and |
| 139 | 121.091(5), respectively. |
| 140 | 6. Eligible community college employees shall be |
| 141 | compulsory members of the Florida Retirement System until, |
| 142 | pursuant to the procedures set forth in s. 1012.875, a written |
| 143 | election to withdraw from the Florida Retirement System and to |
| 144 | participate in the State Community College Optional Retirement |
| 145 | Program is filed with the program administrator and received by |
| 146 | the division. |
| 147 | a. Any community college employee whose program |
| 148 | eligibility results from initial employment shall be enrolled in |
| 149 | the State Community College Optional Retirement Program |
| 150 | retroactive to the first day of eligible employment. The |
| 151 | employer retirement contributions paid through the month of the |
| 152 | employee plan change shall be transferred to the community |
| 153 | college for the employee's optional program account, and, |
| 154 | effective the first day of the next month, the employer shall |
| 155 | pay the applicable contributions based upon subparagraph 1. |
| 156 | b. Any community college employee whose program |
| 157 | eligibility results from a change in status due to the |
| 158 | subsequent designation of the employee's position as one of |
| 159 | those specified in subparagraph 4. or due to the employee's |
| 160 | appointment, promotion, transfer, or reclassification to a |
| 161 | position specified in subparagraph 4. shall be enrolled in the |
| 162 | program upon the first day of the first full calendar month that |
| 163 | such change in status becomes effective. The employer retirement |
| 164 | contributions paid from the effective date through the month of |
| 165 | the employee plan change shall be transferred to the community |
| 166 | college for the employee's optional program account, and, |
| 167 | effective the first day of the next month, the employer shall |
| 168 | pay the applicable contributions based upon subparagraph 1. |
| 169 | 7. Effective July 1, 2003, any participant of the State |
| 170 | Community College Optional Retirement Program who has service |
| 171 | credit in the defined benefit plan of the Florida Retirement |
| 172 | System for the period between his or her first eligibility to |
| 173 | transfer from the defined benefit plan to the optional |
| 174 | retirement program and the actual date of transfer may, during |
| 175 | his or her employment, elect to transfer to the optional |
| 176 | retirement program a sum representing the present value of the |
| 177 | accumulated benefit obligation under the defined benefit |
| 178 | retirement program for such period of service credit. Upon such |
| 179 | transfer, all such service credit previously earned under the |
| 180 | defined benefit program of the Florida Retirement System during |
| 181 | this period shall be nullified for purposes of entitlement to a |
| 182 | future benefit under the defined benefit program of the Florida |
| 183 | Retirement System. |
| 184 | Section 2. Paragraph (a) of subsection (2) and paragraphs |
| 185 | (e) and (g) of subsection (3) of section 121.35, Florida |
| 186 | Statutes, are amended, and paragraph (i) is added to subsection |
| 187 | (3) of that section, to read: |
| 188 | 121.35 Optional retirement program for the State |
| 189 | University System.-- |
| 190 | (2) ELIGIBILITY FOR PARTICIPATION IN OPTIONAL PROGRAM.-- |
| 191 | (a) Participation in the optional retirement program |
| 192 | provided by this section shall be limited to persons who are |
| 193 | otherwise eligible for membership or renewed membership in the |
| 194 | Florida Retirement System and who are employed in one of the |
| 195 | following State University System positions: |
| 196 | 1. Positions classified as instructional and research |
| 197 | faculty which are exempt from the career service under the |
| 198 | provisions of s. 110.205(2)(d). |
| 199 | 2. Positions classified as administrative and professional |
| 200 | which are exempt from the career service under the provisions of |
| 201 | s. 110.205(2)(d). |
| 202 | 3. The Chancellor and the university presidents. |
| 203 | (3) ELECTION OF OPTIONAL PROGRAM.-- |
| 204 | (e) The election by an eligible employee to participate in |
| 205 | the optional retirement program shall be irrevocable for so long |
| 206 | as the employee continues to meet the eligibility requirements |
| 207 | specified in subsection (2), except as provided in paragraphs |
| 208 | paragraph (h) and (i). In the event that an employee |
| 209 | participates in the optional retirement program for 90 days or |
| 210 | more and is subsequently employed in an administrative or |
| 211 | professional position which has been determined by the |
| 212 | department, under subparagraph (2)(a)2., to be not otherwise |
| 213 | eligible for participation in the optional retirement program, |
| 214 | the employee shall continue participation in the optional |
| 215 | program so long as the employee meets the other eligibility |
| 216 | requirements for the program, except as provided in paragraphs |
| 217 | paragraph (h) and (i). |
| 218 | (g) An eligible employee who is a member of the Florida |
| 219 | Retirement System at the time of election to participate in the |
| 220 | optional retirement program shall retain all retirement service |
| 221 | credit earned under the Florida Retirement System, at the rate |
| 222 | earned. No additional service credit in the Florida Retirement |
| 223 | System shall be earned while the employee participates in the |
| 224 | optional program, nor shall the employee be eligible for |
| 225 | disability retirement under the Florida Retirement System. An |
| 226 | eligible employee may transfer from the Florida Retirement |
| 227 | System to his or her accounts under the optional retirement |
| 228 | program a sum representing the present value of the employee's |
| 229 | accumulated benefit obligation under the defined benefit program |
| 230 | of the Florida Retirement System for any service credit accrued |
| 231 | from the employee's first eligible transfer date to the optional |
| 232 | retirement program through the actual date of such transfer, if |
| 233 | such service credit was earned between July 1, 1984, and |
| 234 | December 31, 1992. Upon such transfer, all service credit |
| 235 | previously earned under the defined benefit program of the |
| 236 | Florida Retirement System during this period shall be nullified |
| 237 | for purposes of entitlement to a future benefit under the |
| 238 | defined benefit program of the Florida Retirement System, except |
| 239 | as provided in paragraph (i). |
| 240 | (i) An employee who has elected to participate in the |
| 241 | State University System Optional Retirement Program shall have |
| 242 | one opportunity, at the employee's discretion, to choose to |
| 243 | transfer from this program to the defined benefit program of the |
| 244 | Florida Retirement System or to the Public Employee Optional |
| 245 | Retirement Program, subject to the terms of the applicable State |
| 246 | University System Optional Retirement Program contracts. |
| 247 | 1. If the employee chooses to transfer to the Public |
| 248 | Employee Optional Retirement Program, any contributions, |
| 249 | interest, and earnings creditable to the employee under the |
| 250 | State University System Optional Retirement Program shall be |
| 251 | retained by the employee in the State University System Optional |
| 252 | Retirement Program, and the applicable provisions of s. |
| 253 | 121.4501(4) shall govern the election. |
| 254 | 2. If the employee chooses to transfer to the defined |
| 255 | benefit program of the Florida Retirement System, the employee |
| 256 | shall receive service credit equal to his or her years of |
| 257 | service under the State University System Optional Retirement |
| 258 | Program. |
| 259 | a. The cost for the service credit shall be an amount |
| 260 | representing the actuarial accrued liability for the affected |
| 261 | period of service. The cost shall be calculated as if the |
| 262 | benefit commencement occurs on the first date the employee would |
| 263 | become eligible for unreduced benefits, using the discount rate |
| 264 | and other relevant actuarial assumptions that were used to value |
| 265 | the Florida Retirement System defined benefit plan liabilities |
| 266 | in the most recent actuarial valuation. The calculation shall |
| 267 | include any service already maintained under the defined benefit |
| 268 | plan in addition to the years under the State University System |
| 269 | Optional Retirement Program. The actuarial accrued liability of |
| 270 | any service already maintained under the defined benefit plan |
| 271 | shall be applied as a credit to the total cost resulting from |
| 272 | the calculation. The division shall ensure that the transfer sum |
| 273 | is prepared using a formula and methodology certified by an |
| 274 | enrolled actuary. |
| 275 | b. The employee must transfer from his or her State |
| 276 | University System Optional Retirement Program account, and from |
| 277 | other employee moneys as necessary, a sum representing the |
| 278 | actuarial accrued liability immediately following the time of |
| 279 | such movement, determined assuming that attained service equals |
| 280 | the sum of service in the defined benefit program and service in |
| 281 | the State University System Optional Retirement Program. |
| 282 | Section 3. Paragraph (f) of subsection (2) and paragraph |
| 283 | (a) of subsection (4) of section 121.4501, Florida Statutes, are |
| 284 | amended to read: |
| 285 | 121.4501 Public Employee Optional Retirement Program.-- |
| 286 | (2) DEFINITIONS.--As used in this part, the term: |
| 287 | (f) "Eligible employee" means an officer or employee, as |
| 288 | defined in s. 121.021(11), who: |
| 289 | 1. Is a member of, or is eligible for membership in, the |
| 290 | Florida Retirement System, including any renewed member of the |
| 291 | Florida Retirement System; or |
| 292 | 2. Participates in, or is eligible to participate in, the |
| 293 | Senior Management Service Optional Annuity Program as |
| 294 | established under s. 121.055(6), or the State Community College |
| 295 | Optional Retirement Program as established under s. |
| 296 | 121.051(2)(c),; or |
| 297 | 3. Is eligible to participate in, but does not participate |
| 298 | in, the State University System Optional Retirement Program |
| 299 | established under s. 121.35. |
| 300 |
|
| 301 | The term does not include any member participating in the |
| 302 | Deferred Retirement Option Program established under s. |
| 303 | 121.091(13) or any employee participating in an optional |
| 304 | retirement program established under s. 121.35. |
| 305 | (4) PARTICIPATION; ENROLLMENT.-- |
| 306 | (a)1. With respect to an eligible employee who is employed |
| 307 | in a regularly established position on June 1, 2002, by a state |
| 308 | employer: |
| 309 | a. Any such employee may elect to participate in the |
| 310 | Public Employee Optional Retirement Program in lieu of retaining |
| 311 | his or her membership in the defined benefit program of the |
| 312 | Florida Retirement System. The election must be made in writing |
| 313 | or by electronic means and must be filed with the third-party |
| 314 | administrator by August 31, 2002, or, in the case of an active |
| 315 | employee who is on a leave of absence on April 1, 2002, by the |
| 316 | last business day of the 5th month following the month the leave |
| 317 | of absence concludes. This election is irrevocable, except as |
| 318 | provided in paragraph (e). Upon making such election, the |
| 319 | employee shall be enrolled as a participant of the Public |
| 320 | Employee Optional Retirement Program, the employee's membership |
| 321 | in the Florida Retirement System shall be governed by the |
| 322 | provisions of this part, and the employee's membership in the |
| 323 | defined benefit program of the Florida Retirement System shall |
| 324 | terminate. The employee's enrollment in the Public Employee |
| 325 | Optional Retirement Program shall be effective the first day of |
| 326 | the month for which a full month's employer contribution is made |
| 327 | to the optional program. |
| 328 | b. Any such employee who fails to elect to participate in |
| 329 | the Public Employee Optional Retirement Program within the |
| 330 | prescribed time period is deemed to have elected to retain |
| 331 | membership in the defined benefit program of the Florida |
| 332 | Retirement System, and the employee's option to elect to |
| 333 | participate in the optional program is forfeited. |
| 334 | 2. With respect to employees who become eligible to |
| 335 | participate in the Public Employee Optional Retirement Program |
| 336 | by reason of employment in a regularly established position with |
| 337 | a state employer commencing after April 1, 2002: |
| 338 | a. Any such employee shall, by default, be enrolled in the |
| 339 | defined benefit retirement program of the Florida Retirement |
| 340 | System at the commencement of employment, and may, by the last |
| 341 | business day of the 5th month following the employee's month of |
| 342 | hire, elect to participate in the Public Employee Optional |
| 343 | Retirement Program. The employee's election must be made in |
| 344 | writing or by electronic means and must be filed with the third- |
| 345 | party administrator. The election to participate in the optional |
| 346 | program is irrevocable, except as provided in paragraph (e). |
| 347 | b. If the employee files such election within the |
| 348 | prescribed time period, enrollment in the optional program shall |
| 349 | be effective on the first day of employment. The employer |
| 350 | retirement contributions paid through the month of the employee |
| 351 | plan change shall be transferred to the optional program, and, |
| 352 | effective the first day of the next month, the employer shall |
| 353 | pay the applicable contributions based on the employee |
| 354 | membership class in the optional program. |
| 355 | c. Any such employee who fails to elect to participate in |
| 356 | the Public Employee Optional Retirement Program within the |
| 357 | prescribed time period is deemed to have elected to retain |
| 358 | membership in the defined benefit program of the Florida |
| 359 | Retirement System, and the employee's option to elect to |
| 360 | participate in the optional program is forfeited. |
| 361 | 3. With respect to employees who become eligible to |
| 362 | participate in the Public Employee Optional Retirement Program |
| 363 | pursuant to s. 121.051(2)(c)3. or s. 121.35(3)(i), any such |
| 364 | employee may elect to participate in the Public Employee |
| 365 | Optional Retirement Program in lieu of retaining his or her |
| 366 | participation in the State Community College Optional Retirement |
| 367 | Program or the State University System Optional Retirement |
| 368 | Program. The election must be made in writing or by electronic |
| 369 | means and must be filed with the third-party administrator. This |
| 370 | election is irrevocable, except as provided in paragraph (e). |
| 371 | Upon making such election, the employee shall be enrolled as a |
| 372 | participant of the Public Employee Optional Retirement Program, |
| 373 | the employee's membership in the Florida Retirement System shall |
| 374 | be governed by the provisions of this part, and the employee's |
| 375 | participation in the State Community College Optional Retirement |
| 376 | Program or the State University System Optional Retirement |
| 377 | Program shall terminate. The employee's enrollment in the Public |
| 378 | Employee Optional Retirement Program shall be effective the |
| 379 | first day of the month for which a full month's employer |
| 380 | contribution is made to the optional program. |
| 381 | 4. For purposes of this paragraph, "state employer" means |
| 382 | any agency, board, branch, commission, community college, |
| 383 | department, institution, institution of higher education, or |
| 384 | water management district of the state, which participates in |
| 385 | the Florida Retirement System for the benefit of certain |
| 386 | employees. |
| 387 | Section 4. This act shall take effect July 1, 2007. |