Florida Senate - 2013                      CS for CS for SB 1392
       
       
       
       By the Committees on Appropriations; and Governmental Oversight
       and Accountability; and Senator Simpson
       
       
       
       576-03205-13                                          20131392c2
    1                        A bill to be entitled                      
    2         An act relating to retirement; amending s. 121.021,
    3         F.S.; revising the definition of “vested” or
    4         “vesting”; providing that a member initially enrolled
    5         in the Florida Retirement System after a certain date
    6         is vested in the pension plan after 10 years of
    7         creditable service; amending s. 121.051, F.S.;
    8         providing for compulsory membership in the Florida
    9         Retirement System Investment Plan for employees in the
   10         Elected Officers’ Class or the Senior Management
   11         Service Class initially enrolled after a specified
   12         date; conforming cross-references to changes made by
   13         the act; amending s. 121.052, F.S.; prohibiting
   14         members of the Elected Officers’ Class from joining
   15         the Senior Management Service Class after a specified
   16         date; amending s. 121.055, F.S.; prohibiting an
   17         elected official eligible for membership in the
   18         Elected Officers’ Class from enrolling in the Senior
   19         Management Service Class or in the Senior Management
   20         Service Optional Annuity Program; closing the Senior
   21         Management Optional Annuity Program to new members
   22         after a specified date; amending s. 121.091, F.S.;
   23         providing that certain members are entitled to a
   24         monthly disability benefit; revising provisions to
   25         conform to changes made by the act; amending s.
   26         121.4501, F.S.; requiring certain employees initially
   27         enrolled in the Florida Retirement System on or after
   28         a specified date to be compulsory members of the
   29         investment plan; revising the definition of “member”
   30         or “employee”; revising a provision relating to
   31         acknowledgement of an employee’s election to
   32         participate in the investment plan; placing certain
   33         employees in the pension plan from their date of hire
   34         until they are automatically enrolled in the
   35         investment plan or timely elect enrollment in the
   36         pension plan; authorizing certain employees to elect
   37         to participate in the pension plan, rather than the
   38         default investment plan, within a specified time;
   39         providing for the transfer of certain contributions;
   40         revising the education component; deleting the
   41         obligation of system employers to communicate the
   42         existence of both retirement plans; conforming
   43         provisions and cross-references to changes made by the
   44         act; amending s. 121.591, F.S.; revising provisions
   45         relating to disability retirement benefits; amending
   46         s. 121.71, F.S.; decreasing the employee retirement
   47         contribution rates for investment plan members;
   48         amending ss. 121.35, 238.072, 413.051, and 1012.875,
   49         F.S.; conforming cross-references; providing that the
   50         act fulfills an important state interest; providing an
   51         effective date.
   52  
   53  Be It Enacted by the Legislature of the State of Florida:
   54  
   55         Section 1. Subsection (45) of section 121.021, Florida
   56  Statutes, is amended to read:
   57         121.021 Definitions.—The following words and phrases as
   58  used in this chapter have the respective meanings set forth
   59  unless a different meaning is plainly required by the context:
   60         (45) “Vested” or “vesting” means the guarantee that a
   61  member is eligible to receive a future retirement benefit upon
   62  completion of the required years of creditable service for the
   63  employee’s class of membership, even though the member may have
   64  terminated covered employment before reaching normal or early
   65  retirement date. Being vested does not entitle a member to a
   66  disability benefit. Provisions governing entitlement to
   67  disability benefits are set forth under s. 121.091(4).
   68         (a) Effective July 1, 2001, through June 30, 2011, a 6-year
   69  vesting requirement shall be implemented for the Florida
   70  Retirement System Pension Plan:
   71         1. Any member employed in a regularly established position
   72  on July 1, 2001, who completes or has completed a total of 6
   73  years of creditable service is considered vested.
   74         2. Any member initially enrolled in the Florida Retirement
   75  System before July 1, 2001, but not employed in a regularly
   76  established position on July 1, 2001, shall be deemed vested
   77  upon completion of 6 years of creditable service if such member
   78  is employed in a covered position for at least 1 work year after
   79  July 1, 2001. However, a member is not required to complete more
   80  years of creditable service than would have been required for
   81  that member to vest under retirement laws in effect before July
   82  1, 2001.
   83         3. Any member initially enrolled in the Florida Retirement
   84  System on July 1, 2001, through June 30, 2011, shall be deemed
   85  vested upon completion of 6 years of creditable service.
   86         (b) Any member initially enrolled in the Florida Retirement
   87  System on or after July 1, 2011, through June 30, 2014, shall be
   88  vested in the pension plan upon completion of 8 years of
   89  creditable service.
   90         (c) Any member initially enrolled in the Florida Retirement
   91  System on or after July 1, 2014, shall be vested in the pension
   92  plan upon completion of 10 years of creditable service.
   93         Section 2. Paragraph (c) of subsection (2) of section
   94  121.051, Florida Statutes, is amended, present subsections (3)
   95  through (9) of that section are renumbered as subsections (4)
   96  through (10), respectively, and a new subsection (3) is added to
   97  that section, to read:
   98         121.051 Participation in the system.—
   99         (2) OPTIONAL PARTICIPATION.—
  100         (c) Employees of public community colleges or charter
  101  technical career centers sponsored by public community colleges,
  102  designated in s. 1000.21(3), who are members of the Regular
  103  Class of the Florida Retirement System and who comply with the
  104  criteria set forth in this paragraph and s. 1012.875 may, in
  105  lieu of participating in the Florida Retirement System, elect to
  106  withdraw from the system altogether and participate in the State
  107  Community College System Optional Retirement Program provided by
  108  the employing agency under s. 1012.875.
  109         1.a. Through June 30, 2001, the cost to the employer for
  110  benefits under the optional retirement program equals the normal
  111  cost portion of the employer retirement contribution which would
  112  be required if the employee were a member of the pension plan’s
  113  Regular Class, plus the portion of the contribution rate
  114  required by s. 112.363(8) which would otherwise be assigned to
  115  the Retiree Health Insurance Subsidy Trust Fund.
  116         b. Effective July 1, 2001, through June 30, 2011, each
  117  employer shall contribute on behalf of each member of the
  118  optional program an amount equal to 10.43 percent of the
  119  employee’s gross monthly compensation. The employer shall deduct
  120  an amount for the administration of the program.
  121         c. Effective July 1, 2011, through June 30, 2012, each
  122  member shall contribute an amount equal to the employee
  123  contribution required under s. 121.71(3)(a). The employer shall
  124  contribute on behalf of each program member an amount equal to
  125  the difference between 10.43 percent of the employee’s gross
  126  monthly compensation and the employee’s required contribution
  127  based on the employee’s gross monthly compensation.
  128         d. Effective July 1, 2012, each member shall contribute an
  129  amount equal to the employee contribution required under s.
  130  121.71(3)(a). The employer shall contribute on behalf of each
  131  program member an amount equal to the difference between 8.15
  132  percent of the employee’s gross monthly compensation and the
  133  employee’s required contribution based on the employee’s gross
  134  monthly compensation.
  135         e. The employer shall contribute an additional amount to
  136  the Florida Retirement System Trust Fund equal to the unfunded
  137  actuarial accrued liability portion of the Regular Class
  138  contribution rate.
  139         2. The decision to participate in the optional retirement
  140  program is irrevocable as long as the employee holds a position
  141  eligible for participation, except as provided in subparagraph
  142  3. Any service creditable under the Florida Retirement System is
  143  retained after the member withdraws from the system; however,
  144  additional service credit in the system may not be earned while
  145  a member of the optional retirement program.
  146         3. An employee who has elected to participate in the
  147  optional retirement program shall have one opportunity, at the
  148  employee’s discretion, to transfer from the optional retirement
  149  program to the pension plan of the Florida Retirement System or
  150  to the investment plan established under part II of this
  151  chapter, subject to the terms of the applicable optional
  152  retirement program contracts.
  153         a. If the employee chooses to move to the investment plan,
  154  any contributions, interest, and earnings creditable to the
  155  employee under the optional retirement program are retained by
  156  the employee in the optional retirement program, and the
  157  applicable provisions of s. 121.4501(4) govern the election.
  158         b. If the employee chooses to move to the pension plan of
  159  the Florida Retirement System, the employee shall receive
  160  service credit equal to his or her years of service under the
  161  optional retirement program.
  162         (I) The cost for such credit is the amount representing the
  163  present value of the employee’s accumulated benefit obligation
  164  for the affected period of service. The cost shall be calculated
  165  as if the benefit commencement occurs on the first date the
  166  employee becomes eligible for unreduced benefits, using the
  167  discount rate and other relevant actuarial assumptions that were
  168  used to value the Florida Retirement System Pension Plan
  169  liabilities in the most recent actuarial valuation. The
  170  calculation must include any service already maintained under
  171  the pension plan in addition to the years under the optional
  172  retirement program. The present value of any service already
  173  maintained must be applied as a credit to total cost resulting
  174  from the calculation. The division must ensure that the transfer
  175  sum is prepared using a formula and methodology certified by an
  176  enrolled actuary.
  177         (II) The employee must transfer from his or her optional
  178  retirement program account and from other employee moneys as
  179  necessary, a sum representing the present value of the
  180  employee’s accumulated benefit obligation immediately following
  181  the time of such movement, determined assuming that attained
  182  service equals the sum of service in the pension plan and
  183  service in the optional retirement program.
  184         4. Participation in the optional retirement program is
  185  limited to employees who satisfy the following eligibility
  186  criteria:
  187         a. The employee is otherwise eligible for membership or
  188  renewed membership in the Regular Class of the Florida
  189  Retirement System, as provided in s. 121.021(11) and (12) or s.
  190  121.122.
  191         b. The employee is employed in a full-time position
  192  classified in the Accounting Manual for Florida’s Public
  193  Community Colleges as:
  194         (I) Instructional; or
  195         (II) Executive Management, Instructional Management, or
  196  Institutional Management and the community college determines
  197  that recruiting to fill a vacancy in the position is to be
  198  conducted in the national or regional market, and the duties and
  199  responsibilities of the position include the formulation,
  200  interpretation, or implementation of policies, or the
  201  performance of functions that are unique or specialized within
  202  higher education and that frequently support the mission of the
  203  community college.
  204         c. The employee is employed in a position not included in
  205  the Senior Management Service Class of the Florida Retirement
  206  System as described in s. 121.055.
  207         5. Members of the program are subject to the same
  208  reemployment limitations, renewed membership provisions, and
  209  forfeiture provisions applicable to regular members of the
  210  Florida Retirement System under ss. 121.091(9), 121.122, and
  211  121.091(5), respectively. A member who receives a program
  212  distribution funded by employer and required employee
  213  contributions is deemed to be retired from a state-administered
  214  retirement system if the member is subsequently employed with an
  215  employer that participates in the Florida Retirement System.
  216         6. Eligible community college employees are compulsory
  217  members of the Florida Retirement System until, pursuant to s.
  218  1012.875, a written election to withdraw from the system and
  219  participate in the optional retirement program is filed with the
  220  program administrator and received by the division.
  221         a. A community college employee whose program eligibility
  222  results from initial employment shall be enrolled in the
  223  optional retirement program retroactive to the first day of
  224  eligible employment. The employer and employee retirement
  225  contributions paid through the month of the employee plan change
  226  shall be transferred to the community college to the employee’s
  227  optional program account, and, effective the first day of the
  228  next month, the employer shall pay the applicable contributions
  229  based upon subparagraph 1.
  230         b. A community college employee whose program eligibility
  231  is due to the subsequent designation of the employee’s position
  232  as one of those specified in subparagraph 4., or due to the
  233  employee’s appointment, promotion, transfer, or reclassification
  234  to a position specified in subparagraph 4., must be enrolled in
  235  the program on the first day of the first full calendar month
  236  that such change in status becomes effective. The employer and
  237  employee retirement contributions paid from the effective date
  238  through the month of the employee plan change must be
  239  transferred to the community college to the employee’s optional
  240  program account, and, effective the first day of the next month,
  241  the employer shall pay the applicable contributions based upon
  242  subparagraph 1.
  243         7. Effective July 1, 2003, through December 31, 2008, any
  244  member of the optional retirement program who has service credit
  245  in the pension plan of the Florida Retirement System for the
  246  period between his or her first eligibility to transfer from the
  247  pension plan to the optional retirement program and the actual
  248  date of transfer may, during employment, transfer to the
  249  optional retirement program a sum representing the present value
  250  of the accumulated benefit obligation under the defined benefit
  251  retirement program for the period of service credit. Upon
  252  transfer, all service credit previously earned under the pension
  253  plan during this period is nullified for purposes of entitlement
  254  to a future benefit under the pension plan.
  255         (3) INVESTMENT PLAN MEMBERSHIP COMPULSORY.—
  256         (a) Employees initially enrolled on or after July 1, 2014,
  257  in positions covered by the Elected Officers’ Class or the
  258  Senior Management Service Class are compulsory members of the
  259  investment plan, except those eligible to withdraw from the
  260  system under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those
  261  eligible for optional retirement programs under paragraph
  262  (1)(a), paragraph (2)(c), or s. 121.35. Investment plan
  263  membership continues if there is subsequent employment in a
  264  position covered by another membership class. Membership in the
  265  pension plan is not permitted except as provided in s.
  266  121.591(2). Employees initially enrolled in the Florida
  267  Retirement System prior to July 1, 2014, may retain their
  268  membership in the pension plan or investment plan and are
  269  eligible to use the election opportunity specified in s.
  270  121.4501(4)(f). Employees initially enrolled on or after July 1,
  271  2014, are not eligible to use the election opportunity specified
  272  in s. 121.4501(4)(f).
  273         (b) Employees eligible to withdraw from the system under s.
  274  121.052(3)(d) or s. 121.055(1)(b)2. may choose to withdraw from
  275  the system or to participate in the investment plan as provided
  276  in these sections. Employees eligible for optional retirement
  277  programs under paragraph (2)(c) or s. 121.35 may choose to
  278  participate in the optional retirement program or the investment
  279  plan as provided in this paragraph or this section. Eligible
  280  employees required to participate pursuant to (1)(a) in the
  281  optional retirement program as provided under s. 121.35 must
  282  participate in the investment plan when employed in a position
  283  not eligible for the optional retirement program.
  284         Section 3. Paragraph (c) of subsection (3) of section
  285  121.052, Florida Statutes, is amended to read:
  286         121.052 Membership class of elected officers.—
  287         (3) PARTICIPATION AND WITHDRAWAL, GENERALLY.—Effective July
  288  1, 1990, participation in the Elected Officers’ Class shall be
  289  compulsory for elected officers listed in paragraphs (2)(a)-(d)
  290  and (f) assuming office on or after said date, unless the
  291  elected officer elects membership in another class or withdraws
  292  from the Florida Retirement System as provided in paragraphs
  293  (3)(a)-(d):
  294         (c) Before July 1, 2014, any elected officer may, within 6
  295  months after assuming office, or within 6 months after this act
  296  becomes a law for serving elected officers, elect membership in
  297  the Senior Management Service Class as provided in s. 121.055 in
  298  lieu of membership in the Elected Officers’ Class. Any such
  299  election made by a county elected officer shall have no effect
  300  upon the statutory limit on the number of nonelective full-time
  301  positions that may be designated by a local agency employer for
  302  inclusion in the Senior Management Service Class under s.
  303  121.055(1)(b)1.
  304         Section 4. Paragraph (f) of subsection (1) and paragraph
  305  (c) of subsection (6) of section 121.055, Florida Statutes, are
  306  amended to read:
  307         121.055 Senior Management Service Class.—There is hereby
  308  established a separate class of membership within the Florida
  309  Retirement System to be known as the “Senior Management Service
  310  Class,” which shall become effective February 1, 1987.
  311         (1)
  312         (f) Effective July 1, 1997, through June 30, 2014:
  313         1. Except as provided in subparagraphs subparagraph 3. and
  314  4., an elected state officer eligible for membership in the
  315  Elected Officers’ Class under s. 121.052(2)(a), (b), or (c) who
  316  elects membership in the Senior Management Service Class under
  317  s. 121.052(3)(c) may, within 6 months after assuming office or
  318  within 6 months after this act becomes a law for serving elected
  319  state officers, elect to participate in the Senior Management
  320  Service Optional Annuity Program, as provided in subsection (6),
  321  in lieu of membership in the Senior Management Service Class.
  322         2. Except as provided in subparagraphs subparagraph 3. and
  323  4., an elected officer of a local agency employer eligible for
  324  membership in the Elected Officers’ Class under s. 121.052(2)(d)
  325  who elects membership in the Senior Management Service Class
  326  under s. 121.052(3)(c) may, within 6 months after assuming
  327  office, or within 6 months after this act becomes a law for
  328  serving elected officers of a local agency employer, elect to
  329  withdraw from the Florida Retirement System, as provided in
  330  subparagraph (b)2., in lieu of membership in the Senior
  331  Management Service Class.
  332         3. A retiree of a state-administered retirement system who
  333  is initially reemployed in a regularly established position on
  334  or after July 1, 2010, as an elected official eligible for the
  335  Elected Officers’ Class may not be enrolled in renewed
  336  membership in the Senior Management Service Class or in the
  337  Senior Management Service Optional Annuity Program as provided
  338  in subsection (6), and may not withdraw from the Florida
  339  Retirement System as a renewed member as provided in
  340  subparagraph (b)2., as applicable, in lieu of membership in the
  341  Senior Management Service Class.
  342         4. On or after July 1, 2014, an elected officer eligible
  343  for membership in the Elected Officers’ Class may not be
  344  enrolled in the Senior Management Service Class or in the Senior
  345  Management Service Optional Annuity Program as provided in
  346  subsection (6).
  347         (6)
  348         (c) Participation.—
  349         1. An eligible employee who is employed on or before
  350  February 1, 1987, may elect to participate in the optional
  351  annuity program in lieu of participating in the Senior
  352  Management Service Class. Such election must be made in writing
  353  and filed with the department and the personnel officer of the
  354  employer on or before May 1, 1987. An eligible employee who is
  355  employed on or before February 1, 1987, and who fails to make an
  356  election to participate in the optional annuity program by May
  357  1, 1987, shall be deemed to have elected membership in the
  358  Senior Management Service Class.
  359         2. Except as provided in subparagraph 6., an employee who
  360  becomes eligible to participate in the optional annuity program
  361  by reason of initial employment commencing after February 1,
  362  1987, may, within 90 days after the date of commencing
  363  employment, elect to participate in the optional annuity
  364  program. Such election must be made in writing and filed with
  365  the personnel officer of the employer. An eligible employee who
  366  does not within 90 days after commencing employment elect to
  367  participate in the optional annuity program shall be deemed to
  368  have elected membership in the Senior Management Service Class.
  369         3. A person who is appointed to a position in the Senior
  370  Management Service Class and who is a member of an existing
  371  retirement system or the Special Risk or Special Risk
  372  Administrative Support Classes of the Florida Retirement System
  373  may elect to remain in such system or class in lieu of
  374  participating in the Senior Management Service Class or optional
  375  annuity program. Such election must be made in writing and filed
  376  with the department and the personnel officer of the employer
  377  within 90 days after such appointment. An eligible employee who
  378  fails to make an election to participate in the existing system,
  379  the Special Risk Class of the Florida Retirement System, the
  380  Special Risk Administrative Support Class of the Florida
  381  Retirement System, or the optional annuity program shall be
  382  deemed to have elected membership in the Senior Management
  383  Service Class.
  384         4. Except as provided in subparagraph 5., an employee’s
  385  election to participate in the optional annuity program is
  386  irrevocable if the employee continues to be employed in an
  387  eligible position and continues to meet the eligibility
  388  requirements set forth in this paragraph.
  389         5. Effective from July 1, 2002, through September 30, 2002,
  390  an active employee in a regularly established position who has
  391  elected to participate in the Senior Management Service Optional
  392  Annuity Program has one opportunity to choose to move from the
  393  Senior Management Service Optional Annuity Program to the
  394  Florida Retirement System Pension Plan.
  395         a. The election must be made in writing and must be filed
  396  with the department and the personnel officer of the employer
  397  before October 1, 2002, or, in the case of an active employee
  398  who is on a leave of absence on July 1, 2002, within 90 days
  399  after the conclusion of the leave of absence. This election is
  400  irrevocable.
  401         b. The employee shall receive service credit under the
  402  pension plan equal to his or her years of service under the
  403  Senior Management Service Optional Annuity Program. The cost for
  404  such credit is the amount representing the present value of that
  405  employee’s accumulated benefit obligation for the affected
  406  period of service.
  407         c. The employee must transfer the total accumulated
  408  employer contributions and earnings on deposit in his or her
  409  Senior Management Service Optional Annuity Program account. If
  410  the transferred amount is not sufficient to pay the amount due,
  411  the employee must pay a sum representing the remainder of the
  412  amount due. The employee may not retain any employer
  413  contributions or earnings from the Senior Management Service
  414  Optional Annuity Program account.
  415         6. A retiree of a state-administered retirement system who
  416  is initially reemployed on or after July 1, 2010, may not renew
  417  membership in the Senior Management Service Optional Annuity
  418  Program.
  419         7. Effective July 1, 2014, the Senior Management Service
  420  Optional Annuity Program is closed to new members. Members
  421  enrolled in the Senior Management Service Optional Annuity
  422  Program before July 1, 2014, may retain their membership in the
  423  annuity program.
  424         Section 5. Paragraph (a) of subsection (4) of section
  425  121.091, Florida Statutes, is amended to read:
  426         121.091 Benefits payable under the system.—Benefits may not
  427  be paid under this section unless the member has terminated
  428  employment as provided in s. 121.021(39)(a) or begun
  429  participation in the Deferred Retirement Option Program as
  430  provided in subsection (13), and a proper application has been
  431  filed in the manner prescribed by the department. The department
  432  may cancel an application for retirement benefits when the
  433  member or beneficiary fails to timely provide the information
  434  and documents required by this chapter and the department’s
  435  rules. The department shall adopt rules establishing procedures
  436  for application for retirement benefits and for the cancellation
  437  of such application when the required information or documents
  438  are not received.
  439         (4) DISABILITY RETIREMENT BENEFIT.—
  440         (a) Disability retirement; entitlement and effective date.—
  441         1.a. A member who becomes totally and permanently disabled,
  442  as defined in paragraph (b), after completing 5 years of
  443  creditable service, or a member who becomes totally and
  444  permanently disabled in the line of duty regardless of service,
  445  is entitled to a monthly disability benefit; except that any
  446  member with less than 5 years of creditable service on July 1,
  447  1980, or any person who becomes a member of the Florida
  448  Retirement System on or after such date must have completed 10
  449  years of creditable service before becoming totally and
  450  permanently disabled in order to receive disability retirement
  451  benefits for any disability which occurs other than in the line
  452  of duty. However, if a member employed on July 1, 1980, who has
  453  less than 5 years of creditable service as of that date becomes
  454  totally and permanently disabled after completing 5 years of
  455  creditable service and is found not to have attained fully
  456  insured status for benefits under the federal Social Security
  457  Act, such member is entitled to a monthly disability benefit.
  458         b. Effective July 1, 2001, a member of the pension plan
  459  initially enrolled before July 1, 2014, who becomes totally and
  460  permanently disabled, as defined in paragraph (b), after
  461  completing 8 years of creditable service, or a member who
  462  becomes totally and permanently disabled in the line of duty
  463  regardless of service, is entitled to a monthly disability
  464  benefit.
  465         c. Effective July 1, 2014, a member of the pension plan
  466  initially enrolled on or after July 1, 2014, who becomes totally
  467  and permanently disabled, as defined in paragraph (b), after
  468  completing 10 years of creditable service, or a member who
  469  becomes totally and permanently disabled in the line of duty
  470  regardless of service, is entitled to a monthly disability
  471  benefit.
  472         2. If the division has received from the employer the
  473  required documentation of the member’s termination of
  474  employment, the effective retirement date for a member who
  475  applies and is approved for disability retirement shall be
  476  established by rule of the division.
  477         3. For a member who is receiving Workers’ Compensation
  478  payments, the effective disability retirement date may not
  479  precede the date the member reaches Maximum Medical Improvement
  480  (MMI), unless the member terminates employment before reaching
  481  MMI.
  482         Section 6. Subsection (1), paragraph (i) of subsection (2),
  483  paragraph (b) of subsection (3), subsection (4), paragraph (c)
  484  of subsection (5), subsection (8), and paragraphs (a), (b), (c),
  485  and (h) of subsection (10) of section 121.4501, Florida
  486  Statutes, are amended to read:
  487         121.4501 Florida Retirement System Investment Plan.—
  488         (1) The Trustees of the State Board of Administration shall
  489  establish a defined contribution program called the “Florida
  490  Retirement System Investment Plan” or “investment plan” for
  491  members of the Florida Retirement System under which retirement
  492  benefits will be provided for eligible employees who elect to
  493  participate in the program and for employees initially enrolled
  494  on or after July 1, 2014, in positions covered by the Elected
  495  Officers’ Class or the Senior Management Service Class and are
  496  compulsory members of the investment plan unless otherwise
  497  eligible to withdraw from the system under s. 121.052(3)(d) or
  498  s. 121.055(1)(b)2., or to participate in an optional retirement
  499  program under s. 121.051(1)(a), s. 121.051(2)(c), or s. 121.35.
  500  Investment plan membership continues if there is subsequent
  501  employment in a position covered by another membership class.
  502  The retirement benefits shall be provided through member
  503  directed investments, in accordance with s. 401(a) of the
  504  Internal Revenue Code and related regulations. The employer and
  505  employee shall make contributions, as provided in this section
  506  and ss. 121.571 and 121.71, to the Florida Retirement System
  507  Investment Plan Trust Fund toward the funding of benefits.
  508         (2) DEFINITIONS.—As used in this part, the term:
  509         (i) “Member” or “employee” means an eligible employee who
  510  enrolls in or is defaulted into the investment plan as provided
  511  in subsection (4), a terminated Deferred Retirement Option
  512  Program member as described in subsection (21), or a beneficiary
  513  or alternate payee of a member or employee.
  514         (3) RETIREMENT SERVICE CREDIT; TRANSFER OF BENEFITS.—
  515         (b) Notwithstanding paragraph (a), an eligible employee who
  516  elects to participate in or is defaulted into the investment
  517  plan and establishes one or more individual member accounts may
  518  elect to transfer to the investment plan a sum representing the
  519  present value of the employee’s accumulated benefit obligation
  520  under the pension plan, except as provided in paragraph (4)(b).
  521  Upon transfer, all service credit earned under the pension plan
  522  is nullified for purposes of entitlement to a future benefit
  523  under the pension plan. A member may not transfer the
  524  accumulated benefit obligation balance from the pension plan
  525  after the time period for enrolling in the investment plan has
  526  expired.
  527         1. For purposes of this subsection, the present value of
  528  the member’s accumulated benefit obligation is based upon the
  529  member’s estimated creditable service and estimated average
  530  final compensation under the pension plan, subject to
  531  recomputation under subparagraph 2. For state employees, initial
  532  estimates shall be based upon creditable service and average
  533  final compensation as of midnight on June 30, 2002; for district
  534  school board employees, initial estimates shall be based upon
  535  creditable service and average final compensation as of midnight
  536  on September 30, 2002; and for local government employees,
  537  initial estimates shall be based upon creditable service and
  538  average final compensation as of midnight on December 31, 2002.
  539  The dates specified are the “estimate date” for these employees.
  540  The actuarial present value of the employee’s accumulated
  541  benefit obligation shall be based on the following:
  542         a. The discount rate and other relevant actuarial
  543  assumptions used to value the Florida Retirement System Trust
  544  Fund at the time the amount to be transferred is determined,
  545  consistent with the factors provided in sub-subparagraphs b. and
  546  c.
  547         b. A benefit commencement age, based on the member’s
  548  estimated creditable service as of the estimate date.
  549         c. Except as provided under sub-subparagraph d., for a
  550  member initially enrolled:
  551         (I) Before July 1, 2011, the benefit commencement age is
  552  the younger of the following, but may not be younger than the
  553  member’s age as of the estimate date:
  554         (A) Age 62; or
  555         (B) The age the member would attain if the member completed
  556  30 years of service with an employer, assuming the member worked
  557  continuously from the estimate date, and disregarding any
  558  vesting requirement that would otherwise apply under the pension
  559  plan.
  560         (II) On or after July 1, 2011, the benefit commencement age
  561  is the younger of the following, but may not be younger than the
  562  member’s age as of the estimate date:
  563         (A) Age 65; or
  564         (B) The age the member would attain if the member completed
  565  33 years of service with an employer, assuming the member worked
  566  continuously from the estimate date, and disregarding any
  567  vesting requirement that would otherwise apply under the pension
  568  plan.
  569         d. For members of the Special Risk Class and for members of
  570  the Special Risk Administrative Support Class entitled to retain
  571  the special risk normal retirement date:
  572         (I) Initially enrolled before July 1, 2011, the benefit
  573  commencement age is the younger of the following, but may not be
  574  younger than the member’s age as of the estimate date:
  575         (A) Age 55; or
  576         (B) The age the member would attain if the member completed
  577  25 years of service with an employer, assuming the member worked
  578  continuously from the estimate date, and disregarding any
  579  vesting requirement that would otherwise apply under the pension
  580  plan.
  581         (II) Initially enrolled on or after July 1, 2011, the
  582  benefit commencement age is the younger of the following, but
  583  may not be younger than the member’s age as of the estimate
  584  date:
  585         (A) Age 60; or
  586         (B) The age the member would attain if the member completed
  587  30 years of service with an employer, assuming the member worked
  588  continuously from the estimate date, and disregarding any
  589  vesting requirement that would otherwise apply under the pension
  590  plan.
  591         e. The calculation must disregard vesting requirements and
  592  early retirement reduction factors that would otherwise apply
  593  under the pension plan.
  594         2. For each member who elects to transfer moneys from the
  595  pension plan to his or her account in the investment plan, the
  596  division shall recompute the amount transferred under
  597  subparagraph 1. within 60 days after the actual transfer of
  598  funds based upon the member’s actual creditable service and
  599  actual final average compensation as of the initial date of
  600  participation in the investment plan. If the recomputed amount
  601  differs from the amount transferred by $10 or more, the division
  602  shall:
  603         a. Transfer, or cause to be transferred, from the Florida
  604  Retirement System Trust Fund to the member’s account the excess,
  605  if any, of the recomputed amount over the previously transferred
  606  amount together with interest from the initial date of transfer
  607  to the date of transfer under this subparagraph, based upon the
  608  effective annual interest equal to the assumed return on the
  609  actuarial investment which was used in the most recent actuarial
  610  valuation of the system, compounded annually.
  611         b. Transfer, or cause to be transferred, from the member’s
  612  account to the Florida Retirement System Trust Fund the excess,
  613  if any, of the previously transferred amount over the recomputed
  614  amount, together with interest from the initial date of transfer
  615  to the date of transfer under this subparagraph, based upon 6
  616  percent effective annual interest, compounded annually, pro rata
  617  based on the member’s allocation plan.
  618         3. If contribution adjustments are made as a result of
  619  employer errors or corrections, including plan corrections,
  620  following recomputation of the amount transferred under
  621  subparagraph 1., the member is entitled to the additional
  622  contributions or is responsible for returning any excess
  623  contributions resulting from the correction. However, any return
  624  of such erroneous excess pretax contribution by the plan must be
  625  made within the period allowed by the Internal Revenue Service.
  626  The present value of the member’s accumulated benefit obligation
  627  shall not be recalculated.
  628         4. As directed by the member, the state board shall
  629  transfer or cause to be transferred the appropriate amounts to
  630  the designated accounts within 30 days after the effective date
  631  of the member’s participation in the investment plan unless the
  632  major financial markets for securities available for a transfer
  633  are seriously disrupted by an unforeseen event that causes the
  634  suspension of trading on any national securities exchange in the
  635  country where the securities were issued. In that event, the 30
  636  day period may be extended by a resolution of the state board.
  637  Transfers are not commissionable or subject to other fees and
  638  may be in the form of securities or cash, as determined by the
  639  state board. Such securities are valued as of the date of
  640  receipt in the member’s account.
  641         5. If the state board or the division receives notification
  642  from the United States Internal Revenue Service that this
  643  paragraph or any portion of this paragraph will cause the
  644  retirement system, or a portion thereof, to be disqualified for
  645  tax purposes under the Internal Revenue Code, the portion that
  646  will cause the disqualification does not apply. Upon such
  647  notice, the state board and the division shall notify the
  648  presiding officers of the Legislature.
  649         (4) PARTICIPATION; ENROLLMENT.—
  650         (a)1. Effective June 1, 2002, through February 28, 2003, a
  651  90-day election period was provided to each eligible employee
  652  participating in the Florida Retirement System, preceded by a
  653  90-day education period, permitting each eligible employee to
  654  elect membership in the investment plan, and an employee who
  655  failed to elect the investment plan during the election period
  656  remained in the pension plan. An eligible employee who was
  657  employed in a regularly established position during the election
  658  period was granted the option to make one subsequent election,
  659  as provided in paragraph (f). With respect to an eligible
  660  employee who did not participate in the initial election period
  661  or who are initially employee who is employed in a regularly
  662  established position after the close of the initial election
  663  period but before July 1, 2014, on June 1, 2002, by a state
  664  employer:
  665         a. Any such employee may elect to participate in the
  666  investment plan in lieu of retaining his or her membership in
  667  the pension plan. The election must be made in writing or by
  668  electronic means and must be filed with the third-party
  669  administrator by August 31, 2002, or, in the case of an active
  670  employee who is on a leave of absence on April 1, 2002, by the
  671  last business day of the 5th month following the month the leave
  672  of absence concludes. This election is irrevocable, except as
  673  provided in paragraph (g). Upon making such election, the
  674  employee shall be enrolled as a member of the investment plan,
  675  the employee’s membership in the Florida Retirement System is
  676  governed by the provisions of this part, and the employee’s
  677  membership in the pension plan terminates. The employee’s
  678  enrollment in the investment plan is effective the first day of
  679  the month for which a full month’s employer contribution is made
  680  to the investment plan.
  681         b. Any such employee who fails to elect to participate in
  682  the investment plan within the prescribed time period is deemed
  683  to have elected to retain membership in the pension plan, and
  684  the employee’s option to elect to participate in the investment
  685  plan is forfeited.
  686         2. With respect to employees who become eligible to
  687  participate in the investment plan by reason of employment in a
  688  regularly established position with a state employer commencing
  689  after April 1, 2002:
  690         a. Any such employee shall, by default, be enrolled in the
  691  pension plan at the commencement of employment, and may, by the
  692  last business day of the 5th month following the employee’s
  693  month of hire, elect to participate in the investment plan. The
  694  employee’s election must be made in writing or by electronic
  695  means and must be filed with the third-party administrator. The
  696  election to participate in the investment plan is irrevocable,
  697  except as provided in paragraph (f)(g).
  698         a.b. If the employee files such election within the
  699  prescribed time period, enrollment in the investment plan is
  700  effective on the first day of employment. The retirement
  701  contributions paid through the month of the employee plan change
  702  shall be transferred to the investment program, and, effective
  703  the first day of the next month, the employer and employee must
  704  pay the applicable contributions based on the employee
  705  membership class in the program.
  706         b.c. An employee who fails to elect to participate in the
  707  investment plan within the prescribed time period is deemed to
  708  have elected to retain membership in the pension plan, and the
  709  employee’s option to elect to participate in the investment plan
  710  is forfeited.
  711         2.3. With respect to employees who become eligible to
  712  participate in the investment plan pursuant to s.
  713  121.051(2)(c)3. or s. 121.35(3)(i), the employee may elect to
  714  participate in the investment plan in lieu of retaining his or
  715  her membership in the State Community College System Optional
  716  Retirement Program or the State University System Optional
  717  Retirement Program. The election must be made in writing or by
  718  electronic means and must be filed with the third-party
  719  administrator. This election is irrevocable, except as provided
  720  in paragraph (f)(g). Upon making such election, the employee
  721  shall be enrolled as a member in the investment plan, the
  722  employee’s membership in the Florida Retirement System is
  723  governed by the provisions of this part, and the employee’s
  724  participation in the State Community College System Optional
  725  Retirement Program or the State University System Optional
  726  Retirement Program terminates. The employee’s enrollment in the
  727  investment plan is effective on the first day of the month for
  728  which a full month’s employer and employee contribution is made
  729  to the investment plan.
  730         (b)1. With respect to employees who become eligible to
  731  participate in the investment plan, except as provided in
  732  paragraph (g), by reason of employment in a regularly
  733  established position commencing on or after July 1, 2014, any
  734  such employee shall be enrolled in the pension plan at the
  735  commencement of employment and may, by the last business day of
  736  the 5th month following the employee’s month of hire, elect to
  737  participate in the pension plan or the investment plan. Eligible
  738  employees may make a plan election only if they are earning
  739  service credit in an employer-employee relationship consistent
  740  with s. 121.021(17)(b), excluding leaves of absence without pay.
  741         2. The employee’s election must be made in writing or by
  742  electronic means and must be filed with the third-party
  743  administrator. The election to participate in the pension plan
  744  or investment plan is irrevocable, except as provided in
  745  paragraph (f).
  746         3. If the employee fails to make an election of the pension
  747  plan or investment plan within 5 months following the month of
  748  hire, the employee is deemed to have elected the investment plan
  749  and will be defaulted into the investment plan retroactively to
  750  the employee’s date of employment. The employee’s option to
  751  participate in the pension plan is forfeited, except as provided
  752  in paragraph (f).
  753         4. The amount of the employee and employer contributions
  754  paid before the default to the investment plan shall be
  755  transferred to the investment plan and shall be placed in a
  756  default fund as designated by the State Board of Administration.
  757  The employee may move the contributions once an account is
  758  activated in the investment plan.
  759         5. Effective the first day of the month after an eligible
  760  employee makes a plan election of the pension plan or investment
  761  plan, or after the month of default to the investment plan, the
  762  employee and employer shall pay the applicable contributions
  763  based on the employee membership class in the pension plan or
  764  investment plan.
  765         4. For purposes of this paragraph, “state employer” means
  766  any agency, board, branch, commission, community college,
  767  department, institution, institution of higher education, or
  768  water management district of the state, which participates in
  769  the Florida Retirement System for the benefit of certain
  770  employees.
  771         (b)1. With respect to an eligible employee who is employed
  772  in a regularly established position on September 1, 2002, by a
  773  district school board employer:
  774         a. Any such employee may elect to participate in the
  775  investment plan in lieu of retaining his or her membership in
  776  the pension plan. The election must be made in writing or by
  777  electronic means and must be filed with the third-party
  778  administrator by November 30, or, in the case of an active
  779  employee who is on a leave of absence on July 1, 2002, by the
  780  last business day of the 5th month following the month the leave
  781  of absence concludes. This election is irrevocable, except as
  782  provided in paragraph (g). Upon making such election, the
  783  employee shall be enrolled as a member of the investment plan,
  784  the employee’s membership in the Florida Retirement System is
  785  governed by the provisions of this part, and the employee’s
  786  membership in the pension plan terminates. The employee’s
  787  enrollment in the investment plan is effective the first day of
  788  the month for which a full month’s employer contribution is made
  789  to the investment program.
  790         b. Any such employee who fails to elect to participate in
  791  the investment plan within the prescribed time period is deemed
  792  to have elected to retain membership in the pension plan, and
  793  the employee’s option to elect to participate in the investment
  794  plan is forfeited.
  795         2. With respect to employees who become eligible to
  796  participate in the investment plan by reason of employment in a
  797  regularly established position with a district school board
  798  employer commencing after July 1, 2002:
  799         a. Any such employee shall, by default, be enrolled in the
  800  pension plan at the commencement of employment, and may, by the
  801  last business day of the 5th month following the employee’s
  802  month of hire, elect to participate in the investment plan. The
  803  employee’s election must be made in writing or by electronic
  804  means and must be filed with the third-party administrator. The
  805  election to participate in the investment plan is irrevocable,
  806  except as provided in paragraph (g).
  807         b. If the employee files such election within the
  808  prescribed time period, enrollment in the investment plan is
  809  effective on the first day of employment. The employer
  810  retirement contributions paid through the month of the employee
  811  plan change shall be transferred to the investment plan, and,
  812  effective the first day of the next month, the employer shall
  813  pay the applicable contributions based on the employee
  814  membership class in the investment plan.
  815         c. Any such employee who fails to elect to participate in
  816  the investment plan within the prescribed time period is deemed
  817  to have elected to retain membership in the pension plan, and
  818  the employee’s option to elect to participate in the investment
  819  plan is forfeited.
  820         3. For purposes of this paragraph, “district school board
  821  employer” means any district school board that participates in
  822  the Florida Retirement System for the benefit of certain
  823  employees, or a charter school or charter technical career
  824  center that participates in the Florida Retirement System as
  825  provided in s. 121.051(2)(d).
  826         (c)1. With respect to an eligible employee who is employed
  827  in a regularly established position on December 1, 2002, by a
  828  local employer:
  829         a. Any such employee may elect to participate in the
  830  investment plan in lieu of retaining his or her membership in
  831  the pension plan. The election must be made in writing or by
  832  electronic means and must be filed with the third-party
  833  administrator by February 28, 2003, or, in the case of an active
  834  employee who is on a leave of absence on October 1, 2002, by the
  835  last business day of the 5th month following the month the leave
  836  of absence concludes. This election is irrevocable, except as
  837  provided in paragraph (g). Upon making such election, the
  838  employee shall be enrolled as a participant of the investment
  839  plan, the employee’s membership in the Florida Retirement System
  840  is governed by the provisions of this part, and the employee’s
  841  membership in the pension plan terminates. The employee’s
  842  enrollment in the investment plan is effective the first day of
  843  the month for which a full month’s employer contribution is made
  844  to the investment plan.
  845         b. Any such employee who fails to elect to participate in
  846  the investment plan within the prescribed time period is deemed
  847  to have elected to retain membership in the pension plan, and
  848  the employee’s option to elect to participate in the investment
  849  plan is forfeited.
  850         2. With respect to employees who become eligible to
  851  participate in the investment plan by reason of employment in a
  852  regularly established position with a local employer commencing
  853  after October 1, 2002:
  854         a. Any such employee shall, by default, be enrolled in the
  855  pension plan at the commencement of employment, and may, by the
  856  last business day of the 5th month following the employee’s
  857  month of hire, elect to participate in the investment plan. The
  858  employee’s election must be made in writing or by electronic
  859  means and must be filed with the third-party administrator. The
  860  election to participate in the investment plan is irrevocable,
  861  except as provided in paragraph (g).
  862         b. If the employee files such election within the
  863  prescribed time period, enrollment in the investment plan is
  864  effective on the first day of employment. The employer
  865  retirement contributions paid through the month of the employee
  866  plan change shall be transferred to the investment plan, and,
  867  effective the first day of the next month, the employer shall
  868  pay the applicable contributions based on the employee
  869  membership class in the investment plan.
  870         c. Any such employee who fails to elect to participate in
  871  the investment plan within the prescribed time period is deemed
  872  to have elected to retain membership in the pension plan, and
  873  the employee’s option to elect to participate in the investment
  874  plan is forfeited.
  875         3. For purposes of this paragraph, “local employer” means
  876  any employer not included in paragraph (a) or paragraph (b).
  877         (c)(d) Contributions available for self-direction by a
  878  member who has not selected one or more specific investment
  879  products shall be allocated as prescribed by the state board.
  880  The third-party administrator shall notify the member at least
  881  quarterly that the member should take an affirmative action to
  882  make an asset allocation among the investment products.
  883         (d)(e) On or after July 1, 2011, a member of the pension
  884  plan who obtains a refund of employee contributions retains his
  885  or her prior plan choice upon return to employment in a
  886  regularly established position with a participating employer.
  887         (e)(f) A member of the investment plan who takes a
  888  distribution of any contributions from his or her investment
  889  plan account is considered a retiree. A retiree who is initially
  890  reemployed in a regularly established position on or after July
  891  1, 2010, is not eligible to be enrolled in renewed membership.
  892         (f)(g) After the period during which an eligible employee
  893  had the choice to elect the pension plan or the investment plan,
  894  or the month following the receipt of the eligible employee’s
  895  plan election, if sooner, the employee shall have one
  896  opportunity, at the employee’s discretion, to choose to move
  897  from the pension plan to the investment plan or from the
  898  investment plan to the pension plan. Eligible employees may
  899  elect to move between plans only if they are earning service
  900  credit in an employer-employee relationship consistent with s.
  901  121.021(17)(b), excluding leaves of absence without pay.
  902  Effective July 1, 2005, such elections are effective on the
  903  first day of the month following the receipt of the election by
  904  the third-party administrator and are not subject to the
  905  requirements regarding an employer-employee relationship or
  906  receipt of contributions for the eligible employee in the
  907  effective month, except when the election is received by the
  908  third-party administrator. This paragraph is contingent upon
  909  approval by the Internal Revenue Service. This paragraph is not
  910  applicable to compulsory investment plan members under paragraph
  911  (g).
  912         1. If the employee chooses to move to the investment plan,
  913  the provisions of subsection (3) govern the transfer.
  914         2. If the employee chooses to move to the pension plan, the
  915  employee must transfer from his or her investment plan account,
  916  and from other employee moneys as necessary, a sum representing
  917  the present value of that employee’s accumulated benefit
  918  obligation immediately following the time of such movement,
  919  determined assuming that attained service equals the sum of
  920  service in the pension plan and service in the investment plan.
  921  Benefit commencement occurs on the first date the employee is
  922  eligible for unreduced benefits, using the discount rate and
  923  other relevant actuarial assumptions that were used to value the
  924  pension plan liabilities in the most recent actuarial valuation.
  925  For any employee who, at the time of the second election,
  926  already maintains an accrued benefit amount in the pension plan,
  927  the then-present value of the accrued benefit is deemed part of
  928  the required transfer amount. The division must ensure that the
  929  transfer sum is prepared using a formula and methodology
  930  certified by an enrolled actuary. A refund of any employee
  931  contributions or additional member payments made which exceed
  932  the employee contributions that would have accrued had the
  933  member remained in the pension plan and not transferred to the
  934  investment plan is not permitted.
  935         3. Notwithstanding subparagraph 2., an employee who chooses
  936  to move to the pension plan and who became eligible to
  937  participate in the investment plan by reason of employment in a
  938  regularly established position with a state employer after June
  939  1, 2002; a district school board employer after September 1,
  940  2002; or a local employer after December 1, 2002, must transfer
  941  from his or her investment plan account, and from other employee
  942  moneys as necessary, a sum representing the employee’s actuarial
  943  accrued liability. A refund of any employee contributions or
  944  additional member participant payments made which exceed the
  945  employee contributions that would have accrued had the member
  946  remained in the pension plan and not transferred to the
  947  investment plan is not permitted.
  948         4. An employee’s ability to transfer from the pension plan
  949  to the investment plan pursuant to paragraphs (a) and (b)
  950  paragraphs (a)-(d), and the ability of a current employee to
  951  have an option to later transfer back into the pension plan
  952  under subparagraph 2., shall be deemed a significant system
  953  amendment. Pursuant to s. 121.031(4), any resulting unfunded
  954  liability arising from actual original transfers from the
  955  pension plan to the investment plan must be amortized within 30
  956  plan years as a separate unfunded actuarial base independent of
  957  the reserve stabilization mechanism defined in s. 121.031(3)(f).
  958  For the first 25 years, a direct amortization payment may not be
  959  calculated for this base. During this 25-year period, the
  960  separate base shall be used to offset the impact of employees
  961  exercising their second program election under this paragraph.
  962  The actuarial funded status of the pension plan will not be
  963  affected by such second program elections in any significant
  964  manner, after due recognition of the separate unfunded actuarial
  965  base. Following the initial 25-year period, any remaining
  966  balance of the original separate base shall be amortized over
  967  the remaining 5 years of the required 30-year amortization
  968  period.
  969         5. If the employee chooses to transfer from the investment
  970  plan to the pension plan and retains an excess account balance
  971  in the investment plan after satisfying the buy-in requirements
  972  under this paragraph, the excess may not be distributed until
  973  the member retires from the pension plan. The excess account
  974  balance may be rolled over to the pension plan and used to
  975  purchase service credit or upgrade creditable service in the
  976  pension plan.
  977         (g)1. All employees initially enrolled on or after July 1,
  978  2014, in positions covered by the Elected Officers’ Class or the
  979  Senior Management Service Class are compulsory members of the
  980  investment plan, except those eligible to withdraw from the
  981  system under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those
  982  eligible for optional retirement programs under s.
  983  121.051(1)(a), s. 121.051(2)(c), or s. 121.35. Employees
  984  eligible to withdraw from the system under s. 121.052(3)(d) or
  985  s. 121.055(1)(b)2. may choose to withdraw from the system or to
  986  participate in the investment plan as provided in those
  987  sections. Employees eligible for optional retirement programs
  988  under s. 121.051(2)(c) or s. 121.35, except as provided in s.
  989  121.051(1)(a), may choose to participate in the optional
  990  retirement program or the investment plan as provided in those
  991  sections. Investment plan membership continues if there is
  992  subsequent employment in a position covered by another
  993  membership class. Membership in the pension plan is not
  994  permitted except as provided in s. 121.591(2). Employees
  995  initially enrolled in the Florida Retirement System prior to
  996  July 1, 2014, may retain their membership in the pension plan or
  997  investment plan and are eligible to use the election opportunity
  998  specified in s. 121.4501(4)(f).
  999         2. Employees initially enrolled on or after July 1, 2014,
 1000  are not permitted to use the election opportunity specified in
 1001  paragraph (f).
 1002         3. The amount of retirement contributions paid by the
 1003  employee and employer, as required under s. 121.72, shall be
 1004  placed in a default fund as designated by the state board, until
 1005  an account is activated in the investment plan, at which time
 1006  the member may move the contributions from the default fund to
 1007  other funds provided in the investment plan.
 1008         (5) CONTRIBUTIONS.—
 1009         (c) The state board, acting as plan fiduciary, must ensure
 1010  that all plan assets are held in a trust, pursuant to s. 401 of
 1011  the Internal Revenue Code. The fiduciary must ensure that such
 1012  contributions are allocated as follows:
 1013         1. The employer and employee contribution portion earmarked
 1014  for member accounts shall be used to purchase interests in the
 1015  appropriate investment vehicles as specified by the member, or
 1016  in accordance with paragraph (4)(c) (4)(d).
 1017         2. The employer contribution portion earmarked for
 1018  administrative and educational expenses shall be transferred to
 1019  the Florida Retirement System Investment Plan Trust Fund.
 1020         3. The employer contribution portion earmarked for
 1021  disability benefits shall be transferred to the Florida
 1022  Retirement System Trust Fund.
 1023         (8) INVESTMENT PLAN ADMINISTRATION.—The investment plan
 1024  shall be administered by the state board and affected employers.
 1025  The state board may require oaths, by affidavit or otherwise,
 1026  and acknowledgments from persons in connection with the
 1027  administration of its statutory duties and responsibilities for
 1028  the investment plan. An oath, by affidavit or otherwise, may not
 1029  be required of a member at the time of enrollment.
 1030  Acknowledgment of an employee’s election to participate in the
 1031  program shall be no greater than necessary to confirm the
 1032  employee’s election except for members initially enrolled on or
 1033  after July 1, 2014, as provided in paragraph (4)(g). The state
 1034  board shall adopt rules to carry out its statutory duties with
 1035  respect to administering the investment plan, including
 1036  establishing the roles and responsibilities of affected state,
 1037  local government, and education-related employers, the state
 1038  board, the department, and third-party contractors. The
 1039  department shall adopt rules necessary to administer the
 1040  investment plan in coordination with the pension plan and the
 1041  disability benefits available under the investment plan.
 1042         (a)1. The state board shall select and contract with a
 1043  third-party administrator to provide administrative services if
 1044  those services cannot be competitively and contractually
 1045  provided by the division. With the approval of the state board,
 1046  the third-party administrator may subcontract to provide
 1047  components of the administrative services. As a cost of
 1048  administration, the state board may compensate any such
 1049  contractor for its services, in accordance with the terms of the
 1050  contract, as is deemed necessary or proper by the board. The
 1051  third-party administrator may not be an approved provider or be
 1052  affiliated with an approved provider.
 1053         2. These administrative services may include, but are not
 1054  limited to, enrollment of eligible employees, collection of
 1055  employer and employee contributions, disbursement of
 1056  contributions to approved providers in accordance with the
 1057  allocation directions of members; services relating to
 1058  consolidated billing; individual and collective recordkeeping
 1059  and accounting; asset purchase, control, and safekeeping; and
 1060  direct disbursement of funds to and from the third-party
 1061  administrator, the division, the state board, employers,
 1062  members, approved providers, and beneficiaries. This section
 1063  does not prevent or prohibit a bundled provider from providing
 1064  any administrative or customer service, including accounting and
 1065  administration of individual member benefits and contributions;
 1066  individual member recordkeeping; asset purchase, control, and
 1067  safekeeping; direct execution of the member’s instructions as to
 1068  asset and contribution allocation; calculation of daily net
 1069  asset values; direct access to member account information; or
 1070  periodic reporting to members, at least quarterly, on account
 1071  balances and transactions, if these services are authorized by
 1072  the state board as part of the contract.
 1073         (b)1. The state board shall select and contract with one or
 1074  more organizations to provide educational services. With
 1075  approval of the state board, the organizations may subcontract
 1076  to provide components of the educational services. As a cost of
 1077  administration, the state board may compensate any such
 1078  contractor for its services in accordance with the terms of the
 1079  contract, as is deemed necessary or proper by the board. The
 1080  education organization may not be an approved provider or be
 1081  affiliated with an approved provider.
 1082         2. Educational services shall be designed by the state
 1083  board and department to assist employers, eligible employees,
 1084  members, and beneficiaries in order to maintain compliance with
 1085  United States Department of Labor regulations under s. 404(c) of
 1086  the Employee Retirement Income Security Act of 1974 and to
 1087  assist employees in their choice of pension plan or investment
 1088  plan retirement alternatives. Educational services include, but
 1089  are not limited to, disseminating educational materials;
 1090  providing retirement planning education; explaining the pension
 1091  plan and the investment plan; and offering financial planning
 1092  guidance on matters such as investment diversification,
 1093  investment risks, investment costs, and asset allocation. An
 1094  approved provider may also provide educational information,
 1095  including retirement planning and investment allocation
 1096  information concerning its products and services.
 1097         (c)1. In evaluating and selecting a third-party
 1098  administrator, the state board shall establish criteria for
 1099  evaluating the relative capabilities and qualifications of each
 1100  proposed administrator. In developing such criteria, the state
 1101  board shall consider:
 1102         a. The administrator’s demonstrated experience in providing
 1103  administrative services to public or private sector retirement
 1104  systems.
 1105         b. The administrator’s demonstrated experience in providing
 1106  daily valued recordkeeping to defined contribution programs.
 1107         c. The administrator’s ability and willingness to
 1108  coordinate its activities with employers, the state board, and
 1109  the division, and to supply to such employers, the board, and
 1110  the division the information and data they require, including,
 1111  but not limited to, monthly management reports, quarterly member
 1112  reports, and ad hoc reports requested by the department or state
 1113  board.
 1114         d. The cost-effectiveness and levels of the administrative
 1115  services provided.
 1116         e. The administrator’s ability to interact with the
 1117  members, the employers, the state board, the division, and the
 1118  providers; the means by which members may access account
 1119  information, direct investment of contributions, make changes to
 1120  their accounts, transfer moneys between available investment
 1121  vehicles, and transfer moneys between investment products; and
 1122  any fees that apply to such activities.
 1123         f. Any other factor deemed necessary by the state board.
 1124         2. In evaluating and selecting an educational provider, the
 1125  state board shall establish criteria under which it shall
 1126  consider the relative capabilities and qualifications of each
 1127  proposed educational provider. In developing such criteria, the
 1128  state board shall consider:
 1129         a. Demonstrated experience in providing educational
 1130  services to public or private sector retirement systems.
 1131         b. Ability and willingness to coordinate its activities
 1132  with the employers, the state board, and the division, and to
 1133  supply to such employers, the board, and the division the
 1134  information and data they require, including, but not limited
 1135  to, reports on educational contacts.
 1136         c. The cost-effectiveness and levels of the educational
 1137  services provided.
 1138         d. Ability to provide educational services via different
 1139  media, including, but not limited to, the Internet, personal
 1140  contact, seminars, brochures, and newsletters.
 1141         e. Any other factor deemed necessary by the state board.
 1142         3. The establishment of the criteria shall be solely within
 1143  the discretion of the state board.
 1144         (d) The state board shall develop the form and content of
 1145  any contracts to be offered under the investment plan. In
 1146  developing the contracts, the board shall consider:
 1147         1. The nature and extent of the rights and benefits to be
 1148  afforded in relation to the contributions required under the
 1149  plan.
 1150         2. The suitability of the rights and benefits provided and
 1151  the interests of employers in the recruitment and retention of
 1152  eligible employees.
 1153         (e)1. The state board may contract for professional
 1154  services, including legal, consulting, accounting, and actuarial
 1155  services, deemed necessary to implement and administer the
 1156  investment plan. The state board may enter into a contract with
 1157  one or more vendors to provide low-cost investment advice to
 1158  members, supplemental to education provided by the third-party
 1159  administrator. All fees under any such contract shall be paid by
 1160  those members who choose to use the services of the vendor.
 1161         2. The department may contract for professional services,
 1162  including legal, consulting, accounting, and actuarial services,
 1163  deemed necessary to implement and administer the investment plan
 1164  in coordination with the pension plan. The department, in
 1165  coordination with the state board, may enter into a contract
 1166  with the third-party administrator in order to coordinate
 1167  services common to the various programs within the Florida
 1168  Retirement System.
 1169         (f) The third-party administrator may not receive direct or
 1170  indirect compensation from an approved provider, except as
 1171  specifically provided for in the contract with the state board.
 1172         (g) The state board shall receive and resolve member
 1173  complaints against the program, the third-party administrator,
 1174  or any program vendor or provider; shall resolve any conflict
 1175  between the third-party administrator and an approved provider
 1176  if such conflict threatens the implementation or administration
 1177  of the program or the quality of services to employees; and may
 1178  resolve any other conflicts. The third-party administrator shall
 1179  retain all member records for at least 5 years for use in
 1180  resolving any member conflicts. The state board, the third-party
 1181  administrator, or a provider is not required to produce
 1182  documentation or an audio recording to justify action taken with
 1183  regard to a member if the action occurred 5 or more years before
 1184  the complaint is submitted to the state board. It is presumed
 1185  that all action taken 5 or more years before the complaint is
 1186  submitted was taken at the request of the member and with the
 1187  member’s full knowledge and consent. To overcome this
 1188  presumption, the member must present documentary evidence or an
 1189  audio recording demonstrating otherwise.
 1190         (10) EDUCATION COMPONENT.—
 1191         (a) The state board, in coordination with the department,
 1192  shall provide for an education component for eligible employees
 1193  system members in a manner consistent with the provisions of
 1194  this subsection section. The education component must be
 1195  available to eligible employees at least 90 days prior to the
 1196  beginning date of the election period for the employees of the
 1197  respective types of employers.
 1198         (b) The education component must provide system members
 1199  with impartial and balanced information about plan choices
 1200  except for members initially enrolled on or after July 1, 2014,
 1201  as provided in paragraph (4)(g). The education component must
 1202  involve multimedia formats. Program comparisons must, to the
 1203  greatest extent possible, be based upon the retirement income
 1204  that different retirement programs may provide to the member.
 1205  The state board shall monitor the performance of the contract to
 1206  ensure that the program is conducted in accordance with the
 1207  contract, applicable law, and the rules of the state board.
 1208         (c) The state board, in coordination with the department,
 1209  shall provide for an initial and ongoing transfer education
 1210  component to provide system members except for those members
 1211  initially enrolled on or after July 1, 2014, as provided in
 1212  paragraph (4)(g), with information necessary to make informed
 1213  plan choice decisions. The transfer education component must
 1214  include, but is not limited to, information on:
 1215         1. The amount of money available to a member to transfer to
 1216  the defined contribution program.
 1217         2. The features of and differences between the pension plan
 1218  and the defined contribution program, both generally and
 1219  specifically, as those differences may affect the member.
 1220         3. The expected benefit available if the member were to
 1221  retire under each of the retirement programs, based on
 1222  appropriate alternative sets of assumptions.
 1223         4. The rate of return from investments in the defined
 1224  contribution program and the period of time over which such rate
 1225  of return must be achieved to equal or exceed the expected
 1226  monthly benefit payable to the member under the pension plan.
 1227         5. The historical rates of return for the investment
 1228  alternatives available in the defined contribution programs.
 1229         6. The benefits and historical rates of return on
 1230  investments available in a typical deferred compensation plan or
 1231  a typical plan under s. 403(b) of the Internal Revenue Code for
 1232  which the employee may be eligible.
 1233         7. The program choices available to employees of the State
 1234  University System and the comparative benefits of each available
 1235  program, if applicable.
 1236         8. Payout options available in each of the retirement
 1237  programs.
 1238         (h) Pursuant to subsection (8), all Florida Retirement
 1239  System employers have an obligation to regularly communicate the
 1240  existence of the two Florida Retirement System plans and the
 1241  plan choice in the natural course of administering their
 1242  personnel functions, using the educational materials supplied by
 1243  the state board and the Department of Management Services.
 1244         Section 7. Paragraph (b) of subsection (2) of section
 1245  121.591, Florida Statutes, is amended to read:
 1246         121.591 Payment of benefits.—Benefits may not be paid under
 1247  the Florida Retirement System Investment Plan unless the member
 1248  has terminated employment as provided in s. 121.021(39)(a) or is
 1249  deceased and a proper application has been filed as prescribed
 1250  by the state board or the department. Benefits, including
 1251  employee contributions, are not payable under the investment
 1252  plan for employee hardships, unforeseeable emergencies, loans,
 1253  medical expenses, educational expenses, purchase of a principal
 1254  residence, payments necessary to prevent eviction or foreclosure
 1255  on an employee’s principal residence, or any other reason except
 1256  a requested distribution for retirement, a mandatory de minimis
 1257  distribution authorized by the administrator, or a required
 1258  minimum distribution provided pursuant to the Internal Revenue
 1259  Code. The state board or department, as appropriate, may cancel
 1260  an application for retirement benefits if the member or
 1261  beneficiary fails to timely provide the information and
 1262  documents required by this chapter and the rules of the state
 1263  board and department. In accordance with their respective
 1264  responsibilities, the state board and the department shall adopt
 1265  rules establishing procedures for application for retirement
 1266  benefits and for the cancellation of such application if the
 1267  required information or documents are not received. The state
 1268  board and the department, as appropriate, are authorized to cash
 1269  out a de minimis account of a member who has been terminated
 1270  from Florida Retirement System covered employment for a minimum
 1271  of 6 calendar months. A de minimis account is an account
 1272  containing employer and employee contributions and accumulated
 1273  earnings of not more than $5,000 made under the provisions of
 1274  this chapter. Such cash-out must be a complete lump-sum
 1275  liquidation of the account balance, subject to the provisions of
 1276  the Internal Revenue Code, or a lump-sum direct rollover
 1277  distribution paid directly to the custodian of an eligible
 1278  retirement plan, as defined by the Internal Revenue Code, on
 1279  behalf of the member. Any nonvested accumulations and associated
 1280  service credit, including amounts transferred to the suspense
 1281  account of the Florida Retirement System Investment Plan Trust
 1282  Fund authorized under s. 121.4501(6), shall be forfeited upon
 1283  payment of any vested benefit to a member or beneficiary, except
 1284  for de minimis distributions or minimum required distributions
 1285  as provided under this section. If any financial instrument
 1286  issued for the payment of retirement benefits under this section
 1287  is not presented for payment within 180 days after the last day
 1288  of the month in which it was originally issued, the third-party
 1289  administrator or other duly authorized agent of the state board
 1290  shall cancel the instrument and credit the amount of the
 1291  instrument to the suspense account of the Florida Retirement
 1292  System Investment Plan Trust Fund authorized under s.
 1293  121.4501(6). Any amounts transferred to the suspense account are
 1294  payable upon a proper application, not to include earnings
 1295  thereon, as provided in this section, within 10 years after the
 1296  last day of the month in which the instrument was originally
 1297  issued, after which time such amounts and any earnings
 1298  attributable to employer contributions shall be forfeited. Any
 1299  forfeited amounts are assets of the trust fund and are not
 1300  subject to chapter 717.
 1301         (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under
 1302  this subsection are payable in lieu of the benefits that would
 1303  otherwise be payable under the provisions of subsection (1).
 1304  Such benefits must be funded from employer contributions made
 1305  under s. 121.571, transferred employee contributions and funds
 1306  accumulated pursuant to paragraph (a), and interest and earnings
 1307  thereon.
 1308         (b) Disability retirement; entitlement.—
 1309         1.a. A member of the investment plan initially enrolled
 1310  before July 1, 2014, who becomes totally and permanently
 1311  disabled, as defined in paragraph (d), after completing 8 years
 1312  of creditable service, or a member who becomes totally and
 1313  permanently disabled in the line of duty regardless of length of
 1314  service, is entitled to a monthly disability benefit.
 1315         b. A member of the investment plan initially enrolled on or
 1316  after July 1, 2014, who becomes totally and permanently
 1317  disabled, as defined in paragraph (d), after completing 10 years
 1318  of creditable service, or a member who becomes totally and
 1319  permanently disabled in the line of duty regardless of service,
 1320  is entitled to a monthly disability benefit.
 1321         2. In order for service to apply toward the 8 years of
 1322  creditable service required for regular disability benefits, or
 1323  toward the creditable service used in calculating a service
 1324  based benefit as provided under paragraph (g), the service must
 1325  be creditable service as described below:
 1326         a. The member’s period of service under the investment plan
 1327  shall be considered creditable service, except as provided in
 1328  subparagraph d.
 1329         b. If the member has elected to retain credit for service
 1330  under the pension plan as provided under s. 121.4501(3), all
 1331  such service shall be considered creditable service.
 1332         c. If the member elects to transfer to his or her member
 1333  accounts a sum representing the present value of his or her
 1334  retirement credit under the pension plan as provided under s.
 1335  121.4501(3), the period of service under the pension plan
 1336  represented in the present value amounts transferred shall be
 1337  considered creditable service, except as provided in
 1338  subparagraph d.
 1339         d. If a member has terminated employment and has taken
 1340  distribution of his or her funds as provided in subsection (1),
 1341  all creditable service represented by such distributed funds is
 1342  forfeited for purposes of this subsection.
 1343         Section 8. Subsection (3) of section 121.71, Florida
 1344  Statutes, is amended to read:
 1345         121.71 Uniform rates; process; calculations; levy.—
 1346         (3)(a) Required employee retirement contribution rates for
 1347  each membership class and subclass of the Florida Retirement
 1348  System for the pension plan both retirement plans are as
 1349  follows:
 1350  Membership Class                               Percentage ofGrossCompensation,EffectiveJuly 1, 2011
 1351                                                 
 1352  Regular Class                                          3.00%        
 1353  Special Risk Class                                     3.00%        
 1354  Special Risk Administrative Support Class              3.00%        
 1355  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders        3.00%        
 1356  Elected Officers’ Class— Justices, Judges              3.00%        
 1357  Elected Officers’ Class— County Elected Officers        3.00%        
 1358  Senior Management Service Class                        3.00%        
 1359  DROP                                                   0.00%        
 1360                                                                      
 1361                                                                      
 1362  
 1363  
 1364  
 1365  
 1366  
 1367  
 1368  
 1369         (b) Required employee retirement contribution rates for
 1370  each membership class and subclass of the Florida Retirement
 1371  System for the investment plan are as follows:
 1372  
 1373  Membership Class    Percentage ofGrossCompensation,EffectiveJuly 1, 2011Percentage ofGrossCompensation,EffectiveJuly 1, 2014
 1374                      
 1375  Regular Class            3.00%          2.00%     
 1376  Special Risk Class       3.00%          2.00%     
 1377  Special Risk Administrative Support Class     3.00%          2.00%     
 1378  Elected Officers’ Class—Legislators, Governor,Lt. Governor,Cabinet Officers,State Attorneys,Public Defenders     3.00%          2.00%     
 1379  Elected Officers’ Class—Justices, Judges     3.00%          2.00%     
 1380  Elected Officers’ Class—County Elected Officers     3.00%          2.00%     
 1381  Senior Management Service Class     3.00%          2.00%     
 1382                                                    
 1383                                                    
 1384  
 1385         Section 9. Paragraph (a) of subsection (4) of section
 1386  121.35, Florida Statutes, is amended to read:
 1387         121.35 Optional retirement program for the State University
 1388  System.—
 1389         (4) CONTRIBUTIONS.—
 1390         (a)1. Through June 30, 2001, each employer shall contribute
 1391  on behalf of each member of the optional retirement program an
 1392  amount equal to the normal cost portion of the employer
 1393  retirement contribution which would be required if the employee
 1394  were a regular member of the Florida Retirement System Pension
 1395  Plan, plus the portion of the contribution rate required in s.
 1396  112.363(8) that would otherwise be assigned to the Retiree
 1397  Health Insurance Subsidy Trust Fund.
 1398         2. Effective July 1, 2001, through June 30, 2011, each
 1399  employer shall contribute on behalf of each member of the
 1400  optional retirement program an amount equal to 10.43 percent of
 1401  the employee’s gross monthly compensation.
 1402         3. Effective July 1, 2011, through June 30, 2012, each
 1403  member of the optional retirement program shall contribute an
 1404  amount equal to the employee contribution required in s.
 1405  121.71(3)(a). The employer shall contribute on behalf of each
 1406  such member an amount equal to the difference between 10.43
 1407  percent of the employee’s gross monthly compensation and the
 1408  amount equal to the employee’s required contribution based on
 1409  the employee’s gross monthly compensation.
 1410         4. Effective July 1, 2012, each member of the optional
 1411  retirement program shall contribute an amount equal to the
 1412  employee contribution required in s. 121.71(3)(a). The employer
 1413  shall contribute on behalf of each such member an amount equal
 1414  to the difference between 8.15 percent of the employee’s gross
 1415  monthly compensation and the amount equal to the employee’s
 1416  required contribution based on the employee’s gross monthly
 1417  compensation.
 1418         5. The payment of the contributions, including
 1419  contributions by the employee, shall be made by the employer to
 1420  the department, which shall forward the contributions to the
 1421  designated company or companies contracting for payment of
 1422  benefits for members of the program. However, such contributions
 1423  paid on behalf of an employee described in paragraph (3)(c) may
 1424  not be forwarded to a company and do not begin to accrue
 1425  interest until the employee has executed a contract and notified
 1426  the department. The department shall deduct an amount from the
 1427  contributions to provide for the administration of this program.
 1428         Section 10. Section 238.072, Florida Statutes, is amended
 1429  to read:
 1430         238.072 Special service provisions for extension
 1431  personnel.—All state and county cooperative extension personnel
 1432  holding appointments by the United States Department of
 1433  Agriculture for extension work in agriculture and home economics
 1434  in this state who are joint representatives of the University of
 1435  Florida and the United States Department of Agriculture, as
 1436  provided in s. 121.051(8) 121.051(7), who are members of the
 1437  Teachers’ Retirement System, chapter 238, and who are prohibited
 1438  from transferring to and participating in the Florida Retirement
 1439  System, chapter 121, may retire with full benefits upon
 1440  completion of 30 years of creditable service and shall be
 1441  considered to have attained normal retirement age under this
 1442  chapter, any law to the contrary notwithstanding. In order to
 1443  comply with the provisions of s. 14, Art. X of the State
 1444  Constitution, any liability accruing to the Florida Retirement
 1445  System Trust Fund as a result of the provisions of this section
 1446  shall be paid on an annual basis from the General Revenue Fund.
 1447         Section 11. Subsection (11) of section 413.051, Florida
 1448  Statutes, is amended to read:
 1449         413.051 Eligible blind persons; operation of vending
 1450  stands.—
 1451         (11) Effective July 1, 1996, blind licensees who remain
 1452  members of the Florida Retirement System pursuant to s.
 1453  121.051(7)(b)1. 121.051(6)(b)1. shall pay any unappropriated
 1454  retirement costs from their net profits or from program income.
 1455  Within 30 days after the effective date of this act, each blind
 1456  licensee who is eligible to maintain membership in the Florida
 1457  Retirement System under s. 121.051(7)(b)1. 121.051(6)(b)1., but
 1458  who elects to withdraw from the system as provided in s.
 1459  121.051(7)(b)3. 121.051(6)(b)3., must, on or before July 31,
 1460  1996, notify the Division of Blind Services and the Department
 1461  of Management Services in writing of his or her election to
 1462  withdraw. Failure to timely notify the divisions shall be deemed
 1463  a decision to remain a compulsory member of the Florida
 1464  Retirement System. However, if, at any time after July 1, 1996,
 1465  sufficient funds are not paid by a blind licensee to cover the
 1466  required contribution to the Florida Retirement System, that
 1467  blind licensee shall become ineligible to participate in the
 1468  Florida Retirement System on the last day of the first month for
 1469  which no contribution is made or the amount contributed is
 1470  insufficient to cover the required contribution. For any blind
 1471  licensee who becomes ineligible to participate in the Florida
 1472  Retirement System as described in this subsection, no creditable
 1473  service shall be earned under the Florida Retirement System for
 1474  any period following the month that retirement contributions
 1475  ceased to be reported. However, any such person may participate
 1476  in the Florida Retirement System in the future if employed by a
 1477  participating employer in a covered position.
 1478         Section 12. Paragraph (a) of subsection (4) of section
 1479  1012.875, Florida Statutes, is amended to read:
 1480         1012.875 State Community College System Optional Retirement
 1481  Program.—Each Florida College System institution may implement
 1482  an optional retirement program, if such program is established
 1483  therefor pursuant to s. 1001.64(20), under which annuity or
 1484  other contracts providing retirement and death benefits may be
 1485  purchased by, and on behalf of, eligible employees who
 1486  participate in the program, in accordance with s. 403(b) of the
 1487  Internal Revenue Code. Except as otherwise provided herein, this
 1488  retirement program, which shall be known as the State Community
 1489  College System Optional Retirement Program, may be implemented
 1490  and administered only by an individual Florida College System
 1491  institution or by a consortium of Florida College System
 1492  institutions.
 1493         (4)(a)1. Through June 30, 2011, each college must
 1494  contribute on behalf of each program member an amount equal to
 1495  10.43 percent of the employee’s gross monthly compensation.
 1496         2. Effective July 1, 2011, through June 30, 2012, each
 1497  member shall contribute an amount equal to the employee
 1498  contribution required under s. 121.71(3)(a). The employer shall
 1499  contribute on behalf of each program member an amount equal to
 1500  the difference between 10.43 percent of the employee’s gross
 1501  monthly compensation and the employee’s required contribution
 1502  based on the employee’s gross monthly compensation.
 1503         3. Effective July 1, 2012, each member shall contribute an
 1504  amount equal to the employee contribution required under s.
 1505  121.71(3)(a). The employer shall contribute on behalf of each
 1506  program member an amount equal to the difference between 8.15
 1507  percent of the employee’s gross monthly compensation and the
 1508  employee’s required contribution based on the employee’s gross
 1509  monthly compensation.
 1510         4. The college shall deduct an amount approved by the
 1511  district board of trustees of the college to provide for the
 1512  administration of the optional retirement program. Payment of
 1513  this contribution must be made directly by the college or
 1514  through the program administrator to the designated company
 1515  contracting for payment of benefits to the program member.
 1516         Section 13. The Legislature finds that a proper and
 1517  legitimate state purpose is served when employees and retirees
 1518  of the state and its political subdivisions, and the dependents,
 1519  survivors, and beneficiaries of such employees and retirees, are
 1520  extended the basic protections afforded by governmental
 1521  retirement systems. These persons must be provided benefits that
 1522  are fair and adequate and that are managed, administered, and
 1523  funded in an actuarially sound manner, as required by s. 14,
 1524  Article X of the State Constitution and part VII of chapter 112,
 1525  Florida Statutes. Therefore, the Legislature determines and
 1526  declares that this act fulfills an important state interest.
 1527         Section 14. This act shall take effect July 1, 2014.