HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 853 Reemployment of Retired Law Enforcement Officers
SPONSOR(S): McClure and Alvarez
TIED BILLS: IDEN./SIM. BILLS: SB 400
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Constitutional Rights, Rule of Law & 14 Y, 0 N Villa Miller
Government Operations Subcommittee
2) Appropriations Committee
3) State Affairs Committee
SUMMARY ANALYSIS
The Florida Retirement System (FRS) is a multiple-employer, contributory plan that provides retirement income
benefits for employees of state and county government agencies, district school boards, state colleges, and
universities. It also serves as the retirement plan for employees of the cities, special districts, and independent
hospitals that have elected to join the system. Members of the FRS have two plan options available for
participation: the pension plan, which is a defined benefit plan, and the investment plan, which is a defined
contribution plan. Membership in the FRS is divided into membership classes. The Special Risk Class is for
members employed as law enforcement officers, firefighters, correctional officers, probation officers,
paramedics and emergency medical technicians, among others.
An FRS retiree may not be reemployed by an FRS employer within 6 months of termination. In addition, if the
retiree is reemployed by an FRS employer during months 7 through 12, the retiree’s retirement benefit for
those months is suspended and forfeited. After the 12-month reemployment limitation period, there are no
restrictions on receiving both a salary and retirement benefits when reemployed by an FRS employer.
However, there is currently an exception for retired law enforcement officers that are reemployed as school
resource officers that authorizes such retirees to be reemployed during months 7 through 12 and receive both
a salary and retirement benefits.
The State and County Officers and Employees Retirement System (SCOERS) was consolidated into the FRS
in 1970 as a closed group. SCOERS retirees reemployed by an FRS employer are prohibited from receiving a
salary from reemployment and retirement benefits for 12 months after their date of retirement.
The bill authorizes an FRS retired law enforcement officer to be reemployed by an FRS employer in a position
that qualifies for the Special Risk Class and receive compensation from that employer and retirement benefits
provided the retiree is not reemployed within the 6 months following his or her date of retirement.
The bill also reduces the amount of time a SCOERS retiree is prohibited from receiving both a salary from an
FRS employer and retirement benefits from 12 months to 6 months immediately subsequent to his or her date
of retirement and limits those employees eligible for reemployment by an FRS employer to those reemployed
in a position that qualifies for the Special Risk Class.
The bill may have a negative fiscal impact on state and local governments; however, such impact is
indeterminate at this time. See Fiscal Comments.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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 FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
State Board of Administration
The State Board of Administration (SBA) is established by Art. IV, s. 4(e) of the Florida Constitution,
and is composed of the Governor as Chair, the Chief Financial Officer, and the Attorney General,
commonly referred to as the “Board of Trustees.” 1 The SBA has responsibility for investing the assets
of the Florida Retirement System (FRS) Pension Plan2 and administering the FRS Investment Plan,3
which combined represent approximately $190.8 billion, or approximately 84.4 percent of the $225.4
billion in assets managed by the SBA, as of October 31, 2023.4 The SBA also manages over 25 other
investment portfolios, with combined assets of approximately $34.6 billion, including the Florida
Hurricane Catastrophe Fund, the Florida Lottery Fund, the Florida Prepaid College Plan, and various
debt-service accounts for state bond issues.5
Florida Retirement System
The Florida Retirement System (FRS) was established in 1970 when the Legislature consolidated and
closed 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 closed
and 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 closed
retirement plan.6 The FRS was amended in 1998 to include the Deferred Retirement Option Program
(DROP) under the defined benefit plan and in 2000 was amended to provide a defined contribution plan
alternative to the defined benefit plan for FRS members effective July 1, 2002. 7
The FRS is a multiple-employer, contributory plan8 governed by the Florida Retirement System Act.9 As
of June 30, 2023, the FRS had 646,277 active members,10 455,601 retired members and beneficiaries,
and 27,767 members in DROP.11 It is the primary retirement plan for employees of state and county
government agencies, district school boards, state colleges, and state universities. The FRS also
serves as the retirement plan for the employees of the 181 cities, 153 special districts, and two
independent hospitals that have elected to join the system. 12
Membership of the FRS is divided into the following membership classes: 13
1 See also art. XII, s. 9, FLA. C ONST.
2 S. 121.151, F.S.
3 S. 121.4501(8), F.S. See also, rule 19-13.001, F.A.C.
4 See State Board of Administration, Performance Report Month Ending: Octob er 30, 2023,
https://www.sbafla.com/fsb/Portals/FSB/Content/Performance/Trustees/2023/October%202023%20Monthly%20Trustee%20Report.pdf
?ver=2023-12-22-140235-787, (last visited January 5, 2024).
5 Id.
6 A closed retirement plan refers to a retirement plan that is no longer open to new members, meaning that employees who joined the
organization after a certain date are not eligible to participate in the plan.
7
DMS, Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Comprehensive
Financial Report Fiscal Year Ended June 30, 2023, at p. 33. A copy of the report can be found online at:
http://www.dms.myflorida.com/workforce_operations/retirement/publications/annual_reports [hereinafter Annual Report] (last visited
January 4, 2024).
8 Prior to 1975, members of the FRS were required to make employee contributions of either 4 percent of their salaries for Regular
Class members or 6 percent for Special Risk Class members. Members were again required to contribute to the system after June 30,
2011, at 3 percent of their salary regardless of membership class.
9 Ch. 121, F.S.
10 As of June 30, 2022, the FRS Pension Plan, which is a defined benefit plan, had 441,816 members, and the FRS Investment Plan,
which is a defined contribution plan, had 204,461 members. Annual Report, supra note 5, at p. 188.
11 Id.
12 Id., at 266.
13 Id., at 191.
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  Regular Class 14 consists of 550,931 members (85.27 percent of the total 2023 FRS
membership). This class is for all members who are not assigned to another class.
 Special Risk Class 15 includes 75,495 members (11.68 percent). This class is for members
employed as law enforcement officers, firefighters, correctional officers, probation officers,
paramedics and emergency medical technicians, among others.
 Special Risk Administrative Support Class 16 has 93 members (0.014 percent). This class is for
former Special Risk Class members who provide administrative support within an FRS special
risk employing agency. Members of this class must maintain the certification required for their
former Special Risk Class position and be subject to recall into those positions if needed.
 Elected Officers’ Class 17 has 2,105 members (0.33 percent). This class is for 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.
 SMSC18 has 7,714 members (1.19 percent). This class is for members who fill senior
management level positions assigned by law to the SMSC or authorized by law as eligible for
SMSC designation.
Members of the FRS have two primary plan options available for participation:
 The defined benefit plan, also known as the pension plan; and
 The defined contribution plan, also known as the investment plan.
Pension Plan
The pension plan is a defined benefit plan that is administered by the secretary of the Department of
Management Services (DMS) through the Division of Retirement (Division).19 Investment management
is provided by the SBA.
Any member initially enrolled in the pension plan before July 1, 2011, vests in the pension plan after
completing 6 years of service with an FRS employer.20 For members initially enrolled on or after July 1,
2011, the member vests in the pension plan after 8 years of creditable service.21 A member vests
immediately in all employee contributions paid to the pension plan. 22 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. 23
For non-special risk members of the pension plan initially enrolled before July 1, 2011, normal
retirement is the earlier of 30 years of service or age 62.24 Those members initially enrolled in the
pension plan on or after July 1, 2011, must complete 33 years of credible service or attain age 65. 25 For
members in the Special Risk and Special Risk Administrative Support Classes, normal retirement is the
earlier of 25 years of credible service or age 55.26
Investment Plan
In 2000, the Legislature created the Public Employee Optional Retirement Program (investment plan), a
defined contribution plan offered to eligible employees as an alternative to the pension plan. The
14 S. 121.021(12), F.S.
15 S. 121.0515, F.S.
16
The Special Risk Administrative Support Class is for a special risk member who moved or was reassigned to a nonspecial risk l aw
enforcement, firefighting, correctional, or emergency medical care administrative support position with the same agency, or w ho is
subsequently employed in such a position under the FRS. S. 121.0515(8), F.S.
17 S. 121.052, F.S.
18 S. 121.055, F.S.
19 See s. 121.025, F.S.
20 S. 121.021(45)(a), F.S.
21 S. 121.021(45)(b), F.S.
22 See s. 121.091(5)(a), F.S.
23 S. 121.091, F.S.
24 S. 121.021(29)(a)1., F.S.
25 S. 121.021(29)(a)2., F.S.
26 S. 121.021(29)(b), F.S.
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 earliest that any member could participate in the investment plan was July 1, 2002. The SBA is
primarily responsible for administering the investment plan. 27
A member vests immediately in all employee contributions paid to the investment plan. 28 With respect
to the employer contributions, a member vests after completing one work year with an FRS employer. 29
Vested benefits are payable upon termination of employment with the FRS employer or death, as a
lump-sum distribution, direct rollover distribution, or periodic distribution. 30 The investment plan also
provides disability coverage for both in-line-of-duty and regular disability retirement benefits.31 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.32
Benefits under the investment plan accrue in individual member accounts funded by both employee
and employer contributions and investment earnings. Benefits are provided through employee-directed
investments offered by approved investment providers. The amount of money contributed to each
member’s account varies by class.33
Deferred Retirement Option Program
The Deferred Retirement Option Program (DROP) allows eligible members of the FRS Pension Plan to
participate in the program and defer receipt of retirement benefits while continuing employment with an
FRS employer. The deferred monthly benefits accrue, plus interest, 34 in the FRS on behalf of the
employee for the period of time the member participates in DROP. Upon termination of employment,
the member receives the total DROP benefits and begins to receive the previously determined normal
retirement benefits.35
A member may elect to participate in DROP anytime after reaching the normal retirement date. 36
Generally, an eligible member is authorized to participate in DROP for 8 years. However, certain
instructional personnel may participate in DROP for 10 years until June 30, 2029. 37
Employment After Retirement
The FRS is a 401(a) qualified plan under the Internal Revenue Code (IRC). Accordingly, FRS
contributions qualify for tax deductions and investment earnings are tax deferred until distributed to
retirees. Federal regulations require 401(a) qualified plans to be established by an employer primarily to
provide regular and clearly defined benefits to its employees over an extended period, typically for life,
following retirement or upon reaching the normal retirement age. 38 Retirement involves more than just a
decrease in the hours worked by an employee. Therefore, retirement benefits cannot be distributed
solely because an employee’s hours have been reduced before reaching normal retirement age. 39
27 S. 121.4501(8), F.S.
28 S. 121.4501(6)(a), F.S.
29 If a member terminates employment before vesting in the investment plan, the nonvested money is transferred from the membe r’s
account to the SBA for deposit and investment by the SBA in its suspense account for up to 5 years. If the member is not reemployed
as an eligible employee within 5 years, any nonvested accumulations transferred from a member’s account to the SBA’s sus pense
account are forfeited. S. 121.4501(6)(b) – (d), F.S.
30 S. 121.591, F.S.
31 See s. 121.4501(16), F.S.
32
Pension plan disability retirement benefits, which apply for investment plan members who qualify for disability, compensate a n in-line-
of-duty disabled member up to 65 percent of the average monthly compensation as of the disability retirement date for sp ecial 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 perce nt of the average
monthly compensation as of the disability retirement date. S. 121.091(4)(f), F.S.
33 S. 121.72(7), F.S.
34 Currently, the interest that is applied accrues at an effective annual rate of 4 percent compounded monthly. Before July 1, 2 011, the
rate was 6.5 percent, and between July 1, 2011, through June 30, 2023, the rate was 1.3 percent. S. 121.091(13)(c)1., F.S.
35 S. 121.091(13), F.S.
36 S. 121.091(13)(a)2., F.S.
37 S. 121.091(13)(b), F.S.
38 26 CFR § 1.401(a)-1(b)(1)(i).
39 26 CFR § 1.401(a)-1(b)(3).
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 Florida law prohibits a distribution from being made prior to participation in DROP or termination of
employment.40 The law applies the same definition of termination of employment for retirements
occurring either before and after normal retirement age. Thus, determining whether a bona fide
termination of employment has occurred is crucial for both the tax-exempt qualification of the FRS and
state statutory compliance purposes.41
The Internal Revenue Service (IRS), the federal agency responsible for administering the IRC, has not
provided an objective test for determining whether a bona fide termination of employment has occurred.
Instead the IRS has applied Treasury Regulation 1.409A-1(h)(l)(ii), which states whether a termination
of employment has occurred is determined based on whether the facts and circumstances indicate that
the employer and employee reasonably anticipated that no further services would be performed after a
certain date42 or that the level of bona fide services the employee would perform after such date would
permanently decrease to no more than 20 percent of the average level of bona fide services performed
over the immediately preceding 36-month period.43 However, when applying the regulation in the
context of a 401(a) plan, the IRS has opined that “if both the employer and employee know at the time
of ‘retirement’ that the employee will, with reasonably [sic] certainty, continue to perform services for the
employer, a termination of employment has not occurred upon ‘retirement’ and the employee has n