The Florida Senate

¹121.021  Definitions.--The following words and phrases as used in this chapter have the respective meanings set forth unless a different meaning is plainly required by the context:

(1)  Gender-specific language whenever used in this chapter includes the other gender.

(2)  "Existing systems" means the State and County Officers and Employees' Retirement System, the retirement system for school teachers, and the highway patrol pensions and pension trust fund, which are consolidated in s. 121.011(2). On and after July 1, 1972, the term "existing systems" shall also include the retirement system for justices and judges established by ²chapter 123 and as consolidated with the Florida Retirement System in s. 121.046.

(3)  "System" means the general retirement system established by this chapter to be known and cited as the "Florida Retirement System."

(4)  "Division" means the Division of Retirement.

(5)  "Administrator" means the director of the Division of Retirement.

(6)  "Actuary" or "state retirement actuary" means a fellow of the Society of Actuaries or a member of the American Academy of Actuaries or an organization of which one or more members is a fellow of the Society of Actuaries or a member of the American Academy of Actuaries or both.

(7)  "City" means any municipality duly incorporated under the laws of the state.

(8)  "Unit" means any department, division, or subdivision of a city or any classification of city employees approved for social security coverage, as such, by the United States Department of Health and Human Services, not based on age, sex, or other classification resulting in higher than average costs for retirement benefits.

(9)  "Special district" means an independent special district as defined in s. 189.403(3).

(10)  "Employer" means any agency, branch, department, institution, university, institution of higher education, or board of the state, or any county agency, branch, department board, district school board, or special district of the state, or any city of the state which participates in the system for the benefit of certain of its employees, or a charter school that participates as provided in s. 121.051(2)(d).

(11)  "Officer or employee" means any person receiving salary payments for work performed in a regularly established position and, if employed by a city or special district, employed in a covered group.

(12)  "Member" means any officer or employee who is covered or who becomes covered under this system in accordance with this chapter. On and after December 1, 1970, all new members and those members transferring from existing systems shall be divided into the following classes: "Special Risk Class," as provided in s. 121.0515(2); "Special Risk Administrative Support Class," as provided in s. 121.0515(7); "Elected State and County Officers' Class," as provided in s. 121.052; "Senior Management Service Class," as provided in s. 121.055; and "Regular Class," which consists of all members who are not in the Special Risk Class, Special Risk Administrative Support Class, Elected State and County Officers' Class, or Senior Management Service Class.

(13)  "Disability in line of duty" means an injury or illness arising out of and in the actual performance of duty required by a member's employment during his or her regularly scheduled working hours or irregular working hours as required by the employer. Disability resulting from drug or alcohol abuse shall not be considered in the line of duty, except when the member is expected to use alcohol in the course of his or her official work in undercover law enforcement, and such use clearly results in the member's disability. The administrator may require such proof as he or she deems necessary as to the time, date, and cause of any such injury or illness, including evidence from any available witnesses. Workers' compensation records under the provisions of chapter 440 may also be used.

(14)  "Death in line of duty" means death arising out of and in the actual performance of duty required by a member's employment during his or her regularly scheduled working hours or irregular working hours as required by the employer. The administrator may require such proof as he or she deems necessary as to the time, date, and cause of death, including evidence from any available witnesses. Workers' compensation records under the provisions of chapter 440 may also be used.

(15)

(a)  Until October 1, 1978, "special risk member" means any officer or employee whose application is approved by the administrator and who receives salary payments for work performed as a peace officer; law enforcement officer; police officer; highway patrol officer; custodial employee at a correctional or detention facility; correctional agency employee whose duties and responsibilities involve direct contact with inmates, but excluding secretarial and clerical employees; firefighter; or an employee in any other job in the field of law enforcement or fire protection if the duties of such person are certified as hazardous by his or her employer.

(b)  Effective October 1, 1978, "special risk member" means a member of the Florida Retirement System who is designated as a special risk member by the division in accordance with s. 121.0515. Such member must be employed as a law enforcement officer, a firefighter, or a correctional officer and must meet certain other special criteria as set forth in s. 121.0515.

(16)  "Date of participation" means the date on which the officer or employee becomes a member.

(17)

(a)  "Creditable service" of any member means the sum of his or her past service, prior service, military service, out-of-state service, workers' compensation credit, and future service allowed within the provisions of this chapter if all required contributions have been paid and all other requirements of this chapter have been met. However, in no case shall a member receive credit for more than a year's service during any 12-month period. Service as applied to a teacher or a nonacademic employee of a school board shall be based on contract years of employment or school term years of employment, as provided in chapters 122 and 238, rather than 12-month periods of employment.

(b)  For purposes of the definition of "creditable service," monthly service credit under the Florida Retirement System and existing state systems shall be awarded as follows:

1.  One month of service credit shall be awarded for each month of service performed prior to July 1, 1974.

2.  One month of service credit shall be awarded for each month of service performed on and after July 1, 1974, in which the member was paid a salary of $100 or more. If the member was paid less than $100 during a month of employment, the service credit for that month shall be a fraction of one month of credit, such fraction to be determined by dividing the actual salary by $100.

3.  One month of service credit shall be awarded for each month of service performed on and after July 1, 1979, for which the member was paid a salary of $250 or more, including any amount which was set aside for participation in a deferred compensation plan. If the member was paid less than $250 during a month of employment, the service credit for that month shall be a fraction of one month of credit, such fraction to be determined by dividing the actual salary payment by $250.

4.  On and after July 1, 1985, one month of service credit shall be awarded for each month salary is paid for service performed.

(18)  "Past service" of any member, as provided in s. 121.081(1), means the number of years and complete months and any fractional part of a month, recognized and credited by an employer and approved by the administrator, during which the member was in the active employ of an employer prior to his or her date of participation.

(19)  "Prior service" under this chapter means:

(a)  Service for which the member had credit under one of the existing systems and received a refund of his or her contributions upon termination of employment. Prior service shall also include that service between December 1, 1970, and the date the system becomes noncontributory for which the member had credit under the Florida Retirement System and received a refund of his or her contributions upon termination of employment.

(b)  Service prior to an employee's membership in the Florida Retirement System with an employer, either before or during the employer's participation in an existing system. The word "service" as used in this paragraph and paragraph (c) means employment service prior to December 1, 1970, which, at the time it is claimed as prior service, satisfies the requirements for a regularly established position, as defined by rules of the Florida Retirement System.

(c)  Service as described in paragraph (b) for which no contributions were made due to the fact that the employee made a written rejection of an existing system. If such person withdraws the rejection, the person may purchase retirement credit for all his or her service during the period of rejection. Any governmental entity may contribute up to 50 percent of the amount required to purchase any prior service under paragraph (b) and this paragraph.

(d)  Service which was performed in a Florida Highway Patrol recruit training school or the Florida Highway Patrol Training Academy, prior to taking the constitutional oath of office, by any Florida highway patrol officer who was hired on or after November 1, 1939, and before July 1, 1968, and for which no retirement contributions were paid.

(20)  "Military service" of any member means:

(a)  Service in the Armed Forces of the United States under the conditions set forth in s. 121.111(1); or

(b)  Actual "wartime service" in the Armed Forces of the United States, as defined by s. 1.01(14), or "wartime service" in the Allied Forces, not to exceed 4 years, if credit for such service has not been granted under any other federal or state system, and provided such service is not used in any other retirement system; however, this paragraph does not prohibit the use of such service as creditable service if granted and used in a pension system under chapter 67 of Title 10 of the United States Code.

(21)  "Future service" of any member means service subsequent to date of the member's participation and may include authorized leaves of absence as provided in s. 121.121.

(22)  "Compensation" means the monthly salary paid a member by his or her employer for work performed arising from that employment, including overtime payments paid from a salary fund, except that:

(a)  Under no circumstances shall compensation include fees paid professional persons for special or particular services or include salary payments made from a faculty practice plan operated by rule of the Board of Regents for eligible clinical faculty at the University of Florida and the University of South Florida.

(b)  For all purposes under this chapter, the member's compensation or gross compensation contributed as employee-elective salary reductions or deferrals to any salary reduction, deferred compensation, or tax-sheltered annuity program authorized under the Internal Revenue Code shall be deemed to be the compensation or gross compensation which the member would receive if he or she were not participating in such program and shall be treated as compensation for retirement purposes under this chapter. Any public funds otherwise paid by an employer into an employee's salary reduction, deferred compensation, or tax-sheltered annuity program on or after July 1, 1990 (the date as of which all employers were notified in writing by the division to cease making contributions to the System Trust Fund based on such amounts), shall be considered a fringe benefit and shall not be treated as compensation for retirement purposes under this chapter. However, if an employer was notified in writing by the division to cease making such contributions as of a different date, that employer shall be subject to the requirements of said written notice.

(c)  For any person who first becomes a member on or after July 1, 1996, compensation for any plan year shall not include any amounts in excess of the s. 401(a)(17), Internal Revenue Code limitation (as amended by the Omnibus Budget Reconciliation Act of 1993), which limitation of $150,000 effective July 1, 1996, shall be adjusted as required by federal law for qualified government plans and shall be further adjusted for changes in the cost of living in the manner provided by s. 401(a)(17)(B), Internal Revenue Code. For any person who first became a member prior to July 1, 1996, compensation for all plan years beginning on or after July 1, 1990, shall not include any amounts in excess of the compensation limitation (originally $200,000) established by s. 401(a)(17), Internal Revenue Code prior to the Omnibus Budget Reconciliation Act of 1993, which limitation shall be adjusted for changes in the cost of living since 1989, in the manner provided by s. 401(a)(17) of the Internal Revenue Code of 1991. This limitation, which has been part of the Florida Retirement System since plan years beginning on or after July 1, 1990, shall be adjusted as required by federal law for qualified government plans.

(23)  "Annual compensation" means the total compensation paid a member during a year. A "year" is 12 continuous months.

(24)  "Average final compensation" means the average of the 5 highest fiscal years of compensation for creditable service prior to retirement, termination, or death. For in-line-of-duty disability benefits, if less than 5 years of creditable service have been completed, the term "average final compensation" means the average annual compensation of the total number of years of creditable service. Each year used in the calculation of average final compensation shall commence on July 1. The payment for accumulated sick leave, accumulated annual leave in excess of 500 hours, and bonuses, whether paid as salary or otherwise, shall not be used in the calculation of the average final compensation.

(25)  "Average monthly compensation" means one-twelfth of average final compensation.

(26)  "Accumulated contributions" means the sum of:

(a)  A member's contributions, without interest, subsequent to December 1, 1970; and

(b)  The single-sum amount the member would have received if he or she was covered by an existing system prior to December 1, 1970, and had terminated membership in such system on November 30, 1970, subject to reduction on account of benefit payments as provided under certain options.

(27)  "Pension" means monthly payments to a retiree derived as provided in this chapter.

(28)  "Joint annuitant" or "dependent beneficiary" means any person designated by the member to receive a retirement benefit upon the member's death who is either:

(a)  The spouse of the member;

(b)  The member's natural or adopted child who is under age 25, or is physically or mentally disabled and incapable of self-support, regardless of age; or any person other than the spouse for whom the member is the legal guardian, provided that such person is under age 25 and is financially dependent for no less than one-half of his or her support from the member at retirement or at the time of death of such member, whichever occurs first; or

(c)  A parent or grandparent, or a person age 25 or older for whom the member is the legal guardian, provided that such parent, grandparent, or other person is financially dependent for no less than one-half of his or her support from the member at retirement or at time of the death of such member, whichever occurs first.

(29)  "Normal retirement date" means the first day of any month following the date a member attains one of the following statuses:

(a)  Completes 10 or more years of creditable service and attains age 62;

(b)  Completes 30 years of creditable service, which may include a maximum of 4 years of military service credit, so long as such credit is not claimed under any other system, regardless of age;

(c)  If a special risk member:

1.  Completes 10 or more years of creditable service and attains age 55;

2.  Completes 25 years of creditable service, regardless of age; or

3.  Completes 25 years of creditable service, which may include a maximum of 4 years of military service credit, and attains age 52; or

(d)  If a Senior Management Service Class member:

1.  Completes 7 years of creditable service in the Senior Management Service Class and attains age 62; or

2.  Completes 30 years of creditable service, which may include a maximum of 4 years of military service credit, regardless of age.

"Normal retirement age" is attained on the "normal retirement date."

(30)  "Early retirement date" means the first day of the month following the date a member completes 10 years of creditable service and elects to receive retirement benefits in accordance with this chapter. Such benefits shall be based on average monthly compensation and creditable service as of the member's early retirement date, and the benefit so computed shall be reduced by five-twelfths of 1 percent for each complete month by which the early retirement date precedes his or her normal retirement date as provided in s. 121.091(3).

(31)  "Actuarial equivalent" means a benefit of equal value when computed at regular interest upon the basis of the mortality tables adopted by the administrator.

(32)  "State agency" means the Division of Retirement within the provisions and contemplation of chapter 650.

(33)  "Agreement" means that certain agreement entered into October 23, 1951, between the State of Florida and the Federal Security Administrator. (Chapter 650 implements the procedure to provide for social security coverage.)

(34)  "Covered group" means the officers and employees of an employer who become members under this chapter. "Covered group" applies also when the employer is a charter school, special district, or city for which coverage under this chapter is applied for by the employer and approved for social security coverage by the United States Secretary of Health and Human Services and approved by the administrator for membership under this chapter. Members of a firefighters' pension trust fund or a municipal police officers' retirement trust fund, established in accordance with chapter 175 or chapter 185, respectively, shall be considered eligible for membership under this chapter only after holding a referendum and by affirmative majority vote electing coverage under this chapter.

(35)  "Social security coverage" means old-age, survivors, disability, and health insurance, as provided by the federal Social Security Act.

(36)  "System Trust Fund" means the trust fund established in the State Treasury by this chapter for the purpose of holding and investing the contributions paid by members and employers and paying the benefits to which members or their beneficiaries may become entitled. Other trust funds may be established in the State Treasury to administer the "System Trust Fund."

(37)  "Social Security Trust Fund" means the trust fund established in the State Treasury by this chapter for the purpose of receiving the contributions paid by members and employers for payment to the Secretary of the Treasury. Other trust funds may be established to administer the "Social Security Trust Fund."

(38)  "Continuous service" means creditable service as a member, beginning with the first day of employment with an employer covered under a state-administered retirement system consolidated herein and continuing for as long as the member remains in an employer-employee relationship with an employer covered under this chapter. An absence of 1 calendar month or more from an employer's payroll shall be considered a break in continuous service, except for periods of absence during which an employer-employee relationship continues to exist and such period of absence is creditable under this chapter or under one of the existing systems consolidated herein. However, a law enforcement officer as defined in s. 121.0515(2)(a) who was a member of a state-administered retirement system under chapter 122 or chapter 321 and who resigned and was subsequently reemployed in a law enforcement position within 12 calendar months of such resignation by an employer under such state-administered retirement system shall be deemed to have not experienced a break in service. Further, with respect to a state-employed law enforcement officer who meets the criteria specified in s. 121.0515(2)(a), if the absence from the employer's payroll is the result of a "layoff" as defined in s. 110.203(24) or a resignation to run for an elected office that meets the criteria specified in s. 121.0515(2)(a), no break in continuous service shall be deemed to have occurred if the member is reemployed as a state law enforcement officer or is elected to an office which meets the criteria specified in s. 121.0515(2)(a) within 12 calendar months after the date of the layoff or resignation, notwithstanding the fact that such period of layoff or resignation is not creditable service under this chapter. A withdrawal of contributions will constitute a break in service. Continuous service also includes past service purchased under this chapter, provided such service is continuous within this definition and the rules established by the administrator. The administrator may establish administrative rules and procedures for applying this definition to creditable service authorized under this chapter. Any correctional officer, as defined in s. 943.10, whose participation in the state-administered retirement system is terminated due to the transfer of a county detention facility through a contractual agreement with a private entity pursuant to s. 951.062, shall be deemed an employee with continuous service in the Special Risk Class, provided return to employment with the former employer takes place within 3 years due to contract termination or the officer is employed by a covered employer in a special risk position within 1 year after his or her initial termination of employment by such transfer of its detention facilities to the private entity.

¹(39)  "Termination" occurs when a member ceases all employment relationships with employers under this system, as defined in subsection (10), but in the event a member should be employed by any such employer within the next calendar month, termination shall be deemed not to have occurred. A leave of absence shall constitute a continuation of the employment relationship, except that a leave of absence without pay due to disability may constitute termination for a member, if such member makes application for and is approved for disability retirement in accordance with s. 121.091(4). The division may require other evidence of termination as it deems necessary.

(40)  "Plan year" means the period of time beginning July 1 and ending on the following June 30, both dates inclusive, for all state-administered retirement systems.

(41)  "Effective date of retirement" means the first day of the month in which benefit payments begin to accrue pursuant to s. 121.091.

(42)

(a)  "Local agency employer" means the board of county commissioners or other legislative governing body of a county, however styled, including that of a consolidated or metropolitan government; a clerk of the circuit court, sheriff, property appraiser, tax collector, or supervisor of elections, provided such officer is elected or has been appointed to fill a vacancy in an elective office; a community college board of trustees or district school board; or the governing body of any city or special district of the state which participates in the system for the benefit of certain of its employees.

(b)  The term "local agency employer" also includes the governing body of any council, commission, authority, or other governmental entity created or authorized by general or special law, which participates in the Florida Retirement System for the benefit of its employees, and which is independent of any local agency employer as defined under paragraph (a).

(43)  "Phased retirement program" means a program contracted by the governing board of a university or community college participating under this chapter in which a retiree may be reemployed in a faculty position provided:

(a)  The member retired and met the definition of termination under this section;

(b)  The retired member is reemployed for not more than 780 hours during the first 12 months of his retirement; and

(c)  The retired member is reemployed with the university or community college from which he or she retired.

Renewed membership for a retiree participating in a phased retirement program shall be determined in accordance with s. 121.053 or s. 121.122.

History.--s. 2, ch. 70-112; s. 1, ch. 72-122; s. 1, ch. 72-347; s. 2, ch. 72-388; s. 2, ch. 73-312; s. 1, ch. 73-326; s. 42, ch. 73-333; s. 2, ch. 74-302; s. 1, ch. 74-328; s. 3, ch. 75-248; s. 1, ch. 76-226; s. 1, ch. 77-174; ss. 1, 4, ch. 77-467; ss. 1, 6, ch. 77-469; s. 1, ch. 78-308; s. 56, ch. 79-40; s. 5, ch. 80-126; s. 3, ch. 80-131; s. 8, ch. 80-242; s. 1, ch. 80-243; s. 3, ch. 81-214; s. 59, ch. 81-259; ss. 2, 13, ch. 83-76; s. 6, ch. 84-114; s. 3, ch. 84-266; s. 4, ch. 85-246; s. 13, ch. 86-149; s. 10, ch. 86-183; s. 5, ch. 87-373; s. 5, ch. 88-382; s. 1, ch. 89-126; s. 56, ch. 89-169; s. 43, ch. 89-526; s. 5, ch. 90-274; s. 2, ch. 92-122; s. 52, ch. 92-279; s. 55, ch. 92-326; s. 4, ch. 93-193; s. 1, ch. 93-285; s. 4, ch. 94-259; s. 1422, ch. 95-147; s. 18, ch. 95-154; s. 1, ch. 95-338; s. 2, ch. 96-186; s. 4, ch. 96-368; s. 1, ch. 97-154; ss. 2, 7, ch. 97-180.

¹Note.--

A.  Section 1, ch. 97-154, and s. 7, ch. 97-180, amended subsection (39) and added subsection (43), redesignated as subsection (44), effective July 1, 1998, to read:

(39)(a)  "Termination" occurs, except as provided in paragraph (b), when a member ceases all employment relationships with employers under this system, as defined in subsection (10), but in the event a member should be employed by any such employer within the next calendar month, termination shall be deemed not to have occurred. A leave of absence shall constitute a continuation of the employment relationship, except that a leave of absence without pay due to disability may constitute termination for a member, if such member makes application for and is approved for disability retirement in accordance with s. 121.091(4). The division may require other evidence of termination as it deems necessary.

(b)  "Termination" for a member electing to participate under the Deferred Retirement Option Program occurs when the Deferred Retirement Option Program participant ceases all employment relationships with employers under this system in accordance with s. 121.091(13), but in the event the Deferred Retirement Option Program participant should be employed by any such employer within the next calendar month, termination will be deemed not to have occurred, except as provided in s. 121.091(13)(b)5.b. A leave of absence shall constitute a continuation of the employment relationship.

(44)  "DROP participant" means any member who elects to retire and participate in the Deferred Retirement Option Program as provided in s. 121.091(13).

B.  Section 5, ch. 97-154, and s. 10, ch. 97-180, provide that the amendments to ss. 121.021 and 121.091, except the amendment to s. 121.021 by s. 2, ch. 97-180, are effective July 1, 1998:

"[C]ontingent upon the Division of Retirement receiving a favorable determination letter and a favorable private letter ruling, hereinafter referred to as favorable letters, from the Internal Revenue Service, as provided below prior to the end of the 1998 legislative session. The division shall request from the Internal Revenue Service, within 90 days of the passage of this act:

"(1)  A written determination letter stating that the Florida Retirement System, as amended to include the DROP, continues to be a facially qualified plan; and

"(2)  A private letter ruling stating:

"(a)  That the Florida Retirement System, as amended to include the DROP, is not a "defined contribution plan" as defined in ss. 414(i) and 415(k)(1) of the Internal Revenue Code, is not subject to the separate limitations contained within s. 415(c) and (e) of the Internal Revenue Code, and is not a "hybrid plan" as defined in s. 414(k) of the Internal Revenue Code;

"(b)  That the Florida Retirement System, as amended to include the DROP, is not a "cash or deferred arrangement" within the meaning of s. 401(k) of the Internal Revenue Code; and

"(c)  That the monthly retirement benefits paid into the DROP are not deemed to be constructive receipt of income under s. 402(a) of the Internal Revenue Code and shall not be taxable until actual distribution to the retiree.


"The division shall notify the Speaker of the House of Representatives and the President of the Senate within 30 days of receipt of the favorable or unfavorable letters. If no favorable letters are received by July 1, 1998, [the amendments to ss. 121.021 and 121.091 by chs. 97-154 and 97-180, contingently effective July 1, 1998] shall take effect January 1, 1999, provided the division receives the favorable letters prior to such date. In the event favorable letters are not received, this act shall not take effect."

²Note.--Repealed by s. 20, ch. 97-180.