HB 239 — Florida Retirement System

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 system and the remaining years are in the Special Risk Class.

The first day of the month following the date the member completes 30 years of creditable service and attains age 57, which service may include a maximum of 4 years of military service credit if such credit is not claimed under any other systemPage and2of the16 remainingCODING: years are in the Special Risk Class.

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hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB239 2023 system and the remaining years are in the Special Risk Class.

ParagraphSubsection (3) and paragraph (a) of subsection (7)(13) of section 121.053,121.091, Florida Statutes, isare amended to read:

121.053 Participation in the Elected Officers' Class for retired members.— Page 3of 43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 (7) A member who is elected or appointed to an elective office and who is participating in the Deferred Retirement Option Program is not subject to termination as defined in s.

121.021, or reemployment limitations as provided in s.

121.091(9), until the end of his or her current term of office or, if the officer is consecutively elected or reelected to an elective office eligible for coverage under the Florida Retirement System, until he or she no longer holds an elective office, as follows:

(a) At the end of the 96-month 60-month DROP period:

1.

The officer's DROP account may not accrue additional monthly benefits, but does continue to earn interest as provided in s.

121.091(13).

However, an officer whose DROP participation begins on or after July 1, 2010, may not continue to earn such interest.

2.

Retirement contributions, except for unfunded actuarial liability and health insurance subsidy contributions required in ss.

121.71(5) and 121.76, are not required of the employer of the elected officer, and additional retirement credit may not be earned under the Florida Retirement System.

Section 3.

Paragraph (a) of subsection (3) and subsection (13) of section 121.091, Florida Statutes, are amended to read:

121.021(39)(a) or begun Pageparticipation 4ofin 43the CODING:Deferred Retirement Option Program as provided in subsection (13), and a proper application has been filed in the manner prescribed by the department.

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 participation in the Deferred Retirement Option Program as provided in subsection (13), and a proper application has been filed in the manner prescribed by the department.

(3) EARLY RETIREMENT BENEFIT.—Upon retirement on his or her early retirement date, the member shall receive an immediate monthlyPage benefit3of that16 shallCODING: begin to accrue on the first day of the month of the retirement date and be payable on the last day of that month and each month thereafter during his or her lifetime.

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hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB239 2023 monthly benefit that shall begin to accrue on the first day of the month of the retirement date and be payable on the last day of that month and each month thereafter during his or her lifetime.

For all special risk class members or a member of the Regular Class, Senior Management Service Class, or the Elected Officers' Class initially enrolled:

a.1.1.

Beforebefore July 1, 2011, the amount of each monthly payment shall be computed in the same manner as for a normal retirement benefit, in accordance with subsection (1), but shall be based on the member's average monthly compensation and creditable service as of the member's early retirement date.

The benefit so computed shall be reduced by five-twelfths of 1 percent for each complete month by which the early retirement date precedes the normal retirement date of age 62 for a member Pageof 5ofthe 43Regular CODING:Class, Senior Management Service Class, or the Elected Officers' Class, and age 55 for a member of the Special Risk Class, or age 52 if a Special Risk member has completed 25 years of creditable service in accordance with s.

121.021(29)(b)3.

s.

121.021(29)(b)1.c.

2.

For a member of the Regular Class, Senior Management Service Class, or the Elected Officers' Class initially enrolled on or after July 1, 2011, the amount of each monthly payment shall be computed in the same manner as for a normal retirement benefit, in accordance with subsection (1), but shall be based Page 4of 16 CODING:

hb0239-02-c2hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239CS/HB239 2023 ofon the Regularmember's Class,average Seniormonthly Managementcompensation Service Class, or the Elected Officers' Class, and agecreditable 55service foras a member of the Specialmember's Riskearly Class,retirement ordate. age 52 if a Special Risk member has completed 25 years of creditable service in accordance with s.

121.021(29)(b)1.c.

b.2.

On or after July 1, 2011, the amount of each monthly payment shall be computed in the same manner as for a normal retirement benefit, in accordance with subsection (1), but shall be based on the member's average monthly compensation and creditable service as of the member's early retirement date.

2.(b) If the employment of a member is terminated by reason of death within 10 years before normal retirement as described in s.

For121.021(29)(a)1.b. members of the Special Risk Class, the amount of each monthly payment shall be computed in the same manner as for a normal retirement benefit, in accordance with subsection (1), but shall be based on the member's average monthly compensation and creditable service as of the member's early retirement date.

Theor benefits. so computed shall be reduced by five-twelfths of 1 percent for each complete month by which the early retirement Page 6of 43 CODING:

121.021(29)(a)2.b., the monthly benefit payable to the member's beneficiary shall be calculated in accordance with subsection (1), but must be based on average monthly compensation and creditable service as of the date of death.

The benefit so computed shall be reduced by five-twelfths of 1 percent for each complete month by which death precedes the normal retirement date specified above or the date on which the member would have attained the normal retirement date had he or she survived and continued his or her employment, whichever provides a higher benefit.

(13) DEFERRED RETIREMENT OPTION PROGRAM.—In general, and subject to this section, the Deferred Retirement Option Program, hereinafter referred to as DROP, is a program under which an eligible member of the Florida Retirement System may elect to Page 5of 16 CODING:

hb0239-02-c2hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239CS/HB239 2023 dateparticipate, precedesdeferring thereceipt normalof retirement datebenefits ofwhile agecontinuing 55,employment orwith agehis 52or ifher aFlorida SpecialRetirement RiskSystem memberemployer. has completed 25 years of creditable service in accordance with s.

121.021(29)(b)3.

(13) DEFERRED RETIREMENT OPTION PROGRAM.—In general, and subject to this section, the Deferred Retirement Option Program, hereinafter referred to as DROP, is a program under which an eligible member of the Florida Retirement System may elect to participate, deferring receipt of retirement benefits while continuing employment with his or her Florida Retirement System employer.

(a) Eligibility of member to participate in DROP.—All active Florida Retirement System members in a regularly established position, and all active members of the Teachers' Retirement System established in chapter 238 or the State and County Officers' and Employees' Retirement System established in Pagechapter 7of122, 43which CODING:are consolidated within the Florida Retirement System under s.

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 chapter 122, which are consolidated within the Florida Retirement System under s.

121.055, or the optionalPage retirement6of program16 forCODING: the State University System under s.

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hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB239 2023 optional retirement program for the State University System under s.

Except as provided in subparagraphssubparagraph 6.6., for all special risk class members and Regular Class, Senior Management Service Class, or Elected Officers' Class members initially enrolled before July 1, 2011, election to participate is made within 12 months immediately following the date on which the member first reaches normal retirement date, or, for a member who reaches normal retirement date based on service before he or she reaches age 62, or age 55 for Special Risk Class members, election to participate may be deferred to the 12 months immediately following the date the member attains age 57, or age 52 for Special Risk Class members.

andExcept 7.as provided in subparagraph 6., for Regular Class, Senior Management Service Class, or Elected Officers' Class members initially enrolled on or after July 1, 2011, election to participate is made within 12 months immediately following the date on which the member first reaches normal retirement date, or, for a member who reaches normal retirement date based on service before he or she reaches age 65, or age 60 for Special Risk Class members, election to participate may be deferred to the 12 months immediately following the date the member attains age 60, or age 55 for Special Risk Class members.

subparagraphA 6., for members initially enrolled before July 1, 2011, election to participate is made within 12 months immediately following the date on which the member first reaches normal retirement date, or, for a member who reachesdelays normalDROP retirementparticipation dateduring based on service before he or she reaches age 62, or age 52 55 for Special Risk Class members, election to participate may be deferred to the 1212-month monthsperiod immediately following thehis dateor theher membermaximum attainsDROP agedeferral 57,date, orexcept ageas 52provided forin SpecialPage Risk7of Class16 members.CODING:

Except as provided in subparagraphs 6.

and 7.

subparagraph 6., for members initially enrolled on or after July 1, 2011, election to participate is made within 12 months immediately following the date on which the member first reaches normal retirement date, or, for a member who reaches normal retirement date based on service before he or she reaches age 65, or age 55 60 for Special Risk Class members, election to Page 8of 43 CODING:

hb0239-02-c2hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239CS/HB239 2023 participatesubparagraph may6., beloses deferreda tomonth theof 12DROP monthsparticipation immediately following the date the member attains age 60, or age 52 55 for Specialeach Riskmonth Classdelayed. members.

A member who delays DROP participation during the 12-month period immediately following his or her maximum DROP deferral date, except as provided in subparagraphs 6.

and 7.

subparagraph 6., loses a month of DROP participation for each month delayed.

The beginning date may be subsequent to the 12-month election period but must be within the original 96-month60-month 60- month participation period provided in subparagraph (b)1.

Simultaneous employment of a member by additional PageFlorida 9ofRetirement 43System CODING:employers subsequent to the commencement of a member's participation in DROP is permissible if such employers acknowledge in writing a DROP termination date no later than the member's existing termination date or the maximum participation period provided in subparagraph (b)1.

5.

A member may change employers while participating in Page 8of 16 CODING:

hb0239-02-c2hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239CS/HB239 2023 FloridaDROP, Retirementsubject System employers subsequent to the commencementfollowing: of a member's participation in DROP is permissible if such employers acknowledge in writing a DROP termination date no later than the member's existing termination date or the maximum participation period provided in subparagraph (b)1.

5.

A member may change employers while participating in DROP, subject to the following:

1012.01(2), election to participate in DROP may be made at any time following the date on which the member first Pagereaches 10normal of43retirement CODING:date.

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 reaches normal retirement date.

When establishing eligibility of the member to participate in DROP for the 96-month 60-month participation period provided in subparagraph (b)1., the member may elect to include or exclude any optional service credit purchased by the member fromPage the9of total16 serviceCODING: used to establish the normal retirement date.

A member who has dual normal retirement dates is eligible to elect to participate in either class.

7.

Effective July 1, 2023, election to participate in DROP may be made at any time following the date on which the member first reaches normal retirement date.

The member shall advise his or her employer and the division in writing of the date on which DROP begins.

When establishing eligibility of the member to participate in DROP for the 96-month participation period provided in paragraph (b), the member may elect to include or exclude any optional service credit purchased by the member from the total service used to establish the normal retirement date.

A member who has dual normal retirement dates is eligible to participate in either class.

(b) Participation in DROP.—Except as provided in this paragraph, an eligible member may elect to participate in DROP for a period not to exceed a maximum of 96 60 calendar months.

1.a.

Members who are instructional personnel employed by the Florida School for the Deaf and the Blind and authorized by Page 11 of43 CODING:

hb0239-02-c2hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239CS/HB239 2023 thefrom Board of Trustees of the Floridatotal Schoolservice forused theto Deafestablish and the Blind,normal whoretirement aredate. instructional personnel as defined in s.

1012.01(2)(a)-(d)A inmember gradeswho K-12has anddual authorizednormal byretirement thedates districtis schooleligible superintendent,to orelect whoto areparticipate instructional personnel as defined in s.either class.

1012.01(2)(a)Section employed3. by a developmental research school and authorized by the school's director, or if the school has no director, by the school's principal, may extend DROP participation participate in DROP for up to 36 calendar months beyond the 60-month period.

Effective July 1, 2018, instructional personnel who are authorized to extend DROP participation beyond the 60-month period must have a termination date that is the last day of the last calendar month of the school year within the DROP extension granted by the employer.

If, on July 1, 2018, the member's DROP participation has already been extended for the maximum 36 calendar months and the extension period concludes before the end of the school year, the member's DROP participation may be extended through the last day of the last calendar month of that school year if the 96 calendar months of DROP participation concludes before the end of the school year.

The employer shall notify the division of the change in termination date and the additional period of DROP participation for the affected instructional personnel.

b.

Administrative personnel in grades K-12, as defined in s.

1012.01(3), who have a DROP termination date on or after July 1, 2018, may be authorized to extend DROP participation beyond Page 12 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 the initial 96 60 calendar month period if the administrative personnel's termination date is before the end of the school year.

Such administrative personnel may have DROP participation extended until the last day of the last calendar month of the school year in which their original DROP termination date occurred if a date other than the last day of the last calendar month of the school year is designated.

The employer shall notify the division of the change in termination date and the additional period of DROP participation for the affected administrative personnel.

c.

Effective July 1, 2022, a member of the Special Risk Class who is a law enforcement officer who meets the criteria in s.

121.0515(3)(a) and who is a DROP participant on or after July 1, 2022, may participate in DROP for up to 36 calendar months beyond the 60-month period if he or she enters DROP on or before June 30, 2028.

2.

Upon deciding to participate in DROP, the member shall submit, on forms required by the division:

a.

A written election to participate in DROP;

b.

Selection of DROP participation and termination dates that satisfy the limitations stated in paragraph (a) and subparagraph 1.

The termination date must be in a binding letter of resignation to the employer establishing a deferred termination date.

The member may change the termination date within the limitations of subparagraph 1., but only with the Page 13 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 written approval of the employer;

c.

A properly completed DROP application for service retirement as provided in this section;

and d.

Any other information required by the division.

3.

The DROP participant is a retiree under the Florida Retirement System for all purposes, except for paragraph (5)(f) and subsection (9) and ss.

112.3173, 112.363, 121.053, and 121.122.

DROP participation is final and may not be canceled by the participant after the first payment is credited during the DROP participation period.

However, participation in DROP does not alter the participant's employment status, and the member is not deemed retired from employment until his or her deferred resignation is effective and termination occurs as defined in s.

121.021.

4.

Elected officers are eligible to participate in DROP subject to the following:

a.

An elected officer who reaches normal retirement date during a term of office may defer the election to participate until the next succeeding term in that office.

An elected officer who exercises this option may participate in DROP for up to 96 60 calendar months or no longer than the succeeding term of office, whichever is less.

b.

An elected or a nonelected participant may run for a term of office while participating in DROP and, if elected, extend the DROP termination date accordingly;

however, if such Page 14 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 additional term of office exceeds the 96-month 60-month limitation established in subparagraph 1., and the officer does not resign from office within such 96-month 60-month limitation, the retirement and the participant's DROP is null and void as provided in sub-subparagraph (c)5.d.

c.

An elected officer who is dually employed and elects to participate in DROP must terminate all employment relationships as provided in s.

121.021(39) for the nonelected position within the original 96-month 60-month period or maximum participation period as provided in subparagraph 1.

For DROP participation ending:

(I) Before July 1, 2010, the officer may continue employment as an elected officer as provided in s.

121.053.

The elected officer shall be enrolled as a renewed member in the Elected Officers' Class or the Regular Class, as provided in ss.

121.053 and 121.122, on the first day of the month after termination of employment in the nonelected position and termination of DROP.

Distribution of the DROP benefits shall be made as provided in paragraph (c).

(II) On or after July 1, 2010, the officer may continue employment as an elected officer but must defer termination as provided in s.

121.053.

(c) Benefits payable under DROP.— 1.

Effective on the date of DROP participation, the member's initial normal monthly benefit, including creditable Page 15 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 service, optional form of payment, and average final compensation, and the effective date of retirement are fixed.

The beneficiary established under the Florida Retirement System is the beneficiary eligible to receive any DROP benefits payable if the DROP participant dies before completing the period of DROP participation.

If a joint annuitant predeceases the member, the member may name a beneficiary to receive accumulated DROP benefits payable.

The retirement benefit, the annual cost of living adjustments provided in s.

121.101, and interest accrue monthly in the Florida Retirement System Trust Fund.

For members whose DROP participation begins:

a.

Before July 1, 2011, the interest accrues at an effective annual rate of 6.5 percent compounded monthly, on the prior month's accumulated ending balance, up to the month of termination or death, except as provided in s.

121.053(7).

b.

On or after July 1, 2011, through June 30, 2023, the interest accrues at an effective annual rate of 1.3 percent, compounded monthly, on the prior month's accumulated ending balance, up to the month of termination or death, except as provided in s.

121.053(7).

c.

On or after July 1, 2023, the interest accrues at an effective annual rate of 4 percent, compounded monthly, on the prior month's accumulated ending balance, up to the month of termination or death, except as provided in s.

121.053(7).

2.

Each employee who elects to participate in DROP may Page 16 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 elect to receive a lump-sum payment for accrued annual leave earned in accordance with agency policy upon beginning participation in DROP.

The accumulated leave payment certified to the division upon commencement of DROP shall be included in the calculation of the member's average final compensation.

The employee electing the lump-sum payment is not eligible to receive a second lump-sum payment upon termination, except to the extent the employee has earned additional annual leave which, combined with the original payment, does not exceed the maximum lump-sum payment allowed by the employing agency's policy or rules.

An early lump-sum payment shall be based on the hourly wage of the employee at the time he or she begins participation in DROP.

If the member elects to wait and receive a lump-sum payment upon termination of DROP and termination of employment with the employer, any accumulated leave payment made at that time may not be included in the member's retirement benefit, which was determined and fixed by law when the employee elected to participate in DROP.

3.

The effective date of DROP participation and the effective date of retirement of a DROP participant shall be the first day of the month selected by the member to begin participation in DROP, provided such date is properly established, with the written confirmation of the employer, and the approval of the division, on forms required by the division.

4.

Normal retirement benefits and any interest continue to Page 17 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 accrue in DROP until the established termination date of DROP or until the member terminates employment or dies before such date, except as provided in s.

121.053(7).

Although individual DROP accounts may not be established, a separate accounting of each member's accrued benefits under DROP shall be calculated and provided to the member.

5.

At the conclusion of the member's participation in DROP, the division shall distribute the member's total accumulated DROP benefits, subject to the following:

a.

The division shall receive verification by the member's employer or employers that the member has terminated all employment relationships as provided in s.

121.021(39).

b.

The terminated DROP participant or, if deceased, the member's named beneficiary, shall elect on forms provided by the division to receive payment of the DROP benefits in accordance with one of the options listed below.

If a member or beneficiary fails to elect a method of payment within 60 days after termination of DROP, the division shall pay a lump sum as provided in sub-sub-subparagraph (I).

(I) Lump sum.—All accrued DROP benefits, plus interest, less withholding taxes remitted to the Internal Revenue Service, shall be paid to the DROP participant or surviving beneficiary.

(II) Direct rollover.—All accrued DROP benefits, plus interest, shall be paid from DROP directly to the custodian of an eligible retirement plan as defined in s.

402(c)(8)(B) of the Page 18 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 Internal Revenue Code.

However, in the case of an eligible rollover distribution to the surviving spouse of a deceased member, an eligible retirement plan is an individual retirement account or an individual retirement annuity as described in s.

402(c)(9) of the Internal Revenue Code.

(III) Partial lump sum.—A portion of the accrued DROP benefits shall be paid to DROP participant or surviving spouse, less withholding taxes remitted to the Internal Revenue Service, and the remaining DROP benefits must be transferred directly to the custodian of an eligible retirement plan as defined in s.

402(c)(8)(B) of the Internal Revenue Code.

However, in the case of an eligible rollover distribution to the surviving spouse of a deceased member, an eligible retirement plan is an individual retirement account or an individual retirement annuity as described in s.

402(c)(9) of the Internal Revenue Code.

The proportions must be specified by the DROP participant or surviving beneficiary.

c.

The form of payment selected by the DROP participant or surviving beneficiary must comply with the minimum distribution requirements of the Internal Revenue Code.

d.

A DROP participant who fails to terminate all employment relationships as provided in s.

121.021(39) shall be deemed as not retired, and the DROP election is null and void.

Florida Retirement System membership shall be reestablished retroactively to the date of the commencement of DROP, and each Page 19 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 employer with whom the member continues employment must pay to the Florida Retirement System Trust Fund the difference between the DROP contributions paid in paragraph (i) and the contributions required for the applicable Florida Retirement System class of membership during the period the member participated in DROP, plus 6.5 percent interest compounded annually.

6.

The retirement benefits of any DROP participant who terminates all employment relationships as provided in s.

121.021(39) but is reemployed in violation of the reemployment provisions of subsection (9) are suspended during those months in which the retiree is in violation.

Any retiree in violation of this subparagraph and any employer that employs or appoints such person without notifying the division to suspend retirement benefits are jointly and severally liable for any benefits paid during the reemployment limitation period.

The employer must have a written statement from the retiree that he or she is not retired from a state-administered retirement system.

Any retirement benefits received by a retiree while employed in violation of the reemployment limitations must be repaid to the Florida Retirement System Trust Fund, and his or her retirement benefits shall remain suspended until payment is made.

Benefits suspended beyond the end of the reemployment limitation period apply toward repayment of benefits received in violation of the reemployment limitation.

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 7.

The accrued benefits of any DROP participant, and any contributions accumulated under the program, are not subject to assignment, execution, attachment, or any legal process except for qualified domestic relations court orders, income deduction orders as provided in s.

61.1301, and federal income tax levies.

8.

DROP participants are not eligible for disability retirement benefits as provided in subsection (4).

(d) Death benefits under DROP.— 1.

Upon the death of a DROP participant, the named beneficiary is entitled to apply for and receive the accrued benefits in DROP as provided in sub-subparagraph (c)5.b.

2.

The normal retirement benefit accrued to DROP during the month of a participant's death is the final monthly benefit credited for such DROP participant.

3.

Eligibility to participate in DROP terminates upon death of the participant.

If the participant dies on or after the effective date of enrollment in DROP, but before the first monthly benefit is credited to DROP, Florida Retirement System benefits are paid in accordance with subparagraph (7)(c)1.

or subparagraph 2.

4.

A DROP participant's survivors are not eligible to receive Florida Retirement System death benefits as provided in paragraph (7)(d).

(e) Cost-of-living adjustment.—On each July 1, the participant's normal retirement benefit shall be increased as Page 21 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 provided in s.

121.101.

(f) Retiree health insurance subsidy.—DROP participants are not eligible to apply for the retiree health insurance subsidy payments as provided in s.

112.363 until such participants have terminated employment and participation in DROP.

(g) Renewed membership.—DROP participants are not eligible for renewed membership in the Florida Retirement System under ss.

121.053 and 121.122 until all employment relationships are terminated as provided in s.

121.021(39).

(h) Employment limitation after DROP participation.—Upon termination as defined in s.

121.021, DROP participants are subject to the same reemployment limitations as other retirees.

Reemployment restrictions applicable to retirees as provided in subsection (9) do not apply to DROP participants until their employment and participation in DROP are terminated.

(i) Contributions.— 1.

All employers paying the salary of a DROP participant filling a regularly established position shall contribute 8.0 percent of such participant's gross compensation for the period of July 1, 2002, through June 30, 2003, and the percentage of such compensation required by s.

121.71 thereafter, which shall constitute the entire employer DROP contribution with respect to such participant.

Such contributions, payable to the Florida Retirement System Trust Fund in the same manner as required in Page 22 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 s.

121.071, must be made as appropriate for each pay period and are in addition to contributions required for social security and the Retiree Health Insurance Subsidy Trust Fund.

Such employer, social security, and health insurance subsidy contributions are not included in DROP.

2.

The employer shall, in addition to subparagraph 1., also withhold one-half of the entire social security contribution required for the participant.

Contributions for social security by each participant and each employer, in the amount required for social security coverage as provided by the federal Social Security Act, are in addition to contributions specified in subparagraph 1.

3.

All employers paying the salary of a DROP participant filling a regularly established position shall contribute the percent of such participant's gross compensation required in s.

121.071(4), which constitutes the employer's health insurance subsidy contribution with respect to such participant.

Such contributions must be deposited by the administrator in the Retiree Health Insurance Subsidy Trust Fund.

(j) Forfeiture of retirement benefits.—This section does not remove DROP participants from the scope of s.

8(d), Art.

II of the State Constitution, s.

112.3173, and paragraph (5)(f).

DROP participants who commit a specified felony offense while employed are subject to forfeiture of all retirement benefits, including DROP benefits, pursuant to those provisions of law.

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 (k) Administration of program.—The division shall adopt rules as necessary for the effective and efficient administration of this subsection.

The division is not required to advise members of the federal tax consequences of an election related to the DROP but may advise members to seek independent advice.

Section 4.

Subsection (5) of section 121.101, Florida Statutes, is amended, and subsection (3) of that section is republished, to read:

121.101 Cost-of-living adjustment of benefits.— (3) Commencing July 1, 1987, the benefit of each retiree and annuitant whose effective retirement date is before July 1, 2011, shall be adjusted annually on July 1 as follows:

(a) For those retirees and annuitants who have never received a cost-of-living adjustment under this section, the amount of the monthly benefit payable for the 12-month period commencing on the adjustment date shall be the amount of the member's initial benefit plus an amount equal to a percentage of the member's initial benefit;

this percentage is derived by dividing the number of months the member has received an initial benefit by 12, and multiplying the result by 3.

(b) For those retirees and annuitants who have received a cost-of-living adjustment under this subsection, the adjusted monthly benefit shall be the amount of the monthly benefit being received on June 30 immediately preceding the adjustment date Page 24 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 plus an amount equal to 3 percent of this benefit.

(5) Notwithstanding subsection (4), beginning on July 1, 2023, and each July 1 thereafter, the cost-of-living benefit of each retiree and annuitant shall be adjusted Subject to the availability of funding and the Legislature enacting sufficient employer contributions specifically for the purpose of funding the expiration of the cost-of-living adjustment specified in subsection (4), in accordance with s.

14, Art.

X of the State Constitution, the cost-of-living adjustment formula provided for in subsection (4) shall expire effective June 30, 2016, and the benefit of each retiree and annuitant shall be adjusted on each July 1 thereafter, as provided in subsection (3).

Section 5.

A member may not transfer Pagethe 25accumulated of43benefit CODING:obligation balance from the pension plan after the time period for enrolling in the investment plan has expired.

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 the accumulated benefit obligation balance from the pension plan after the time period for enrolling in the investment plan has expired.

For state employees, initial estimates shall be based upon creditable service and average finalPage compensation10 asof16 ofCODING: midnight on June 30, 2002;

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hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB239 2023 final compensation as of midnight on June 30, 2002;

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 c.

or (B) The age the member would attain if the member completed 30 years of service with an employer, assuming the member worked continuously from the estimate date, and disregardingPage any11 vestingof16 requirementCODING: that would otherwise apply under the pension plan.

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hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB239 2023 disregarding any vesting requirement that would otherwise apply under the pension plan.

(I) Initially enrolled before July 1, 2011, the benefit commencement age is the younger of the following, but may not be Pageyounger 27than of43the CODING:member's age as of the estimate date:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 younger than the member's age as of the estimate date:

(II) Initially enrolled on or after July 1, 2011, the benefit commencement age is the younger of the following, but mayPage not12 beof16 youngerCODING: than the member's age as of the estimate date:

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hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB239 2023 may not be younger than the member's age as of the estimate date:

within 60 days after the actual transfer of funds based upon the member's actual creditable service and Pageactual 28final of43average CODING:compensation as of the initial date of participation in the investment plan.

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 actual final average compensation as of the initial date of participation in the investment plan.

Transfer, or cause to be transferred, from the Florida Retirement System Trust Fund to the member's account the excess, if any, of the recomputed amount over the previously transferred amount together with interest from the initial date of transfer to the date of transfer under this subparagraph, based upon the effectivePage annual13 interestof16 equalCODING: to the assumed return on the actuarial investment which was used in the most recent actuarial valuation of the system, compounded annually.

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hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB239 2023 effective annual interest equal to the assumed return on the actuarial investment which was used in the most recent actuarial valuation of the system, compounded annually.

However, a return Pageof 29such of43erroneous CODING:excess pretax contribution by the plan must be made within the period allowed by the Internal Revenue Service.

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 of such erroneous excess pretax contribution by the plan must be made within the period allowed by the Internal Revenue Service.

As directed by the member, the state board shall transfer or cause to be transferred the appropriate amounts to the designated accounts within 30 days after the effective date of the member's participation in the investment plan unless the major financial markets for securities available for a transfer arePage seriously14 disruptedof16 byCODING: an unforeseen event that causes the suspension of trading on a national securities exchange in the country where the securities were issued.

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hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB239 2023 are seriously disrupted by an unforeseen event that causes the suspension of trading on a national securities exchange in the country where the securities were issued.

PageSection 304. of43 CODING:

Members of the Special Risk Class of the Florida Retirement System who have not reached eligibility for participation in the Deferred Retirement Option Program (DROP) and who would be past their 12-month DROP election limitation period upon enactment of this act may apply for participation in DROP within the 12 months immediately following the effective date of this act.

Section 5.

The Legislature finds that a proper and legitimate state purpose is served when employees and retirees Page 15 of16 CODING:

hb0239-02-c2hb0239-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239CS/HB239 2023 Sectionof 6.the state and its political subdivisions, and the dependents, survivors, and beneficiaries of such employees and retirees, are extended the basic protections afforded by governmental retirement systems that provide fair and adequate benefits and that are managed, administered, and funded in an actuarially sound manner as required by s.

Subsections14, (4)Art. and (5) of section 121.71, Florida Statutes, are amended to read:

121.71X Uniformof rates;the State Constitution and part VII of chapter 112, Florida Statutes.

process;

calculations;

levy.— (4) Required employer retirement contribution rates for each membership class and subclass of the Florida Retirement System for both retirement plans are as follows:

Percentage of Gross Compensation, Effective Membership Class July 1, 2023 2022 Regular Class 8.07% 5.96% Special Risk Class 24.47% 16.44% Special Risk Administrative Support Class 13.77% 10.77% Elected Officers' Class— Legislators, Governor, 11.72% 9.31% Page 31 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 Lt.

Governor, Cabinet Officers, State Attorneys, Public Defenders Elected Officers' Class— Justices, Judges 18.21% 14.41% Elected Officers' Class— County Elected Officers 14.03% 11.30% Senior Management Service Class 9.95% 7.70% DROP 11.63% 7.79% (5) In order to address unfunded actuarial liabilities of the system, the required employer retirement contribution rates for each membership class and subclass of the Florida Retirement System for both retirement plans are as follows:

Percentage of Gross Compensation, Effective Membership Class July 1, 2023 2022 Page 32 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 Regular Class 7.84% 4.23% Special Risk Class 19.51% 9.67% Special Risk Administrative Support Class 32.83% 26.16% Elected Officers' Class— Legislators, Governor, Lt.

Governor, Cabinet Officers, State Attorneys, Public Defenders 54.55% 56.76% Elected Officers' Class— Justices, Judges 33.80% 27.64% Elected Officers' Class— County Elected Officers 48.77% 43.98% Senior Management Service Class 28.42% 22.15% Page 33 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 DROP 16.46% 9.15% Section 7.

Subsection (6) of section 121.72, Florida Statutes, is amended, and subsection (7) is added to that section, to read:

121.72 Allocations to investment plan member accounts;

percentage amounts.— (6) Effective July 1, 2022, through June 30, 2023, allocations from the Florida Retirement System Contributions Clearing Trust Fund to investment plan member accounts are as follows:

Membership Class Percentage of Gross Compensation Regular Class 9.30% Special Risk Class 17.00% Special Risk Administrative Support Class 10.95% Page 34 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 Elected Officers' Class— Legislators, Governor, Lt.

Governor, Cabinet Officers, State Attorneys, Public Defenders 12.38% Elected Officers' Class— Justices, Judges 16.23% Elected Officers' Class— County Elected Officers 14.34% Senior Management Service Class 10.67% (7) Effective July 1, 2023, allocations from the Florida Retirement System Contributions Clearing Trust Fund to investment plan member accounts are as follows:

Membership Class Percentage of Gross Compensation Regular Class 10.30% Page 35 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 Special Risk Class 18.00% Special Risk Administrative Support Class 11.95% Elected Officers' Class— Legislators, Governor, Lt.

Governor, Cabinet Officers, State Attorneys, Public Defenders 13.38% Elected Officers' Class— Justices, Judges 17.23% Elected Officers' Class— County Elected Officers 15.34% Senior Management Service Class 11.67% Section 8.

Section 121.73, Florida Statutes, is amended to read:

121.73 Allocations for member disability coverage;

percentage amounts.— (1) The allocations established in this section subsection (3) shall be used to provide disability coverage for members in the investment plan and shall be transferred monthly by the Division of Retirement from the Florida Retirement System Page 36 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 Contributions Clearing Trust Fund to the disability account of the Florida Retirement System Trust Fund.

(2) The allocations are stated as a percentage of each investment plan member's gross compensation for the calendar month.

A change in a contribution percentage is effective the first day of the month for which retirement contributions may be made on or after the beginning date of the change.

Contribution percentages may be modified by general law.

(3) Effective July 1, 2002, through June 30, 2023, allocations from the Florida Retirement System Contributions Clearing Trust Fund to provide disability coverage for members in the investment plan, and to offset the costs of administering said coverage, are as follows:

Membership Class Percentage of Gross Compensation Regular Class 0.25% Special Risk Class 1.33% Special Risk Administrative Support Class 0.45% Page 37 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 Elected Officers' Class— Legislators, Governor, Lt.

Governor, Cabinet Officers, State Attorneys, Public Defenders 0.41% Elected Officers' Class— Justices, Judges 0.73% Elected Officers' Class— County Elected Officers 0.41% Senior Management Service Class 0.26% (4) Effective July 1, 2023, allocations from the Florida Retirement System Contributions Clearing Trust Fund to provide disability coverage for members in the investment plan, and to offset the costs of administering said coverage, are as follows:

Membership Class Percentage of Gross Compensation Page 38 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 Regular Class 0.27% Special Risk Class 1.61% Special Risk Administrative Support Class 0.47% Elected Officers' Class— Legislators, Governor, Lt.

Governor, Cabinet Officers, State Attorneys, Public Defenders 0.46% Elected Officers' Class— Justices, Judges 0.77% Elected Officers' Class— County Elected Officers 0.44% Senior Management Service Class 0.29% Section 9.

Section 121.735, Florida Statutes, is amended to read:

121.735 Allocations for member line-of-duty death benefits;

percentage amounts.— (1) The allocations established in this section subsection (3) shall be used to provide line-of-duty death benefit coverage Page 39 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 for members in the investment plan and shall be transferred monthly by the division from the Florida Retirement System Contributions Clearing Trust Fund to the survivor benefit account of the Florida Retirement System Trust Fund.

(2) Such allocations are stated as a percentage of each investment plan member's gross compensation for the calendar month.

Any change in a contribution percentage is effective the first day of the month for which retirement contributions may be made on or after the beginning date of the change.

Contribution percentages may be modified by general law.

(3) Before July 1, 2023, allocations from the Florida Retirement System Contributions Clearing Trust Fund to provide line-of-duty death benefits for members in the investment plan, and to offset the costs of administering said coverage, are as follows:

Membership Class Percentage of Gross Compensation Regular Class 0.05% Special Risk Class 1.21% Page 40 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 Special Risk Administrative Support Class 0.03% Elected Officers' Class— Legislators, Governor, Lt.

Governor, Cabinet Officers, State Attorneys, Public Defenders 0.15% Elected Officers' Class— Justices, Judges 0.09% Elected Officers' Class— County Elected Officers 0.20% Senior Management Service Class 0.05% (4) Effective July 1, 2023, allocations from the Florida Retirement System Contributions Clearing Trust Fund to provide line-of-duty death benefits for members in the investment plan, and to offset the costs of administering said coverage, are as follows:

Membership Class Percentage of Gross Compensation Page 41 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 Regular Class 0.06% Special Risk Class 1.34% Special Risk Administrative Support Class 0.03% Elected Officers' Class— Legislators, Governor, Lt.

Governor, Cabinet Officers, State Attorneys, Public Defenders 0.15% Elected Officers' Class— Justices, Judges 0.10% Elected Officers' Class— County Elected Officers 0.21% Senior Management Service Class 0.06% Section 10.

The Legislature finds that a proper and legitimate state purpose is served when employees and retirees of the state and its political subdivisions, and the dependents, Page 42 of43 CODING:

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hb0239-02-c2 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/CS/HB239 2023 survivors, and beneficiaries of such employees and retirees, are extended the basic protections afforded by governmental retirement systems.

These persons must be provided benefits that are fair and adequate and that are managed, administered, and funded in an actuarially sound manner, as required by s.

14, Article X of the State Constitution and part VII of chapter 112, Florida Statutes.

Section 11.6.

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hb0239-02-c2hb0239-01-c1