The Florida Senate

121.591  Benefits payable under the Public Employee Optional Retirement Program of the Florida Retirement System.--Benefits may not be paid under this section unless the member has terminated employment as provided in s. 121.021(39)(a) or is deceased and a proper application has been filed in the manner prescribed by the state board or the department. The state board or department, as appropriate, may cancel an application for retirement benefits when the member or beneficiary fails to timely provide the information and documents required by this chapter and the rules of the state board and department. In accordance with their respective responsibilities as provided herein, the State Board of Administration and the Department of Management Services shall adopt rules establishing procedures for application for retirement benefits and for the cancellation of such application when the required information or documents are not received. The State Board of Administration and the Department of Management Services, as appropriate, are authorized to cash out a de minimis account of a participant who has been terminated from Florida Retirement System covered employment for a minimum of 6 calendar months. A de minimis account is an account containing employer contributions and accumulated earnings of not more than $5,000 made under the provisions of this chapter. Such cash-out must either be a complete lump-sum liquidation of the account balance, subject to the provisions of the Internal Revenue Code, or a lump-sum direct rollover distribution paid directly to the custodian of an eligible retirement plan, as defined by the Internal Revenue Code, on behalf of the participant. If any financial instrument issued for the payment of retirement benefits under this section is not presented for payment within 180 days after the last day of the month in which it was originally issued, the third-party administrator or other duly authorized agent of the State Board of Administration shall cancel the instrument and credit the amount of the instrument to the suspense account of the Public Employee Optional Retirement Program Trust Fund authorized under s. 121.4501(6). Any such amounts transferred to the suspense account are payable upon a proper application, not to include earnings thereon, as provided in this section, within 10 years after the last day of the month in which the instrument was originally issued, after which time such amounts and any earnings thereon shall be forfeited. Any such forfeited amounts are assets of the Public Employee Optional Retirement Program Trust Fund and are not subject to the provisions of chapter 717.

(1)  NORMAL BENEFITS.--Under the Public Employee Optional Retirement Program:

(a)  Benefits in the form of vested accumulations as described in s. 121.4501(6) are payable under this subsection in accordance with the following terms and conditions:

1.  To the extent vested, benefits are payable only to a participant.

2.  Benefits shall be paid by the third-party administrator or designated approved providers in accordance with the law, the contracts, and any applicable board rule or policy.

3.  To receive benefits, the participant must be terminated from all employment with all Florida Retirement System employers, as provided in s. 121.021(39).

4.  Benefit payments may not be made until the participant has been terminated for 3 calendar months, except that the board may authorize by rule for the distribution of up to 10 percent of the participant's account after being terminated for 1 calendar month if the participant has reached the normal retirement date as defined in s. 121.021 of the defined benefit plan.

5.  If a member or former member of the Florida Retirement System receives an invalid distribution from the Public Employee Optional Retirement Program Trust Fund, such person must repay the full invalid distribution to the trust fund within 90 days after receipt of final notification by the state board or the third-party administrator that the distribution was invalid. If such person fails to repay the full invalid distribution within 90 days after receipt of final notification, the person may be deemed retired from the optional retirement program by the state board, as provided pursuant to s. 121.4501(2)(j), and is subject to s. 121.122 If such person is deemed retired by the state board, any joint and several liability set out in s. 121.091(9)(d)2. becomes null and void, and the state board, the department, or the employing agency is not liable for gains on payroll contributions that have not been deposited to the person's account in the retirement program, pending resolution of the invalid distribution. The member or former member who has been deemed retired or who has been determined by the board to have taken an invalid distribution may appeal the agency decision through the complaint process as provided under s. 121.4501(9)(g)3. As used in this subparagraph, the term "invalid distribution" means any distribution from an account in the optional retirement program which is taken in violation of this section, s. 121.091(9), or s. 121.4501

(b)  If a participant elects to receive his or her benefits upon termination of employment as defined in s. 121.021, the participant must submit a written application or an equivalent form to the third-party administrator indicating his or her preferred distribution date and selecting an authorized method of distribution as provided in paragraph (c). The participant may defer receipt of benefits until he or she chooses to make such application, subject to federal requirements.

(c)  Upon receipt by the third-party administrator of a properly executed application for distribution of benefits, the total accumulated benefit shall be payable to the participant, as:

1.  A lump-sum distribution to the participant;

2.  A lump-sum direct rollover distribution whereby all accrued benefits, plus interest and investment earnings, are paid from the participant's account directly to the custodian of an eligible retirement plan, as defined in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the participant; or

3.  Periodic distributions, as authorized by the state board.

(2)  DISABILITY RETIREMENT BENEFITS.--Benefits provided under this subsection are payable in lieu of the benefits which would otherwise be payable under the provisions of subsection (1). Such benefits shall be funded entirely from employer contributions made under s. 121.571, transferred participant funds accumulated pursuant to paragraph (a), and interest and earnings thereon. Pursuant thereto:

(a)  Transfer of funds.--To qualify to receive monthly disability benefits under this subsection:

1.  All moneys accumulated in the participant's Public Employee Optional Retirement Program accounts, including vested and nonvested accumulations as described in s. 121.4501(6), shall be transferred from such individual accounts to the Division of Retirement for deposit in the disability account of the Florida Retirement System Trust Fund. Such moneys shall be separately accounted for. Earnings shall be credited on an annual basis for amounts held in the disability accounts of the Florida Retirement System Trust Fund based on actual earnings of the Florida Retirement System Trust Fund.

2.  If the participant has retained retirement credit he or she had earned under the defined benefit program of the Florida Retirement System as provided in s. 121.4501(3)(b), a sum representing the actuarial present value of such credit within the Florida Retirement System Trust Fund shall be reassigned by the Division of Retirement from the defined benefit program to the disability program as implemented under this subsection and shall be deposited in the disability account of the Florida Retirement System Trust Fund. Such moneys shall be separately accounted for.

(b)  Disability retirement; entitlement.--

1.  A participant of the Public Employee Optional Retirement Program who becomes totally and permanently disabled, as defined in s. 121.091(4)(b), after completing 8 years of creditable service, or a participant who becomes totally and permanently disabled in the line of duty regardless of his or her length of service, shall be entitled to a monthly disability benefit as provided herein.

2.  In order for service to apply toward the 8 years of service required to vest for regular disability benefits, or toward the creditable service used in calculating a service-based benefit as provided for under paragraph (g), the service must be creditable service as described below:

a.  The participant's period of service under the Public Employee Optional Retirement Program will be considered creditable service, except as provided in subparagraph d.

b.  If the participant has elected to retain credit for his or her service under the defined benefit program of the Florida Retirement System as provided under s. 121.4501(3)(b), all such service will be considered creditable service.

c.  If the participant has elected to transfer to his or her participant accounts a sum representing the present value of his or her retirement credit under the defined benefit program as provided under s. 121.4501(3)(c), the period of service under the defined benefit program represented in the present value amounts transferred will be considered creditable service for purposes of vesting for disability benefits, except as provided in subparagraph d.

d.  Whenever a participant has terminated employment and has taken distribution of his or her funds as provided in subsection (1), all creditable service represented by such distributed funds is forfeited for purposes of this subsection.

(c)  Disability retirement effective date.--The effective retirement date for a participant who applies and is approved for disability retirement shall be established as provided under s. 121.091(4)(a)2. and 3.

(d)  Total and permanent disability.--A participant shall be considered totally and permanently disabled if, in the opinion of the division, he or she is prevented, by reason of a medically determinable physical or mental impairment, from rendering useful and efficient service as an officer or employee.

(e)  Proof of disability.--The division, before approving payment of any disability retirement benefit, shall require proof that the participant is totally and permanently disabled in the same manner as provided for members of the defined benefit program of the Florida Retirement System under s. 121.091(4)(c).

(f)  Disability retirement benefit.--Upon the disability retirement of a participant under this subsection, the participant shall receive a monthly benefit that shall begin to accrue on the first day of the month of disability retirement, as approved by the division, and shall be payable on the last day of that month and each month thereafter during his or her lifetime and continued disability. All disability benefits payable to such member shall be paid out of the disability account of the Florida Retirement System Trust Fund established under this subsection.

(g)  Computation of disability retirement benefit.--The amount of each monthly payment shall be calculated in the same manner as provided for members of the defined benefit program of the Florida Retirement System under s. 121.091(4)(f). For such purpose, creditable service under both the defined benefit program and the Public Employee Optional Retirement Program of the Florida Retirement System shall be applicable as provided under paragraph (b).

(h)  Reapplication.--A participant whose initial application for disability retirement has been denied may reapply for disability benefits in the same manner, and under the same conditions, as provided for members of the defined benefit program of the Florida Retirement System under s. 121.091(4)(g).

(i)  Membership.--Upon approval of an application for disability benefits under this subsection, the applicant shall be transferred to the defined benefit program of the Florida Retirement System, effective upon his or her disability retirement effective date.

(j)  Option to cancel.--Any participant whose application for disability benefits is approved may cancel his or her application for disability benefits, provided that the cancellation request is received by the division before a disability retirement warrant has been deposited, cashed, or received by direct deposit. Upon such cancellation:

1.  The participant's transfer to the defined benefit program under paragraph (i) shall be nullified;

2.  The participant shall be retroactively reinstated in the Public Employee Optional Retirement Program without hiatus;

3.  All funds transferred to the Florida Retirement System Trust Fund under paragraph (a) shall be returned to the participant accounts from which such funds were drawn; and

4.  The participant may elect to receive the benefit payable under the provisions of subsection (1) in lieu of disability benefits as provided under this subsection.

(k)  Recovery from disability.--

1.  The division may require periodic reexaminations at the expense of the disability program account of the Florida Retirement System Trust Fund. Except as otherwise provided in subparagraph 2., the requirements, procedures, and restrictions relating to the conduct and review of such reexaminations, discontinuation or termination of benefits, reentry into employment, disability retirement after reentry into covered employment, and all other matters relating to recovery from disability shall be the same as are set forth under s. 121.091(4)(h).

2.  Upon recovery from disability, any recipient of disability retirement benefits under this subsection shall be a compulsory member of the Public Employee Optional Retirement Program of the Florida Retirement System. The net difference between the recipient's original account balance transferred to the Florida Retirement System Trust Fund, including earnings, under paragraph (a) and total disability benefits paid to such recipient, if any, shall be determined as provided in sub-subparagraph a.

a.  An amount equal to the total benefits paid shall be subtracted from that portion of the transferred account balance consisting of vested accumulations as described under s. 121.4501(6), if any, and an amount equal to the remainder of benefit amounts paid, if any, shall then be subtracted from any remaining portion consisting of nonvested accumulations as described under s. 121.4501(6).

b.  Amounts subtracted under sub-subparagraph a. shall be retained within the disability account of the Florida Retirement System Trust Fund. Any remaining account balance shall be transferred to the third-party administrator for disposition as provided under sub-subparagraph c. or sub-subparagraph d., as appropriate.

c.  If the recipient returns to covered employment, transferred amounts shall be deposited in individual accounts under the Public Employee Optional Retirement Program, as directed by the participant. Vested and nonvested amounts shall be separately accounted for as provided in s. 121.4501(6).

d.  If the recipient fails to return to covered employment upon recovery from disability:

(I)  Any remaining vested amount shall be deposited in individual accounts under the Public Employee Optional Retirement Program, as directed by the participant, and shall be payable as provided in subsection (1).

(II)  Any remaining nonvested amount shall be held in a suspense account and shall be forfeitable after 5 years as provided in s. 121.4501(6).

3.  If present value was reassigned from the defined benefit program to the disability program of the Florida Retirement System as provided under subparagraph (a)2., the full present value amount shall be returned to the defined benefit account within the Florida Retirement System Trust Fund and the affected individual's associated retirement credit under the defined benefit program shall be reinstated in full. Any benefit based upon such credit shall be calculated as provided in s. 121.091(4)(h)1.

(l)  Nonadmissible causes of disability.--A participant shall not be entitled to receive a disability retirement benefit if the disability results from any injury or disease sustained or inflicted as described in s. 121.091(4)(i).

(m)  Disability retirement of justice or judge by order of Supreme Court.--

1.  If a participant is a justice of the Supreme Court, judge of a district court of appeal, circuit judge, or judge of a county court who has served for 6 years or more as an elected constitutional judicial officer, including service as a judicial officer in any court abolished pursuant to Art. V of the State Constitution, and who is retired for disability by order of the Supreme Court upon recommendation of the Judicial Qualifications Commission pursuant to the provisions of Art. V of the State Constitution, the participant's Option 1 monthly disability benefit amount as provided in s. 121.091(6)(a)1. shall be two-thirds of his or her monthly compensation as of the participant's disability retirement date. Such a participant may alternatively elect to receive an actuarially adjusted disability retirement benefit under any other option as provided in s. 121.091(6)(a), or to receive the normal benefit payable under the Public Employee Optional Retirement Program as set forth in subsection (1).

2.  If any justice or judge who is a participant of the Public Employee Optional Retirement Program of the Florida Retirement System is retired for disability by order of the Supreme Court upon recommendation of the Judicial Qualifications Commission pursuant to the provisions of Art. V of the State Constitution and elects to receive a monthly disability benefit under the provisions of this paragraph:

a.  Any present value amount that was transferred to his or her program account and all employer contributions made to such account on his or her behalf, plus interest and earnings thereon, shall be transferred to and deposited in the disability account of the Florida Retirement System Trust Fund; and

b.  The monthly benefits payable under this paragraph for any affected justice or judge retired from the Florida Retirement System pursuant to Art. V of the State Constitution shall be paid from the disability account of the Florida Retirement System Trust Fund.

(n)  Death of retiree or beneficiary.--Upon the death of a disabled retiree or beneficiary thereof who is receiving monthly benefits under this subsection, the monthly benefits shall be paid through the last day of the month of death and shall terminate, or be adjusted, if applicable, as of that date in accordance with the optional form of benefit selected at the time of retirement. The Department of Management Services may adopt rules necessary to administer this paragraph.

(3)  DEATH BENEFITS.--Under the Public Employee Optional Retirement Program:

(a)  Survivor benefits shall be payable in accordance with the following terms and conditions:

1.  To the extent vested, benefits shall be payable only to a participant's beneficiary or beneficiaries as designated by the participant as provided in s. 121.4501(20).

2.  Benefits shall be paid by the third-party administrator or designated approved providers in accordance with the law, the contracts, and any applicable board rule or policy.

3.  To receive benefits under this subsection, the participant must be deceased.

(b)  In the event of a participant's death, all vested accumulations as described in s. 121.4501(6), less withholding taxes remitted to the Internal Revenue Service, shall be distributed, as provided in paragraph (c) or as described in s. 121.4501(20), as if the participant retired on the date of death. No other death benefits shall be available for survivors of participants under the Public Employee Optional Retirement Program, except for such benefits, or coverage for such benefits, as are otherwise provided by law or are separately afforded by the employer, at the employer's discretion.

(c)  Upon receipt by the third-party administrator of a properly executed application for distribution of benefits, the total accumulated benefit shall be payable by the third-party administrator to the participant's surviving beneficiary or beneficiaries, as:

1.  A lump-sum distribution payable to the beneficiary or beneficiaries, or to the deceased participant's estate;

2.  An eligible rollover distribution on behalf of the surviving spouse of a deceased participant, whereby all accrued benefits, plus interest and investment earnings, are paid from the deceased participant's account directly to the custodian of an eligible retirement plan, as described in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the surviving spouse; or

3.  A partial lump-sum payment whereby a portion of the accrued benefit is paid to the deceased participant's surviving spouse or other designated beneficiaries, less withholding taxes remitted to the Internal Revenue Service, and the remaining amount is transferred directly to the custodian of an eligible retirement plan, as described in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the surviving spouse. The proportions must be specified by the participant or the surviving beneficiary.

This paragraph does not abrogate other applicable provisions of state or federal law providing for payment of death benefits.

(4)  LIMITATION ON LEGAL PROCESS.--The benefits payable to any person under the Public Employee Optional Retirement Program, and any contributions accumulated under such program, are not subject to assignment, execution, attachment, or any legal process, except for qualified domestic relations orders by a court of competent jurisdiction, income deduction orders as provided in s. 61.1301, and federal income tax levies.

History.--s. 9, ch. 2002-273; s. 3, ch. 2004-71; s. 5, ch. 2005-253; s. 2, ch. 2006-205; s. 2, ch. 2009-97; s. 19, ch. 2009-209.