Senate Bill sb2132e1

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    CS for SB 2132                                 First Engrossed



  1                      A bill to be entitled

  2         An act relating to the Florida Retirement

  3         System; amending s. 110.123, F.S.; redefining

  4         the term "retired state officer or employee" or

  5         "retiree" to include an officer or employee who

  6         retires under the Public Employee Optional

  7         Retirement Program under certain circumstances;

  8         amending s. 110.205, F.S.; granting senior

  9         management service benefits to county health

10         department directors and administrators;

11         amending ss. 121.052, 121.055, and 121.071,

12         F.S.; amending s. 121.052, F.S.; revising the

13         membership requirements of the Elected

14         Officers' Class of the system to include

15         certain sheriffs and clerks of the circuit

16         court; making the date for payment of

17         retirement contributions consistent under the

18         Florida Retirement System defined benefit and

19         defined contribution programs; providing

20         eligibility of certain officials for membership

21         in the Senior Management Service Class of the

22         Florida Retirement System; revising provisions

23         governing contributions to the Senior

24         Management Service Optional Annuity Program;

25         amending s. 121.35, F.S.; authorizing

26         contributions to the optional retirement

27         program in the form of rollovers or direct

28         trustee-to-trustee transfers; expanding the

29         methods for disbursing benefits; amending s.

30         121.4501, F.S., relating to the Public Employee

31         Optional Retirement Program; updating


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    CS for SB 2132                                 First Engrossed



  1         definitions; establishing dates on which

  2         present value calculations are based;

  3         conforming election provisions for local

  4         government employees to provisions applicable

  5         to other employees; providing for the effective

  6         date of enrollment for certain employers;

  7         providing for the transfer of contributions

  8         under certain circumstances; transferring

  9         certain provisions relating to payment of

10         benefits to s. 121.591, F.S., as created in the

11         act; amending s. 121.571, F.S., relating to

12         employer contributions to the Public Employee

13         Optional Retirement Program; adjusting rates;

14         making the date for payment of retirement

15         contributions consistent under the Florida

16         Retirement System defined benefit and defined

17         contribution programs; creating s. 121.591,

18         F.S., relating to benefits payable under the

19         Public Employee Optional Retirement Program;

20         providing for payment of the normal benefit

21         upon termination; providing for disability

22         retirement benefits; providing for transfer of

23         certain funds; specifying eligibility

24         requirements; providing procedure and required

25         documentation; providing for computation of the

26         disability benefit; providing for

27         reapplication; providing for membership;

28         providing an option to cancel; providing for

29         reexamination and other matters relating to

30         recovery from disability; providing

31         nonadmissible causes of disability; providing


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    CS for SB 2132                                 First Engrossed



  1         for disability retirement of justices or

  2         judges; providing for payment of death

  3         benefits; providing for spousal notification in

  4         certain cases; updating death benefit

  5         distribution provisions to conform to recent

  6         changes in federal law; providing protection of

  7         benefits from assignment, execution, etc.;

  8         providing a declaration of important state

  9         interest; authorizing the Department of

10         Management Services to contract with a private

11         company to administer the disability benefit

12         program; authorizing the department to provide

13         for an alternative method to administer and

14         fund disability benefits; requiring the

15         department to seek a private letter ruling from

16         the Internal Revenue Service with respect to

17         the disability retirement program; providing

18         rulemaking authority; providing an effective

19         date.

20

21  Be It Enacted by the Legislature of the State of Florida:

22

23         Section 1.  Paragraph (g) of subsection (2), paragraph

24  (g) of subsection (3), and paragraph (h) of subsection (4) of

25  section 110.123, Florida Statutes, are amended to read:

26         110.123  State group insurance program.--

27         (2)  DEFINITIONS.--As used in this section, the term:

28         (g)  "Retired state officer or employee" or "retiree"

29  means any state officer or state employee who retires under a

30  state retirement system or a state optional annuity or

31  retirement program or is placed on disability retirement, and


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    CS for SB 2132                                 First Engrossed



  1  who was insured under the state group insurance program at the

  2  time of retirement, and who begins receiving retirement

  3  benefits immediately after retirement from state office or

  4  employment. In addition to these requirements, any state

  5  officer or state employee who retires under the Public

  6  Employee Optional Retirement Program established under part II

  7  of chapter 121 shall be considered a "retired state officer or

  8  employee" or "retiree" as used in this section if he or she:

  9         1.  Meets the age and service requirements to qualify

10  for normal retirement as set forth in s. 121.021(29); or

11         2.  Has attained the age specified by s. 72(t)(2)(A)(i)

12  of the Internal Revenue Code and has 6 years of creditable

13  service.

14         (3)  STATE GROUP INSURANCE PROGRAM.--

15         (g)  Participation by individuals in the program shall

16  be available to all state officers, full-time state employees,

17  and part-time state employees; and such participation in the

18  program or any plan thereof shall be voluntary. Participation

19  in the program shall also be available to retired state

20  officers and employees, as defined in paragraph (2)(g), who

21  elect at the time of retirement to continue coverage under the

22  program, but they may elect to continue all or only part of

23  the coverage they had at the time of retirement. A surviving

24  spouse may elect to continue coverage only under the state

25  group health insurance plan or a health maintenance

26  organization plan.

27         (4)  PAYMENT OF PREMIUMS; CONTRIBUTION BY STATE;

28  LIMITATION ON ACTIONS TO PAY AND COLLECT PREMIUMS.--

29         (h)  State employees may participate in the state group

30  health insurance plan at the time of receiving their state

31  retirement benefits.


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    CS for SB 2132                                 First Engrossed



  1         Section 2.  Paragraphs (j) and (q) of subsection (2) of

  2  section 110.205, Florida Statutes, are amended to read:

  3         110.205  Career service; exemptions.--

  4         (2)  EXEMPT POSITIONS.--The exempt positions that are

  5  not covered by this part include the following:

  6         (j)  The appointed secretaries, assistant secretaries,

  7  deputy secretaries, and deputy assistant secretaries of all

  8  departments; the executive directors, assistant executive

  9  directors, deputy executive directors, and deputy assistant

10  executive directors of all departments; and the directors of

11  all divisions and those positions determined by the department

12  to have managerial responsibilities comparable to such

13  positions, which positions include, but are not limited to,

14  program directors, assistant program directors, district

15  administrators, deputy district administrators, the Director

16  of Central Operations Services of the Department of Children

17  and Family Services, and the State Transportation Planner,

18  State Highway Engineer, State Public Transportation

19  Administrator, district secretaries, district directors of

20  planning and programming, production, and operations, and the

21  managers of the offices specified in s. 20.23(3)(d)2., of the

22  Department of Transportation.  Unless otherwise fixed by law,

23  the department shall set the salary and benefits of these

24  positions in accordance with the rules of the Senior

25  Management Service; and the county health department directors

26  and county health department administrators of the Department

27  of Health.

28         (q)  The staff directors, assistant staff directors,

29  district program managers, district program coordinators,

30  district subdistrict administrators, district administrative

31  services directors, district attorneys, and the Deputy


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    CS for SB 2132                                 First Engrossed



  1  Director of Central Operations Services of the Department of

  2  Children and Family Services and the county health department

  3  directors and county health department administrators of the

  4  Department of Health. Unless otherwise fixed by law, the

  5  department shall establish the salary range and benefits for

  6  these positions in accordance with the rules of the Selected

  7  Exempt Service.

  8         Section 3.  Paragraph (d) of subsection (2) and

  9  subsection (7) of section 121.052, Florida Statutes, as

10  amended by chapter 2001-262, Laws of Florida, are amended to

11  read:

12         121.052  Membership class of elected officers.--

13         (2)  MEMBERSHIP.--The following holders of elective

14  office, hereinafter referred to as "elected officers," whether

15  assuming elective office by election, reelection, or

16  appointment, are members of the Elected Officers' Class,

17  except as provided in subsection (3):

18         (d)  Any constitutional county elected officer assuming

19  office on or after July 1, 1981, including any sheriff, tax

20  collector, property appraiser, supervisor of elections, clerk

21  of the circuit court, county commissioner, school board

22  member, or elected school board superintendent, or any elected

23  officer of any entity with countywide jurisdiction assuming

24  office on or after July 1, 1981, who, pursuant to general or

25  special law, exercises powers and duties that, but for such

26  general or special law, would be exercised by any of the

27  constitutional county elected officers set forth in this

28  paragraph, including the sheriff and clerk of the circuit

29  court in a consolidated government with countywide

30  jurisdiction unless such sheriff or clerk elected to continue

31  to participate in a local retirement system.


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    CS for SB 2132                                 First Engrossed



  1         (7)  CONTRIBUTIONS.--

  2         (a)  The following table states the required retirement

  3  contribution rates for members of the Elected Officers' Class

  4  and their employers in terms of a percentage of the member's

  5  gross compensation. A change in a contribution rate is

  6  effective with the first salary paid on or after the beginning

  7  date of the change. Contributions shall be made or deducted as

  8  may be appropriate for each pay period and are in addition to

  9  the contributions required for social security and the Retiree

10  Health Insurance Subsidy Trust Fund.

11

12  Dates of Contribution

13    Rate Changes                             Members   Employers

14  Effective July 1, 2001

15    Legislators                                 0%       15.14%

16    Governor, Lt. Governor, Cabinet

17    Officers                                    0%       15.14%

18    State Attorneys, Public Defenders           0%       15.14%

19    Justices, Judges                            0%       20.61%

20    County Elected Officers                     0%       17.61%

21

22         (b)  The employer paying the salary of a member of the

23  Elected Officers' Class shall contribute an amount as

24  specified in this subsection which shall constitute the entire

25  employer retirement contribution with respect to such member.

26  The employer shall also withhold one-half of the entire

27  contribution of the member required for social security

28  coverage.

29         (c)  The following table states the required employer

30  contribution on behalf of each member of the Elected Officers'

31  Class in terms of a percentage of the member's gross


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    CS for SB 2132                                 First Engrossed



  1  compensation. Such contribution constitutes the entire health

  2  insurance subsidy contribution with respect to the member. A

  3  change in the contribution rate is effective with the first

  4  salary paid on or after the beginning date of the change. The

  5  retiree health insurance subsidy contribution rate is as

  6  follows:

  7

  8  Dates of Contribution                             Contribution

  9    Rate Changes                                        Rate

10

11  October 1, 1987, through December 31, 1988             0.24%

12  January 1, 1989, through December 31, 1993             0.48%

13  January 1, 1994, through December 31, 1994             0.56%

14  January 1, 1995, through June 30, 1998                 0.66%

15  July 1, 1998, through June 30, 2001                    0.94%

16  Effective July 1, 2001                                 1.11%

17

18  Such contributions and accompanying payroll data are due and

19  payable no later than the 5th working day of the month

20  immediately following the month during which the payroll

21  period ended and shall be deposited by the administrator in

22  the Retiree Health Insurance Subsidy Trust Fund.

23         Section 4.  Paragraph (h) of subsection (1), subsection

24  (3), paragraph (d) of subsection (4), and paragraph (c) of

25  subsection (6) of section 121.055, Florida Statutes, as

26  amended by chapter 2001-262, Laws of Florida, are amended to

27  read:

28         121.055  Senior Management Service Class.--There is

29  hereby established a separate class of membership within the

30  Florida Retirement System to be known as the "Senior

31


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    CS for SB 2132                                 First Engrossed



  1  Management Service Class," which shall become effective

  2  February 1, 1987.

  3         (1)

  4         (h)1.  Except as provided in subparagraph 3., effective

  5  January 1, 1994, participation in the Senior Management

  6  Service Class shall be compulsory for the State Courts

  7  Administrator and the Deputy State Courts Administrators, the

  8  Clerk of the Supreme Court, the Marshal of the Supreme Court,

  9  the Executive Director of the Justice Administrative

10  Commission, the Capital Collateral Regional Counsels, the

11  clerks of the district courts of appeals, the marshals of the

12  district courts of appeals, and the trial court administrator

13  and the Chief Deputy Court Administrator in each judicial

14  circuit. Effective January 1, 1994, additional positions in

15  the offices of the state attorney and public defender in each

16  judicial circuit may be designated for inclusion in the Senior

17  Management Service Class of the Florida Retirement System,

18  provided that:

19         a.  Positions to be included in the class shall be

20  designated by the state attorney or public defender, as

21  appropriate.  Notice of intent to designate positions for

22  inclusion in the class shall be published once a week for 2

23  consecutive weeks in a newspaper of general circulation

24  published in the county or counties affected, as provided in

25  chapter 50.

26         b.  One nonelective full-time position may be

27  designated for each state attorney and public defender

28  reporting to the Department of Management Services; for

29  agencies with 200 or more regularly established positions

30  under the state attorney or public defender, additional

31  nonelective full-time positions may be designated, not to


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    CS for SB 2132                                 First Engrossed



  1  exceed 0.5 percent of the regularly established positions

  2  within the agency.

  3         c.  Each position added to the class must be a

  4  managerial or policymaking position filled by an employee who

  5  serves at the pleasure of the state attorney or public

  6  defender without civil service protection, and who:

  7         (I)  Heads an organizational unit; or

  8         (II)  Has responsibility to effect or recommend

  9  personnel, budget, expenditure, or policy decisions in his or

10  her areas of responsibility.

11         2.  Participation in this class shall be compulsory,

12  except as provided in subparagraph 3., for any judicial

13  employee who holds a position designated for coverage in the

14  Senior Management Service Class, and such participation shall

15  continue until the employee terminates employment in a covered

16  position. Effective January 1, 2001, participation in this

17  class is compulsory for assistant state attorneys, assistant

18  statewide prosecutors, assistant public defenders, and

19  assistant capital collateral regional counsels. Effective

20  January 1, 2002, participation in this class is compulsory for

21  assistant attorneys general.

22         3.  In lieu of participation in the Senior Management

23  Service Class, such members, excluding assistant state

24  attorneys, assistant public defenders, assistant statewide

25  prosecutors, assistant attorneys general, and assistant

26  capital collateral regional counsels, may participate in the

27  Senior Management Service Optional Annuity Program as

28  established in subsection (6).

29         (3)(a)  The following table states the required

30  retirement contribution rates for members of the Senior

31  Management Service Class and their employers in terms of a


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    CS for SB 2132                                 First Engrossed



  1  percentage of the member's gross compensation. A change in the

  2  contribution rate is effective with the first salary paid on

  3  or after the beginning date of the change.  Contributions

  4  shall be made for each pay period and are in addition to the

  5  contributions required for social security and the Retiree

  6  Health Insurance Subsidy Trust Fund.

  7

  8  Dates of Contribution

  9    Rate Changes                          Members   Employers

10  Effective July 1, 2001                    0%       11.73%

11

12         (b)  The employer paying the salary of a member of the

13  Senior Management Service Class shall contribute an amount as

14  specified in this section which shall constitute the entire

15  employer retirement contribution with respect to such member.

16  The employer shall also withhold one-half of the entire

17  contribution of the member required for social security

18  coverage.

19         (c)  The following table states the required employer

20  contribution on behalf of each member of the Senior Management

21  Service Class in terms of a percentage of the member's gross

22  compensation.  Such contribution constitutes the entire health

23  insurance subsidy contribution with respect to the member. A

24  change in the contribution rate is effective with the first

25  salary paid on or after the beginning date of the change.  The

26  retiree health insurance subsidy contribution rate is as

27  follows:

28

29  Dates of Contribution                             Contribution

30    Rate Changes                                        Rate

31  October 1, 1987, through December 31, 1988             0.24%


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    CS for SB 2132                                 First Engrossed



  1  January 1, 1989, through December 31, 1993             0.48%

  2  January 1, 1994, through December 31, 1994             0.56%

  3  January 1, 1995, through June 30, 1998                 0.66%

  4  July 1, 1998, through June 30, 2001                    0.94%

  5  Effective July 1, 2001                                 1.11%

  6

  7  Such contributions and accompanying payroll data are due and

  8  payable no later than the 5th working day of the month

  9  immediately following the month during which the payroll

10  period ended and shall be deposited by the administrator in

11  the Retiree Health Insurance Subsidy Trust Fund.

12         (4)

13         (d)  A member of the Senior Management Service Class

14  shall receive retirement credit at the rate of 3 2 percent of

15  average final compensation for each year of service in such

16  class after January 31, 1987.

17         (6)

18         (c)  Participation.--

19         1.  Any eligible employee who is employed on or before

20  February 1, 1987, may elect to participate in the optional

21  annuity program in lieu of participation in the Senior

22  Management Service Class.  Such election shall be made in

23  writing and filed with the department and the personnel

24  officer of the employer on or before May 1, 1987.  Any

25  eligible employee who is employed on or before February 1,

26  1987, and who fails to make an election to participate in the

27  optional annuity program by May 1, 1987, shall be deemed to

28  have elected membership in the Senior Management Service

29  Class.

30         2.  Any employee who becomes eligible to participate in

31  the optional annuity program by reason of initial employment


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    CS for SB 2132                                 First Engrossed



  1  commencing after February 1, 1987, may, within 90 days after

  2  the date of commencement of employment, elect to participate

  3  in the optional annuity program.  Such election shall be made

  4  in writing and filed with the personnel officer of the

  5  employer.  Any eligible employee who does not within 90 days

  6  after commencement of such employment elect to participate in

  7  the optional annuity program shall be deemed to have elected

  8  membership in the Senior Management Service Class.

  9         3.  A person who is appointed to a position in the

10  Senior Management Service Class and who is a member of an

11  existing retirement system or the Special Risk or Special Risk

12  Administrative Support Classes of the Florida Retirement

13  System may elect to remain in such system or class in lieu of

14  participation in the Senior Management Service Class or

15  optional annuity program. Such election shall be made in

16  writing and filed with the department and the personnel

17  officer of the employer within 90 days of such appointment.

18  Any eligible employee who fails to make an election to

19  participate in the existing system, the Special Risk Class of

20  the Florida Retirement System, the Special Risk Administrative

21  Support Class of the Florida Retirement System, or the

22  optional annuity program shall be deemed to have elected

23  membership in the Senior Management Service Class.

24         4.  Except as provided in subparagraph 5., an

25  employee's election to participate in the optional annuity

26  program is irrevocable as long as such employee continues to

27  be employed in an eligible position and continues to meet the

28  eligibility requirements set forth in this paragraph.

29         5.  Effective from July 1, 2002, through September 30,

30  2002, any active employee in a regularly established position

31  who has elected to participate in the Senior Management


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    CS for SB 2132                                 First Engrossed



  1  Service Optional Annuity Program has one opportunity to choose

  2  to move from the Senior Management Service Optional Annuity

  3  Program to the Florida Retirement System defined benefit

  4  program.

  5         a.  The election must be made in writing and must be

  6  filed with the department and the personnel officer of the

  7  employer before October 1, 2002, or, in the case of an active

  8  employee who is on a leave of absence on July 1, 2002, within

  9  90 days after the conclusion of the leave of absence. This

10  election is irrevocable.

11         b.  The employee will receive service credit under the

12  defined benefit program of the Florida Retirement System equal

13  to his or her years of service under the Senior Management

14  Service Optional Annuity Program. The cost for such credit

15  shall be an amount representing the present value of that

16  employee's accumulated benefit obligation for the affected

17  period of service.

18         c.  The employee must transfer the total accumulated

19  employer contributions and earnings on deposit in his or her

20  Senior Management Service Optional Annuity Program account. If

21  the transferred amount is not sufficient to pay the amount

22  due, the employee must pay a sum representing the remainder of

23  the amount due. In no case may the employee retain any

24  employer contributions or earnings thereon from the Senior

25  Management Service Optional Annuity Program account.

26         Section 5.  Subsection (5) of section 121.071, Florida

27  Statutes, as amended by chapter 2001-262, Laws of Florida, is

28  amended to read:

29         121.071  Contributions.--Contributions to the system

30  shall be made as follows:

31


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    CS for SB 2132                                 First Engrossed



  1         (5)  Contributions made in accordance with subsections

  2  (1), (2), (3), and (4) shall be paid by the employer into the

  3  system trust funds in accordance with rules adopted by the

  4  administrator pursuant to chapter 120, except as may be

  5  otherwise specified herein.

  6         (a)1.  Effective October 1, 1978, such contributions

  7  are due and payable no later than the 25th day of the month

  8  immediately following the month during which the payroll

  9  period ended. The department may, by rule, establish a

10  different due date, which shall supersede the date specified

11  herein; however, such due date may not be established earlier

12  than the 20th day of the month immediately following the month

13  during which the payroll period ended.

14         2.  Effective July 1, 2002, contributions paid under

15  subsections (1) and (4) and accompanying payroll data are due

16  and payable no later than the 5th working day of the month

17  immediately following the month during which the payroll

18  period ended. Effective January 1, 1984, contributions made in

19  accordance with subsection (3) shall be paid by the employer

20  into the system trust fund in accordance with rules adopted by

21  the administrator pursuant to chapter 120.  For any payroll

22  period ending any day of the month before the 16th day of the

23  month, such contributions are due and payable no later than

24  the 20th day of the month; and, for any payroll periods ending

25  any day of the month after the 15th day of the month, such

26  contributions are due and payable no later than the 5th day of

27  the next month.

28         (b)  Contributions received in the offices of the

29  department after the prescribed date shall be considered

30  delinquent unless, in the opinion of the department,

31  exceptional circumstances beyond an employer's control


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  1  prevented remittance by the prescribed due date

  2  notwithstanding such employer's good faith efforts to effect

  3  delivery; and, with respect to retirement contributions due

  4  under subsections (1) and (4), each employer shall be assessed

  5  a delinquent fee of 1 percent of the contributions due for

  6  each calendar month or part thereof that the contributions are

  7  delinquent. Such a waiver of the delinquency fee by the

  8  department may be granted an employer only one time each

  9  fiscal year. Delinquent social security contributions shall be

10  assessed a delinquent fee as authorized by s. 650.05(4).  The

11  delinquent fee assessable for an employer's first delinquency

12  after July 1, 1984, shall be as specified in s. 650.05(4),

13  and, beginning with the second delinquency in any fiscal year

14  by the employer subsequent to July 1, 1984, all subsequent

15  delinquency fees shall be assessed against the employer at

16  twice the applicable percentage rate specified in s.

17  650.05(4).

18         Section 6.  Section 121.35, Florida Statutes, is

19  amended to read:

20         121.35  Optional retirement program for the State

21  University System.--

22         (1)  OPTIONAL RETIREMENT PROGRAM ESTABLISHED.--The

23  Department of Management Services shall establish an optional

24  retirement program under which contracts providing retirement

25  and death benefits may be purchased for eligible members of

26  the State University System who elect to participate in the

27  program. The benefits to be provided for or on behalf of

28  participants in such optional retirement program shall be

29  provided through individual contracts or individual

30  certificates issued for group annuity or other contracts,

31  which may be fixed, variable, or a combination thereof, in


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    CS for SB 2132                                 First Engrossed



  1  accordance with s. 403(b) of the Internal Revenue Code. Any

  2  individual contract or certificate shall state the annuity

  3  plan on its face page, and shall include, but not be limited

  4  to, a statement of ownership, the contract benefits, annuity

  5  income options, limitations, expense charges, and surrender

  6  charges, if any. The state shall contribute, as provided in

  7  this section, toward the purchase of such optional benefits.

  8         (2)  ELIGIBILITY FOR PARTICIPATION IN OPTIONAL

  9  PROGRAM.--

10         (a)  Participation in the optional retirement program

11  provided by this section shall be limited to persons who are

12  otherwise eligible for membership in the Florida Retirement

13  System; who are employed or appointed for no less than one

14  academic year; and who are employed in one of the following

15  State University System positions:

16         1.  Positions classified as instructional and research

17  faculty which are exempt from the career service under the

18  provisions of s. 110.205(2)(d).

19         2.  Positions classified as administrative and

20  professional which are exempt from the career service under

21  the provisions of s. 110.205(2)(d).

22         3.  The Chancellor and the university presidents.

23         (b)  For purposes of this section, both the appointees

24  and employees are referred to as "employees," and the

25  "employer" of an appointee or employee is the individual

26  institution within the State University System or the State

27  Board of Education Regents, whichever is appropriate with

28  respect to the particular employee or appointee.

29         (c)  For purposes of this section, the Department of

30  Management Services is referred to as the "department."

31


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  1         (d)  For purposes of this section, the authority

  2  granted to the State Board of Education Regents may be

  3  exercised by the board or by the Chancellor of the Division of

  4  Colleges and Universities State University System.

  5         (3)  ELECTION OF OPTIONAL PROGRAM.--

  6         (a)  Any eligible employee who is employed on or before

  7  March 1, 1984, may elect to participate in the optional

  8  retirement program in lieu of participation in the Florida

  9  Retirement System. Such election shall be made in writing and

10  filed with the division and the personnel officer of the

11  employer on or before June 1, 1984.  Upon such election,

12  participation in the optional program will take effect July 1,

13  1984, and election to so participate will terminate the

14  membership of the employee in the Florida Retirement System.

15  Any eligible employee who is employed on or before March 1,

16  1984, and who fails to make an election to participate in the

17  optional program by June 1, 1984, shall be deemed to have

18  elected to retain membership in the Florida Retirement System.

19         (b)1.  Any employee who becomes eligible to participate

20  in the optional retirement program by reason of initial

21  employment commencing after March 1, 1984, but before January

22  1, 1993, may, within 90 days after the date of commencement of

23  employment, elect to participate in the optional program. Such

24  election shall be made in writing and filed with the personnel

25  officer of the employer.  The eligible employees described in

26  this subparagraph shall be enrolled in the Florida Retirement

27  System at the commencement of employment, with the exception

28  of those employees who file an election with the personnel

29  officer of the employer prior to the submission of the initial

30  payroll for the employee. For such employees, participation

31  will be effective on the first day of employment or on July 1,


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    CS for SB 2132                                 First Engrossed



  1  1984, whichever is later.  If an eligible employee, as

  2  described in this subparagraph, files an election to

  3  participate in the optional program within 90 days after the

  4  commencement of employment, but after the submission by the

  5  employer of the initial payroll for the employee, the

  6  employee's participation in the optional program will not be

  7  effective until the first day of the month for which a full

  8  month's employer contribution may be made, or until July 1,

  9  1984, whichever is later. Any eligible employee who does not

10  within 90 days after commencement of such employment elect to

11  participate in the optional program shall be deemed to have

12  elected to retain membership in the Florida Retirement System.

13         2.  Any employee who after March 1, 1984, but before

14  January 1, 1993, becomes eligible to participate in the

15  optional program by reason of a change in status due to the

16  subsequent designation of the employee's position as one of

17  those specified in paragraph (2)(a) or due to the employee's

18  appointment, promotion, transfer, or reclassification to a

19  position specified in paragraph (2)(a) may elect to

20  participate in the optional program.  Such employee shall be

21  notified by the employer of the change in his or her

22  eligibility status. Such employee may, within 90 days after

23  the date of such notification, file with the personnel officer

24  of the employer an election in writing to participate in the

25  optional program in lieu of participation in the Florida

26  Retirement System. Upon such election, participation in the

27  optional program will be effective on the first day of the

28  month for which a full month's employer contribution may be

29  made or on July 1, 1984, whichever is later. Election to so

30  participate shall terminate the membership of the employee in

31  the Florida Retirement System.  Any eligible employee who does


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    CS for SB 2132                                 First Engrossed



  1  not within 90 days after notification of his or her

  2  eligibility to participate in the optional program elect to

  3  participate in the program shall be deemed to have elected to

  4  retain membership in the Florida Retirement System.

  5         (c)  Any employee who becomes eligible to participate

  6  in the optional retirement program on or after January 1,

  7  1993, shall be a compulsory participant of the program unless

  8  such employee elects membership in the Florida Retirement

  9  System.  Such election shall be made in writing and filed with

10  the personnel officer of the employer.  Any eligible employee

11  who fails to make such election within the prescribed time

12  period shall be deemed to have elected to participate in the

13  optional retirement program.

14         1.  Any employee whose optional retirement program

15  eligibility results from initial employment shall be enrolled

16  in the program at the commencement of employment.  If, within

17  90 days after commencement of employment, the employee elects

18  membership in the Florida Retirement System, such membership

19  shall be effective retroactive to the date of commencement of

20  employment.

21         2.  Any employee whose optional retirement program

22  eligibility results from a change in status due to the

23  subsequent designation of the employee's position as one of

24  those specified in paragraph (2)(a) or due to the employee's

25  appointment, promotion, transfer, or reclassification to a

26  position specified in paragraph (2)(a) shall be enrolled in

27  the optional retirement program upon such change in status and

28  shall be notified by the employer of such action.  If, within

29  90 days after the date of such notification, the employee

30  elects to retain membership in the Florida Retirement System,

31


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    CS for SB 2132                                 First Engrossed



  1  such continuation of membership shall be retroactive to the

  2  date of the change in status.

  3         3.  Notwithstanding the provisions of this paragraph,

  4  effective July 1, 1997, any employee who is eligible to

  5  participate in the Optional Retirement Program and who fails

  6  to execute a an annuity contract with one of the approved

  7  companies and to notify the department in writing as provided

  8  in subsection (4) within 90 days after of the date of

  9  eligibility shall be deemed to have elected membership in the

10  Florida Retirement System, except as provided in s.

11  121.051(1)(a). This provision shall also apply to any employee

12  who terminates employment in an eligible position before

13  executing the required annuity contract and notifying the

14  department. Such membership shall be retroactive to the date

15  of eligibility, and all appropriate contributions shall be

16  transferred to the Florida Retirement System Trust Fund and

17  the Health Insurance Subsidy Trust Fund.

18         (d)  Participants shall be fully and immediately vested

19  in the optional retirement program only upon execution of a an

20  annuity contract.

21         (e)  The election by an eligible employee to

22  participate in the optional retirement program shall be

23  irrevocable for so long as the employee continues to meet the

24  eligibility requirements specified in subsection (2), except

25  as provided in paragraph (h). In the event that an employee

26  participates in the optional retirement program for 90 days or

27  more and is subsequently employed in an administrative or

28  professional position which has been determined by the

29  department, under subparagraph (2)(a)2., to be not otherwise

30  eligible for participation in the optional retirement program,

31  the employee shall continue participation in the optional


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    CS for SB 2132                                 First Engrossed



  1  program so long as the employee meets the other eligibility

  2  requirements for the program, except as provided in paragraph

  3  (h).

  4         (f)  If an employee becomes ineligible to continue

  5  participation in the optional retirement program under

  6  subsection (2), the employee shall thereafter participate in

  7  the Florida Retirement System if he or she is otherwise

  8  eligible.

  9         (g)  An eligible employee who is a member of the

10  Florida Retirement System at the time of election to

11  participate in the optional retirement program shall retain

12  all retirement service credit earned under the Florida

13  Retirement System, at the rate earned.  No additional service

14  credit in the Florida Retirement System shall be earned while

15  the employee participates in the optional program, nor shall

16  the employee be eligible for disability retirement under the

17  Florida Retirement System.

18         (h)  A participant in the optional retirement program

19  may not participate in more than one state-administered

20  retirement system, plan, or class simultaneously.  Except as

21  provided in s. 121.052(6)(d), a participant who is or becomes

22  dually employed in two or more positions covered by the

23  Florida Retirement System, one of which is eligible for the

24  optional program and one of which is not, may remain a member

25  of the optional program and contributions shall be paid as

26  required only on the salary earned in the position eligible

27  for the optional program during such period of dual

28  employment; or, within 90 days after becoming dually employed,

29  he or she may elect membership in the Regular Class of the

30  Florida Retirement System in lieu of the optional program and

31  contributions shall be paid as required on the total salary


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    CS for SB 2132                                 First Engrossed



  1  received for all employment. At retirement, the average final

  2  compensation used to calculate any benefits for which the

  3  member becomes eligible under the Florida Retirement System

  4  shall be based on all salary reported for both positions

  5  during such period of dual employment.  When such member

  6  ceases to be dually employed, he or she may, within 90 days,

  7  elect to remain in the Florida Retirement System class for

  8  which he or she is eligible or to again become a participant

  9  in the optional retirement program.  Failure to elect

10  membership in the optional program within 90 days shall result

11  in compulsory membership in the Florida Retirement System,

12  except that a member filling a faculty position under a

13  faculty practice plan at the University of Florida or the

14  Medical Center at the University of South Florida shall again

15  participate in the optional retirement program as required in

16  s. 121.051(1)(a).

17         (4)  CONTRIBUTIONS.--

18         (a)  Through June 30, 2001, each employer shall

19  contribute on behalf of each participant in the optional

20  retirement program an amount equal to the normal cost portion

21  of the employer retirement contribution which would be

22  required if the participant were a regular member of the

23  Florida Retirement System defined benefit program, plus the

24  portion of the contribution rate required in s. 112.363(8)

25  that would otherwise be assigned to the Retiree Health

26  Insurance Subsidy Trust Fund. Effective July 1, 2001, each

27  employer shall contribute on behalf of each participant in the

28  optional program an amount equal to 10.43 percent of the

29  participant's gross monthly compensation. The department shall

30  deduct an amount approved by the Legislature to provide for

31  the administration of this program. The payment of the


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    CS for SB 2132                                 First Engrossed



  1  contributions to the optional program which is required by

  2  this paragraph for each participant shall be made by the

  3  employer to the department, which shall forward the

  4  contributions to the designated company or companies

  5  contracting for payment of benefits for the participant under

  6  the program. However, such contributions paid on behalf of an

  7  employee described in paragraph (3)(c) shall not be forwarded

  8  to a company and shall not begin to accrue interest until the

  9  employee has executed an annuity contract and notified the

10  department.

11         (b)  Each employer shall contribute on behalf of each

12  participant in the optional retirement program an amount equal

13  to the unfunded actuarial accrued liability portion of the

14  employer contribution which would be required for members of

15  the Florida Retirement System.  This contribution shall be

16  paid to the department for transfer to the Florida Retirement

17  System Trust Fund.

18         (c)  An Optional Retirement Program Trust Fund shall be

19  established in the State Treasury and administered by the

20  department to make payments to the provider companies on

21  behalf of the optional retirement program participants, and to

22  transfer the unfunded liability portion of the state optional

23  retirement program contributions to the Florida Retirement

24  System Trust Fund.

25         (d)  Contributions required for social security by each

26  employer and each participant, in the amount required for

27  social security coverage as now or hereafter may be provided

28  by the federal Social Security Act, shall be maintained for

29  each participant in the optional retirement program and shall

30  be in addition to the retirement contributions specified in

31  this subsection.


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    CS for SB 2132                                 First Engrossed



  1         (e)  Each participant in the optional retirement

  2  program who has executed a an annuity contract may contribute

  3  by way of salary reduction or deduction a percentage amount of

  4  the participant's gross compensation not to exceed the

  5  percentage amount contributed by the employer to the optional

  6  program, but in no case may such contribution exceed federal

  7  limitations. Payment of the participant's contributions shall

  8  be made by the financial officer of the employer to the

  9  division which shall forward the contributions to the

10  designated company or companies contracting for payment of

11  benefits for the participant under the program. A participant

12  may not make, through salary reduction, any voluntary employee

13  contributions to any other plan under s. 403(b) of the

14  Internal Revenue Code, with the exception of a custodial

15  account under s. 403(b)(7) of the Internal Revenue Code, until

16  he or she has made an employee contribution to his or her

17  optional program equal to the employer contribution. A

18  participant is responsible for monitoring his or her

19  individual tax-deferred income to ensure he or she does not

20  exceed the maximum deferral amounts permitted under the

21  Internal Revenue Code.

22         (f)  The Optional Retirement Trust Fund may accept for

23  deposit into participant contracts contributions in the form

24  of rollovers or direct trustee-to-trustee transfers by or on

25  behalf of participants who are reasonably determined by the

26  department to be eligible for rollover or transfer to the

27  optional retirement program pursuant to the Internal Revenue

28  Code, if such contributions are made in accordance with rules

29  adopted by the department. Such contributions shall be

30  accounted for in accordance with any applicable requirements

31  of the Internal Revenue Code and rules of the department.


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    CS for SB 2132                                 First Engrossed



  1         (5)  BENEFITS.--

  2         (a)  Benefits shall be payable under the optional

  3  retirement program only to vested participants in the program,

  4  or their beneficiaries as designated by the participant in the

  5  contract with a provider company, and such benefits shall be

  6  paid only by the designated company in accordance with s.

  7  403(b) of the Internal Revenue Code and in accordance with the

  8  terms of the annuity contract or contracts applicable to the

  9  participant. Benefits shall accrue in individual accounts that

10  are participant-directed, portable, and funded by employer

11  contributions and the earnings thereon. The participant must

12  be terminated from all employment with all Florida Retirement

13  System employers, as provided in s. 121.021(39), to begin

14  receiving the employer-funded benefit. Benefits funded by

15  employer contributions shall be payable in accordance with the

16  following terms and conditions only as a lifetime annuity to

17  the participant, his or her beneficiary, or his or her estate,

18  except for:

19         1.  Benefits shall be payable only to a participant, to

20  his or her beneficiaries, or to his or her estate, as

21  designated by the participant.

22         2.  Benefits shall be paid by the provider company or

23  companies in accordance with the law, the provisions of the

24  contract, and any applicable board rule or policy.

25         3.  In the event of a participant's death, moneys

26  accumulated by, or on behalf of, the participant, less

27  withholding taxes remitted to the Internal Revenue Service, if

28  any, shall be distributed to the participant's designated

29  beneficiary or beneficiaries, or to the participant's estate,

30  as if the participant retired on the date of death, as

31  provided in paragraph (c). No other death benefits shall be


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    CS for SB 2132                                 First Engrossed



  1  available for survivors of participants under the optional

  2  retirement program except for such benefits, or coverage for

  3  such benefits, as are separately afforded by the employer, at

  4  the employer's discretion.

  5         (b)  Upon receipt by the provider company of a properly

  6  executed application for distribution of benefits, the total

  7  accumulated benefit shall be payable to the participant, as:

  8         1.  A lump-sum distribution to the participant;

  9         2.  A lump-sum direct rollover distribution whereby all

10  accrued benefits, plus interest and investment earnings, are

11  paid from the participant's account directly to an eligible

12  retirement plan, as defined in s. 402(c)(8)(B) of the Internal

13  Revenue Code, on behalf of the participant;

14         3.  Periodic distributions;

15         4.  A partial lump-sum payment whereby a portion of the

16  accrued benefit is paid to the participant and the remaining

17  amount is transferred to an eligible retirement plan, as

18  defined in s. 402(c)(8)(B) of the Internal Revenue Code, on

19  behalf of the participant; or

20         5.  Such other distribution options as are provided for

21  in the participant's optional retirement program contract.

22         (c)  Survivor benefits shall be payable as:

23         1.  A lump-sum distribution payable to the

24  beneficiaries or to the deceased participant's estate;

25         2.  An eligible rollover distribution on behalf of the

26  surviving spouse of a deceased participant, whereby all

27  accrued benefits, plus interest and investment earnings, are

28  paid from the deceased participant's account directly to an

29  eligible retirement plan, as described in s. 402(c)(8)(B) of

30  the Internal Revenue Code, on behalf of the surviving spouse;

31


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    CS for SB 2132                                 First Engrossed



  1         3.  Such other distribution options as are provided for

  2  in the participant's optional retirement program contract; or

  3         4.  A partial lump-sum payment whereby a portion of the

  4  accrued benefit is paid to the deceased participant's

  5  surviving spouse or other designated beneficiaries, less

  6  withholding taxes remitted to the Internal Revenue Service, if

  7  any, and the remaining amount is transferred directly to an

  8  eligible retirement plan, as described in s.402(c)(8)(B) of

  9  the Internal Revenue Code, on behalf of the surviving spouse.

10  The proportions must be specified by the participant or the

11  surviving beneficiary.

12

13  This paragraph does not abrogate other applicable provisions

14  of state or federal law providing payment of death benefits.

15         1.  A lump-sum payment to the beneficiary upon the

16  death of the participant; or

17         2.  A cash-out of a de minimis account upon the request

18  of a former participant who has been terminated for a minimum

19  of 6 months from the employment that entitled him or her to

20  optional retirement program participation. A de minimis

21  account is an account with a provider company containing

22  employer contributions and accumulated earnings of not more

23  than $5,000 made under the provisions of this chapter. Such

24  cash-out must be a complete liquidation of the account balance

25  with that company and is subject to the provisions of the

26  Internal Revenue Code.

27         (d)(b)  The benefits payable to any person under the

28  optional retirement program, and any contribution accumulated

29  under such program, shall not be subject to assignment,

30  execution, or attachment or to any legal process whatsoever.

31


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    CS for SB 2132                                 First Engrossed



  1         (e)(c)  A participant who chooses to receive his or her

  2  benefits upon termination of employment shall have

  3  responsibility to notify the provider company of the date on

  4  which he or she wishes benefits the annuity funded by employer

  5  contributions to begin. Benefits may be deferred until such

  6  time as the participant chooses to make such application.

  7         (f)(d)  Benefits funded by the participant's personal

  8  contributions may be paid out at any time and in any form

  9  within the limits provided in the contract between the

10  participant and his or her provider company. The participant

11  shall notify the provider company regarding the date and

12  provisions under which he or she wants to receive the

13  employee-funded portion of the plan.

14         (6)  ADMINISTRATION OF PROGRAM.--

15         (a)  The optional retirement program authorized by this

16  section shall be administered by the department.  The

17  department shall adopt rules establishing the responsibilities

18  of the State Board of Education Regents and institutions in

19  the State University System in administering the optional

20  retirement program. The State Board of Education Regents

21  shall, no more than 90 days after July 1, 1983, submit to the

22  department its recommendations for the annuity contracts to be

23  offered by the companies chosen by the department.  The

24  recommendations of the board shall include the following:

25         1.  The nature and extent of the rights and benefits in

26  relation to the required contributions; and

27         2.  The suitability of the rights and benefits to the

28  needs of the participants and the interests of the

29  institutions in the recruitment and retention of eligible

30  employees.

31


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    CS for SB 2132                                 First Engrossed



  1         (b)  After receiving and considering the

  2  recommendations of the State Board of Education Regents, the

  3  department shall designate no more than four companies from

  4  which annuity contracts may be purchased under the program and

  5  shall approve the form and content of the optional retirement

  6  program contracts.  Upon application by a qualified Florida

  7  domestic company, the department shall give reasonable notice

  8  to all other such companies that it intends to designate one

  9  of such companies as a fifth company from which annuity

10  contracts may be purchased pursuant to this section and that

11  they may apply for such designation prior to the deadline

12  established by said notice. At least 60 days after giving such

13  notice and upon receipt of the recommendation of the State

14  Board of Education Regents, the department shall so designate

15  one of such companies as the fifth company from which such

16  contracts may be purchased.

17         (c)  Effective July 1, 1997, the State Board of

18  Administration shall review and make recommendations to the

19  department on the acceptability of all investment products

20  proposed by provider companies of the optional retirement

21  program before they are offered through annuity contracts to

22  the participants and may advise the department of any changes

23  necessary to ensure that the optional retirement program

24  offers an acceptable mix of investment products. The

25  department shall make the final determination as to whether an

26  investment product will be approved for the program.

27         (d)  The provisions of each contract applicable to a

28  participant in the optional retirement program shall be

29  contained in a written program description which shall include

30  a report of pertinent financial and actuarial information on

31  the solvency and actuarial soundness of the program and the


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    CS for SB 2132                                 First Engrossed



  1  benefits applicable to the participant.  Such description

  2  shall be furnished by the companies to each participant in the

  3  program and to the department upon commencement of

  4  participation in the program and annually thereafter.

  5         (e)  The department shall ensure that each participant

  6  in the optional retirement program is provided an accounting

  7  of the total contribution and the annual contribution made by

  8  and on behalf of such participant.

  9         Section 7.  Subsection (2), paragraph (c) of subsection

10  (3), paragraphs (a), (b), and (c) of subsection (4), and

11  subsections (7) and (16) of section 121.4501, Florida

12  Statutes, as amended by chapter 2001-235, Laws of Florida, are

13  amended to read:

14         121.4501  Public Employee Optional Retirement

15  Program.--

16         (2)  DEFINITIONS.--As used in this part section, the

17  term:

18         (a)  "Approved provider" or "provider" means a private

19  sector company that is selected and approved by the state

20  board to offer one or more investment products or services to

21  the Public Employee Optional Retirement Program. The term

22  includes a bundled provider that offers participants a range

23  of individually allocated or unallocated investment products

24  and may offer a range of administrative and customer services,

25  which may include accounting and administration of individual

26  participant benefits and contributions; individual participant

27  recordkeeping; asset purchase, control, and safekeeping;

28  direct execution of the participant's instructions as to asset

29  and contribution allocation; calculation of daily net asset

30  values; direct access to participant account information;

31  periodic reporting to participants, at least quarterly, on


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    CS for SB 2132                                 First Engrossed



  1  account balances and transactions; guidance, advice, and

  2  allocation services directly relating to its own investment

  3  options or products, but only if the bundled provider complies

  4  with the standard of care of s. 404(a)(1)(A-B) of the Employee

  5  Retirement Income Security Act of 1974 (ERISA) and if

  6  providing such guidance, advice, or allocation services does

  7  not constitute a prohibited transaction under s. 4975(c)(1) of

  8  the Internal Revenue Code or s. 406 of ERISA, notwithstanding

  9  that such prohibited transaction provisions do not apply to

10  the optional retirement program; a broad array of distribution

11  options; asset allocation; and retirement counseling and

12  education. Private sector companies include investment

13  management companies, insurance companies, depositories, and

14  mutual fund companies.

15         (b)  "Average monthly compensation" means one-twelfth

16  of average final compensation as defined in s. 121.021(24).

17         (c)  "Covered employment" means employment in a

18  regularly established position as defined in s. 121.021(52).

19         (d)(b)  "Department" means the Department of Management

20  Services.

21         (e)(c)  "Division" means the Division of Retirement

22  within the Department of Management Services.

23         (f)(d)  "Eligible employee" means an officer or

24  employee, as defined in s. 121.021(11), who:

25         1.  Is a member of, or is eligible for membership in,

26  the Florida Retirement System;

27         2.  Participates in, or is eligible to participate in,

28  the Senior Management Service Optional Annuity Program as

29  established under s. 121.055(6); or

30         3.  Is eligible to participate in, but does not

31  participate in, the State University System Optional


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  1  Retirement Program established under s. 121.35 or the State

  2  Community College System Optional Retirement Program

  3  established under s. 121.051(2)(c).

  4

  5  The term does not include any renewed member of the Florida

  6  Retirement System, any member participating in the Deferred

  7  Retirement Option Program established under s. 121.091(13), or

  8  any employee participating in an optional retirement program

  9  established under s. 121.051(2)(c) or s. 121.35.

10         (g)(e)  "Employer" means an employer, as defined in s.

11  121.021(10), of an eligible employee.

12         (h)(f)  "Participant" means an eligible employee who

13  elects to participate in the Public Employee Optional

14  Retirement Program and enrolls in such optional program as

15  provided in subsection (4).

16         (i)(g)  "Public Employee Optional Retirement Program,"

17  "optional program," or "optional retirement program" means the

18  alternative defined contribution retirement program

19  established under this section.

20         (j)(h)  "State board" or "board" means the State Board

21  of Administration.

22         (k)(i)  "Trustees" means Trustees of the State Board of

23  Administration.

24         (l)(j)  "Vested" or "vesting" means the guarantee that

25  a participant is eligible to receive a retirement benefit upon

26  completion of the required years of service under the Public

27  Employee Optional Retirement Program.

28         (3)  ELIGIBILITY; RETIREMENT SERVICE CREDIT.--

29         (c)1.  Notwithstanding paragraph (b), each eligible

30  employee who elects to participate in the Public Employee

31  Optional Retirement Program and establishes one or more


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    CS for SB 2132                                 First Engrossed



  1  individual participant accounts under the optional program may

  2  elect to transfer to the optional program a sum representing

  3  the present value of the employee's accumulated benefit

  4  obligation under the defined benefit retirement program of the

  5  Florida Retirement System. Upon such transfer, all service

  6  credit previously earned under the defined benefit program of

  7  the Florida Retirement System shall be nullified for purposes

  8  of entitlement to a future benefit under the defined benefit

  9  program of the Florida Retirement System. A participant is

10  precluded from transferring the accumulated benefit obligation

11  balance from the defined benefit program upon the expiration

12  of the period afforded to enroll in the optional program.

13         2.  For purposes of this subsection, the present value

14  of the member's accumulated benefit obligation is based upon

15  the member's estimated creditable service and estimated

16  average final compensation under the defined benefit program,

17  subject to recomputation under subparagraph 3. For state

18  employees enrolling under subparagraph (4)(a)1., initial

19  estimates will be based upon creditable service and average

20  final compensation as of midnight on June 30, 2002; for

21  district school board employees enrolling under subparagraph

22  (4)(b)1., initial estimates will be based upon creditable

23  service and average final compensation as of midnight on

24  September 30, 2002; and for local government employees

25  enrolling under subparagraph (4)(c)1., initial estimates will

26  be based upon creditable service and average final

27  compensation as of midnight on December 31, 2002. The dates

28  respectively specified above shall be construed as the

29  "estimate date" for these employees of the day prior to the

30  opening of the election window for the employee. The actuarial

31


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    CS for SB 2132                                 First Engrossed



  1  present value of the employee's accumulated benefit obligation

  2  shall be based on the following:

  3         a.  The discount rate and other relevant actuarial

  4  assumptions used to value the Florida Retirement System Trust

  5  Fund at the time the amount to be transferred is determined,

  6  consistent with the factors provided in sub-subparagraphs b.

  7  and c.

  8         b.  A benefit commencement age, based on the member's

  9  estimated creditable service as of the estimate date midnight

10  on May 31, 2002. The benefit commencement age shall be the

11  younger of the following, but shall not be younger than the

12  member's age as of the estimate date midnight on May 31, 2002:

13         (I)  Age 62; or

14         (II)  The age the member would attain if the member

15  completed 30 years of service with an employer, assuming the

16  member worked continuously from the estimate date May 31,

17  2002, and disregarding any vesting requirement that would

18  otherwise apply under the defined benefit program of the

19  Florida Retirement System.

20         c.  For members of the Special Risk Class and for

21  members of the Special Risk Administrative Support Class

22  entitled to retain special risk normal retirement date, the

23  benefit commencement age shall be the younger of the

24  following, but shall not be younger than the member's age as

25  of the estimate date midnight on May 31, 2002:

26         (I)  Age 55; or

27         (II)  The age the member would attain if the member

28  completed 25 years of service with an employer, assuming the

29  member worked continuously from the estimate date May 31,

30  2002, and disregarding any vesting requirement that would

31


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    CS for SB 2132                                 First Engrossed



  1  otherwise apply under the defined benefit program of the

  2  Florida Retirement System.

  3         d.  The calculation shall disregard vesting

  4  requirements and early retirement reduction factors that would

  5  otherwise apply under the defined benefit retirement program.

  6         3.  For each participant who elects to transfer moneys

  7  from the defined benefit program to his or her account in the

  8  optional program, the division shall recompute the amount

  9  transferred under subparagraph 2. not later than 60 days after

10  the actual transfer of funds based upon the participant's

11  actual creditable service and actual final average

12  compensation as of the initial date of participation in the

13  optional program. If the recomputed amount differs from the

14  amount transferred under subparagraph 2. by $10 or more, the

15  division shall:

16         a.  Transfer, or cause to be transferred, from the

17  Florida Retirement System Trust Fund to the participant's

18  account in the optional program the excess, if any, of the

19  recomputed amount over the previously transferred amount

20  together with interest from the initial date of transfer to

21  the date of transfer under this subparagraph, based upon 8

22  percent effective annual interest, compounded annually.

23         b.  Transfer, or cause to be transferred, from the

24  participant's account to the Florida Retirement System Trust

25  Fund the excess, if any, of the previously transferred amount

26  over the recomputed amount, together with interest from the

27  initial date of transfer to the date of transfer under this

28  subparagraph, based upon 6 percent effective annual interest,

29  compounded annually, pro rata based on the participant's

30  allocation plan.

31


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    CS for SB 2132                                 First Engrossed



  1         4.  As directed by the participant, the board shall

  2  transfer or cause to be transferred the appropriate amounts to

  3  the designated accounts. The board shall establish transfer

  4  procedures by rule, but the actual transfer shall not be later

  5  than 30 days after the effective date of the member's

  6  participation in the optional program. Transfers are not

  7  commissionable or subject to other fees and may be in the form

  8  of securities or cash as determined by the state board. Such

  9  securities shall be valued as of the date of receipt in the

10  participant's account.

11         5.  If the board or the division receives notification

12  from the United States Internal Revenue Service that this

13  paragraph or any portion of this paragraph will cause the

14  retirement system, or a portion thereof, to be disqualified

15  for tax purposes under the Internal Revenue Code, then the

16  portion that will cause the disqualification does not apply.

17  Upon such notice, the state board and the division shall

18  notify the presiding officers of the Legislature.

19         (4)  PARTICIPATION; ENROLLMENT.--

20         (a)1.  With respect to an eligible employee who is

21  employed in a regularly established position on June 1, 2002,

22  by a state employer:

23         a.  Any such employee may elect to participate in the

24  Public Employee Optional Retirement Program in lieu of

25  retaining his or her membership in the defined benefit program

26  of the Florida Retirement System. The election must be made in

27  writing or by electronic means and must be filed with the

28  third-party administrator by August 31, department and the

29  personnel officer of the employer within 90 days after June 1,

30  2002, or, in the case of an active employee who is on a leave

31  of absence on April June 1, 2002, by August 31, 2002, or


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    CS for SB 2132                                 First Engrossed



  1  within 90 days after the conclusion of the leave of absence,

  2  whichever is later. This election is irrevocable, except as

  3  provided in paragraph (e). Upon making such election, the

  4  employee shall be enrolled as a participant of the Public

  5  Employee Optional Retirement Program, the employee's

  6  membership in the Florida Retirement System shall be governed

  7  by the provisions of this part, and the employee's membership

  8  in the defined benefit program of the Florida Retirement

  9  System shall terminate. The employee's enrollment in the

10  Public Employee Optional Retirement Program shall be effective

11  the first day of the month for which a full month's employer

12  contribution is made to the optional program.

13         b.  Any such employee who fails to elect to participate

14  in the Public Employee Optional Retirement Program within the

15  prescribed time period 90 days is deemed to have elected to

16  retain membership in the defined benefit program of the

17  Florida Retirement System, and the employee's option to elect

18  to participate in the optional program is forfeited.

19         2.  With respect to employees who become eligible to

20  participate in the Public Employee Optional Retirement Program

21  by reason of employment in a regularly established position

22  with a state employer commencing after April June 1, 2002:

23         a.  Any such employee shall, by default, be enrolled in

24  the defined benefit retirement program of the Florida

25  Retirement System at the commencement of employment, and may,

26  by the end of the 5th month following the employee's month of

27  hire within 180 days after employment commences, elect to

28  participate in the Public Employee Optional Retirement

29  Program. The employee's election must be made in writing or by

30  electronic means and must be filed with the third-party

31  administrator personnel officer of the employer. The election


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    CS for SB 2132                                 First Engrossed



  1  to participate in the optional program is irrevocable, except

  2  as provided in paragraph (e).

  3         b.  If the employee files such election before the

  4  initial payroll is submitted for the employee, enrollment in

  5  the Public Employee Optional Retirement Program shall be

  6  effective on the first day of employment.

  7         b.c.  If the employee files such election within the

  8  prescribed time period 180 days after employment commences,

  9  but after the initial payroll is submitted for the employee,

10  enrollment in the optional program shall be effective on the

11  first day of employment the month for which a full month's

12  employer contribution is made to the optional program. The

13  employer retirement contributions paid through the month of

14  the employee plan change shall be transferred to the optional

15  program, and, effective the first day of the next month, the

16  employer shall pay the applicable contributions based on the

17  employee membership class in the optional program.

18         c.d.  Any such employee who fails to elect to

19  participate in the Public Employee Optional Retirement Program

20  within the prescribed time period 180 days is deemed to have

21  elected to retain membership in the defined benefit program of

22  the Florida Retirement System, and the employee's option to

23  elect to participate in the optional program is forfeited.

24         3.  For purposes of this paragraph, "state employer"

25  means any agency, board, branch, commission, community

26  college, department, institution, institution of higher

27  education, or water management district of the state, which

28  participates in the Florida Retirement System for the benefit

29  of certain employees.

30

31


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    CS for SB 2132                                 First Engrossed



  1         (b)1.  With respect to an eligible employee who is

  2  employed in a regularly established position on September 1,

  3  2002, by a district school board employer:

  4         a.  Any such employee may elect to participate in the

  5  Public Employee Optional Retirement Program in lieu of

  6  retaining his or her membership in the defined benefit program

  7  of the Florida Retirement System. The election must be made in

  8  writing or by electronic means and must be filed with the

  9  third-party administrator by November 30 department and the

10  personnel officer of the employer within 90 days after

11  September 1, 2002, or, in the case of an active employee who

12  is on a leave of absence on July September 1, 2002, by

13  November 30, 2002, or within 90 days after the conclusion of

14  the leave of absence, whichever is later. This election is

15  irrevocable, except as provided in paragraph (e). Upon making

16  such election, the employee shall be enrolled as a participant

17  of the Public Employee Optional Retirement Program, the

18  employee's membership in the Florida Retirement System shall

19  be governed by the provisions of this part, and the employee's

20  membership in the defined benefit program of the Florida

21  Retirement System shall terminate. The employee's enrollment

22  in the Public Employee Optional Retirement Program shall be

23  effective the first day of the month for which a full month's

24  employer contribution is made to the optional program.

25         b.  Any such employee who fails to elect to participate

26  in the Public Employee Optional Retirement Program within the

27  prescribed time period 90 days is deemed to have elected to

28  retain membership in the defined benefit program of the

29  Florida Retirement System, and the employee's option to elect

30  to participate in the optional program is forfeited.

31


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    CS for SB 2132                                 First Engrossed



  1         2.  With respect to employees who become eligible to

  2  participate in the Public Employee Optional Retirement Program

  3  by reason of employment in a regularly established position

  4  with a district school board employer commencing after July

  5  September 1, 2002:

  6         a.  Any such employee shall, by default, be enrolled in

  7  the defined benefit retirement program of the Florida

  8  Retirement System at the commencement of employment, and may,

  9  by the end of the 5th month following the employee's month of

10  hire within 180 days after employment commences, elect to

11  participate in the Public Employee Optional Retirement

12  Program. The employee's election must be made in writing or by

13  electronic means and must be filed with the third-party

14  administrator personnel officer of the employer. The election

15  to participate in the optional program is irrevocable, except

16  as provided in paragraph (e).

17         b.  If the employee files such election before the

18  initial payroll is submitted for the employee, enrollment in

19  the Public Employee Optional Retirement Program shall be

20  effective on the first day of employment.

21         b.c.  If the employee files such election within the

22  prescribed time period 180 days after employment commences,

23  but after the initial payroll is submitted for the employee,

24  enrollment in the optional program shall be effective on the

25  first day of employment the month for which a full month's

26  employer contribution is made to the optional program. The

27  employer retirement contributions paid through the month of

28  the employee plan change shall be transferred to the optional

29  program, and, effective the first day of the next month, the

30  employer shall pay the applicable contributions based on the

31  employee membership class in the optional program.


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    CS for SB 2132                                 First Engrossed



  1         c.d.  Any such employee who fails to elect to

  2  participate in the Public Employee Optional Retirement Program

  3  within the prescribed time period 180 days is deemed to have

  4  elected to retain membership in the defined benefit program of

  5  the Florida Retirement System, and the employee's option to

  6  elect to participate in the optional program is forfeited.

  7         3.  For purposes of this paragraph, "district school

  8  board employer" means any district school board that

  9  participates in the Florida Retirement System for the benefit

10  of certain employees, or a charter school or charter technical

11  career center that participates in the Florida Retirement

12  System as provided in s. 121.051(2)(d).

13         (c)1.  With respect to an eligible employee who is

14  employed in a regularly established position on December 1,

15  2002, by a local employer:

16         a.  Any such employee may elect to participate in the

17  Public Employee Optional Retirement Program in lieu of

18  retaining his or her membership in the defined benefit program

19  of the Florida Retirement System. The election must be made in

20  writing or by electronic means and must be filed with the

21  third-party administrator by February 28, 2003, department and

22  the personnel officer of the employer within 90 days after

23  December 1, 2002 or, in the case of an active employee who is

24  on a leave of absence on October December 1, 2002, by February

25  28, 2003, or within 90 days after the conclusion of the leave

26  of absence, whichever is later. This election is irrevocable,

27  except as provided in paragraph (e). Upon making such

28  election, the employee shall be enrolled as a participant of

29  the Public Employee Optional Retirement Program, the

30  employee's membership in the Florida Retirement System shall

31  be governed by the provisions of this part, and the employee's


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    CS for SB 2132                                 First Engrossed



  1  membership in the defined benefit program of the Florida

  2  Retirement System shall terminate. The employee's enrollment

  3  in the Public Employee Optional Retirement Program shall be

  4  effective the first day of the month for which a full month's

  5  employer contribution is made to the optional program.

  6         b.  Any such employee who fails to elect to participate

  7  in the Public Employee Optional Retirement Program within the

  8  prescribed time period 90 days is deemed to have elected to

  9  retain membership in the defined benefit program of the

10  Florida Retirement System, and the employee's option to elect

11  to participate in the optional program is forfeited.

12         2.  With respect to employees who become eligible to

13  participate in the Public Employee Optional Retirement Program

14  by reason of employment in a regularly established position

15  with a local employer commencing after October December 1,

16  2002:

17         a.  Any such employee shall, by default, be enrolled in

18  the defined benefit retirement program of the Florida

19  Retirement System at the commencement of employment, and may,

20  by the end of the 5th month following the employee's month of

21  hire within 180 days after employment commences, elect to

22  participate in the Public Employee Optional Retirement

23  Program. The employee's election must be made in writing or by

24  electronic means and must be filed with the third-party

25  administrator personnel officer of the employer. The election

26  to participate in the optional program is irrevocable, except

27  as provided in paragraph (e).

28         b.  If the employee files such election before the

29  initial payroll is submitted for the employee, enrollment in

30  the Public Employee Optional Retirement Program shall be

31  effective on the first day of employment.


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    CS for SB 2132                                 First Engrossed



  1         b.c.  If the employee files such election within the

  2  prescribed time period 180 days after employment commences,

  3  but after the initial payroll is submitted for the employee,

  4  enrollment in the optional program shall be effective on the

  5  first day of employment the month for which a full month's

  6  employer contribution is made to the optional program. The

  7  employer retirement contributions paid through the month of

  8  the employee plan change shall be transferred to the optional

  9  program, and, effective the first day of the next month, the

10  employer shall pay the applicable contributions based on the

11  employee membership class in the optional program.

12         c.d.  Any such employee who fails to elect to

13  participate in the Public Employee Optional Retirement Program

14  within the prescribed time period 180 days is deemed to have

15  elected to retain membership in the defined benefit program of

16  the Florida Retirement System, and the employee's option to

17  elect to participate in the optional program is forfeited.

18         3.  For purposes of this paragraph, "local employer"

19  means any employer not included in paragraph (a) or paragraph

20  (b).

21         (7)  BENEFITS.--Under the Public Employee Optional

22  Retirement Program:

23         (a)  Benefits shall be provided in accordance with s.

24  401(a) of the Internal Revenue Code.

25         (b)  Benefits shall accrue in individual accounts that

26  are participant-directed, portable, and funded by employer

27  contributions and earnings thereon.

28         (c)  Benefits shall be payable in accordance with the

29  provisions of s. 121.591. following terms and conditions:

30

31


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    CS for SB 2132                                 First Engrossed



  1         1.  To the extent vested, benefits shall be payable

  2  only to a participant, or to his or her beneficiaries as

  3  designated by the participant.

  4         2.  Benefits shall be paid by the third-party

  5  administrator or designated approved providers in accordance

  6  with the law, the contracts, and any applicable board rule or

  7  policy.

  8         3.  To begin receiving the benefits, the participant

  9  must be terminated from all employment with all Florida

10  Retirement System employers, as provided in s. 121.021(39), or

11  the participant must be deceased. If a participant elects to

12  receive his or her benefits upon termination of employment,

13  the participant must submit a written application to the

14  third-party administrator indicating his or her preferred

15  distribution date and selecting an authorized method of

16  distribution as provided in paragraph (d). The participant may

17  defer receipt of benefits until he or she chooses to make such

18  application, subject to federal requirements.

19         4.  In the event of a participant's death, moneys

20  accumulated by, or on behalf of, the participant, less

21  withholding taxes remitted to the Internal Revenue Service,

22  shall be distributed to the participant's designated

23  beneficiary or beneficiaries, or to the participant's estate,

24  as if the participant retired on the date of death, as

25  provided in paragraph (e). No other death benefits shall be

26  available for survivors of participants under the Public

27  Employee Optional Retirement Program, except for such

28  benefits, or coverage for such benefits, as are separately

29  afforded by the employer, at the employer's discretion.

30         (d)  Upon receipt by the third-party administrator of a

31  properly executed application for distribution of benefits,


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    CS for SB 2132                                 First Engrossed



  1  the total accumulated benefit shall be payable to the

  2  participant, as:

  3         1.  A lump-sum distribution to the participant;

  4         2.  A lump-sum direct rollover distribution whereby all

  5  accrued benefits, plus interest and investment earnings, are

  6  paid from the participant's account directly to the custodian

  7  of an eligible retirement plan, as defined in s. 402(c)(8)(B)

  8  of the Internal Revenue Code, on behalf of the participant; or

  9         3.  Periodic distributions, as authorized by the state

10  board.

11         (e)  Survivor benefits shall be payable as:

12         1.  A lump-sum distribution payable to the

13  beneficiaries, or to the deceased participant's estate;

14         2.  An eligible rollover distribution on behalf of the

15  surviving spouse of a deceased participant, whereby all

16  accrued benefits, plus interest and investment earnings, are

17  paid from the deceased participant's account directly to the

18  custodian of an individual retirement account or an individual

19  retirement annuity, as described in s. 402(c)(9) of the

20  Internal Revenue Code, on behalf of the surviving spouse; or

21         3.  A partial lump-sum payment whereby a portion of the

22  accrued benefit is paid to the deceased participant's

23  surviving spouse or other designated beneficiaries, less

24  withholding taxes remitted to the Internal Revenue Service,

25  and the remaining amount is transferred directly to the

26  custodian of an individual retirement account or an individual

27  retirement annuity, as described in s. 402(c)(9) of the

28  Internal Revenue Code, on behalf of the surviving spouse. The

29  proportions must be specified by the participant or the

30  surviving beneficiary.

31


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    CS for SB 2132                                 First Engrossed



  1  This paragraph does not abrogate other applicable provisions

  2  of state or federal law providing for payment of death

  3  benefits.

  4         (f)  The benefits payable to any person under the

  5  Public Employee Optional Retirement Program, and any

  6  contributions accumulated under such program, are not subject

  7  to assignment, execution, attachment, or any legal process,

  8  except for qualified domestic relations orders by a court of

  9  competent jurisdiction, income deduction orders as provided in

10  s. 61.1301, and federal income tax levies.

11         (16)  DISABILITY BENEFITS.--For any participant of the

12  optional retirement program who becomes totally and

13  permanently disabled, benefits shall be paid in accordance

14  with the provisions of s. 121.591 as defined in s.

15  121.091(4)(b), the participant shall be entitled to receive

16  those moneys that have accrued in his or her participant

17  account.  It is the intent of the Legislature to design a

18  disability benefit for participants of the optional program

19  similar to those disability benefits afforded defined benefit

20  program members.  The department is directed to study the

21  potential options of such coverage, including self-insurance

22  and commercial coverage, the alternative methods of

23  administering such benefits, and the fiscal impacts on the

24  employees and employers, and to make recommendations to the

25  Legislature by January 15, 2001.

26         Section 8.  Subsections (3) and (7) of section 121.571,

27  Florida Statutes, are amended to read:

28         121.571  Contributions.--Contributions to the Public

29  Employee Optional Retirement Program shall be made as follows:

30         (3)  CONTRIBUTIONS TO DISABILITY ACCOUNT.--

31


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    CS for SB 2132                                 First Engrossed



  1         (a)  All contributions made on behalf of a participant

  2  pursuant to this subsection shall be transferred by the

  3  employer to the third-party administrator for deposit in the

  4  disability account of the Florida Retirement System Public

  5  Employee Disability Trust Fund administered by the Division of

  6  Retirement. Such contributions, less any fees or charges

  7  authorized by the Legislature to offset the costs of

  8  administering the disability component of the optional

  9  retirement program, shall be separately accounted for and

10  shall be used to provide disability coverage for participants

11  in the optional retirement program.

12         (b)  Disability contributions for Regular Class members

13  of the optional retirement plan are as follows:

14

15  Dates of Contribution                      Employers

16  Rate Changes

17  Effective July 1, 2002:                    0.25% 0.39%

18

19         (c)  Disability contributions for Special Risk Class

20  members of the optional retirement plan are as follows:

21

22  Dates of Contribution                      Employers

23  Rate Changes

24  Effective July 1, 2002:                    1.33% 1.25%

25

26         (d)  Disability contributions for Special Risk

27  Administrative Support Class members of the optional

28  retirement plan are as follows:

29

30  Dates of Contribution                      Employers

31  Rate Changes


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    CS for SB 2132                                 First Engrossed



  1  Effective July 1, 2002:                    0.45% 0.73%

  2

  3         (e)  Disability contributions for Elected Officers'

  4  Class members of the optional retirement plan are as follows:

  5

  6  Dates of Contribution                      Employers

  7  Rate Changes

  8  Effective July 1, 2002:

  9    Legislators                              0.41% 0.61%

10    Governor, Lt. Governor,                  0.41% 0.61%

11      Cabinet Officers

12    State Attorneys, Public                  0.41% 0.61%

13      Defenders

14    Justices, Judges                         0.73% 1.45%

15    County Elected Officers                  0.41% 0.86%

16

17         (f)  Disability contributions for Senior Management

18  Service Class members of the optional retirement plan are as

19  follows:

20

21  Dates of Contribution                      Employers

22  Rate Changes

23  Effective July 1, 2002:                    0.26% 0.50%

24

25         (7)  PAYMENT AND DISTRIBUTION OF

26  CONTRIBUTIONS.--Contributions made pursuant to this section

27  and accompanying payroll data are due and payable shall be

28  paid by the employer to the third-party administrator by

29  electronic funds transfer or electronic data transfer no later

30  than the 5th working day of the month immediately following

31  the month during which the payroll period ended. The board and


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    CS for SB 2132                                 First Engrossed



  1  the third-party administrator shall ensure that the

  2  contributions are distributed to the appropriate trust funds

  3  or participant accounts in a timely manner.

  4         Section 9.  Section 121.591, Florida Statutes, is

  5  created to read:

  6         121.591  Benefits payable under the Public Employee

  7  Optional Retirement Program of the Florida Retirement

  8  System.--Benefits may not be paid under this section unless

  9  the member has terminated employment as provided in s.

10  121.021(39)(a) or is deceased and a proper application has

11  been filed in the manner prescribed by the state board or the

12  department. The state board or department, as appropriate, may

13  cancel an application for retirement benefits when the member

14  or beneficiary fails to timely provide the information and

15  documents required by this chapter and the rules of the state

16  board and department. In accordance with their respective

17  responsibilities as provided herein, the State Board of

18  Administration and the Department of Management Services shall

19  adopt rules establishing procedures for application for

20  retirement benefits and for the cancellation of such

21  application when the required information or documents are not

22  received.

23         (1)  NORMAL BENEFITS.--Under the Public Employee

24  Optional Retirement Program:

25         (a)  Benefits in the form of vested accumulations as

26  described in s. 121.4501(6) shall be payable under this

27  subsection in accordance with the following terms and

28  conditions:

29         1.  To the extent vested, benefits shall be payable

30  only to a participant.

31


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    CS for SB 2132                                 First Engrossed



  1         2.  Benefits shall be paid by the third-party

  2  administrator or designated approved providers in accordance

  3  with the law, the contracts, and any applicable board rule or

  4  policy.

  5         3.  To receive benefits under this subsection, the

  6  participant must be terminated from all employment with all

  7  Florida Retirement System employers, as provided in s.

  8  121.021(39).

  9         (b)  If a participant elects to receive his or her

10  benefits upon termination of employment, the participant must

11  submit a written application to the third-party administrator

12  indicating his or her preferred distribution date and

13  selecting an authorized method of distribution as provided in

14  paragraph (c). The participant may defer receipt of benefits

15  until he or she chooses to make such application, subject to

16  federal requirements.

17         (c)  Upon receipt by the third-party administrator of a

18  properly executed application for distribution of benefits,

19  the total accumulated benefit shall be payable to the

20  participant, as:

21         1.  A lump-sum distribution to the participant;

22         2.  A lump-sum direct rollover distribution whereby all

23  accrued benefits, plus interest and investment earnings, are

24  paid from the participant's account directly to the custodian

25  of an eligible retirement plan, as defined in s. 402(c)(8)(B)

26  of the Internal Revenue Code, on behalf of the participant; or

27         3.  Periodic distributions, as authorized by the state

28  board.

29         (2)  DISABILITY RETIREMENT BENEFITS.--Benefits provided

30  under this subsection are payable in lieu of the benefits

31  which would otherwise be payable under the provisions of


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    CS for SB 2132                                 First Engrossed



  1  subsection (1). Such benefits shall be funded entirely from

  2  employer contributions made under s. 121.571, transferred

  3  participant funds accumulated pursuant to paragraph (a), and

  4  interest and earnings thereon. Pursuant thereto:

  5         (a)  Transfer of funds.--To qualify to receive monthly

  6  disability benefits under this subsection:

  7         1.  All moneys accumulated in the participant's Public

  8  Employee Optional Retirement Program accounts, including

  9  vested and nonvested accumulations as described in s.

10  121.4501(6), shall be transferred from such individual

11  accounts to the Division of Retirement for deposit in the

12  disability account of the Florida Retirement System Trust

13  Fund. Such moneys shall be separately accounted for. Earnings

14  shall be credited on an annual basis for amounts held in the

15  disability accounts of the Florida Retirement System Trust

16  Fund based on actual earnings of the Florida Retirement System

17  Trust Fund.

18         2.  If the participant has retained retirement credit

19  he or she had earned under the defined benefit program of the

20  Florida Retirement System as provided in s. 121.4501(3)(b), a

21  sum representing the actuarial present value of such credit

22  within the Florida Retirement System Trust Fund shall be

23  reassigned by the Division of Retirement from the defined

24  benefit program to the disability program as implemented under

25  this subsection and shall be deposited in the disability

26  account of the Florida Retirement System Trust Fund. Such

27  moneys shall be separately accounted for.

28         (b)  Disability retirement; entitlement.--

29         1.  A participant of the Public Employee Optional

30  Retirement Program who becomes totally and permanently

31  disabled, as defined in s. 121.091(4)(b), after completing 8


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    CS for SB 2132                                 First Engrossed



  1  years of creditable service, or a participant who becomes

  2  totally and permanently disabled in the line of duty

  3  regardless of his or her length of service, shall be entitled

  4  to a monthly disability benefit as provided herein.

  5         2.  In order for service to apply toward the 8 years of

  6  service required to vest for regular disability benefits, or

  7  toward the creditable service used in calculating a

  8  service-based benefit as provided for under paragraph (g), the

  9  service must be creditable service as described below:

10         a.  The participant's period of service under the

11  Public Employee Optional Retirement Program will be considered

12  creditable service, except as provided in subparagraph d.

13         b.  If the participant has elected to retain credit for

14  his or her service under the defined benefit program of the

15  Florida Retirement System as provided under s. 121.4501(3)(b),

16  all such service will be considered creditable service.

17         c.  If the participant has elected to transfer to his

18  or her participant accounts a sum representing the present

19  value of his or her retirement credit under the defined

20  benefit program as provided under s. 121.4501(3)(c), the

21  period of service under the defined benefit program

22  represented in the present value amounts transferred will be

23  considered creditable service for purposes of vesting for

24  disability benefits, except as provided in subparagraph d.

25         d.  Whenever a participant has terminated employment

26  and has taken distribution of his or her funds as provided in

27  subsection (1), all creditable service represented by such

28  distributed funds is forfeited for purposes of this

29  subsection.

30         (c)  Disability retirement effective date.--The

31  effective retirement date for a participant who applies and is


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    CS for SB 2132                                 First Engrossed



  1  approved for disability retirement shall be established as

  2  provided under s. 121.091(4)(a)2. and 3.

  3         (d)  Total and permanent disability.--A participant

  4  shall be considered totally and permanently disabled if, in

  5  the opinion of the division, he or she is prevented, by reason

  6  of a medically determinable physical or mental impairment,

  7  from rendering useful and efficient service as an officer or

  8  employee.

  9         (e)  Proof of disability.--The division, before

10  approving payment of any disability retirement benefit, shall

11  require proof that the participant is totally and permanently

12  disabled in the same manner as provided for members of the

13  defined benefit program of the Florida Retirement System under

14  s. 121.091(4)(c).

15         (f)  Disability retirement benefit.--Upon the

16  disability retirement of a participant under this subsection,

17  the participant shall receive a monthly benefit that shall

18  begin to accrue on the first day of the month of disability

19  retirement, as approved by the division, and shall be payable

20  on the last day of that month and each month thereafter during

21  his or her lifetime and continued disability. All disability

22  benefits payable to such member shall be paid out of the

23  disability account of the Florida Retirement System Trust Fund

24  established under this subsection.

25         (g)  Computation of disability retirement benefit.--The

26  amount of each monthly payment shall be calculated in the same

27  manner as provided for members of the defined benefit program

28  of the Florida Retirement System under s. 121.091(4)(f). For

29  such purpose, creditable service under both the defined

30  benefit program and the Public Employee Optional Retirement

31


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    CS for SB 2132                                 First Engrossed



  1  Program of the Florida Retirement System shall be applicable

  2  as provided under paragraph (b).

  3         (h)  Reapplication.--A participant whose initial

  4  application for disability retirement has been denied may

  5  reapply for disability benefits in the same manner, and under

  6  the same conditions, as provided for members of the defined

  7  benefit program of the Florida Retirement System under s.

  8  121.091(4)(g).

  9         (i)  Membership.--Upon approval of an application for

10  disability benefits under this subsection, the applicant shall

11  be transferred to the defined benefit program of the Florida

12  Retirement System, effective upon his or her disability

13  retirement effective date.

14         (j)  Option to cancel.--Any participant whose

15  application for disability benefits is approved may cancel his

16  or her application for disability benefits, provided that the

17  cancellation request is received by the division before a

18  disability retirement warrant has been deposited, cashed, or

19  received by direct deposit. Upon such cancellation:

20         1.  The participant's transfer to the defined benefit

21  program under paragraph (i) shall be nullified;

22         2.  The participant shall be retroactively reinstated

23  in the Public Employee Optional Retirement Program without

24  hiatus;

25         3.  All funds transferred to the Florida Retirement

26  System Trust Fund under paragraph (a) shall be returned to the

27  participant accounts from which such funds were drawn; and

28         4.  The participant may elect to receive the benefit

29  payable under the provisions of subsection (1) in lieu of

30  disability benefits as provided under this subsection.

31         (k)  Recovery from disability.--


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    CS for SB 2132                                 First Engrossed



  1         1.  The division may require periodic reexaminations at

  2  the expense of the disability program account of the Florida

  3  Retirement System Trust Fund. Except as otherwise provided in

  4  subparagraph 2., the requirements, procedures, and

  5  restrictions relating to the conduct and review of such

  6  reexaminations, discontinuation or termination of benefits,

  7  reentry into employment, disability retirement after reentry

  8  into covered employment, and all other matters relating to

  9  recovery from disability shall be the same as are set forth

10  under s. 121.091(4)(h).

11         2.  Upon recovery from disability, any recipient of

12  disability retirement benefits under this subsection shall be

13  a compulsory member of the Public Employee Optional Retirement

14  Program of the Florida Retirement System. The net difference

15  between the recipient's original account balance transferred

16  to the Florida Retirement System Trust Fund, including

17  earnings, under paragraph (a) and total disability benefits

18  paid to such recipient, if any, shall be determined as

19  provided in sub-subparagraph a.

20         a.  An amount equal to the total benefits paid shall be

21  subtracted from that portion of the transferred account

22  balance consisting of vested accumulations as described under

23  s. 121.4501(6), if any, and an amount equal to the remainder

24  of benefit amounts paid, if any, shall then be subtracted from

25  any remaining portion consisting of nonvested accumulations as

26  described under s. 121.4501(6).

27         b.  Amounts subtracted under sub-subparagraph a. shall

28  be retained within the disability account of the Florida

29  Retirement System Trust Fund. Any remaining account balance

30  shall be transferred to the third-party administrator for

31


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    CS for SB 2132                                 First Engrossed



  1  disposition as provided under sub-subparagraph c. or

  2  sub-subparagraph d., as appropriate.

  3         c.  If the recipient returns to covered employment,

  4  transferred amounts shall be deposited in individual accounts

  5  under the Public Employee Optional Retirement Program, as

  6  directed by the participant. Vested and nonvested amounts

  7  shall be separately accounted for as provided in s.

  8  121.4501(6).

  9         d.  If the recipient fails to return to covered

10  employment upon recovery from disability:

11         (I)  Any remaining vested amount shall be deposited in

12  individual accounts under the Public Employee Optional

13  Retirement Program, as directed by the participant, and shall

14  be payable as provided in subsection (1).

15         (II)  Any remaining nonvested amount shall be held in a

16  suspense account and shall be forfeitable after 5 years as

17  provided in s. 121.4501(6).

18         3.  If present value was reassigned from the defined

19  benefit program to the disability program of the Florida

20  Retirement System as provided under subparagraph (a)2., the

21  full present value amount shall be returned to the defined

22  benefit account within the Florida Retirement System Trust

23  Fund and the affected individual's associated retirement

24  credit under the defined benefit program shall be reinstated

25  in full. Any benefit based upon such credit shall be

26  calculated as provided in s. 121.091(4)(h)1.

27         (l)  Nonadmissible causes of disability.--A participant

28  shall not be entitled to receive a disability retirement

29  benefit if the disability results from any injury or disease

30  sustained or inflicted as described in s. 121.091(4)(i).

31


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    CS for SB 2132                                 First Engrossed



  1         (m)  Disability retirement of justice or judge by order

  2  of Supreme Court.--

  3         1.  If a participant is a justice of the Supreme Court,

  4  judge of a district court of appeal, circuit judge, or judge

  5  of a county court who has served for 6 years or more as an

  6  elected constitutional judicial officer, including service as

  7  a judicial officer in any court abolished pursuant to Article

  8  V of the State Constitution, and who is retired for disability

  9  by order of the Supreme Court upon recommendation of the

10  Judicial Qualifications Commission pursuant to the provisions

11  of Article V of the State Constitution, the participant's

12  Option 1 monthly disability benefit amount as provided in s.

13  121.091(6)(a)1. shall be two-thirds of his or her monthly

14  compensation as of the participant's disability retirement

15  date.  Such a participant may alternatively elect to receive

16  an actuarially adjusted disability retirement benefit under

17  any other option as provided in s. 121.091(6)(a), or to

18  receive the normal benefit payable under the Public Employee

19  Optional Retirement Program as set forth in subsection (1).

20         2.  If any justice or judge who is a participant of the

21  Public Employee Optional Retirement Program of the Florida

22  Retirement System is retired for disability by order of the

23  Supreme Court upon recommendation of the Judicial

24  Qualifications Commission pursuant to the provisions of

25  Article V of the State Constitution and elects to receive a

26  monthly disability benefit under the provisions of this

27  paragraph:

28         a.  Any present value amount that was transferred to

29  his or her program account and all employer contributions made

30  to such account on his or her behalf, plus interest and

31  earnings thereon, shall be transferred to and deposited in the


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    CS for SB 2132                                 First Engrossed



  1  disability account of the Florida Retirement System Trust

  2  Fund; and

  3         b.  The monthly benefits payable under this paragraph

  4  for any affected justice or judge retired from the Florida

  5  Retirement System pursuant to Article V of the State

  6  Constitution shall be paid from the disability account of the

  7  Florida Retirement System Trust Fund.

  8         (n)  Upon the death of a disabled retiree or

  9  beneficiary thereof who is receiving monthly benefits under

10  this subsection, the monthly benefits shall be paid through

11  the last day of the month of death and shall terminate, or be

12  adjusted, if applicable, as of that date in accordance with

13  the optional form of benefit selected at the time of

14  retirement.  The deceased disabled retiree's beneficiary shall

15  also receive the amount of the participant's remaining account

16  balance, if any, in the Florida Retirement System Trust Fund.

17  The Department of Management Services may adopt rules

18  necessary to administer this paragraph.

19         (3)  DEATH BENEFITS.--Under the Public Employee

20  Optional Retirement Program:

21         (a)  Survivor benefits shall be payable in accordance

22  with the following terms and conditions:

23         1.  To the extent vested, benefits shall be payable

24  only to a participant's beneficiary or beneficiaries as

25  designated by the participant. If a participant designates a

26  primary beneficiary other than the participant's spouse, the

27  participant's spouse shall be notified of the designation.

28  This requirement shall not apply to the designation of one or

29  more contingent beneficiaries to receive any benefits

30  remaining upon the death of the primary beneficiary or

31  beneficiaries.


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    CS for SB 2132                                 First Engrossed



  1         2.  Benefits shall be paid by the third-party

  2  administrator or designated approved providers in accordance

  3  with the law, the contracts, and any applicable board rule or

  4  policy.

  5         3.  To receive benefits under this subsection, the

  6  participant must be deceased.

  7         (b)  In the event of a participant's death, all vested

  8  accumulations as described in s. 121.4501(6), less withholding

  9  taxes remitted to the Internal Revenue Service, shall be

10  distributed, as provided in paragraph (c), to the

11  participant's designated beneficiary or beneficiaries, or to

12  the participant's estate, as if the participant retired on the

13  date of death. No other death benefits shall be available for

14  survivors of participants under the Public Employee Optional

15  Retirement Program, except for such benefits, or coverage for

16  such benefits, as are otherwise provided by law or are

17  separately afforded by the employer, at the employer's

18  discretion.

19         (c)  Upon receipt by the third-party administrator of a

20  properly executed application for distribution of benefits,

21  the total accumulated benefit shall be payable by the

22  third-party administrator to the participant's surviving

23  beneficiary or beneficiaries, as:

24         1.  A lump-sum distribution payable to the beneficiary

25  or beneficiaries, or to the deceased participant's estate;

26         2.  An eligible rollover distribution on behalf of the

27  surviving spouse of a deceased participant, whereby all

28  accrued benefits, plus interest and investment earnings, are

29  paid from the deceased participant's account directly to the

30  custodian of an eligible retirement plan, as described in s.

31


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    CS for SB 2132                                 First Engrossed



  1  402(c)(8)(B) of the Internal Revenue Code, on behalf of the

  2  surviving spouse; or

  3         3.  A partial lump-sum payment whereby a portion of the

  4  accrued benefit is paid to the deceased participant's

  5  surviving spouse or other designated beneficiaries, less

  6  withholding taxes remitted to the Internal Revenue Service,

  7  and the remaining amount is transferred directly to the

  8  custodian of an eligible retirement plan, as described in s.

  9  402(c)(8)(B) of the Internal Revenue Code, on behalf of the

10  surviving spouse. The proportions must be specified by the

11  participant or the surviving beneficiary.

12

13  This paragraph does not abrogate other applicable provisions

14  of state or federal law providing for payment of death

15  benefits.

16         (4)  LIMITATION ON LEGAL PROCESS.--The benefits payable

17  to any person under the Public Employee Optional Retirement

18  Program, and any contributions accumulated under such program,

19  are not subject to assignment, execution, attachment, or any

20  legal process, except for qualified domestic relations orders

21  by a court of competent jurisdiction, income deduction orders

22  as provided in s. 61.1301, and federal income tax levies.

23         Section 10.  The Legislature finds that a proper and

24  legitimate state purpose is served when employees and retirees

25  of the state and of its political subdivisions, and the

26  dependents, survivors, and beneficiaries of such employees and

27  retirees, are extended the basic protections afforded by

28  governmental retirement systems that provide fair and adequate

29  benefits that are managed, administered, and funded in an

30  actuarially sound manner, as required by s. 14, Art. X of the

31  State Constitution and part VII of chapter 112, Florida


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    CS for SB 2132                                 First Engrossed



  1  Statutes. Therefore, the Legislature hereby determines and

  2  declares that this act fulfills an important state interest.

  3         Section 11.  Notwithstanding any provision to the

  4  contrary and the authority of the Department of Management

  5  Services, the Department of Management Services may contract

  6  with a private-sector company selected and approved by the

  7  department for services to administer the disability benefit

  8  program.  Not later than March 1, 2003, the department may

  9  provide to the Legislature for its approval an alternative

10  method for administering and funding disability benefits for

11  participants in the Public Employee Optional Retirement

12  Program and the Florida Retirement System, including through

13  commercial insurance coverage.

14         Section 12.  It is the intent of the Legislature that

15  the disability retirement program for participants of the

16  Public Employee Optional Retirement Program as created in this

17  act must meet all applicable requirements of federal law for a

18  qualified plan.  The Department of Management Services shall

19  seek a private letter ruling from the Internal Revenue Service

20  on the disability retirement program for participants of the

21  Public Employee Optional Retirement Program.  Consistent with

22  the private letter ruling, the Department of Management

23  Services shall adopt any necessary rules required to maintain

24  the qualified status of the disability retirement program and

25  the Florida Retirement System defined benefit plan.

26         Section 13.  This act shall take effect July 1, 2002.

27

28

29

30

31


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