Florida Senate - 2017 COMMITTEE AMENDMENT
Bill No. SB 7030
Ì584972IÎ584972
LEGISLATIVE ACTION
Senate . House
Comm: WD .
05/01/2017 .
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The Committee on Appropriations (Brandes) recommended the
following:
1 Senate Amendment to Amendment (686242) (with title
2 amendment)
3
4 Between lines 2169 and 2170
5 insert:
6 Section 19. Subsection (3) of section 121.031, Florida
7 Statutes, is amended to read
8 121.031 Administration of system; appropriation; oaths;
9 actuarial studies; public records.—
10 (3) The administrator shall cause an actuarial study of the
11 system to be made at least annually and shall report the results
12 of such study to the Legislature Governor, the President of the
13 Senate, and the Speaker of the House of Representatives by
14 December 31 prior to the next legislative session. The study
15 shall, at a minimum, conform to the requirements of s. 112.63,
16 with the following exceptions and additions:
17 (a) The valuation of plan assets shall be based on a 5-year
18 averaging methodology such as that specified in the United
19 States Department of Treasury Regulations, 26 C.F.R. s.
20 1.412(c)(2)-1 in effect on August 16, 2006, or a similar
21 accepted approach designed to attenuate fluctuations in asset
22 values.
23 (b) The study shall include a narrative explaining the
24 changes in the covered group over the period between actuarial
25 valuations and the impact of those changes on actuarial results.
26 (c) When substantial changes in actuarial assumptions have
27 been made, the study shall reflect the results of an actuarial
28 assumption as of the current date based on the assumptions
29 utilized in the prior actuarial report.
30 (d) The study shall include an analysis of the changes in
31 actuarial valuation results by the factors generating those
32 changes. Such analysis shall reconcile the current actuarial
33 valuation results with those results from the prior valuation.
34 (e) The study shall include measures of funding status and
35 funding progress designed to facilitate the assessment of trends
36 over several actuarial valuations with respect to the overall
37 solvency of the system. Such measures shall be adopted by the
38 department and shall be used consistently in all actuarial
39 valuations performed on the system.
40 (f) The study shall include an analysis of the assumed rate
41 of return adopted by the Florida Retirement System Actuarial
42 Assumption Conference pursuant to s. 216.136(10). This analysis
43 shall include specific recommendations regarding an appropriate
44 assumed rate of return.
45 (f)(g) The actuarial model used to determine the adequate
46 level of funding for the Florida Retirement System shall include
47 a specific rate stabilization mechanism, as prescribed herein.
48 It is the intent of the Legislature to maintain as a reserve a
49 specific portion of any actuarial surplus, and to use such
50 reserve for the purpose of offsetting future unfunded
51 liabilities caused by experience losses, thereby minimizing the
52 risk of future increases in contribution rates. It is further
53 the intent of the Legislature that the use of any excess above
54 the reserve to offset retirement system normal costs shall be in
55 a manner that will allow system employers to plan appropriately
56 for resulting cost reductions and subsequent cost increases. The
57 rate stabilization mechanism shall operate as follows:
58 1. The actuarial surplus shall be the value of actuarial
59 assets over actuarial liabilities, as is determined on the
60 preceding June 30 or as may be estimated on the preceding
61 December 31.
62 2. The full amount of any experience loss shall be offset,
63 to the extent possible, by any actuarial surplus.
64 3. If the actuarial surplus exceeds 5 percent of actuarial
65 liabilities, one-half of the excess may be used to offset total
66 retirement system costs. In addition, if the actuarial surplus
67 exceeds 10 percent of actuarial liabilities, an additional one
68 fourth of the excess above 10 percent may be used to offset
69 total retirement system costs. In addition, if the actuarial
70 surplus exceeds 15 percent of actuarial liabilities, an
71 additional one-fourth of the excess above 15 percent may be used
72 to offset total retirement system costs.
73 4. Any surplus amounts available to offset total retirement
74 system costs pursuant to subparagraph 3. should be amortized
75 each year over a 10-year rolling period on a level-dollar basis.
76 Section 20. Section 121.0312, Florida Statutes, is amended
77 to read
78 121.0312 Acknowledgement of review Review; actuarial
79 valuation report; contribution rate determination process.—
80 (1) The Governor, Chief Financial Officer, and Attorney
81 General, sitting as the Board of Trustees of the State Board of
82 Administration, shall review the actuarial valuation report
83 prepared in accordance with the provisions of this chapter. The
84 Board shall review the process by which Florida Retirement
85 System contribution rates are determined and recommend and
86 submit any comments regarding the process to the Legislature.
87 (2) Effective July 1, 2019, the Governor, the President of
88 the Senate, and the Speaker of the House of Representatives
89 shall within 30 days of receipt, acknowledge in writing, their
90 acceptance, and review of, the actuarial valuation report
91 prepared in accordance with the provisions of this chapter and
92 any recommendations regarding actuarial assumptions contained
93 therein. The department shall publish the written
94 acknowledgements as addendums to the report.
95
96 ================= T I T L E A M E N D M E N T ================
97 And the title is amended as follows:
98 Delete line 2303
99 and insert:
100 and budget authority; amending s. 121.031; providing
101 criteria to be included in the annual actuarial
102 valuation report; amending s. 121.0312; requiring
103 acknowledgement and review of the report; providing
104 effective dates.