Senate Bill sb1258c1

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    Florida Senate - 2003                           CS for SB 1258

    By the Committee on Governmental Oversight and Productivity;
    and Senator Bennett




    302-2138-03

  1                      A bill to be entitled

  2         An act relating to agency reorganization;

  3         transferring the Division of Retirement and its

  4         powers, duties, functions, components, and

  5         assets from the Department of Management

  6         Services to the State Board of Administration;

  7         amending s. 110.205, F.S.; providing status of

  8         division personnel under the Career Service

  9         System; amending ss. 20.22, 20.28, 112.05,

10         112.3173, 112.352, 112.354, 112.356, 112.358,

11         112.361, 112.362, 112.363, 112.625, 112.63,

12         112.64, 112.658, 112.661, 112.665, 121.021,

13         121.025, 121.031, 121.051, 121.0511, 121.0515,

14         121.052, 121.055, 121.081, 121.085, 121.091,

15         121.101, 121.111, 121.133, 121.135, 121.136,

16         121.1815, 121.1905, 121.192, 121.193, 121.22,

17         121.23, 121.24, 121.30, 121.35, 121.40, 121.45,

18         121.4501, 121.403, 121.591, 121.5911, 121.72,

19         121.73, 121.74, 175.032, 175.1215, 185.02,

20         185.105, 185.23, 215.28, 215.44, 215.50,

21         215.52, 238.01, 238.05, 238.06, 238.181,

22         238.32, and 650.02, F.S., to conform to such

23         transfer; providing an effective date.

24  

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

26  

27         Section 1.  The Division of Retirement of the

28  Department of Management Services is transferred to the State

29  Board of Administration. All powers, duties, functions,

30  records, personnel, property, and unexpended balances of

31  appropriations, allocations, and other funds relating to the

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 1  Division of Retirement are transferred by a type one transfer,

 2  as defined in s. 20.06, Florida Statutes, to the State Board

 3  of Administration. This act does not alter or amend the

 4  powers, operations, or functioning of the State Board of

 5  Administration with respect to its duties, responsibilities,

 6  and authority existing prior to the enactment of this

 7  legislation.

 8         Section 2.  Paragraphs (g) and (h) of subsection (2) of

 9  section 20.22, Florida Statutes, are amended to read:

10         20.22  Department of Management Services.--There is

11  created a Department of Management Services.

12         (2)  The following divisions and programs within the

13  Department of Management Services are established:

14         (g)  Division of Retirement.

15         (g)(h)  Division of State Group Insurance.

16         Section 3.  Section 20.28, Florida Statutes, is amended

17  to read:

18         20.28  State Board of Administration.--The State Board

19  of Administration, continued by s. 9, Art. XII of the State

20  Constitution, retains all of its powers, duties, and functions

21  as prescribed by law. There is established under the State

22  Board of Administration a Division of Retirement, which shall

23  be subject to the direction of the executive director of the

24  board who is the agency head of the division for purposes of

25  chapter 120.

26         Section 4.  Paragraph (u) of subsection (2) of section

27  110.205, Florida Statutes, is amended to read:

28         110.205  Career service; exemptions.--

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

30  not covered by this part include the following:

31  

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 1         (u)  All officers and employees of the State Board of

 2  Administration, including its Division of Retirement. The

 3  State Board of Administration shall set the salaries and

 4  benefits of these positions.

 5         Section 5.  Paragraph (b) of subsection (4) of section

 6  112.05, Florida Statutes, is amended to read:

 7         112.05  Retirement; cost-of-living adjustment;

 8  employment after retirement.--

 9         (4)

10         (b)  Any person to whom the limitation in paragraph (a)

11  applies who violates such reemployment limitation and is

12  reemployed with any agency participating in the Florida

13  Retirement System prior to completion of the 12-month

14  limitation period shall give timely notice of this fact in

15  writing to the employer and to the Department of Management

16  Services Division; and the person's retirement benefits shall

17  be suspended for the balance of the 12-month limitation

18  period. Any person employed in violation of this subsection

19  and any employing agency which knowingly employs or appoints

20  such person without notifying the Department of Management

21  Services to suspend retirement benefits shall be jointly and

22  severally liable for reimbursement to the retirement trust

23  fund of any benefits paid during the reemployment limitation

24  period. To avoid liability, such employing agency shall have a

25  written statement from the retiree that he or she is not

26  retired from a state-administered retirement system. Any

27  retirement benefits received by such person while reemployed

28  during this limitation period shall be repaid to the

29  retirement trust fund, and the retirement benefits shall

30  remain suspended until such repayment has been made. Any

31  benefits suspended beyond the reemployment limitation period

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 1  shall apply toward the repayment of benefits received in

 2  violation of the reemployment limitation.

 3         Section 6.  Paragraph (d) of subsection (4) of section

 4  112.3173, Florida Statutes, is amended to read:

 5         112.3173  Felonies involving breach of public trust and

 6  other specified offenses by public officers and employees;

 7  forfeiture of retirement benefits.--

 8         (4)  NOTICE.--

 9         (d)  The Commission on Ethics shall forward any notice

10  and any other document received by it pursuant to this

11  subsection to the governing body of the public retirement

12  system of which the public officer or employee is a member or

13  from which the public officer or employee may be entitled to

14  receive a benefit. When called on by the Commission on Ethics,

15  the Division of Retirement of the State Board of

16  Administration Department of Management Services shall assist

17  the commission in identifying the appropriate public

18  retirement system.

19         Section 7.  Subsections (2), (4), (7), and (8) of

20  section 112.363, Florida Statutes, are amended to read:

21         112.363  Retiree health insurance subsidy.--

22         (2)  ELIGIBILITY FOR RETIREE HEALTH INSURANCE

23  SUBSIDY.--

24         (a)  A person who is retired under a state-administered

25  retirement system, or a beneficiary who is a spouse or

26  financial dependent entitled to receive benefits under a

27  state-administered retirement system, is eligible for health

28  insurance subsidy payments provided under this section; except

29  that pension recipients under ss. 121.40, 238.07(16)(a), and

30  250.22, recipients of health insurance coverage under s.

31  

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 1  110.1232, or any other special pension or relief act shall not

 2  be eligible for such payments.

 3         (b)  For purposes of this section, a person is deemed

 4  retired from a state-administered retirement system when he or

 5  she terminates employment with all employers participating in

 6  the Florida Retirement System as described in s. 121.021(39)

 7  and:

 8         1.  For a participant of the Public Employee Optional

 9  Retirement Program established under part II of chapter 121,

10  the participant meets the age or service requirements to

11  qualify for normal retirement as set forth in s. 121.021(29).

12         2.  For a member of the Florida Retirement System

13  defined benefit program, or any employee who maintains

14  creditable service under both the defined benefit program and

15  the Public Employee Optional Retirement Program, the member

16  begins drawing retirement benefits from the defined benefit

17  program of the Florida Retirement System.

18         (c)1.  Effective July 1, 2001, any person retiring on

19  or after such date as a member of the Florida Retirement

20  System, including any participant of the defined contribution

21  program administered pursuant to part II of chapter 121, must

22  have satisfied the vesting requirements for his or her

23  membership class under the Florida Retirement System defined

24  benefit program as administered under part I of chapter 121.

25         2.  Notwithstanding the provisions of subparagraph 1.,

26  a person retiring due to disability must either qualify for a

27  regular or in-line-of-duty disability benefit as provided in

28  s. 121.091(4) or qualify for a disability benefit under a

29  disability plan established under part II of chapter 121, as

30  appropriate.

31  

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 1         (d)  Payment of the retiree health insurance subsidy

 2  shall be made only after coverage for health insurance for the

 3  retiree or beneficiary has been certified in writing to the

 4  Division of Retirement of the State Board of Administration

 5  Department of Management Services. Participation in a former

 6  employer's group health insurance program is not a requirement

 7  for eligibility under this section.

 8         (e)  Participants in the Senior Management Service

 9  Optional Annuity Program as provided in s. 121.055(6) and the

10  State University System Optional Retirement Program as

11  provided in s. 121.35 shall not receive the retiree health

12  insurance subsidy provided in this section. The employer of

13  such participant shall pay the contributions required in

14  subsection (8) to the annuity program provided in s.

15  121.055(6)(d) or s. 121.35(4)(a), as applicable.

16         (4)  PAYMENT OF RETIREE HEALTH INSURANCE

17  SUBSIDY.--Beginning January 1, 1988, any monthly retiree

18  health insurance subsidy amount due and payable under this

19  section shall be paid to retired members by the Division of

20  Retirement of the State Board of Administration Department of

21  Management Services or under the direction and control of the

22  division department.

23         (7)  ADMINISTRATION OF SYSTEM.--The Division of

24  Retirement of the State Board of Administration Department of

25  Management Services may adopt such rules and regulations as

26  are necessary for the effective and efficient administration

27  of this section. The cost of administration is shall be

28  appropriated from the trust fund.

29         (8)  CONTRIBUTIONS.--For purposes of funding the

30  insurance subsidy provided by this section:

31  

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 1         (a)  Beginning October 1, 1987, the employer of each

 2  member of a state-administered retirement plan shall

 3  contribute 0.24 percent of gross compensation each pay period.

 4         (b)  Beginning January 1, 1989, the employer of each

 5  member of a state-administered retirement plan shall

 6  contribute 0.48 percent of gross compensation each pay period.

 7         (c)  Beginning January 1, 1994, the employer of each

 8  member of a state-administered retirement plan shall

 9  contribute 0.56 percent of gross compensation each pay period.

10         (d)  Beginning January 1, 1995, the employer of each

11  member of a state-administered retirement plan shall

12  contribute 0.66 percent of gross compensation each pay period.

13         (e)  Beginning July 1, 1998, the employer of each

14  member of a state-administered retirement plan shall

15  contribute 0.94 percent of gross compensation each pay period.

16         (f)  Beginning July 1, 2001, the employer of each

17  member of a state-administered plan shall contribute 1.11

18  percent of gross compensation each pay period.

19  

20  Such contributions shall be submitted to the Division of

21  Retirement of the State Board of Administration Department of

22  Management Services and deposited in the Retiree Health

23  Insurance Subsidy Trust Fund.

24         Section 8.  Subsection (10) is added to section

25  112.625, Florida Statutes, to read:

26         112.625  Definitions.--As used in this act:

27         (10)  "Division" means the Division of Retirement of

28  the State Board of Administration.

29         Section 9.  Subsections (2) and (4) of section 112.63,

30  Florida Statutes, are amended to read:

31  

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 1         112.63  Actuarial reports and statements of actuarial

 2  impact; review.--

 3         (2)  The frequency of actuarial reports must be at

 4  least every 3 years commencing from the last actuarial report

 5  of the plan or system or October 1, 1980, if no actuarial

 6  report has been issued within the 3-year period prior to

 7  October 1, 1979. The results of each actuarial report shall be

 8  filed with the plan administrator within 60 days of

 9  certification. Thereafter, the results of each actuarial

10  report shall be made available for inspection upon request.

11  Additionally, each retirement system or plan covered by this

12  act which is not administered directly by the division

13  Department of Management Services shall furnish a copy of each

14  actuarial report to the division Department of Management

15  Services within 60 days after receipt from the actuary. The

16  requirements of this section are supplemental to actuarial

17  valuations necessary to comply with the requirements of ss.

18  218.321 and 218.39.

19         (4)  Upon receipt, pursuant to subsection (2), of an

20  actuarial report, or upon receipt, pursuant to subsection (3),

21  of a statement of actuarial impact, the division Department of

22  Management Services shall acknowledge such receipt, but shall

23  only review and comment on each retirement system's or plan's

24  actuarial valuations at least on a triennial basis. If the

25  division department finds that the actuarial valuation is not

26  complete, accurate, or based on reasonable assumptions, or if

27  the division department does not receive the actuarial report

28  or statement of actuarial impact, the division department

29  shall notify the local government and request appropriate

30  adjustment. If, after a reasonable period of time, a

31  satisfactory adjustment is not made, the affected local

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 1  government or the division department may petition for a

 2  hearing under the provisions of ss. 120.569 and 120.57. If the

 3  administrative law judge recommends in favor of the division

 4  department, the division department shall perform an actuarial

 5  review or prepare the statement of actuarial impact. The cost

 6  to the division department of performing such actuarial review

 7  or preparing such statement shall be charged to the

 8  governmental entity of which the employees are covered by the

 9  retirement system or plan. If payment of such costs is not

10  received by the division department within 60 days after

11  receipt by the governmental entity of the request for payment,

12  the division department shall certify to the Comptroller the

13  amount due, and the Comptroller shall pay such amount to the

14  division department from any funds payable to the governmental

15  entity of which the employees are covered by the retirement

16  system or plan. If the administrative law judge recommends in

17  favor of the local retirement system and the division

18  department performs an actuarial review, the cost to the

19  division department of performing the actuarial review shall

20  be paid by the division department .

21         Section 10.  Subsection (1) of section 112.64, Florida

22  Statutes, is amended to read:

23         112.64  Administration of funds; amortization of

24  unfunded liability.--

25         (1)  Employee contributions shall be deposited in the

26  retirement system or plan at least monthly. Employer

27  contributions shall be deposited at least quarterly; however,

28  any revenues received from any source by an employer which are

29  specifically collected for the purpose of allocation for

30  deposit into a retirement system or plan shall be so deposited

31  within 30 days of receipt by the employer. All employers and

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 1  employees participating in the Florida Retirement System and

 2  other existing retirement systems which are administered by

 3  the division Department of Management Services shall continue

 4  to make contributions at least monthly.

 5         Section 11.  Subsections (1) and (3) of section

 6  112.658, Florida Statutes, are amended to read:

 7         112.658  Office of Program Policy Analysis and

 8  Government Accountability to determine compliance of the

 9  Florida Retirement System.--

10         (1)  The Office of Program Policy Analysis and

11  Government Accountability shall determine, through the

12  examination of actuarial reviews, financial statements, and

13  the practices and procedures of the Division of Retirement

14  Department of Management Services, the compliance of the

15  Florida Retirement System with the provisions of this act.

16         (3)  The Office of Program Policy Analysis and

17  Government Accountability shall employ the same actuarial

18  standards to monitor the division Department of Management

19  Services as the division Department of Management Services

20  uses to monitor local governments.

21         Section 12.  Subsections (9), (16), and (17) of section

22  112.661, Florida Statutes, are amended to read:

23         112.661  Investment policies.--Investment of the assets

24  of any local retirement system or plan must be consistent with

25  a written investment policy adopted by the board. Such

26  policies shall be structured to maximize the financial return

27  to the retirement system or plan consistent with the risks

28  incumbent in each investment and shall be structured to

29  establish and maintain an appropriate diversification of the

30  retirement system or plan's assets.

31  

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 1         (9)  EXPECTED ANNUAL RATE OF RETURN.--The investment

 2  policy shall require that, for each actuarial valuation, the

 3  board determine the total expected annual rate of return for

 4  the current year, for each of the next several years, and for

 5  the long term thereafter. This determination must be filed

 6  promptly with the division Department of Management Services

 7  and with the plan's sponsor and the consulting actuary. The

 8  division department shall use this determination only to

 9  notify the board, the plan's sponsor, and consulting actuary

10  of material differences between the total expected annual rate

11  of return and the actuarial assumed rate of return.

12         (16)  FILING OF INVESTMENT POLICY.--Upon adoption by

13  the board, the investment policy shall be promptly filed with

14  the division Department of Management Services and the plan's

15  sponsor and consulting actuary. The effective date of the

16  investment policy, and any amendment thereto, shall be the

17  31st calendar day following the filing date with the plan

18  sponsor.

19         (17)  VALUATION OF ILLIQUID INVESTMENTS.--The

20  investment policy shall provide for the valuation of illiquid

21  investments for which a generally recognized market is not

22  available or for which there is no consistent or generally

23  accepted pricing mechanism. If those investments are utilized,

24  the investment policy must include the criteria set forth in

25  s. 215.47(6), except that submission to the Investment

26  Advisory Council is not required. The investment policy shall

27  require that, for each actuarial valuation, the board must

28  verify the determination of the fair market value for those

29  investments and ascertain that the determination complies with

30  all applicable state and federal requirements. The investment

31  policy shall require that the board disclose to the division

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 1  Department of Management Services and the plan's sponsor each

 2  such investment for which the fair market value is not

 3  provided.

 4         Section 13.  Section 112.665, Florida Statutes, is

 5  amended to read:

 6         112.665  Duties of Division of Retirement Department of

 7  Management Services.--

 8         (1)  The Division of Retirement Department of

 9  Management Services shall:

10         (a)  Gather, catalog, and maintain complete,

11  computerized data information on all public employee

12  retirement systems or plans in the state, based upon a review

13  of audits, reports, and other data pertaining to the systems

14  or plans;

15         (b)  Receive and comment upon all actuarial reviews of

16  retirement systems or plans maintained by units of local

17  government;

18         (c)  Cooperate with local retirement systems or plans

19  on matters of mutual concern and provide technical assistance

20  to units of local government in the assessment and revision of

21  retirement systems or plans;

22         (d)  Issue, by January 1 annually, a report to the

23  President of the Senate and the Speaker of the House of

24  Representatives, which report details division activities,

25  findings, and recommendations concerning all governmental

26  retirement systems. The report may include legislation

27  proposed to carry out such recommendations;

28         (e)  Issue, by January 1 annually, a report to the

29  Special District Information Program of the Department of

30  Community Affairs that includes the participation in and

31  compliance of special districts with the local government

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 1  retirement system provisions in s. 112.63 and the

 2  state-administered retirement system provisions as specified

 3  in part I of chapter 121; and

 4         (f)  Adopt reasonable rules to administer the

 5  provisions of this part.

 6         (2)  The division department may subpoena actuarial

 7  witnesses, review books and records, hold hearings, and take

 8  testimony. A witness shall have the right to be accompanied by

 9  counsel.

10         Section 14.  Subsections (4), (5), and (32), and

11  paragraph (a) of subsection (39) of section 121.021, Florida

12  Statutes, are amended, and subsection (62) is added to that

13  section, to read:

14         121.021  Definitions.--The following words and phrases

15  as used in this chapter have the respective meanings set forth

16  unless a different meaning is plainly required by the context:

17         (4)  "Division Department" means the Division of

18  Retirement of the State Board of Administration Department of

19  Management Services.

20         (5)  "Administrator" means the executive director of

21  the State Board of Administration secretary of the Department

22  of Management Services.

23         (32)  "State agency" means the Division of Retirement

24  Department of Management Services within the provisions and

25  contemplation of chapter 650.

26         (39)(a)  "Termination" occurs, except as provided in

27  paragraph (b), when a member ceases all employment

28  relationships with employers under this system, as defined in

29  subsection (10), but in the event a member should be employed

30  by any such employer within the next calendar month,

31  termination shall be deemed not to have occurred. A leave of

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 1  absence shall constitute a continuation of the employment

 2  relationship, except that a leave of absence without pay due

 3  to disability may constitute termination for a member, if such

 4  member makes application for and is approved for disability

 5  retirement in accordance with s. 121.091(4). The division

 6  department may require other evidence of termination as it

 7  deems necessary.

 8         (62)  "Board" means the State Board of Administration.

 9         Section 15.  Section 121.025, Florida Statutes, is

10  amended to read:

11         121.025  Administrator; powers and duties.--The

12  executive director of the State Board of Administration

13  secretary of the Department of Management Services shall be

14  the administrator of the retirement and pension systems

15  assigned or transferred to the division Department of

16  Management Services by law. The executive director of the

17  State Board of Administration is the trustee of the System

18  Trust Fund and shall have the authority to sign the contracts

19  necessary to carry out the duties and responsibilities

20  assigned by law to the division Department of Management

21  Services.

22         Section 16.  Subsections (1), (2), and (5) and

23  paragraph (e) of subsection (3) of section 121.031, Florida

24  Statutes, are amended to read:

25         121.031  Administration of system; appropriation;

26  oaths; actuarial studies; public records.--

27         (1)  The division Department of Management Services has

28  the authority to adopt rules pursuant to ss. 120.536(1) and

29  120.54 to implement the provisions of law conferring duties

30  upon the division department and to adopt rules as are

31  necessary for the effective and efficient administration of

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 1  this system. The funds to pay the expenses for administration

 2  of the system are hereby appropriated from the interest earned

 3  on investments made for the retirement and social security

 4  trust funds and the assessments allowed under chapter 650.

 5         (2)  The division Department of Management Services is

 6  authorized to require oaths, by affidavit or otherwise, and

 7  acknowledgments from persons in connection with the

 8  administration of its duties and responsibilities under this

 9  chapter.

10         (3)  The administrator shall cause an actuarial study

11  of the system to be made at least annually and shall report

12  the results of such study to the Legislature by December 31

13  prior to the next legislative session. The study shall, at a

14  minimum, conform to the requirements of s. 112.63, with the

15  following exceptions and additions:

16         (e)  The study shall include measures of funding status

17  and funding progress designed to facilitate the assessment of

18  trends over several actuarial valuations with respect to the

19  overall solvency of the system. Such measures shall be adopted

20  by the division department and shall be used consistently in

21  all actuarial valuations performed on the system.

22         (5)  The names and addresses of retirees are

23  confidential and exempt from the provisions of s. 119.07(1) to

24  the extent that no state or local governmental agency may

25  provide the names or addresses of such persons in aggregate,

26  compiled, or list form to any person except to a public agency

27  engaged in official business. However, a state or local

28  government agency may provide the names and addresses of

29  retirees from that agency to a bargaining agent as defined in

30  s. 447.203(12) or to a retiree organization for official

31  business use. Lists of names or addresses of retirees may be

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 1  exchanged by public agencies, but such lists shall not be

 2  provided to, or open for inspection by, the public. Any person

 3  may view or copy any individual's retirement records at the

 4  division Department of Management Services, one record at a

 5  time, or may obtain information by a separate written request

 6  for a named individual for which information is desired.

 7         Section 17.  Paragraph (c) of subsection (1) and

 8  paragraphs (b) and (f) of subsection (2) of section 121.051,

 9  Florida Statutes, are amended to read:

10         121.051  Participation in the system.--

11         (1)  COMPULSORY PARTICIPATION.--

12         (c)1.  After June 30, 1983, a member of an existing

13  system who is reemployed after terminating employment shall

14  have at the time of reemployment the option of selecting to

15  remain in the existing retirement system or to transfer to the

16  Florida Retirement System. Failure to submit such selection in

17  writing to the division Department of Management Services

18  within 6 months of reemployment shall result in compulsory

19  membership in the Florida Retirement System.

20         2.  After June 30, 1988, the provisions of subparagraph

21  1. shall not apply to a member of an existing system who is

22  reemployed within 12 months after terminating employment. Such

23  member shall continue to have membership in the existing

24  system upon reemployment and shall not be permitted to become

25  a member of the Florida Retirement System, except by

26  transferring to that system as provided in ss. 121.052 and

27  121.055.

28         (2)  OPTIONAL PARTICIPATION.--

29         (b)1.  The governing body of any municipality or

30  special district in the state may elect to participate in the

31  system upon proper application to the administrator and may

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 1  cover all or any of its units as approved by the Secretary of

 2  Health and Human Services and the administrator. The division

 3  department shall adopt rules establishing provisions for the

 4  submission of documents necessary for such application. Prior

 5  to being approved for participation in the Florida Retirement

 6  System, the governing body of any such municipality or special

 7  district that has a local retirement system shall submit to

 8  the administrator a certified financial statement showing the

 9  condition of the local retirement system as of a date within 3

10  months prior to the proposed effective date of membership in

11  the Florida Retirement System. The statement must be certified

12  by a recognized accounting firm that is independent of the

13  local retirement system. All required documents necessary for

14  extending Florida Retirement System coverage must be received

15  by the division department for consideration at least 15 days

16  prior to the proposed effective date of coverage. If the

17  municipality or special district does not comply with this

18  requirement, the division department may require that the

19  effective date of coverage be changed.

20         2.  Any city or special district that has an existing

21  retirement system covering the employees in the units that are

22  to be brought under the Florida Retirement System may

23  participate only after holding a referendum in which all

24  employees in the affected units have the right to participate.

25  Only those employees electing coverage under the Florida

26  Retirement System by affirmative vote in said referendum shall

27  be eligible for coverage under this chapter, and those not

28  participating or electing not to be covered by the Florida

29  Retirement System shall remain in their present systems and

30  shall not be eligible for coverage under this chapter. After

31  

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 1  the referendum is held, all future employees shall be

 2  compulsory members of the Florida Retirement System.

 3         3.  The governing body of any city or special district

 4  complying with subparagraph 1. may elect to provide, or not

 5  provide, benefits based on past service of officers and

 6  employees as described in s. 121.081(1). However, if such

 7  employer elects to provide past service benefits, such

 8  benefits must be provided for all officers and employees of

 9  its covered group.

10         4.  Once this election is made and approved it may not

11  be revoked, except pursuant to subparagraphs 5. and 6., and

12  all present officers and employees electing coverage under

13  this chapter and all future officers and employees shall be

14  compulsory members of the Florida Retirement System.

15         5.  Subject to the conditions set forth in subparagraph

16  6., the governing body of any hospital licensed under chapter

17  395 which is governed by the board of a special district as

18  defined in s. 189.403(1) or by the board of trustees of a

19  public health trust created under s. 154.07, hereinafter

20  referred to as "hospital district," and which participates in

21  the system, may elect to cease participation in the system

22  with regard to future employees in accordance with the

23  following procedure:

24         a.  No more than 30 days and at least 7 days before

25  adopting a resolution to partially withdraw from the Florida

26  Retirement System and establish an alternative retirement plan

27  for future employees, a public hearing must be held on the

28  proposed withdrawal and proposed alternative plan.

29         b.  From 7 to 15 days before such hearing, notice of

30  intent to withdraw, specifying the time and place of the

31  hearing, must be provided in writing to employees of the

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 1  hospital district proposing partial withdrawal and must be

 2  published in a newspaper of general circulation in the area

 3  affected, as provided by ss. 50.011-50.031. Proof of

 4  publication of such notice shall be submitted to the division

 5  Department of Management Services.

 6         c.  The governing body of any hospital district seeking

 7  to partially withdraw from the system must, before such

 8  hearing, have an actuarial report prepared and certified by an

 9  enrolled actuary, as defined in s. 112.625(3), illustrating

10  the cost to the hospital district of providing, through the

11  retirement plan that the hospital district is to adopt,

12  benefits for new employees comparable to those provided under

13  the Florida Retirement System.

14         d.  Upon meeting all applicable requirements of this

15  subparagraph, and subject to the conditions set forth in

16  subparagraph 6., partial withdrawal from the system and

17  adoption of the alternative retirement plan may be

18  accomplished by resolution duly adopted by the hospital

19  district board. The hospital district board must provide

20  written notice of such withdrawal to the division by mailing a

21  copy of the resolution to the division, postmarked no later

22  than December 15, 1995. The withdrawal shall take effect

23  January 1, 1996.

24         6.  Following the adoption of a resolution under

25  sub-subparagraph 5.d., all employees of the withdrawing

26  hospital district who were participants in the Florida

27  Retirement System prior to January 1, 1996, shall remain as

28  participants in the system for as long as they are employees

29  of the hospital district, and all rights, duties, and

30  obligations between the hospital district, the system, and the

31  employees shall remain in full force and effect. Any employee

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 1  who is hired or appointed on or after January 1, 1996, may not

 2  participate in the Florida Retirement System, and the

 3  withdrawing hospital district shall have no obligation to the

 4  system with respect to such employees.

 5         (f)1.  Whenever an employer that participates in the

 6  Florida Retirement System undertakes the transfer, merger, or

 7  consolidation of governmental services or functions, the

 8  employer must notify the division department at least 60 days

 9  prior to such action and shall provide documentation as

10  required by the division department.

11         2.  When the agency to which a member's employing unit

12  is transferred, merged, or consolidated does not participate

13  in the Florida Retirement System, a member shall elect in

14  writing to remain in the Florida Retirement System or to

15  transfer to the local retirement system operated by such

16  agency. If such agency does not participate in a local

17  retirement system, the member shall continue membership in the

18  Florida Retirement System. In either case, the membership

19  shall continue for as long as the member is employed by the

20  agency to which his or her unit was transferred, merged, or

21  consolidated.

22         Section 18.  Subsection (2) of section 121.0511,

23  Florida Statutes, is amended to read:

24         121.0511  Revocation of election and alternative

25  plan.--The governing body of any municipality or independent

26  special district that has elected to participate in the

27  Florida Retirement System may revoke its election in

28  accordance with the following procedure:

29         (2)  At least 7 days, but not more than 15 days, before

30  the hearing, notice of intent to revoke, specifying the time

31  and place of the hearing, must be published in a newspaper of

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 1  general circulation in the area affected, as provided by ss.

 2  50.011-50.031. Proof of publication of the notice must be

 3  submitted to the division Department of Management Services.

 4         Section 19.  Subsections (3) and (4) and paragraph (c)

 5  of subsection (7) of section 121.0515, Florida Statutes, are

 6  amended to read:

 7         121.0515  Special risk membership.--

 8         (3)  PROCEDURE FOR DESIGNATING.--

 9         (a)  Any member of the Florida Retirement System

10  employed by a county, city, or special district who feels that

11  he or she meets the criteria set forth in this section for

12  membership in the Special Risk Class may request that his or

13  her employer submit an application to the division department

14  requesting that the division department designate him or her

15  as a special risk member. If the employer agrees that the

16  member meets the requirements for special risk membership, the

17  employer shall submit an application to the division

18  department in behalf of the employee containing a

19  certification that the member meets the criteria for special

20  risk membership set forth in this section and such other

21  supporting documentation as may be required by administrative

22  rule. The division department shall, within 90 days, either

23  designate or refuse to designate the member as a special risk

24  member. If the employer declines to submit the member's

25  application to the division department or if the division

26  department does not designate the member as a special risk

27  member, the member or the employer may appeal to the State

28  Retirement Commission, as provided in s. 121.23, for

29  designation as a special risk member. A member who receives a

30  final affirmative ruling pursuant to such appeal for special

31  risk membership shall have special risk membership retroactive

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 1  to the date such member would have had special risk membership

 2  had such membership been approved by the employer and the

 3  division department, as determined by the division department,

 4  and the employer contributions shall be paid in full within 1

 5  year after such final ruling.

 6         (b)1.  Applying the criteria set forth in this section,

 7  the division Department of Management Services shall specify

 8  which current and newly created classes of positions under the

 9  uniform classification plan established pursuant to chapter

10  110 entitle the incumbents of positions in those classes to

11  membership in the Special Risk Class. Only employees employed

12  in the classes so specified shall be special risk members.

13         2.  When a class is not specified by the division

14  department as provided in subparagraph 1., the employing

15  agency may petition the State Retirement Commission for

16  approval in accordance with s. 121.23.

17         (4)  REMOVAL OF SPECIAL RISK MEMBERSHIP.--Any member

18  who is a special risk member on October 1, 1978, and who fails

19  to meet the criteria for special risk membership established

20  by this section shall have his or her special risk designation

21  removed and thereafter shall be a regular member and shall

22  earn only regular membership credit. The division department

23  shall have the authority to review the special risk

24  designation of members to determine whether or not those

25  members continue to meet the criteria for special risk

26  membership.

27         (7)  RETENTION OF SPECIAL RISK NORMAL RETIREMENT

28  DATE.--

29         (c)  The division department shall adopt such rules as

30  are required to administer this subsection.

31  

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 1         Section 20.  Paragraph (e) of subsection (3) of section

 2  121.052, Florida Statutes, is amended to read:

 3         121.052  Membership class of elected officers.--

 4         (3)  PARTICIPATION AND WITHDRAWAL,

 5  GENERALLY.--Effective July 1, 1990, participation in the

 6  Elected Officers' Class shall be compulsory for elected

 7  officers listed in paragraphs (2)(a)-(d) and (f) assuming

 8  office on or after said date, unless the elected officer

 9  elects membership in another class or withdraws from the

10  Florida Retirement System as provided in paragraphs

11  (3)(a)-(d):

12         (e)  Effective July 1, 2001, the governing body of a

13  municipality or special district may, by majority vote, elect

14  to designate all its elected positions for inclusion in the

15  Elected Officers' Class. Such election shall be made between

16  July 1, 2001, and December 31, 2001, and shall be irrevocable.

17  The designation of such positions shall be effective the first

18  day of the month following receipt by the division department

19  of the ordinance or resolution passed by the governing body.

20         Section 21.  Paragraphs (b) and (h) of subsection (1)

21  and paragraphs (a), (c), (d), and (f) of subsection (6) of

22  section 121.055, Florida Statutes, are amended to read:

23         121.055  Senior Management Service Class.--There is

24  hereby established a separate class of membership within the

25  Florida Retirement System to be known as the "Senior

26  Management Service Class," which shall become effective

27  February 1, 1987.

28         (1)

29         (b)1.  Except as provided in subparagraph 2., effective

30  January 1, 1990, participation in the Senior Management

31  Service Class shall be compulsory for the president of each

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 1  community college, the manager of each participating city or

 2  county, and all appointed district school superintendents.

 3  Effective January 1, 1994, additional positions may be

 4  designated for inclusion in the Senior Management Service

 5  Class of the Florida Retirement System, provided that:

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

 7  designated by the local agency employer. Notice of intent to

 8  designate positions for inclusion in the class shall be

 9  published once a week for 2 consecutive weeks in a newspaper

10  of general circulation published in the county or counties

11  affected, as provided in chapter 50.

12         b.  Up to 10 nonelective full-time positions may be

13  designated for each local agency employer reporting to the

14  division Department of Management Services; for local agencies

15  with 100 or more regularly established positions, additional

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

17  exceed 1 percent of the regularly established positions within

18  the agency.

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

20  managerial or policymaking position filled by an employee who

21  is not subject to continuing contract and serves at the

22  pleasure of the local agency employer without civil service

23  protection, and who:

24         (I)  Heads an organizational unit; or

25         (II)  Has responsibility to effect or recommend

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

27  her areas of responsibility.

28         2.  In lieu of participation in the Senior Management

29  Service Class, members of the Senior Management Service Class

30  pursuant to the provisions of subparagraph 1. may withdraw

31  from the Florida Retirement System altogether. The decision to

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 1  withdraw from the Florida Retirement System shall be

 2  irrevocable for as long as the employee holds such a position.

 3  Any service creditable under the Senior Management Service

 4  Class shall be retained after the member withdraws from the

 5  Florida Retirement System; however, additional service credit

 6  in the Senior Management Service Class shall not be earned

 7  after such withdrawal. Such members shall not be eligible to

 8  participate in the Senior Management Service Optional Annuity

 9  Program.

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

11  January 1, 1994, participation in the Senior Management

12  Service Class shall be compulsory for the State Courts

13  Administrator and the Deputy State Courts Administrators, the

14  Clerk of the Supreme Court, the Marshal of the Supreme Court,

15  the Executive Director of the Justice Administrative

16  Commission, the Capital Collateral Regional Counsels, the

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

18  district courts of appeals, and the trial court administrator

19  and the Chief Deputy Court Administrator in each judicial

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

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

22  judicial circuit may be designated for inclusion in the Senior

23  Management Service Class of the Florida Retirement System,

24  provided that:

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

26  designated by the state attorney or public defender, as

27  appropriate. Notice of intent to designate positions for

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

29  consecutive weeks in a newspaper of general circulation

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

31  chapter 50.

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 1         b.  One nonelective full-time position may be

 2  designated for each state attorney and public defender

 3  reporting to the division Department of Management Services;

 4  for agencies with 200 or more regularly established positions

 5  under the state attorney or public defender, additional

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

 7  exceed 0.5 percent of the regularly established positions

 8  within the agency.

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

10  managerial or policymaking position filled by an employee who

11  serves at the pleasure of the state attorney or public

12  defender without civil service protection, and who:

13         (I)  Heads an organizational unit; or

14         (II)  Has responsibility to effect or recommend

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

16  her areas of responsibility.

17         2.  Participation in this class shall be compulsory,

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

19  employee who holds a position designated for coverage in the

20  Senior Management Service Class, and such participation shall

21  continue until the employee terminates employment in a covered

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

23  class is compulsory for assistant state attorneys, assistant

24  statewide prosecutors, assistant public defenders, and

25  assistant capital collateral regional counsels. Effective

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

27  assistant attorneys general.

28         3.  In lieu of participation in the Senior Management

29  Service Class, such members, excluding assistant state

30  attorneys, assistant public defenders, assistant statewide

31  prosecutors, assistant attorneys general, and assistant

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 1  capital collateral regional counsels, may participate in the

 2  Senior Management Service Optional Annuity Program as

 3  established in subsection (6).

 4         (6)(a)  Senior Management Service Optional Annuity

 5  Program.--The State Board of Administration Department of

 6  Management Services shall establish a Senior Management

 7  Service Optional Annuity Program under which contracts

 8  providing retirement, death, and disability benefits may be

 9  purchased for those employees who elect to participate in the

10  optional annuity program. The benefits to be provided for or

11  on behalf of participants in such optional annuity program

12  shall be provided through individual contracts or individual

13  certificates issued for group annuity contracts, which may be

14  fixed, variable, or a combination thereof, in accordance with

15  s. 401(a) of the Internal Revenue Code. Any such individual

16  contract or certificate shall state the annuity plan on its

17  face page, and shall include, but not be limited to, a

18  statement of ownership, the contract benefits, annuity income

19  options, limitations, expense charges, and surrender charges,

20  if any. The employing agency shall contribute, as provided in

21  this section, toward the purchase of such optional benefits

22  which shall be fully and immediately vested in the

23  participants.

24         (c)  Participation.--

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

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

27  annuity program in lieu of participation in the Senior

28  Management Service Class. Such election shall be made in

29  writing and filed with the board department and the personnel

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

31  employee who is employed on or before February 1, 1987, and

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 1  who fails to make an election to participate in the optional

 2  annuity program by May 1, 1987, shall be deemed to have

 3  elected membership in the Senior Management Service Class.

 4         2.  Any employee who becomes eligible to participate in

 5  the optional annuity program by reason of initial employment

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

 7  the date of commencement of employment, elect to participate

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

 9  in writing and filed with the personnel officer of the

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

11  after commencement of such employment elect to participate in

12  the optional annuity program shall be deemed to have elected

13  membership in the Senior Management Service Class.

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

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

16  existing retirement system or the Special Risk or Special Risk

17  Administrative Support Classes of the Florida Retirement

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

19  participation in the Senior Management Service Class or

20  optional annuity program. Such election shall be made in

21  writing and filed with the board department and the personnel

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

23  Any eligible employee who fails to make an election to

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

25  the Florida Retirement System, the Special Risk Administrative

26  Support Class of the Florida Retirement System, or the

27  optional annuity program shall be deemed to have elected

28  membership in the Senior Management Service Class.

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

30  employee's election to participate in the optional annuity

31  program is irrevocable as long as such employee continues to

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

 2  eligibility requirements set forth in this paragraph.

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

 4  2002, any active employee in a regularly established position

 5  who has elected to participate in the Senior Management

 6  Service Optional Annuity Program has one opportunity to choose

 7  to move from the Senior Management Service Optional Annuity

 8  Program to the Florida Retirement System defined benefit

 9  program.

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

11  filed with the department and the personnel officer of the

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

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

14  90 days after the conclusion of the leave of absence. This

15  election is irrevocable.

16         b.  The employee will receive service credit under the

17  defined benefit program of the Florida Retirement System equal

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

19  Service Optional Annuity Program. The cost for such credit

20  shall be an amount representing the present value of that

21  employee's accumulated benefit obligation for the affected

22  period of service.

23         c.  The employee must transfer the total accumulated

24  employer contributions and earnings on deposit in his or her

25  Senior Management Service Optional Annuity Program account. If

26  the transferred amount is not sufficient to pay the amount

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

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

29  employer contributions or earnings thereon from the Senior

30  Management Service Optional Annuity Program account.

31         (d)  Contributions.--

                                  29

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 1         1.  Through June 30, 2001, each employer shall

 2  contribute on behalf of each participant in the Senior

 3  Management Service Optional Annuity Program an amount equal to

 4  the normal cost portion of the employer retirement

 5  contribution which would be required if the participant were a

 6  Senior Management Service Class member of the Florida

 7  Retirement System defined benefit program, plus the portion of

 8  the contribution rate required in s. 112.363(8) that would

 9  otherwise be assigned to the Retiree Health Insurance Subsidy

10  Trust Fund. Effective July 1, 2001, each employer shall

11  contribute on behalf of each participant in the optional

12  program an amount equal to 12.49 percent of the participant's

13  gross monthly compensation. The board department shall deduct

14  an amount approved by the board, pursuant to s. 215.44(4),

15  Legislature to provide for the administration of this program.

16  The payment of the contributions to the optional program which

17  is required by this subparagraph for each participant shall be

18  made by the employer to the board department, which shall

19  forward the contributions to the designated company or

20  companies contracting for payment of benefits for the

21  participant under the program.

22         2.  Each employer shall contribute on behalf of each

23  participant in the Senior Management Service Optional Annuity

24  Program an amount equal to the unfunded actuarial accrued

25  liability portion of the employer contribution which would be

26  required for members of the Senior Management Service Class in

27  the Florida Retirement System. This contribution shall be paid

28  to the board department for transfer to the Florida Retirement

29  System Trust Fund.

30         3.  An Optional Annuity Program Trust Fund shall be

31  established in the State Treasury and administered by the

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 1  board department to make payments to provider companies on

 2  behalf of the optional annuity program participants, and to

 3  transfer the unfunded liability portion of the state optional

 4  annuity program contributions to the Florida Retirement System

 5  Trust Fund.

 6         4.  Contributions required for social security by each

 7  employer and each participant, in the amount required for

 8  social security coverage as now or hereafter may be provided

 9  by the federal Social Security Act shall be maintained for

10  each participant in the Senior Management Service retirement

11  program and shall be in addition to the retirement

12  contributions specified in this paragraph.

13         5.  Each participant in the Senior Management Service

14  Optional Annuity Program may contribute by way of salary

15  reduction or deduction a percentage amount of the participant'

16  s gross compensation not to exceed the percentage amount

17  contributed by the employer to the optional annuity program.

18  Payment of the participant's contributions shall be made by

19  the employer to the board department, which shall forward the

20  contributions to the designated company or companies

21  contracting for payment of benefits for the participant under

22  the program.

23         (f)  Administration.--

24         1.  The Senior Management Service Optional Annuity

25  Program authorized by this section shall be administered by

26  the board department. The board department shall designate one

27  or more provider companies from which annuity contracts may be

28  purchased under the program and shall approve the form and

29  content of the contracts. The board department shall sign a

30  contract with each of the provider companies and shall

31  evaluate the performance of the provider companies on a

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 1  continuing basis. The board department may terminate the

 2  services of a provider company for reasons stated in the

 3  contract. The board department shall adopt rules establishing

 4  its responsibilities and the responsibilities of employers in

 5  administering the optional annuity program.

 6         2.  Effective July 1, 1997, the State Board of

 7  Administration shall review and make recommendations to the

 8  department on the acceptability of all investment products

 9  proposed by provider companies of the optional annuity program

10  before such products are offered through annuity contracts to

11  the participants and may advise the department of any changes

12  deemed necessary to ensure that the optional annuity program

13  offers an acceptable mix of investment products. The board

14  department shall determine which make the final determination

15  as to whether an investment products product will be included

16  in approved for the program.

17         3.  The provisions of each contract applicable to a

18  participant in the Senior Management Service Optional Annuity

19  Program shall be contained in a written program description

20  which shall include a report of pertinent financial and

21  actuarial information on the solvency and actuarial soundness

22  of the program and the benefits applicable to the participant.

23  Such description shall be furnished by the company or

24  companies to each participant in the program and to the board

25  department upon commencement of participation in the program

26  and annually thereafter.

27         4.  The board department shall ensure that each

28  participant in the Senior Management Service Optional Annuity

29  Program is provided an accounting of the total contribution

30  and the annual contribution made by and on behalf of such

31  participants.

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 1         Section 22.  Paragraph (h) of subsection (1) and

 2  paragraph (e) of subsection (2) of section 121.081, Florida

 3  Statutes, are amended to read:

 4         121.081  Past service; prior service;

 5  contributions.--Conditions under which past service or prior

 6  service may be claimed and credited are:

 7         (1)

 8         (h)  The following provisions apply to the purchase of

 9  past service:

10         1.  Notwithstanding any of the provisions of this

11  subsection, past-service credit may not be purchased under

12  this chapter for any service that is used to obtain a benefit

13  from any local retirement system.

14         2.  A member may not receive past service credit under

15  paragraphs (a), (b), (e), or (f) for any leaves of absence

16  without pay, except that credit for active military service

17  leaves of absence may be claimed under paragraphs (a), (b),

18  and (f), in accordance with s. 121.111(1).

19         3.  If a member does not desire to receive credit for

20  all of his or her past service, the period the member claims

21  must be the most recent past service prior to his or her

22  participation in the Florida Retirement System.

23         4.  The cost of past service purchased by an employing

24  agency for its employees may be amortized over such period of

25  time as is provided in the agreement, but not to exceed 15

26  years, calculated in accordance with rule 60S-1.007(5)(f),

27  Florida Administrative Code.

28         5.  The retirement account of each member for whom past

29  service is being provided by his or her employer shall be

30  credited with all past service the employer agrees to purchase

31  

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 1  as soon as the agreement between the employer and the board

 2  department is executed. Pursuant thereto:

 3         a.  Each such member's account shall also be posted

 4  with the total contribution his or her employer agrees to make

 5  in the member's behalf for past service earned prior to

 6  October 1, 1975, excluding those contributions representing

 7  the employer's matching share and the compound interest

 8  calculation on the total contribution. However, a portion of

 9  any contributions paid by an employer for past service credit

10  earned on and after October 1, 1975, may not be posted to a

11  member's account.

12         b.  A refund of contributions payable after an employer

13  has made a written agreement to purchase past service for

14  employees of the covered group shall include contributions for

15  past service which are posted to a member's account. However,

16  contributions for past service earned on and after October 1,

17  1975, are not refundable.

18         (2)  Prior service, as defined in s. 121.021(19), may

19  be claimed as creditable service under the Florida Retirement

20  System after a member has been reemployed for 1 complete year

21  of creditable service within a period of 12 consecutive

22  months, except as provided in paragraph (c). Service performed

23  as a participant of the optional retirement program for the

24  State University System under s. 121.35 or the Senior

25  Management Service Optional Annuity Program under s. 121.055

26  may be used to satisfy the reemployment requirement of 1

27  complete year of creditable service. The member shall not be

28  permitted to make any contributions for prior service until

29  after completion of the 1 year of creditable service. If a

30  member does not wish to claim credit for all of his or her

31  prior service, the service the member claims must be the most

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 1  recent period of service. The required contributions for

 2  claiming the various types of prior service are:

 3         (e)  For service performed under the Florida Retirement

 4  System after December 1, 1970, that was never reported to the

 5  division or the department due to error, retirement credit may

 6  be claimed by a member of the Florida Retirement System. The

 7  division department shall adopt rules establishing criteria

 8  for claiming such credit and detailing the documentation

 9  required to substantiate the error.

10         Section 23.  Subsection (1) of section 121.085, Florida

11  Statutes, is amended to read:

12         121.085  Creditable service.--The following provisions

13  shall apply to creditable service as defined in s.

14  121.021(17):

15         (1)  The division department shall adopt rules

16  establishing procedures for the submission of evidence or

17  information necessary to establish a member's claim of

18  creditable service.

19         Section 24.  Section 121.091, Florida Statutes, is

20  amended to read:

21         121.091  Benefits payable under the system.--Benefits

22  may not be paid under this section unless the member has

23  terminated employment as provided in s. 121.021(39)(a) or

24  begun participation in the Deferred Retirement Option Program

25  as provided in subsection (13), and a proper application has

26  been filed in the manner prescribed by the division

27  department. The division department may cancel an application

28  for retirement benefits when the member or beneficiary fails

29  to timely provide the information and documents required by

30  this chapter and the division's department's rules. The

31  division department shall adopt rules establishing procedures

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 1  for application for retirement benefits and for the

 2  cancellation of such application when the required information

 3  or documents are not received.

 4         (1)  NORMAL RETIREMENT BENEFIT.--Upon attaining his or

 5  her normal retirement date, the member, upon application to

 6  the administrator, shall receive a monthly benefit which shall

 7  begin to accrue on the first day of the month of retirement

 8  and be payable on the last day of that month and each month

 9  thereafter during his or her lifetime. The normal retirement

10  benefit, including any past or additional retirement credit,

11  may not exceed 100 percent of the average final compensation.

12  The amount of monthly benefit shall be calculated as the

13  product of A and B, subject to the adjustment of C, if

14  applicable, as set forth below:

15         (a)1.  For creditable years of Regular Class service, A

16  is 1.60 percent of the member's average final compensation, up

17  to the member's normal retirement date. Upon completion of the

18  first year after the normal retirement date, A is 1.63 percent

19  of the member's average final compensation. Following the

20  second year after the normal retirement date, A is 1.65

21  percent of the member's average final compensation. Following

22  the third year after the normal retirement date, and for

23  subsequent years, A is 1.68 percent of the member's average

24  final compensation.

25         2.  For creditable years of special risk service, A is:

26         a.  Two percent of the member's average final

27  compensation for all creditable years prior to October 1,

28  1974;

29         b.  Three percent of the member's average final

30  compensation for all creditable years after September 30,

31  1974, and before October 1, 1978;

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 1         c.  Two percent of the member's average final

 2  compensation for all creditable years after September 30,

 3  1978, and before January 1, 1989;

 4         d.  Two and two-tenths percent of the member's final

 5  monthly compensation for all creditable years after December

 6  31, 1988, and before January 1, 1990;

 7         e.  Two and four-tenths percent of the member's average

 8  final compensation for all creditable years after December 31,

 9  1989, and before January 1, 1991;

10         f.  Two and six-tenths percent of the member's average

11  final compensation for all creditable years after December 31,

12  1990, and before January 1, 1992;

13         g.  Two and eight-tenths percent of the member's

14  average final compensation for all creditable years after

15  December 31, 1991, and before January 1, 1993;

16         h.  Three percent of the member's average final

17  compensation for all creditable years after December 31, 1992;

18  and

19         i.  Three percent of the member's average final

20  compensation for all creditable years of service after

21  September 30, 1978, and before January 1, 1993, for any

22  special risk member who retires after July 1, 2000, or any

23  member of the Special Risk Administrative Support Class

24  entitled to retain the special risk normal retirement date who

25  was a member of the Special Risk Class during the time period

26  and who retires after July 1, 2000.

27         3.  For creditable years of Senior Management Service

28  Class service after January 31, 1987, A is 2 percent;

29         4.  For creditable years of Elected Officers' Class

30  service as a Supreme Court Justice, district court of appeal

31  judge, circuit judge, or county court judge, A is 31/3 percent

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 1  of the member's average final compensation, and for all other

 2  creditable service in such class, A is 3 percent of average

 3  final compensation;

 4         (b)  B is the number of the member's years and any

 5  fractional part of a year of creditable service earned

 6  subsequent to November 30, 1970; and

 7         (c)  C is the normal retirement benefit credit brought

 8  forward as of November 30, 1970, by a former member of an

 9  existing system. Such normal retirement benefit credit shall

10  be determined as the product of X and Y when X is the

11  percentage of average final compensation which the member

12  would have been eligible to receive if the member had attained

13  his or her normal retirement date as of November 30, 1970, all

14  in accordance with the existing system under which the member

15  is covered on November 30, 1970, and Y is average final

16  compensation as defined in s. 121.021(25). However, any member

17  of an existing retirement system who is eligible to retire and

18  who does retire, become disabled, or die prior to April 15,

19  1971, may have his or her retirement benefits calculated on

20  the basis of the best 5 of the last 10 years of service.

21         (d)  A member's average final compensation shall be

22  determined by formula to obtain the coverage for the 5 highest

23  fiscal years' salaries, calculated as provided by rule.

24         (2)  BENEFITS PAYABLE FOR DUAL NORMAL RETIREMENT

25  AGES.--If a member accumulates retirement benefits to commence

26  at different normal retirement ages by virtue of having

27  performed duties for an employer which would entitle him or

28  her to benefits as both a member of the Special Risk Class and

29  a member of either the Regular Class, Senior Management

30  Service Class, or Elected Officers' Class, the amount of

31  benefits payable shall be computed separately with respect to

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 1  each such age and the sum of such computed amounts shall be

 2  paid as provided in this section.

 3         (3)  EARLY RETIREMENT BENEFIT.--Upon retirement on his

 4  or her early retirement date, the member shall receive an

 5  immediate monthly benefit that shall begin to accrue on the

 6  first day of the month of the retirement date and be payable

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

 8  his or her lifetime. Such benefit shall be calculated as

 9  follows:

10         (a)  The amount of each monthly payment shall be

11  computed in the same manner as for a normal retirement

12  benefit, in accordance with subsection (1), but shall be based

13  on the member's average monthly compensation and creditable

14  service as of the member's early retirement date. The benefit

15  so computed shall be reduced by five-twelfths of 1 percent for

16  each complete month by which the early retirement date

17  precedes the normal retirement date of age 62 for a member of

18  the Regular Class, Senior Management Service Class, or the

19  Elected Officers' Class, and age 55 for a member of the

20  Special Risk Class, or age 52 if a Special Risk member has

21  completed 25 years of creditable service in accordance with s.

22  121.021(29)(b)3.

23         (b)  If the employment of a member is terminated by

24  reason of death subsequent to the completion of 20 years of

25  creditable service, the monthly benefit payable to the

26  member's beneficiary shall be calculated in accordance with

27  subsection (1), but shall be based on average monthly

28  compensation and creditable service as of the date of death.

29  The benefit so computed shall be reduced by five-twelfths of 1

30  percent for each complete month by which death precedes the

31  normal retirement date specified above or the date on which

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 1  the member would have attained 30 years of creditable service

 2  had he or she survived and continued his or her employment,

 3  whichever provides a higher benefit.

 4         (4)  DISABILITY RETIREMENT BENEFIT.--

 5         (a)  Disability retirement; entitlement and effective

 6  date.--

 7         1.a.  A member who becomes totally and permanently

 8  disabled, as defined in paragraph (b), after completing 5

 9  years of creditable service, or a member who becomes totally

10  and permanently disabled in the line of duty regardless of

11  service, shall be entitled to a monthly disability benefit;

12  except that any member with less than 5 years of creditable

13  service on July 1, 1980, or any person who becomes a member of

14  the Florida Retirement System on or after such date must have

15  completed 10 years of creditable service prior to becoming

16  totally and permanently disabled in order to receive

17  disability retirement benefits for any disability which occurs

18  other than in the line of duty. However, if a member employed

19  on July 1, 1980, with less than 5 years of creditable service

20  as of that date, becomes totally and permanently disabled

21  after completing 5 years of creditable service and is found

22  not to have attained fully insured status for benefits under

23  the federal Social Security Act, such member shall be entitled

24  to a monthly disability benefit.

25         b.  Effective July 1, 2001, a member of the defined

26  benefit retirement program who becomes totally and permanently

27  disabled, as defined in paragraph (b), after completing 8

28  years of creditable service, or a member who becomes totally

29  and permanently disabled in the line of duty regardless of

30  service, shall be entitled to a monthly disability benefit.

31  

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 1         2.  If the division has received from the employer the

 2  required documentation of the member's termination of

 3  employment, the effective retirement date for a member who

 4  applies and is approved for disability retirement shall be

 5  established by rule of the division.

 6         3.  For a member who is receiving Workers' Compensation

 7  payments, the effective disability retirement date may not

 8  precede the date the member reaches Maximum Medical

 9  Improvement (MMI), unless the member terminates employment

10  prior to reaching MMI.

11         (b)  Total and permanent disability.--A member shall be

12  considered totally and permanently disabled if, in the opinion

13  of the administrator, he or she is prevented, by reason of a

14  medically determinable physical or mental impairment, from

15  rendering useful and efficient service as an officer or

16  employee.

17         (c)  Proof of disability.--The administrator, before

18  approving payment of any disability retirement benefit, shall

19  require proof that the member is totally and permanently

20  disabled as provided herein:

21         1.  Such proof shall include the certification of the

22  member's total and permanent disability by two licensed

23  physicians of the state and such other evidence of disability

24  as the administrator may require, including reports from

25  vocational rehabilitation, evaluation, or testing specialists

26  who have evaluated the applicant for employment.

27         2.  It must be documented that:

28         a.  The member's medical condition occurred or became

29  symptomatic during the time the member was employed in an

30  employee/employer relationship with his or her employer;

31  

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 1         b.  The member was totally and permanently disabled at

 2  the time he or she terminated covered employment; and

 3         c.  The member has not been employed with any other

 4  employer after such termination.

 5         3.  If the application is for in-line-of-duty

 6  disability, in addition to the requirements of subparagraph

 7  2., it must be documented by competent medical evidence that

 8  the disability was caused by a job-related illness or accident

 9  which occurred while the member was in an employee/employer

10  relationship with his or her employer.

11         4.  The unavailability of an employment position that

12  the member is physically and mentally capable of performing

13  will not be considered as proof of total and permanent

14  disability.

15         (d)  Election on appeal.--A member whose application

16  for regular disability retirement has been denied and who has

17  filed an appeal to the State Retirement Commission may, if

18  eligible, elect to receive normal or early service retirement

19  benefits while he or she is awaiting the decision on the

20  appeal. However:

21         1.  If the member elects to receive service retirement

22  benefits and disability benefits are later approved as a

23  result of the appeal, the payment option chosen by the member

24  may not be changed.

25         2.  If the member elects to receive early service

26  retirement and the appeal is later denied, the member may not

27  change his or her election of early retirement.

28  

29  Before such regular or early retirement benefits may be paid

30  by the division, the member must provide to the division a

31  written statement indicating that the member understands that

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 1  such changes are not permitted after he or she begins

 2  receiving the benefits.

 3         (e)  Disability retirement benefit.--Upon the

 4  retirement of a member on his or her disability retirement

 5  date, the member shall receive a monthly benefit that shall

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

 7  retirement and shall be payable on the last day of that month

 8  and each month thereafter during his or her lifetime and

 9  continued disability.

10         (f)  Computation of disability retirement benefit.--The

11  amount of each monthly payment shall be computed in the same

12  manner as for a normal retirement benefit, in accordance with

13  subsection (1), but shall be based on disability option

14  actuarial equivalency tables and the average monthly

15  compensation and creditable service of the member as of the

16  disability retirement date, subject to the following

17  conditions:

18         1.  If the member's disability occurred in the line of

19  duty, the monthly Option 1 benefit shall not be less than:

20         a.  Forty-two percent of average monthly compensation

21  as of the disability retirement date; or

22         b.  Sixty-five percent of the average monthly

23  compensation as of the disability retirement date for a member

24  of the special risk class who retires on or after July 1,

25  2000; or

26         2.  If the member's disability occurred other than in

27  the line of duty, the monthly Option 1 benefit shall not be

28  less than 25 percent of average monthly compensation as of the

29  disability retirement date.

30         (g)  Reapplication.--A member, whose initial

31  application for disability retirement has been denied, may

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 1  reapply for disability benefits. However, such member's

 2  reapplication will be considered only if the member presents

 3  new medical evidence of a medical condition that existed prior

 4  to the member's termination of employment. The division may

 5  prescribe by rule procedures for reapplication and for review

 6  and approval or disapproval of reapplication.

 7         (h)  Recovery from disability.--The administrator may

 8  require periodic reexaminations at the expense of the

 9  retirement fund. The division may adopt rules establishing

10  procedures for conducting and review of such reexaminations.

11         1.  If the administrator finds that a member who is

12  receiving disability benefits is, at any time prior to his or

13  her normal retirement date, no longer disabled, the

14  administrator shall direct that the benefits be discontinued.

15  The decision of the administrator on this question shall be

16  final and binding. If such member:

17         a.  Does not reenter the employ of an employer and was

18  not vested as of the disability retirement date, he or she

19  shall be entitled to the excess, if any, of his or her

20  accumulated contributions over the total disability benefits

21  received up to the date of recovery.

22         b.  Does not reenter the employ of an employer, but was

23  vested as of the disability retirement date, he or she may

24  elect to receive:

25         (I)  The excess, if any, of his or her accumulated

26  contributions over the total disability benefits received up

27  to the date of recovery; or

28         (II)  A deferred benefit commencing on the last day of

29  the month of the normal retirement date which shall be payable

30  on the last day of the month thereafter during his or her

31  lifetime. The amount of such monthly benefit shall be computed

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 1  in the same manner as for a normal retirement benefit, in

 2  accordance with subsection (1), but shall be based on average

 3  monthly compensation and creditable service as of the member's

 4  disability retirement date.

 5         c.  Reenters employment of an employer within 6 months

 6  after recovery, the member's service will be deemed to have

 7  been continuous, but the period beginning with the first month

 8  for which he or she received a disability benefit payment and

 9  ending with the date he or she reentered employment will not

10  be considered as creditable service for the purpose of

11  computing benefits except as provided in sub-subparagraph d.

12  As used in this section, the term "accumulated contributions"

13  for such member means the excess of the member's accumulated

14  contributions as of the disability retirement date over the

15  total disability benefits received under paragraph (e).

16         d.  Terminates his or her disability benefit, reenters

17  covered employment, and is continuously employed for a minimum

18  of 1 year of creditable service, he or she may claim as

19  creditable service the months during which he or she was

20  receiving a disability benefit, upon payment of the required

21  contributions. Contributions shall equal the total required

22  employee and employer contribution rate applicable during the

23  period the retiree received retirement benefits, multiplied

24  times his or her rate of monthly compensation prior to the

25  commencement of disability retirement for each month of the

26  period claimed, plus 4 percent interest until July 1, 1975,

27  and 6.5 percent interest thereafter, compounded annually each

28  June 30 to the date of payment. If the member does not claim

29  credit for all of the months he or she received disability

30  benefits, the months claimed must be the most recent months of

31  retirement. Such credit for periods of disability, when

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 1  purchased under the Florida Retirement System, shall apply

 2  toward vesting requirements for eligibility to purchase

 3  additional credit for other service.

 4         2.  Both the member receiving disability benefits who

 5  reenters employment and the employer employing such disability

 6  retiree shall notify the division immediately upon

 7  reemployment, and the division shall terminate such member's

 8  disability benefits, effective the first day of the month

 9  following the month in which notification of recovery is

10  received. If the member is reemployed with a Florida

11  Retirement System employer at the time of benefit termination,

12  and he or she has received disability retirement benefit and

13  salary payments concurrently prior to notifying the division,

14  he or she may elect within 30 days to:

15         a.  Retain the retirement benefits received prior to

16  termination of disability benefits and begin receiving

17  retirement service credit effective upon the date of

18  termination of benefits; or

19         b.  Repay, within 12 months after his or her decision

20  to receive service credit, the retirement benefits received

21  for each month of reemployment prior to termination of

22  disability benefits and begin receiving retirement service

23  credit effective upon the date of reemployment. Any such

24  unpaid benefits shall have compound interest of 6.5 percent

25  added June 30.

26  

27  A member may not receive both retirement service credit for

28  employment and retirement benefits for the same month.

29         3.  If, after recovery of disability and reentry into

30  covered employment, the member again becomes disabled and is

31  again approved for disability retirement, the Option 1 monthly

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 1  retirement benefit shall not be less than the Option 1 monthly

 2  benefit calculated at the time of the previous disability,

 3  plus any cost of living increases up to the time the

 4  disability benefit was terminated upon his or her reentry into

 5  covered employment.

 6         (i)  Nonadmissible causes of disability.--A member

 7  shall not be entitled to receive any disability retirement

 8  benefit if the disability is a result of any of the following:

 9         1.  Injury or disease sustained by the member while

10  willfully participating in a riot, civil insurrection, or

11  other act of violence or while committing a felony;

12         2.  Injury or disease sustained by the member after his

13  or her employment has terminated; or

14         3.  Intentional, self-inflicted injury.

15         (j)  Disability retirement of justice or judge by order

16  of Supreme Court.--

17         1.  If a member is a justice of the Supreme Court,

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

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

20  elected constitutional judicial officer, including service as

21  a judicial officer in any court abolished pursuant to Art. V

22  of the State Constitution, and who is retired for disability

23  by order of the Supreme Court upon recommendation of the

24  Judicial Qualifications Commission pursuant to the provisions

25  of Art. V of the State Constitution, the member's Option 1

26  monthly benefit as provided in subparagraph (6)(a)1. shall not

27  be less than two-thirds of his or her monthly compensation as

28  of the member's disability retirement date. Such a member may

29  alternatively elect to receive a disability retirement benefit

30  under any other option as provided in paragraph (6)(a).

31  

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 1         2.  Should any justice or judge who is a member of the

 2  Florida Retirement System be retired for disability by order

 3  of the Supreme Court upon recommendation of the Judicial

 4  Qualifications Commission pursuant to the provisions of Art. V

 5  of the State Constitution, then all contributions to his or

 6  her account and all contributions made on his or her behalf by

 7  the employer shall be transferred to and deposited in the

 8  General Revenue Fund of the state, and there is hereby

 9  appropriated annually out of the General Revenue Fund, to be

10  paid into the Florida Retirement System Fund, an amount

11  necessary to pay the benefits of all justices and judges

12  retired from the Florida Retirement System pursuant to Art. V

13  of the State Constitution.

14         (5)  TERMINATION BENEFITS.--A member whose employment

15  is terminated prior to retirement retains membership rights to

16  previously earned member-noncontributory service credit, and

17  to member-contributory service credit, if the member leaves

18  the member contributions on deposit in his or her retirement

19  account. If a terminated member receives a refund of member

20  contributions, such member may reinstate membership rights to

21  the previously earned service credit represented by the refund

22  by completing 1 year of creditable service and repaying the

23  refunded member contributions, plus interest.

24         (a)  A member whose employment is terminated for any

25  reason other than death or retirement prior to becoming vested

26  is entitled to the return of his or her accumulated

27  contributions as of the date of termination.

28         (b)  A member whose employment is terminated for any

29  reason other than death or retirement after becoming vested

30  may elect to receive a deferred monthly benefit which shall

31  begin to accrue on the first day of the month of normal or

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 1  early retirement and shall be payable on the last day of that

 2  month and each month thereafter during his or her lifetime.

 3  The amount of monthly benefit shall be computed in the same

 4  manner as for a normal retirement benefit in accordance with

 5  subsection (1) or early retirement benefit in accordance with

 6  s. 121.021(30), but based on average monthly compensation and

 7  creditable service as of the date of termination.

 8         (c)  In lieu of the deferred monthly benefit provided

 9  in paragraph (b), the terminated member may elect to receive a

10  lump-sum amount equal to his or her accumulated contributions

11  as of the date of termination.

12         (d)  If any retired member dies without having received

13  in benefit payments an amount equal to his or her accumulated

14  contributions, there shall be payable to his or her designated

15  beneficiary an amount equal to the excess, if any, of the

16  member's accumulated contributions over the total monthly

17  payments made to the member prior to the date of death.

18         (e)  A member shall be deemed a terminated member when

19  termination of employment has occurred as provided in s.

20  121.021(39).

21         (f)  Any member who has been found guilty by a verdict

22  of a jury, or by the court trying the case without a jury, of

23  committing, aiding, or abetting any embezzlement or theft from

24  his or her employer, bribery in connection with the

25  employment, or other felony specified in chapter 838, except

26  ss. 838.15 and 838.16, committed prior to retirement, or who

27  has entered a plea of guilty or of nolo contendere to such

28  crime, or any member whose employment is terminated by reason

29  of the member's admitted commitment, aiding, or abetting of an

30  embezzlement or theft from his or her employer, bribery, or

31  other felony specified in chapter 838, except ss. 838.15 and

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 1  838.16, shall forfeit all rights and benefits under this

 2  chapter, except the return of his or her accumulated

 3  contributions as of the date of termination.

 4         (g)  Any elected official who is convicted by the

 5  Senate of an impeachable offense shall forfeit all rights and

 6  benefits under this chapter, except the return of his or her

 7  accumulated contributions as of the date of the conviction.

 8         (h)  Any member who, prior to retirement, is adjudged

 9  by a court of competent jurisdiction to have violated any

10  state law against strikes by public employees, or who has been

11  found guilty by such court of violating any state law

12  prohibiting strikes by public employees, shall forfeit all

13  rights and benefits under this chapter, except the return of

14  his or her accumulated contributions as of the date of the

15  conviction.

16         (i)  Any beneficiary who by a verdict of a jury or by

17  the court trying the case without a jury is found guilty, or

18  who has entered a plea of guilty or nolo contendere, of

19  unlawfully and intentionally killing or procuring the death of

20  the member forfeits all rights to the deceased member's

21  benefits under this chapter, and the benefits will be paid as

22  if such beneficiary had predeceased the decedent.

23         (j)  Benefits shall not be paid by the division pending

24  final resolution of such charges against a member or

25  beneficiary if the resolution of such charges could require

26  the forfeiture of benefits as provided in paragraph (f),

27  paragraph (g), paragraph (h), or paragraph (i).

28         (6)  OPTIONAL FORMS OF RETIREMENT BENEFITS AND

29  DISABILITY RETIREMENT BENEFITS.--

30         (a)  Prior to the receipt of the first monthly

31  retirement payment, a member shall elect to receive the

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 1  retirement benefits to which he or she is entitled under

 2  subsection (1), subsection (2), subsection (3), or subsection

 3  (4) in accordance with one of the following options:

 4         1.  The maximum retirement benefit payable to the

 5  member during his or her lifetime.

 6         2.  A decreased retirement benefit payable to the

 7  member during his or her lifetime and, in the event of his or

 8  her death within a period of 10 years after retirement, the

 9  same monthly amount payable for the balance of such 10-year

10  period to his or her beneficiary or, in case the beneficiary

11  is deceased, in accordance with subsection (8) as though no

12  beneficiary had been named.

13         3.  A decreased retirement benefit payable during the

14  joint lifetime of both the member and his or her joint

15  annuitant and which, after the death of either, shall continue

16  during the lifetime of the survivor in the same amount,

17  subject to the provisions of subsection (12).

18         4.  A decreased retirement benefit payable during the

19  joint lifetime of the member and his or her joint annuitant

20  and which, after the death of either, shall continue during

21  the lifetime of the survivor in an amount equal to 662/3

22  percent of the amount that was payable during the joint

23  lifetime of the member and his or her joint annuitant, subject

24  to the provisions of subsection (12).

25  

26  The spouse of any member who elects to receive the benefit

27  provided under subparagraph 1. or subparagraph 2. shall be

28  notified of and shall acknowledge any such election. The

29  division shall establish by rule a method for selecting the

30  appropriate actuarial factor for optional forms of benefits

31  

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 1  selected under subparagraphs 3. and 4., based on the age of

 2  the member and the joint annuitant.

 3         (b)  The benefit payable under any option stated above

 4  shall be the actuarial equivalent, based on tables adopted by

 5  the administrator for this purpose, of the amount to which the

 6  member was otherwise entitled.

 7         (c)  A member who elects the option in subparagraph

 8  (a)2. shall, in accordance with subsection (8), designate one

 9  or more persons to receive the benefits payable in the event

10  of his or her death. Such persons shall be the beneficiaries

11  of the member. The member may also designate one or more

12  contingent beneficiaries to receive any benefits remaining

13  upon the death of the primary beneficiary.

14         (d)  A member who elects the option in subparagraph

15  (a)3. or subparagraph (a)4. shall, on a form provided for that

16  purpose, designate a joint annuitant to receive the benefits

17  which continue to be payable upon the death of the member.

18  After benefits have commenced under the option in subparagraph

19  (a)3. or subparagraph (a)4., the following shall apply:

20         1.  A retired member may change his or her designation

21  of a joint annuitant only twice. If such a retired member

22  desires to change his or her designation of a joint annuitant,

23  he or she shall file with the division a notarized "change of

24  joint annuitant" form and shall notify the former joint

25  annuitant in writing of such change. Effective the first day

26  of the next month following receipt by the division of a

27  completed change of joint annuitant form, the division shall

28  adjust the member's monthly benefit by the application of

29  actuarial tables and calculations developed to ensure that the

30  benefit paid is the actuarial equivalent of the present value

31  of the member's current benefit. The consent of a retired

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 1  member's first designated joint annuitant to any such change

 2  shall not be required. However, if either the member or the

 3  joint annuitant dies before the effective date of the request

 4  for change of joint annuitant, the requested change shall be

 5  void, and survivor benefits, if any, shall be paid as if no

 6  request had been made.

 7         2.  In the event of the dissolution of marriage of a

 8  retired member and a joint annuitant, such member may make an

 9  election to nullify the joint annuitant designation of the

10  former spouse, unless there is an existing qualified domestic

11  relations order preventing such action. The member shall file

12  with the division a written, notarized nullification which

13  shall be effective on the first day of the next month

14  following receipt by the division. Benefits shall be paid as

15  if the former spouse predeceased the member. A member who

16  makes such an election may not reverse the nullification but

17  may designate a new joint annuitant in accordance with

18  subparagraph 1.

19         (e)  The election of an option shall be null and void

20  if the member dies before the effective date of retirement.

21         (f)  A member who elects to receive benefits under the

22  option in subparagraph (a)3. may designate one or more

23  qualified persons, either a spouse or other dependent, as his

24  or her joint annuitant to receive the benefits after the

25  member's death in whatever proportion he or she so assigns to

26  each person named as joint annuitant. The division shall adopt

27  appropriate actuarial tables and calculations necessary to

28  ensure that the benefit paid is the actuarial equivalent of

29  the benefit to which the member is otherwise entitled under

30  the option in subparagraph (a)1.

31  

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 1         (g)  Upon the death of a retired member or beneficiary

 2  receiving monthly benefits under this chapter, the monthly

 3  benefits shall be paid through the last day of the month of

 4  death and shall terminate, or be adjusted, if applicable, as

 5  of that date in accordance with the optional form of benefit

 6  selected at the time of retirement.

 7         (h)  The option selected or determined for payment of

 8  benefits as provided in this section shall be final and

 9  irrevocable at the time a benefit payment is cashed or

10  deposited or credited to the Deferred Retirement Option

11  Program as provided in subsection (13).

12         (7)  DEATH BENEFITS.--

13         (a)  If the employment of a member is terminated by

14  reason of his or her death prior to being vested, except as

15  provided in paragraph (f), there shall be payable to his or

16  her designated beneficiary the member's accumulated

17  contributions.

18         (b)  If the employment of an active member who may or

19  may not have applied for retirement is terminated by reason of

20  his or her death subsequent to becoming vested and prior to

21  his or her effective date of retirement, if established, it

22  shall be assumed that the member retired as of the date of

23  death in accordance with subsection (1) if eligible for normal

24  retirement benefits, subsection (2) if eligible for benefits

25  payable for dual normal retirement, or subsection (3) if

26  eligible for early retirement benefits. Benefits payable to

27  the designated beneficiary shall be as follows:

28         1.  For a beneficiary who qualifies as a joint

29  annuitant, the optional form of payment provided in accordance

30  with subparagraph (6)(a)3. shall be paid for the joint

31  annuitant's lifetime.

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 1         2.  For a beneficiary who does not qualify as a joint

 2  annuitant, no continuing monthly benefit shall be paid and the

 3  beneficiary shall be entitled only to the return of the

 4  member's personal contributions. If there is no monetary

 5  interest in the member's retirement account for which such

 6  beneficiary is eligible, the beneficiary shall be the next

 7  named beneficiary or, if no other beneficiary is named, the

 8  beneficiary shall be the next eligible beneficiary according

 9  to subsection (8).

10         (c)  If a retiring member dies on or after the

11  effective date of retirement, but prior to a benefit payment

12  being cashed or deposited, or credited to the Deferred

13  Retirement Option Program, benefits shall be paid as follows:

14         1.  For a designated beneficiary who qualifies as a

15  joint annuitant, benefits shall be paid in the optional form

16  of payment provided in subparagraph (6)(a)3. for the joint

17  annuitant's lifetime or, if the member chose the optional form

18  of payment provided in subparagraph (6)(a)2., the joint

19  annuitant may select the form provided in either subparagraph

20  (6)(a)2. or subparagraph (6)(a)3.

21         2.  For a designated beneficiary who does not qualify

22  as a joint annuitant, any benefits payable shall be paid as

23  provided in the option selected by the member; or if the

24  member has not selected an option, benefits shall be paid in

25  the optional form of payment provided in subparagraph (6)(a)1.

26         (d)  Notwithstanding any other provision in this

27  chapter to the contrary, with the exception of the Deferred

28  Retirement Option Program, as provided in subsection (13):

29         1.  The surviving spouse of any member killed in the

30  line of duty may receive a monthly pension equal to one-half

31  of the monthly salary being received by the member at the time

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 1  of death for the rest of the surviving spouse's lifetime or,

 2  if the member was vested, such surviving spouse may elect to

 3  receive a benefit as provided in paragraph (b). Benefits

 4  provided by this paragraph shall supersede any other

 5  distribution that may have been provided by the member's

 6  designation of beneficiary.

 7         2.  If the surviving spouse of a member killed in the

 8  line of duty dies, the monthly payments which would have been

 9  payable to such surviving spouse had such surviving spouse

10  lived shall be paid for the use and benefit of such member's

11  child or children under 18 years of age and unmarried until

12  the 18th birthday of the member's youngest child.

13         3.  If a member killed in the line of duty leaves no

14  surviving spouse but is survived by a child or children under

15  18 years of age, the benefits provided by subparagraph 1.,

16  normally payable to a surviving spouse, shall be paid for the

17  use and benefit of such member's child or children under 18

18  years of age and unmarried until the 18th birthday of the

19  member's youngest child.

20         4.  The surviving spouse of a member whose benefit

21  terminated because of remarriage shall have the benefit

22  reinstated beginning July 1, 1993, at an amount that would

23  have been payable had the benefit not been terminated.

24         (e)  The surviving spouse or other dependent of any

25  member, except a member who participated in the Deferred

26  Retirement Option Program, whose employment is terminated by

27  death shall, upon application to the administrator, be

28  permitted to pay the required contributions for any service

29  performed by the member which could have been claimed by the

30  member at the time of his or her death. Such service shall be

31  added to the creditable service of the member and shall be

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 1  used in the calculation of any benefits which may be payable

 2  to the surviving spouse or other surviving dependent.

 3         (f)  Notwithstanding any other provisions in this

 4  chapter to the contrary and upon application to the

 5  administrator, an eligible joint annuitant, of a member whose

 6  employment is terminated by death within 1 year of such member

 7  satisfying the service requirements for vesting and retirement

 8  eligibility, shall be permitted to purchase only the

 9  additional service credit necessary to vest and qualify for

10  retirement benefits, not to exceed a total of 1 year of

11  credit, by one or a combination of the following methods:

12         1.  Such eligible joint annuitant may use the deceased

13  member's accumulated hours of annual, sick, and compensatory

14  leave to purchase additional creditable service, on an hour by

15  hour basis, provided that such deceased member's accumulated

16  leave is sufficient to cover the additional months required.

17  For each month of service credit needed prior to the final

18  month, credit for the total number of work hours in that month

19  must be purchased, using an equal number of the deceased

20  member's accumulated leave hours. Service credit required for

21  the final month in which the deceased member would have become

22  vested shall be awarded upon the purchase of 1 hour of credit.

23  Such eligible joint annuitant shall pay the contribution rate

24  in effect for the period of time being claimed for the

25  deceased member's class of membership, multiplied by such

26  member's monthly salary at the time of death, plus 6.5 percent

27  interest compounded annually. The accumulated leave payment

28  used in the average final compensation shall not include that

29  portion of the payment that represents any leave hours used in

30  the purchase of such creditable service.

31  

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 1         2.  Such eligible joint annuitant may purchase

 2  additional months of creditable service for any periods of

 3  out-of-state service as provided in s. 121.1115, and in-state

 4  service as provided in s. 121.1122, that the deceased member

 5  would have been eligible to purchase prior to his or her

 6  death.

 7  

 8  Service purchased under this paragraph shall be added to the

 9  creditable service of the member and used to vest for

10  retirement eligibility, and shall be used in the calculation

11  of any benefits which may be payable to the eligible joint

12  annuitant. Any benefits paid in accordance with this paragraph

13  shall only be made prospectively.

14         (g)  Notwithstanding any other provisions in this

15  chapter to the contrary, if any member who is vested dies and

16  the surviving spouse receives a refund of the accumulated

17  contributions made to the retirement trust fund, such spouse

18  may pay to the Division of Retirement an amount equal to the

19  sum of the amount of the deceased member's accumulated

20  contributions previously refunded plus interest at 4 percent

21  compounded annually each June 30 from the date of refund until

22  July 1, 1975, and 6.5 percent interest compounded annually

23  thereafter, until full payment is made, and receive the

24  monthly retirement benefit as provided in paragraph (b).

25         (h)  The designated beneficiary who is the surviving

26  spouse or other dependent of a member whose employment is

27  terminated by death subsequent to becoming vested, but prior

28  to actual retirement, may elect to receive a deferred monthly

29  benefit as if the member had lived and had elected a deferred

30  monthly benefit, as provided in paragraph (5)(b), calculated

31  on the basis of the average final compensation and creditable

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 1  service of the member at his or her death and the age the

 2  member would have attained on the commencement date of the

 3  deferred benefit elected by the beneficiary, paid in

 4  accordance with option 3 of paragraph (6)(a).

 5         (8)  DESIGNATION OF BENEFICIARIES.--

 6         (a)  Each member may, on a form provided for that

 7  purpose, signed and filed with the division, designate a

 8  choice of one or more persons, named sequentially or jointly,

 9  as his or her beneficiary who shall receive the benefits, if

10  any, which may be payable in the event of the member's death

11  pursuant to the provisions of this chapter. If no beneficiary

12  is named in the manner provided above, or if no beneficiary

13  designated by the member survives the member, the beneficiary

14  shall be the spouse of the deceased, if living. If the

15  member's spouse is not alive at his or her death, the

16  beneficiary shall be the living children of the member. If no

17  children survive, the beneficiary shall be the member's father

18  or mother, if living; otherwise, the beneficiary shall be the

19  member's estate. The beneficiary most recently designated by a

20  member on a form or letter filed with the division shall be

21  the beneficiary entitled to any benefits payable at the time

22  of the member's death, except that benefits shall be paid as

23  provided in paragraph (7)(d) when death occurs in the line of

24  duty. Notwithstanding any other provisions in this subsection

25  to the contrary, for a member who dies prior to his or her

26  effective date of retirement on or after January 1, 1999, the

27  spouse at the time of death shall be the member's beneficiary

28  unless such member designates a different beneficiary as

29  provided herein subsequent to the member's most recent

30  marriage.

31  

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 1         (b)  A designated beneficiary of a retirement account

 2  for whom there is a monetary interest may disclaim his or her

 3  monetary interest as provided in s. 689.21, and in accordance

 4  with division rules governing such disclaimers. Such

 5  disclaimer must be filed within 24 months after the event that

 6  created the interest, that is, the death of the member or

 7  annuitant.

 8         (c)  Notwithstanding the member's designation of

 9  benefits to be paid through a trust to a beneficiary that is a

10  natural person as provided in s. 121.021(46), and

11  notwithstanding the provisions of the trust, benefits shall be

12  paid directly to the beneficiary if such person is no longer a

13  minor or incapacitated as defined in s. 744.102(10) and (11).

14         (9)  EMPLOYMENT AFTER RETIREMENT; LIMITATION.--

15         (a)  Any person who is retired under this chapter,

16  except under the disability retirement provisions of

17  subsection (4), may be employed by an employer that does not

18  participate in a state-administered retirement system and may

19  receive compensation from that employment without limiting or

20  restricting in any way the retirement benefits payable to that

21  person.

22         (b)1.  Any person who is retired under this chapter,

23  except under the disability retirement provisions of

24  subsection (4), may be reemployed by any private or public

25  employer after retirement and receive retirement benefits and

26  compensation from his or her employer without any limitations,

27  except that a person may not receive both a salary from

28  reemployment with any agency participating in the Florida

29  Retirement System and retirement benefits under this chapter

30  for a period of 12 months immediately subsequent to the date

31  of retirement. However, a DROP participant shall continue

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 1  employment and receive a salary during the period of

 2  participation in the Deferred Retirement Option Program, as

 3  provided in subsection (13).

 4         2.  Any person to whom the limitation in subparagraph

 5  1. applies who violates such reemployment limitation and who

 6  is reemployed with any agency participating in the Florida

 7  Retirement System before completion of the 12-month limitation

 8  period shall give timely notice of this fact in writing to the

 9  employer and to the division and shall have his or her

10  retirement benefits suspended for the balance of the 12-month

11  limitation period. Any person employed in violation of this

12  paragraph and any employing agency which knowingly employs or

13  appoints such person without notifying the Division of

14  Retirement to suspend retirement benefits shall be jointly and

15  severally liable for reimbursement to the retirement trust

16  fund of any benefits paid during the reemployment limitation

17  period. To avoid liability, such employing agency shall have a

18  written statement from the retiree that he or she is not

19  retired from a state-administered retirement system. Any

20  retirement benefits received while reemployed during this

21  reemployment limitation period shall be repaid to the

22  retirement trust fund, and retirement benefits shall remain

23  suspended until such repayment has been made. Benefits

24  suspended beyond the reemployment limitation shall apply

25  toward repayment of benefits received in violation of the

26  reemployment limitation.

27         3.  A district school board may reemploy a retired

28  member as a substitute or hourly teacher, education

29  paraprofessional, transportation assistant, bus driver, or

30  food service worker on a noncontractual basis after he or she

31  has been retired for 1 calendar month, in accordance with s.

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 1  121.021(39). Any retired member who is reemployed within 1

 2  calendar month after retirement shall void his or her

 3  application for retirement benefits. District school boards

 4  reemploying such teachers, education paraprofessionals,

 5  transportation assistants, bus drivers, or food service

 6  workers are subject to the retirement contribution required by

 7  subparagraph 7. Reemployment of a retired member as a

 8  substitute or hourly teacher, education paraprofessional,

 9  transportation assistant, bus driver, or food service worker

10  is limited to 780 hours during the first 12 months of his or

11  her retirement. Any retired member reemployed for more than

12  780 hours during his or her first 12 months of retirement

13  shall give timely notice in writing to the employer and to the

14  division of the date he or she will exceed the limitation. The

15  division shall suspend his or her retirement benefits for the

16  remainder of the first 12 months of retirement. Any person

17  employed in violation of this subparagraph and any employing

18  agency which knowingly employs or appoints such person without

19  notifying the Division of Retirement to suspend retirement

20  benefits shall be jointly and severally liable for

21  reimbursement to the retirement trust fund of any benefits

22  paid during the reemployment limitation period. To avoid

23  liability, such employing agency shall have a written

24  statement from the retiree that he or she is not retired from

25  a state-administered retirement system. Any retirement

26  benefits received by a retired member while reemployed in

27  excess of 780 hours during the first 12 months of retirement

28  shall be repaid to the Retirement System Trust Fund, and his

29  or her retirement benefits shall remain suspended until

30  repayment is made. Benefits suspended beyond the end of the

31  retired member's first 12 months of retirement shall apply

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 1  toward repayment of benefits received in violation of the

 2  780-hour reemployment limitation.

 3         4.  A community college board of trustees may reemploy

 4  a retired member as an adjunct instructor, that is, an

 5  instructor who is noncontractual and part-time, or as a

 6  participant in a phased retirement program within the Florida

 7  Community College System, after he or she has been retired for

 8  1 calendar month, in accordance with s. 121.021(39). Any

 9  retired member who is reemployed within 1 calendar month after

10  retirement shall void his or her application for retirement

11  benefits. Boards of trustees reemploying such instructors are

12  subject to the retirement contribution required in

13  subparagraph 7. A retired member may be reemployed as an

14  adjunct instructor for no more than 780 hours during the first

15  12 months of retirement. Any retired member reemployed for

16  more than 780 hours during the first 12 months of retirement

17  shall give timely notice in writing to the employer and to the

18  division of the date he or she will exceed the limitation. The

19  division shall suspend his or her retirement benefits for the

20  remainder of the first 12 months of retirement. Any person

21  employed in violation of this subparagraph and any employing

22  agency which knowingly employs or appoints such person without

23  notifying the Division of Retirement to suspend retirement

24  benefits shall be jointly and severally liable for

25  reimbursement to the retirement trust fund of any benefits

26  paid during the reemployment limitation period. To avoid

27  liability, such employing agency shall have a written

28  statement from the retiree that he or she is not retired from

29  a state-administered retirement system. Any retirement

30  benefits received by a retired member while reemployed in

31  excess of 780 hours during the first 12 months of retirement

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 1  shall be repaid to the Retirement System Trust Fund, and

 2  retirement benefits shall remain suspended until repayment is

 3  made. Benefits suspended beyond the end of the retired

 4  member's first 12 months of retirement shall apply toward

 5  repayment of benefits received in violation of the 780-hour

 6  reemployment limitation.

 7         5.  The State University System may reemploy a retired

 8  member as an adjunct faculty member or as a participant in a

 9  phased retirement program within the State University System

10  after the retired member has been retired for 1 calendar

11  month, in accordance with s. 121.021(39). Any retired member

12  who is reemployed within 1 calendar month after retirement

13  shall void his or her application for retirement benefits. The

14  State University System is subject to the retired contribution

15  required in subparagraph 7., as appropriate. A retired member

16  may be reemployed as an adjunct faculty member or a

17  participant in a phased retirement program for no more than

18  780 hours during the first 12 months of his or her retirement.

19  Any retired member reemployed for more than 780 hours during

20  the first 12 months of retirement shall give timely notice in

21  writing to the employer and to the division of the date he or

22  she will exceed the limitation. The division shall suspend his

23  or her retirement benefits for the remainder of the first 12

24  months of retirement. Any person employed in violation of this

25  subparagraph and any employing agency which knowingly employs

26  or appoints such person without notifying the Division of

27  Retirement to suspend retirement benefits shall be jointly and

28  severally liable for reimbursement to the retirement trust

29  fund of any benefits paid during the reemployment limitation

30  period. To avoid liability, such employing agency shall have a

31  written statement from the retiree that he or she is not

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 1  retired from a state-administered retirement system. Any

 2  retirement benefits received by a retired member while

 3  reemployed in excess of 780 hours during the first 12 months

 4  of retirement shall be repaid to the Retirement System Trust

 5  Fund, and retirement benefits shall remain suspended until

 6  repayment is made. Benefits suspended beyond the end of the

 7  retired member's first 12 months of retirement shall apply

 8  toward repayment of benefits received in violation of the

 9  780-hour reemployment limitation.

10         6.  The Board of Trustees of the Florida School for the

11  Deaf and the Blind may reemploy a retired member as a

12  substitute teacher, substitute residential instructor, or

13  substitute nurse on a noncontractual basis after he or she has

14  been retired for 1 calendar month, in accordance with s.

15  121.021(39). Any retired member who is reemployed within 1

16  calendar month after retirement shall void his or her

17  application for retirement benefits. The Board of Trustees of

18  the Florida School for the Deaf and the Blind reemploying such

19  teachers, residential instructors, or nurses is subject to the

20  retirement contribution required by subparagraph 7.

21  Reemployment of a retired member as a substitute teacher,

22  substitute residential instructor, or substitute nurse is

23  limited to 780 hours during the first 12 months of his or her

24  retirement. Any retired member reemployed for more than 780

25  hours during the first 12 months of retirement shall give

26  timely notice in writing to the employer and to the division

27  of the date he or she will exceed the limitation. The division

28  shall suspend his or her retirement benefits for the remainder

29  of the first 12 months of retirement. Any person employed in

30  violation of this subparagraph and any employing agency which

31  knowingly employs or appoints such person without notifying

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 1  the Division of Retirement to suspend retirement benefits

 2  shall be jointly and severally liable for reimbursement to the

 3  retirement trust fund of any benefits paid during the

 4  reemployment limitation period. To avoid liability, such

 5  employing agency shall have a written statement from the

 6  retiree that he or she is not retired from a

 7  state-administered retirement system. Any retirement benefits

 8  received by a retired member while reemployed in excess of 780

 9  hours during the first 12 months of retirement shall be repaid

10  to the Retirement System Trust Fund, and his or her retirement

11  benefits shall remain suspended until payment is made.

12  Benefits suspended beyond the end of the retired member's

13  first 12 months of retirement shall apply toward repayment of

14  benefits received in violation of the 780-hour reemployment

15  limitation.

16         7.  The employment by an employer of any retiree or

17  DROP participant of any state-administered retirement system

18  shall have no effect on the average final compensation or

19  years of creditable service of the retiree or DROP

20  participant. Prior to July 1, 1991, upon employment of any

21  person, other than an elected officer as provided in s.

22  121.053, who has been retired under any state-administered

23  retirement program, the employer shall pay retirement

24  contributions in an amount equal to the unfunded actuarial

25  liability portion of the employer contribution which would be

26  required for regular members of the Florida Retirement System.

27  Effective July 1, 1991, contributions shall be made as

28  provided in s. 121.122 for retirees with renewed membership or

29  subsection (13) with respect to DROP participants.

30         8.  Any person who has previously retired and who is

31  holding an elective public office or an appointment to an

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 1  elective public office eligible for the Elected Officers'

 2  Class on or after July 1, 1990, shall be enrolled in the

 3  Florida Retirement System as provided in s. 121.053(1)(b) or,

 4  if holding an elective public office that does not qualify for

 5  the Elected Officers' Class on or after July 1, 1991, shall be

 6  enrolled in the Florida Retirement System as provided in s.

 7  121.122, and shall continue to receive retirement benefits as

 8  well as compensation for the elected officer's service for as

 9  long as he or she remains in elective office. However, any

10  retired member who served in an elective office prior to July

11  1, 1990, suspended his or her retirement benefit, and had his

12  or her Florida Retirement System membership reinstated shall,

13  upon retirement from such office, have his or her retirement

14  benefit recalculated to include the additional service and

15  compensation earned.

16         9.  Any person who is holding an elective public office

17  which is covered by the Florida Retirement System and who is

18  concurrently employed in nonelected covered employment may

19  elect to retire while continuing employment in the elective

20  public office, provided that he or she shall be required to

21  terminate his or her nonelected covered employment. Any person

22  who exercises this election shall receive his or her

23  retirement benefits in addition to the compensation of the

24  elective office without regard to the time limitations

25  otherwise provided in this subsection. No person who seeks to

26  exercise the provisions of this subparagraph, as the same

27  existed prior to May 3, 1984, shall be deemed to be retired

28  under those provisions, unless such person is eligible to

29  retire under the provisions of this subparagraph, as amended

30  by chapter 84-11, Laws of Florida.

31  

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 1         10.  The limitations of this paragraph apply to

 2  reemployment in any capacity with an "employer" as defined in

 3  s. 121.021(10), irrespective of the category of funds from

 4  which the person is compensated.

 5         11.  An employing agency may reemploy a retired member

 6  as a firefighter or paramedic after the retired member has

 7  been retired for 1 calendar month, in accordance with s.

 8  121.021(39). Any retired member who is reemployed within 1

 9  calendar month after retirement shall void his or her

10  application for retirement benefits. The employing agency

11  reemploying such firefighter or paramedic is subject to the

12  retired contribution required in subparagraph 8. Reemployment

13  of a retired firefighter or paramedic is limited to no more

14  than 780 hours during the first 12 months of his or her

15  retirement. Any retired member reemployed for more than 780

16  hours during the first 12 months of retirement shall give

17  timely notice in writing to the employer and to the division

18  of the date he or she will exceed the limitation. The division

19  shall suspend his or her retirement benefits for the remainder

20  of the first 12 months of retirement. Any person employed in

21  violation of this subparagraph and any employing agency which

22  knowingly employs or appoints such person without notifying

23  the Division of Retirement to suspend retirement benefits

24  shall be jointly and severally liable for reimbursement to the

25  Retirement System Trust Fund of any benefits paid during the

26  reemployment limitation period. To avoid liability, such

27  employing agency shall have a written statement from the

28  retiree that he or she is not retired from a

29  state-administered retirement system. Any retirement benefits

30  received by a retired member while reemployed in excess of 780

31  hours during the first 12 months of retirement shall be repaid

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 1  to the Retirement System Trust Fund, and retirement benefits

 2  shall remain suspended until repayment is made. Benefits

 3  suspended beyond the end of the retired member's first 12

 4  months of retirement shall apply toward repayment of benefits

 5  received in violation of the 780-hour reemployment limitation.

 6         (10)  FUTURE BENEFITS BASED ON ACTUARIAL DATA.--It is

 7  the intent of the Legislature that future benefit increases

 8  enacted into law in this chapter shall be financed

 9  concurrently by increased contributions or other adequate

10  funding, and such funding shall be based on sound actuarial

11  data as developed by the actuary or state retirement actuary,

12  as provided in ss. 121.021(6) and 121.192.

13         (11)  A member who becomes eligible to retire and has

14  accumulated the maximum benefit of 100 percent of average

15  final compensation may continue in active service, and, if

16  upon the member's retirement the member elects to receive a

17  retirement compensation pursuant to subsection (2), subsection

18  (6), or subsection (7), the actuarial equivalent percentage

19  factor applicable to the age of such member at the time the

20  member reached the maximum benefit and to the age, at that

21  time, of the member's spouse shall determine the amount of

22  benefits to be paid.

23         (12)  SPECIAL PROVISIONS FOR PAYMENT OF CERTAIN

24  SURVIVOR BENEFITS.--Notwithstanding any provision of this

25  chapter to the contrary, for members with an effective date of

26  retirement, or date of death if prior to retirement, on or

27  after January 1, 1996, the named joint annuitant, as defined

28  in s. 121.021(28)(b), who is eligible to receive benefits

29  under subparagraph (6)(a)3. or subparagraph (6)(a)4., shall

30  receive the maximum monthly retirement benefit that would have

31  been payable to the member under subparagraph (6)(a)1.;

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 1  however, payment of such benefit shall cease the month the

 2  joint annuitant attains age 25 unless such joint annuitant is

 3  disabled and incapable of self-support, in which case,

 4  benefits shall cease when the joint annuitant is no longer

 5  disabled. The administrator may require proof of disability or

 6  continued disability in the same manner as is provided for a

 7  member seeking or receiving a disability retirement benefit

 8  under subsection (4).

 9         (13)  DEFERRED RETIREMENT OPTION PROGRAM.--In general,

10  and subject to the provisions of this section, the Deferred

11  Retirement Option Program, hereinafter referred to as the

12  DROP, is a program under which an eligible member of the

13  Florida Retirement System may elect to participate, deferring

14  receipt of retirement benefits while continuing employment

15  with his or her Florida Retirement System employer. The

16  deferred monthly benefits shall accrue in the System Trust

17  Fund on behalf of the participant, plus interest compounded

18  monthly, for the specified period of the DROP participation,

19  as provided in paragraph (c). Upon termination of employment,

20  the participant shall receive the total DROP benefits and

21  begin to receive the previously determined normal retirement

22  benefits. Participation in the DROP does not guarantee

23  employment for the specified period of DROP.

24         (a)  Eligibility of member to participate in the

25  DROP.--All active Florida Retirement System members in a

26  regularly established position, and all active members of

27  either the Teachers' Retirement System established in chapter

28  238 or the State and County Officers' and Employees'

29  Retirement System established in chapter 122 which systems are

30  consolidated within the Florida Retirement System under s.

31  

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 1  121.011, are eligible to elect participation in the DROP

 2  provided that:

 3         1.  The member is not a renewed member of the Florida

 4  Retirement System under s. 121.122, or a member of the State

 5  Community College System Optional Retirement Program under s.

 6  121.051, the Senior Management Service Optional Annuity

 7  Program under s. 121.055, or the optional retirement program

 8  for the State University System under s. 121.35.

 9         2.  Except as provided in subparagraph 6., election to

10  participate is made within 12 months immediately following the

11  date on which the member first reaches normal retirement date,

12  or, for a member who reaches normal retirement date based on

13  service before he or she reaches age 62, or age 55 for Special

14  Risk Class members, election to participate may be deferred to

15  the 12 months immediately following the date the member

16  attains 57, or age 52 for Special Risk Class members. For a

17  member who first reached normal retirement date or the

18  deferred eligibility date described above prior to the

19  effective date of this section, election to participate shall

20  be made within 12 months after the effective date of this

21  section. A member who fails to make an election within such

22  12-month limitation period shall forfeit all rights to

23  participate in the DROP. The member shall advise his or her

24  employer and the division in writing of the date on which the

25  DROP shall begin. Such beginning date may be subsequent to the

26  12-month election period, but must be within the 60-month

27  limitation period as provided in subparagraph (b)1. When

28  establishing eligibility of the member to participate in the

29  DROP for the 60-month maximum participation period, the member

30  may elect to include or exclude any optional service credit

31  purchased by the member from the total service used to

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 1  establish the normal retirement date. A member with dual

 2  normal retirement dates shall be eligible to elect to

 3  participate in DROP within 12 months after attaining normal

 4  retirement date in either class.

 5         3.  The employer of a member electing to participate in

 6  the DROP, or employers if dually employed, shall acknowledge

 7  in writing to the division the date the member's participation

 8  in the DROP begins and the date the member's employment and

 9  DROP participation will terminate.

10         4.  Simultaneous employment of a participant by

11  additional Florida Retirement System employers subsequent to

12  the commencement of participation in the DROP shall be

13  permissible provided such employers acknowledge in writing a

14  DROP termination date no later than the participant's existing

15  termination date or the 60-month limitation period as provided

16  in subparagraph (b)1.

17         5.  A DROP participant may change employers while

18  participating in the DROP, subject to the following:

19         a.  A change of employment must take place without a

20  break in service so that the member receives salary for each

21  month of continuous DROP participation. If a member receives

22  no salary during a month, DROP participation shall cease

23  unless the employer verifies a continuation of the employment

24  relationship for such participant pursuant to s.

25  121.021(39)(b).

26         b.  Such participant and new employer shall notify the

27  division on forms required by the division as to the identity

28  of the new employer.

29         c.  The new employer shall acknowledge, in writing, the

30  participant's DROP termination date, which may be extended but

31  not beyond the original 60-month period provided in

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 1  subparagraph (b)1., shall acknowledge liability for any

 2  additional retirement contributions and interest required if

 3  the participant fails to timely terminate employment, and

 4  shall be subject to the adjustment required in

 5  sub-subparagraph (c)5.d.

 6         6.  Effective July 1, 2001, for instructional personnel

 7  as defined in s. 1012.01(2), election to participate in the

 8  DROP shall be made at any time following the date on which the

 9  member first reaches normal retirement date. The member shall

10  advise his or her employer and the division in writing of the

11  date on which the Deferred Retirement Option Program shall

12  begin. When establishing eligibility of the member to

13  participate in the DROP for the 60-month maximum participation

14  period, as provided in subparagraph (b)1., the member may

15  elect to include or exclude any optional service credit

16  purchased by the member from the total service used to

17  establish the normal retirement date. A member with dual

18  normal retirement dates shall be eligible to elect to

19  participate in either class.

20         (b)  Participation in the DROP.--

21         1.  An eligible member may elect to participate in the

22  DROP for a period not to exceed a maximum of 60 calendar

23  months immediately following the date on which the member

24  first reaches his or her normal retirement date or the date to

25  which he or she is eligible to defer his or her election to

26  participate as provided in subparagraph (a)2. However, a

27  member who has reached normal retirement date prior to the

28  effective date of the DROP shall be eligible to participate in

29  the DROP for a period of time not to exceed 60 calendar months

30  immediately following the effective date of the DROP, except a

31  member of the Special Risk Class who has reached normal

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 1  retirement date prior to the effective date of the DROP and

 2  whose total accrued value exceeds 75 percent of average final

 3  compensation as of his or her effective date of retirement

 4  shall be eligible to participate in the DROP for no more than

 5  36 calendar months immediately following the effective date of

 6  the DROP.

 7         2.  Upon deciding to participate in the DROP, the

 8  member shall submit, on forms required by the division:

 9         a.  A written election to participate in the DROP;

10         b.  Selection of the DROP participation and termination

11  dates, which satisfy the limitations stated in paragraph (a)

12  and subparagraph 1. Such termination date shall be in a

13  binding letter of resignation with the employer, establishing

14  a deferred termination date. The member may change the

15  termination date within the limitations of subparagraph 1.,

16  but only with the written approval of his or her employer;

17         c.  A properly completed DROP application for service

18  retirement as provided in this section; and

19         d.  Any other information required by the division.

20         3.  The DROP participant shall be a retiree under the

21  Florida Retirement System for all purposes, except for

22  paragraph (5)(f) and subsection (9) and ss. 112.3173, 112.363,

23  121.053, and 121.122. However, participation in the DROP does

24  not alter the participant's employment status and such

25  employee shall not be deemed retired from employment until his

26  or her deferred resignation is effective and termination

27  occurs as provided in s. 121.021(39).

28         4.  Elected officers shall be eligible to participate

29  in the DROP subject to the following:

30         a.  An elected officer who reaches normal retirement

31  date during a term of office may defer the election to

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 1  participate in the DROP until the next succeeding term in that

 2  office. Such elected officer who exercises this option may

 3  participate in the DROP for up to 60 calendar months or a

 4  period of no longer than such succeeding term of office,

 5  whichever is less.

 6         b.  An elected or a nonelected participant may run for

 7  a term of office while participating in DROP and, if elected,

 8  extend the DROP termination date accordingly, except, however,

 9  if such additional term of office exceeds the 60-month

10  limitation established in subparagraph 1., and the officer

11  does not resign from office within such 60-month limitation,

12  the retirement and the participant' s DROP shall be null and

13  void as provided in sub-subparagraph (c)5.d.

14         c.  An elected officer who is dually employed and

15  elects to participate in DROP shall be required to satisfy the

16  definition of termination within the 60-month limitation

17  period as provided in subparagraph 1. for the nonelected

18  position and may continue employment as an elected officer as

19  provided in s. 121.053. The elected officer will be enrolled

20  as a renewed member in the Elected Officers' Class or the

21  Regular Class, as provided in ss. 121.053 and 121.22, on the

22  first day of the month after termination of employment in the

23  nonelected position and termination of DROP. Distribution of

24  the DROP benefits shall be made as provided in paragraph (c).

25         (c)  Benefits payable under the DROP.--

26         1.  Effective with the date of DROP participation, the

27  member's initial normal monthly benefit, including creditable

28  service, optional form of payment, and average final

29  compensation, and the effective date of retirement shall be

30  fixed. The beneficiary established under the Florida

31  Retirement System shall be the beneficiary eligible to receive

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 1  any DROP benefits payable if the DROP participant dies prior

 2  to the completion of the period of DROP participation. In the

 3  event a joint annuitant predeceases the member, the member may

 4  name a beneficiary to receive accumulated DROP benefits

 5  payable. Such retirement benefit, the annual cost of living

 6  adjustments provided in s. 121.101, and interest shall accrue

 7  monthly in the System Trust Fund. Such interest shall accrue

 8  at an effective annual rate of 6.5 percent compounded monthly,

 9  on the prior month's accumulated ending balance, up to the

10  month of termination or death.

11         2.  Each employee who elects to participate in the DROP

12  shall be allowed to elect to receive a lump-sum payment for

13  accrued annual leave earned in accordance with agency policy

14  upon beginning participation in the DROP. Such accumulated

15  leave payment certified to the division upon commencement of

16  DROP shall be included in the calculation of the member's

17  average final compensation. The employee electing such

18  lump-sum payment upon beginning participation in DROP will not

19  be eligible to receive a second lump-sum payment upon

20  termination, except to the extent the employee has earned

21  additional annual leave which combined with the original

22  payment does not exceed the maximum lump-sum payment allowed

23  by the employing agency's policy or rules. Such early lump-sum

24  payment shall be based on the hourly wage of the employee at

25  the time he or she begins participation in the DROP. If the

26  member elects to wait and receive such lump-sum payment upon

27  termination of DROP and termination of employment with the

28  employer, any accumulated leave payment made at that time

29  cannot be included in the member's retirement benefit, which

30  was determined and fixed by law when the employee elected to

31  participate in the DROP.

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 1         3.  The effective date of DROP participation and the

 2  effective date of retirement of a DROP participant shall be

 3  the first day of the month selected by the member to begin

 4  participation in the DROP, provided such date is properly

 5  established, with the written confirmation of the employer,

 6  and the approval of the division, on forms required by the

 7  division.

 8         4.  Normal retirement benefits and interest thereon

 9  shall continue to accrue in the DROP until the established

10  termination date of the DROP, or until the participant

11  terminates employment or dies prior to such date. Although

12  individual DROP accounts shall not be established, a separate

13  accounting of each participant's accrued benefits under the

14  DROP shall be calculated and provided to participants.

15         5.  At the conclusion of the participant's DROP, the

16  division shall distribute the participant's total accumulated

17  DROP benefits, subject to the following provisions:

18         a.  The division shall receive verification by the

19  participant's employer or employers that such participant has

20  terminated employment as provided in s. 121.021(39)(b).

21         b.  The terminated DROP participant or, if deceased,

22  such participant's named beneficiary, shall elect on forms

23  provided by the division to receive payment of the DROP

24  benefits in accordance with one of the options listed below.

25  For a participant or beneficiary who fails to elect a method

26  of payment within 60 days of termination of the DROP, the

27  division will pay a lump sum as provided in

28  sub-sub-subparagraph (I).

29         (I)  Lump sum.--All accrued DROP benefits, plus

30  interest, less withholding taxes remitted to the Internal

31  

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 1  Revenue Service, shall be paid to the DROP participant or

 2  surviving beneficiary.

 3         (II)  Direct rollover.--All accrued DROP benefits, plus

 4  interest, shall be paid from the DROP directly to the

 5  custodian of an eligible retirement plan as defined in s.

 6  402(c)(8)(B) of the Internal Revenue Code. However, in the

 7  case of an eligible rollover distribution to the surviving

 8  spouse of a deceased participant, an eligible retirement plan

 9  is an individual retirement account or an individual

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

11  Internal Revenue Code.

12         (III)  Partial lump sum.--A portion of the accrued DROP

13  benefits shall be paid to the DROP participant or surviving

14  spouse, less withholding taxes remitted to the Internal

15  Revenue Service, and the remaining DROP benefits shall be

16  transferred directly to the custodian of an eligible

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

18  Revenue Code. However, in the case of an eligible rollover

19  distribution to the surviving spouse of a deceased

20  participant, an eligible retirement plan is an individual

21  retirement account or an individual retirement annuity as

22  described in s. 402(c)(9) of the Internal Revenue Code. The

23  proportions shall be specified by the DROP participant or

24  surviving beneficiary.

25         c.  The form of payment selected by the DROP

26  participant or surviving beneficiary complies with the minimum

27  distribution requirements of the Internal Revenue Code.

28         d.  A DROP participant who fails to terminate

29  employment as defined in s. 121.021(39)(b) shall be deemed not

30  to be retired, and the DROP election shall be null and void.

31  Florida Retirement System membership shall be reestablished

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 1  retroactively to the date of the commencement of the DROP, and

 2  each employer with whom the participant continues employment

 3  shall be required to pay to the System Trust Fund the

 4  difference between the DROP contributions paid in paragraph

 5  (i) and the contributions required for the applicable Florida

 6  Retirement System class of membership during the period the

 7  member participated in the DROP, plus 6.5 percent interest

 8  compounded annually.

 9         6.  The accrued benefits of any DROP participant, and

10  any contributions accumulated under such program, shall not be

11  subject to assignment, execution, attachment, or to any legal

12  process whatsoever, except for qualified domestic relations

13  orders by a court of competent jurisdiction, income deduction

14  orders as provided in s. 61.1301, and federal income tax

15  levies.

16         7.  DROP participants shall not be eligible for

17  disability retirement benefits as provided in subsection (4).

18         (d)  Death benefits under the DROP.--

19         1.  Upon the death of a DROP participant, the named

20  beneficiary shall be entitled to apply for and receive the

21  accrued benefits in the DROP as provided in sub-subparagraph

22  (c)5.b.

23         2.  The normal retirement benefit accrued to the DROP

24  during the month of a participant's death shall be the final

25  monthly benefit credited for such DROP participant.

26         3.  Eligibility to participate in the DROP terminates

27  upon death of the participant. If the participant dies on or

28  after the effective date of enrollment in the DROP, but prior

29  to the first monthly benefit being credited to the DROP,

30  Florida Retirement System benefits shall be paid in accordance

31  with subparagraph (7)(c)1. or subparagraph 2.

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 1         4.  A DROP participants' survivors shall not be

 2  eligible to receive Florida Retirement System death benefits

 3  as provided in paragraph (7)(d).

 4         (e)  Cost-of-living adjustment.--On each July 1, the

 5  participants' normal retirement benefit shall be increased as

 6  provided in s. 121.101.

 7         (f)  Retiree health insurance subsidy.--DROP

 8  participants are not eligible to apply for the retiree health

 9  insurance subsidy payments as provided in s. 112.363 until

10  such participants have terminated employment and participation

11  in the DROP.

12         (g)  Renewed membership.--DROP participants shall not

13  be eligible for renewed membership in the Florida Retirement

14  System under ss. 121.053 and 121.122 until termination of

15  employment is effectuated as provided in s. 121.021(39)(b).

16         (h)  Employment limitation after DROP

17  participation.--Upon satisfying the definition of termination

18  of employment as provided in s. 121.021(39)(b), DROP

19  participants shall be subject to such reemployment limitations

20  as other retirees. Reemployment restrictions applicable to

21  retirees as provided in subsection (9) shall not apply to DROP

22  participants until their employment and participation in the

23  DROP are terminated.

24         (i)  Contributions.--

25         1.  All employers paying the salary of a DROP

26  participant filling a regularly established position shall

27  contribute 8.0 percent of such participant's gross

28  compensation for the period of July 1, 2002, through June 30,

29  2003, and 11.56 percent of such compensation thereafter, which

30  shall constitute the entire employer DROP contribution with

31  respect to such participant. Such contributions, payable to

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 1  the System Trust Fund in the same manner as required in s.

 2  121.071, shall be made as appropriate for each pay period and

 3  are in addition to contributions required for social security

 4  and the Retiree Health Insurance Subsidy Trust Fund. Such

 5  employer, social security, and health insurance subsidy

 6  contributions are not included in the DROP.

 7         2.  The employer shall, in addition to subparagraph 1.,

 8  also withhold one-half of the entire social security

 9  contribution required for the participant. Contributions for

10  social security by each participant and each employer, in the

11  amount required for social security coverage as now or

12  hereafter provided by the federal Social Security Act, shall

13  be in addition to contributions specified in subparagraph 1.

14         3.  All employers paying the salary of a DROP

15  participant filling a regularly established position shall

16  contribute the percent of such participant's gross

17  compensation required in s. 121.071(4), which shall constitute

18  the employer's health insurance subsidy contribution with

19  respect to such participant. Such contributions shall be

20  deposited by the administrator in the Retiree Health Insurance

21  Subsidy Trust Fund.

22         (j)  Forfeiture of retirement benefits.--Nothing in

23  this section shall be construed to remove DROP participants

24  from the scope of s. 8(d), Art. II of the State Constitution,

25  s. 112.3173, and paragraph (5)(f). DROP participants who

26  commit a specified felony offense while employed will be

27  subject to forfeiture of all retirement benefits, including

28  DROP benefits, pursuant to those provisions of law.

29         (k)  Administration of program.--The division shall

30  make such rules as are necessary for the effective and

31  efficient administration of this subsection. The division

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 1  shall not be required to advise members of the federal tax

 2  consequences of an election related to the DROP but may advise

 3  members to seek independent advice.

 4         (14)  PAYMENT OF BENEFITS.--This subsection applies to

 5  the payment of benefits to a payee (retiree or beneficiary)

 6  under the Florida Retirement System:

 7         (a)  Federal income tax shall be withheld in accordance

 8  with federal law, unless the payee elects otherwise on Form

 9  W-4P. The division shall prepare and distribute to each

10  recipient of monthly retirement benefits an appropriate income

11  tax form that reflects the recipient's income and federal

12  income tax withheld for the calendar year just ended.

13         (b)  Subject to approval by the division in accordance

14  with rule 60S-4.015, Florida Administrative Code, a payee

15  receiving retirement benefits under the Florida Retirement

16  System may also have the following payments deducted from his

17  or her monthly benefit:

18         1.  Premiums for life and health-related insurance

19  policies from approved companies.

20         2.  Life insurance premiums for the State Group Life

21  Insurance Plan, if authorized in writing by the payee and by

22  the Department of Management Services.

23         3.  Repayment of overpayments from the Florida

24  Retirement System Trust Fund, the State Employees' Health

25  Insurance Trust Fund, or the State Employees' Life Insurance

26  Trust Fund, upon notification of the payee.

27         4.  Payments to an alternate payee for alimony, child

28  support, or division of marital assets pursuant to a qualified

29  domestic relations order under s. 222.21 or an income

30  deduction order under s. 61.1301.

31  

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 1         5.  Payments to the Internal Revenue Service for

 2  federal income tax levies, upon notification of the division

 3  by the Internal Revenue Service.

 4         (c)  A payee shall notify the division of any change in

 5  his or her address. The division may suspend benefit payments

 6  to a payee if correspondence sent to the payee's mailing

 7  address is returned due to an incorrect address. Benefit

 8  payments shall be resumed upon notification to the division of

 9  the payee's new address.

10         (d)  A payee whose retirement benefits are reduced by

11  the application of maximum benefit limits under s. 415(b) of

12  the Internal Revenue Code, as specified in s. 121.30(5), shall

13  have the portion of his or her calculated benefit in the

14  Florida Retirement System defined benefit plan which exceeds

15  such federal limitation paid through the Florida Retirement

16  System Preservation of Benefits Plan, as provided in s.

17  121.1001.

18         (e)  No benefit may be reduced for the purpose of

19  preserving the member's eligibility for a federal program.

20         (f)  The division shall adopt rules establishing

21  procedures for determining that the persons to whom benefits

22  are being paid are still living. The division shall suspend

23  the benefits being paid to any payee when it is unable to

24  contact such payee and to confirm that he or she is still

25  living.

26         Section 25.  Paragraph (b) of subsection (7) of section

27  121.101, Florida Statutes, is amended to read:

28         121.101  Cost-of-living adjustment of benefits.--

29         (7)  The purpose of this subsection is to establish a

30  supplemental cost-of-living adjustment for certain retirees

31  and beneficiaries who receive monthly retirement benefits

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 1  under the provisions of this chapter and the existing systems

 2  consolidated therein, s. 112.05 for certain state officers and

 3  employees, and s. 238.171 for certain elderly incapacitated

 4  teachers.

 5         (b)  Application for the supplemental cost-of-living

 6  adjustment provided by this subsection shall include

 7  certification by the retiree or annuitant that he or she is

 8  not receiving, and is not eligible to receive, social security

 9  benefits and shall include written authorization for the

10  division department to have access to information from the

11  Social Security Administration concerning his or her

12  entitlement to, or eligibility for, social security benefits.

13  Such supplemental cost-of-living adjustment shall not be paid

14  unless and until the application requirements of this

15  paragraph are met.

16         Section 26.  Paragraph (e) of subsection (2) of section

17  121.111, Florida Statutes, is amended to read:

18         121.111  Credit for military service.--

19         (2)  Any member whose initial date of employment is

20  before January 1, 1987, who has military service as defined in

21  s. 121.021(20)(b), and who does not claim such service under

22  subsection (1) may receive creditable service for such

23  military service if:

24         (e)  Any member claiming credit under this subsection

25  must certify on the form prescribed by the division department

26  that credit for such service has not and will not be claimed

27  for retirement purposes under any other federal, state, or

28  local retirement or pension system where "length of service"

29  is a factor in determining the amount of compensation

30  received, except where credit for such service has been

31  granted in a pension system providing retired pay for

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 1  nonregular service as provided in paragraph (d). If the member

 2  dies prior to retirement, the member's beneficiary must make

 3  the required certification before credit may be claimed. If

 4  such certification is not made by the member or the member's

 5  beneficiary, credit for wartime military service shall not be

 6  allowed.

 7         Section 27.  Section 121.133, Florida Statutes, is

 8  amended to read:

 9         121.133  Cancellation of uncashed

10  warrants.--Notwithstanding the provisions of s. 17.26 or s.

11  717.123 to the contrary, effective July 1, 1998, if any state

12  warrant issued by the Comptroller for the payment of

13  retirement benefits from the Florida Retirement System Trust

14  Fund, or any other pension trust fund administered by the

15  division department, is not presented for payment within 1

16  year after the last day of the month in which it was

17  originally issued, the Comptroller shall cancel the benefit

18  warrant and credit the amount of the warrant to the Florida

19  Retirement System Trust Fund or other pension trust fund

20  administered by the division department, as appropriate. The

21  division department may provide for issuance of a replacement

22  warrant when deemed appropriate.

23         Section 28.  Section 121.135, Florida Statutes, is

24  amended to read:

25         121.135  Annual report to Legislature concerning the

26  Florida Retirement System state-administered retirement

27  systems.--The board department shall make to each regular

28  session of the Legislature a written report on the operation

29  and condition of the Florida Retirement System the

30  state-administered retirement systems.

31  

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 1         Section 29.  Section 121.136, Florida Statutes, is

 2  amended to read:

 3         121.136  Annual benefit statement to

 4  members.--Beginning January 1, 1993, and each January

 5  thereafter, the board department shall provide each active

 6  member of the Florida Retirement System with 5 or more years

 7  of creditable service an annual statement of benefits. Such

 8  statement should provide the member with basic data about the

 9  member's retirement account. Minimally, it shall include the

10  member's retirement plan, the amount of funds on deposit in

11  the retirement account, and an estimate of retirement

12  benefits.

13         Section 30.  Section 121.1905, Florida Statutes, is

14  amended to read:

15         121.1905  Division of Retirement; mission creation.--

16         (1)  There is created the Division of Retirement within

17  the Department of Management Services.

18         (2)  The mission of the Division of Retirement is to

19  provide quality and cost-effective retirement services as

20  measured by member satisfaction and by comparison with

21  administrative costs of comparable retirement systems.

22         Section 31.  Section 121.192, Florida Statutes, is

23  amended to read:

24         121.192  State retirement actuary.--The division

25  department may employ an actuary. Such actuary shall, together

26  with such other duties as the administrator assigns secretary

27  may assign, be responsible for:

28         (1)  Advising the administrator secretary on actuarial

29  matters of the state retirement systems.

30         (2)  Making periodic valuations of the retirement

31  systems.

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 1         (3)  Providing actuarial analyses to the Legislature

 2  concerning proposed changes in the retirement systems.

 3         (4)  Assisting the administrator secretary in

 4  developing a sound and modern retirement system.

 5         Section 32.  Section 121.193, Florida Statutes, is

 6  amended to read:

 7         121.193  External compliance audits.--

 8         (1)  The division department shall conduct audits of

 9  the payroll and personnel records of participating agencies.

10  These audits shall be made to determine the accuracy of

11  reports submitted to the division department and to assess the

12  degree of compliance with applicable statutes, rules, and

13  coverage agreements. Audits shall be scheduled on a regular

14  basis, as the result of concerns known to exist at an agency,

15  or as a followup to ensure agency action was taken to correct

16  deficiencies found in an earlier audit.

17         (2)  Upon request, participating agencies shall furnish

18  the division department with information and documents that

19  the division department requires to conduct the audit. The

20  division department may prescribe by rule the documents that

21  may be requested.

22         (3)  The division department shall review the agency's

23  operations concerning retirement and social security coverage.

24  Preliminary findings shall be discussed with agency personnel

25  at the close of the audit. An audit report of findings and

26  recommendations shall be submitted to division department

27  management and an audit summary letter shall be submitted to

28  the agency noting any concerns and necessary corrective

29  action.

30         Section 33.  Subsection (1) of section 121.22, Florida

31  Statutes, is amended to read:

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 1         121.22  State Retirement Commission; creation;

 2  membership; compensation.--

 3         (1)  There is created within the Division of Retirement

 4  Department of Management Services a State Retirement

 5  Commission composed of three members: One member who is

 6  retired under a state-supported retirement system administered

 7  by the division department; one member who is an active member

 8  of a state-supported retirement system that is administered by

 9  the division department; and one member who is neither a

10  retiree, beneficiary, or member of a state-supported

11  retirement system administered by the division department.

12  Each member shall have a different occupational background

13  from the other members.

14         Section 34.  Subsection (1) of section 121.23, Florida

15  Statutes, is amended to read:

16         121.23  Disability retirement and special risk

17  membership applications; Retirement Commission; powers and

18  duties; judicial review.--The provisions of this section apply

19  to all proceedings in which the administrator has made a

20  written final decision on the merits respecting applications

21  for disability retirement, reexamination of retired members

22  receiving disability benefits, applications for special risk

23  membership, and reexamination of special risk members in the

24  Florida Retirement System. The jurisdiction of the State

25  Retirement Commission under this section shall be limited to

26  written final decisions of the administrator on the merits.

27         (1)  In accordance with the rules of procedure adopted

28  by the division Department of Management Services, the

29  administrator shall:

30  

31  

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 1         (a)  Give reasonable notice of his or her proposed

 2  action, or decision to refuse action, together with a summary

 3  of the factual, legal, and policy grounds therefor.

 4         (b)  Give affected members, or their counsel, an

 5  opportunity to present to the division written evidence in

 6  opposition to the proposed action or refusal to act or a

 7  written statement challenging the grounds upon which the

 8  administrator has chosen to justify his or her action or

 9  inaction.

10         (c)  If the objections of the member are overruled,

11  provide a written explanation within 21 days.

12         Section 35.  Subsections (2), (3), and (4) of section

13  121.24, Florida Statutes, are amended to read:

14         121.24  Conduct of commission business; legal and other

15  assistance; compensation.--

16         (2)  Legal counsel for the commission may be provided

17  by the Department of Legal Affairs or by the division

18  Department of Management Services, with the concurrence of the

19  commission, and shall be paid by the division Department of

20  Management Services from the appropriate funds.

21         (3)  The division Department of Management Services

22  shall provide timely and appropriate training for newly

23  appointed members of the commission. Such training shall be

24  designed to acquaint new members of the commission with the

25  duties and responsibilities of the commission.

26         (4)  The division Department of Management Services

27  shall furnish administrative and secretarial assistance to the

28  commission and shall provide a place where the commission may

29  hold its meetings.

30         Section 36.  Subsection (9) of section 121.30, Florida

31  Statutes, is amended to read:

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 1         121.30  Statements of purpose and intent and other

 2  provisions required for qualification under the Internal

 3  Revenue Code of the United States.--Any other provisions in

 4  this chapter to the contrary notwithstanding, it is

 5  specifically provided that:

 6         (9)  The division department may adopt any rule

 7  necessary to accomplish the purpose of the section which is

 8  not inconsistent with this chapter.

 9         Section 37.  Paragraph (c) of subsection (2),

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

11  and (c) of subsection (4), and subsection (6) of section

12  121.35, Florida Statutes, are amended to read:

13         121.35  Optional retirement program for the State

14  University System.--

15         (2)  ELIGIBILITY FOR PARTICIPATION IN OPTIONAL

16  PROGRAM.--

17         (c)  For purposes of this section, the State Board of

18  Administration Department of Management Services is referred

19  to as the "board department."

20         (3)  ELECTION OF OPTIONAL PROGRAM.--

21         (c)  Any employee who becomes eligible to participate

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

23  1993, shall be a compulsory participant of the program unless

24  such employee elects membership in the Florida Retirement

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

26  the personnel officer of the employer. Any eligible employee

27  who fails to make such election within the prescribed time

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

29  optional retirement program.

30         1.  Any employee whose optional retirement program

31  eligibility results from initial employment shall be enrolled

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

 2  90 days after commencement of employment, the employee elects

 3  membership in the Florida Retirement System, such membership

 4  shall be effective retroactive to the date of commencement of

 5  employment.

 6         2.  Any employee whose optional retirement program

 7  eligibility results from a change in status due to the

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

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

10  appointment, promotion, transfer, or reclassification to a

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

12  the optional retirement program upon such change in status and

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

14  90 days after the date of such notification, the employee

15  elects to retain membership in the Florida Retirement System,

16  such continuation of membership shall be retroactive to the

17  date of the change in status.

18         3.  Notwithstanding the provisions of this paragraph,

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

20  participate in the Optional Retirement Program and who fails

21  to execute a contract with one of the approved companies and

22  to notify the board department in writing as provided in

23  subsection (4) within 90 days after the date of eligibility

24  shall be deemed to have elected membership in the Florida

25  Retirement System, except as provided in s. 121.051(1)(a).

26  This provision shall also apply to any employee who terminates

27  employment in an eligible position before executing the

28  required annuity contract and notifying the board department.

29  Such membership shall be retroactive to the date of

30  eligibility, and all appropriate contributions shall be

31  

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 1  transferred to the Florida Retirement System Trust Fund and

 2  the Health Insurance Subsidy Trust Fund.

 3         (e)  The election by an eligible employee to

 4  participate in the optional retirement program shall be

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

 6  eligibility requirements specified in subsection (2), except

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

 8  participates in the optional retirement program for 90 days or

 9  more and is subsequently employed in an administrative or

10  professional position which has been determined by the board

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

12  eligible for participation in the optional retirement program,

13  the employee shall continue participation in the optional

14  program so long as the employee meets the other eligibility

15  requirements for the program, except as provided in paragraph

16  (h).

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 board, pursuant

30  to s. 215.44(4), department shall deduct an amount approved by

31  the Legislature to provide for the administration of this

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 1  program. The payment of the contributions to the optional

 2  program which is required by this paragraph for each

 3  participant shall be made by the employer to the board

 4  department, which shall forward the contributions to the

 5  designated company or companies contracting for payment of

 6  benefits for the participant under the program. However, such

 7  contributions paid on behalf of an employee described in

 8  paragraph (3)(c) shall not be forwarded to a company and shall

 9  not begin to accrue interest until the employee has executed

10  an annuity contract and notified the board 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 paid

16  to the board 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  board 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         (6)  ADMINISTRATION OF PROGRAM.--

26         (a)  The optional retirement program authorized by this

27  section shall be administered by the board department. The

28  board department shall adopt rules establishing the

29  responsibilities of the State Board of Education and

30  institutions in the State University System in administering

31  the optional retirement program. The State Board of Education

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

 2  board department its recommendations for the contracts to be

 3  offered by the companies chosen by the board department. The

 4  recommendations of the board shall include the following:

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

 6  relation to the required contributions; and

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

 8  needs of the participants and the interests of the

 9  institutions in the recruitment and retention of eligible

10  employees.

11         (b)  After receiving and considering the

12  recommendations of the State Board of Education, the board

13  department shall designate no more than four companies from

14  which contracts may be purchased under the program and shall

15  approve the form and content of the optional retirement

16  program contracts. Upon application by a qualified Florida

17  domestic company, the board department shall give reasonable

18  notice to all other such companies that it intends to

19  designate one of such companies as a fifth company from which

20  contracts may be purchased pursuant to this section and that

21  they may apply for such designation prior to the deadline

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

23  notice and upon receipt of the recommendation of the State

24  Board of Education, the board department shall so designate

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

26  contracts may be purchased.

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

28  Administration shall review and make recommendations to the

29  department on the acceptability of all investment products

30  proposed by provider companies of the optional retirement

31  program before they are offered through annuity contracts to

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 1  the participants and may advise the department of any changes

 2  necessary to ensure that the optional retirement program

 3  offers an acceptable mix of investment products. The board

 4  department shall determine which make the final determination

 5  as to whether an investment products product will be included

 6  in approved for the program.

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

 8  participant in the optional retirement program shall be

 9  contained in a written program description which shall include

10  a report of pertinent financial and actuarial information on

11  the solvency and actuarial soundness of the program and the

12  benefits applicable to the participant. Such description shall

13  be furnished by the companies to each participant in the

14  program and to the division department upon commencement of

15  participation in the program and annually thereafter.

16         (e)  The division department shall ensure that each

17  participant in the optional retirement program is provided an

18  accounting of the total contribution and the annual

19  contribution made by and on behalf of such participant.

20         Section 38.  Paragraph (b) of subsection (3) and

21  paragraphs (a) and (b) of subsection (14) of section 121.40,

22  Florida Statutes, are amended to read:

23         121.40  Cooperative extension personnel at the

24  Institute of Food and Agricultural Sciences; supplemental

25  retirement benefits.--

26         (3)  DEFINITIONS.--The definitions provided in s.

27  121.021 shall not apply to this section except when

28  specifically cited. For the purposes of this section, the

29  following words or phrases have the respective meanings set

30  forth:

31  

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 1         (b)  "Division Department" means the Division of

 2  Retirement of the State Board of Administration Department of

 3  Management Services.

 4         (14)  ADMINISTRATION OF SYSTEM.--

 5         (a)  The division department shall make such rules as

 6  are necessary for the effective and efficient administration

 7  of this system. The executive director of the State Board of

 8  Administration secretary of the department shall be the

 9  administrator of the system. The funds to pay the expenses for

10  such administration are shall be appropriated from the

11  interest earned on investments made for the trust fund.

12         (b)  The division department is authorized to require

13  oaths, by affidavit or otherwise, and acknowledgments from

14  persons in connection with the administration of its duties

15  and responsibilities under this section.

16         Section 39.  Subsection (3) of section 121.45, Florida

17  Statutes, is amended to read:

18         121.45  Interstate compacts relating to pension

19  portability.--

20         (3)  ESTABLISHMENT OF COMPACTS.--

21         (a)  The division Department of Management Services is

22  authorized and directed to survey other state retirement

23  systems to determine if such retirement systems are interested

24  in developing an interstate compact with Florida.

25         (b)  If any such state is interested in pursuing the

26  matter, the division department shall confer with the other

27  state and the consulting actuaries of both states, and shall

28  present its findings to the committees having jurisdiction

29  over retirement matters in the Legislature, and to

30  representatives of affected certified bargaining units, in

31  order to determine the feasibility of developing a portability

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 1  compact, what groups should be covered, and the goals and

 2  priorities which should guide such development.

 3         (c)  Upon a determination that such a compact is

 4  feasible and upon request of the Legislature, the division

 5  department, together with its consulting actuaries, shall, in

 6  accordance with such said goals and priorities, develop a

 7  proposal under which retirement credit may be transferred to

 8  or from Florida in an actuarially sound manner.

 9         (d)  Once a proposal has been developed, the division

10  department shall contract with its consulting actuaries to

11  conduct an actuarial study of the proposal to determine the

12  cost to the Florida Retirement System Trust Fund and the State

13  of Florida.

14         (e)  After the actuarial study has been completed, the

15  division department shall present its findings and the

16  actuarial study to the Legislature for consideration. If

17  either house of the Legislature elects to enter into such a

18  compact, it shall be introduced in the form of a proposed

19  committee bill to the full Legislature during the same or next

20  regular session.

21         Section 40.  Subsection (2), paragraph (a) of

22  subsection (5), paragraphs (a), (b), (c), and (e) of

23  subsection (8), paragraph (c) of subsection (9), paragraphs

24  (a), (c), and (f) of subsection (10), subsection (11), and

25  paragraph (b) of subsection (12) and subsection (19) of

26  section 121.4501, Florida Statutes, are amended to read:

27         121.4501  Public Employee Optional Retirement

28  Program.--

29         (2)  DEFINITIONS.--As used in this part, the term:

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

31  sector company that is selected and approved by the state

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

 2  the Public Employee Optional Retirement Program. The term

 3  includes a bundled provider that offers participants a range

 4  of individually allocated or unallocated investment products

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

 6  which may include accounting and administration of individual

 7  participant benefits and contributions; individual participant

 8  recordkeeping; asset purchase, control, and safekeeping;

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

10  and contribution allocation; calculation of daily net asset

11  values; direct access to participant account information;

12  periodic reporting to participants, at least quarterly, on

13  account balances and transactions; guidance, advice, and

14  allocation services directly relating to its own investment

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

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

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

18  providing such guidance, advice, or allocation services does

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

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

21  that such prohibited transaction provisions do not apply to

22  the optional retirement program; a broad array of distribution

23  options; asset allocation; and retirement counseling and

24  education. Private sector companies include investment

25  management companies, insurance companies, depositories, and

26  mutual fund companies.

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

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

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

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

31  

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 1         (d)  "Department" means the Department of Management

 2  Services.

 3         (d)(e)  "Division" means the Division of Retirement of

 4  the State Board of Administration within the Department of

 5  Management Services.

 6         (e)(f)  "Eligible employee" means an officer or

 7  employee, 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 member participating in the

21  Deferred Retirement Option Program established under s.

22  121.091(13) or any employee participating in an optional

23  retirement program established under s. 121.051(2)(c) or s.

24  121.35.

25         (f)(g)  "Employer" means an employer, as defined in s.

26  121.021(10), of an eligible employee.

27         (g)(h)  "Participant" means an eligible employee who

28  elects to participate in the Public Employee Optional

29  Retirement Program and enrolls in such optional program as

30  provided in subsection (4).

31  

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 1         (h)(i)  "Public Employee Optional Retirement Program,"

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

 3  alternative defined contribution retirement program

 4  established under this section.

 5         (i)(j)  "State board" or "board" means the State Board

 6  of Administration.

 7         (j)(k)  "Trustees" means Trustees of the State Board of

 8  Administration.

 9         (k)(l)  "Vested" or "vesting" means the guarantee that

10  a participant is eligible to receive a retirement benefit upon

11  completion of the required years of service under the Public

12  Employee Optional Retirement Program.

13         (5)  CONTRIBUTIONS.--

14         (a)  Each employer shall contribute on behalf of each

15  participant in the Public Employee Optional Retirement

16  Program, as provided in part III of this chapter. The state

17  board, acting as plan fiduciary, shall ensure that all plan

18  assets are held in a trust, pursuant to s. 401 of the Internal

19  Revenue Code. The fiduciary shall ensure that said

20  contributions are allocated as follows:

21         1.  The portion earmarked for participant accounts

22  shall be used to purchase interests in the appropriate

23  investment vehicles for the accounts of each participant as

24  specified by the participant, or in accordance with paragraph

25  (4)(d).

26         2.  The portion earmarked for administrative and

27  educational expenses shall be transferred to the board.

28         3.  The portion earmarked for disability benefits shall

29  be transferred to the division department .

30         (8)  ADMINISTRATION OF PROGRAM.--

31  

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 1         (a)  The Public Employee Optional Retirement Program

 2  shall be administered by the state board and affected

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

 4  affidavit or otherwise, and acknowledgments from persons in

 5  connection with the administration of its duties and

 6  responsibilities under this chapter. No oath, by affidavit or

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

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

 9  participate in the program shall be no greater than necessary

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

11  rules establishing the role and responsibilities of affected

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

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

14  administering the Public Employee Optional Retirement Program.

15  The division department shall adopt rules necessary to

16  implement the optional program in coordination with the

17  defined benefit retirement program and the disability benefits

18  available under the optional program.

19         (b)1.  The state board shall select and contract with

20  one third-party administrator to provide administrative

21  services if those services cannot be competitively and

22  contractually provided by the division of Retirement within

23  the Department of Management Services. With the approval of

24  the state board, the third-party administrator may subcontract

25  with other organizations or individuals to provide components

26  of the administrative services. As a cost of administration,

27  the board may compensate any such contractor for its services,

28  in accordance with the terms of the contract, as is deemed

29  necessary or proper by the board. The third-party

30  administrator may not be an approved provider or be affiliated

31  with an approved provider.

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 1         2.  These administrative services may include, but are

 2  not limited to, enrollment of eligible employees, collection

 3  of employer contributions, disbursement of such contributions

 4  to approved providers in accordance with the allocation

 5  directions of participants; services relating to consolidated

 6  billing; individual and collective recordkeeping and

 7  accounting; asset purchase, control, and safekeeping; and

 8  direct disbursement of funds to and from the third-party

 9  administrator, the division, the board, employers,

10  participants, approved providers, and beneficiaries. This

11  section does not prevent or prohibit a bundled provider from

12  providing any administrative or customer service, including

13  accounting and administration of individual participant

14  benefits and contributions; individual participant

15  recordkeeping; asset purchase, control, and safekeeping;

16  direct execution of the participant' s instructions as to

17  asset and contribution allocation; calculation of daily net

18  asset values; direct access to participant account

19  information; or periodic reporting to participants, at least

20  quarterly, on account balances and transactions, if these

21  services are authorized by the board as part of the contract.

22         3.  The state board shall select and contract with one

23  or more organizations to provide educational services. With

24  approval of the board, the organizations may subcontract with

25  other organizations or individuals to provide components of

26  the educational services. As a cost of administration, the

27  board may compensate any such contractor for its services in

28  accordance with the terms of the contract, as is deemed

29  necessary or proper by the board. The education organization

30  may not be an approved provider or be affiliated with an

31  approved provider.

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 1         4.  Educational services shall be designed by the board

 2  and department to assist employers, eligible employees,

 3  participants, and beneficiaries in order to maintain

 4  compliance with United States Department of Labor regulations

 5  under s. 404(c) of the Employee Retirement Income Security Act

 6  of 1974 and to assist employees in their choice of defined

 7  benefit or defined contribution retirement alternatives.

 8  Educational services include, but are not limited to,

 9  disseminating educational materials; providing retirement

10  planning education; explaining the differences between the

11  defined benefit retirement plan and the defined contribution

12  retirement plan; and offering financial planning guidance on

13  matters such as investment diversification, investment risks,

14  investment costs, and asset allocation. An approved provider

15  may also provide educational information, including retirement

16  planning and investment allocation information concerning its

17  products and services.

18         (c)1.  In evaluating and selecting a third-party

19  administrator, the board shall establish criteria under which

20  it shall consider the relative capabilities and qualifications

21  of each proposed administrator. In developing such criteria,

22  the board shall consider:

23         a.  The administrator's demonstrated experience in

24  providing administrative services to public or private sector

25  retirement systems.

26         b.  The administrator's demonstrated experience in

27  providing daily valued recordkeeping to defined contribution

28  plans.

29         c.  The administrator's ability and willingness to

30  coordinate its activities with the Florida Retirement System

31  employers, the board, and the division, and to supply to such

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 1  employers, the board, and the division the information and

 2  data they require, including, but not limited to, monthly

 3  management reports, quarterly participant reports, and ad hoc

 4  reports requested by the department or board.

 5         d.  The cost-effectiveness and levels of the

 6  administrative services provided.

 7         e.  The administrator's ability to interact with the

 8  participants, the employers, the board, the division, and the

 9  providers; the means by which participants may access account

10  information, direct investment of contributions, make changes

11  to their accounts, transfer moneys between available

12  investment vehicles, and transfer moneys between investment

13  products; and any fees that apply to such activities.

14         f.  Any other factor deemed necessary by the Trustees

15  of the State Board of Administration.

16         g.  The recommendations of the Public Employee Optional

17  Retirement Program Advisory Committee established in

18  subsection (12).

19         2.  In evaluating and selecting an educational

20  provider, the board shall establish criteria under which it

21  shall consider the relative capabilities and qualifications of

22  each proposed educational provider. In developing such

23  criteria, the board shall consider:

24         a.  Demonstrated experience in providing educational

25  services to public or private sector retirement systems.

26         b.  Ability and willingness to coordinate its

27  activities with the Florida Retirement System employers, the

28  board, and the division, and to supply to such employers, the

29  board, and the division the information and data they require,

30  including, but not limited to, reports on educational

31  contacts.

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 1         c.  The cost-effectiveness and levels of the

 2  educational services provided.

 3         d.  Ability to provide educational services via

 4  different media, including, but not limited to, the Internet,

 5  personal contact, seminars, brochures, and newsletters.

 6         e.  Any other factor deemed necessary by the Trustees

 7  of the State Board of Administration.

 8         f.  The recommendations of the Public Employee Optional

 9  Retirement Program Advisory Committee established in

10  subsection (12).

11         3.  The establishment of the criteria shall be solely

12  within the discretion of the board.

13         (e)1.  The board may contract with any consultant for

14  professional services, including legal, consulting,

15  accounting, and actuarial services, deemed necessary to

16  implement and administer the optional program by the Trustees

17  of the State Board of Administration. The board may enter into

18  a contract with one or more vendors to provide low-cost

19  investment advice to participants, supplemental to education

20  provided by the third-party administrator. All fees under any

21  such contract shall be paid by those participants who choose

22  to use the services of the vendor.

23         2.  The department may contract with consultants for

24  professional services, including legal, consulting,

25  accounting, and actuarial services, deemed necessary to

26  implement and administer the optional program in coordination

27  with the defined benefit program of the Florida Retirement

28  System. The department, in coordination with the board, may

29  enter into a contract with the third-party administrator in

30  order to coordinate services common to the various programs

31  within the Florida Retirement System.

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 1         (9)  INVESTMENT OPTIONS OR PRODUCTS; PERFORMANCE

 2  REVIEW.--

 3         (c)  In evaluating and selecting approved providers and

 4  products, the board shall establish criteria under which it

 5  shall consider the relative capabilities and qualifications of

 6  each proposed provider company and product. In developing such

 7  criteria, the board shall consider the following to the extent

 8  such factors may be applied in connection with investment

 9  products, services, or providers:

10         1.  Experience in the United States providing

11  retirement products and related financial services under

12  defined contribution retirement plans.

13         2.  Financial strength and stability which shall be

14  evidenced by the highest ratings assigned by nationally

15  recognized rating services when comparing proposed providers

16  that are so rated.

17         3.  Intrastate and interstate portability of the

18  product offered, including early withdrawal options.

19         4.  Compliance with the Internal Revenue Code.

20         5.  The cost-effectiveness of the product provided and

21  the levels of service supporting the product relative to its

22  benefits and its characteristics, including, without

23  limitation, the level of risk borne by the provider.

24         6.  The provider company's ability and willingness to

25  coordinate its activities with Florida Retirement System

26  employers, the division department , and the board, and to

27  supply to such employers, the division department, and the

28  board the information and data they require.

29         7.  The methods available to participants to interact

30  with the provider company; the means by which participants may

31  access account information, direct investment of

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 1  contributions, make changes to their accounts, transfer moneys

 2  between available investment vehicles, and transfer moneys

 3  between provider companies; and any fees that apply to such

 4  activities.

 5         8.  The provider company's policies with respect to the

 6  transfer of individual account balances, contributions, and

 7  earnings thereon, both internally among investment products

 8  offered by the provider company and externally between

 9  approved providers, as well as any fees, charges, reductions,

10  or penalties that may be applied.

11         9.  An evaluation of specific investment products,

12  taking into account each product's experience in meeting its

13  investment return objectives net of all related fees,

14  expenses, and charges, including, but not limited to,

15  investment management fees, loads, distribution and marketing

16  fees, custody fees, recordkeeping fees, education fees,

17  annuity expenses, and consulting fees.

18         10.  Organizational factors, including, but not limited

19  to, financial solvency, organizational depth, and experience

20  in providing institutional and retail investment services.

21         (10)  EDUCATION COMPONENT.--

22         (a)  The board, in coordination with the department,

23  shall provide for an education component for system members in

24  a manner consistent with the provisions of this section. The

25  education component must be available to eligible employees at

26  least 90 days prior to the beginning date of the election

27  period for the employees of the respective types of employers.

28         (c)  The board, in coordination with the department,

29  shall provide for an initial and ongoing transfer education

30  component to provide system members with information necessary

31  

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 1  to make informed plan choice decisions. The transfer education

 2  component must include, but is not limited to, information on:

 3         1.  The amount of money available to a member to

 4  transfer to the defined contribution program.

 5         2.  The features of and differences between the defined

 6  benefit program and the defined contribution program, both

 7  generally and specifically, as those differences may affect

 8  the member.

 9         3.  The expected benefit available if the member were

10  to retire under each of the retirement programs, based on

11  appropriate alternative sets of assumptions.

12         4.  The rate of return from investments in the defined

13  contribution program and the period of time over which such

14  rate of return must be achieved to equal or exceed the

15  expected monthly benefit payable to the member under the

16  defined benefit program.

17         5.  The historical rates of return for the investment

18  alternatives available in the defined contribution programs.

19         6.  The benefits and historical rates of return on

20  investments available in a typical deferred compensation plan

21  or a typical plan under s. 403(b) of the Internal Revenue Code

22  for which the employee may be eligible.

23         7.  The program choices available to employees of the

24  State University System and the comparative benefits of each

25  available program, if applicable.

26         8.  Payout options available in each of the retirement

27  programs.

28         (f)  The board and the department shall also establish

29  a communication component to provide program information to

30  participating employers and the employers' personnel and

31  

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 1  payroll officers and to explain their respective

 2  responsibilities in conjunction with the retirement programs.

 3         (11)  PARTICIPANT INFORMATION REQUIREMENTS.--The board

 4  shall ensure that each participant is provided a quarterly

 5  statement that accounts for the contributions made on behalf

 6  of such participant; the interest and investment earnings

 7  thereon; and any fees, penalties, or other deductions that

 8  apply thereto. At a minimum, such statements must:

 9         (a)  Indicate the participant's investment options.

10         (b)  State the market value of the account at the close

11  of the current quarter and previous quarter.

12         (c)  Show account gains and losses for the period and

13  changes in account accumulation unit values for the period.

14         (d)  Itemize account contributions for the quarter.

15         (e)  Indicate any account changes due to adjustment of

16  contribution levels, reallocation of contributions, balance

17  transfers, or withdrawals.

18         (f)  Set forth any fees, charges, penalties, and

19  deductions that apply to the account.

20         (g)  Indicate the amount of the account in which the

21  participant is fully vested and the amount of the account in

22  which the participant is not vested.

23         (h)  Indicate each investment product's performance

24  relative to an appropriate market benchmark.

25  

26  The third-party administrator shall provide quarterly and

27  annual summary reports to the board and any other reports

28  requested by the department or the board. In any solicitation

29  or offer of coverage under an optional retirement program, a

30  provider company shall be governed by the contract readability

31  provisions of s. 627.4145, notwithstanding s. 627.4145(6)(c).

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 1  In addition, all descriptive materials must be prepared under

 2  the assumption that the participant is an unsophisticated

 3  investor. Provider companies must maintain an internal system

 4  of quality assurance, have proven functional systems that are

 5  date-calculation compliant, and be subject to a due-diligence

 6  inquiry that proves their capacity and fitness to undertake

 7  service responsibilities.

 8         (12)  ADVISORY COMMITTEES TO PROVIDE ADVICE AND

 9  ASSISTANCE.--The Investment Advisory Council and the Public

10  Employee Optional Retirement Program Advisory Committee shall

11  assist the board in implementing and administering the Public

12  Employee Optional Retirement Program.

13         (b)1.  The Public Employee Optional Retirement Program

14  Advisory Committee shall be composed of seven members. The

15  President of the Senate shall appoint two members, the Speaker

16  of the House of Representatives shall appoint two members, the

17  Governor shall appoint one member, the Treasurer shall appoint

18  one member, and the Comptroller shall appoint one member. The

19  members of the advisory committee shall elect a member as

20  chair. The appointments shall be made by September 1, 2000,

21  and the committee shall meet to organize by October 1, 2000.

22  The initial appointments shall be for a term of 24 months.

23  Each appointing authority shall fill any vacancy occurring

24  among its appointees for the remainder of the original term.

25         2.  The advisory committee shall make recommendations

26  on the selection of the third-party administrator, the

27  education providers, and the investment products and

28  providers. The committee's recommendations on the third-party

29  administrator must be forwarded to the Trustees of the State

30  Board of Administration by January 1, 2001. The

31  

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 1  recommendations on the education providers must be forwarded

 2  to the trustees by April 1, 2001.

 3         3.  The advisory committee's recommendations and

 4  activities shall be guided by the best interests of the

 5  employees, considering the interests of employers, and the

 6  intent of the Legislature in establishing the Public Employee

 7  Optional Retirement Program.

 8         4.  The staff of the state board and the department

 9  shall assist the advisory committee.

10         (19)  PARTICIPANT RECORDS.--All personal identifying

11  information regarding a participant in the Public Employee

12  Optional Retirement Program contained in Florida Retirement

13  System records held by the State Board of Administration or

14  the Department of Management Services, or its their agents,

15  employees, or contractors is exempt from the provisions of s.

16  119.07(1) and s. 24(a), Art. I of the State Constitution.  The

17  department or board may use such exempt information as

18  necessary in any legal or administrative proceeding. This

19  subsection is subject to the Open Government Sunset Review Act

20  of 1995 in accordance with s. 119.15, and shall stand repealed

21  October 2, 2007, unless reviewed and saved from repeal through

22  reenactment by the Legislature.

23         Section 41.  Section 121.4503, Florida Statutes, is

24  amended to read:

25         121.4503  Florida Retirement System Contributions

26  Clearing Trust Fund.--

27         (1)  The Florida Retirement System Contributions

28  Clearing Trust Fund is created as a clearing fund for

29  disbursing employer contributions to the component plans of

30  the Florida Retirement System and shall be administered by the

31  State Board of Administration Department of Management

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 1  Services. Funds shall be credited to the trust fund as

 2  provided in this chapter and shall be held in trust for the

 3  contributing employers until such time as the assets are

 4  transferred by the board department to the Florida Retirement

 5  System Trust Fund, the Public Employee Optional Retirement

 6  Program Trust Fund, or other trust funds as authorized by law,

 7  to be used for the purposes of this chapter. The trust fund is

 8  exempt from the service charges imposed by s. 215.20.

 9         (2)  The Florida Retirement System Contributions

10  Clearing Trust Fund is a clearing trust fund of the State

11  Board of Administration Department of Management Services

12  pursuant to s. 19(f), Art. III of the State Constitution, and

13  is not subject to termination.

14         (3)  The State Board of Administration Department of

15  Management Services may adopt rules governing the receipt and

16  disbursement of amounts received by the Florida Retirement

17  System Contributions Clearing Trust Fund from employers

18  contributing to the component plans of the Florida Retirement

19  System.

20         Section 42.  Section 121.591, Florida Statutes, is

21  amended to read:

22         121.591  Benefits payable under the Public Employee

23  Optional Retirement Program of the Florida Retirement

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

25  the member has terminated employment as provided in s.

26  121.021(39)(a) or is deceased and a proper application has

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

28  division department. The state board or division department,

29  as appropriate, may cancel an application for retirement

30  benefits when the member or beneficiary fails to timely

31  provide the information and documents required by this chapter

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 1  and the rules of the state board and division department. In

 2  accordance with their respective responsibilities as provided

 3  herein, the State Board of Administration and the division

 4  Department of Management Services shall adopt rules

 5  establishing procedures for application for retirement

 6  benefits and for the cancellation of such application when the

 7  required information or documents are not received.

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

 9  Optional Retirement Program:

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

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

12  subsection in accordance with the following terms and

13  conditions:

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

15  only to a participant.

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

17  administrator or designated approved providers in accordance

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

19  policy.

20         3.  To receive benefits under this subsection, the

21  participant must be terminated from all employment with all

22  Florida Retirement System employers, as provided in s.

23  121.021(39).

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

25  benefits upon termination of employment, the participant must

26  submit a written application to the third-party administrator

27  indicating his or her preferred distribution date and

28  selecting an authorized method of distribution as provided in

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

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

31  federal requirements.

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

 2  properly executed application for distribution of benefits,

 3  the total accumulated benefit shall be payable to the

 4  participant, as:

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

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

 7  accrued benefits, plus interest and investment earnings, are

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

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

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

11         3.  Periodic distributions, as authorized by the state

12  board.

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

14  under this subsection are payable in lieu of the benefits

15  which would otherwise be payable under the provisions of

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

17  employer contributions made under s. 121.571, transferred

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

19  interest and earnings thereon. Pursuant thereto:

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

21  disability benefits under this subsection:

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

23  Employee Optional Retirement Program accounts, including

24  vested and nonvested accumulations as described in s.

25  121.4501(6), shall be transferred from such individual

26  accounts to the Division of Retirement for deposit in the

27  disability account of the Florida Retirement System Trust

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

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

30  disability accounts of the Florida Retirement System Trust

31  

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 1  Fund based on actual earnings of the Florida Retirement System

 2  Trust Fund.

 3         2.  If the participant has retained retirement credit

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

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

 6  sum representing the actuarial present value of such credit

 7  within the Florida Retirement System Trust Fund shall be

 8  reassigned by the Division of Retirement from the defined

 9  benefit program to the disability program as implemented under

10  this subsection and shall be deposited in the disability

11  account of the Florida Retirement System Trust Fund. Such

12  moneys shall be separately accounted for.

13         (b)  Disability retirement; entitlement.--

14         1.  A participant of the Public Employee Optional

15  Retirement Program who becomes totally and permanently

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

17  years of creditable service, or a participant who becomes

18  totally and permanently disabled in the line of duty

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

20  to a monthly disability benefit as provided herein.

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

22  service required to vest for regular disability benefits, or

23  toward the creditable service used in calculating a

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

25  service must be creditable service as described below:

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

27  Public Employee Optional Retirement Program will be considered

28  creditable service, except as provided in subparagraph d.

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

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

31  

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

 2  all such service will be considered creditable service.

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

 4  or her participant accounts a sum representing the present

 5  value of his or her retirement credit under the defined

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

 7  period of service under the defined benefit program

 8  represented in the present value amounts transferred will be

 9  considered creditable service for purposes of vesting for

10  disability benefits, except as provided in subparagraph d.

11         d.  Whenever a participant has terminated employment

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

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

14  distributed funds is forfeited for purposes of this

15  subsection.

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

17  effective retirement date for a participant who applies and is

18  approved for disability retirement shall be established as

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

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

21  shall be considered totally and permanently disabled if, in

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

23  of a medically determinable physical or mental impairment,

24  from rendering useful and efficient service as an officer or

25  employee.

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

27  approving payment of any disability retirement benefit, shall

28  require proof that the participant is totally and permanently

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

30  defined benefit program of the Florida Retirement System under

31  s. 121.091(4)(c).

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

 2  disability retirement of a participant under this subsection,

 3  the participant shall receive a monthly benefit that shall

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

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

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

 7  his or her lifetime and continued disability. All disability

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

 9  disability account of the Florida Retirement System Trust Fund

10  established under this subsection.

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

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

13  manner as provided for members of the defined benefit program

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

15  such purpose, creditable service under both the defined

16  benefit program and the Public Employee Optional Retirement

17  Program of the Florida Retirement System shall be applicable

18  as provided under paragraph (b).

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

20  application for disability retirement has been denied may

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

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

23  benefit program of the Florida Retirement System under s.

24  121.091(4)(g).

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

26  disability benefits under this subsection, the applicant shall

27  be transferred to the defined benefit program of the Florida

28  Retirement System, effective upon his or her disability

29  retirement effective date.

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

31  application for disability benefits is approved may cancel his

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 1  or her application for disability benefits, provided that the

 2  cancellation request is received by the division before a

 3  disability retirement warrant has been deposited, cashed, or

 4  received by direct deposit. Upon such cancellation:

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

 6  program under paragraph (i) shall be nullified;

 7         2.  The participant shall be retroactively reinstated

 8  in the Public Employee Optional Retirement Program without

 9  hiatus;

10         3.  All funds transferred to the Florida Retirement

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

12  participant accounts from which such funds were drawn; and

13         4.  The participant may elect to receive the benefit

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

15  disability benefits as provided under this subsection.

16         (k)  Recovery from disability.--

17         1.  The division may require periodic reexaminations at

18  the expense of the disability program account of the Florida

19  Retirement System Trust Fund. Except as otherwise provided in

20  subparagraph 2., the requirements, procedures, and

21  restrictions relating to the conduct and review of such

22  reexaminations, discontinuation or termination of benefits,

23  reentry into employment, disability retirement after reentry

24  into covered employment, and all other matters relating to

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

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

27         2.  Upon recovery from disability, any recipient of

28  disability retirement benefits under this subsection shall be

29  a compulsory member of the Public Employee Optional Retirement

30  Program of the Florida Retirement System. The net difference

31  between the recipient's original account balance transferred

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 1  to the Florida Retirement System Trust Fund, including

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

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

 4  provided in sub-subparagraph a.

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

 6  subtracted from that portion of the transferred account

 7  balance consisting of vested accumulations as described under

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

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

10  any remaining portion consisting of nonvested accumulations as

11  described under s. 121.4501(6).

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

13  be retained within the disability account of the Florida

14  Retirement System Trust Fund. Any remaining account balance

15  shall be transferred to the third-party administrator for

16  disposition as provided under sub-subparagraph c. or

17  sub-subparagraph d., as appropriate.

18         c.  If the recipient returns to covered employment,

19  transferred amounts shall be deposited in individual accounts

20  under the Public Employee Optional Retirement Program, as

21  directed by the participant. Vested and nonvested amounts

22  shall be separately accounted for as provided in s.

23  121.4501(6).

24         d.  If the recipient fails to return to covered

25  employment upon recovery from disability:

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

27  individual accounts under the Public Employee Optional

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

29  be payable as provided in subsection (1).

30  

31  

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

 2  suspense account and shall be forfeitable after 5 years as

 3  provided in s. 121.4501(6).

 4         3.  If present value was reassigned from the defined

 5  benefit program to the disability program of the Florida

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

 7  full present value amount shall be returned to the defined

 8  benefit account within the Florida Retirement System Trust

 9  Fund and the affected individual's associated retirement

10  credit under the defined benefit program shall be reinstated

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

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

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

14  shall not be entitled to receive a disability retirement

15  benefit if the disability results from any injury or disease

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

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

18  of Supreme Court.--

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

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

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

22  elected constitutional judicial officer, including service as

23  a judicial officer in any court abolished pursuant to Art. V

24  of the State Constitution, and who is retired for disability

25  by order of the Supreme Court upon recommendation of the

26  Judicial Qualifications Commission pursuant to the provisions

27  of Art. V of the State Constitution, the participant's Option

28  1 monthly disability benefit amount as provided in s.

29  121.091(6)(a)1. shall be two-thirds of his or her monthly

30  compensation as of the participant's disability retirement

31  date.  Such a participant may alternatively elect to receive

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 1  an actuarially adjusted disability retirement benefit under

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

 3  receive the normal benefit payable under the Public Employee

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

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

 6  Public Employee Optional Retirement Program of the Florida

 7  Retirement System is retired for disability by order of the

 8  Supreme Court upon recommendation of the Judicial

 9  Qualifications Commission pursuant to the provisions of Art. V

10  of the State Constitution and elects to receive a monthly

11  disability benefit under the provisions of this paragraph:

12         a.  Any present value amount that was transferred to

13  his or her program account and all employer contributions made

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

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

16  disability account of the Florida Retirement System Trust

17  Fund; and

18         b.  The monthly benefits payable under this paragraph

19  for any affected justice or judge retired from the Florida

20  Retirement System pursuant to Art. V of the State Constitution

21  shall be paid from the disability account of the Florida

22  Retirement System Trust Fund.

23         (n)  Death of retiree or beneficiary.--Upon the death

24  of a disabled retiree or beneficiary thereof who is receiving

25  monthly benefits under this subsection, the monthly benefits

26  shall be paid through the last day of the month of death and

27  shall terminate, or be adjusted, if applicable, as of that

28  date in accordance with the optional form of benefit selected

29  at the time of retirement. The deceased disabled retiree's

30  beneficiary shall also receive the amount of the participant's

31  remaining account balance, if any, in the Florida Retirement

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 1  System Trust Fund. The Division of Retirement Department of

 2  Management Services may adopt rules necessary to administer

 3  this paragraph.

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

 5  Optional Retirement Program:

 6         (a)  Survivor benefits shall be payable in accordance

 7  with the following terms and conditions:

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

 9  only to a participant's beneficiary or beneficiaries as

10  designated by the participant. If a participant designates a

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

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

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

14  more contingent beneficiaries to receive any benefits

15  remaining upon the death of the primary beneficiary or

16  beneficiaries.

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

18  administrator or designated approved providers in accordance

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

20  policy.

21         3.  To receive benefits under this subsection, the

22  participant must be deceased.

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

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

25  taxes remitted to the Internal Revenue Service, shall be

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

27  participant's designated beneficiary or beneficiaries, or to

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

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

30  survivors of participants under the Public Employee Optional

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

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

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

 3  discretion.

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

 5  properly executed application for distribution of benefits,

 6  the total accumulated benefit shall be payable by the

 7  third-party administrator to the participant's surviving

 8  beneficiary or beneficiaries, as:

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

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

11         2.  An eligible rollover distribution on behalf of the

12  surviving spouse of a deceased participant, whereby all

13  accrued benefits, plus interest and investment earnings, are

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

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

16  402(c)(8)(B) of the Internal Revenue Code, on behalf of the

17  surviving spouse; or

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

19  accrued benefit is paid to the deceased participant's

20  surviving spouse or other designated beneficiaries, less

21  withholding taxes remitted to the Internal Revenue Service,

22  and the remaining amount is transferred directly to the

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

24  402(c)(8)(B) of the Internal Revenue Code, on behalf of the

25  surviving spouse. The proportions must be specified by the

26  participant or the surviving beneficiary.

27  

28  This paragraph does not abrogate other applicable provisions

29  of state or federal law providing for payment of death

30  benefits.

31  

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

 2  to any person under the Public Employee Optional Retirement

 3  Program, and any contributions accumulated under such program,

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

 5  legal process, except for qualified domestic relations orders

 6  by a court of competent jurisdiction, income deduction orders

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

 8         Section 43.  Section 121.5911, Florida Statutes, is

 9  amended to read:

10         121.5911  Disability retirement program; qualified

11  status; rulemaking authority.--It is the intent of the

12  Legislature that the disability retirement program for

13  participants of the Public Employee Optional Retirement

14  Program as created in this act must meet all applicable

15  requirements of federal law for a qualified plan.  The

16  Department of Management Services or the Division of

17  Retirement shall seek a private letter ruling from the

18  Internal Revenue Service on the disability retirement program

19  for participants of the Public Employee Optional Retirement

20  Program. Consistent with the private letter ruling, the

21  division Department of Management Services shall adopt any

22  necessary rules required to maintain the qualified status of

23  the disability retirement program and the Florida Retirement

24  System defined benefit plan.

25         Section 44.  Subsection (1) of section 121.72, Florida

26  Statutes, is amended to read:

27         121.72  Allocations to optional retirement program

28  participant accounts; percentage amounts.--

29         (1)  The allocations established in subsection (4)

30  shall fund retirement benefits under the optional retirement

31  program and shall be transferred monthly by the State Board of

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 1  Administration Division of Retirement from the Florida

 2  Retirement System Contributions Clearing Trust Fund to the

 3  third-party administrator for deposit in each participating

 4  employee's individual account based on the membership class of

 5  the participant.

 6         Section 45.  Subsection (1) of section 121.73, Florida

 7  Statutes, is amended to read:

 8         121.73  Allocations for optional retirement program

 9  participant disability coverage; percentage amounts.--

10         (1)  The allocations established in subsection (3)

11  shall be used to provide disability coverage for participants

12  in the optional retirement program and shall be transferred

13  monthly by the State Board of Administration Division of

14  Retirement from the Florida Retirement System Contributions

15  Clearing Trust Fund to the disability account of the Florida

16  Retirement System Trust Fund.

17         Section 46.  Section 121.74, Florida Statutes, is

18  amended to read:

19         121.74  Administrative and educational

20  expenses.--Effective July 1, 2002, in addition to

21  contributions required under s. 121.71, employers

22  participating in the Florida Retirement System shall

23  contribute an amount equal to 0.15 percent of the payroll

24  reported for each class or subclass of Florida Retirement

25  System membership, which amount shall be transferred by the

26  State Board of Administration Division of Retirement from the

27  Florida Retirement System Contributions Clearing Trust Fund to

28  the board's State Board of Administration's Administrative

29  Trust Fund to offset the costs of administering the optional

30  retirement program and the costs of providing educational

31  services to participants in the defined benefit program and

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 1  the optional retirement program. Approval of the Trustees of

 2  the State Board of Administration is required prior to the

 3  expenditure of these funds. Payments for third-party

 4  administrative or educational expenses shall be made only

 5  pursuant to the terms of the approved contracts for such

 6  services.

 7         Section 47.  Subsection (6) of section 175.032, Florida

 8  Statutes, is amended to read:

 9         175.032  Definitions.--For any municipality, special

10  fire control district, chapter plan, local law municipality,

11  local law special fire control district, or local law plan

12  under this chapter, the following words and phrases have the

13  following meanings:

14         (6)  "Division" means the Division of Retirement of the

15  State Board of Administration Department of Management

16  Services.

17         Section 48.  Section 175.1215, Florida Statutes, is

18  amended to read:

19         175.1215  Police and Firefighters' Premium Tax Trust

20  Fund.--The Police and Firefighters' Premium Tax Trust Fund is

21  created, to be administered by the Division of Retirement of

22  the Department of Management Services. Funds credited to the

23  trust fund, as provided in chapter 95-250, Laws of Florida, or

24  similar legislation, shall be expended for the purposes set

25  forth in that legislation.

26         Section 49.  Subsection (7) of section 185.02, Florida

27  Statutes, is amended to read:

28         185.02  Definitions.--For any municipality, chapter

29  plan, local law municipality, or local law plan under this

30  chapter, the following words and phrases as used in this

31  

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 1  chapter shall have the following meanings, unless a different

 2  meaning is plainly required by the context:

 3         (7)  "Division" means the Division of Retirement of the

 4  State Board of Administration Department of Management

 5  Services.

 6         Section 50.  Section 185.105, Florida Statutes, is

 7  amended to read:

 8         185.105  Police and Firefighters' Premium Tax Trust

 9  Fund.--The Police and Firefighters' Premium Tax Trust Fund is

10  created, to be administered by the Division of Retirement of

11  the Department of Management Services. Funds credited to the

12  trust fund, as provided in chapter 95-250, Laws of Florida, or

13  similar legislation, shall be expended for the purposes set

14  forth in that legislation.

15         Section 51.  Subsection (1) of section 185.23, Florida

16  Statutes, is amended to read:

17         185.23  Duties of Division of Retirement; rulemaking

18  authority; investments by State Board of Administration.--

19         (1)  The division shall be responsible for the daily

20  oversight and monitoring for actuarial soundness of the

21  municipal police officers' retirement plans, whether chapter

22  or local law plans, established under this chapter, for

23  receiving and holding the premium tax moneys collected under

24  this chapter, and, upon determining compliance with the

25  provisions of this chapter, for disbursing those moneys to the

26  municipal police officers' retirement plans.  The funds to pay

27  the expenses for such administration are shall be annually

28  appropriated from the interest and investment income earned on

29  moneys deposited in the trust fund.

30         Section 52.  Subsection (3) of section 215.28, Florida

31  Statutes, is amended to read:

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 1         215.28  United States securities, purchase by state and

 2  county officers and employees; deductions from salary.--

 3         (3)  All deductions so made by any such disbursing

 4  authority shall be deposited in a trust account separate and

 5  apart from the funds of the state, county, or subordinate

 6  agency. Such account will be subject to withdrawal only for

 7  the purchase of United States securities on behalf of officers

 8  and employees, or for refunds to such persons in accordance

 9  with the provisions of this law. Whenever the sum of $18.75 or

10  the purchase price of the security requested to be purchased

11  is accumulated from deductions so made from the salaries or

12  wages of an officer or employee, such disbursing agent shall

13  arrange the purchase of the bond or security applied for and

14  have it registered in the name or names requested in the

15  deduction authorization. Securities so purchased will be

16  delivered in such manner as may be convenient for the issuing

17  agent and the purchaser. Any interest earned on moneys in such

18  account while awaiting the accumulation of the purchase price

19  of the security shall be transferred to the Florida Retirement

20  System Trust Fund as reimbursement for administrative costs

21  incurred by the Division of Retirement of the State Board of

22  Administration Department of Management Services under this

23  section.

24         Section 53.  Subsection (7) of section 215.44, Florida

25  Statutes, is amended to read:

26         215.44  Board of Administration; powers and duties in

27  relation to investment of trust funds.--

28         (7)  Investment and debt purchasing procedures and

29  contracts of funds held in trust by the State Board of

30  Administration, whether directly or incidentally related to

31  the investment or debt transactions, and purchases of

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 1  commodities or services related to the administration of

 2  pension benefits, are exempt from the provisions of chapter

 3  287.

 4         Section 54.  Subsection (3) of section 215.50, Florida

 5  Statutes, is amended to read:

 6         215.50  Custody of securities purchased; income.--

 7         (3)  The Treasurer, as custodian of securities owned by

 8  the Florida Retirement System Trust Fund and the Florida

 9  Survivor Benefit Trust Fund, shall collect the interest,

10  dividends, prepayments, maturities, proceeds from sales, and

11  other income accruing from such assets. As such income is

12  collected by the Treasurer, it shall be deposited directly

13  into a commercial bank to the credit of the State Board of

14  Administration. Such bank accounts as may be required for this

15  purpose shall offer satisfactory collateral security as

16  provided by chapter 280. In the event funds so deposited

17  according to the provisions of this section are required for

18  the purpose of paying benefits or other operational needs, the

19  State Board of Administration shall remit to the Florida

20  Retirement System Trust Fund in the State Treasury such

21  amounts as are required may be requested by the Department of

22  Management Services.

23         Section 55.  Section 215.52, Florida Statutes, is

24  amended to read:

25         215.52  Rules and regulations.--The board may adopt

26  shall have the power and authority to make reasonable rules

27  and regulations necessary to implement general law conferring

28  powers and duties upon it carry out the provisions of ss.

29  215.44-215.53.

30         Section 56.  Subsection (18) of section 238.01, Florida

31  Statutes, is amended to read:

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 1         238.01  Definitions.--The following words and phrases

 2  as used in this chapter shall have the following meanings

 3  unless a different meaning is plainly required by the context:

 4         (18)  "Actuarial equivalent" means a benefit of equal

 5  value when computed at regular interest upon the basis of the

 6  mortality tables adopted by the department division.

 7         Section 57.  Subsection (5) of section 238.05, Florida

 8  Statutes, is amended to read:

 9         238.05  Membership.--

10         (5)  Any person may, at his or her option, choose not

11  to become a member of the Teachers' Retirement System when:

12         (a)  An election is made to the department division not

13  to become a member within 60 days after of appointment to a

14  teaching position as defined in this chapter or within 60 days

15  from the date this law becomes effective.

16         (b)  Any election hereunder will not affect any rights

17  accrued in the retirement system to which the person belongs.

18         Section 58.  Subsections (1), (3), (4), and (6) of

19  section 238.06, Florida Statutes, are amended to read:

20         238.06  Membership application, creditable service, and

21  time for making contributions.--

22         (1)  Under such rules and regulations as the department

23  Division of Retirement shall adopt, each teacher upon becoming

24  a member shall file with the department division an

25  application showing date of birth and such other necessary

26  information as the department division may require for the

27  proper operation of the retirement system. Until such

28  application is filed no teacher or his or her beneficiary

29  shall be eligible to receive any benefits under this chapter.

30  If a member has been a teacher in Florida, he or she shall

31  itemize on such application all service as a teacher rendered

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 1  prior to the date of establishment of the retirement system,

 2  including service in a similar capacity in other states

 3  rendered by him or her prior to July 1, 1939, for which he or

 4  she claims credit. Persons not eligible to membership in the

 5  retirement system as of July 1, 1939, and now eligible to

 6  membership shall file with the department division an

 7  application and shall meet with all other requirements

 8  prescribed above.  All such persons shall be entitled to prior

 9  service credit for the years prior to July 1, 1939, as

10  prescribed in subsection (4). Any person made eligible to

11  membership in the retirement system by provisions of this law

12  may elect:

13         (a)  To make no contributions for the school years

14  between 1939-1940 and 1952-1953, inclusive, and if he or she

15  so elects, shall be entitled to no membership credit for those

16  years except as otherwise provided in this chapter.

17         (b)  To make contributions with accumulated regular

18  interest to the retirement system on or before the time of

19  retirement of such member for such years after July 1, 1939,

20  as he or she served as a teacher, at the prescribed rate on

21  the basis of his or her salary for those years, and if such

22  contributions are made, he or she shall be entitled to

23  membership service credit for such years.

24         (3)  The department division shall fix and determine by

25  appropriate rules and regulations how much service in any year

26  is the equivalent of a year of service, but in no case shall

27  it allow any credit for a period of absence without pay of

28  more than a month's duration nor shall it allow credit for

29  more than 1 year of service for all service in any school

30  year.

31  

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 1         (4)  Subject to the above restriction and to such other

 2  rules and regulations as the department division shall adopt,

 3  the department division shall verify, as soon as practicable

 4  after the filing of the application, the statement of service

 5  therein claimed and shall issue to each person who becomes a

 6  member or any person with prior teaching service in the state

 7  who becomes a member of the retirement system, a prior service

 8  certificate certifying the length of service with which he or

 9  she is credited on the basis of his or her statement of

10  service.  Such prior service credit shall include credit for

11  service rendered prior to date of establishment as a teacher

12  within the state or in a similar capacity outside the state

13  but not more than 10 years of credit for service outside the

14  state shall be included.  Credit for prior service outside the

15  state may be claimed only by a person employed as a teacher in

16  the state prior to July 1, 1939; provided that any person who

17  became a member of the system after July 1, 1939, but prior to

18  July 1, 1955, and remained a member for 10 years shall be

19  entitled to receive out-of-state prior service credit for a

20  period not exceeding 10 years; provided that any person with

21  out-of-state service who became a member of the system after

22  July 1, 1939, but prior to July 1, 1955, and remained a member

23  for 10 years shall be entitled to receive membership service

24  credit for a period of not exceeding 10 years, including

25  credit for the period covered by service in the Armed Forces

26  of the nation during World War II; provided such member was a

27  public school teacher within 1 year before entering the armed

28  services; and provided he or she resumed teaching, if such

29  member shall, prior to retirement, make contribution to the

30  retirement system with accumulated regular interest thereon in

31  an amount equal to the contribution he or she would have made

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 1  if such service had been rendered in the state subsequent to

 2  July 1, 1939; provided that no member who receives, or who is

 3  entitled to receive, a pension or annuity from any other state

 4  or county or municipality or other taxing district shall

 5  receive out-of-state prior service credit or membership

 6  service credit as set forth above; provided, however, that the

 7  change in this subsection shall not affect the rights of

 8  persons who have retired when this amendment to the law takes

 9  effect; provided, however, that any person who becomes a

10  member of the system on or after July 1, 1955, and who has

11  moved from another state to Florida, and becoming employed in

12  a category covered by the Teachers' Retirement System, must

13  teach in the state for 5 years before being entitled to

14  receive any out-of-state service credit.  After having been

15  employed within the state for a period of 5 years, a teacher

16  may establish and receive credit for 1 year of out-of-state

17  service for each additional year of service credit within the

18  state, with a maximum of 10 years out-of-state credit allowed.

19  In order to establish and receive this out-of-state credit, a

20  teacher, who became a member of the system on or after July 1,

21  1955, but prior to October 1, 1963, must pay into the

22  retirement system prior to retirement total contributions

23  equal to 8 percent (plus accumulated regular interest

24  thereon), of such out-of-state compensation as the teacher

25  received during those years of out-of-state service for which

26  the teacher receives out-of-state credit, provided, however,

27  that contributions on out-of-state salary received prior to

28  July 1, 1939, will not be required of any member in this

29  category retiring on or after July 1, 1969.  In order to

30  establish and receive this out-of-state credit, a teacher who

31  becomes a member of the retirement system on or after October

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 1  1, 1963, must pay into the retirement system prior to

 2  retirement, total contributions which are in addition to the

 3  regular membership contributions and which, when accumulated

 4  with regular interest thereon, are equal to the actuarial

 5  equivalent at the time of retirement of the monthly benefit

 6  which becomes payable at retirement on account of out-of-state

 7  credit.  In the event that such accumulated additional

 8  contributions at time of retirement are less than the

 9  actuarial equivalent at time of retirement of the monthly

10  benefit attributable to out-of-state credit, the monthly

11  benefit attributable to out-of-state credit shall be reduced

12  by an amount equal to the product of:

13         (a)  The monthly benefit attributable to out-of-state

14  credit, and

15         (b)  The ratio that such deficiency bears to the

16  actuarial equivalent of the monthly benefit attributable to

17  the out-of-state credit.

18  

19  If such accumulated additional contributions are in excess of

20  the actuarial equivalent at time of retirement of the monthly

21  benefit attributable to out-of-state credit, such excess shall

22  be paid in a lump sum to the member at time of retirement.  No

23  person may receive retirement benefits for less than 10 years

24  of service credit earned in Florida.

25         (6)  So long as membership continues, a prior service

26  certificate shall be final and conclusive for retirement

27  purposes as to such prior service credit, unless modified by

28  the department division upon application made by the member

29  within 1 year after the date of issuance or modification of a

30  prior service certificate or upon the discovery by the

31  department division of error or fraud.

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 1         Section 59.  Subsection (4) of section 650.02, Florida

 2  Statutes, is amended to read:

 3         650.02  Definitions.--For the purpose of this chapter:

 4         (4)  The term "state agency" means the Division of

 5  Retirement of the State Board of Administration Department of

 6  Management Services.

 7         Section 60.  The Department of Management Services may

 8  contract with the State Board of Administration to administer

 9  sections 112.05, 112.1815, 250.22, 112.351-112.362, and

10  chapters 122 and 238, Florida Statutes.

11         Section 61.  This act shall take effect July 1, 2003.

12  

13          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
14                             SB 1258

15                                 

16  Transfers the Division of Retirement of the Department of
    Management Services to the State Board of Administration by a
17  type one transfer.

18  Maintains the current powers of the State Board of
    Administration.
19  
    Makes the executive director of the State Board of
20  Administration the agency head of the division for purposes of
    the Administrative Procedure Act.
21  
    Provides that officers and employees of the division are
22  select exempt employees.

23  Makes reference changes to the Florida Statutes to conform
    statutory references made by the bill.
24  
    Exempts the purchase of commodities or services related to the
25  administration of benefits from ch. 287, F.S., which
    establishes bidding and other requirements for the purchase of
26  commodities, personal property and services, insurance and
    contractual services.
27  
    Authorizes the Department of Management Services to contract
28  with the State Board of Administration for the administration
    of certain statutory sections, including the Teacher's
29  Retirement System, State and County Retirement, Florida
    National Guard Retirement, Supplemental Retirement.
30  

31  

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