The Florida Senate

240.3195  State Community College System Optional Retirement Program.--Each community college may implement an optional retirement program, if such program is established therefor pursuant to s. 240.319(4)(r), under which annuity contracts providing retirement and death benefits may be purchased by, and on behalf of, eligible employees who participate in the program. Except as otherwise provided herein, this retirement program, which shall be known as the State Community College System Optional Retirement Program, may be implemented and administered only by an individual community college or by a consortium of community colleges.

(1)  As used in this section, the term:

(a)  "Activation" means the date upon which an optional retirement program is first made available by the program administrator to eligible employees.

(b)  "College" means public community colleges that are members of the Florida Community College System.

(c)  "Department" means the Department of Management Services.

(d)  "Program administrator" means the individual college or consortium of colleges responsible for implementing and administering an optional retirement program.

(e)  "Program participant" means an eligible employee who has elected to participate in an available optional retirement program as authorized by this section.

(2)  Participation in the optional retirement program provided by this section is limited to employees who satisfy the criteria set forth in s. 121.051(2)(c).

(3)(a)  With respect to any employee who is eligible to participate in the optional retirement program by reason of qualifying employment commencing before the program's activation:

1.  The employee may elect to participate in the optional retirement program in lieu of participation in the Florida Retirement System. To become a program participant, the employee must file with the personnel officer of the college, within 60 days after the program's activation, both a written election on a form provided by the department and a completed application for an individual contract or certificate.

2.  An employee's participation in the optional retirement program commences on the first day of the next full calendar month following the filing of the election and completed application with the program administrator and receipt of such election by the department. An employee's membership in the Florida Retirement System terminates on this same date.

3.  Any such employee who fails to make an election to participate in the optional retirement program within 60 days after its activation has elected to retain membership in the Florida Retirement System.

(b)  With respect to any employee who becomes eligible to participate in an optional retirement program by reason of qualifying employment commencing on or after the program's activation:

1.  The employee may elect to participate in the optional retirement program in lieu of participation in the Florida Retirement System. To become a program participant, the employee must file with the personnel officer of the college, within 60 days after commencing qualifying employment, both a written election on a form provided by the department and a completed application for an individual contract or certificate.

2.  An employee's participation in the optional retirement program commences on the first day of the next full calendar month following the filing of the election and completed application with the program administrator and receipt of such election by the department. An employee's membership in the Florida Retirement System terminates on this same date.

3.  If the employee makes an election to participate in the optional retirement program before the community college submits its initial payroll for the employee, participation in the optional retirement program commences on the first date of employment.

4.  Any such employee who fails to make an election to participate in the optional retirement program within 60 days after commencing qualifying employment has elected to retain membership in the Florida Retirement System.

(c)  Any employee who, on or after an optional retirement program's activation, becomes eligible to participate in the program by reason of a change in status due to the subsequent designation of the employee's position as one of those referenced in subsection (2), or due to the employee's appointment, promotion, transfer, or reclassification to a position referenced in subsection (2), must be notified by the community college of the employee's eligibility to participate in the optional retirement program in lieu of participation in the Florida Retirement System. These eligible employees are subject to the provisions of paragraph (b) and may elect to participate in the optional retirement program in the same manner as those employees described in paragraph (b), except that the 60-day election period commences upon the date notice of eligibility is received by the employee.

(d)  Program participants must be fully and immediately vested in the optional retirement program.

(e)  The election by an eligible employee to participate in the optional retirement program is irrevocable for so long as the employee continues to meet the eligibility requirements set forth in this section and in s. 121.051(2)(c), except as provided in paragraph (i).

(f)  If a program participant becomes ineligible to continue participating in the optional retirement program pursuant to the criteria referenced in subsection (2), the employee becomes a member of the Florida Retirement System if eligible. The college must notify the department of an employee's change in eligibility status within 30 days after the event that makes the employee ineligible to continue participation in the optional retirement program.

(g)  An eligible employee who is a member of the Florida Retirement System at the time of election to participate in the optional retirement program retains all retirement service credit earned under the Florida Retirement System at the rate earned. Additional service credit in the Florida Retirement System may not be earned while the employee participates in the optional retirement program, nor is the employee eligible for disability retirement under the Florida Retirement System.

(h)  A program participant may not simultaneously participate in any other state-administered retirement system, plan, or class.

(i)  Except as provided in s. 121.052(6)(d), a program participant who is or who becomes dually employed in two or more positions covered by the Florida Retirement System, one of which is eligible for an optional retirement program pursuant to this section and one of which is not, is subject to the dual employment provisions of chapter 121.

(4)(a)  Each college must contribute on behalf of each program participant an amount equal to the normal cost portion of the employer retirement contribution which would be required if the program participant were a member of the Regular Class of the Florida Retirement System as provided in s. 121.071, plus the portion of the contribution rate required in s. 112.363(8) that would otherwise be assigned to the Retiree Health Insurance Subsidy Trust Fund, and less an amount approved by the community college to provide for the administration of the optional retirement program. Payment of this contribution must be made either directly by the community college or through the program administrator to the designated company contracting for payment of benefits to the program participant.

(b)  Each community college must contribute on behalf of each program participant an amount equal to the unfunded actuarial accrued liability portion of the employer contribution which would be required if the program participant were a member of the Regular Class of the Florida Retirement System. Payment of this contribution must be made directly by the college to the department for deposit in the Florida Retirement System Trust Fund.

(c)  Each program participant who has executed an annuity contract may contribute by way of salary reduction or deduction a percentage of the program participant's gross compensation, but this percentage may not exceed the corresponding percentage contributed by the community college to the optional retirement program. Payment of this contribution may be made either directly by the college or through the program administrator to the designated company contracting for payment of benefits to the program participant.

(d)  Contributions to an optional retirement program by a college or a program participant are in addition to, and have no effect upon, contributions required now or in future by the federal Social Security Act.

(5)(a)  The benefits to be provided to program participants must be provided through individual contracts or group annuity contracts, which may be fixed, variable, or both. Each individual contract or certificate must state the type of annuity contract on its face page, and must include at least a statement of ownership, the contract benefits, annuity income options, limitations, expense charges, and surrender charges, if any.

(b)  Benefits are payable under the optional retirement program to program participants or their beneficiaries, and the benefits must be paid only by the designated company in accordance with the terms of the annuity contracts applicable to the program participant, provided that benefits funded by employer contributions are payable only as a lifetime annuity to the program participant, except for:

1.  A lump-sum payment to the program participant's beneficiary or estate upon the death of the program participant; or

2.  A cash-out of a de minimis account upon the request of a former program participant who has been terminated for a minimum of 6 months from the employment that caused the participant to be eligible for participation. A de minimis account is an account with a designated company containing employer contributions and accumulated earnings of not more than $3,500. The cash-out must be a complete liquidation of the account balance with that designated company and is subject to the provisions of the Internal Revenue Code.

(c)  The benefits payable to any person under the optional retirement program, and any contribution accumulated under the program, are not subject to assignment, execution, attachment, or to any legal process whatsoever.

(6)(a)  The optional retirement program authorized by this section must be implemented and administered by the program administrator under s. 403(b) of the Internal Revenue Code. The program administrator has the express authority to contract with a third party to fulfill any of the program administrator's duties.

(b)  The program administrator shall solicit competitive bids or issue a request for proposal and select no more than four companies from which annuity contracts may be purchased under the optional retirement program. In making these selections, the program administrator shall consider the following factors:

1.  The financial soundness of the company.

2.  The extent of the company's experience in providing annuity contracts to fund retirement programs.

3.  The nature and extent of the rights and benefits provided to program participants in relation to the premiums paid.

4.  The suitability of the rights and benefits provided to the needs of eligible employees and the interests of the college in the recruitment and retention of employees.

In lieu of soliciting competitive bids or issuing a request for proposals, the program administrator may authorize the purchase of annuity contracts under the optional retirement program from those companies currently selected by the department to offer such contracts through the State University System Optional Retirement Program, as set forth in s. 121.35.

(c)  Optional retirement program annuity contracts must be approved in form and content by the program administrator in order to qualify. The program administrator may use the same annuity contracts currently used within the State University System Optional Retirement Program, as set forth in s. 121.35.

(d)  The provision of each annuity contract applicable to a program participant must be contained in a written program description that includes a report of pertinent financial and actuarial information on the solvency and actuarial soundness of the program and the benefits applicable to the program participant. The company must furnish the description annually to the program administrator, and to each program participant upon commencement of participation in the program and annually thereafter.

(e)  The program administrator must ensure that each program participant is provided annually with an accounting of the total contributions and the annual contributions made by and on the behalf of the program participant.

History.--s. 19, ch. 95-392; s. 14, ch. 99-13; s. 88, ch. 99-255.