Florida Senate - 2023 CS for SB 7024 By the Committees on Appropriations; and Governmental Oversight and Accountability 576-03179-23 20237024c1 1 A bill to be entitled 2 An act relating to retirement; amending s. 112.363, 3 F.S.; providing that eligible retirees of the Florida 4 Retirement System pension plan must receive a certain 5 monthly retiree health insurance subsidy payment, 6 beginning on a specified date; specifying how such 7 payment is to be calculated; providing construction; 8 providing that eligible members of the Florida 9 Retirement System investment plan must receive a 10 certain monthly retiree health insurance subsidy 11 payment; specifying how such payment is to be 12 calculated; specifying that the members spouse at the 13 time of the members death is the members 14 beneficiary; providing an exception; requiring the 15 employer of members of a state-administered retirement 16 plan to contribute a certain percentage of gross 17 compensation each pay period, beginning on a specified 18 date; amending ss. 121.052, 121.055, and 121.071, 19 F.S.; revising the employer contribution rates for the 20 retiree health insurance subsidy; amending s. 121.71, 21 F.S.; revising required employer retirement 22 contribution rates for each membership class and 23 subclass of the Florida Retirement System; providing a 24 declaration of important state interest; providing an 25 effective date. 26 27 Be It Enacted by the Legislature of the State of Florida: 28 29 Section 1.Paragraph (f) is added to subsection (3) of 30 section 112.363, Florida Statutes, and paragraph (j) is added to 31 subsection (8) of that section, to read: 32 112.363Retiree health insurance subsidy. 33 (3)RETIREE HEALTH INSURANCE SUBSIDY AMOUNT. 34 (f)1.Beginning July 1, 2023, each eligible retiree of the 35 pension plan of the Florida Retirement System, or, if the 36 retiree is deceased, his or her beneficiary who is receiving a 37 monthly benefit from such retirees account and who is a spouse, 38 or a person who meets the definition of joint annuitant in s. 39 121.021, shall receive a monthly retiree health insurance 40 subsidy payment equal to the number of years of creditable 41 service, as defined in s. 121.021, completed at the time of 42 retirement multiplied by $7.50; however, an eligible retiree or 43 beneficiary may not receive a subsidy payment of more than $225 44 or less than $45. If there are multiple beneficiaries, the total 45 payment may not be greater than the payment to which the retiree 46 was entitled. The health insurance subsidy amount payable to any 47 person receiving the retiree health insurance subsidy payment on 48 July 1, 2023, may not be reduced solely by operation of this 49 subparagraph. 50 2.Beginning July 1, 2023, each eligible member of the 51 investment plan of the Florida Retirement System who has met the 52 requirements of this section, or, if the member is deceased, his 53 or her spouse who is the members designated beneficiary, shall 54 receive a monthly retiree health insurance subsidy payment equal 55 to the number of years of creditable service, as provided in 56 this subparagraph, completed at the time of retirement, 57 multiplied by $7.50; however, an eligible retiree or beneficiary 58 may not receive a subsidy payment of more than $225 or less than 59 $45. For purposes of determining a members creditable service 60 used to calculate the health insurance subsidy, a members years 61 of service credit or fraction thereof must be based on the 62 members work year as defined in s. 121.021(54). Credit must be 63 awarded for a full work year if health insurance subsidy 64 contributions have been made for each month in the members work 65 year. In addition, all years of creditable service retained 66 under the Florida Retirement System Pension Plan must be 67 included as creditable service for purposes of this section. 68 Notwithstanding this section, the spouse at the time of death is 69 the members beneficiary unless such member has designated a 70 different beneficiary subsequent to the members most recent 71 marriage. 72 (8)CONTRIBUTIONS.For purposes of funding the insurance 73 subsidy provided by this section: 74 (j)Beginning July 1, 2023, the employer of each member of 75 a state-administered retirement plan shall contribute 2.00 76 percent of gross compensation each pay period. 77 78 Such contributions shall be submitted to the Department of 79 Management Services and deposited in the Retiree Health 80 Insurance Subsidy Trust Fund. 81 Section 2.Paragraph (d) of subsection (7) of section 82 121.052, Florida Statutes, is amended to read: 83 121.052Membership class of elected officers. 84 (7)CONTRIBUTIONS. 85 (d)The following table states the required employer 86 contribution on behalf of each member of the Elected Officers 87 Class in terms of a percentage of the members gross 88 compensation. Such contribution constitutes the entire health 89 insurance subsidy contribution with respect to each such member. 90 A change in the contribution rate is effective with the first 91 salary paid on or after the beginning date of the change. The 92 retiree health insurance subsidy contribution rate is as 93 follows: 94 95 Dates of ContributionRate Changes ContributionRate 96 97 October 1, 1987, through December 31, 1988 0.24% 98 January 1, 1989, through December 31, 1993 0.48% 99 January 1, 1994, through December 31, 1994 0.56% 100 January 1, 1995, through June 30, 1998 0.66% 101 July 1, 1998, through June 30, 2001 0.94% 102 July 1, 2001, through June 30, 2013 1.11% 103 July 1, 2013, through June 30, 2014 1.20% 104 July 1, 2014, through June 30, 2015 1.26% 105 106 Effective July 1, 2015, through June 30, 2023 1.66% 107 Effective July 1, 2023 2.00% 108 109 Such contributions and accompanying payroll data are due and 110 payable no later than the 5th working day of the month 111 immediately following the month during which the payroll period 112 ended and shall be deposited by the administrator in the Retiree 113 Health Insurance Subsidy Trust Fund. 114 Section 3.Paragraph (d) of subsection (3) of section 115 121.055, Florida Statutes, is amended to read: 116 121.055Senior Management Service Class.There is hereby 117 established a separate class of membership within the Florida 118 Retirement System to be known as the Senior Management Service 119 Class, which shall become effective February 1, 1987. 120 (3) 121 (d)The following table states the required employer 122 contribution on behalf of each member of the Senior Management 123 Service Class in terms of a percentage of the members gross 124 compensation. Such contribution constitutes the entire health 125 insurance subsidy contribution with respect to each such member. 126 A change in the contribution rate is effective with the first 127 salary paid on or after the beginning date of the change. The 128 retiree health insurance subsidy contribution rate is as 129 follows: 130 131 Dates of ContributionRate Changes ContributionRate 132 133 October 1, 1987, through December 31, 1988 0.24% 134 January 1, 1989, through December 31, 1993 0.48% 135 January 1, 1994, through December 31, 1994 0.56% 136 January 1, 1995, through June 30, 1998 0.66% 137 July 1, 1998, through June 30, 2001 0.94% 138 July 1, 2001, through June 30, 2013 1.11% 139 July 1, 2013, through June 30, 2014 1.20% 140 July 1, 2014, through June 30, 2015 1.26% 141 142 Effective July 1, 2015, through June 30, 2023 1.66% 143 Effective July 1, 2023 2.00% 144 145 Such contributions and accompanying payroll data are due and 146 payable no later than the 5th working day of the month 147 immediately following the month during which the payroll period 148 ended and shall be deposited by the administrator in the Retiree 149 Health Insurance Subsidy Trust Fund. 150 Section 4.Subsection (4) of section 121.071, Florida 151 Statutes, is amended to read: 152 121.071Contributions.Contributions to the system shall be 153 made as follows: 154 (4)The following table states the required employer 155 contribution on behalf of each member of the Regular Class, 156 Special Risk Class, or Special Risk Administrative Support Class 157 in terms of a percentage of the members gross compensation. 158 Such contribution constitutes the entire health insurance 159 subsidy contribution with respect to each such member. A change 160 in the contribution rate is effective with the first salary paid 161 on or after the beginning date of the change. The retiree health 162 insurance subsidy contribution rate is as follows: 163 164 Dates of ContributionRate Changes ContributionRate 165 166 October 1, 1987, through December 31, 1988 0.24% 167 January 1, 1989, through December 31, 1993 0.48% 168 January 1, 1994, through December 31, 1994 0.56% 169 January 1, 1995, through June 30, 1998 0.66% 170 July 1, 1998, through June 30, 2001 0.94% 171 July 1, 2001, through June 30, 2013 1.11% 172 July 1, 2013, through June 30, 2014 1.20% 173 July 1, 2014, through June 30, 2015 1.26% 174 175 Effective July 1, 2015, through June 30, 2023 1.66% 176 Effective July 1, 2023 2.00% 177 178 Such contributions shall be deposited by the administrator in 179 the Retiree Health Insurance Subsidy Trust Fund. 180 Section 5.Subsections (4) and (5) of section 121.71, 181 Florida Statutes, are amended to read: 182 121.71Uniform rates; process; calculations; levy. 183 (4)Required employer retirement contribution rates for 184 each membership class and subclass of the Florida Retirement 185 System for both retirement plans are as follows: 186 187 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2023 2022 188 189 Regular Class 6.14% 5.96% 190 Special Risk Class 17.05% 16.44% 191 Special RiskAdministrativeSupport Class 10.75% 10.77% 192 Elected Officers ClassLegislators, Governor,Lt. Governor,Cabinet Officers,State Attorneys,Public Defenders 9.69% 9.31% 193 Elected Officers ClassJustices, Judges 14.64% 14.41% 194 Elected Officers ClassCounty Elected Officers 11.74% 11.30% 195 Senior Management Service Class 7.90% 7.70% 196 DROP 8.18% 7.79% 197 (5)In order to address unfunded actuarial liabilities of 198 the system, the required employer retirement contribution rates 199 for each membership class and subclass of the Florida Retirement 200 System for both retirement plans are as follows: 201 202 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2023 2022 203 204 Regular Class 4.72% 4.23% 205 Special Risk Class 10.83% 9.67% 206 Special RiskAdministrativeSupport Class 25.02% 26.16% 207 Elected Officers ClassLegislators, Governor,Lt. Governor,Cabinet Officers,State Attorneys,Public Defenders 49.85% 56.76% 208 Elected Officers ClassJustices, Judges 27.63% 27.64% 209 Elected Officers ClassCounty Elected Officers 44.04% 43.98% 210 Senior Management Service Class 23.61% 22.15% 211 DROP 10.01% 9.15% 212 Section 6.The Legislature finds that a proper and 213 legitimate state purpose is served when employees, officers, and 214 retirees of the state and its political subdivisions, and the 215 dependents, survivors, and beneficiaries of such employees, 216 officers, and retirees, are extended the basic protections 217 afforded by governmental retirement systems. These persons must 218 be provided benefits that are fair and adequate and that are 219 managed, administered, and funded in an actuarially sound manner 220 as required by s. 14, Article X of the State Constitution and 221 part VII of chapter 112, Florida Statutes. Therefore, the 222 Legislature determines and declares that this act fulfills an 223 important state interest. 224 Section 7.This act shall take effect July 1, 2023.