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       2009 Legislature                   CS for SB 1802, 1st Engrossed
    2         An act relating to retirement; amending s. 121.71,
    3         F.S.; revising the payroll contribution rates for the
    4         membership classes of the Florida Retirement System
    5         for the state fiscal years effective July 1, 2009, and
    6         July 1, 2010; requiring the state actuary to consider
    7         additional factors when conducting the annual
    8         actuarial study of the State Retirement System;
    9         specifying the factors to be considered; providing a
   10         declaration of important state interest; providing an
   11         effective date.
   13  Be It Enacted by the Legislature of the State of Florida:
   15         Section 1. Section 121.71, Florida Statutes, is amended to
   16  read:
   17         121.71 Uniform rates; process; calculations; levy.—
   18         (1) In conducting the system actuarial study required under
   19  s. 121.031, the actuary shall follow all requirements specified
   20  thereunder to determine, by Florida Retirement System employee
   21  membership class, the dollar contribution amounts necessary for
   22  the forthcoming fiscal year for the defined benefit program. In
   23  addition, the actuary shall determine, by Florida Retirement
   24  System membership class, based on an estimate for the
   25  forthcoming fiscal year of the gross compensation of employees
   26  participating in the optional retirement program, the dollar
   27  contribution amounts necessary to make the allocations required
   28  under ss. 121.72 and 121.73. For each employee membership class
   29  and subclass, the actuarial study shall establish a uniform rate
   30  necessary to fund the benefit obligations under both Florida
   31  Retirement System retirement plans, by dividing the sum of total
   32  dollars required by the estimated gross compensation of members
   33  in both plans.
   34         (2) Based on the uniform rates set forth in subsection (3),
   35  employers shall make monthly contributions to the Division of
   36  Retirement, which shall initially deposit the funds into the
   37  Florida Retirement System Contributions Clearing Trust Fund. A
   38  change in a contribution rate is effective the first day of the
   39  month for which a full month’s employer contribution may be made
   40  on or after the beginning date of the change.
   41         (3) Required employer retirement contribution rates for
   42  each membership class and subclass of the Florida Retirement
   43  System for both retirement plans are as follows:
   44  Membership Class           Percentage of Gross Compensation,Effective July 1, 2009 2008Percentage of Gross Compensation,Effective July 1, 2010 2009
   45  Regular Class                      8.69%             9.63% 9.60%     
   46  Special Risk Class                19.76%            22.11% 22.03%    
   47  Special Risk Administrative  Support Class       11.39%            12.10% 11.98%    
   48  Elected Officers’ Class -  Legislators, Governor,  Lt. Governor,  Cabinet Officers,  State Attorneys,  Public Defenders       13.32%            15.20% 14.56%    
   49  Elected Officers’ Class -  Justices, Judges       18.40%            20.65% 20.37%    
   50  Elected Officers’ Class -  County Elected Officers       15.37%            17.50% 17.06%    
   51  Senior Management Class           11.96%            13.43% 13.36%    
   52  DROP                               9.80%            11.14% 10.96%    
   53         (4) The state actuary shall recognize and use an
   54  appropriate level of available excess assets of the Florida
   55  Retirement System Trust Fund to offset the difference between
   56  the normal costs of the Florida Retirement System and the
   57  statutorily prescribed contribution rates.
   58         Section 2. As part of the actuarial study required by s.
   59  121.031(3), Florida Statutes, based on the results of June 30,
   60  2009, the administrator of the Florida Retirement System shall
   61  contract with the state actuary to conduct an actuarial study of
   62  the Florida Retirement System which considers the following
   63  methods of funding the Deferred Retirement Option Program:
   64         (1) Through a separate contribution rate regardless of the
   65  participant’s membership class, which has been the method
   66  through the 2008 valuation;
   67         (2) Treat participants as retirees such that the payroll
   68  associated with the participants is not used to develop the
   69  contribution rates for the respective membership class, and the
   70  employer is not required to make contributions on such payroll
   71  except for unfunded actuarial liability contributions; and
   72         (3) Treat participants as active members such that the
   73  payroll associated with the participants is used to develop the
   74  contribution rates for the respective membership class, and the
   75  employer is required to make contributions on the payroll at the
   76  same contribution rate as the employer pays for an active member
   77  of the applicable class.
   78         Section 3. The Legislature finds that a proper and
   79  legitimate state purpose is served when employees and retirees
   80  of the state and its political subdivisions, and the dependents,
   81  survivors, and beneficiaries of such employees and retirees, are
   82  extended the basic protections afforded by governmental
   83  retirement systems. These persons must be provided benefits that
   84  are fair and adequate and that are managed, administered, and
   85  funded in an actuarially sound manner, as required by s. 14,
   86  Article X of the State Constitution and part VII of chapter 112,
   87  Florida Statutes. Therefore, the Legislature determines and
   88  declares that this act fulfills an important state interest.
   89         Section 4. This act shall take effect July 1, 2009.

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