April 5, 2021

By: Glenn E. Thomas, Janice Rustin, and Jim Linn

As the legislative session reaches the midpoint (assuming an on-time adjournment on April 30), little action has been taken on retirement legislation.  One bill progressing in the Senate (SB 84) would make a significant change to the Florida Retirement System.  If it passes, FRS members hired on or after July 1, 2022 would be placed in the Investment Plan (defined contribution plan), with no option to move to the Pension Plan (defined benefit plan).  The bill still lacks a companion in the House, however.  The FRS rate bill (SPB 7018), which is a “must pass” measure as part of the state budget, is on its final committee stop.

Copies of any bill can be viewed at the legislature’s website: www.leg.state.fl.us.  Please feel free to contact us if you have any questions.

CS/SB 84 FRS Investment Plan (Rodrigues)

Participants in the Florida Retirement System have two membership options:  the defined benefit “pension plan” or the defined contribution “investment plan.”  Members hired on or after January 1, 2018, are initially enrolled in the pension plan and must elect to remain in the pension plan or transfer to the investment plan by the last business day of the eighth month of employment. If they make no election, the employee is transferred to the investment plan. Thereafter, the member has one opportunity, at the employee’s discretion, to choose to move from the pension plan to the investment plan or from the investment plan to the pension plan. SB 84 would eliminate the pension plan option for new members.  Members initially enrolled in FRS on or after July 1, 2022 would be compulsory members of the investment plan and would have no opportunity to transfer to the pension plan.  On March 31, SB 84 was amended to exempt Special Risk Class members from compulsory participation in the Investment Plan.

Current law permits employees of universities, public community colleges and other state educational institutions, to withdraw from FRS and participate in one of several optional retirement programs.  Employees who elect to participate in an optional retirement program then have one opportunity—at their discretion—to transfer back to FRS.  SB 84 would still permit those employees, who are hired on or after July 1, 2022, to withdraw from the FRS investment plan and participate in a state optional retirement program; but it would eliminate any opportunity to transfer back to FRS for all optional plan members on or after July 1, 2022, regardless of hire date.

Under Section 121.74, FRS assesses employers 0.06% of the payroll reported for each class or subclass of membership to offset the costs of administering the investment plan and providing educational services to FRS members.  SB 84 would increase the assessment to 0.07% of payroll, effective July 1, 2022.

On March 31 an amendment exempting Special Risk Class members from compulsory participation in the Investment Plan was adopted and CS/SB 84 was approved by the Senate Appropriations Committee – the bill’s final committee assignment.  The bill still has no companion in the House.

Florida Retirement System Special Risk Class

Several bills are filed each session that would include new employment classifications under the FRS Special Risk Class.  Special Risk Class members earn benefits at a higher rate (3%) than Regular Class members (1.6%) and can qualify for retirement at an earlier age (age 60 with 8 years of service, or 30 years of service regardless of age) than Regular Class members (age 65 with 8 years of service or 33 years of service regardless of age). Employer contribution rates are also significantly higher for Special Risk Class members.

SB 230 Special Risk Class of the Florida Retirement System (Hutson)

SB 230 would extend membership in the FRS Special Risk Class to members employed in water, sewer, or other public works departments, who perform duties under conditions where there is a clear and present safety or health hazard that poses an imminent risk to the life and safety of the member, such as working in confined spaces or working around toxic chemicals or wastewater.

SB 230 currently has no House companion, and has been referred to the Senate Committees on Governmental Oversight and Accountability, Community Affairs and Appropriations.

HB 477 Special Risk Class of the Florida Retirement System (Alexander); SB 1518 (Book)

HB 477 would extend membership in the FRS Special Risk Class to members employed by the Florida State Hospital; Northeast Florida State Hospital; a developmental disability center, including Sunland Center at Marianna, Developmental Disabilities Defendant Program at Chattahoochee, and Tacachale at Gainesville; or the North Florida Evaluation and Treatment Center, who spend at least 75 percent of their time performing duties that involve contact with patients or inmates.  The bill would be effective July 1, 2021.

HB 477 has been referred to the House Government Operations Subcommittee, the Appropriations Committee and the State Affairs Committee.  It is identical to SB 1518, which has not yet been assigned to any committees.

SB 1224 911 Operators; HB 1171 (Jones)

Section 112.1815, Florida Statutes, provides guidelines and restrictions governing benefits for firefighters, EMTs, and law enforcement officers who are injured in the line of duty from causes such as exposure to toxic substances, occupational disease, and mental or nervous injuries. Section 112.1815 currently defines the term “first responder” for purposes of that section, as

[A] law enforcement officer as defined in s. 943.10, a firefighter as defined in s. 633.102, or an emergency medical technician or paramedic as defined in s. 401.23 employed by state or local government. A volunteer law enforcement officer, firefighter, or emergency medical technician or paramedic engaged by the state or a local government is also considered a first responder of the state or local government for purposes of this section.

SB 1224 and HB 1171 would amend the definition of first responder under section 112.1815 to include a 911 public safety telecommunicator as defined in section 401.465, Florida Statutes.  In addition, the bill would delete language limiting this definition of first responder to section 112.1815.

The bills would also extend membership in the FRS Special Risk Class to FRS members employed as 911 public safety telecommunicators. The monthly benefits for 911 telecommunicator members would still be calculated using the Regular Class multiplier (1.6%).

SB 1224 has been referred to the Senate Governmental Oversight and Accountability Committee; Community Affairs Committee; and Appropriations Committee.  HB 1171 has been referred to the House Government Operations Committee; Appropriations Committee; and State Affairs Committee.

HB 321 FRS Employment after Retirement of School District Personnel

Under current law, if an FRS retiree is employed by any FRS employer within 6 calendar months following retirement or deferred retirement option plan participation (DROP), termination of employment is deemed not to have occurred and the member’s retirement is voided.  In this situation, the employee and employer are jointly and severally liable for repayment to FRS of all benefits received by the employee.

HB 321 would create an exception, effective January 1, 2022, under which an FRS retiree from a regular class teaching position may be reemployed as a substitute teacher with an FRS employer immediately after retirement or DROP participation. The retired member may not renew membership in FRS.

HB 321 has no Senate companion. It has been referred to the Government Operations Subcommittee; Secondary Education & Career Development Subcommittee; Appropriations Committee and State Affairs Committee.

SB 702 Individual Retirement Accounts (Thurston); HB 253 (Geller)

Section 222.21(2)(a), Florida Statutes, exempts any assets payable to a participant or beneficiary in a fund or account from all claims of creditors of the participant or beneficiary if the fund or account is exempt from taxation under sections 401(a), 403(a), 403(b), 408, 408A, 409, 414, 457(b), or 501(a) of the Internal Revenue Code.  Under section 222.21(c) any such assets that are exempt from claims of creditors do not cease to be exempt by reason of a direct transfer or eligible rollover after the owner’s death.  SB 702 and HB 253 amend section 222.21(c) to provide that an interest in any fund or account described in section 222.21(2)(a) that is received in a transfer incident to divorce also continues to be exempt from legal process after the transfer. This provision is effective retroactive to transfers incident to divorce without regard to the date the transfer was made.

SB 702 has been approved by all of its assigned committees and was placed on the Senate calendar on second reading.  HB 253 is on the agenda of the House Civil Justice and Property Rights Subcommittee; and has also been referred to the Insurance and Banking Subcommittee; and the Judiciary Committee.

HB 949 Communicable and Infectious Diseases (Fetterhoff and Omphroy); SB 1314 (Gruters); SB 1422 (Thurston)

In response to the effects of COVID-19 on first responders, several bills have been filed to address work-related exposure to communicable and infectious diseases. Under Section 112.181(2) Florida Statutes, any condition or impairment of health caused by hepatitis, meningococcal meningitis, or tuberculosis, resulting in the total or partial disability or death of an emergency rescue or public safety worker, is presumed to have been suffered in the line of duty, unless the contrary can be shown by competent evidence.

These bills would add to section 112.181 a rebuttable presumption that disability or death caused by an “infectious disease” was suffered in the line of duty.  “Infectious disease” would be defined as “any condition or impairment of health caused by a disease that has been declared a public health emergency in accordance with s. 381.00315.” The emergency rescue or public safety worker would be required to verify by written affidavit that, to the best of his or her knowledge and belief, he or she contracted the infectious disease during a public health emergency and was not exposed, outside of the scope of his or her employment, to any person known to have the infectious disease.  The bill would take effect July 1, 2021.

HB 949 was approved by the House Government Operations Subcommittee. It has also been referred to the State Affairs Committee; Appropriations Committee; and Professions and Public Health Subcommittee.  SB 1314 is on the March 31 agenda of the Senate Governmental Oversight and Accountability Committee. It has also been referred to the Community Affairs Committee and Appropriations Committee.  SB 1422 has been referred to the Senate Governmental Oversight and Accountability Committee; Judiciary Committee; and Appropriations Committee.

HB 1023 FRS Cost of Living Adjustment (Skidmore and Tant); SB 1310 (Polsky)

These bills would provide a minimum cost-of-living adjustment (COLA) of at least 2% for FRS members who retire on or after July 1, 2011 with service credit earned prior to July 1, 2011.  Under the current FRS statute, a 3% COLA is applied to benefits earned before July 1, 2011, but no COLA is applied to benefits earned on or after that date.  Thus, the member’s COLA amount is based on the quotient of the member’s service credit earned before July 1, 2011, divided by the member’s total service credit.  Under HB 1023 and SB 1310, the COLA for members with FRS service before July 1, 2011 could not be less than 2%.

HB 1023 has been referred to the House Government Operations Subcommittee; Appropriations Committee; and State Affairs Committee.  SB 1310 has been referred to the Senate Governmental Oversight and Accountability Committee; Appropriations Subcommittee on Agriculture, Environment, and General Government; and Appropriations Committee.

HB 1609 Criminal Justice (Hardy)

Most of this 49-page bill is dedicated to the creation of a new Chapter 952, Florida Statutes: Law Enforcement and Correctional Officer Oversight.  Generally, the Chapter requires each county to establish an independent Office of Law Enforcement & Correctional Officer Oversight, with the independent authority to investigate and discipline police officers and correctional officers. It also prohibits the inclusion of disciplinary matters in collective bargaining agreements for law enforcement and correctional officers.

The bill also would affect retirement plans, by amending section 112.3173, Florida Statutes, which provides for the forfeiture of pensions under public retirement systems. Section 112.3173(3) requires forfeiture of pension benefits of any public officer or employee who is “convicted of a specified offense committed prior to retirement, or whose office or employment is terminated by reason of his or her admitted commission, aid, or abetment of a specified offense,”  HB 1609 would amend the definition of specified offense to include:

The committing of any willful act by a law enforcement officer or correction officer that violates the law or applicable policy of the officer’s employer and leads to the death of a person or award of damages against the officer or the officer’s employer for having violated the civil rights of an individual under state or federal law.

When combined with the existing language under section 112.3173(3), the effect of HB 1609 would be to require forfeiture of the pension benefits of:

• Any law enforcement officer or correction officer who is convicted of a crime, and that crime resulted in either the death of a person, or an award of damages for violation of civil rights; or
• Any law enforcement officer or correction officer whose employment is terminated by reason of his or her admitted violation of law or employer policy, and that violation resulted in either the death of a person, or an award of damages for violation of civil rights.

The bill would repeal section 112.532, Florida Statutes, which provides rights to law enforcement and corrections officers under investigation, and section 112.533, Florida Statutes, which provide procedures for law enforcement and correctional agencies to process and investigate complaints against law enforcement and correction officers.

HB 1609 has no Senate companion and has been referred to no committees.

SB 1632 FRS Continuous Service (Ausley); HB 1327 (Alexander)

Under current law, if an FRS retiree is employed by any FRS employer within six calendar months following retirement, termination of employment will be deemed not to have occurred and the member’s retirement is voided.  An FRS retiree who is reemployed with an FRS employer after meeting the definition of termination, may not receive retirement benefits and a salary until 12 months after retirement.  There is an exception for a retired law enforcement officer who is reemployed as a school resource officer.  Section 121.091(9)(f) permits a law enforcement officer who retires under FRS and is reemployed by an FRS employer as a school resource officer, to receive both a salary from the employer and retirement benefits beginning 6 months after retirement.  Under SB 1632 and HB 1327, a law enforcement officer who retires under FRS and is reemployed by an FRS employer as a school resource officer, could receive both a salary from the employer and retirement benefits, beginning 30 days after retirement.

Neither bill has been referred to a committee.

SB 1870 FRS Membership (Ausely); HB 1403 (Willhite)

These bills would require any municipality, metropolitan planning organization, or special district created on or after July 1, 2021, to participate in the Florida Retirement System.  Participation is currently optional for these entities.

The bills would also change FRS death benefits for certain beneficiaries.  Under current law, if a vested FRS member dies while still employed, the member’s joint annuitant is entitled to a lifetime benefit.  If the beneficiary is not a joint annuitant, the beneficiary is only entitled to a refund of the member’s contributions.  Under SB 1870 and HB 1403, a beneficiary who does not qualify as a joint annuitant would be entitled to the beneficiary benefits as provided in the option selected by the member.

The bills would also provide an exception to the FRS reemployment restrictions for elected officials.  The exception would permit an FRS member who retires or terminates DROP on or after July 1, 2021 to hold an elective public office in an agency covered by FRS.  The elected officer would be permitted to receive retirement benefits in addition to the compensation of the elective office without regard to the time limitations otherwise imposed by FRS.

Neither Bill has been referred to a committee.

SPB 7016 Florida Retirement System Investment Plan (Governmental Oversight and Accountability)

SPB 7016 authorizes the State Board of Administration (SBA), which administers the FRS investment plan, to develop one or more investment products to be offered to investment plan members.

It also amends procedures for married FRS members who do not designate their spouse as primary beneficiary.  Under current law, the member’s spouse must sign the beneficiary designation form to acknowledge the designation.  SPB 7016 would eliminate this requirement, and instead require that the spouse “be notified and acknowledge any such designation.”  If the spouse cannot be located or fails to affirmatively acknowledge the designation, the member would be able to request that the acknowledgment requirement be waived by SBA through an affidavit describing the facts and circumstances.

SPB 7016 was approved by the Committee on Governmental Oversight and Accountability and is now in Appropriations.

SPB 7018 FRS Employer Contributions (Governmental Oversight and Accountability)

SPB 7018 contains the FRS employer contribution rates for the year beginning July 1, 2021.  The contribution rates are intended to fund the full normal cost as well as the amortization payment for unfunded actuarial liabilities, as reflected in the July 1, 2020 actuarial valuation.  The bill provides the following employer contribution rates:

Note: the above employer contribution rates do not include the FRS health insurance subsidy contribution, a change to which is also included in the bill (see below); or the 0.06% employer assessment for administrative and educational expenses.  Also, the above employer contribution rates do not reflect the 3% member contribution.

A retiree under FRS or another state-administered retirement system is eligible for monthly health insurance subsidy payments.  To fund this benefit, participating employers must contribute an amount in addition to regular employer retirement contributions. SPB 7016 would decrease the contribution rate from 1.66% to 1.50%, effective July 1, 2021.Note: the above employer contribution rates do not include the FRS health insurance subsidy contribution, a change to which is also included in the bill (see below); or the 0.06% employer assessment for administrative and educational expenses.  Also, the above employer contribution rates do not reflect the 3% member contribution.

SPB 7018 was approved by the Senate Governmental Oversight and Accountability Committee and is on the April 1 Appropriations Committee agenda.

If you have any questions on a bill, please contact Glenn E. Thomas, Janice Rustin or Jim Linn.