House Bill hb0933c1

CODING: Words stricken are deletions; words underlined are additions.




    Florida House of Representatives - 2002              CS/HB 933

        By the Fiscal Responsibility Council and Representatives
    Rubio and McGriff





  1                      A bill to be entitled

  2         An act relating to the Florida Retirement

  3         System; amending s. 121.4501, F.S., relating to

  4         the Public Employee Optional Retirement

  5         Program; amending the definition of "eligible

  6         employee"; providing for an extension of time

  7         to transfer assets from the defined benefit

  8         plan in the event of market disruption;

  9         providing for acceptance of rollovers;

10         requiring the election be filed with the

11         third-party administrator; amending the

12         earnings rate for funds in the suspense account

13         to be invested by the board; providing for

14         spousal notification of designation of

15         beneficiary; providing for spousal rollovers to

16         an eligible retirement plan; providing

17         authorization for statements under oath;

18         amending s. 121.571, F.S., relating to

19         contributions to participant accounts;

20         providing for a penalty for late contributions;

21         providing for an assessment equal to certain

22         market losses and the calculation thereof;

23         providing an effective date.

24

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

26

27         Section 1.  Paragraph (d) of subsection (2), paragraph

28  (c) of subsection (3), paragraphs (a), (b), and (c) of

29  subsection (4), subsection (6), paragraphs (c) and (e) of

30  subsection (7), and paragraph (a) of subsection (8) of section

31

                                  1

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1  121.4501, Florida Statutes, are amended, and paragraph (c) is

  2  added to subsection (5) of said section, to read:

  3         121.4501  Public Employee Optional Retirement

  4  Program.--

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

  6         (d)  "Eligible employee" means an officer or employee,

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

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

  9  the Florida Retirement System, including any renewed member of

10  the Florida Retirement System;

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

12  the Senior Management Service Optional Annuity Program as

13  established under s. 121.055(6); or

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

15  participate in, the State University System Optional

16  Retirement Program established under s. 121.35 or the State

17  Community College System Optional Retirement Program

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

19

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

21  Retirement System, any member participating in the Deferred

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

23  any employee participating in an optional retirement program

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

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

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

27  employee who elects to participate in the Public Employee

28  Optional Retirement Program and establishes one or more

29  individual participant accounts under the optional program may

30  elect to transfer to the optional program a sum representing

31  the present value of the employee's accumulated benefit

                                  2

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1  obligation under the defined benefit retirement program of the

  2  Florida Retirement System. Upon such transfer, all service

  3  credit previously earned under the defined benefit program of

  4  the Florida Retirement System shall be nullified for purposes

  5  of entitlement to a future benefit under the defined benefit

  6  program of the Florida Retirement System. A participant is

  7  precluded from transferring the accumulated benefit obligation

  8  balance from the defined benefit program upon the expiration

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

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

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

12  the member's estimated creditable service and estimated

13  average final compensation as of midnight of the day prior to

14  the opening of the election window for the employee. The

15  actuarial present value of the employee's accumulated benefit

16  obligation shall be based on the following:

17         a.  The discount rate and other relevant actuarial

18  assumptions used to value the Florida Retirement System Trust

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

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

21  and c.

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

23  estimated creditable service as of midnight on May 31, 2002.

24  The benefit commencement age shall be the younger of the

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

26  of midnight on May 31, 2002:

27         (I)  Age 62; or

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

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

30  member worked continuously from May 31, 2002, and disregarding

31

                                  3

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1  any vesting requirement that would otherwise apply under the

  2  defined benefit program of the Florida Retirement System.

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

  4  members of the Special Risk Administrative Support Class

  5  entitled to retain special risk normal retirement date, the

  6  benefit commencement age shall be the younger of the

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

  8  of midnight on May 31, 2002:

  9         (I)  Age 55; or

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

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

12  member worked continuously from May 31, 2002, and disregarding

13  any vesting requirement that would otherwise apply under the

14  defined benefit program of the Florida Retirement System.

15         d.  The calculation shall disregard vesting

16  requirements and early retirement reduction factors that would

17  otherwise apply under the defined benefit retirement program.

18         3.  For each participant who elects to transfer moneys

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

20  optional program, the division shall recompute the amount

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

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

23  actual creditable service and actual final average

24  compensation as of the initial date of participation in the

25  optional program. If the recomputed amount differs from the

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

27  division shall:

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

29  Florida Retirement System Trust Fund to the participant's

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

31  recomputed amount over the previously transferred amount

                                  4

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1  together with interest from the initial date of transfer to

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

  3  percent effective annual interest, compounded annually.

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

  5  participant's account to the Florida Retirement System Trust

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

  7  over the recomputed amount, together with interest from the

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

  9  subparagraph, based upon 6 percent effective annual interest,

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

11  allocation plan.

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

13  transfer or cause to be transferred the appropriate amounts to

14  the designated accounts. The board shall establish transfer

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

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

17  participation in the optional program unless the major

18  financial markets for securities available for a transfer are

19  seriously disrupted by an unforeseen event which also causes

20  the suspension of trading on any national securities exchange

21  in the country where the securities were issued. In that

22  event, such 30-day period of time may be extended by a

23  resolution of the trustees. Transfers are not commissionable

24  or subject to other fees and may be in the form of securities

25  or cash as determined by the state board. Such securities

26  shall be valued as of the date of receipt in the participant's

27  account.

28         5.  If the board or the division receives notification

29  from the United States Internal Revenue Service that this

30  paragraph or any portion of this paragraph will cause the

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

                                  5

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






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

  2  portion that will cause the disqualification does not apply.

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

  4  notify the presiding officers of the Legislature.

  5         (4)  PARTICIPATION; ENROLLMENT.--

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

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

  8  by a state employer:

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

10  Public Employee Optional Retirement Program in lieu of

11  retaining his or her membership in the defined benefit program

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

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

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

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

16  2002, or, in the case of an active employee who is on a leave

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

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

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

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

21  employee shall be enrolled as a participant of the Public

22  Employee Optional Retirement Program, the employee's

23  membership in the Florida Retirement System shall be governed

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

25  in the defined benefit program of the Florida Retirement

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

27  Public Employee Optional Retirement Program shall be effective

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

29  contribution is made to the optional program.

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

31  in the Public Employee Optional Retirement Program within the

                                  6

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






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

  2  retain membership in the defined benefit program of the

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

  4  to participate in the optional program is forfeited.

  5         2.  With respect to employees who become eligible to

  6  participate in the Public Employee Optional Retirement Program

  7  by reason of employment in a regularly established position

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

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

10  the defined benefit retirement program of the Florida

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

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

13  hire within 180 days after employment commences, elect to

14  participate in the Public Employee Optional Retirement

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

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

17  administrator personnel officer of the employer. The election

18  to participate in the optional program is irrevocable, except

19  as provided in paragraph (e).

20         b.  If the employee files such election before the

21  initial payroll is submitted for the employee, enrollment in

22  the Public Employee Optional Retirement Program shall be

23  effective on the first day of employment.

24         c.  If the employee files such election within the

25  prescribed time period 180 days after employment commences,

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

27  enrollment in the optional program shall be effective on the

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

29  contribution is made to the optional program.

30         d.  Any such employee who fails to elect to participate

31  in the Public Employee Optional Retirement Program within the

                                  7

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1  prescribed time period 180 days is deemed to have elected to

  2  retain membership in the defined benefit program of the

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

  4  to participate in the optional program is forfeited.

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

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

  7  college, department, institution, institution of higher

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

  9  participates in the Florida Retirement System for the benefit

10  of certain employees.

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

12  employed in a regularly established position on September 1,

13  2002, by a district school board employer:

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

15  Public Employee Optional Retirement Program in lieu of

16  retaining his or her membership in the defined benefit program

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

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

19  third-party administrator by November 30, department and the

20  personnel officer of the employer within 90 days after

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

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

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

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

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

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

27  of the Public Employee Optional Retirement Program, the

28  employee's membership in the Florida Retirement System shall

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

30  membership in the defined benefit program of the Florida

31  Retirement System shall terminate. The employee's enrollment

                                  8

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1  in the Public Employee Optional Retirement Program shall be

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

  3  employer contribution is made to the optional program.

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

  5  in the Public Employee Optional Retirement Program within the

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

  7  retain membership in the defined benefit program of the

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

  9  to participate in the optional program is forfeited.

10         2.  With respect to employees who become eligible to

11  participate in the Public Employee Optional Retirement Program

12  by reason of employment in a regularly established position

13  with a district school board employer commencing after July

14  September 1, 2002:

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

16  the defined benefit retirement program of the Florida

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

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

19  hire within 180 days after employment commences, elect to

20  participate in the Public Employee Optional Retirement

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

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

23  administrator personnel officer of the employer. The election

24  to participate in the optional program is irrevocable, except

25  as provided in paragraph (e).

26         b.  If the employee files such election before the

27  initial payroll is submitted for the employee, enrollment in

28  the Public Employee Optional Retirement Program shall be

29  effective on the first day of employment.

30         c.  If the employee files such election within the

31  prescribed time period 180 days after employment commences,

                                  9

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






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

  2  enrollment in the optional program shall be effective on the

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

  4  contribution is made to the optional program.

  5         d.  Any such employee who fails to elect to participate

  6  in the Public Employee Optional Retirement Program within the

  7  prescribed time period 180 days is deemed to have elected to

  8  retain membership in the defined benefit program of the

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

10  to participate in the optional program is forfeited.

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

12  board employer" means any district school board that

13  participates in the Florida Retirement System for the benefit

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

15  career center that participates in the Florida Retirement

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

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

18  employed in a regularly established position on December 1,

19  2002, by a local employer:

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

21  Public Employee Optional Retirement Program in lieu of

22  retaining his or her membership in the defined benefit program

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

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

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

26  the personnel officer of the employer within 90 days after

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

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

29  28, 2003, or, within 90 days after the conclusion of the leave

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

31  Upon making such election, the employee shall be enrolled as a

                                  10

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1  participant of the Public Employee Optional Retirement

  2  Program, the employee's membership in the Florida Retirement

  3  System shall be governed by the provisions of this part, and

  4  the employee's membership in the defined benefit program of

  5  the Florida Retirement System shall terminate. The employee's

  6  enrollment in the Public Employee Optional Retirement Program

  7  shall be effective the first day of the month for which a full

  8  month's employer contribution is made to the optional program.

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

10  in the Public Employee Optional Retirement Program within the

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

12  retain membership in the defined benefit program of the

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

14  to participate in the optional program is forfeited.

15         2.  With respect to employees who become eligible to

16  participate in the Public Employee Optional Retirement Program

17  by reason of employment in a regularly established position

18  with a local employer commencing after October December 1,

19  2002:

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

21  the defined benefit retirement program of the Florida

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

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

24  hire within 180 days after employment commences, elect to

25  participate in the Public Employee Optional Retirement

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

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

28  administrator personnel officer of the employer. The election

29  to participate in the optional program is irrevocable, except

30  as provided in paragraph (e).

31

                                  11

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1         b.  If the employee files such election before the

  2  initial payroll is submitted for the employee, enrollment in

  3  the Public Employee Optional Retirement Program shall be

  4  effective on the first day of employment.

  5         c.  If the employee files such election within the

  6  prescribed time period 180 days after employment commences,

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

  8  enrollment in the optional program shall be effective on the

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

10  contribution is made to the optional program.

11         d.  Any such employee who fails to elect to participate

12  in the Public Employee Optional Retirement Program within the

13  prescribed time period 180 days is deemed to have elected to

14  retain membership in the defined benefit program of the

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

16  to participate in the optional program is forfeited.

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

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

19  (b).

20         (5)  CONTRIBUTIONS.--

21         (c)  The Public Employee Optional Retirement Program

22  may accept for deposit into participant accounts contributions

23  in the form of rollovers or direct trustee-to-trustee

24  transfers by or on behalf of participants, reasonably

25  determined by the board to be eligible for rollover or

26  transfer to the optional retirement program pursuant to the

27  Internal Revenue Code, if such contributions are made in

28  accordance with rules as may be adopted by the board. Such

29  contributions shall be accounted for in accordance with any

30  applicable Internal Revenue Code requirements and rules of the

31  board.

                                  12

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1         (6)  VESTING REQUIREMENTS.--

  2         (a)1.  With respect to employer contributions paid on

  3  behalf of the participant to the Public Employee Optional

  4  Retirement Program, plus interest and earnings thereon and

  5  less investment fees and administrative charges, a participant

  6  shall be vested after completing 1 work year, as defined in s.

  7  121.021(54), with an employer, including any service while the

  8  participant was a member of the defined benefit retirement

  9  program or an optional retirement program authorized under s.

10  121.051(2)(c) or s. 121.055(6).

11         2.  If the participant terminates employment prior to

12  satisfying the vesting requirements, the nonvested

13  accumulation shall be transferred from the participant's

14  accounts to the state board for deposit and investment by the

15  board in the suspense account of the Public Employee Optional

16  Retirement Program Trust Fund of the board. If the terminated

17  participant is reemployed as an eligible employee within 5

18  years, the state board shall transfer to the participant's

19  account any amount of the moneys previously transferred from

20  the participant's accounts to the suspense account of the

21  Public Employee Optional Retirement Program Trust Fund, plus

22  the actual earnings on such amount while in the suspense

23  account interest calculated at 3.0 percent per annum,

24  calculated from the date of transfer to the date of

25  reemployment.

26         (b)1.  A participant shall be vested in the amount

27  transferred from the defined benefit program, plus interest

28  and earnings thereon and less administrative charges and

29  investment fees, upon meeting the service requirements for the

30  participant's membership class as set forth in s. 121.021(29).

31  The third-party administrator shall account for such amounts

                                  13

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1  for each participant. The division shall notify the

  2  participant and the third-party administrator when the

  3  participant has satisfied the vesting period for Florida

  4  Retirement System purposes.

  5         2.  If the participant terminates employment prior to

  6  satisfying the vesting requirements, the nonvested

  7  accumulation shall be transferred from the participant's

  8  accounts to the state board for deposit and investment by the

  9  board in the suspense account of the Public Employee Optional

10  Retirement Program Trust Fund of the board. If the terminated

11  participant is reemployed as an eligible employee within 5

12  years, the state board shall transfer to the participant's

13  account any amount of the moneys previously transferred from

14  the participant's accounts to the suspense account of the

15  Public Employee Optional Retirement Program Trust Fund, plus

16  the actual earnings on such amount while in the suspense

17  account interest calculated at 6.0 percent per annum,

18  calculated from the date of transfer to the date of

19  reemployment.

20         (c)  Any nonvested accumulations transferred from a

21  participant's account to the suspense account shall be

22  forfeited by the participant if the participant is not

23  reemployed as an eligible employee within 5 years after

24  termination.

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

26  Retirement Program:

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

28  following terms and conditions:

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

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

31  designated by the participant. If a participant designates a

                                  14

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1  beneficiary who is not the participant's spouse, the

  2  participant's spouse shall be notified. This requirement shall

  3  not apply to the designation of a contingent beneficiary

  4  designated to receive benefits hereunder in the event the

  5  participant's spouse dies before such contingent beneficiary.

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

  7  administrator or designated approved providers in accordance

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

  9  policy.

10         3.  To begin receiving the benefits, the participant

11  must be terminated from all employment with all Florida

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

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

14  receive his or her benefits upon termination of employment,

15  the participant must submit a written application to the

16  third-party administrator indicating his or her preferred

17  distribution date and selecting an authorized method of

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

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

20  application, subject to federal requirements.

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

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

23  withholding taxes remitted to the Internal Revenue Service,

24  shall be distributed to the participant's designated

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

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

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

28  available for survivors of participants under the Public

29  Employee Optional Retirement Program, except for such

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

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

                                  15

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1         (e)  Survivor benefits shall be payable as:

  2         1.  A lump-sum distribution payable to the

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

  4         2.  An eligible rollover distribution on behalf of the

  5  surviving spouse of a deceased participant, whereby all

  6  accrued benefits, plus interest and investment earnings, are

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

  8  custodian of an eligible retirement plan individual retirement

  9  account or an individual retirement annuity, as described in

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

11  the surviving spouse; or

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

13  accrued benefit is paid to the deceased participant's

14  surviving spouse or other designated beneficiaries, less

15  withholding taxes remitted to the Internal Revenue Service,

16  and the remaining amount is transferred directly to the

17  custodian of an individual retirement account or an individual

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

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

20  proportions must be specified by the participant or the

21  surviving beneficiary.

22

23  This paragraph does not abrogate other applicable provisions

24  of state or federal law providing for payment of death

25  benefits.

26         (8)  ADMINISTRATION OF PROGRAM.--

27         (a)  The Public Employee Optional Retirement Program

28  shall be administered by the state board and affected

29  employers. The board is authorized to require oaths, by

30  affidavit or otherwise, and acknowledgments from persons in

31  connection with the administration of its duties and

                                  16

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1  responsibilities under this chapter. No oaths, by affidavit or

  2  otherwise, shall be required of an employee participant at the

  3  time of election. Acknowledgment of an employee's election to

  4  participate in the program shall be no greater than necessary

  5  to confirm the employee's election. The board shall adopt

  6  rules establishing the role and responsibilities of affected

  7  state, local government, and education-related employers, the

  8  state board, the department, and third-party contractors in

  9  administering the Public Employee Optional Retirement Program.

10  The department shall adopt rules necessary to implement the

11  optional program in coordination with the defined benefit

12  retirement program and the disability benefits available under

13  the optional program.

14         Section 2.  Paragraph (a) of subsection (2) of section

15  121.571, Florida Statutes, is amended to read:

16         121.571  Contributions.--Contributions to the Public

17  Employee Optional Retirement Program shall be made as follows:

18         (2)  CONTRIBUTIONS TO PARTICIPANT ACCOUNTS.--Employer

19  and participant contributions to participant accounts shall be

20  accounted for separately. Interest and investment earnings on

21  employer contributions shall accrue on a tax-deferred basis

22  until proceeds are distributed. Pursuant thereto:

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

24  pursuant to this subsection shall be transferred by the

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

26  participant's account. All contributions made on behalf of a

27  participant shall be made timely. Employer contributions

28  received after the 5th working day of each month shall be

29  considered late. The employer shall be assessed a penalty of 1

30  percent of the contributions due for each calendar month or

31  part thereof that the contributions are late. If contributions

                                  17

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002              CS/HB 933

    187-970-02






  1  made by an employer are not received within the calendar month

  2  they are due and if that lateness results in market losses to

  3  participants, the employer shall make each participant whole

  4  for market losses resulting from the late contributions.

  5  Proceeds from the 1-percent assessment and any market loss

  6  shall be deposited into participant accounts by the

  7  third-party administrator. The third-party administrator,

  8  hired by the board pursuant to s. 121.4501(8), shall calculate

  9  the market losses for each affected participant. When

10  contributions are more than 1 calendar month late, the

11  employer shall also pay the cost of the third-party

12  administrator calculation and reconciliation adjustments

13  resulting from the late contributions. The third-party

14  administrator shall notify the employer of the results of the

15  calculations and the total amount due from the employer. The

16  employer shall remit to the third-party administrator the

17  amount due within 10 working days after the date of the

18  penalty notice sent by the third-party administrator. The

19  board is authorized to adopt rules to implement the provisions

20  regarding late contributions, the process for making

21  participants whole for resultant market losses, and the

22  penalties charged to the employers.

23         Section 3.  This act shall take effect June 1, 2002.

24

25

26

27

28

29

30

31

                                  18

CODING: Words stricken are deletions; words underlined are additions.