The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Governmental Oversight and Accountability
BILL: SB 1670
INTRODUCER: Senator Broxson
SUBJECT: Deferred Retirement Option Program
DATE: March 28, 2023 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Harmsen McVaney GO Favorable
2. AP
I. Summary:
The bill increases the extended participation period in the Deferred Option Retirement Program
(DROP) available to K-12 instructional and administrative personnel from 36 additional to 60
additional months after the initial 60-month DROP period. Such personnel must be participating
in DROP after July 1, 2023, and on or before June 30, 2029, to be eligible for this 60-month
DROP extension. Eligibility for the 60-month DROP extension period is subject to approval by
an authorized supervisor.
State and local governments that participate in the Florida Retirement System will incur
increased costs associated with funding the benefits granted by this bill. At this time, the bill
does not include the requisite contributions to fund these benefits. An actuarial study of the
impact of this legislation has been requested but has not yet been completed.
The bill finds that the act fulfills an important state interest. It provides that a proper and
legitimate state interest is served by the act, which includes providing benefits that are managed,
administered, and funded in an actuarially sound manner.
The bill takes effect July 1, 2023.
II. Present Situation:
The Florida Retirement System (FRS)
The Florida Retirement System (FRS) was established in 1970 when the Legislature consolidated
the Teachers’ Retirement System, the State and County Officers and Employees’ Retirement
System, and the Highway Patrol Pension Fund. In 1972, the Judicial Retirement System was
consolidated into the FRS, and in 2007, the Institute of Food and Agricultural Sciences
Supplemental Retirement Program was consolidated under the Regular Class of the FRS as a
BILL: SB 1670 Page 2
closed group.1 The FRS is a contributory system, with active members contributing 3 percent of
their salaries.2
The FRS is a multi-employer plan, governed by ch. 121, F.S., the “Florida Retirement System
Act.” As of June 30, 2022, the FRS had 629,073 active non-retired members, 448,846 annuitants,
14,858 disabled retirees, and 28,827 active participants of the Deferred Retirement Option
Program (DROP).3 As of September 2022, the FRS consisted of 990 total employers; it is the
primary retirement plan for employees of state and county government agencies, district school
boards, Florida College institutions, and state universities, and includes the 180 cities and 153
special districts that have elected to join the system.4
The membership of the FRS is divided into five membership classes:
 The Regular Class5 consists of 537,128 active members and 7,806 in renewed membership;
 The Special Risk Class6 includes 72,925 active members and 1,100 in renewed membership;
 The Special Risk Administrative Support Class7 has 104 active members and one in renewed
membership;
 The Elected Officers’ Class8 has 2,075 active members and 109 in renewed membership; and
 The Senior Management Service Class9 has 7,610 active members and 210 in renewed
membership.10
Each class is funded separately based upon the costs attributable to the members of that class.
1
Florida Department of Management Services (DMS), Division of Retirement, Florida Retirement System Pension Plan and
Other State Administered Retirement Systems FY 2021-22 Annual Comprehensive Financial Report, 35, available at
https://employer.frs.fl.gov/forms/2020-21_ACFR.pdf. (last visited Mar. 27, 2023).
2
Prior to 1975, members of the FRS were required to make employee contributions of either 4 percent for Regular Class
employees or 6 percent for Special Risk Class members. Employees were again required to contribute to the system after
July 1, 2011. See, ch. 2011-68, s. 33, Laws of Fla. Members in the Deferred Retirement Option Program do not contribute to
the system.
3
DMS, Division of Retirement, Florida Retirement System Pension Plan and Other State Administered Retirement Systems
FY 2021-22 Annual Comprehensive Financial Report, at 260, available at https://employer.frs.fl.gov/forms/2020-
21_ACFR.pdf. (last visited Mar. 20, 2023).
4
DMS, Division of Retirement, Participating Employers for Fiscal Year 2022-2023 (Sept. 2022), available at
https://employer.frs.fl.gov/forms/part-emp.pdf (last visited Mar. 27, 2023).
5
The Regular Class is for all members who are not assigned to another class. Section 121.021(12), F.S.
6
The Special Risk Class is for members employed as law enforcement officers, firefighters, correctional officers, probation
officers, paramedics and emergency technicians, among others. Section 121.0515, F.S.
7
The Special Risk Administrative Support Class is for a special risk member who moved or was reassigned to a nonspecial
risk law enforcement, firefighting, correctional, or emergency medical care administrative support position with the same
agency, or who is subsequently employed in such a position under the Florida Retirement System. Section 121.0515(8), F.S.
8
The Elected Officers’ Class includes elected state and county officers, and those elected municipal or special district
officers whose governing body has chosen Elected Officers’ Class participation for its elected officers. Section 121.052, F.S.
9
The Senior Management Service Class is for members who fill senior management level positions assigned by law to the
Senior Management Service Class or authorized by law as eligible for Senior Management Service designation. Section
121.055, F.S.
10
All figures are from Florida Retirement System Pension Plan and Other State Administered Retirement Systems FY 2021-
22 Annual Comprehensive Financial Report, at 263.
BILL: SB 1670 Page 3
Members of the FRS have two primary plan options available for participation:11
 The defined contribution plan, also known as the Investment Plan; and
 The defined benefit plan, also known as the Pension Plan.
Investment Plan
In 2000, the Public Employee Optional Retirement Program (investment plan) was created as a
defined contribution plan offered to eligible employees as an alternative to the FRS Pension
Plan.12
Benefits under the investment plan accrue in individual member accounts funded by both
employee and employer contributions and earnings. Benefits are provided through employee-
directed investments offered by approved investment providers.13
A member vests immediately in all employee contributions paid to the investment plan.14 With
respect to the employer contributions, a member vests after completing one work year of
employment with an FRS employer.15 Vested benefits are payable upon termination or death as a
lump-sum distribution, direct rollover distribution, or periodic distribution.16 The investment
plan also provides disability coverage for both in-line-of-duty and regular disability retirement
benefits.17 An FRS member who qualifies for disability while enrolled in the investment plan
may apply for benefits as if the employee were a member of the pension plan. If approved for
retirement disability benefits, the member is transferred to the pension plan.18
The State Board of Administration (SBA) is primarily responsible for administering the
investment plan.19 The Board of Trustees of the SBA is comprised of the Governor as chair, the
Chief Financial Officer, and the Attorney General.20
11
Florida State Board of Administration (SBA), Plan Comparison Chart (Jul. 2020), available at
https://www.myfrs.com/pdf/forms/plancomparison.pdf (last visited Mar. 27, 2023).
12
See, ch. 2000-169, Laws of Fla.
13
Section 121.4501(1), F.S.
14
Section 121.4501(6)(a), F.S.
15
If a member terminates employment before vesting in the investment plan, the nonvested money is transferred from the
member’s account to the SBA for deposit and investment by the SBA in its suspense account for up to five years. If the
member is not reemployed as an eligible employee within five years, any nonvested accumulations transferred from a
member’s account to the SBA’s suspense account are forfeited. Section 121.4501(6)(b)-(d), F.S.
16
Section 121.591, F.S.
17
See s. 121.4501(16), F.S.
18
Pension plan disability retirement benefits, which apply for investment plan members who qualify for disability,
compensate a line-of-duty disabled member up to 65 percent of the average monthly compensation as of the disability
retirement date for special risk class members. Other members may receive up to 42 percent of the member’s average
monthly compensation for disability retirement benefits. If the disability occurs other than in the line-of-duty, the monthly
benefit may not be less than 25 percent of the average monthly compensation as of the disability retirement date.
Section 121.091(4)(f), F.S.
19
Section 121.4501(8), F.S.
20
FLA. CONST. art. IV, s. 4.
BILL: SB 1670 Page 4
Pension Plan
The pension plan is administered by the Secretary of Management Services (DMS) through the
Division of Retirement.21 The SBA manages the pension fund’s assets.22
Any member initially enrolled in the pension plan before July 1, 2011, vests in the pension plan
after completing six years of service with an FRS employer.23 For members initially enrolled on
or after July 1, 2011, the member vests in the pension plan after eight years of creditable
service.24 Benefits payable under the pension plan are calculated based on the member’s years of
creditable service multiplied by the service accrual rate multiplied by the member’s average final
compensation.25
For most current members of the pension plan, normal retirement (when first eligible for
unreduced benefits) occurs at the earliest attainment of 30 years of service or age 62.26 For public
safety employees in the Special Risk and Special Risk Administrative Support Classes, normal
retirement is the earliest of 25 years of service or age 55.27 Members initially enrolled in the
pension plan on or after July 1, 2011, have longer service requirements. For members initially
enrolled after that date, the member must complete 33 years of service or attain age 65; members
in the Special Risk classes must complete 30 years of service or attain age 60.28
Deferred Retirement Option Program (DROP)
Members who retire from the FRS pension plan are eligible to enroll in the DROP, which allows
a member to continue employment with an FRS employer for up to 60 additional months.29
While in the DROP, the member’s retirement benefits accumulate in the FRS Trust Fund
increased by a cost-of-living adjustment (COLA) each July and earn monthly interest equivalent
to an annual rate of 1.30 percent on the preceding month’s DROP accumulation until termination
of participation in the DROP.30
Generally, eligible FRS pension plan members must elect to participate in the DROP within 12
months of their normal retirement date.31 However, a member initially enrolled in the FRS before
July 1, 2011, who reaches normal retirement date based on years of service before he or she
reaches age 62 (or age 55 for special risk class members) may defer his or her entry into DROP
until 12 months immediately following their 57th birthday, or 52nd birthday for special risk class
members. A member who enrolled in the FRS pension plan on or after July 1, 2011, and who
21
Section 121.025, F.S.
22
Florida SBA, Summary Overview of the State Board of Administration of Florida, 4, available at
https://www.sbafla.com/fsb/Portals/FSB/Content/Topics/SBAOverview_20211025.pdf?ver=2021-10-28-120954-217 (last
visited Mar. 27, 2023).
23
Section 121.021(45)(a), F.S.
24
Section 121.021(45)(b), F.S.
25
Section 121.091, F.S. See also, Florida Retirement System Pension Plan and Other State Administered Retirement Systems
FY 2021-22 Annual Comprehensive Financial Report, 35-37, supra at 1.
26
Section 121.021(29)(a)1., F.S.
27
Section 121.021(29)(b)1., F.S.
28
Sections 121.021(29)(a)2. and (b)2., F.S.
29
Section 121.091(13), F.S.
30
Florida Retirement System Pension Plan and Other State Administered Retirement Systems FY 2021-22 Annual
Comprehensive Financial Report, supra note 1 at pp. 38-39.
31
Section 121.091(13)(a), F.S.
BILL: SB 1670 Page 5
reaches normal retirement date based on service before age 65, (or 60 for special risk class) may
defer DROP participation until the 12 months immediately following his or her 60th birthday, or
55th birthday for special risk class.32
K-12 instructional personnel employed with an FRS employer may extend their DROP
participation for up to an additional 36 months, for a total of 8 years of DROP participation.
Administrative personnel who are employed with a K-12 FRS employer may extend their DROP
participation through the end of the current school year.33
Similarly, law enforcement officers who are in the special risk class,34 who elect to participate in
DROP on or after July 1, 2022, may participate in DROP for an additional 36 calendar months
beyond the 60-month DROP period, for a total of 8 years enrollment in the DROP. To qualify,
the participant must enter DROP on or before June 30, 2028.35
Regular School Year
Each district school board in Florida is responsible for setting the dates for the opening and
closing of schools.36 Schools that are governed by a district school board may not have an
opening date earlier than August 10 each year,37 and their school year must run for at least 180
days.38 For the 2022-2023 school year, school district calendars began the traditional school year
with students reporting for classes between August 10 and August 23.39 Dates for the close of the
school year were between May 19 and June 8.40
Instructional Personnel and School Administrators
Instructional personnel include classroom teachers, staff who provide student personnel services,
librarians and media specialists, other instructional staff, and education paraprofessionals under
the direct supervision of instructional personnel in K-12 schools.41 School administrators include
school principals, school or career center directors, and assistant principals in K-12 schools.42
32
Section 121.091(13)(a)2., F.S.
33
Section 121.091(13)(b)1., F.S.
34
See, s. 121.0515(3)(a), F.S. This is a narrow permission that excludes sheriffs and elected police chiefs and does not
encompass the special risk class as a whole.
35
Section 121.091(13)(c), F.S.
36
Section 1001.42(4)(f), F.S.
37
Section 1001.42(4)(f), F.S.
38
Section 1001.42(12)(a), F.S.
39
Florida Department of Education, 2022-2023 School District Calendars,
https://www.fldoe.org/core/fileparse.php/7584/urlt/school-district-calendars.xlsx (last visited March 27, 2023).
40
Id.
41
Section 1012.01(2), F.S.
42
Section 1012.01(3), F.S.
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Contracts for Instructional Personnel
Four types of contracts are used to employ instructional personnel in Florida– continuing
contracts, professional service contracts, annual contracts, and probationary contracts. Holding a
continuing contract or professional service contract is often referred to as having tenured status.43
A continuing contract entitles the employee to continue employment without the necessity of
annual renewal until discontinuation of the position, resignation, dismissal, or removal from
continuing contract status.44
Instructional personnel hired on or after July 1, 1984, and up to July 1, 2011, were awarded
professional service contracts after 3 years of probationary service on annual contracts if
certified, recommended for a professional service contract by the superintendent, and
reappointed by the school board.45 Professional service contracts automatically renew each year,
unless the employee is charged with unsatisfactory performance based upon his or her annual
performance evaluation or the employee’s performance evaluations indicate chronically
ineffective performance.46
As of July 1, 2011, instructional personnel are hired under a probationary contract for 1 year, and
thereafter, are hired on an annual contract basis.47 An annual contract is an employment contract
for a period of no longer than 1 school