FL H1309

Renames the "Florida Retirement System Investment Plan" to the "Public Employee Optional Retirement Program" and replaces terminology throughout, changing "pension plan" to "defined benefit program," "investment plan" to "defined contribution retirement program," and "member" to "participant" for defined contribution participants.

Eliminates the 3% employee retirement contribution requirement established July 1, 2011, for all FRS membership classes, and requires reimbursement of employee contributions plus interest (at the actuarial assumption rate) made between July 1, 2011, and June 30, 2012.

Restores uniform retirement eligibility standards by removing the separate, less favorable tier created for members enrolled on or after July 1, 2011: normal retirement returns to age 62 with 6 years of service or 30 years regardless of age for Regular Class (previously age 65/33 years for newer members), and age 55 with 6 years or 25 years of service for Special Risk Class (previously age 60/30 years).

Restores the 6-year vesting requirement for all defined benefit program members by eliminating the 8-year vesting requirement imposed on members initially enrolled on or after July 1, 2011, and standardizes the 6-year creditable service threshold for purchasing out-of-state, federal, and in-state service credit.

Restores the 6.5% effective annual interest rate on Deferred Retirement Option Program (DROP) accounts for all participants, eliminating the reduced 1.3% rate that applied to members whose DROP participation began on or after July 1, 2011.

Restores the 3% annual cost-of-living adjustment (COLA) for all retirees by deleting the reduced COLA formula (prorated based on pre- and post-July 1, 2011 service) and its scheduled June 30, 2016 expiration.

Establishes new employer-only contribution rate schedules effective July 1, 2012, and July 1, 2013 (e.g., Regular Class increases from 8.69% to 9.63%; Special Risk Class from 19.76% to 22.11%; Senior Management from 11.96% to 13.43%), while deleting the separate unfunded actuarial liability contribution rate table.

Sets employer contributions for the State University System Optional Retirement Program and State Community College System Optional Retirement Program at a flat 10.43% of gross monthly compensation, and for the Senior Management Service Optional Annuity Program at 12.49%, removing provisions that reduced employer shares by employee contribution amounts.

Removes prohibitions on pre-termination distributions for hardships, emergencies, loans, medical/educational expenses, home purchases, and eviction/foreclosure prevention across multiple optional retirement programs, and deletes the 3-calendar-month termination waiting period for receiving contribution refunds.

The act takes effect July 1, 2012, with a legislative finding that it fulfills an important state interest by ensuring benefits are fair, adequate, and managed in an actuarially sound manner as required by Article X, Section 14 of the State Constitution.