FRS Budget Conference Final

Conference Committee on FRS/Retirement
House Offer #1
Meeting Packet
Friday, April 29, 2011

37508
Florida Retirement System: SB 2100, Eng. 2 and CS/CS/HB 1405
Savings from SB Savings from Savings from House Offer #1
SB 2100, Eng. 2 2100, Eng. 2 CS/CS/HB 1405 CS/CS/HB 1405 House Offer #1
"Compensation" and Effective July 1, 2011, amends the definitions ($9.1M) N/A For members initially enrolled on or after July 1, ($68.1M)
"Average Final of "compensation" and "average final 2011, "average final compensation" means the
Compensation" compensation" to exclude accumulated average of the 8 highest fiscal years of
annual leave payments and to exclude compensation for creditable service prior to
overtime payments in excess of 300 hours. retirement, termination, or death. For in-Iine-of-
duty disability benefits, if less than 8 years of
creditable service have been completed, the
term "average final compensation" means the
average annual compensation of the total
number of years of creditable service.
....
Compulsory Requires all eligible employees initially indeterminate N/A N/A

Enrollment in the enrolled on or after July 1, 2011, who are (no study)
Investment Plan members of the Elected Officers' Class or the
Senior Management Service Class, to be
compulsory members ofthe investment plan.
Page 1 of 5
Normal Retirement N/A Increases the normal retirement date for ($145.3M) Increases the normal retirement date for all ($145.3M)
Date all members initially enrolled on or after members initially enrolled on or after July 1,
July 1, 2011: 2011:
For Special Risk: Increases the age from For Special Risk Class: Increases the age from 55
55- 60 years of age; and increases the 60 years of age; and increases the years of
years of creditable service from 25 to 30. creditable service from 25 to 30.
For all other classes: Increases the age For all other classes: Increases the age from 62
from 62 to 65 years of age; and increases to 65 years of age; and increases the years of
the years of creditable service from 30 to creditable service from 30 to 33 years.
33 years.
Deferred Retirement Closes DROP to new participants, effective indeterminate Closes DROP to new participants, ($108.9M) Maintains DROP; however, members entering ($80.9M)
Option Program July 1, 2016. (no study) effective July 1, 2011. DROP on or after July 1, 2011, will earn interest
at a reduced accrual rate of 1.3%.
Reenrollment in the Allows reenrollment after retirement in the indeterminate N/A N/A
FRS investment plan. (no study)
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Vesting
Investment Plan Changes vesting of employer contributions for indeterminate N/A N/A
Vesting members initially enrolled in the investment (no study)
plan on or after July 1, 2011. Such members
will vest:
Upon completion of 1 year of service: 20%.
Upon completion of 2 years of service: 40%.
Pension Plan Vesting Changes vesting of employer contributions for ($34.3M) N/A For members initially enrolled in the pension ($26.2M)
members initially enrolled in the pension plan plan on or after July 1, 2011, such members will
on or after July 1, 2011. Such members will vest in 100% of employer contributions upon
vest in 100% of employer contributions upon completion of 8 years of creditable service.
completion of 10 years of creditable service.
Page 3 of 5
Employee Effective July 1, 2011: ($497.0M) Effective July 1, 2011, requires 3% ($456.5M) Effective July 1, 2011, requires 3% employee ($456.5M)
Contributions employee contribution for all FRS contribution for all FRS members. DROP
Requires employee contributions for FRS members. DROP participants are not participants are not required to pay employee
members of 2% for gross compensation up to required to pay employee contributions. contributions.
and including $25,000,4% for gross
compensation greater than $25,000 and up to
and including $50,000, and 6% for gross
compensation greater than $50,000.00.
Requires employee contributions for

members of the Florida Legislature and for all
statewide elected officials of 3% for gross
compensation up to and including $25,000,
5% for gross compensation greater than
$25,000 and up to and including $50,000, and
7% for gross compensation greater than
$50,000.00.
DROP participants are not required to pay

employee contributions.
Requires members of optional retirement

programs (SMS Optional Annuity Program and
the State University System AND Community
College Optional Retirement Programs) to pay
the same employee contributions as FRS
members.
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Cost-of-Living Eliminates the cost-of-living adjustment ($406.6M) N/A Eliminates the cost-of-living adjustment (COLA) ($404.8M)
Adjustment (COLA) for service earned on or after July 1, for service earned on or after July 1, 2011.
2011. Subject to the availability of funding and the
Legislature enacting sufficient employer
contributions specifically for the purpose of
funding the expiration of the COLA, in
accordance with s. 14, Art. X of the State
Constitution, the COLA formula will expire
effective June 30, 2016, and the 3% cost-of-
living adjustment will be reinstated.
Funds/Positions for N/A For the 2011-12 fiscal year, funds for four For the 2011-12 fiscal year, funds for four
Div. of Retirement to positions and $238,000. positions and $238,000.
Implement
•••••
....
•••• • ••
Total Savings ($947.1M) ($710.7M) ($1,181.8M)

.. .. ....
Note: This comparison includes the main provisions of the bills.

....
Please see the staff analyses or contact stafffor additional information.
Page 5 of 5

FRS Budget Conference Final

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Conference Committee on FRS/Retirement

Friday, April 29, 2011

Compulsory Requires all eligible employees initially indeterminate N/A N/A

Upon completion of 1 year of service: 20%.

Upon completion of 2 years of service: 40%.

Upon completion of 3 years of service: 60%.

Upon completion of 4 years of service: 80%.

Upon completion of 5 years of service: 100%.

Requires employee contributions for

DROP participants are not required to pay

Requires members of optional retirement

Total Savings ($947.1M) ($710.7M) ($1,181.8M)

Note: This comparison includes the main provisions of the bills.

Please see the staff analyses or contact stafffor additional information.

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