| 1 | A bill to be entitled | 
| 2 | An act relating to state retirement programs; amending s. | 
| 3 | 121.051, F.S.; revising conditions for membership in the | 
| 4 | State Community College System Optional Retirement | 
| 5 | Program; amending s. 121.35, F.S.; revising conditions for | 
| 6 | membership in the State University System Optional | 
| 7 | Retirement Program; authorizing transfer of funds for | 
| 8 | specified earned credit between the Florida Retirement | 
| 9 | System and the optional retirement program; authorizing a | 
| 10 | transfer of membership between the State University System | 
| 11 | Optional Retirement Program and the Florida Retirement | 
| 12 | System; providing for transfer of retirement | 
| 13 | contributions, interest, and earnings; providing employees | 
| 14 | with service credit upon transferring into a new program; | 
| 15 | providing requirements for the calculation of service | 
| 16 | credit; requiring employees to transfer funds upon moving | 
| 17 | into a new program; amending s. 121.4501, F.S.; redefining | 
| 18 | the term "eligible employee" for purposes of the Public | 
| 19 | Employee Optional Retirement Program; revising conditions | 
| 20 | for participation in the Public Employee Optional | 
| 21 | Retirement Program; providing an effective date. | 
| 22 | 
 | 
| 23 | Be It Enacted by the Legislature of the State of Florida: | 
| 24 | 
 | 
| 25 | Section 1.  Paragraph (c) of subsection (2) of section | 
| 26 | 121.051, Florida Statutes, is amended to read: | 
| 27 | 121.051  Participation in the system.-- | 
| 28 | (2)  OPTIONAL PARTICIPATION.-- | 
| 29 | (c)  Employees of public community colleges or charter | 
| 30 | technical career centers sponsored by public community colleges, | 
| 31 | as designated in s. 1000.21(3), who are members of the Regular | 
| 32 | Class of the Florida Retirement System and who comply with the | 
| 33 | criteria set forth in this paragraph and in s. 1012.875 may | 
| 34 | elect, in lieu of participating in the Florida Retirement | 
| 35 | System, to withdraw from the Florida Retirement System | 
| 36 | altogether and participate in an optional retirement program | 
| 37 | provided by the employing agency under s. 1012.875, to be known | 
| 38 | as the State Community College System Optional Retirement | 
| 39 | Program. Pursuant thereto: | 
| 40 | 1.  Through June 30, 2001, the cost to the employer for | 
| 41 | such annuity shall equal the normal cost portion of the employer | 
| 42 | retirement contribution which would be required if the employee | 
| 43 | were a member of the Regular Class defined benefit program, plus | 
| 44 | the portion of the contribution rate required by s. 112.363(8) | 
| 45 | that would otherwise be assigned to the Retiree Health Insurance | 
| 46 | Subsidy Trust Fund. Effective July 1, 2001, each employer shall | 
| 47 | contribute on behalf of each participant in the optional program | 
| 48 | an amount equal to 10.43 percent of the participant's gross | 
| 49 | monthly compensation. The employer shall deduct an amount to | 
| 50 | provide for the administration of the optional retirement | 
| 51 | program. The employer providing the optional program shall | 
| 52 | contribute an additional amount to the Florida Retirement System | 
| 53 | Trust Fund equal to the unfunded actuarial accrued liability | 
| 54 | portion of the Regular Class contribution rate. | 
| 55 | 2.  The decision to participate in such an optional | 
| 56 | retirement program shall be irrevocable for as long as the | 
| 57 | employee holds a position eligible for participation, except as | 
| 58 | provided in subparagraph 3. Any service creditable under the | 
| 59 | Florida Retirement System shall be retained after the member | 
| 60 | withdraws from the Florida Retirement System; however, | 
| 61 | additional service credit in the Florida Retirement System shall | 
| 62 | not be earned while a member of the optional retirement program. | 
| 63 | 3.  An employee who has elected to participate in the | 
| 64 | optional retirement program shall have one opportunity, at the | 
| 65 | employee's discretion, to choose to transfer from the optional | 
| 66 | retirement program to the defined benefit program of the Florida | 
| 67 | Retirement System or to the Public Employee Optional Retirement | 
| 68 | Program, subject to the terms of the applicable optional | 
| 69 | retirement program contracts. | 
| 70 | a.  If the employee chooses to move to the Public Employee | 
| 71 | Optional Retirement Program, any contributions, interest, and | 
| 72 | earnings creditable to the employee under the State Community | 
| 73 | College System Optional Retirement Program shall be retained by | 
| 74 | the employee in the State Community College System Optional | 
| 75 | Retirement Program, and the applicable provisions of s. | 
| 76 | 121.4501(4) shall govern the election. | 
| 77 | b.  If the employee chooses to move to the defined benefit | 
| 78 | program of the Florida Retirement System, the employee shall | 
| 79 | receive service credit equal to his or her years of service | 
| 80 | under the State Community College Optional Retirement Program. | 
| 81 | (I)  The cost for such credit shall be an amount | 
| 82 | representing the present value of that employee's accumulated | 
| 83 | benefit obligation for the affected period of service. The cost | 
| 84 | shall be calculated as if the benefit commencement occurs on the | 
| 85 | first date the employee would become eligible for unreduced | 
| 86 | benefits, using the discount rate and other relevant actuarial | 
| 87 | assumptions that were used to value the Florida Retirement | 
| 88 | System defined benefit plan liabilities in the most recent | 
| 89 | actuarial valuation. The calculation shall include any service | 
| 90 | already maintained under the defined benefit plan in addition to | 
| 91 | the years under the State Community College Optional Retirement | 
| 92 | Program. The present value of any service already maintained | 
| 93 | under the defined benefit plan shall be applied as a credit to | 
| 94 | total cost resulting from the calculation. The division shall | 
| 95 | ensure that the transfer sum is prepared using a formula and | 
| 96 | methodology certified by an enrolled actuary. | 
| 97 | (II)  The employee must transfer from his or her State | 
| 98 | Community College System Optional Retirement Program account and | 
| 99 | from other employee moneys as necessary, a sum representing the | 
| 100 | present value of that employee's accumulated benefit obligation | 
| 101 | immediately following the time of such movement, determined | 
| 102 | assuming that attained service equals the sum of service in the | 
| 103 | defined benefit program and service in the State Community | 
| 104 | College System Optional Retirement Program. | 
| 105 | 4.  Participation in the optional retirement program shall | 
| 106 | be limited to those employees who satisfy the following | 
| 107 | eligibility criteria: | 
| 108 | a.  The employee must be otherwise eligible for membership | 
| 109 | or renewed membership in the Regular Class of the Florida | 
| 110 | Retirement System, as provided in s. 121.021(11) and (12) or s. | 
| 111 | 121.122. | 
| 112 | b.  The employee must be employed in a full-time position | 
| 113 | classified in the Accounting Manual for Florida's Public | 
| 114 | Community Colleges as: | 
| 115 | (I)  Instructional; or | 
| 116 | (II)  Executive Management, Instructional Management, or | 
| 117 | Institutional Management, if a community college determines that | 
| 118 | recruiting to fill a vacancy in the position is to be conducted | 
| 119 | in the national or regional market, and: | 
| 120 | (A)  The duties and responsibilities of the position | 
| 121 | include either the formulation, interpretation, or | 
| 122 | implementation of policies; or | 
| 123 | (B)  The duties and responsibilities of the position | 
| 124 | include the performance of functions that are unique or | 
| 125 | specialized within higher education and that frequently involve | 
| 126 | the support of the mission of the community college. | 
| 127 | c.  The employee must be employed in a position not | 
| 128 | included in the Senior Management Service Class of the Florida | 
| 129 | Retirement System, as described in s. 121.055. | 
| 130 | 5.  Participants in the program are subject to the same | 
| 131 | reemployment limitations, renewed membership provisions, and | 
| 132 | forfeiture provisions as are applicable to regular members of | 
| 133 | the Florida Retirement System under ss. 121.091(9), 121.122, and | 
| 134 | 121.091(5), respectively. | 
| 135 | 6.  Eligible community college employees shall be | 
| 136 | compulsory members of the Florida Retirement System until, | 
| 137 | pursuant to the procedures set forth in s. 1012.875, a written | 
| 138 | election to withdraw from the Florida Retirement System and to | 
| 139 | participate in the State Community College Optional Retirement | 
| 140 | Program is filed with the program administrator and received by | 
| 141 | the division. | 
| 142 | a.  Any community college employee whose program | 
| 143 | eligibility results from initial employment shall be enrolled in | 
| 144 | the State Community College Optional Retirement Program | 
| 145 | retroactive to the first day of eligible employment. The | 
| 146 | employer retirement contributions paid through the month of the | 
| 147 | employee plan change shall be transferred to the community | 
| 148 | college for the employee's optional program account, and, | 
| 149 | effective the first day of the next month, the employer shall | 
| 150 | pay the applicable contributions based upon subparagraph 1. | 
| 151 | b.  Any community college employee whose program | 
| 152 | eligibility results from a change in status due to the | 
| 153 | subsequent designation of the employee's position as one of | 
| 154 | those specified in subparagraph 4. or due to the employee's | 
| 155 | appointment, promotion, transfer, or reclassification to a | 
| 156 | position specified in subparagraph 4. shall be enrolled in the | 
| 157 | program upon the first day of the first full calendar month that | 
| 158 | such change in status becomes effective. The employer retirement | 
| 159 | contributions paid from the effective date through the month of | 
| 160 | the employee plan change shall be transferred to the community | 
| 161 | college for the employee's optional program account, and, | 
| 162 | effective the first day of the next month, the employer shall | 
| 163 | pay the applicable contributions based upon subparagraph 1. | 
| 164 | 7.  Effective July 1, 2003, through December 31, 2008, any | 
| 165 | participant of the State Community College Optional Retirement | 
| 166 | Program who has service credit in the defined benefit plan of | 
| 167 | the Florida Retirement System for the period between his or her | 
| 168 | first eligibility to transfer from the defined benefit plan to | 
| 169 | the optional retirement program and the actual date of transfer | 
| 170 | may, during his or her employment, elect to transfer to the | 
| 171 | optional retirement program a sum representing the present value | 
| 172 | of the accumulated benefit obligation under the defined benefit | 
| 173 | retirement program for such period of service credit. Upon such | 
| 174 | transfer, all such service credit previously earned under the | 
| 175 | defined benefit program of the Florida Retirement System during | 
| 176 | this period shall be nullified for purposes of entitlement to a | 
| 177 | future benefit under the defined benefit program of the Florida | 
| 178 | Retirement System. | 
| 179 | Section 2.  Paragraph (a) of subsection (2) and paragraphs | 
| 180 | (e) and (g) of subsection (3) of section 121.35, Florida | 
| 181 | Statutes, are amended, and paragraph (i) is added to subsection | 
| 182 | (3) of that section, to read: | 
| 183 | 121.35  Optional retirement program for the State | 
| 184 | University System.-- | 
| 185 | (2)  ELIGIBILITY FOR PARTICIPATION IN OPTIONAL PROGRAM.-- | 
| 186 | (a)  Participation in the optional retirement program | 
| 187 | provided by this section shall be limited to persons who are | 
| 188 | otherwise eligible for membership or renewed membership in the | 
| 189 | Florida Retirement System and who are employed in one of the | 
| 190 | following State University System positions: | 
| 191 | 1.  Positions classified as instructional and research | 
| 192 | faculty which are exempt from the career service under the | 
| 193 | provisions of s. 110.205(2)(d). | 
| 194 | 2.  Positions classified as administrative and professional | 
| 195 | which are exempt from the career service under the provisions of | 
| 196 | s. 110.205(2)(d). | 
| 197 | 3.  The Chancellor and the university presidents. | 
| 198 | (3)  ELECTION OF OPTIONAL PROGRAM.-- | 
| 199 | (e)  The election by an eligible employee to participate in | 
| 200 | the optional retirement program shall be irrevocable for so long | 
| 201 | as the employee continues to meet the eligibility requirements | 
| 202 | specified in subsection (2), except as provided in paragraph (h) | 
| 203 | or paragraph (i). In the event that an employee participates in | 
| 204 | the optional retirement program for 90 days or more and is | 
| 205 | subsequently employed in an administrative or professional | 
| 206 | position which has been determined by the department, under | 
| 207 | subparagraph (2)(a)2., to be not otherwise eligible for | 
| 208 | participation in the optional retirement program, the employee | 
| 209 | shall continue participation in the optional program so long as | 
| 210 | the employee meets the other eligibility requirements for the | 
| 211 | program, except as provided in paragraph (h) or paragraph (i). | 
| 212 | (g)  An eligible employee who is a member of the Florida | 
| 213 | Retirement System at the time of election to participate in the | 
| 214 | optional retirement program shall retain all retirement service | 
| 215 | credit earned under the Florida Retirement System, at the rate | 
| 216 | earned. No additional service credit in the Florida Retirement | 
| 217 | System shall be earned while the employee participates in the | 
| 218 | optional program, nor shall the employee be eligible for | 
| 219 | disability retirement under the Florida Retirement System. An | 
| 220 | eligible employee may transfer from the Florida Retirement | 
| 221 | System to his or her accounts under the State University System | 
| 222 | Optional Retirement Program a sum representing the present value | 
| 223 | of the employee's accumulated benefit obligation under the | 
| 224 | defined benefit program of the Florida Retirement System for any | 
| 225 | service credit accrued from the employee's first eligible | 
| 226 | transfer date to the optional retirement program through the | 
| 227 | actual date of such transfer, if such service credit was earned | 
| 228 | in the period from July 1, 1984, through December 31, 1992. The | 
| 229 | present value of the employee's accumulated benefit obligation | 
| 230 | shall be calculated as described in s. 121.4501(3)(c)2. Upon | 
| 231 | such transfer, all such service credit previously earned under | 
| 232 | the defined benefit program of the Florida Retirement System | 
| 233 | during this period shall be nullified for purposes of | 
| 234 | entitlement to a future benefit under the defined benefit | 
| 235 | program of the Florida Retirement System. | 
| 236 | (i)  Effective January 1, 2008, through December 31, 2008, | 
| 237 | except for an employee who is a mandatory participant of the | 
| 238 | State University System Optional Retirement Program, an employee | 
| 239 | who has elected to participate in the State University System | 
| 240 | Optional Retirement Program shall have one opportunity, at the | 
| 241 | employee's discretion, to choose to transfer from this program | 
| 242 | to the defined benefit program of the Florida Retirement System | 
| 243 | or to the Public Employee Optional Retirement Program, subject | 
| 244 | to the terms of the applicable contracts of the State University | 
| 245 | System Optional Retirement Program. | 
| 246 | 1.  If the employee chooses to move to the Public Employee | 
| 247 | Optional Retirement Program, any contributions, interest, and | 
| 248 | earnings creditable to the employee under the State University | 
| 249 | System Optional Retirement Program shall be retained by the | 
| 250 | employee in the State University System Optional Retirement | 
| 251 | Program, and the applicable provisions of s. 121.4501(4) shall | 
| 252 | govern the election. | 
| 253 | 2.  If the employee chooses to move to the defined benefit | 
| 254 | program of the Florida Retirement System, the employee shall | 
| 255 | receive service credit equal to his or her years of service | 
| 256 | under the State University System Optional Retirement Program. | 
| 257 | a.  The cost for such credit shall be an amount | 
| 258 | representing the actuarial accrued liability for the affected | 
| 259 | period of service. The cost shall be calculated using the | 
| 260 | discount rate and other relevant actuarial assumptions that were | 
| 261 | used to value the Florida Retirement System defined benefit plan | 
| 262 | liabilities in the most recent actuarial valuation. The | 
| 263 | calculation shall include any service already maintained under | 
| 264 | the defined benefit plan in addition to the years under the | 
| 265 | State University System Optional Retirement Program. The | 
| 266 | actuarial accrued liability of any service already maintained | 
| 267 | under the defined benefit plan shall be applied as a credit to | 
| 268 | the total cost resulting from the calculation. The division | 
| 269 | shall ensure that the transfer sum is prepared using a formula | 
| 270 | and methodology certified by an enrolled actuary. | 
| 271 | b.  The employee must transfer from his or her State | 
| 272 | University System Optional Retirement Program account, and from | 
| 273 | other employee moneys as necessary, a sum representing the | 
| 274 | actuarial accrued liability immediately following the time of | 
| 275 | such movement, determined assuming that attained service equals | 
| 276 | the sum of service in the defined benefit program and service in | 
| 277 | the State University System Optional Retirement Program. | 
| 278 | Section 3.  Paragraph (f) of subsection (2) and paragraph | 
| 279 | (a) of subsection (4) of section 121.4501, Florida Statutes, are | 
| 280 | amended to read: | 
| 281 | 121.4501  Public Employee Optional Retirement Program.-- | 
| 282 | (2)  DEFINITIONS.--As used in this part, the term: | 
| 283 | (f)  "Eligible employee" means an officer or employee, as | 
| 284 | defined in s. 121.021(11), who: | 
| 285 | 1.  Is a member of, or is eligible for membership in, the | 
| 286 | Florida Retirement System, including any renewed member of the | 
| 287 | Florida Retirement System; or | 
| 288 | 2.  Participates in, or is eligible to participate in, the | 
| 289 | Senior Management Service Optional Annuity Program as | 
| 290 | established under s. 121.055(6), orthe State Community College | 
| 291 | Optional Retirement Program as established under s. | 
| 292 | 121.051(2)(c), ;or | 
| 293 | 3.  Is eligible to participate in, but does not participate | 
| 294 | in,the State University System Optional Retirement Program | 
| 295 | established under s. 121.35. | 
| 296 | 
 | 
| 297 | The term does not include any member participating in the | 
| 298 | Deferred Retirement Option Program established under s. | 
| 299 | 121.091(13) or a mandatory participant of the State University | 
| 300 | System Optional Retirement Program or any employee participating | 
| 301 | in an optional retirement programestablished under s. 121.35. | 
| 302 | (4)  PARTICIPATION; ENROLLMENT.-- | 
| 303 | (a)1.  With respect to an eligible employee who is employed | 
| 304 | in a regularly established position on June 1, 2002, by a state | 
| 305 | employer: | 
| 306 | a.  Any such employee may elect to participate in the | 
| 307 | Public Employee Optional Retirement Program in lieu of retaining | 
| 308 | his or her membership in the defined benefit program of the | 
| 309 | Florida Retirement System. The election must be made in writing | 
| 310 | or by electronic means and must be filed with the third-party | 
| 311 | administrator by August 31, 2002, or, in the case of an active | 
| 312 | employee who is on a leave of absence on April 1, 2002, by the | 
| 313 | last business day of the 5th month following the month the leave | 
| 314 | of absence concludes. This election is irrevocable, except as | 
| 315 | provided in paragraph (e). Upon making such election, the | 
| 316 | employee shall be enrolled as a participant of the Public | 
| 317 | Employee Optional Retirement Program, the employee's membership | 
| 318 | in the Florida Retirement System shall be governed by the | 
| 319 | provisions of this part, and the employee's membership in the | 
| 320 | defined benefit program of the Florida Retirement System shall | 
| 321 | terminate. The employee's enrollment in the Public Employee | 
| 322 | Optional Retirement Program shall be effective the first day of | 
| 323 | the month for which a full month's employer contribution is made | 
| 324 | to the optional program. | 
| 325 | b.  Any such employee who fails to elect to participate in | 
| 326 | the Public Employee Optional Retirement Program within the | 
| 327 | prescribed time period is deemed to have elected to retain | 
| 328 | membership in the defined benefit program of the Florida | 
| 329 | Retirement System, and the employee's option to elect to | 
| 330 | participate in the optional program is forfeited. | 
| 331 | 2.  With respect to employees who become eligible to | 
| 332 | participate in the Public Employee Optional Retirement Program | 
| 333 | by reason of employment in a regularly established position with | 
| 334 | a state employer commencing after April 1, 2002: | 
| 335 | a.  Any such employee shall, by default, be enrolled in the | 
| 336 | defined benefit retirement program of the Florida Retirement | 
| 337 | System at the commencement of employment, and may, by the last | 
| 338 | business day of the 5th month following the employee's month of | 
| 339 | hire, elect to participate in the Public Employee Optional | 
| 340 | Retirement Program. The employee's election must be made in | 
| 341 | writing or by electronic means and must be filed with the third- | 
| 342 | party administrator. The election to participate in the optional | 
| 343 | program is irrevocable, except as provided in paragraph (e). | 
| 344 | b.  If the employee files such election within the | 
| 345 | prescribed time period, enrollment in the optional program shall | 
| 346 | be effective on the first day of employment. The employer | 
| 347 | retirement contributions paid through the month of the employee | 
| 348 | plan change shall be transferred to the optional program, and, | 
| 349 | effective the first day of the next month, the employer shall | 
| 350 | pay the applicable contributions based on the employee | 
| 351 | membership class in the optional program. | 
| 352 | c.  Any such employee who fails to elect to participate in | 
| 353 | the Public Employee Optional Retirement Program within the | 
| 354 | prescribed time period is deemed to have elected to retain | 
| 355 | membership in the defined benefit program of the Florida | 
| 356 | Retirement System, and the employee's option to elect to | 
| 357 | participate in the optional program is forfeited. | 
| 358 | 3.  With respect to employees who become eligible to | 
| 359 | participate in the Public Employee Optional Retirement Program | 
| 360 | pursuant to s. 121.051(2)(c)3. or s. 121.35(3)(i), any such | 
| 361 | employee may elect to participate in the Public Employee | 
| 362 | Optional Retirement Program in lieu of retaining his or her | 
| 363 | participation in the State Community College Optional Retirement | 
| 364 | Program or the State University System Optional Retirement | 
| 365 | Program. The election must be made in writing or by electronic | 
| 366 | means and must be filed with the third-party administrator. This | 
| 367 | election is irrevocable, except as provided in paragraph (e). | 
| 368 | Upon making such election, the employee shall be enrolled as a | 
| 369 | participant of the Public Employee Optional Retirement Program, | 
| 370 | the employee's membership in the Florida Retirement System shall | 
| 371 | be governed by the provisions of this part, and the employee's | 
| 372 | participation in the State Community College Optional Retirement | 
| 373 | Program or the State University System Optional Retirement | 
| 374 | Program shall terminate. The employee's enrollment in the Public | 
| 375 | Employee Optional Retirement Program shall be effective the | 
| 376 | first day of the month for which a full month's employer | 
| 377 | contribution is made to the optional program. | 
| 378 | 4.  For purposes of this paragraph, "state employer" means | 
| 379 | any agency, board, branch, commission, community college, | 
| 380 | department, institution, institution of higher education, or | 
| 381 | water management district of the state, which participates in | 
| 382 | the Florida Retirement System for the benefit of certain | 
| 383 | employees. | 
| 384 | Section 4.  This act shall take effect July 1, 2007. |