2002 FRS & Local Retirement Bills Report

Bills Enacted Into Law | Proposed Bills

Bills Enacted into Law

The 2002 Florida Legislature has passed a number of retirement bills and related bills of significance to members of the Florida Retirement System (FRS) and other public retirement plans. These bills must be approved by the Governor (or become law without his signature) before they will be enacted into law. A brief summary of each passed bill follows:

General Bills Passed

CS/CS/SB 108, Enrolled
Approved, Chapter No. 2002-236
This bill specifies circumstances under which firefighters, emergency medical technicians, and paramedics can qualify for workers' compensation benefits. In addition to matters strictly affecting workers' compensation, the bill also amends s. 112.81, F.S., which provides that when certain employees become disabled or die as a result of tuberculosis, heart disease, or hypertension, the disability or death is presumed to have been suffered in the line of duty. This bill would expand the presumption to cover "firefighters, law enforcement officers, and correctional officers," which should make it easier for affected members to obtain in-line-of-duty disability and death benefits under public pension plans in Florida, including the FRS. (Current law provides the presumption for "firefighters and state law enforcement officers" only.)

CS/HB 385, Enrolled
Became Law, Chapter No. 2002-282
This bill increases the period of exemption from certain taxes & assessments for certain minority businesses and extends future repeal. This bill has an impact on municipal and special district fire and police pension plans subsidized by premium taxes under chapters 175 and 185, F.S.

CS/SB 426, Enrolled
Approved, Chapter No. 2002-26
This bill makes miscellaneous changes to the tax code. With respect to municipal and special district fire and police pension plans funded under chapters 175 and 185, F.S., the bill authorizes the Department of Revenue to release information relative to returns required under these plans and authorizes the Department of Management Services to "disclose payment information to a governmental agency or the agency's agent for purposes related to budget preparation, auditing, revenue or financial administration, or the administration of chapters 175 and 185." The bill also repeals an exemption from the insurance premium tax for insurers who write monoline flood insurance policies.

CS/HB 683, Enrolled
Approved, Chapter No. 2002-66
This bill amends chapters 175 and 185 of the Florida Statutes to provide an extended time period for the recognition of supplemental firefighter plans and supplemental police pension plans, to prescribe guidelines for selecting trustees for closed plans of specified size, and to provide for termination of plans after distribution of final benefit payments. The bill also allows the resumption of state contributions if a plan becomes not fully funded.

CS/HB 807, Enrolled
Approved, Chapter No. 2002-273
Effective June 1, 2001, this bill modifies miscellaneous provisions affecting the FRS. With respect to the Public Employee Optional Retirement Program (FRS Investment Plan), the bill:

• Allows renewed members of the FRS to participate in the FRS Investment Plan.

• Provides an extension of time for asset transfer in the event of a market disruption.

• Modifies election/enrollment periods to give existing employees and newly hired employees 6 months to educate themselves and make a plan election or default to the FRS Pension Plan.

• Allows the plan to accept rollovers from incoming participants.

• Provides that funds placed in suspense accounts for employees who terminate employment before vesting will be invested, and any earnings will be transferred to participant accounts upon return to covered employment within 5 years of termination.

• Requires spousal notification whenever the designated primary beneficiary is someone other than the spouse.

• Updates benefit distribution provisions to conform to recent changes in federal law.

• Authorizes the Florida State Board of Administration to require oaths and acknowledgments.

• Revises statutes governing continued coverage of retirees under the State Group Insurance Program to provide for coverage of FRS Investment Plan participants who meet specified criteria.

• Synchronizes the due dates for employer contributions under the FRS Pension Plan and the FRS Investment Plan and synchronizes present value calculations with enrollment periods.

• Provides for transfer of contributions paid on behalf of newly hired employees who elect to transfer to the FRS Investment Plan within the first 180 days of employment.

• Consolidates benefit provisions under a separate section and establishes a disability benefit program for participants of the FRS Investment Plan similar to the program for members of the FRS Pension Plan. (The bill also requires the IRS to validate that the program meets applicable requirements of federal law for a qualified plan and allows the Department of Management Services to outsource the disability program in the future.)

In addition, the bill revises other retirement provisions to:

• Include county health department directors and administrators employed by the Department of Health in the Senior Management Service (SMS). (By law, SMS employees are members of the Senior Management Service Class of the FRS.)

• Allow the sheriff and clerk of the circuit court of a consolidated government with countywide jurisdiction to elect to continue to participate in the FRS.

• Include Chief Deputy Court Administrators in the Senior Management Service Class.

• Allow state attorneys and public defenders to upgrade retirement credit for service as assistant state attorney or assistant public defender.

• Modify laws relating to the State University System Optional Retirement Program, to allow rollovers into the program and expand the methods by which benefits may be disbursed.

• Modify termination requirements as applied to elected officers participating in the Deferred Retirement Option Program (DROP) to allow such officers to continue in elective office under certain conditions.

• Allow FRS Pension Plan members who have been retired for 1 calendar month to be reemployed in a covered position as a firefighter or paramedic for up to 780 hours during the first 12 months of retirement.

• Provide that certain periods of service in fire prevention or firefighter training are included in the Special Risk Class.

• Allow Special Risk Class member with Regular Class service in fire prevention or firefighter training to upgrade credit for this service to Special Risk Class service credit.

• Cover payments received under the Excellent Teaching Program or the Florida Mentor Teacher School Pilot Program as compensation for retirement purposes under the FRS.

HB 935, Enrolled
Approved, Chapter No. 2002-45
This bill creates a public records exemption for personal identifying information about participants in the Public Employee Optional Retirement Program (FRS Investment Plan).

CS/SB 1058, Enrolled
Approved, Chapter No. 2002-29
This bill allows certain consolidated governments to participate in municipal and special district pension plans for firefighters as authorized under chapter 175 of the Florida Statutes and to qualify for distribution of premium taxes under that chapter. The consolidated government must enter into an interlocal agreement to provide fire services to a municipality within its boundaries. The municipality may then enact an ordinance levying the premium tax notify the Division of Retirement of the interlocal agreement.

HB 1575, Enrolled
Approved, Chapter No. 2002-73
This bill establishes the FRS Contributions Clearing Trust Fund as a clearing account for employer contributions made for all of the programs administered by the Division of Retirement, Department of Management Services (DMS) in accordance with chapter 121 of the Florida Statutes. The DMS is directed to administer the fund.

HB 1973, Enrolled
Approved, Chapter No. 2002-177
This bill establishes contribution rates for each class and subclass of the FRS Pension Plan and of the Public Employee Optional Retirement Program (FRS Investment Plan), based on a uniform system for funding the benefits provided under both plans through blended rates. In addition the bill also:

• Provides guidance to assist employers and the State Board of Administration in maintaining compliance with section 404(c) of the Internal Revenue Code.

• Reduces, from $19 million to $15.1 million, the annual surplus payment to offset the unfunded actuarial liability for the Special Risk Class attributable to a one-time special benefit increase provided for certain retirees, beneficiaries, and DROP participants on January 1, 2002.

• Repeals certain contribution rate increases imposed by section 23 of chapter 2000-169, Laws of Florida, and scheduled to take effect on July 1, 2002. These increases would duplicate rate elements embedded in existing rates and are therefore redundant.

• Beginning July 1, 2002, requires FRS employers to contribute 0.15% of the gross compensation of each FRS member, to fund certain administrative and educational costs of the Florida State Board of Administration. (This contribution replaces the current 0.10% charge and, like the current charge, is essentially funded through surplus offset.)

• Includes the Chief Deputy Court Administrator for each judicial circuit in the Senior Management Service Class.

• Provides a one-time 3-month window for participants in the Senior Management Service Optional Annuity Program (SMSOAP) to transfer to the FRS Pension Plan and regain service credit under that plan upon transfer of their SMSOAP proceeds from employer contributions and earnings thereon and payment of an amount representing the present value of the affected period of service.

Local Bills Passed

HB 759, Enrolled
Approved, Chapter No. 2002-342
This local bill makes miscellaneous changes to the Orlando Police Department pension plan to eliminate the earned income offset (remove the requirement that a disability retirees benefits be offset by one dollar for each three dollars of earned income received by the retiree in the previous year). The bill also authorizes the City of Orlando to amend the plan as needed to maintain plans tax qualified status under the Internal Revenue Code, if agreed to by the members or their collective bargaining agent.

HB 973, Enrolled
Approved, Chapter No. 2002-359
This local bill is a compilation of numerous special acts relating to the West Palm Beach Police Pension Fund. It amends previous special acts to update a statutory reference and to require members to transfer their accumulated leave into the pension plan up to the defined contribution limits under the Internal Revenue Code.

HB 975, Enrolled
Approved, Chapter No. 2002-360
This local bill is a compilation of numerous special acts relating to the West Palm Beach Firefighters Pension Fund. It amends previous special acts to update a statutory reference and to require members to transfer accumulated leave into the pension plan up to the defined contribution limits under the Internal Revenue Code.

HB 1037, Enrolled
Approved, Chapter No. 2002-369
This local bill modifies the Tampa Firefighter and Police Pension Plan to authorize certain employees to buy credit for years of service during which they were required to be compulsory members of the citys general employees' pension plan due to age. (After litigation, a number of these employees were allowed to transfer to the fire and police plan.) This "buy back" will allow affected employees to improve their benefits for the affected years. The bill also adjusts plan benefits to recoup the employers portion of the social security contributions which wouldn't have been required if the employees had never been in the general employees' plan.

Proposed Bills

The following retirement bills and related bills of significance to members of the Florida Retirement System (FRS) and other public retirement plans were filed for consideration during the 2002 Regular Session of the Florida Legislature.

Bills Listed By Subject Area:

FRS Membership Classes
Elected Officers' Class - HB 215, HB 807 SB 1056, SB 2344
Regular Class - SB 2, HB 235, SB 246, SB 2344
Senior Management Service Class - HB 185, HB 807, HB 1973, SB 2344
Special Risk Class - HB 41, HB 509, SB 690, HB 807, HB 925, SB 942, SB 1128, SB 1346, HB 1527, SB 1854, SB 2110, SB 2296

FRS Pension Plan Benefits, Rights, and Features:
Average Final Compensation - SB 2, HB 235
Benefit Formula - SB 2, SB 144, HB 235, HB 237, SB 246
Disability/Death Benefits - HB 5, SB 278, SB 690, SB 2406
Early Retirement - SB 2344
Forfeiture of Benefits - HB 147, SB 1996
Indexing of Deferred Benefits - SB 246
Normal Retirement - SB 1376, HB 1565, SB 2344
Reemployment after Retirement - HB 215, HB 807, HB 941
Renewed Membership - HB 807

FRS Pension Plan Generally
Contributions and Funding - HB 1973
Plan Administration - HB 807
Trust Funds - SB 914, HB 1575, HB 1957, SB 2134

FRS Pension Plan Benefits, Rights, and Features:
Deferred Retirement Option Program (DROP) - HB 215, HB 259, SB 546, SB 718, SB 1056, SB 1376, SB 2024
Public Employee Optional Retirement Program (FRS Investment Plan) - HB 807, HB 933, HB 935, HB 1102, HB 1575, SB 1886, SB 2132, SB 2134
Senior Management Service Optional Annuity Program (SMSOAP) - HB 807, HB 1973
State University System Optional Retirement Program (SUSORP) - HB 807

Health Insurance Subsidy
Benefit Amount - HB 517, SB 1414, SB 2406

Local Pension Plans
HB 108, HB 759, HB 973, HB 975, HB 1037, HB 1979, SB 2578, SB 2660

Miscellaneous
Disability/Death Benefits for Public Employees - HB 5, HB 47, HB 108, SB 176, HB 253, HB 265, SB 278, SB 422, HB 807, HB 925, SB 1346

Police/Fire Plans (chs. 175/185, F.S.):
Pension Plans - SB 666, HB 683, SB 1058, SB 2164 Premium Taxes - HB 107, HB 109, SB 320, HB 385, HB 681, SB 1058, HB 1995, SB 2164

Public Meetings/Records:
FRS Investment Plan Records - HB 539, HB 935, SB 1886

Retirees:
Participation in FRS Investment Plan (Renewed Members) - HB 933, SB 1102
Participation in State Group Insurance Plan - HB 647, SB 1836
Retired Justices and Judges - HB 17, SB 424
Special Risk Disability Retirees - SB 690

Schools, Colleges, Universities
Benefit Formula - SB 144, HB 237
Compensation/Bonuses - HB 697, HB 807, SB 922
Maximum Participation Period (DROP) - HB 259,
Reemployment after Retirement - HB 941, SB 2024

State-Administered Retirement Systems (other than FRS)
Teachers' Retirement System - HB 539

State Board of Administration
Administration - HB 807, HB 933, HB 935, SB 1102, SB 1160
Composition - SB 662, HB 2015
Investment - SB 1160, SB 1392