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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 the Florida Retirement System; 2
amending s. 121.021, F.S.; revising the definition of 3
the term "normal retirement date" for certain members; 4
amending s. 121.053, F.S.; conforming provisions to 5
changes made by the act; amending s. 121.091, F.S.; 6
revising when members can elect to begin to 7
participate in the Deferred Retirement Option Program; 8
increasing the length of time members can participate 9
in such program; increasing the interest accrual rate 10
for such program; conforming provisions to changes 11
made by the act; amending s. 121.101, F.S.; revising 12
provisions related to the cost -of-living adjustment of 13
benefits for certain retirees and beneficiaries; 14
amending s. 121.4501, F.S.; conforming provisions to 15
changes made by the act; amending s. 121.71, F.S.; 16
revising provisions related to required employer 17
retirement contribution rates; amending s. 121.72, 18
F.S.; increasing allocations to investment plan member 19
accounts; amending s. 121.73, F.S.; increasing 20
allocations to provide disability covera ge for 21
investment plan members; amending s. 121.735, F.S.; 22
revising allocations to provide line -of-duty death 23
benefits for investment plan members; providing a 24
declaration of important state interest; providing an 25
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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
effective date. 26
27
Be It Enacted by the Legislature of the State of Florida: 28
29
Section 1. Paragraph (b) of subsection (29) of section 30
121.021, Florida Statutes, is amended to read: 31
121.021 Definitions. —The following words and phrases as 32
used in this chapter have the respective meanings set forth 33
unless a different meaning is plainly required by the context: 34
(29) "Normal retirement date" means the date a member 35
attains normal retirement age and is vested, which is determined 36
as follows: 37
(b) For If a Special Risk Class member initially enrolled: 38
1. Before July 1, 2011 : 39
1.a. The first day of the month the member attains age 55 40
and completes the years of creditable service in the Special 41
Risk Class equal to or greater than the years of service 42
required for vesting; 43
2.b. The first day of the month following the date the 44
member completes 25 years of creditable service in the Special 45
Risk Class, regardless of age; or 46
3.c. The first day of the month following the date the 47
member completes 25 years of creditable service and attains age 48
52, which service may include a maximum of 4 years of military 49
service credit if such credit is not claimed under any other 50
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system and the remaining years are in the Special Risk Class. 51
2. On or after July 1, 2011: 52
a. The first day of the month the member attains age 60 53
and completes the years of creditable service in the Special 54
Risk Class equal to or greater than the years of service 55
required for vesting; 56
b. The first day of the month following the date the 57
member completes 30 years of creditable servic e in the Special 58
Risk Class, regardless of age; or 59
c. The first day of the month following the date the 60
member completes 30 years of creditable service and attains age 61
57, which service may include a maximum of 4 years of military 62
service credit if such credit is not claimed under any other 63
system and the remaining years are in the Special Risk Class. 64
65
For pension plan members, normal retirement age is attained on 66
the normal retirement date. For investment plan members, normal 67
retirement age is the date a member attains his or her normal 68
retirement date as provided in this section, or the date a 69
member is vested under the investment plan as provided in s. 70
121.4501(6), whichever is later. 71
Section 2. Paragraph (a) of subsection (7) of section 72
121.053, Florida Statutes, is amended to read: 73
121.053 Participation in the Elected Officers' Class for 74
retired members.— 75
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(7) A member who is elected or appointed to an elective 76
office and who is participating in the Deferred Retirement 77
Option Program is not subj ect to termination as defined in s. 78
121.021, or reemployment limitations as provided in s. 79
121.091(9), until the end of his or her current term of office 80
or, if the officer is consecutively elected or reelected to an 81
elective office eligible for coverage u nder the Florida 82
Retirement System, until he or she no longer holds an elective 83
office, as follows: 84
(a) At the end of the 96-month 60-month DROP period: 85
1. The officer's DROP account may not accrue additional 86
monthly benefits, but does continue to earn interest as provided 87
in s. 121.091(13). However, an officer whose DROP participation 88
begins on or after July 1, 2010, may not continue to earn such 89
interest. 90
2. Retirement contributions, except for unfunded actuarial 91
liability and health insurance subsi dy contributions required in 92
ss. 121.71(5) and 121.76, are not required of the employer of 93
the elected officer, and additional retirement credit may not be 94
earned under the Florida Retirement System. 95
Section 3. Paragraph (a) of subsection (3) and subse ction 96
(13) of section 121.091, Florida Statutes, are amended to read: 97
121.091 Benefits payable under the system. —Benefits may 98
not be paid under this section unless the member has terminated 99
employment as provided in s. 121.021(39)(a) or begun 100
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participation in the Deferred Retirement Option Program as 101
provided in subsection (13), and a proper application has been 102
filed in the manner prescribed by the department. The department 103
may cancel an application for retirement benefits when the 104
member or beneficiary fails to timely provide the information 105
and documents required by this chapter and the department's 106
rules. The department shall adopt rules establishing procedures 107
for application for retirement benefits and for the cancellation 108
of such application when t he required information or documents 109
are not received. 110
(3) EARLY RETIREMENT BENEFIT. —Upon retirement on his or 111
her early retirement date, the member shall receive an immediate 112
monthly benefit that shall begin to accrue on the first day of 113
the month of the retirement date and be payable on the last day 114
of that month and each month thereafter during his or her 115
lifetime. Such benefit shall be calculated as follows: 116
(a)1. For a member initially enrolled: 117
a.1. Before July 1, 2011, the amount of each monthl y 118
payment shall be computed in the same manner as for a normal 119
retirement benefit, in accordance with subsection (1), but shall 120
be based on the member's average monthly compensation and 121
creditable service as of the member's early retirement date. The 122
benefit so computed shall be reduced by five -twelfths of 1 123
percent for each complete month by which the early retirement 124
date precedes the normal retirement date of age 62 for a member 125
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of the Regular Class, Senior Management Service Class, or the 126
Elected Officers' Class, and age 55 for a member of the Special 127
Risk Class, or age 52 if a Special Risk member has completed 25 128
years of creditable service in accordance with s. 129
121.021(29)(b)1.c. 130
b.2. On or after July 1, 2011, the amount of each monthly 131
payment shall be computed in the same manner as for a normal 132
retirement benefit, in accordance with subsection (1), but shall 133
be based on the member's average monthly compensation and 134
creditable service as of the member's early retirement date. The 135
benefit so computed shall be reduced by five -twelfths of 1 136
percent for each complete month by which the early retirement 137
date precedes the normal retirement date of age 65 for a member 138
of the Regular Class, Senior Management Service Class, or the 139
Elected Officers' Class , and age 60 for a member of the Special 140
Risk Class, or age 57 if a special risk member has completed 30 141
years of creditable service in accordance with s. 142
121.021(29)(b)2.c. 143
2. For members of the Special Risk Class, the amount of 144
each monthly payment shall be computed in the same manner as for 145
a normal retirement benefit, in accordance with subsection (1), 146
but shall be based on the member's average monthly compensation 147
and creditable service as of the member's early retirement date. 148
The benefit so computed shal l be reduced by five -twelfths of 1 149
percent for each complete month by which the early retirement 150
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date precedes the normal retirement date of age 55, or age 52 if 151
a Special Risk member has completed 25 years of creditable 152
service in accordance with s. 121.0 21(29)(b)3. 153
(13) DEFERRED RETIREMENT OPTION PROGRAM. —In general, and 154
subject to this section, the Deferred Retirement Option Program, 155
hereinafter referred to as DROP, is a program under which an 156
eligible member of the Florida Retirement System may elect to 157
participate, deferring receipt of retirement benefits while 158
continuing employment with his or her Florida Retirement System 159
employer. The deferred monthly benefits shall accrue in the 160
Florida Retirement System on behalf of the member, plus interest 161
compounded monthly, for the specified period of the DROP 162
participation, as provided in paragraph (c). Upon termination of 163
employment, the member shall receive the total DROP benefits and 164
begin to receive the previously determined normal retirement 165
benefits. Participation in the DROP does not guarantee 166
employment for the specified period of DROP. Participation in 167
DROP by an eligible member beyond the initial 60 -month period as 168
authorized in this subsection shall be on an annual contractual 169
basis for all particip ants. 170
(a) Eligibility of member to participate in DROP. —All 171
active Florida Retirement System members in a regularly 172
established position, and all active members of the Teachers' 173
Retirement System established in chapter 238 or the State and 174
County Officers' and Employees' Retirement System established in 175
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chapter 122, which are consolidated within the Florida 176
Retirement System under s. 121.011, are eligible to elect 177
participation in DROP if: 178
1. The member is not a renewed member under s. 121.122 or 179
a member of the State Community College System Optional 180
Retirement Program under s. 121.051, the Senior Management 181
Service Optional Annuity Program under s. 121.055, or the 182
optional retirement program for the State University System 183
under s. 121.35. 184
2. Except as provided in subparagraphs 6. and 7. 185
subparagraph 6., for members initially enrolled before July 1, 186
2011, election to participate is made within 12 months 187
immediately following the date on which the member first reaches 188
normal retirement date, or, for a member who reaches normal 189
retirement date based on service before he or she reaches age 190
62, or age 52 55 for Special Risk Class members, election to 191
participate may be deferred to the 12 months immediately 192
following the date the member attains age 57, or a ge 52 for 193
Special Risk Class members. Except as provided in subparagraphs 194
6. and 7. subparagraph 6., for members initially enrolled on or 195
after July 1, 2011, election to participate is made within 12 196
months immediately following the date on which the membe r first 197
reaches normal retirement date, or, for a member who reaches 198
normal retirement date based on service before he or she reaches 199
age 65, or age 55 60 for Special Risk Class members, election to 200
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participate may be deferred to the 12 months immediately 201
following the date the member attains age 60, or age 52 55 for 202
Special Risk Class members. A member who delays DROP 203
participation during the 12 -month period immediately following 204
his or her maximum DROP deferral date, except as provided in 205
subparagraphs 6. and 7. subparagraph 6., loses a month of DROP 206
participation for each month delayed. A member who fails to make 207
an election within the 12 -month limitation period forfeits all 208
rights to participate in DROP. The member shall advise his or 209
her employer and the division in writing of the date DROP 210
begins. The beginning date may be subsequent to the 12 -month 211
election period but must be within the original 96-month 60-212
month participation period provided in subparagraph (b)1. When 213
establishing eligibility to parti cipate in DROP, the member may 214
elect to include or exclude any optional service credit 215
purchased by the member from the total service used to establish 216
the normal retirement date. A member who has dual normal 217
retirement dates is eligible to elect to partic ipate in DROP 218
after attaining normal retirement date in either class. 219
3. The employer of a member electing to participate in 220
DROP, or employers if dually employed, shall acknowledge in 221
writing to the division the date the member's participation in 222
DROP begins and the date the member's employment and DROP 223
participation terminates. 224
4. Simultaneous employment of a member by additional 225
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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
Florida Retirement System employers subsequent to the 226
commencement of a member's participation in DROP is permissible 227
if such employers acknowledge in writing a DROP termination date 228
no later than the member's existing termination date or the 229
maximum participation period provided in subparagraph (b)1. 230
5. A member may change employers while participating in 231
DROP, subject to the following: 232
a. A change of employment takes place without a break in 233
service so that the member receives salary for each month of 234
continuous DROP participation. If a member receives no salary 235
during a month, DROP participation ceases unless the employe r 236
verifies a continuation of the employment relationship for such 237
member pursuant to s. 121.021(39)(b). 238
b. The member and new employer notify the division of the 239
identity of the new employer on forms required by the division. 240
c. The new employer acknow ledges, in writing, the member's 241
DROP termination date, which may be extended but not beyond the 242
maximum participation period provided in subparagraph (b)1., 243
acknowledges liability for any additional retirement 244
contributions and interest required if the me mber fails to 245
timely terminate employment, and is subject to the adjustment 246
required in sub-subparagraph (c)5.d. 247
6. Effective July 1, 2001, for instructional personnel as 248
defined in s. 1012.01(2), election to participate in DROP may be 249
made at any time following the date on which the member first 250
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reaches normal retirement date. The member shall advise his or 251
her employer and the division in writing of the date on which 252
DROP begins. When establishing eligibility of the member to 253
participate in DROP for the 96-month 60-month participation 254
period provided in subparagraph (b)1., the member may elect to 255
include or exclude any optional service credit purchased by the 256
member from the total service used to establish the normal 257
retirement date. A member who has dual normal retiremen t dates 258
is eligible to elect to participate in either class. 259
7. Effective July 1, 2023, election to participate in DROP 260
may be made at any time following the date on which the member 261
first reaches normal retirement date. The member shall advise 262
his or her employer and the division in writing of the date on 263
which DROP begins. When establishing eligibility of the member 264
to participate in DROP for the 96 -month participation period 265
provided in paragraph (b), the member may elect to include or 266
exclude any optional service credit purchased by the member from 267
the total service used to establish the normal retirement date. 268
A member who has dual normal retirement dates is eligible to 269
participate in either class. 270
(b) Participation in DROP. —Except as provided in th is 271
paragraph, an eligible member may elect to participate in DROP 272
for a period not to exceed a maximum of 96 60 calendar months. 273
1.a. Members who are instructional personnel employed by 274
the Florida School for the Deaf and the Blind and authorized by 275
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the Board of Trustees of the Florida School for the Deaf and the 276
Blind, who are instructional personnel as defined in s. 277
1012.01(2)(a)-(d) in grades K-12 and authorized by the district 278
school superintendent, or who are instructional personnel as 279
defined in s. 1012.01(2)(a) employed by a developmental research 280
school and authorized by the school's director, or if the school 281
has no director, by the school's principal, may extend DROP 282
participation participate in DROP for up to 36 calendar months 283
beyond the 60-month period. Effective July 1, 2018, 284
instructional personnel who are authorized to extend DROP 285
participation beyond the 60 -month period must have a termination 286
date that is the last day of the last calendar month of the 287
school year within the DROP extension granted by the employer. 288
If, on July 1, 2018, the member's DROP participation has already 289
been extended for the maximum 36 calendar months and the 290
extension period concludes before the end of the school year, 291
the member's DROP participation may be extended through the last 292
day of the last calendar month of that school year if the 96 293
calendar months of DROP participation concludes before the end 294
of the school year. The employer shall notify the division of 295
the change in termination date and the additional pe riod of DROP 296
participation for the affected instructional personnel. 297
b. Administrative personnel in grades K -12, as defined in 298
s. 1012.01(3), who have a DROP termination date on or after July 299
1, 2018, may be authorized to extend DROP participation beyond 300
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the initial 96 60 calendar month period if the administrative 301
personnel's termination date is before the end of the school 302
year. Such administrative personnel may have DROP participation 303
extended until the last day of the last calendar month of the 304
school year in which their original DROP termination date 305
occurred if a date other than the last day of the last calendar 306
month of the school year is designated. The employer shall 307
notify the division of the change in termination date and the 308
additional period of DROP participation for the affected 309
administrative personnel. 310
c. Effective July 1, 2022, a member of the Special Risk 311
Class who is a law enforcement officer who meets the criteria in 312
s. 121.0515(3)(a) and who is a DROP participant on or after July 313
1, 2022, may participate in DROP for up to 36 calendar months 314
beyond the 60-month period if he or she enters DROP on or before 315
June 30, 2028. 316
2. Upon deciding to participate in DROP, the member shall 317
submit, on forms required by the division: 318
a. A written election to participate in DROP; 319
b. Selection of DROP participation and termination dates 320
that satisfy the limitations stated in paragraph (a) and 321
subparagraph 1. The termination date must be in a binding letter 322
of resignation to the employer establishing a deferred 323
termination date. The member may change the termination d ate 324
within the limitations of subparagraph 1., but only with the 325
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written approval of the employer; 326
c. A properly completed DROP application for service 327
retirement as provided in this section; and 328
d. Any other information required by the division. 329
3. The DROP participant is a retiree under the Florida 330
Retirement System for all purposes, except for paragraph (5)(f) 331
and subsection (9) and ss. 112.3173, 112.363, 121.053, and 332
121.122. DROP participation is final and may not be canceled by 333
the participant after the first payment is credited during the 334
DROP participation period. However, participation in DROP does 335
not alter the participant's employment status, and the member is 336
not deemed retired from employment until his or her deferred 337
resignation is effect ive and termination occurs as defined in s. 338
121.021. 339
4. Elected officers are eligible to participate in DROP 340
subject to the following: 341
a. An elected officer who reaches normal retirement date 342
during a term of office may defer the election to participat e 343
until the next succeeding term in that office. An elected 344
officer who exercises this option may participate in DROP for up 345
to 96 60 calendar months or no longer than the succeeding term 346
of office, whichever is less. 347
b. An elected or a nonelected partic ipant may run for a 348
term of office while participating in DROP and, if elected, 349
extend the DROP termination date accordingly; however, if such 350
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additional term of office exceeds the 96-month 60-month 351
limitation established in subparagraph 1., and the office r does 352
not resign from office within such 96-month 60-month limitation, 353
the retirement and the participant's DROP is null and void as 354
provided in sub-subparagraph (c)5.d. 355
c. An elected officer who is dually employed and elects to 356
participate in DROP must terminate all employment relationships 357
as provided in s. 121.021(39) for the nonelected position within 358
the original 96-month 60-month period or maximum participation 359
period as provided in subparagraph 1. For DROP participation 360
ending: 361
(I) Before July 1, 2010, the officer may continue 362
employment as an elected officer as provided in s. 121.053. The 363
elected officer shall be enrolled as a renewed member in the 364
Elected Officers' Class or the Regular Class, as provided in ss. 365
121.053 and 121.122, on the first day of the month after 366
termination of employment in the nonelected position and 367
termination of DROP. Distribution of the DROP benefits shall be 368
made as provided in paragraph (c). 369
(II) On or after July 1, 2010, the officer may continue 370
employment as an elected officer but must defer termination as 371
provided in s. 121.053. 372
(c) Benefits payable under DROP. — 373
1. Effective on the date of DROP participation, the 374
member's initial normal monthly benefit, including creditable 375
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service, optional form of payment, and average final 376
compensation, and the effective date of retirement are fixed. 377
The beneficiary established under the Florida Retirement System 378
is the beneficiary eligible to receive any DROP benefits payable 379
if the DROP participant dies before completing the period of 380
DROP participation. If a joint annuitant predeceases the member, 381
the member may name a beneficiary to receive accumulated DROP 382
benefits payable. The retirement benefit, the annual cost of 383
living adjustments provided in s. 121.101, and interes t accrue 384
monthly in the Florida Retirement System Trust Fund. For members 385
whose DROP participation begins: 386
a. Before July 1, 2011, the interest accrues at an 387
effective annual rate of 6.5 percent compounded monthly, on the 388
prior month's accumulated ending balance, up to the month of 389
termination or death, except as provided in s. 121.053(7). 390
b. On or after July 1, 2011, through June 30, 2023, the 391
interest accrues at an effective annual rate of 1.3 percent, 392
compounded monthly, on the prior month's accumula ted ending 393
balance, up to the month of termination or death, except as 394
provided in s. 121.053(7). 395
c. On or after July 1, 2023, the interest accrues at an 396
effective annual rate of 4 percent, compounded monthly, on the 397
prior month's accumulated ending bala nce, up to the month of 398
termination or death, except as provided in s. 121.053(7). 399
2. Each employee who elects to participate in DROP may 400
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elect to receive a lump -sum payment for accrued annual leave 401
earned in accordance with agency policy upon beginning 402
participation in DROP. The accumulated leave payment certified 403
to the division upon commencement of DROP shall be included in 404
the calculation of the member's average final compensation. The 405
employee electing the lump -sum payment is not eligible to 406
receive a second lump-sum payment upon termination, except to 407
the extent the employee has earned additional annual leave 408
which, combined with the original payment, does not exceed the 409
maximum lump-sum payment allowed by the employing agency's 410
policy or rules. An e arly lump-sum payment shall be based on the 411
hourly wage of the employee at the time he or she begins 412
participation in DROP. If the member elects to wait and receive 413
a lump-sum payment upon termination of DROP and termination of 414
employment with the employer , any accumulated leave payment made 415
at that time may not be included in the member's retirement 416
benefit, which was determined and fixed by law when the employee 417
elected to participate in DROP. 418
3. The effective date of DROP participation and the 419
effective date of retirement of a DROP participant shall be the 420
first day of the month selected by the member to begin 421
participation in DROP, provided such date is properly 422
established, with the written confirmation of the employer, and 423
the approval of the divisio n, on forms required by the division. 424
4. Normal retirement benefits and any interest continue to 425
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accrue in DROP until the established termination date of DROP or 426
until the member terminates employment or dies before such date, 427
except as provided in s. 12 1.053(7). Although individual DROP 428
accounts may not be established, a separate accounting of each 429
member's accrued benefits under DROP shall be calculated and 430
provided to the member. 431
5. At the conclusion of the member's participation in 432
DROP, the division shall distribute the member's total 433
accumulated DROP benefits, subject to the following: 434
a. The division shall receive verification by the member's 435
employer or employers that the member has terminated all 436
employment relationships as provided in s. 121. 021(39). 437
b. The terminated DROP participant or, if deceased, the 438
member's named beneficiary, shall elect on forms provided by the 439
division to receive payment of the DROP benefits in accordance 440
with one of the options listed below. If a member or benefici ary 441
fails to elect a method of payment within 60 days after 442
termination of DROP, the division shall pay a lump sum as 443
provided in sub-sub-subparagraph (I). 444
(I) Lump sum.—All accrued DROP benefits, plus interest, 445
less withholding taxes remitted to the Int ernal Revenue Service, 446
shall be paid to the DROP participant or surviving beneficiary. 447
(II) Direct rollover. —All accrued DROP benefits, plus 448
interest, shall be paid from DROP directly to the custodian of 449
an eligible retirement plan as defined in s. 402(c )(8)(B) of the 450
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Internal Revenue Code. However, in the case of an eligible 451
rollover distribution to the surviving spouse of a deceased 452
member, an eligible retirement plan is an individual retirement 453
account or an individual retirement annuity as described i n s. 454
402(c)(9) of the Internal Revenue Code. 455
(III) Partial lump sum. —A portion of the accrued DROP 456
benefits shall be paid to DROP participant or surviving spouse, 457
less withholding taxes remitted to the Internal Revenue Service, 458
and the remaining DROP ben efits must be transferred directly to 459
the custodian of an eligible retirement plan as defined in s. 460
402(c)(8)(B) of the Internal Revenue Code. However, in the case 461
of an eligible rollover distribution to the surviving spouse of 462
a deceased member, an eligib le retirement plan is an individual 463
retirement account or an individual retirement annuity as 464
described in s. 402(c)(9) of the Internal Revenue Code. The 465
proportions must be specified by the DROP participant or 466
surviving beneficiary. 467
c. The form of payme nt selected by the DROP participant or 468
surviving beneficiary must comply with the minimum distribution 469
requirements of the Internal Revenue Code. 470
d. A DROP participant who fails to terminate all 471
employment relationships as provided in s. 121.021(39) shall be 472
deemed as not retired, and the DROP election is null and void. 473
Florida Retirement System membership shall be reestablished 474
retroactively to the date of the commencement of DROP, and each 475
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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
employer with whom the member continues employment must pay to 476
the Florida Retirement System Trust Fund the difference between 477
the DROP contributions paid in paragraph (i) and the 478
contributions required for the applicable Florida Retirement 479
System class of membership during the period the member 480
participated in DROP, plus 6.5 percent interest compounded 481
annually. 482
6. The retirement benefits of any DROP participant who 483
terminates all employment relationships as p rovided in s. 484
121.021(39) but is reemployed in violation of the reemployment 485
provisions of subsection (9) are suspended during those months 486
in which the retiree is in violation. Any retiree in violation 487
of this subparagraph and any employer that employs or appoints 488
such person without notifying the division to suspend retirement 489
benefits are jointly and severally liable for any benefits paid 490
during the reemployment limitation period. The employer must 491
have a written statement from the retiree that he or she is not 492
retired from a state -administered retirement system. Any 493
retirement benefits received by a retiree while employed in 494
violation of the reemployment limitations must be repaid to the 495
Florida Retirement System Trust Fund, and his or her retirement 496
benefits shall remain suspended until payment is made. Benefits 497
suspended beyond the end of the reemployment limitation period 498
apply toward repayment of benefits received in violation of the 499
reemployment limitation. 500
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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
7. The accrued benefits of any DROP parti cipant, and any 501
contributions accumulated under the program, are not subject to 502
assignment, execution, attachment, or any legal process except 503
for qualified domestic relations court orders, income deduction 504
orders as provided in s. 61.1301, and federal inc ome tax levies. 505
8. DROP participants are not eligible for disability 506
retirement benefits as provided in subsection (4). 507
(d) Death benefits under DROP. — 508
1. Upon the death of a DROP participant, the named 509
beneficiary is entitled to apply for and receiv e the accrued 510
benefits in DROP as provided in sub -subparagraph (c)5.b. 511
2. The normal retirement benefit accrued to DROP during 512
the month of a participant's death is the final monthly benefit 513
credited for such DROP participant. 514
3. Eligibility to partici pate in DROP terminates upon 515
death of the participant. If the participant dies on or after 516
the effective date of enrollment in DROP, but before the first 517
monthly benefit is credited to DROP, Florida Retirement System 518
benefits are paid in accordance with su bparagraph (7)(c)1. or 519
subparagraph 2. 520
4. A DROP participant's survivors are not eligible to 521
receive Florida Retirement System death benefits as provided in 522
paragraph (7)(d). 523
(e) Cost-of-living adjustment.—On each July 1, the 524
participant's normal retir ement benefit shall be increased as 525
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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
provided in s. 121.101. 526
(f) Retiree health insurance subsidy. —DROP participants 527
are not eligible to apply for the retiree health insurance 528
subsidy payments as provided in s. 112.363 until such 529
participants have termina ted employment and participation in 530
DROP. 531
(g) Renewed membership. —DROP participants are not eligible 532
for renewed membership in the Florida Retirement System under 533
ss. 121.053 and 121.122 until all employment relationships are 534
terminated as provided in s. 121.021(39). 535
(h) Employment limitation after DROP participation. —Upon 536
termination as defined in s. 121.021, DROP participants are 537
subject to the same reemployment limitations as other retirees. 538
Reemployment restrictions applicable to retirees as provide d in 539
subsection (9) do not apply to DROP participants until their 540
employment and participation in DROP are terminated. 541
(i) Contributions.— 542
1. All employers paying the salary of a DROP participant 543
filling a regularly established position shall contribut e 8.0 544
percent of such participant's gross compensation for the period 545
of July 1, 2002, through June 30, 2003, and the percentage of 546
such compensation required by s. 121.71 thereafter, which shall 547
constitute the entire employer DROP contribution with respec t to 548
such participant. Such contributions, payable to the Florida 549
Retirement System Trust Fund in the same manner as required in 550
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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
s. 121.071, must be made as appropriate for each pay period and 551
are in addition to contributions required for social security 552
and the Retiree Health Insurance Subsidy Trust Fund. Such 553
employer, social security, and health insurance subsidy 554
contributions are not included in DROP. 555
2. The employer shall, in addition to subparagraph 1., 556
also withhold one-half of the entire social se curity 557
contribution required for the participant. Contributions for 558
social security by each participant and each employer, in the 559
amount required for social security coverage as provided by the 560
federal Social Security Act, are in addition to contributions 561
specified in subparagraph 1. 562
3. All employers paying the salary of a DROP participant 563
filling a regularly established position shall contribute the 564
percent of such participant's gross compensation required in s. 565
121.071(4), which constitutes the employer 's health insurance 566
subsidy contribution with respect to such participant. Such 567
contributions must be deposited by the administrator in the 568
Retiree Health Insurance Subsidy Trust Fund. 569
(j) Forfeiture of retirement benefits. —This section does 570
not remove DROP participants from the scope of s. 8(d), Art. II 571
of the State Constitution, s. 112.3173, and paragraph (5)(f). 572
DROP participants who commit a specified felony offense while 573
employed are subject to forfeiture of all retirement benefits, 574
including DROP benefits, pursuant to those provisions of law. 575
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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
(k) Administration of program. —The division shall adopt 576
rules as necessary for the effective and efficient 577
administration of this subsection. The division is not required 578
to advise members of the federal tax c onsequences of an election 579
related to the DROP but may advise members to seek independent 580
advice. 581
Section 4. Subsection (5) of section 121.101, Florida 582
Statutes, is amended, and subsection (3) of that section is 583
republished, to read: 584
121.101 Cost-of-living adjustment of benefits. — 585
(3) Commencing July 1, 1987, the benefit of each retiree 586
and annuitant whose effective retirement date is before July 1, 587
2011, shall be adjusted annually on July 1 as follows: 588
(a) For those retirees and annuitants who ha ve never 589
received a cost-of-living adjustment under this section, the 590
amount of the monthly benefit payable for the 12 -month period 591
commencing on the adjustment date shall be the amount of the 592
member's initial benefit plus an amount equal to a percentage o f 593
the member's initial benefit; this percentage is derived by 594
dividing the number of months the member has received an initial 595
benefit by 12, and multiplying the result by 3. 596
(b) For those retirees and annuitants who have received a 597
cost-of-living adjustment under this subsection, the adjusted 598
monthly benefit shall be the amount of the monthly benefit being 599
received on June 30 immediately preceding the adjustment date 600
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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
plus an amount equal to 3 percent of this benefit. 601
(5) Notwithstanding subsection (4), beginning on July 1, 602
2023, and each July 1 thereafter, the cost -of-living benefit of 603
each retiree and annuitant shall be adjusted Subject to the 604
availability of funding and the Legislature enacting sufficient 605
employer contributions specifically for the pu rpose of funding 606
the expiration of the cost -of-living adjustment specified in 607
subsection (4), in accordance with s. 14, Art. X of the State 608
Constitution, the cost -of-living adjustment formula provided for 609
in subsection (4) shall expire effective June 30, 2 016, and the 610
benefit of each retiree and annuitant shall be adjusted on each 611
July 1 thereafter, as provided in subsection (3). 612
Section 5. Paragraph (b) of subsection (3) of section 613
121.4501, Florida Statutes, is amended to read: 614
121.4501 Florida Reti rement System Investment Plan. — 615
(3) RETIREMENT SERVICE CREDIT; TRANSFER OF BENEFITS. — 616
(b) Notwithstanding paragraph (a), an eligible employee 617
who elects to participate in, or who defaults into, the 618
investment plan and establishes one or more individual member 619
accounts may elect to transfer to the investment plan a sum 620
representing the present value of the employee's accumulated 621
benefit obligation under the pension plan, except as provided in 622
paragraph (4)(b). Upon transfer, all service credit earned und er 623
the pension plan is nullified for purposes of entitlement to a 624
future benefit under the pension plan. A member may not transfer 625
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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
the accumulated benefit obligation balance from the pension plan 626
after the time period for enrolling in the investment plan h as 627
expired. 628
1. For purposes of this subsection, the present value of 629
the member's accumulated benefit obligation is based upon the 630
member's estimated creditable service and estimated average 631
final compensation under the pension plan, subject to 632
recomputation under subparagraph 2. For state employees, initial 633
estimates shall be based upon creditable service and average 634
final compensation as of midnight on June 30, 2002; for district 635
school board employees, initial estimates shall be based upon 636
creditable service and average final compensation as of midnight 637
on September 30, 2002; and for local government employees, 638
initial estimates shall be based upon creditable service and 639
average final compensation as of midnight on December 31, 2002. 640
The dates specified are the "estimate date" for these employees. 641
The actuarial present value of the employee's accumulated 642
benefit obligation shall be based on the following: 643
a. The discount rate and other relevant actuarial 644
assumptions used to value the Florida R etirement System Trust 645
Fund at the time the amount to be transferred is determined, 646
consistent with the factors provided in sub -subparagraphs b. and 647
c. 648
b. A benefit commencement age, based on the member's 649
estimated creditable service as of the estimate d ate. 650
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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
c. Except as provided under sub -subparagraph d., for a 651
member initially enrolled: 652
(I) Before July 1, 2011, the benefit commencement age is 653
the younger of the following, but may not be younger than the 654
member's age as of the estimate date: 655
(A) Age 62; or 656
(B) The age the member would attain if the member 657
completed 30 years of service with an employer, assuming the 658
member worked continuously from the estimate date, and 659
disregarding any vesting requirement that would otherwise apply 660
under the pension plan. 661
(II) On or after July 1, 2011, the benefit commencement 662
age is the younger of the following, but may not be younger than 663
the member's age as of the estimate date: 664
(A) Age 65; or 665
(B) The age the member would attain if the member 666
completed 33 years of service with an employer, assuming the 667
member worked continuously from the estimate date, and 668
disregarding any vesting requirement that would otherwise apply 669
under the pension plan. 670
d. For members of the Special Risk Class and for members 671
of the Special Risk Administrative Support Class entitled to 672
retain the special risk normal retirement date : 673
(I) Initially enrolled before July 1, 2011 , the benefit 674
commencement age is the younger of the following, but may not be 675
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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
younger than the member's age as of the estimate date: 676
(I)(A) Age 55; or 677
(II)(B) The age the member would attain if the member 678
completed 25 years of service with an employer, assuming the 679
member worked continuously from the estimate date, and 680
disregarding any vesting requirement th at would otherwise apply 681
under the pension plan. 682
(II) Initially enrolled on or after July 1, 2011, the 683
benefit commencement age is the younger of the following, but 684
may not be younger than the member's age as of the estimate 685
date: 686
(A) Age 60; or 687
(B) The age the member would attain if the member 688
completed 30 years of service with an employer, assuming the 689
member worked continuously from the estimate date, and 690
disregarding any vesting requirement that would otherwise apply 691
under the pension plan. 692
e. The calculation must disregard vesting requirements and 693
early retirement reduction factors that would otherwise apply 694
under the pension plan. 695
2. For each member who elects to transfer moneys from the 696
pension plan to his or her account in the investment pl an, the 697
division shall recompute the amount transferred under 698
subparagraph 1. within 60 days after the actual transfer of 699
funds based upon the member's actual creditable service and 700
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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
actual final average compensation as of the initial date of 701
participation in the investment plan. If the recomputed amount 702
differs from the amount transferred by $10 or more, the division 703
shall: 704
a. Transfer, or cause to be transferred, from the Florida 705
Retirement System Trust Fund to the member's account the excess, 706
if any, of the recomputed amount over the previously transferred 707
amount together with interest from the initial date of transfer 708
to the date of transfer under this subparagraph, based upon the 709
effective annual interest equal to the assumed return on the 710
actuarial investment which was used in the most recent actuarial 711
valuation of the system, compounded annually. 712
b. Transfer, or cause to be transferred, from the member's 713
account to the Florida Retirement System Trust Fund the excess, 714
if any, of the previously transf erred amount over the recomputed 715
amount, together with interest from the initial date of transfer 716
to the date of transfer under this subparagraph, based upon 6 717
percent effective annual interest, compounded annually, pro rata 718
based on the member's allocatio n plan. 719
3. If contribution adjustments are made as a result of 720
employer errors or corrections, including plan corrections, 721
following recomputation of the amount transferred under 722
subparagraph 1., the member is entitled to the additional 723
contributions or is responsible for returning any excess 724
contributions resulting from the correction. However, a return 725
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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
of such erroneous excess pretax contribution by the plan must be 726
made within the period allowed by the Internal Revenue Service. 727
The present value of the member's accumulated benefit obligation 728
may not be recalculated. 729
4. As directed by the member, the state board shall 730
transfer or cause to be transferred the appropriate amounts to 731
the designated accounts within 30 days after the effective date 732
of the member's participation in the investment plan unless the 733
major financial markets for securities available for a transfer 734
are seriously disrupted by an unforeseen event that causes the 735
suspension of trading on a national securities exchange in the 736
country where the securities were issued. In that event, the 30 -737
day period may be extended by a resolution of the state board. 738
Transfers are not commissionable or subject to other fees and 739
may be in the form of securities or cash, as determined by the 740
state board. Such securities are valued as of the date of 741
receipt in the member's account. 742
5. If the state board or the division receives 743
notification from the United States Internal Revenue Service 744
that this paragraph or any portion of this paragraph will cause 745
the retirement system, or a portion thereof, to be disqualified 746
for tax purposes under the Internal Revenue Code, the portion 747
that will cause the disqualification does not apply. Upon such 748
notice, the state board and the division shall notify the 749
presiding officers of the Legislature. 750
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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
Section 6. Subsections (4) and (5) of section 121.71, 751
Florida Statutes, are amended to read: 752
121.71 Uniform rates; process; calculations; levy. — 753
(4) Required employer retirement contribution rates for 754
each membership class a nd subclass of the Florida Retirement 755
System for both retirement plans are as follows: 756
757
Membership Class
Percentage of
Gross
Compensation,
Effective
July 1, 2023 2022
758
759
Regular Class 8.07% 5.96%
760
Special Risk Class 24.47% 16.44%
761
Special Risk
Administrative
Support Class 13.77% 10.77%
762
Elected Officers' Class —
Legislators, Governor, 11.72% 9.31%
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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
Lt. Governor,
Cabinet Officers,
State Attorneys,
Public Defenders
763
Elected Officers' Class —
Justices, Judges 18.21% 14.41%
764
Elected Officers' Class—
County Elected Officers 14.03% 11.30%
765
Senior Management Service Class 9.95% 7.70%
766
DROP 11.63% 7.79%
767
(5) In order to address unfunded actuarial liabilities of 768
the system, the required employer retirement contribution rates 769
for each membership class and subclass of the Florida Retirement 770
System for both retirement plans are as follows: 771
772
Membership Class
Percentage of
Gross
Compensation,
Effective
July 1, 2023 2022
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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
773
774
Regular Class 7.84% 4.23%
775
Special Risk Class 19.51% 9.67%
776
Special Risk
Administrative
Support Class 32.83% 26.16%
777
Elected Officers' Class —
Legislators, Governor,
Lt. Governor,
Cabinet Officers,
State Attorneys,
Public Defenders 54.55% 56.76%
778
Elected Officers' Class —
Justices, Judges 33.80% 27.64%
779
Elected Officers' Class —
County Elected Officers 48.77% 43.98%
780
Senior Management Service Class 28.42% 22.15%
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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
781
DROP 16.46% 9.15%
782
Section 7. Subsection (6) of section 121.72, Florida 783
Statutes, is amended, and subsection (7) is added to that 784
section, to read: 785
121.72 Allocations to investment plan member accounts; 786
percentage amounts.— 787
(6) Effective July 1, 2022, through June 30, 2023, 788
allocations from the Florida Retirement System Contributions 789
Clearing Trust Fund to investment plan me mber accounts are as 790
follows: 791
792
Membership Class Percentage of
Gross
Compensation
793
794
Regular Class 9.30%
795
Special Risk Class 17.00%
796
Special Risk Administrative Support Class 10.95%
797
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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
Elected Officers' Class —
Legislators, Governor,
Lt. Governor, Cabinet Officers,
State Attorneys, Public Defenders 12.38%
798
Elected Officers' Class —
Justices, Judges 16.23%
799
Elected Officers' Class —
County Elected Officers 14.34%
800
Senior Management Service Class 10.67%
801
(7) Effective July 1, 2023, allocations from the Florida 802
Retirement System Contributions Clearing Trust Fund to 803
investment plan member accounts are as follows: 804
805
Membership Class Percentage of
Gross
Compensation
806
807
Regular Class 10.30%
808
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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
Special Risk Class 18.00%
809
Special Risk Administrative Support Class 11.95%
810
Elected Officers' Class —
Legislators, Governor,
Lt. Governor, Cabinet Officers,
State Attorneys, Public Defenders 13.38%
811
Elected Officers' Class —
Justices, Judges 17.23%
812
Elected Officers' Class —
County Elected Officers 15.34%
813
Senior Management Service Class 11.67%
814
Section 8. Section 121.73, Florida Statutes, is amended to 815
read: 816
121.73 Allocations for member disability coverage; 817
percentage amounts.— 818
(1) The allocations established in this section subsection 819
(3) shall be used to provide disability coverage for members in 820
the investment plan and shall be transferred monthly by the 821
Division of Retirement from the Florida Retirement System 822
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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
Contributions Clearing Trust Fund to the disabilit y account of 823
the Florida Retirement System Trust Fund. 824
(2) The allocations are stated as a percentage of each 825
investment plan member's gross compensation for the calendar 826
month. A change in a contribution percentage is effective the 827
first day of the mont h for which retirement contributions may be 828
made on or after the beginning date of the change. Contribution 829
percentages may be modified by general law. 830
(3) Effective July 1, 2002, through June 30, 2023, 831
allocations from the Florida Retirement System Cont ributions 832
Clearing Trust Fund to provide disability coverage for members 833
in the investment plan, and to offset the costs of administering 834
said coverage, are as follows: 835
836
Membership Class Percentage of
Gross
Compensation
837
838
Regular Class 0.25%
839
Special Risk Class 1.33%
840
Special Risk Administrative Support Class 0.45%
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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
841
Elected Officers' Class —
Legislators, Governor,
Lt. Governor, Cabinet Officers,
State Attorneys, Public Defenders 0.41%
842
Elected Officers' Class —
Justices, Judges 0.73%
843
Elected Officers' Class—
County Elected Officers 0.41%
844
Senior Management Service Class 0.26%
845
(4) Effective July 1, 2023, allocations from the Florida 846
Retirement System Contributions Clearing Trust Fund to provide 847
disability coverage for members in the investment plan, and to 848
offset the costs of administering said coverage, are as follows: 849
850
Membership Class Percentage of
Gross
Compensation
851
852
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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
Regular Class 0.27%
853
Special Risk Class 1.61%
854
Special Risk Administrative Support Class 0.47%
855
Elected Officers' Class—
Legislators, Governor,
Lt. Governor, Cabinet Officers,
State Attorneys, Public Defenders 0.46%
856
Elected Officers' Class —
Justices, Judges 0.77%
857
Elected Officers' Class —
County Elected Officers 0.44%
858
Senior Management Service Class 0.29%
859
Section 9. Section 121.735, Florida Statutes, is amended 860
to read: 861
121.735 Allocations for member line -of-duty death 862
benefits; percentage amounts. — 863
(1) The allocations established in this section subsection 864
(3) shall be used to prov ide line-of-duty death benefit coverage 865
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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
for members in the investment plan and shall be transferred 866
monthly by the division from the Florida Retirement System 867
Contributions Clearing Trust Fund to the survivor benefit 868
account of the Florida Retirement Syste m Trust Fund. 869
(2) Such allocations are stated as a percentage of each 870
investment plan member's gross compensation for the calendar 871
month. Any change in a contribution percentage is effective the 872
first day of the month for which retirement contributions m ay be 873
made on or after the beginning date of the change. Contribution 874
percentages may be modified by general law. 875
(3) Before July 1, 2023, allocations from the Florida 876
Retirement System Contributions Clearing Trust Fund to provide 877
line-of-duty death benefits for members in the investment plan , 878
and to offset the costs of administering said coverage, are as 879
follows: 880
881
Membership Class Percentage of
Gross
Compensation
882
883
Regular Class 0.05%
884
Special Risk Class 1.21%
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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
885
Special Risk Administrative Support Class 0.03%
886
Elected Officers' Class —
Legislators, Governor,
Lt. Governor, Cabinet Officers,
State Attorneys, Public Defenders 0.15%
887
Elected Officers' Class —
Justices, Judges 0.09%
888
Elected Officers' Class —
County Elected Officers 0.20%
889
Senior Management Service Class 0.05%
890
(4) Effective July 1, 2023, allocations from the Florida 891
Retirement System Contributions Clearing Trust Fund to provide 892
line-of-duty death benefits for members in the investment plan, 893
and to offset the costs of a dministering said coverage, are as 894
follows: 895
896
Membership Class Percentage of
Gross
Compensation
CS/CS/HB 239 2023
CODING: Words stricken are deletions; words underlined are additions.
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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
897
898
Regular Class 0.06%
899
Special Risk Class 1.34%
900
Special Risk Administrative Support Class 0.03%
901
Elected Officers' Class —
Legislators, Governor,
Lt. Governor, Cabinet Officers,
State Attorneys, Public Defenders 0.15%
902
Elected Officers' Class —
Justices, Judges 0.10%
903
Elected Officers' Class —
County Elected Officers 0.21%
904
Senior Management Service Class 0.06%
905
Section 10. The Legislature finds that a proper and 906
legitimate state purpose is served when employees and retirees 907
of the state and its political subdivisions, and the dependents, 908
CS/CS/HB 239 2023
CODING: Words stricken are deletions; words underlined are additions.
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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
survivors, and beneficiaries of such employees and retirees, are 909
extended the basic prot ections afforded by governmental 910
retirement systems. These persons must be provided benefits that 911
are fair and adequate and that are managed, administered, and 912
funded in an actuarially sound manner, as required by s. 14, 913
Article X of the State Constitution and part VII of chapter 112, 914
Florida Statutes. Therefore, the Legislature determines and 915
declares that this act fulfills an important state interest. 916
Section 11. This act shall take effect July 1, 2023. 917