Title: Cost-of-living Adjustment for Special Risk Class Retirees

Summary: Revising the manner of calculating the cost-of-living factor for Special Risk Class retirees, and their beneficiaries, who meet certain criteria; revising required employer contribution rates for the Special Risk Class and the Deferred Retirement Option Program in the Florida Retirement System to fund benefit changes made by the act, etc.

Full Text:
An act relating to cost-of-living adjustment for Special Risk Class retirees; amending s. 121.101, F.S.; revising the manner of calculating the cost-of living factor for Special Risk Class retirees, and their beneficiaries, who meet certain criteria; revising required employer contribution rates for the Special Risk Class and the Deferred Retirement Option Program in the Florida Retirement System to fund benefit changes made by the act; directing the Division of Law Revision to adjust the employer contribution rates with any other rate changes; providing a declaration of important state interest; providing an effective date. Be It Enacted by the Legislature of the State of Florida: Section 1. Paragraph (c) of subsection (4) of section 121.101, Florida Statutes, is amended to read: 121.101 Cost-of-living adjustment of benefits.  (4) For members whose effective retirement date is on or after July 1, 2011, the benefit of each retiree and annuitant shall be adjusted annually on July as follows: (c) The department shall calculate a cost-of-living factor for each retiree and beneficiary retiring on or after July 1, 2011. This factor shall equal the product of percent multiplied by the quotient of the sum of the member s service credit earned for service before July 1, 2011, divided by the sum of the member s total service credit earned. However, beginning July 1, 2020, the cost-of-living factor for each retiree,and the beneficiary of such a retiree, who was a member of the Special Risk Class on June 30, 2011, is a member of the Special Risk Class on the effective date of retirement,who retires on or after July 1, 11, and has earned service credit before July 1, 2011, shall equal the product of percent multiplied by the quotient of the sum of the member s service credit earned for service before July 1, 2011, divided by the sum of the member s total service credit earned as of June 30, 2020. Section 2.  (1) In order to fund the benefit changes provided in this act, the required employer contribution rates for members of the Florida Retirement System are increased as follows: (a) By 0.39 percentage points for the rate established in s. 121.71(4), Florida Statutes, for the Special Risk Class. (b) By 0.63 percentage points for the rate established in s. 121.71(5), Florida Statutes, for the Special Risk Class. (c) By 0.08 percentage points for the rate established in s. 121.71(4), Florida Statutes, for DROP. (2) The adjustments provided in subsection (1) are in addition to any other changes to such contribution rates which may be enacted into law to take effect on July 1, 2020. The Division of Law Revision is directed to adjust accordingly the contribution rates provided in s. 121.71, Florida Statutes. Section 3.  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, 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 Xof the State Constitution and part VII of chapter 112, Florida Statutes. Therefore, the Legislature determines and declares that this act fulfills an important state interest. Section 4. This act shall take effect July 1, 2020.