HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 151 Florida Retirement System
SPONSOR(S): Appropriations Committee, Busatta Cabrera and others
TIED BILLS: IDEN./SIM. BILLS: SB 242
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Constitutional Rights, Rule of Law & 15 Y, 0 N Villa Miller
Government Operations Subcommittee
2) Appropriations Committee 27 Y, 0 N, As CS Helpling Pridgeon
3) State Affairs Committee
SUMMARY ANALYSIS
The bill conforms law to the House proposed 2024-2025 General Appropriations Act (GAA) as retirement
contributions are included in the GAA.
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
state 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.
The Department of Management Services (DMS) must compile an annual actuarial valuation of the FRS and
report the results to the Legislature by December 31 of each year. Thereafter, the Legislature uses the results
of the actuarial valuation to establish uniform employer contribution rates during the next legislative session to
ensure the FRS is funded in a sound actuarial manner.
The bill:
 Restores a 3 percent cost-of-living adjustment (COLA) for eligible FRS pension plan members initially
enrolled in the FRS before July 1, 2011. The bill limits the 3 percent COLA to the first $150,000 of
annual benefit. For any benefit above $150,000, the COLA adjustment is limited to service credit
earned for service prior to July 1, 2011.
 Increases member contribution rates to better align with the benefits earned by each employee class.
 Increases the allocations to the investment plan accounts for each membership class.
 Closes the FRS Preservation of Benefits Plan to new members effective July 1, 2026.
 Allows FRS retirees to receive both compensation from an employer that participates in the FRS and
retirement benefits, provided the retiree is not reemployed within the 6 months following the date of
retirement.
 Authorizes certain elected officers that have completed a DROP participation period as of June 30,
2023, to remain in elective office and receive his or her accumulated DROP proceeds.
 Adjusts the employer contribution rates for the FRS based on the annual actuarial valuation and
additional actuarial studies.
 Declares that the act fulfills an important state interest.
Application of the rates will have a significant fiscal impact on the amount of funds appropriated by the
Legislature associated with employee salaries and benefits. Provisions of the bill relating to employer
retirement contribution rates will increase the amounts that FRS Employers will pay for employee retirement
benefits. 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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DATE: 1/31/2024
 FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Florida Retirement System
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 closed group. The FRS was amended in
1998 to add the Deferred Retirement Option Program (DROP) under the defined benefit plan and
amended again in 2000 to provide a defined contribution plan alternative to the defined benefit plan for
FRS members effective July 1, 2002.1
The FRS is a multiple-employer, contributory plan2 governed by the Florida Retirement System Act.3 As
of June 30, 2023, the FRS provides retirement income benefits to 646,277 active members,4 448,846
retired members and beneficiaries, and 27,767 members in DROP.5 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.6
The FRS is a low-cost system compared to other retirement systems. The cost to administer the FRS in
2022 was $19 per active member and annuitant compared to the peer average of $115 for other similar
pension systems. Further, the number of staff to administer the FRS is 1.3 positions per 10,000
members versus an average of 3.4 per 10,000 members of other similar retirement systems. 7
Membership of the FRS is divided into the following membership classes:8
 Regular Class 9 consists of 550,931 members (85.2 percent of the total 2023 FRS membership).
This class is for all members who are not assigned to another class.
 Special Risk Class 10 includes 75,495 members (11.7 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 11 has 104 members (0.016 percent). This class is for
former Special Risk Class members who provide administrative support within an FRS special
1 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.
http://www.dms.myflorida.com/workforce_operations/retirement/publications/annual_reports [hereinafter Annual Report]
(Last visited Jan. 24, 2024).
2 Prior to 1975, members of the FRS were required to make employee contributions of either 4 percent 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.
3 Ch. 121, F.S.
4 As of June 30, 2023, the FRS Pension Plan, which is a defined benefit plan, had 441,816 members, and the investment
plan, which is a defined contribution plan, had 204,461 members. Annual Report, supra note 1, at p. 188.
5 Id.
6 Id., at 226.
7 Email from Jeff Ivey, Deputy Chief of Staff, Department of Management Services, RE: 2022 CEM Slides (Mar. 13, 2023).
8 Annual Report, supra note 1, at 191.
9 S. 121.021(12), F.S.
10 S. 121.0515, F.S.
11 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 FRS. Secti on 121.0515(8), F.S.
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 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 12 has 2,105 members (0.33 percent). This class is for elected state and
county officers, and for those elected municipal or special district officers whose governing body
has chosen Elected Officers’ Class participation for its elected officers.
 Senior Management Service Class 13 has 7,875 members (1.2 percent). This 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
Class designation.
Each class is funded separately based upon the costs attributable to the members of that class.
Members of the FRS have two primary plan options available for participation:
 The investment plan, which is a defined contribution plan; and
 The pension plan, which is a defined benefit plan.
Total FRS Membership by Plan14
2022 2023 Percent Change
Investment Plan 184,923 204,461 10.57%
Pension Plan 444,150 441,816 -0.53%
Total Membership 629,073 646,277 2.73%
Total FRS Membership by Source 15 Percentage of
2023 Members
School Districts 308,076 47.7%
Counties 154,648 23.9%
State Agencies 94,449 14.6%
State Universities 30,549 4.7%
Others 38,195 5.9%
State Colleges 20,360 3.2%
FRS 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
earliest that any member could participate in the investment plan was July 1, 2002. The State Board of
Administration (SBA) is primarily responsible for administering the investment plan. 16 The SBA is
comprised of the Governor as chair, the Chief Financial Officer, and the Attorney General. 17 A member
vests immediately in all employee contributions paid to the investment plan. 18 With respect to the
employer contributions, a member vests after completing one work year with an FRS employer.19
12 S. 121.052, F.S.
13 S. 121.055, F.S.
14 Annual Report, supra note 1, at 188.
15 Annual Report, supra note 1, at 189.
16 S. 121.4501(8), F.S.
17 Art. IV, s. 4(e), Fla. Const.
18 S. 121.4501(6)(a), F.S.
19 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.
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 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. 20
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 as follows:21
Membership Class Percentage of Gross
Compensation
Regular Class 11.30%
Special Risk Class 19.00%
Special Risk Administrative Support Class 12.95%
Elected Officers’ Class
 Justices and Judges 18.23%
 County Elected Officers 16.34%
 Others 14.38%
Senior Management Service Class 12.67%
The above table reflects the rates in effect since July 1, 2023. Between July 1, 2022, through June 30,
2023, the Percentage of Gross Compensation was 2 percent less for each class. 22 The additional 2
percent for each class was provided in the 2023 Legislative Session. 23
FRS 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).24 Investment management
is handled by the SBA.
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.25 For members initially enrolled on or after July
1, 2011, the member vests in the pension plan after eight years of creditable service. 26 A member vests
immediately in all employee contributions paid to the pension plan.
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 62.27 Non-special risk members initially enrolled in
the pension plan on or after July 1, 2011, must complete 33 years of service or attain age 65. For
members in the Special Risk and Special Risk Administrative Support Classes, normal retirement is the
earlier of 25 years of service or age 55.28
20 S. 121.591, F.S.
21 S. 121.72(7), F.S.
22 S. 121.72(6), F.S.
23 Ch. 2023-193, Laws of Fla.
24 S. 121.025, F.S.
25 S. 121.021(45)(a), F.S.
26 S. 121.021(45)(b), F.S.
27 S. 121.021(29)(a)1., F.S.
28 S. 121.021(29)(b), F.S.
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 Employee Contribution Rates
From 1975 to July 1, 2011, employees were not required to contribute to the FRS. Beginning July, 1,
2011, employees of both retirement plans were required to begin contributions to the FRS. 29 Each
member class of the FRS is required to pay 3 percent 30 which is deducted by the employer from the
employee’s monthly salary and submitted to the Division of Retirement.31 The contribution rates have
not been modified since they were initially required in 2011.
In response to the 2008-2009 market decline, public pension plans increased employee contributions.
Nearly all employees of state and local government share in the cost of their retirement benefits.
Employee rates vary by state and may be dependent on the type of employee, hire date, and income.
Some states include rates in excess of 9 percent. In 2023, the national average across all pension
plans for non-public safety employee contributions was 6.3 percent.32
Normal Retirement Pension Benefit
Statute sets the calculation used to determine a member’s benefit. A member earns a set percentage
for years of service, depending on class.33 Pension plan benefits are calculated as a product of a
statutorily set percent and creditable years of service. The product of the percent and creditable years
of service is applied to the member’s average compensation. 34 Below are the statutorily set
percentages 35 and the calculations based on credible years of service.
Percent Percent
Percent per
Class Earned after Earned after
Year
25 Years 30 Years
Regular 1.6% 40.0% 48.0%
Senior Management 2.0% 50.0% 60.0%
Special Risk 3.0% 75.0% 90.0%
Elected Class - Others 3.0% 75.0% 90.0%
Elected Class - Judges 3.3% 83.3% 99.9%
Cost-of-Living Adjustment
For a member whose effective retirement date is before July 1, 2011, the member receives a 3 percent
cost-of-living adjustment (COLA). 36 In the 2011 Legislative Session, the COLA adjustment was
reduced for future retirees.37 For members enrolled on or after July 1, 2011, the COLA is zero. For
retirees with years of service prior to 2011, the COLA amount is prorated. 38
Below are examples of potential COLAs, dependent on the years of service before and after July 1,
2011.
29 Ch. 2011-68, Laws of Fla.
30 S. 121.71(3), F.S.
31 S. 121.71(2), F.S.
32 National Association of State Retirement Administrators, NASRA Issue Brief: Employee Contributions to Public Pension
Plans, https://www.nasra.org/files/Is