The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Governmental Oversight and Accountability
BILL: SB 338
INTRODUCER: Senator Baxley
SUBJECT: Senior Management Service Class
DATE: February 1, 2022
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Ponder McVaney GO Pre-meeting
2. JU
3. AP
I. Summary:
SB 338 amends s. 121.055, F.S., to make certain supervising employees of the criminal conflict
and regional counsel offices members of the Senior Management Service Class (SMSC) (rather
than the Regular Class) of the Florida Retirement System (FRS).
For each employee participating in the pension plan of the FRS, this shift means the employee
earns 2.0 percent service credit for each year of service, rather than 1.6 percent service credit.
For an employee participating in the investment plan of the FRS, the employee will receive
contributions into the investment account equal to 7.67 percent of salary rather than 6.3 percent
of salary.
Any employee shifted from the Regular Class to the SMSC is permitted to upgrade retirement
credit for service in the same position. The upgraded service credit may not be purchased by the
member’s employer.
The bill increases the personnel costs incurred by the five offices of the criminal conflict and
civil regional counsel by roughly $700,000 annually for the positions enumerated in the bill for
membership in the SMSC.
The bill takes effect on July 1, 2022.
II. Present Situation:
The Florida Retirement System
The Florida Retirement System (FRS) was established in 1970 when the Legislature consolidated
the Teachers’ Retirement System, the State and County Officers and Employees’ Retirement
System, and the Highway Patrol Pension Fund. In 1972, the Judicial Retirement System was
REVISED: BILL: SB 338 Page 2
consolidated into the FRS, and in 2007, the Institute of Food and Agricultural Sciences
Supplemental Retirement Program was consolidated under the Regular Class of the FRS as a
closed group.
1
The FRS is a contributory system, with active members contributing three percent
of their salaries.
2
The membership of the FRS is divided into five membership classes:
The Regular Class
3
consists of 550,053 active members and 7,691 in renewed membership;
The Special Risk Class
4
includes 75,161 active members and 1,182 in renewed membership;
The Special Risk Administrative Support Class
5
has 107 active members and 1 in renewed
membership;
The Elected Officers’ Class
6
has 2,040 active members and 113 in renewed membership; and
The Senior Management Service Class
7
has 7,771 active members and 209 in renewed
membership.
8
Members of the FRS have two primary plan options available for participation:
The defined benefit plan, also known as the Pension Plan; and
The defined contribution plan, also known as the Investment Plan.
Pension Plan
The pension plan is administered by the secretary of the Department of Management Services
through the Division of Retirement.
9
Investment management is handled by the State Board of
Administration.
Any member initially enrolled in the pension plan before July 1, 2011, vests in the pension plan
after completing six years of service with an FRS employer.
10
For members initially enrolled on
or after July 1, 2011, the member vests in the pension plan after eight years of creditable
1
Florida Retirement System Pension Plan and Other State Administered Retirement Systems Comprehensive Annual
Financial Report Fiscal Year 2019-2020, at p. 35. Available online at: https://employer.frs.fl.gov/forms/2019-20_CAFR.pdf
(2019-2020 Report)(last visited November 12, 2021).
2
Prior to 1975, members of the FRS were required to make employee contributions of either 4 percent for Regular Class
employees or 6 percent for Special Risk Class members. Between 1975 and 2011, the FRS was a non-contributory system.
Employees were again required to contribute to the system after July 1, 2011. Members in the Deferred Retirement Option
Program do not contribute to the system.
3
The Regular Class is for all members who are not assigned to another class. Section 121.021(12), F.S.
4
The Special Risk Class is for members employed as law enforcement officers, firefighters, correctional officers, probation
officers, paramedics and emergency technicians, among others. Section 121.0515, F.S.
5
The Special Risk Administrative Support Class is for a special risk member who moved or was reassigned to a nonspecial
risk law enforcement, firefighting, correctional, or emergency medical care administrative support position with the same
agency, or who is subsequently employed in such a position under the Florida Retirement System. Section 121.0515(8), F.S.
6
The Elected Officers’ Class is for elected state and county officers, and for those elected municipal or special district
officers whose governing body has chosen Elected Officers’ Class participation for its elected officers. Section 121.052, F.S.
7
The Senior Management Service Class is for members who fill senior management level positions assigned by law to the
Senior Management Service Class or authorized by law as eligible for Senior Management Service designation.
Section 121.055, F.S.
8
All figures are from Florida Retirement System Pension Plan and Other State Administered Retirement Systems
Comprehensive Annual Financial Report Fiscal Year 2019-2020, at p. 163.
9
Section 121.025, F.S.
10
Section 121.021(45)(a), F.S. BILL: SB 338 Page 3
service.
11
Benefits payable under the pension plan are calculated based on the member’s years of
creditable service multiplied by the service accrual rate multiplied by the member’s average final
compensation.
12
For most current members of the pension plan (including members in the
Regular Class and the Senior Management Service Class), normal retirement (when first eligible
for unreduced benefits) occurs at the earliest attainment of 30 years of service or age 62.
13
Members initially enrolled in the pension plan on or after July 1, 2011, have longer service
requirements. For members initially enrolled after that date, a member in the Regular Class or
the Senior Management Service Class (SMSC) must complete 33 years of service or attain
age 65.
14
The Regular Class and the SMSC share the same normal retirement dates, average final
compensation calculation, and disability/survivor benefits. However, the Regular Class service
credit provides a 1.6 percent accrual value for each year of creditable service, while the SMSC
earns a 2.0 percent accrual value each year.
Section 121.055, F.S., (1)(j), F.S., authorizes a member of the SMSC to upgrade service credit in
the same position from Regular Class accrual value to the SMSC accrual value. Generally, the
service credit may be purchased by the employer on behalf of the member.
Investment Plan
In 2000, the Public Employee Optional Retirement Program (investment plan) was created as a
defined contribution plan offered to eligible employees as an alternative to the FRS Pension
Plan. The State Board of Administration (SBA) is primarily responsible for administering the
investment plan.
15
The Board of Trustees of the SBA is comprised of the Governor as chair, the
Chief Financial Officer, and the Attorney General.
16
Benefits under the investment plan accrue in individual member accounts funded by both
employee and employer contributions and earnings. Benefits are provided through
employee-directed investments offered by approved investment providers.
A member vests immediately in all employee contributions paid to the investment plan.
17
With
respect to the employer contributions, a member vests after completing one work year of
employment with an FRS employer.
18
Vested benefits are payable upon termination or death as a
lump-sum distribution, direct rollover distribution, or periodic distribution.
19
The investment
plan also provides disability coverage for both in-line-of-duty and regular disability retirement
11
Section 121.021(45)(b), F.S.
12
Section 121.091, F.S.
13
Section 121.021(29)(a)1., F.S.
14
Sections 121.021(29)(a)2. and (b)2., F.S.
15
Section 121.4501(8), F.S.
16
FLA CONST. art. IV, s. 4.
17
Section 121.4501(6)(a), F.S.
18
If a member terminates employment before vesting in the investment plan, the nonvested money is transferred from the
member’s account to the SBA for deposit and investment by the SBA in its suspense account for up to five years. If the
member is not reemployed as an eligible employee within five years, then any nonvested accumulations transferred from a
member’s account to the SBA’s suspense account are forfeited. Section 121.4501(6)(b)-(d), F.S.
19
Section 121.591, F.S. BILL: SB 338 Page 4
benefits.
20
An FRS member who qualifies for disability while enrolled in the investment plan
may apply for benefits as if the employee were a member of the pension plan. If approved for
retirement disability benefits, the member is transferred to the pension plan.
21
The table below shows the allocation of contributions made into the FRS for members of the
investment plan participating in the Regular Class and SMSC. The contributions are based on a
percentage of the member’s gross compensation for the month.
Allocation of Contributions Regular Class Senior Management
Service Class
Investment Account 6.30% 7.67%
Disability 0.25% 0.26%
In line of duty death 0.05% 0.05%
Administrative Assessments 0.06% 0.06%
Total 6.66% 8.04%
Offices of the Public Defender
In an effort to meet its responsibility to provide counsel to indigent defendants, as guaranteed
under the Sixth Amendment and applied to the states in Gideon v. Wainwright,
22
the Legislature
first established the office of the Public Defender in 1963.
23
Subsequently, the Legislature
approved a proposal to amend the Florida Constitution to elevate the Office of Public Defender
to the level of a constitutional officer, which was approved by the electorate and adopted in
1972.
24
The public defender in each circuit is primarily responsible for representing indigent
defendants who have been charged or arrested for an enumerated list of criminal offenses and in
a limited number of civil proceedings.
25
Participation in the Senior Management Service Class of
the Florida Retirement System is compulsory for assistant public defenders.
26
Criminal Conflict and Civil Regional Counsel
In 2007, the Legislature established five offices of criminal conflict and civil regional counsel.
27
When an Office of the Public Defender determines it has a conflict in representing an indigent
defendant, the office of criminal conflict and civil regional counsel will be appointed to represent
the defendant.
28
The office of criminal conflict and civil regional counsel has primary
20
See s. 121.4501(16), F.S.
21
Pension plan disability retirement benefits, which apply for investment plan members who qualify for disability,
compensate an in-line-of-duty disabled member up to 65 percent of the average monthly compensation as of the disability
retirement date for special risk class members. Other members may receive up to 42 percent of the member’s average
monthly compensation for disability retirement benefits. If the disability occurs other than in the line of duty, the monthly
benefit may not be less than 25 percent of the average monthly compensation as of the disability retirement date.
Section 121.091(4)(f), F.S.
22
Gideon v. Wainwright, 372 U.S. 335 (1963)
23
See ch. 63-409, enacting s. 27.50, F.S. (1963).
24
See art. V, § 18, Fla. Const.
25
See s. 27.51(1), F.S.
26
Section 121.055, F.S.
27
Section 27.511(1), F.S.
28
Section 27.511(5), F.S. BILL: SB 338 Page 5
responsibility for representing persons entitled to court-appointed counsel under the Federal or
State Constitution or as authorized by law in civil proceedings, such as proceedings to terminate
parental rights.
29
Each regional counsel is recommended as part of a list of qualified candidates from the Supreme
Court Judicial Nominating Commission.
30
Thereafter, the Governor appoints the regional
counsel from amongst those listed for a term of four years.
31
The appointment is subject to
Senate confirmation.
32
Regional counsels serve on a full-time basis and may not engage in the
private practice of law while holding office.
33
Each office of criminal conflict and regional
counsel is housed, for administrative purposes, in the Justice Administrative Commission
(Commission). The regional counsel and the offices are not subject to control, supervision, or
direction of the Commission in the performance of their duties.
34
However, the employees of the
offices are to be governed by the classification plan and the salary and benefits plan for the
Commission.
35
III. Effect of Proposed Changes:
Section 1 amends s. 121.055, F.S., to make assistant regional counsel supervisors of the criminal
conflict and civil regional counsel offices members of the Senior Management Service Class
(rather than the Regular Class) of the Florida Retirement System (FRS). For each employee
participating in the pension plan of the FRS, this shift means the employee earns 2.0 percent
service credit for each year of service. For an employee participating in the investment plan of
the FRS, the employee will receive contributions into the investment account equal to 7.67
percent of salary rather than 6.3 percent of salary. There are currently 51 authorized assistant
regional counsel supervisor positions among the five offices of criminal conflict and civil
regional counsel.
Section 2 provides that the bill will take effect on July 1, 2022.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
Not applicable. The bill does not require counties and municipalities to spend funds,
reduce counties’ or municipalities’ ability to raise revenue, or reduce the percentage of
state tax shared with counties and municipalities.
B. Public Records/Open Meetings Issues:
None.
29
Section 27.511(5) and (6), F.S.
30
Section 27.511(3)(a), F.S.
31
Id.
32
Id.
33
Section 27.511(4), F.S.
34
Section 27.511(2), F.S.
35
Id. BILL: SB 338 Page 6
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None identified.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
None.
C. Government Sector Impact:
The additional employer-paid contributions for the enumerated positions to be paid
annually beginning in Fiscal Year 2022-2023 are estimated to be roughly $700,000.
These funds will be deposited into the Florida Retirement System Trust Fund to be used
to pay benefits upon each member’s retirement.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends 121.055 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None. BILL: SB 338 Page 7
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.