Florida Senate - 2011                      CS for CS for SB 1128
       
       
       
       By the Committees on Budget; and Governmental Oversight and
       Accountability; and Senators Ring, Lynn, and Flores
       
       
       
       576-04655-11                                          20111128c2
    1                        A bill to be entitled                      
    2         An act relating to public retirement plans; amending
    3         s. 112.63, F.S.; requiring plans to regularly disclose
    4         the plan’s accrued benefits; amending s. 112.66, F.S.;
    5         providing for the calculation of local government
    6         retirement benefits after a certain date; providing a
    7         prohibition on the use of certain compensation;
    8         prohibiting the use of surpluses for expenses outside
    9         the plan; prohibiting a reduction in certain
   10         contributions to a plan; amending s. 112.665, F.S.;
   11         requiring the Department of Management Services to
   12         provide a fact sheet on each local plan; amending s.
   13         121.051, F.S.; providing that a local government
   14         employer is eligible for participation in the Florida
   15         Retirement System if it has no unfunded actuarial
   16         liabilities; amending s. 175.032, F.S.; revising the
   17         definition of the term “compensation” or “salary” for
   18         purposes of firefighters’ pensions; amending s.
   19         175.061, F.S.; authorizing a municipality to change
   20         the municipality’s membership on the board of trustees
   21         operating its firefighters’ pension plan under certain
   22         circumstances; amending s. 175.351, F.S.; revising
   23         provisions relating to benefits paid from the premium
   24         tax by a municipality or special fire control district
   25         that has its own pension plan; providing for the use
   26         of accumulated additional premium tax revenues;
   27         requiring such revenues to be used to fund a defined
   28         contribution supplemental plan under certain
   29         circumstances; conforming a cross-reference; amending
   30         s. 185.02, F.S.; revising the definition of the terms
   31         “compensation” and “salary” for purposes of police
   32         officers’ pensions; amending s. 185.05, F.S.;
   33         authorizing a municipality to change the
   34         municipality’s membership on the board of trustees
   35         operating its police officers’ pension plan under
   36         certain circumstances; amending s. 185.35, F.S.;
   37         revising provisions relating to benefits paid by a
   38         municipality that has its own pension plan; providing
   39         for the use of accumulated additional premium tax
   40         revenues; requiring such revenues to be used to fund a
   41         defined contribution supplemental plan under certain
   42         circumstances; directing the Department of Financial
   43         Services to rate the financial strength of local
   44         government defined benefit plans; specifying the
   45         factors for assigning the ratings; requiring local
   46         pension boards, local governments, the Division of
   47         Retirement, and all relevant entities to cooperate in
   48         providing data for the ratings; requiring the ratings
   49         to be posted on the department’s website; creating the
   50         Task Force on Public Employee Disability Presumptions;
   51         providing for appointment and membership; specifying
   52         the issues for the task force to address; providing
   53         for a report to be submitted to the Governor, Chief
   54         Financial Officer, and Legislature by a certain date;
   55         providing for future expiration; directing the
   56         Department of Financial Services to submit a report on
   57         the financial health of local government pension plans
   58         to the Governor and Legislature by a certain date;
   59         specifying the issues the report must address;
   60         providing a declaration of important state interest;
   61         providing an effective date.
   62  
   63  Be It Enacted by the Legislature of the State of Florida:
   64  
   65         Section 1. Present paragraph (f) of subsection (1) of
   66  section 112.63, Florida Statutes, is redesignated as paragraph
   67  (g), and a new paragraph (f) is added to that subsection, to
   68  read:
   69         112.63 Actuarial reports and statements of actuarial
   70  impact; review.—
   71         (1) Each retirement system or plan subject to the
   72  provisions of this act shall have regularly scheduled actuarial
   73  reports prepared and certified by an enrolled actuary. The
   74  actuarial report shall consist of, but shall not be limited to,
   75  the following:
   76         (f) A disclosure of the present value of the plan’s accrued
   77  vested, nonvested, and total benefits, as adopted by the
   78  Financial Accounting Standards Board, using the Florida
   79  Retirement System’s assumed rate of return, in order to promote
   80  the comparability of actuarial data between local plans.
   81  
   82  The actuarial cost methods utilized for establishing the amount
   83  of the annual actuarial normal cost to support the promised
   84  benefits shall only be those methods approved in the Employee
   85  Retirement Income Security Act of 1974 and as permitted under
   86  regulations prescribed by the Secretary of the Treasury.
   87         Section 2. Subsections (11) through (13) are added to
   88  section 112.66, Florida Statutes, to read:
   89         112.66 General provisions.—The following general provisions
   90  relating to the operation and administration of any retirement
   91  system or plan covered by this part shall be applicable:
   92         (11) For noncollectively bargained service earned on or
   93  after July 1, 2011, or for service earned under collective
   94  bargaining agreements entered into on or after July 1, 2011, a
   95  pension system or plan sponsored by a local government may not
   96  include any overtime compensation in excess of 300 hours per
   97  year, or any payments for accrued unused sick leave or annual
   98  leave for purposes of calculating retirement benefits. For those
   99  members whose terms and conditions of employment are
  100  collectively bargained, this subsection is effective for the
  101  first agreement entered into on or after July 1, 2011. This
  102  subsection does not apply to state-administered retirement
  103  systems or plans.
  104         (12) An actuarial or cash surplus in any system or plan may
  105  not be used for any expenses outside the plan.
  106         (13)A local government sponsor of a retirement system or
  107  plan may not reduce contributions required to fund the normal
  108  cost. This subsection does not apply to state-administered
  109  retirement systems or plans.
  110         Section 3. Present paragraphs (e) and (f) of subsection (1)
  111  of section 112.665, Florida Statutes, are redesignated as
  112  paragraphs (f) and (g), respectively, and a new paragraph (e) is
  113  added to that subsection, to read:
  114         112.665 Duties of Department of Management Services.—
  115         (1) The Department of Management Services shall:
  116         (e) Provide a fact sheet for each participating local
  117  government defined benefit pension plan summarizing the plan’s
  118  actuarial status. The fact sheet should provide a summary of the
  119  plan’s most current actuarial data, minimum funding requirements
  120  as a percentage of pay, and a 5-year history of funded ratios.
  121  The fact sheet must include a brief explanation of each element
  122  in order to maximize the transparency of the local government
  123  plans. These documents shall be posted on the department’s
  124  website. Plan sponsors that have websites must provide a link to
  125  the department’s website.
  126         Section 4. Paragraph (b) of subsection (2) of section
  127  121.051, Florida Statutes, is amended to read:
  128         121.051 Participation in the system.—
  129         (2) OPTIONAL PARTICIPATION.—
  130         (b)1. The governing body of any municipality, metropolitan
  131  planning organization, or special district in the state may
  132  elect to participate in the system upon proper application to
  133  the administrator and may cover all or any of its units as
  134  approved by the Secretary of Health and Human Services and the
  135  administrator. The department shall adopt rules establishing
  136  provisions for the submission of documents necessary for such
  137  application. Before Prior to being approved for participation in
  138  the Florida Retirement System, the governing body of any such
  139  municipality, metropolitan planning organization, or special
  140  district that has a local retirement system shall submit to the
  141  administrator a certified financial statement showing the
  142  condition of the local retirement system as of a date within 3
  143  months before prior to the proposed effective date of membership
  144  in the Florida Retirement system. The statement must be
  145  certified by a recognized accounting firm that is independent of
  146  the local retirement system. All required documents necessary
  147  for extending Florida Retirement System coverage must be
  148  received by the department for consideration at least 15 days
  149  before prior to the proposed effective date of coverage. If the
  150  municipality, metropolitan planning organization, or special
  151  district does not comply with this requirement, the department
  152  may require that the effective date of coverage be changed.
  153         2. A local government employer sponsoring a local
  154  government retirement system or plan, including a firefighters’
  155  pension plan or a municipal police officers’ pension plan
  156  established in accordance with chapter 175 or chapter 185, is
  157  eligible for membership under this chapter if the local
  158  government retirement system or plan has no unfunded actuarial
  159  liabilities. Any municipality city, metropolitan planning
  160  organization, or special district that has an existing
  161  retirement system covering the employees in the units that are
  162  to be brought under the Florida Retirement System may
  163  participate only after holding a referendum in which all
  164  employees in the affected units have the right to participate.
  165  Only those employees electing coverage under the Florida
  166  Retirement System by affirmative vote in the said referendum are
  167  shall be eligible for coverage under this chapter, and those not
  168  participating or electing not to be covered by the Florida
  169  Retirement system shall remain in their present systems and are
  170  shall not be eligible for coverage under this chapter. After the
  171  referendum is held, all future employees are shall be compulsory
  172  members of the Florida Retirement System.
  173         3. The governing body of any municipality city,
  174  metropolitan planning organization, or special district
  175  complying with subparagraph 1. may elect to provide, or not
  176  provide, benefits based on past service of officers and
  177  employees as described in s. 121.081(1). However, if such
  178  employer elects to provide past service benefits, such benefits
  179  must be provided for all officers and employees of its covered
  180  group.
  181         4. Once this election is made and approved it may not be
  182  revoked, except pursuant to subparagraphs 5. and 6., and all
  183  present officers and employees electing coverage under this
  184  chapter and all future officers and employees are shall be
  185  compulsory members of the Florida Retirement System.
  186         5. Subject to the conditions set forth in subparagraph 6.,
  187  the governing body of any hospital licensed under chapter 395
  188  which is governed by the board of a special district as defined
  189  in s. 189.403(1) or by the board of trustees of a public health
  190  trust created under s. 154.07, hereinafter referred to as
  191  “hospital district,” and which participates in the system, may
  192  elect to cease participation in the system with regard to future
  193  employees in accordance with the following procedure:
  194         a. No more than 30 days and at least 7 days before adopting
  195  a resolution to partially withdraw from the Florida Retirement
  196  system and establish an alternative retirement plan for future
  197  employees, a public hearing must be held on the proposed
  198  withdrawal and proposed alternative plan.
  199         b. From 7 to 15 days before such hearing, notice of intent
  200  to withdraw, specifying the time and place of the hearing, must
  201  be provided in writing to employees of the hospital district
  202  proposing partial withdrawal and must be published in a
  203  newspaper of general circulation in the area affected, as
  204  provided by ss. 50.011-50.031. Proof of publication of such
  205  notice shall be submitted to the department of Management
  206  Services.
  207         c. The governing body of any hospital district seeking to
  208  partially withdraw from the system must, before such hearing,
  209  have an actuarial report prepared and certified by an enrolled
  210  actuary, as defined in s. 112.625(3), illustrating the cost to
  211  the hospital district of providing, through the retirement plan
  212  that the hospital district is to adopt, benefits for new
  213  employees comparable to those provided under the Florida
  214  Retirement system.
  215         d. Upon meeting all applicable requirements of this
  216  subparagraph, and subject to the conditions set forth in
  217  subparagraph 6., partial withdrawal from the system and adoption
  218  of the alternative retirement plan may be accomplished by
  219  resolution duly adopted by the hospital district board. The
  220  hospital district board must provide written notice of such
  221  withdrawal to the division by mailing a copy of the resolution
  222  to the division, postmarked no later than December 15, 1995. The
  223  withdrawal shall take effect January 1, 1996.
  224         6. Following the adoption of a resolution under sub
  225  subparagraph 5.d., all employees of the withdrawing hospital
  226  district who were participants in the Florida Retirement System
  227  before prior to January 1, 1996, shall remain as participants in
  228  the system for as long as they are employees of the hospital
  229  district, and all rights, duties, and obligations between the
  230  hospital district, the system, and the employees shall remain in
  231  full force and effect. Any employee who is hired or appointed on
  232  or after January 1, 1996, may not participate in the Florida
  233  Retirement System, and the withdrawing hospital district has
  234  shall have no obligation to the system with respect to such
  235  employees.
  236         Section 5. Subsection (3) of section 175.032, Florida
  237  Statutes, is amended to read:
  238         175.032 Definitions.—For any municipality, special fire
  239  control district, chapter plan, local law municipality, local
  240  law special fire control district, or local law plan under this
  241  chapter, the following words and phrases have the following
  242  meanings:
  243         (3) “Compensation” or “salary” means, for noncollectively
  244  bargained service earned before July 1, 2011, or for service
  245  earned under collective bargaining agreements in place before
  246  July 1, 2011, the fixed monthly remuneration paid a firefighter.
  247  If; where, as in the case of a volunteer firefighter,
  248  remuneration is based on actual services rendered, as in the
  249  case of a volunteer firefighter, the term means the total cash
  250  remuneration received yearly for such services, prorated on a
  251  monthly basis. For noncollectively bargained service earned on
  252  or after July 1, 2011, or for service earned under collective
  253  bargaining agreements entered into on or after July 1, 2011, the
  254  term has the same meaning except that overtime compensation in
  255  excess of 300 hours per year, or payments for accrued unused
  256  sick or annual leave, may not be included for purposes of
  257  calculating retirement benefits.
  258         (a) A retirement trust fund or plan may use a definition of
  259  salary other than the definition in this subsection but only if
  260  the monthly retirement income payable to each firefighter
  261  covered by the retirement trust fund or plan, as determined
  262  under s. 175.162(2)(a) and using such other definition, equals
  263  or exceeds the monthly retirement income that would be payable
  264  to each firefighter if his or her monthly retirement income were
  265  determined under s. 175.162(2)(a) and using the definition in
  266  this subsection.
  267         (a)(b) Any retirement trust fund or plan that which now or
  268  hereafter meets the requirements of this chapter does shall not,
  269  solely by virtue of this subsection, reduce or diminish the
  270  monthly retirement income otherwise payable to each firefighter
  271  covered by the retirement trust fund or plan.
  272         (b)(c) The member’s compensation or salary contributed as
  273  employee-elective salary reductions or deferrals to any salary
  274  reduction, deferred compensation, or tax-sheltered annuity
  275  program authorized under the Internal Revenue Code shall be
  276  deemed to be the compensation or salary the member would receive
  277  if he or she were not participating in such program and shall be
  278  treated as compensation for retirement purposes under this
  279  chapter.
  280         (c)(d) For any person who first becomes a member in any
  281  plan year beginning on or after January 1, 1996, compensation
  282  for that any plan year may shall not include any amounts in
  283  excess of the Internal Revenue Code s. 401(a)(17) limitation,
  284  (as amended by the Omnibus Budget Reconciliation Act of 1993),
  285  which limitation of $150,000 shall be adjusted as required by
  286  federal law for qualified government plans and shall be further
  287  adjusted for changes in the cost of living in the manner
  288  provided by Internal Revenue Code s. 401(a)(17)(B). For any
  289  person who first became a member before prior to the first plan
  290  year beginning on or after January 1, 1996, the limitation on
  291  compensation may shall be not be less than the maximum
  292  compensation amount that was allowed to be taken into account
  293  under the plan as in effect on July 1, 1993, which limitation
  294  shall be adjusted for changes in the cost of living since 1989
  295  in the manner provided by Internal Revenue Code s.
  296  401(a)(17)(1991).
  297         Section 6. Paragraph (b) of subsection (1) of section
  298  175.061, Florida Statutes, is amended to read:
  299         175.061 Board of trustees; members; terms of office;
  300  meetings; legal entity; costs; attorney’s fees.—For any
  301  municipality, special fire control district, chapter plan, local
  302  law municipality, local law special fire control district, or
  303  local law plan under this chapter:
  304         (1) In each municipality and in each special fire control
  305  district there is hereby created a board of trustees of the
  306  firefighters’ pension trust fund, which shall be solely
  307  responsible for administering the trust fund. Effective October
  308  1, 1986, and thereafter:
  309         (b) The membership of boards of trustees for local law
  310  plans shall be as follows:
  311         1. If a municipality or special fire control district has a
  312  pension plan for firefighters only, the provisions of paragraph
  313  (a) shall apply.
  314         2. If a municipality has a pension plan for firefighters
  315  and police officers, the provisions of paragraph (a) shall
  316  apply, except that one member of the board must shall be a
  317  firefighter as defined in s. 175.032 and one member of the board
  318  must shall be a police officer as defined in s. 185.02,
  319  respectively elected by a majority of the active firefighters or
  320  police officers who are members of the plan.
  321         3. A Any board of trustees operating a local law plan on
  322  July 1, 1999, which is combined with a plan for general
  323  employees shall hold an election of the firefighters, or
  324  firefighters and police officers, if included, to determine
  325  whether a plan is to be established for firefighters only, or
  326  for firefighters and police officers where included. Based on
  327  the election results, a new board shall be established as
  328  provided in subparagraph 1. or subparagraph 2., as appropriate.
  329  The municipality or fire control district shall enact an
  330  ordinance or resolution to implement the new board by October 1,
  331  1999. The newly established board shall take whatever action is
  332  necessary to determine the amount of assets which is
  333  attributable to firefighters, or firefighters and police
  334  officers where included. Such assets shall include all employer,
  335  employee, and state contributions made by or on behalf of
  336  firefighters, or firefighters and police officers where
  337  included, and any investment income derived from such
  338  contributions. All such moneys shall be transferred into the
  339  newly established retirement plan, as directed by the board.
  340  
  341  With respect to a any board of trustees operating a local law
  342  plan on June 30, 1986, nothing in this paragraph does not shall
  343  permit the reduction of the membership percentage of
  344  firefighters, or of firefighters and police officers where a
  345  joint or mixed fund exists. However, for the sole purpose of
  346  changing municipal representation, a municipality may, by
  347  ordinance, change the municipal representation on the board of
  348  trustees operating a local law plan by ordinance, only if such
  349  change does not reduce the membership percentage of
  350  firefighters, or firefighters and police officers.
  351         Section 7. Section 175.351, Florida Statutes, is amended to
  352  read:
  353         175.351 Municipalities and special fire control districts
  354  having their own pension plans for firefighters.—For any
  355  municipality, special fire control district, local law
  356  municipality, local law special fire control district, or local
  357  law plan under this chapter, in order for municipalities and
  358  special fire control districts with their own pension plans for
  359  firefighters, or for firefighters and police officers if, where
  360  included, to participate in the distribution of the tax fund
  361  established pursuant to s. 175.101, local law plans must meet
  362  the minimum benefits and minimum standards set forth in this
  363  chapter.
  364         (1) PREMIUM TAX INCOME.—If a municipality or special fire
  365  control district has a pension plan for firefighters, or a
  366  pension plan for firefighters and police officers if, where
  367  included, which in the opinion of the division meets the minimum
  368  benefits and minimum standards set forth in this chapter, the
  369  board of trustees of the pension plan, as approved by a majority
  370  of firefighters, or firefighters and police officers, of the
  371  municipality or fire control district, may:
  372         (a) Place the income from the premium tax in s. 175.101 in
  373  such pension plan for the sole and exclusive use of its
  374  firefighters, or for firefighters and police officers if, where
  375  included, where it shall become an integral part of that pension
  376  plan and shall be used to pay extra benefits to the
  377  firefighters, or firefighters and police officers, included in
  378  that pension plan; or
  379         (b) Place the income from the premium tax in s. 175.101 in
  380  a separate supplemental plan to pay extra benefits to
  381  firefighters, or to firefighters and police officers if where
  382  included, participating in such separate supplemental plan.
  383         (2) The premium tax provided by this chapter shall in all
  384  cases be used in its entirety to provide extra benefits to
  385  firefighters, or to firefighters and police officers if, where
  386  included. However, local law plans in effect on October 1, 1998,
  387  must shall be required to comply with the minimum benefit
  388  provisions of this chapter only to the extent that additional
  389  premium tax revenues become available to incrementally fund the
  390  cost of such compliance as provided in s. 175.162(2)(a). If When
  391  a plan is in compliance with such minimum benefit provisions, as
  392  subsequent additional premium tax revenues become available,
  393  they must shall be used to provide extra benefits. Local law
  394  plans created by special act before May 27, 1939, shall be
  395  deemed to comply with this chapter. For the purpose of this
  396  chapter, the term:
  397         (a) “Additional premium tax revenues” means revenues
  398  received by a municipality or special fire control district
  399  pursuant to s. 175.121 which exceed that amount received for
  400  calendar year 1997., and the term
  401         (b) “Extra benefits” means benefits in addition to or
  402  greater than those provided to general employees of the
  403  municipality and in addition to those in existence for
  404  firefighters on March 12, 1999.
  405         (c) “Adjusted base amount” means the amount received for
  406  calendar year 1997, plus any amount attributable to the
  407  enactment of minimum benefits and any amount attributable to
  408  extra benefit improvements enacted since March 12, 1999. Local
  409  law plans created by special act before May 23, 1939, shall be
  410  deemed to comply with this chapter.
  411         (3) In addition to defined benefit plans, each plan sponsor
  412  must have a defined contribution supplemental plan by October 1,
  413  2011. However, the plan sponsor of any plan established by
  414  special act of the Legislature has until July 1, 2012, to create
  415  a defined contribution supplemental plan.
  416         (a) Notwithstanding any other provisions of this section,
  417  if, based on the most recent actuarial valuation, a defined
  418  benefit plan’s market value of assets, divided by present value
  419  of accrued benefits:
  420         1. Is higher than 80 percent and:
  421         a. The plan meets the minimum standards of this chapter,
  422  then all additional premium tax revenues in excess of the
  423  adjusted base amount and all accumulated additional premium tax
  424  revenues held in reserve must be used to fund a defined
  425  contribution supplemental plan; or
  426         b. The plan does not meet the minimum standards of this
  427  chapter, then all additional premium tax revenues in excess of
  428  the adjusted base amount and all accumulated additional premium
  429  tax revenues held in reserve must be used to meet the minimum
  430  standards of this chapter.
  431         2. Is 80 percent or less and:
  432         a. The plan meets the minimum standards of this chapter,
  433  then one-half of additional premium tax revenues in excess of
  434  the adjusted base amount and one-half of accumulated additional
  435  premium tax revenues held in reserve must be used to pay the
  436  plan’s actuarial accrued liability until the market value of
  437  assets, divided by the present value of accrued benefits,
  438  exceeds 80 percent. The other one-half of additional premium tax
  439  revenues in excess of the adjusted base amount and one-half of
  440  accumulated additional premium tax revenues held in reserve must
  441  be used to fund a defined contribution supplemental plan; or
  442         b. The plan does not meet the minimum standards of this
  443  chapter, then one-half of additional premium tax revenues in
  444  excess of the adjusted base amount and one-half of accumulated
  445  additional premium tax revenues held in reserve must be used to
  446  pay the plan’s actuarial accrued liability until the market
  447  value of assets, divided by the present value of accrued
  448  benefits, exceeds 80 percent. The other one-half of additional
  449  premium tax revenues in excess of the adjusted base amount and
  450  one-half of accumulated additional premium tax revenues held in
  451  reserve must be used to meet the minimum standards of this
  452  chapter.
  453         (b) For a supplemental plan that exists in conjunction with
  454  a defined benefit plan under this chapter, if the defined
  455  benefit plan’s market value of assets, divided by present value
  456  of accrued benefits:
  457         1. Is higher than 70 percent and:
  458         a. The plan meets the minimum standards of this chapter,
  459  then all additional premium tax revenues in excess of the
  460  premium tax revenues received for calendar year 2009 and all
  461  accumulated additional premium tax revenues held in reserve must
  462  be used to fund a defined contribution supplemental plan; or
  463         b. The plan does not meet the minimum standards of this
  464  chapter, then all additional premium tax revenues in excess of
  465  the premium tax revenues received for calendar year 2009 and all
  466  accumulated additional premium tax revenues held in reserve must
  467  be used to meet the minimum standards of this chapter.
  468         2. Is 70 percent or less and:
  469         a. The plan meets the minimum standards of this chapter,
  470  then all additional premium tax revenues in excess of the
  471  premium tax revenues received for calendar year 2009 and all
  472  accumulated additional premium tax revenues held in reserve must
  473  be used to pay the plan’s actuarial accrued liability until the
  474  market value of assets, divided by the present value of accrued
  475  benefits, exceeds 80 percent; or
  476         b. The plan does not meet the minimum standards of this
  477  chapter, then one-half of additional premium tax revenues in
  478  excess of the premium tax revenues received for calendar year
  479  2009 and one-half of accumulated additional premium tax revenues
  480  held in reserve must be used to pay the plan’s actuarial accrued
  481  liability until the market value of assets, divided by the
  482  present value of accrued benefits, exceeds 80 percent. The other
  483  one-half of additional premium tax revenues in excess of the
  484  premium tax revenues received for calendar year 2009 and one
  485  half of accumulated additional premium tax revenues held in
  486  reserve must be used to meet the minimum standards of this
  487  chapter.
  488  
  489  This subsection is effective July 1, 2011, for plans that have
  490  defined contribution supplemental plans as of July 1, 2011.
  491  Plans without defined contribution supplemental plans as of July
  492  1, 2011, have until July 1, 2012, to comply with this
  493  subsection.
  494         (4)(2)A ADOPTION OR REVISION OF A LOCAL LAW PLAN.—No
  495  retirement plan or amendment to a retirement plan may not shall
  496  be proposed for adoption unless the proposed plan or amendment
  497  contains an actuarial estimate of the costs involved. No Such
  498  proposed plan or proposed plan change may not shall be adopted
  499  without the approval of the municipality, special fire control
  500  district, or, where permitted, the Legislature. Copies of the
  501  proposed plan or proposed plan change and the actuarial impact
  502  statement of the proposed plan or proposed plan change shall be
  503  furnished to the division before prior to the last public
  504  hearing thereon. Such statement must shall also indicate whether
  505  the proposed plan or proposed plan change is in compliance with
  506  s. 14, Art. X of the State Constitution and those provisions of
  507  part VII of chapter 112 which are not expressly provided in this
  508  chapter. Notwithstanding any other provision, only those local
  509  law plans created by special act of legislation before prior to
  510  May 27 23, 1939, are shall be deemed to meet the minimum
  511  benefits and minimum standards only in this chapter.
  512         (5)(3) Notwithstanding any other provision, with respect to
  513  any supplemental plan municipality:
  514         (a) Section 175.032(3)(a) shall not apply, and A local law
  515  plan and a supplemental plan may continue to use their
  516  definition of compensation or salary in existence on March 12,
  517  1999 the effective date of this act.
  518         (b) Section 175.061(1)(b) does shall not apply, and a local
  519  law plan and a supplemental plan shall continue to be
  520  administered by a board or boards of trustees numbered,
  521  constituted, and selected as the board or boards were numbered,
  522  constituted, and selected on December 1, 2000.
  523         (c) The election set forth in paragraph (1)(b) is shall be
  524  deemed to have been made.
  525         (6)(4) The retirement plan setting forth the benefits and
  526  the trust agreement, if any, covering the duties and
  527  responsibilities of the trustees and the regulations of the
  528  investment of funds must be in writing, and copies thereof must
  529  be made available to the participants and to the general public.
  530         Section 8. Subsection (4) of section 185.02, Florida
  531  Statutes, is amended to read:
  532         185.02 Definitions.—For any municipality, chapter plan,
  533  local law municipality, or local law plan under this chapter,
  534  the following words and phrases as used in this chapter shall
  535  have the following meanings, unless a different meaning is
  536  plainly required by the context:
  537         (4) “Compensation” or “salary” means, for noncollectively
  538  bargained service earned before July 1, 2011, or for service
  539  earned under collective bargaining agreements in place before
  540  July 1, 2011, the total cash remuneration including “overtime”
  541  paid by the primary employer to a police officer for services
  542  rendered, but not including any payments for extra duty or a
  543  special detail work performed on behalf of a second party
  544  employer. However, A local law plan may limit the amount of
  545  overtime payments which can be used for retirement benefit
  546  calculation purposes; however, but in no event shall such
  547  overtime limit may not be less than 300 hours per officer per
  548  calendar year. For noncollectively bargained service earned on
  549  or after July 1, 2011, or for service earned under collective
  550  bargaining agreements entered into on or after July 1, 2011, the
  551  term has the same meaning except that overtime compensation in
  552  excess of 300 hours per year, or payments for accrued unused
  553  sick or annual leave, may not be included for purposes of
  554  calculating retirement benefits.
  555         (a) Any retirement trust fund or plan that which now or
  556  hereafter meets the requirements of this chapter does shall not,
  557  solely by virtue of this subsection, reduce or diminish the
  558  monthly retirement income otherwise payable to each police
  559  officer covered by the retirement trust fund or plan.
  560         (b) The member’s compensation or salary contributed as
  561  employee-elective salary reductions or deferrals to any salary
  562  reduction, deferred compensation, or tax-sheltered annuity
  563  program authorized under the Internal Revenue Code shall be
  564  deemed to be the compensation or salary the member would receive
  565  if he or she were not participating in such program and shall be
  566  treated as compensation for retirement purposes under this
  567  chapter.
  568         (c) For any person who first becomes a member in any plan
  569  year beginning on or after January 1, 1996, compensation for
  570  that any plan year may shall not include any amounts in excess
  571  of the Internal Revenue Code s. 401(a)(17) limitation, (as
  572  amended by the Omnibus Budget Reconciliation Act of 1993), which
  573  limitation of $150,000 shall be adjusted as required by federal
  574  law for qualified government plans and shall be further adjusted
  575  for changes in the cost of living in the manner provided by
  576  Internal Revenue Code s. 401(a)(17)(B). For any person who first
  577  became a member before prior to the first plan year beginning on
  578  or after January 1, 1996, the limitation on compensation may
  579  shall be not be less than the maximum compensation amount that
  580  was allowed to be taken into account under the plan as in effect
  581  on July 1, 1993, which limitation shall be adjusted for changes
  582  in the cost of living since 1989 in the manner provided by
  583  Internal Revenue Code s. 401(a)(17)(1991).
  584         Section 9. Paragraph (b) of subsection (1) of section
  585  185.05, Florida Statutes, is amended to read:
  586         185.05 Board of trustees; members; terms of office;
  587  meetings; legal entity; costs; attorney’s fees.—For any
  588  municipality, chapter plan, local law municipality, or local law
  589  plan under this chapter:
  590         (1) In each municipality described in s. 185.03 there is
  591  hereby created a board of trustees of the municipal police
  592  officers’ retirement trust fund, which shall be solely
  593  responsible for administering the trust fund. Effective October
  594  1, 1986, and thereafter:
  595         (b) The membership of boards of trustees for local law
  596  plans is shall be as follows:
  597         1. If a municipality has a pension plan for police officers
  598  only, the provisions of paragraph (a) shall apply.
  599         2. If a municipality has a pension plan for police officers
  600  and firefighters, the provisions of paragraph (a) shall apply,
  601  except that one member of the board shall be a police officer as
  602  defined in s. 185.02 and one member shall be a firefighter as
  603  defined in s. 175.032, respectively, elected by a majority of
  604  the active firefighters and police officers who are members of
  605  the plan.
  606         3. Any board of trustees operating a local law plan on July
  607  1, 1999, which is combined with a plan for general employees
  608  shall hold an election of the police officers, or police
  609  officers and firefighters if included, to determine whether a
  610  plan is to be established for police officers only, or for
  611  police officers and firefighters where included. Based on the
  612  election results, a new board shall be established as provided
  613  in subparagraph 1. or subparagraph 2., as appropriate. The
  614  municipality shall enact an ordinance to implement the new board
  615  by October 1, 1999. The newly established board shall take
  616  whatever action is necessary to determine the amount of assets
  617  which is attributable to police officers, or police officers and
  618  firefighters where included. Such assets shall include all
  619  employer, employee, and state contributions made by or on behalf
  620  of police officers, or police officers and firefighters where
  621  included, and any investment income derived from such
  622  contributions. All such moneys shall be transferred into the
  623  newly established retirement plan, as directed by the board.
  624  
  625  With respect to any board of trustees operating a local law plan
  626  on June 30, 1986, nothing in this paragraph does not shall
  627  permit the reduction of the membership percentage of police
  628  officers or police officers and firefighters. However, for the
  629  sole purpose of changing municipal representation, a
  630  municipality may, by ordinance, change the municipal
  631  representation on the board of trustees operating a local law
  632  plan by ordinance, only if such change does not reduce the
  633  membership percentage of police officers, or police officers and
  634  firefighters.
  635         Section 10. Section 185.35, Florida Statutes, is amended to
  636  read:
  637         185.35 Municipalities having their own pension plans for
  638  police officers.—For any municipality, chapter plan, local law
  639  municipality, or local law plan under this chapter, in order for
  640  municipalities with their own pension plans for police officers,
  641  or for police officers and firefighters if where included, to
  642  participate in the distribution of the tax fund established
  643  pursuant to s. 185.08, local law plans must meet the minimum
  644  benefits and minimum standards set forth in this chapter:
  645         (1) PREMIUM TAX INCOME.—If a municipality has a pension
  646  plan for police officers, or for police officers and
  647  firefighters if where included, which, in the opinion of the
  648  division, meets the minimum benefits and minimum standards set
  649  forth in this chapter, the board of trustees of the pension
  650  plan, as approved by a majority of police officers, or police
  651  officers and firefighters, of the municipality, may:
  652         (a) Place the income from the premium tax in s. 185.08 in
  653  such pension plan for the sole and exclusive use of its police
  654  officers, or its police officers and firefighters if where
  655  included, where it shall become an integral part of that pension
  656  plan and shall be used to pay extra benefits to the police
  657  officers, or police officers and firefighters, included in that
  658  pension plan; or
  659         (b) May place the income from the premium tax in s. 185.08
  660  in a separate supplemental plan to pay extra benefits to the
  661  police officers, or police officers and firefighters if where
  662  included, participating in such separate supplemental plan.
  663         (2) The premium tax provided by this chapter shall in all
  664  cases be used in its entirety to provide extra benefits to
  665  police officers, or to police officers and firefighters if,
  666  where included. However, local law plans in effect on October 1,
  667  1998, must shall be required to comply with the minimum benefit
  668  provisions of this chapter only to the extent that additional
  669  premium tax revenues become available to incrementally fund the
  670  cost of such compliance as provided in s. 185.16(2). If When a
  671  plan is in compliance with such minimum benefit provisions, as
  672  subsequent additional tax revenues become available, they shall
  673  be used to provide extra benefits. Local law plans created by
  674  special act before May 27, 1939, shall be deemed to comply with
  675  this chapter. For the purpose of this chapter, the term:
  676         (a) “Additional premium tax revenues” means revenues
  677  received by a municipality pursuant to s. 185.10 which exceed
  678  the amount received for calendar year 1997., and the term
  679         (b) “Extra benefits” means benefits in addition to or
  680  greater than those provided to general employees of the
  681  municipality and in addition to those in existence for police
  682  officers on March 12, 1999.
  683         (c) “Adjusted base amount” means the amount received for
  684  calendar year 1997, plus any amount attributable to the
  685  enactment of minimum benefits and any amount attributable to
  686  extra benefit improvements enacted since March 12, 1999. Local
  687  law plans created by special act before May 23, 1939, shall be
  688  deemed to comply with this chapter.
  689         (3) In addition to defined benefit plans, each plan sponsor
  690  must have a defined contribution supplemental plan by October 1,
  691  2011. However, the plan sponsor of any plan established by
  692  special act of the Legislature has until July 1, 2012, to create
  693  a defined contribution supplemental plan.
  694         (a) Notwithstanding any other provisions of this section,
  695  if, based on the most recent actuarial valuation, a defined
  696  benefit plan’s market value of assets, divided by present value
  697  of accrued benefits:
  698         1. Is higher than 80 percent and:
  699         a. The plan meets the minimum standards of this chapter,
  700  then all additional premium tax revenues in excess of the
  701  adjusted base amount and all accumulated additional premium tax
  702  revenues held in reserve must be used to fund a defined
  703  contribution supplemental plan; or
  704         b. The plan does not meet the minimum standards of this
  705  chapter, then all additional premium tax revenues in excess of
  706  the adjusted base amount and all accumulated additional premium
  707  tax revenues held in reserve must be used to meet the minimum
  708  standards of this chapter.
  709         2. Is 80 percent or less and:
  710         a. The plan meets the minimum standards of this chapter,
  711  then one-half of additional premium tax revenues in excess of
  712  the adjusted base amount and one-half of accumulated additional
  713  premium tax revenues held in reserve must be used to pay the
  714  plan’s actuarial accrued liability until the market value of
  715  assets, divided by the present value of accrued benefits,
  716  exceeds 80 percent. The other one-half of additional premium tax
  717  revenues in excess of the adjusted base amount and one-half of
  718  accumulated additional premium tax revenues held in reserve must
  719  be used to fund a defined contribution supplemental plan; or
  720         b. The plan does not meet the minimum standards of this
  721  chapter, then one-half of additional premium tax revenues in
  722  excess of the adjusted base amount and one-half of accumulated
  723  additional premium tax revenues held in reserve must be used to
  724  pay the plan’s actuarial accrued liability until the market
  725  value of assets, divided by the present value of accrued
  726  benefits, exceeds 80 percent. The other one-half of additional
  727  premium tax revenues in excess of the adjusted base amount and
  728  one-half of accumulated additional premium tax revenues held in
  729  reserve must be used to meet the minimum standards of this
  730  chapter.
  731         (b) For a supplemental plan that exists in conjunction with
  732  a defined benefit plan under this chapter, if the defined
  733  benefit plan’s market value of assets, divided by present value
  734  of accrued benefits:
  735         1. Is higher than 70 percent and:
  736         a. The plan meets the minimum standards of this chapter,
  737  then all additional premium tax revenues in excess of the
  738  premium tax revenues received for calendar year 2009 and all
  739  accumulated additional premium tax revenues held in reserve must
  740  be used to fund a defined contribution supplemental plan; or
  741         b. The plan does not meet the minimum standards of this
  742  chapter, then all additional premium tax revenues in excess of
  743  the premium tax revenues received for calendar year 2009 and all
  744  accumulated additional premium tax revenues held in reserve must
  745  be used to meet the minimum standards of this chapter.
  746         2. Is 70 percent or less and:
  747         a. The plan meets the minimum standards of this chapter,
  748  then all additional premium tax revenues in excess of the
  749  premium tax revenues received for calendar year 2009 and all
  750  accumulated additional premium tax revenues held in reserve must
  751  be used to pay the plan’s actuarial accrued liability until the
  752  market value of assets, divided by the present value of accrued
  753  benefits, exceeds 80 percent; or
  754         b. The plan does not meet the minimum standards of this
  755  chapter, then one-half of additional premium tax revenues in
  756  excess of the premium tax revenues received for calendar year
  757  2009 and one-half of accumulated additional premium tax revenues
  758  held in reserve must be used to pay the plan’s actuarial accrued
  759  liability until the market value of assets, divided by the
  760  present value of accrued benefits, exceeds 80 percent. The other
  761  one-half of additional premium tax revenues in excess of the
  762  premium tax revenues received for calendar year 2009 and one
  763  half of accumulated additional premium tax revenues held in
  764  reserve must be used to meet the minimum standards of this
  765  chapter.
  766  
  767  This subsection is effective July 1, 2011, for plans that have
  768  defined contribution supplemental plans as of July 1, 2011.
  769  Plans without defined contribution supplemental plans as of July
  770  1, 2011, have until July 1, 2012, to comply with this
  771  subsection.
  772         (4)(2)A ADOPTION OR REVISION OF A LOCAL LAW PLAN.—No
  773  retirement plan or amendment to a retirement plan may not shall
  774  be proposed for adoption unless the proposed plan or amendment
  775  contains an actuarial estimate of the costs involved. No Such
  776  proposed plan or proposed plan change may not shall be adopted
  777  without the approval of the municipality or, where permitted,
  778  the Legislature. Copies of the proposed plan or proposed plan
  779  change and the actuarial impact statement of the proposed plan
  780  or proposed plan change shall be furnished to the division
  781  before prior to the last public hearing thereon. Such statement
  782  must shall also indicate whether the proposed plan or proposed
  783  plan change is in compliance with s. 14, Art. X of the State
  784  Constitution and those provisions of part VII of chapter 112
  785  which are not expressly provided in this chapter.
  786  Notwithstanding any other provision, only those local law plans
  787  created by special act of legislation before prior to May 27 23,
  788  1939, are shall be deemed to meet the minimum benefits and
  789  minimum standards only in this chapter.
  790         (5)(3) Notwithstanding any other provision, with respect to
  791  any supplemental plan municipality:
  792         (a) Section 185.02(4)(a) does shall not apply, and a local
  793  law plan and a supplemental plan may continue to use their
  794  definition of compensation or salary in existence on March 12,
  795  1999 the effective date of this act.
  796         (b) Section 185.05(1)(b) does shall not apply, and a local
  797  law plan and a supplemental plan shall continue to be
  798  administered by a board or boards of trustees numbered,
  799  constituted, and selected as the board or boards were numbered,
  800  constituted, and selected on December 1, 2000.
  801         (c) The election set forth in paragraph (1)(b) is shall be
  802  deemed to have been made.
  803         (6)(4) The retirement plan setting forth the benefits and
  804  the trust agreement, if any, covering the duties and
  805  responsibilities of the trustees and the regulations of the
  806  investment of funds must be in writing and copies made available
  807  to the participants and to the general public.
  808         Section 11. Financial rating of local pension plans.—The
  809  Department of Financial Services shall develop standardized
  810  ratings for classifying the financial strength of all local
  811  government defined benefit pension plans.
  812         (1) In assigning a rating to a plan, the department shall
  813  consider, without limitation:
  814         (a) The plan’s current and future unfunded liabilities.
  815         (b) The plan’s net asset value, managed returns, and funded
  816  ratio.
  817         (c) Metrics related to the sustainability of the plan,
  818  including, but not limited to, the percentage that the annual
  819  contribution is of the participating employee payroll.
  820         (d) Municipal bond ratings for the local government, if
  821  applicable.
  822         (e) Whether the local government has reduced contribution
  823  rates to the plan when the plan has an actuarial surplus.
  824         (f) Whether the local government uses any actuarial surplus
  825  in the plan for obligations outside the plan.
  826         (2) The department may obtain all necessary data to
  827  formulate the ratings from all relevant entities, including
  828  local pension boards, local governments, and the Division of
  829  Retirement, all of which shall cooperate with the department in
  830  supplying all necessary information.
  831         (3) The ratings shall be posted on the department’s website
  832  in a standardized format.
  833         Section 12. Task Force on Public Employee Disability
  834  Presumptions.—
  835         (1) The Task Force on Public Employee Disability
  836  Presumptions is created for the purpose of developing findings
  837  and issuing recommendations on the disability presumptions in
  838  ss. 112.18, 175.231, and 185.34, Florida Statutes.
  839         (2) All members of the task force shall be appointed on or
  840  before July 15, 2011, and the task force shall hold its first
  841  meeting on or before August 15, 2011. The task force shall be
  842  composed of eight members as follows:
  843         (a) Three members appointed by the President of the Senate,
  844  one of whom must be an attorney in private practice who has
  845  experience in the relevant laws; one of whom must be a
  846  representative of organized labor and who is a member of a
  847  pension plan under chapter 175, Florida Statutes; and one of
  848  whom must be from the Florida Association of Counties.
  849         (b) Three members appointed by the Speaker of the House of
  850  Representatives, one of whom must be an attorney in private
  851  practice who has experience in the relevant laws; one of whom
  852  must be a representative of organized labor and who is a member
  853  of a pension plan under chapter 185, Florida Statutes; and one
  854  of whom must be from the Florida League of Cities.
  855         (c) A member employed by the Division of Retirement of the
  856  Department of Management Services who has experience in local
  857  government pension plans, appointed by the Governor.
  858         (d) A member employed by the Department of Financial
  859  Services who has relevant expertise in state risk management,
  860  appointed by the Chief Financial Officer.
  861         (3) The task force shall address issues, including, but not
  862  limited to:
  863         (a) Data related to the operation of the statutory
  864  disability presumptions.
  865         (b) The manner in which other states handle disability
  866  presumptions.
  867         (c) Proposals for changes to the existing disability
  868  presumptions.
  869         (4) The Department of Financial Services shall provide
  870  administrative support to the task force.
  871         (5) Upon request, the Auditor General shall provide
  872  technical assistance to the task force regarding local
  873  government auditing and finances.
  874         (6) Members of the task force shall serve without
  875  compensation while in the performance of their duties, but are
  876  entitled to reimbursement for per diem and travel expenses in
  877  accordance with s. 112.061, Florida Statutes.
  878         (7) The task force may obtain data, information, and
  879  assistance from any officer or state agency and any political
  880  subdivision thereof. All such officers, agencies, and political
  881  subdivisions shall provide the task force with all relevant
  882  information and assistance on any matter within their knowledge
  883  or control.
  884         (8) The task force shall submit a report, including
  885  findings and recommendations, to the Governor, the Chief
  886  Financial Officer, the President of the Senate, and the Speaker
  887  of the House of Representatives by January 1, 2012. The report
  888  must include specific recommendations for legislative action
  889  during the 2012 Regular Session of the Legislature.
  890         (9) The task force is dissolved upon submission of its
  891  report.
  892         Section 13. By December 1, 2011, the Department of
  893  Financial Services shall submit a report and recommendations to
  894  the Governor, the President of the Senate, and the Speaker of
  895  the House of Representatives on actions to be taken to increase
  896  the visibility and transparency of local government pension
  897  plans, including, but not limited to, those created pursuant to
  898  chapter 175 or chapter 185, Florida Statutes, with the goal of
  899  increasing the ability of a taxpayer or policymaker to assess
  900  the financial health of the local plans. The report must include
  901  specific recommendations for legislative action during the 2012
  902  Regular Session of the Legislature. The department shall consult
  903  with the Legislature’s Office of Economic and Demographic
  904  Research in formulating the recommendations, which must address,
  905  but need not be limited to:
  906         (1) Whether and what kinds of local pension plan data
  907  should be included in the financial audit reports required under
  908  s. 218.39, Florida Statutes.
  909         (2) Whether the reporting requirements of ss. 175.261 and
  910  185.221, Florida Statutes, should be supplemented with other
  911  types of financial data in order to give a more complete and
  912  transparent picture of a local government’s financial solvency.
  913         (3) Proposals for a uniform format for providing pension
  914  data, including standard terminology and data and the specific
  915  types of data which should be provided, including funding
  916  ratios, and whether contributions are sufficient to fund
  917  actuarial liabilities.
  918         (4) Whether to require local governments to provide pension
  919  financial data on local public websites.
  920         (5) Other related issues, including insurance benefits,
  921  health care benefits, and postemployment plan benefits.
  922         (6) Proposals related to the composition of local pension
  923  plan boards.
  924         Section 14. The Legislature finds that a proper and
  925  legitimate state purpose is served when employees and retirees
  926  of the state and of its political subdivisions, and the
  927  dependents, survivors, and beneficiaries of those employees and
  928  retirees, are extended the basic protections afforded by
  929  governmental retirement systems that provide fair and adequate
  930  benefits and that are managed, administered, and funded in an
  931  actuarially sound manner as required by s. 14, Article X of the
  932  State Constitution and part VII of chapter 112, Florida
  933  Statutes. Therefore, the Legislature determines and declares
  934  that this act fulfills an important state interest.
  935         Section 15. This act shall take effect July 1, 2011.