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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
A bill to be entitled 1
An act relating to special risk class retirement date; 2
amending s. 121.021, F.S.; revising the definition of 3
"normal retirement date"; decreasing the age and years 4
of service needed to reach the normal retirement date 5
for certain members; amending ss. 121.091 and 6
121.4501, F.S.; conforming provisions to changes made 7
by this act; providing a declaration of important 8
state interest; providing an effective date. 9
10
Be It Enacted by the Legislature of the State of Florida: 11
12
Section 1. Paragraph (b) of subsection (29) of section 13
121.021, Florida Statutes, is amended to read: 14
121.021 Definitions. —The following words and phrases as 15
used in this chapter have the respective meanings set forth 16
unless a different meaning is plainly required by the context: 17
(29) "Normal retirement date" means the date a member 18
attains normal retirement age and is vested, which is determined 19
as follows: 20
(b) For If a Special Risk Class members member initially 21
enrolled: 22
1. Before July 1, 2011: 23
1.a. The first day of the month the member attains age 55 24
and completes the years of creditable service in the Special 25
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Risk Class equal to or greater than the years of service 26
required for vesting; 27
2.b. The first day of the month following the date the 28
member completes 25 years of creditable service in the Special 29
Risk Class, regardless of age; or 30
3.c. The first day of the month following the date the 31
member completes 25 years of credit able service and attains age 32
52, which service may include a maximum of 4 years of military 33
service credit if such credit is not claimed under any other 34
system and the remaining years are in the Special Risk Class. 35
2. On or after July 1, 2011: 36
a. The first day of the month the member attains age 60 37
and completes the years of creditable service in the Special 38
Risk Class equal to or greater than the years of service 39
required for vesting; 40
b. The first day of the month following the date the 41
member completes 30 years of creditable service in the Special 42
Risk Class, regardless of age; or 43
c. The first day of the month following the date the 44
member completes 30 years of creditable service and attains age 45
57, which service may include a maximum of 4 years of military 46
service credit if such credit is not claimed under any other 47
system and the remaining years are in the Special Risk Class. 48
49
For pension plan members, normal retirement age is attained on 50
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the normal retirement date. For investment plan members, normal 51
retirement age is the date a member attains his or her normal 52
retirement date as provided in this section, or the date a 53
member is vested under the investment plan as provided in s. 54
121.4501(6), whichever is later. 55
Section 2. Subsection (3) and paragraph (a) of subsection 56
(13) of section 121.091, Florida Statutes, are amended to read: 57
121.091 Benefits payable under the system. —Benefits may 58
not be paid under this section unless the member has terminated 59
employment as provided in s. 121.021(39)(a ) or begun 60
participation in the Deferred Retirement Option Program as 61
provided in subsection (13), and a proper application has been 62
filed in the manner prescribed by the department. The department 63
may cancel an application for retirement benefits when the 64
member or beneficiary fails to timely provide the information 65
and documents required by this chapter and the department's 66
rules. The department shall adopt rules establishing procedures 67
for application for retirement benefits and for the cancellation 68
of such application when the required information or documents 69
are not received. 70
(3) EARLY RETIREMENT BENEFIT. —Upon retirement on his or 71
her early retirement date, the member shall receive an immediate 72
monthly benefit that shall begin to accrue on the first day of 73
the month of the retirement date and be payable on the last day 74
of that month and each month thereafter during his or her 75
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lifetime. Such benefit shall be calculated as follows: 76
(a)1. For all special risk class members or a member of 77
the Regular Class, Senior Management Service Class, or the 78
Elected Officers' Class initially enrolled: 79
1. before July 1, 2011, the amount of each monthly payment 80
shall be computed in the same manner as for a normal retirement 81
benefit, in accordance with subsection (1), but shall be based 82
on the member's average monthly compensation and creditable 83
service as of the member's early retirement date. The benefit so 84
computed shall be reduced by five -twelfths of 1 percent for each 85
complete month by which the early retirement d ate precedes the 86
normal retirement date of age 62 for a member of the Regular 87
Class, Senior Management Service Class, or the Elected Officers' 88
Class, and age 55 for a member of the Special Risk Class, or age 89
52 if a Special Risk member has completed 25 yea rs of creditable 90
service in accordance with s. 121.021(29)(b)3. s. 91
121.021(29)(b)1.c. 92
2. For a member of the Regular Class, Senior Management 93
Service Class, or the Elected Officers' Class initially enrolled 94
on or after July 1, 2011, the amount of each mo nthly payment 95
shall be computed in the same manner as for a normal retirement 96
benefit, in accordance with subsection (1), but shall be based 97
on the member's average monthly compensation and creditable 98
service as of the member's early retirement date. The b enefit so 99
computed shall be reduced by five -twelfths of 1 percent for each 100
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complete month by which the early retirement date precedes the 101
normal retirement date of age 65 for a member of the Regular 102
Class, Senior Management Service Class, or the Elected Of ficers' 103
Class, and age 60 for a member of the Special Risk Class, or age 104
57 if a special risk member has completed 30 years of creditable 105
service in accordance with s. 121.021(29)(b)2.c . 106
(b) If the employment of a member is terminated by reason 107
of death within 10 years before normal retirement as described 108
in s. 121.021(29)(a)1.b. or s. 121.021(29)(a)2.b., the monthly 109
benefit payable to the member's beneficiary shall be calculated 110
in accordance with subsection (1), but must be based on average 111
monthly compensation and creditable service as of the date of 112
death. The benefit so computed shall be reduced by five -twelfths 113
of 1 percent for each complete month by which death precedes the 114
normal retirement date specified above or the date on which the 115
member would have attained the normal retirement date had he or 116
she survived and continued his or her employment, whichever 117
provides a higher benefit. 118
(13) DEFERRED RETIREMENT OPTION PROGRAM. —In general, and 119
subject to this section, the Deferred Retirement Option P rogram, 120
hereinafter referred to as DROP, is a program under which an 121
eligible member of the Florida Retirement System may elect to 122
participate, deferring receipt of retirement benefits while 123
continuing employment with his or her Florida Retirement System 124
employer. The deferred monthly benefits shall accrue in the 125
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Florida Retirement System on behalf of the member, plus interest 126
compounded monthly, for the specified period of the DROP 127
participation, as provided in paragraph (c). Upon termination of 128
employment, the member shall receive the total DROP benefits and 129
begin to receive the previously determined normal retirement 130
benefits. Participation in the DROP does not guarantee 131
employment for the specified period of DROP. Participation in 132
DROP by an eligible mem ber beyond the initial 60 -month period as 133
authorized in this subsection shall be on an annual contractual 134
basis for all participants. 135
(a) Eligibility of member to participate in DROP. —All 136
active Florida Retirement System members in a regularly 137
established position, and all active members of the Teachers' 138
Retirement System established in chapter 238 or the State and 139
County Officers' and Employees' Retirement System established in 140
chapter 122, which are consolidated within the Florida 141
Retirement System unde r s. 121.011, are eligible to elect 142
participation in DROP if: 143
1. The member is not a renewed member under s. 121.122 or 144
a member of the State Community College System Optional 145
Retirement Program under s. 121.051, the Senior Management 146
Service Optional Annuity Program under s. 121.055, or the 147
optional retirement program for the State University System 148
under s. 121.35. 149
2. Except as provided in subparagraph 6., for all special 150
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risk class members and Regular Class, Senior Management Service 151
Class, or Elected Officers' Class members initially enrolled 152
before July 1, 2011, election to participate is made within 12 153
months immediately following the date on which the member first 154
reaches normal retirement date, or, for a member who reaches 155
normal retirement date based on service before he or she reaches 156
age 62, or age 55 for Special Risk Class members, election to 157
participate may be deferred to the 12 months immediately 158
following the date the member attains age 57, or age 52 for 159
Special Risk Class members. Except as provided in subparagraph 160
6., for Regular Class, Senior Management Service Class, or 161
Elected Officers' Class members initially enrolled on or after 162
July 1, 2011, election to participate is made within 12 months 163
immediately following the date on which the member first reaches 164
normal retirement date, or, for a member who reaches normal 165
retirement date based on service before he or she reaches age 166
65, or age 60 for Special Risk Class members , election to 167
participate may be deferred to the 12 months immediate ly 168
following the date the member attains age 60, or age 55 for 169
Special Risk Class members . A member who delays DROP 170
participation during the 12 -month period immediately following 171
his or her maximum DROP deferral date, except as provided in 172
subparagraph 6., loses a month of DROP participation for each 173
month delayed. A member who fails to make an election within the 174
12-month limitation period forfeits all rights to participate in 175
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DROP. The member shall advise his or her employer and the 176
division in writing of the date DROP begins. The beginning date 177
may be subsequent to the 12 -month election period but must be 178
within the original 60 -month participation period provided in 179
subparagraph (b)1. When establishing eligibility to participate 180
in DROP, the member may el ect to include or exclude any optional 181
service credit purchased by the member from the total service 182
used to establish the normal retirement date. A member who has 183
dual normal retirement dates is eligible to elect to participate 184
in DROP after attaining nor mal retirement date in either class. 185
3. The employer of a member electing to participate in 186
DROP, or employers if dually employed, shall acknowledge in 187
writing to the division the date the member's participation in 188
DROP begins and the date the member's e mployment and DROP 189
participation terminates. 190
4. Simultaneous employment of a member by additional 191
Florida Retirement System employers subsequent to the 192
commencement of a member's participation in DROP is permissible 193
if such employers acknowledge in writi ng a DROP termination date 194
no later than the member's existing termination date or the 195
maximum participation period provided in subparagraph (b)1. 196
5. A member may change employers while participating in 197
DROP, subject to the following: 198
a. A change of employment takes place without a break in 199
service so that the member receives salary for each month of 200
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continuous DROP participation. If a member receives no salary 201
during a month, DROP participation ceases unless the employer 202
verifies a continuation of the employment relationship for such 203
member pursuant to s. 121.021(39)(b). 204
b. The member and new employer notify the division of the 205
identity of the new employer on forms required by the division. 206
c. The new employer acknowledges, in writing, the member's 207
DROP termination date, which may be extended but not beyond the 208
maximum participation period provided in subparagraph (b)1., 209
acknowledges liability for any additional retirement 210
contributions and interest required if the member fails to 211
timely terminate employment, and is subject to the adjustment 212
required in sub-subparagraph (c)5.d. 213
6. Effective July 1, 2001, for instructional personnel as 214
defined in s. 1012.01(2), election to participate in DROP may be 215
made at any time following the date on which the me mber first 216
reaches normal retirement date. The member shall advise his or 217
her employer and the division in writing of the date on which 218
DROP begins. When establishing eligibility of the member to 219
participate in DROP for the 60 -month participation period 220
provided in subparagraph (b)1., the member may elect to include 221
or exclude any optional service credit purchased by the member 222
from the total service used to establish the normal retirement 223
date. A member who has dual normal retirement dates is eligible 224
to elect to participate in either class. 225
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Section 3. Paragraph (b) of subsection (3) of section 226
121.4501, Florida Statutes, is amended to read: 227
121.4501 Florida Retirement System Investment Plan. — 228
(3) RETIREMENT SERVICE CREDIT; TRANSFER OF BENEFITS. — 229
(b) Notwithstanding paragraph (a), an eligible employee 230
who elects to participate in, or who defaults into, the 231
investment plan and establishes one or more individual member 232
accounts may elect to transfer to the investment plan a sum 233
representing the prese nt value of the employee's accumulated 234
benefit obligation under the pension plan, except as provided in 235
paragraph (4)(b). Upon transfer, all service credit earned under 236
the pension plan is nullified for purposes of entitlement to a 237
future benefit under the pension plan. A member may not transfer 238
the accumulated benefit obligation balance from the pension plan 239
after the time period for enrolling in the investment plan has 240
expired. 241
1. For purposes of this subsection, the present value of 242
the member's accumulated benefit obligation is based upon the 243
member's estimated creditable service and estimated average 244
final compensation under the pension plan, subject to 245
recomputation under subparagraph 2. For state employees, initial 246
estimates shall be based upon cred itable service and average 247
final compensation as of midnight on June 30, 2002; for district 248
school board employees, initial estimates shall be based upon 249
creditable service and average final compensation as of midnight 250
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on September 30, 2002; and for local government employees, 251
initial estimates shall be based upon creditable service and 252
average final compensation as of midnight on December 31, 2002. 253
The dates specified are the "estimate date" for these employees. 254
The actuarial present value of the employee' s accumulated 255
benefit obligation shall be based on the following: 256
a. The discount rate and other relevant actuarial 257
assumptions used to value the Florida Retirement System Trust 258
Fund at the time the amount to be transferred is determined, 259
consistent with the factors provided in sub -subparagraphs b. and 260
c. 261
b. A benefit commencement age, based on the member's 262
estimated creditable service as of the estimate date. 263
c. Except as provided under sub -subparagraph d., for a 264
member initially enrolled: 265
(I) Before July 1, 2011, the benefit commencement age is 266
the younger of the following, but may not be younger than the 267
member's age as of the estimate date: 268
(A) Age 62; or 269
(B) The age the member would attain if the member 270
completed 30 years of service with an employer, assuming the 271
member worked continuously from the estimate date, and 272
disregarding any vesting requirement that would otherwise apply 273
under the pension plan. 274
(II) On or after July 1, 2011, the benefit commencement 275
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age is the younger of the follow ing, but may not be younger than 276
the member's age as of the estimate date: 277
(A) Age 65; or 278
(B) The age the member would attain if the member 279
completed 33 years of service with an employer, assuming the 280
member worked continuously from the estimate date, and 281
disregarding any vesting requirement that would otherwise apply 282
under the pension plan. 283
d. For members of the Special Risk Class and for members 284
of the Special Risk Administrative Support Class entitled to 285
retain the special risk normal retirement da te: 286
(I) Initially enrolled before July 1, 2011 , the benefit 287
commencement age is the younger of the following, but may not be 288
younger than the member's age as of the estimate date: 289
(I)(A) Age 55; or 290
(II)(B) The age the member would attain if the membe r 291
completed 25 years of service with an employer, assuming the 292
member worked continuously from the estimate date, and 293
disregarding any vesting requirement that would otherwise apply 294
under the pension plan. 295
(II) Initially enrolled on or after July 1, 2011 , the 296
benefit commencement age is the younger of the following, but 297
may not be younger than the member's age as of the estimate 298
date: 299
(A) Age 60; or 300
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(B) The age the member would attain if the member 301
completed 30 years of service with an employer, assum ing the 302
member worked continuously from the estimate date, and 303
disregarding any vesting requirement that would otherwise apply 304
under the pension plan. 305
e. The calculation must disregard vesting requirements and 306
early retirement reduction factors that woul d otherwise apply 307
under the pension plan. 308
2. For each member who elects to transfer moneys from the 309
pension plan to his or her account in the investment plan, the 310
division shall recompute the amount transferred under 311
subparagraph 1. within 60 days after the actual transfer of 312
funds based upon the member's actual creditable service and 313
actual final average compensation as of the initial date of 314
participation in the investment plan. If the recomputed amount 315
differs from the amount transferred by $10 or more , the division 316
shall: 317
a. Transfer, or cause to be transferred, from the Florida 318
Retirement System Trust Fund to the member's account the excess, 319
if any, of the recomputed amount over the previously transferred 320
amount together with interest from the initi al date of transfer 321
to the date of transfer under this subparagraph, based upon the 322
effective annual interest equal to the assumed return on the 323
actuarial investment which was used in the most recent actuarial 324
valuation of the system, compounded annually. 325
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b. Transfer, or cause to be transferred, from the member's 326
account to the Florida Retirement System Trust Fund the excess, 327
if any, of the previously transferred amount over the recomputed 328
amount, together with interest from the initial date of transfer 329
to the date of transfer under this subparagraph, based upon 6 330
percent effective annual interest, compounded annually, pro rata 331
based on the member's allocation plan. 332
3. If contribution adjustments are made as a result of 333
employer errors or corrections, in cluding plan corrections, 334
following recomputation of the amount transferred under 335
subparagraph 1., the member is entitled to the additional 336
contributions or is responsible for returning any excess 337
contributions resulting from the correction. However, a ret urn 338
of such erroneous excess pretax contribution by the plan must be 339
made within the period allowed by the Internal Revenue Service. 340
The present value of the member's accumulated benefit obligation 341
may not be recalculated. 342
4. As directed by the member, t he state board shall 343
transfer or cause to be transferred the appropriate amounts to 344
the designated accounts within 30 days after the effective date 345
of the member's participation in the investment plan unless the 346
major financial markets for securities avail able for a transfer 347
are seriously disrupted by an unforeseen event that causes the 348
suspension of trading on a national securities exchange in the 349
country where the securities were issued. In that event, the 30 -350
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day period may be extended by a resolution of the state board. 351
Transfers are not commissionable or subject to other fees and 352
may be in the form of securities or cash, as determined by the 353
state board. Such securities are valued as of the date of 354
receipt in the member's account. 355
5. If the state board or the division receives 356
notification from the United States Internal Revenue Service 357
that this paragraph or any portion of this paragraph will cause 358
the retirement system, or a portion thereof, to be disqualified 359
for tax purposes under the Internal Reven ue Code, the portion 360
that will cause the disqualification does not apply. Upon such 361
notice, the state board and the division shall notify the 362
presiding officers of the Legislature. 363
Section 4. The Legislature finds that a proper and 364
legitimate state pur pose is served when employees and retirees 365
of the state and its political subdivisions, and the dependents, 366
survivors, and beneficiaries of such employees and retirees, are 367
extended the basic protections afforded by governmental 368
retirement systems that pro vide fair and adequate benefits and 369
that are managed, administered, and funded in an actuarially 370
sound manner as required by s. 14, Art. X of the State 371
Constitution and part VII of chapter 112, Florida Statutes. 372
Therefore, the Legislature determines and de clares that this act 373
fulfills an important state interest. 374
Section 5. This act shall take effect July 1, 2023. 375