FRS Legislative Roundup: Approved changes to DROP, Termination Definition, and the Investment Plan

The following bills regarding the Florida Retirement System (FRS) were passed during the 2023 legislative session.

Senate Bill 7024 (Chapter No. 2023-193, Laws of Florida)
This bill makes the following retirement changes:

Amends the normal retirement date for Special Risk Class members initially enrolled on or after July 1, 2011, to be the earlier of 25 years of creditable Special Risk service, or age 55.
Revises the Deferred Retirement Option Program (DROP) by:

– Eliminating the restrictive entry window for eligible members to participate in DROP. It allows entry into DROP at any time after the member reaches their normal retirement date and their vesting requirement is met;

– Increasing the maximum amount of time eligible members may participate in DROP from 60 to 96 calendar months for all membership classes;

– Allowing instructional personnel, as defined in s. 1012.01(2) (a)-(d), Florida Statutes, to extend their DROP participation for up to 24 calendar months in addition to the 96 months; and

– Increasing the interest rate applied to a member’s accrued monthly benefit from 1.3% to 4%, effective July 1, 2023.

Increases the monthly retiree Health Insurance Subsidy from $5 to $7.50 for each year of creditable service. The maximum monthly benefit is adjusted from $150 to $225 and the minimum monthly benefit is adjusted from $30 to $45, effective July 1, 2023.

House Bill 1121 (Chapter No. 2023-316, Laws of Florida)
This bill amends the definition of termination in s. 121.021(39), Florida Statutes, for clarity and provides authority for FRS employers to establish a post-employment volunteer program that allows retirees to provide civic, charitable, and humanitarian services during the first 12 calendar months following retirement without causing the retiree to violate the termination requirements. These volunteer programs must meet specified criteria. A definition of “volunteer services” is also created in s. 121.021(65), Florida Statutes.

Senate Bill 110 (Chapter No. 2023-111, Laws of Florida)
This bill, effective May 24, 2023, makes the following retirement changes:

Clarifies that benefits cannot be paid to a member of the Investment Plan who has been charged with or convicted of specific offenses; and
Permits a waiver of the requirement that a member of the Investment Plan who wishes to designate a non-spouse as their beneficiary receive an acknowledgement of that designation from their spouse.

For more information regarding these changes go to the MyFRS.com website or contact the MyFRS Financial Guidance Line at 1-866-446-9377.