To update the new contribution rates in accordance with 2014 legislation.

 

DEPARTMENT OF MANAGEMENT SERVICES

Senior Management Service Optional Annuity Program

RULE NOS.:RULE TITLES:

60V-2.001Scope and Purpose

60V-2.002Statements of Policy

60V-2.003Employer Contributions

PURPOSE AND EFFECT: To update the new contribution rates in accordance with 2014 legislation.

SUMMARY: SUMMARY: Bring contribution rates up to date.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION: The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: Not required because there are no adverse impacts on economic growth, business competitiveness or regulatory costs of more than $1M in the aggregate within five years of implementation.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 112.363, 121.031(1) FS.

LAW IMPLEMENTED: 112.363, 121.055, 121.35 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW (IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: Wednesday, January 21, 2015, 10:30 a.m.

PLACE: Division of Retirement of the Department of Management Services, 2450 Shumard Oak Blvd., Bldg. 2, Room 2-1460, Tallahassee, FL

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Beth Rissinger, Operation and Pension Analyst, Division of Retirement, Department of Management Services at [phone]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Garry Green, Operations and Management Consultant Manager, Department of Management Services, Division of Retirement, 2450 Shumard Oak Blvd., Bldg. 2, Room 2-1460, Tallahassee, FL, [phone]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

60V-2.001 Scope and Purpose.

This chapter sets forth the rules and regulations governing employer and employee contributions for members participants in the Senior Management Service Optional Annuity Program (SMSOAP).

Rulemaking Specific Authority 121.031(1) FS. Law Implemented 121.055 FS. History–New 7-22-87, Amended 9-8-92, Formerly 22V-2.001,_________.

 

60V-2.003 Employer Contributions.

(1) The employer shall contribute on behalf of each SMSOAP member Optional Annuity Program participant a percentage of the member’s participant’s gross compensation. Prior to July 1, 2001, such percentage shall to be equal to the retirement contribution rate required for Senior Management Service Class members of the Florida Retirement System in accordance with subsections 121.055(3), F.S, and Effective July 1, 2001, and after, such percentage will be as specified in subsection 121.055(6), F.S. Retirement contributions shall not be made on fiscal year compensation in excess of the Internal Revenue Code (IRC) Section 401(a)(17) limitation as follows:

(a) For any person who first became a SMSOAP member participant before July 1, 1996, compensation for all plan years beginning on or after July 1, 1990, shall not include any amounts in excess of the maximum of $200,000 in 1989, adjusted for changes in the cost of living;

(b) For any person who first became a SMSOAP member participant on or after July 1, 1996, compensation for any plan year shall not include any amounts in excess of the maximum of $150,000 in 1996, adjusted for changes in the cost of living only in increments of $10,000.

(c) Such retirement contribution rate shall be:

DatesRate

February 1, 1987 through December 31, 198813.88%

January 1, 1989 through December 31, 198914.95%

January 1, 1990 through December 31, 199016.04%

January 1, 1991 through December 31, 199118.39%

January 1, 1992 through December 31, 199219.48%

January 1, 1993 through December 31, 199320.55%

January 1, 1994 through December 31, 199423.07%

January 1, 1995 through December 31, 199523.88%

January 1, 1996 through June 30, 199624.14%

July 1, 1996, through June 30, 199821.58%

July 1, 1998, through June 30, 199923.10%

July 1, 1999, through June 30, 200011.19%

July 1, 2000, through June 30, 201111.55%

July 1, 2011, through June 30, 20128.87%

July 1, 2012, through June 30, 201317.60%

Effective July 1, 201420.37%

(d) The retirement contribution rate shall be distributed as follows:

1. For the purchase of the SMSOAP member’s participant’s investment annuity contract –

DatesRate

February 1, 1987 through December 31, 19887.48%

January 1, 1989 through December 31, 199011.96%

January 1, 1991 through December 31, 199312.40%

January 1, 1994 through December 31, 199412.62%

January 1, 1995 through December 31, 199512.89%

January 1, 1996 through June 30, 199612.86%

July 1, 1996 through June 30, 199812.85%

July 1, 1998 through June 30, 201112.49%

July 1, 2011 through June 30, 20129.49%

Effective July 12, 20126.27%

2. For transfer to the Florida Retirement System Trust Fund to help amortize the unfunded actuarial liability of the Florida Retirement System –

DatesRate

February 1, 1987 through December 31, 19886.40%

January 1, 1989 through December 31, 19892.99%

January 1, 1990 through December 31, 19904.08%

January 1, 1991 through December 31, 19915.99%

January 1, 1992 through December 31, 19927.08%

January 1, 1993 through December 31, 19938.15%

January 1, 1994 through December 31, 199410.45%

January 1, 1995 through December 31, 199510.99%

January 1, 1996 through June 30, 199611.28%

July 1, 1996 through June 30, 19988.73%

July 1, 1998 through June 30, 199910.61%

July 1, 1999 through June 30, 20110%

July 1, 2011 through June 30, 20130.32%

July 1, 2013 through June 30, 201412.27%

Effective July 1, 201415.04%

(2) In addition to the above retirement contribution each employer shall contribute on behalf of the SMSOAP member Optional Annuity Program participant a percentage of the SMSOAP member’s participant’s gross compensation equal to the contribution rate required for active members of state-administered retirement systems for the Retiree Health Insurance Subsidy. The total amount of such contribution rate shall be applied to the purchase of the SMSOAP member’s investment participant’s annuity contract. The contribution rate shall be:

DatesRate

October 1, 1987 through December 31, 19880.24%

January 1, 1989 through December 31 19930.48%

January 1, 1994 through December 31 19940.56%

January 1, 1995 through December 31, 19980.66%

Effective January 1, 19990.94%

(3) Contributions required for social security by the employer and each SMSOAP member participant, in the amount required for social security coverage as provided by the Federal Social Security Act, shall be submitted for each SMSOAP member participant in the Optional Annuity Program.

(4) The SMSOAP member participant shall designate on Form SMS-1 the provider company to which the employer contribution is to be forwarded and the percentage to be paid to each company. The total percentage designated to the provider company shall equal the employer contribution rates as specified in subparagraph 60V-2.003(1)(b)1. and (2), F.A.C.

(5) A SMSOAP member participant in the Optional Annuity Program may redirect future employer contributions to the provider companies as follows:

(a) Each SMSOAP member participant shall sign a contract with the provider company indicating the portion of the employer contribution to be contributed to that company.

(b) The SMSOAP member participant shall complete a new Form SMS-1 indicating the contract change and file such form with the employer’s personnel office along with verification of having signed a contract.

(c) through (d) No change.

Rulemaking Specific Authority 112.363(7), 121.031(1) FS. Law Implemented 112.363, 121.055 FS. History–New 7-22-87, Amended 5-18-88, 2-7-89, 5-15-91, Formerly 22V-2.003, Amended 8-4-94, 3-12-96, 12-12-96, 2-24-99,____________.

 

60V-2.004 Employee Contributions.

(1) Each SMSOAP member participant in the Optional Annuity Program may make voluntary contributions contribute, by way of after-tax salary deduction, a percentage of salary not to exceed the sum of the percentages contributed by the employer as specified in paragraph 60V-2.003(1)(d) and subsection (2), F.A.C., for the purchase of the member’s participant’s annuity. The Division shall remit the voluntary employee’s contribution to the provider company designated by the member participant on Form SMS-1.

(2) A SMSOAP member participant who chooses to make voluntary an individual contribution to the Optional Annuity Program shall designate on Form SMS-1 the company to which a contribution is to be forwarded and the percentage to be paid to each company.

(3) A SMSOAP member participant in the Optional Annuity Program may redirect, reduce, increase or cease future voluntary employee contributions to the provider companies as follows:

(a) The SMSOAP member participant shall complete a new Form SMS-1 indicating the change and file such form with the employer’s personnel office.

(b) through (c) No change.

(4) Required Employee Contributions.

Effective July 1, 2011, each SMSOAP member shall contribute an amount equal to the employee contribution required under Section 121.71(3), F.S.

Required retirement contributions for SMSOAP members are as follows:

DatesRate

Effective July 1, 20113.00%

Rulemaking Specific Authority 112.363(7), 121.031(1) FS. Law Implemented 112.363, 121.055, 121.35(4) FS. History–New 7-22-87, Amended 5-18-88, Formerly 22V-2.004, Amended 2-24-99,_________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Dan Drake, Director

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Craig Nichols, Agency Secretary

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: November 4, 2014

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: September 20, 2014