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  1                                 

  2         An act relating to state financial matters;

  3         amending s. 121.021, F.S.; clarifying that the

  4         State Board of Administration may require that

  5         a member of the Florida Retirement System

  6         provide evidence of termination; amending s.

  7         121.091, F.S.; providing that a member of the

  8         Public Employee Optional Retirement Program may

  9         not return to employment with an employer under

10         the Florida Retirement System until after being

11         terminated for 3 calendar months; providing an

12         exception for those members who have reached

13         the normal retirement requirements of the

14         defined benefit plan; amending s. 121.35, F.S.;

15         changing the requirements of the Department of

16         Management Services' designation of a fifth

17         company to provide services under the state

18         university optional retirement program;

19         amending s. 121.4501, F.S.; redefining the

20         terms "eligible employee" and "participant" for

21         purposes of the Public Employee Optional

22         Retirement Program; prescribing certain

23         conditions on participation in the program;

24         deleting references to the program's advisory

25         committees; prescribing procedures for, and

26         certain presumptions relating to, designation

27         of beneficiaries; providing for participation

28         by terminated DROP participants; amending s.

29         121.591, F.S.; providing for cancellation of

30         certain payment instruments under the program

31         when not presented for payment; providing for


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 1         payment upon subsequent application and for

 2         forfeiture when not claimed within a certain

 3         period; providing that members of the Public

 4         Employee Optional Retirement Program may not

 5         receive a distribution from their account until

 6         after being terminated for 3 calendar months;

 7         providing an exception; providing for

 8         designation of beneficiaries for death

 9         benefits; amending s. 215.47, F.S.; authorizing

10         investments in asset-backed securities;

11         providing an effective date.

12  

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

14  

15         Section 1.  Subsection (39) of section 121.021, Florida

16  Statutes, is amended to read:

17         121.021  Definitions.--The following words and phrases

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

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

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

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

22  relationships with employers under this system, as defined in

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

24  by any such employer within the next calendar month,

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

26  absence shall constitute a continuation of the employment

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

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

29  member makes application for and is approved for disability

30  retirement in accordance with s. 121.091(4). The department or

31  


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 1  board may require other evidence of termination as it deems

 2  necessary.

 3         (b)  "Termination" for a member electing to participate

 4  under the Deferred Retirement Option Program occurs when the

 5  Deferred Retirement Option Program participant ceases all

 6  employment relationships with employers under this system in

 7  accordance with s. 121.091(13), but in the event the Deferred

 8  Retirement Option Program participant should be employed by

 9  any such employer within the next calendar month, termination

10  will be deemed not to have occurred, except as provided in s.

11  121.091(13)(b)4.c. A leave of absence shall constitute a

12  continuation of the employment relationship.

13         Section 2.  Subsection (9) of section 121.091, Florida

14  Statutes, is amended to read:

15         121.091  Benefits payable under the system.--Benefits

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

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

18  begun participation in the Deferred Retirement Option Program

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

20  been filed in the manner prescribed by the department. The

21  department may cancel an application for retirement benefits

22  when the member or beneficiary fails to timely provide the

23  information and documents required by this chapter and the

24  department's rules. The department shall adopt rules

25  establishing procedures for application for retirement

26  benefits and for the cancellation of such application when the

27  required information or documents are not received.

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

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

30  except under the disability retirement provisions of

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


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 1  participate in a state-administered retirement system and may

 2  receive compensation from that employment without limiting or

 3  restricting in any way the retirement benefits payable to that

 4  person.

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

 6  except under the disability retirement provisions of

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

 8  employer after retirement and receive retirement benefits and

 9  compensation from his or her employer without any limitations,

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

11  reemployment with any agency participating in the Florida

12  Retirement System and retirement benefits under this chapter

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

14  of retirement. However, a DROP participant shall continue

15  employment and receive a salary during the period of

16  participation in the Deferred Retirement Option Program, as

17  provided in subsection (13).

18         2.  Any person to whom the limitation in subparagraph

19  1. applies who violates such reemployment limitation and who

20  is reemployed with any agency participating in the Florida

21  Retirement System before completion of the 12-month limitation

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

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

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

25  limitation period.  Any person employed in violation of this

26  paragraph and any employing agency which knowingly employs or

27  appoints such person without notifying the Division of

28  Retirement to suspend retirement benefits shall be jointly and

29  severally liable for reimbursement to the retirement trust

30  fund of any benefits paid during the reemployment limitation

31  period.  To avoid liability, such employing agency shall have


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 1  a written statement from the retiree that he or she is not

 2  retired from a state-administered retirement system.  Any

 3  retirement benefits received while reemployed during this

 4  reemployment limitation period shall be repaid to the

 5  retirement trust fund, and retirement benefits shall remain

 6  suspended until such repayment has been made.  Benefits

 7  suspended beyond the reemployment limitation shall apply

 8  toward repayment of benefits received in violation of the

 9  reemployment limitation.

10         3.  A district school board may reemploy a retired

11  member as a substitute or hourly teacher, education

12  paraprofessional, transportation assistant, bus driver, or

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

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

15  121.021(39). A district school board may reemploy a retired

16  member as instructional personnel, as defined in s.

17  1012.01(2)(a), on an annual contractual basis after he or she

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

19  121.021(39). Any other retired member who is reemployed within

20  1 calendar month after retirement shall void his or her

21  application for retirement benefits. District school boards

22  reemploying such teachers, education paraprofessionals,

23  transportation assistants, bus drivers, or food service

24  workers are subject to the retirement contribution required by

25  subparagraph 7.

26         4.  A community college board of trustees may reemploy

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

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

29  participant in a phased retirement program within the Florida

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

31  1 calendar month, in accordance with s. 121.021(39).  Any


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 1  retired member who is reemployed within 1 calendar month after

 2  retirement shall void his or her application for retirement

 3  benefits.  Boards of trustees reemploying such instructors are

 4  subject to the retirement contribution required in

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

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

 7  12 months of retirement.  Any retired member reemployed for

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

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

10  division of the date he or she will exceed the limitation.

11  The division shall suspend his or her retirement benefits for

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

13  person employed in violation of this subparagraph and any

14  employing agency which knowingly employs or appoints such

15  person without notifying the Division of Retirement to suspend

16  retirement benefits shall be jointly and severally liable for

17  reimbursement to the retirement trust fund of any benefits

18  paid during the reemployment limitation period.  To avoid

19  liability, such employing agency shall have a written

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

21  a state-administered retirement system. Any retirement

22  benefits received by a retired member while reemployed in

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

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

25  retirement benefits shall remain suspended until repayment is

26  made.  Benefits suspended beyond the end of the retired

27  member's first 12 months of retirement shall apply toward

28  repayment of benefits received in violation of the 780-hour

29  reemployment limitation.

30         5.  The State University System may reemploy a retired

31  member as an adjunct faculty member or as a participant in a


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 1  phased retirement program within the State University System

 2  after the retired member has been retired for 1 calendar

 3  month, in accordance with s. 121.021(39).  Any retired member

 4  who is reemployed within 1 calendar month after retirement

 5  shall void his or her application for retirement benefits.

 6  The State University System is subject to the retired

 7  contribution required in subparagraph 7., as appropriate. A

 8  retired member may be reemployed as an adjunct faculty member

 9  or a participant in a phased retirement program for no more

10  than 780 hours during the first 12 months of his or her

11  retirement.  Any retired member reemployed for more than 780

12  hours during the first 12 months of retirement shall give

13  timely notice in writing to the employer and to the division

14  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

29  retirement benefits shall remain suspended until repayment is

30  made.  Benefits suspended beyond the end of the retired

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


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 1  repayment of benefits received in violation of the 780-hour

 2  reemployment limitation.

 3         6.  The Board of Trustees of the Florida School for the

 4  Deaf and the Blind may reemploy a retired member as a

 5  substitute teacher, substitute residential instructor, or

 6  substitute nurse on a noncontractual basis after he or she 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 Board of Trustees of

11  the Florida School for the Deaf and the Blind reemploying such

12  teachers, residential instructors, or nurses is subject to the

13  retirement contribution required by subparagraph 7.

14  Reemployment of a retired member as a substitute teacher,

15  substitute residential instructor, or substitute nurse is

16  limited to 780 hours during the first 12 months of his or her

17  retirement. Any retired member reemployed for more than 780

18  hours during the first 12 months of retirement shall give

19  timely notice in writing to the employer and to the division

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

21  shall suspend his or her retirement benefits for the remainder

22  of the first 12 months of retirement. Any person employed in

23  violation of this subparagraph and any employing agency which

24  knowingly employs or appoints such person without notifying

25  the Division of Retirement to suspend retirement benefits

26  shall be jointly and severally liable for reimbursement to the

27  retirement trust fund of any benefits paid during the

28  reemployment limitation period. To avoid liability, such

29  employing agency shall have a written statement from the

30  retiree that he or she is not retired from a

31  state-administered retirement system. Any retirement benefits


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 1  received by a retired member while reemployed in excess of 780

 2  hours during the first 12 months of retirement shall be repaid

 3  to the Retirement System Trust Fund, and his or her retirement

 4  benefits shall remain suspended until payment is made.

 5  Benefits suspended beyond the end of the retired member's

 6  first 12 months of retirement shall apply toward repayment of

 7  benefits received in violation of the 780-hour reemployment

 8  limitation.

 9         7.  The employment by an employer of any retiree or

10  DROP participant of any state-administered retirement system

11  shall have no effect on the average final compensation or

12  years of creditable service of the retiree or DROP

13  participant.  Prior to July 1, 1991, upon employment of any

14  person, other than an elected officer as provided in s.

15  121.053, who has been retired under any state-administered

16  retirement program, the employer shall pay retirement

17  contributions in an amount equal to the unfunded actuarial

18  liability portion of the employer contribution which would be

19  required for regular members of the Florida Retirement System.

20  Effective July 1, 1991, contributions shall be made as

21  provided in s. 121.122 for retirees with renewed membership or

22  subsection (13) with respect to DROP participants.

23         8.  Any person who has previously retired and who is

24  holding an elective public office or an appointment to an

25  elective public office eligible for the Elected Officers'

26  Class on or after July 1, 1990, shall be enrolled in the

27  Florida Retirement System as provided in s. 121.053(1)(b) or,

28  if holding an elective public office that does not qualify for

29  the Elected Officers' Class on or after July 1, 1991, shall be

30  enrolled in the Florida Retirement System as provided in s.

31  121.122, and shall continue to receive retirement benefits as


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 1  well as compensation for the elected officer's service for as

 2  long as he or she remains in elective office. However, any

 3  retired member who served in an elective office prior to July

 4  1, 1990, suspended his or her retirement benefit, and had his

 5  or her Florida Retirement System membership reinstated shall,

 6  upon retirement from such office, have his or her retirement

 7  benefit recalculated to include the additional service and

 8  compensation earned.

 9         9.  Any person who is holding an elective public office

10  which is covered by the Florida Retirement System and who is

11  concurrently employed in nonelected covered employment may

12  elect to retire while continuing employment in the elective

13  public office, provided that he or she shall be required to

14  terminate his or her nonelected covered employment.  Any

15  person who exercises this election shall receive his or her

16  retirement benefits in addition to the compensation of the

17  elective office without regard to the time limitations

18  otherwise provided in this subsection.  No person who seeks to

19  exercise the provisions of this subparagraph, as the same

20  existed prior to May 3, 1984, shall be deemed to be retired

21  under those provisions, unless such person is eligible to

22  retire under the provisions of this subparagraph, as amended

23  by chapter 84-11, Laws of Florida.

24         10.  The limitations of this paragraph apply to

25  reemployment in any capacity with an "employer" as defined in

26  s. 121.021(10), irrespective of the category of funds from

27  which the person is compensated.

28         11.  An employing agency may reemploy a retired member

29  as a firefighter or paramedic after the retired member has

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

31  121.021(39). Any retired member who is reemployed within 1


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 1  calendar month after retirement shall void his or her

 2  application for retirement benefits. The employing agency

 3  reemploying such firefighter or paramedic is subject to the

 4  retired contribution required in subparagraph 8. Reemployment

 5  of a retired firefighter or paramedic is limited to no more

 6  than 780 hours during the first 12 months of his or her

 7  retirement. Any retired member reemployed for more than 780

 8  hours during the first 12 months of retirement shall give

 9  timely notice in writing to the employer and to the division

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

11  shall suspend his or her retirement benefits for the remainder

12  of the first 12 months of retirement. Any person employed in

13  violation of this subparagraph and any employing agency which

14  knowingly employs or appoints such person without notifying

15  the Division of Retirement to suspend retirement benefits

16  shall be jointly and severally liable for reimbursement to the

17  Retirement System Trust Fund of any benefits paid during the

18  reemployment limitation period. To avoid liability, such

19  employing agency shall have a written statement from the

20  retiree that he or she is not retired from a

21  state-administered retirement system. Any retirement benefits

22  received by a retired member while reemployed in excess of 780

23  hours during the first 12 months of retirement shall be repaid

24  to the Retirement System Trust Fund, and retirement benefits

25  shall remain suspended until repayment is made. Benefits

26  suspended beyond the end of the retired member's first 12

27  months of retirement shall apply toward repayment of benefits

28  received in violation of the 780-hour reemployment limitation.

29         (c)  The provisions of this subsection apply to

30  retirees, as defined in s. 121.4501(2)(j), of the Public

31  


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 1  Employee Optional Retirement Program created in part II,

 2  subject to the following conditions:

 3         1.  Such retirees may not be reemployed with an

 4  employer participating in the Florida Retirement System as

 5  provided in paragraph (b) until such person has been retired

 6  for 3 calendar months, unless the participant has reached the

 7  normal retirement requirements of the defined benefit plan as

 8  provided in s. 121.021(29).

 9         2.  Such retiree employed in violation of this

10  subsection and any employing agency that knowingly employs or

11  appoints such person shall be jointly and severally liable for

12  reimbursement of any benefits paid to the retirement trust

13  fund from which the benefits were paid, including the

14  Retirement System Trust Fund and the Public Employee Optional

15  Retirement Program Trust Fund, as appropriate. To avoid

16  liability, such employing agency must have a written statement

17  from the retiree that he or she is not retired from a

18  state-administered retirement system.

19         Section 3.  Paragraph (b) of subsection (6) of section

20  121.35, Florida Statutes, is amended to read:

21         121.35  Optional retirement program for the State

22  University System.--

23         (6)  ADMINISTRATION OF PROGRAM.--

24         (b)  After receiving and considering the

25  recommendations of the State Board of Education, the

26  department shall designate no more than five four companies

27  from which contracts may be purchased under the program and

28  shall approve the form and content of the optional retirement

29  program contracts. Any domestic company that has been

30  designated as of July 1, 2005, shall be included in the five

31  companies until expiration of its existing contract with the


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 1  department.  The domestic company may assign its contract with

 2  the department to an affiliated qualified company that is

 3  wholly owned by the domestic company's parent company and has

 4  assumed 100 percent of the responsibility for the contracts

 5  purchased from the domestic company. Upon application by a

 6  qualified Florida domestic company, the department shall give

 7  reasonable notice to all other such companies that it intends

 8  to designate one of such companies as a fifth company from

 9  which contracts may be purchased pursuant to this section and

10  that they may apply for such designation prior to the deadline

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

12  notice and upon receipt of the recommendation of the State

13  Board of Education, the department shall so designate one of

14  such companies as the fifth company from which such contracts

15  may be purchased.

16         Section 4.  Paragraphs (f) and (h) of subsection (2),

17  paragraph (e) of subsection (4), paragraph (c) of subsection

18  (8), and subsection (12) of section 121.4501, Florida

19  Statutes, are amended, and subsections (20) and (21) are added

20  to that section, to read:

21         121.4501  Public Employee Optional Retirement

22  Program.--

23         (2)  DEFINITIONS.--As used in this part, the term:

24         (f)  "Eligible employee" means an officer or employee,

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

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

27  the Florida Retirement System, including any renewed member of

28  the Florida Retirement System;

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

30  the Senior Management Service Optional Annuity Program as

31  established under s. 121.055(6) or the State Community College


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 1  Optional Retirement Program as established under s.

 2  121.051(2)(c); or

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

 4  participate in, the State University System Optional

 5  Retirement Program established under s. 121.35.

 6  

 7  The term does not include any member participating in the

 8  Deferred Retirement Option Program established under s.

 9  121.091(13) or any employee participating in an optional

10  retirement program established under s. 121.051(2)(c) or s.

11  121.35.

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

13  elects to participate in the Public Employee Optional

14  Retirement Program and enrolls in such optional program as

15  provided in subsection (4) or a terminated Deferred Retirement

16  Option Program participant as described in subsection (21).

17         (4)  PARTICIPATION; ENROLLMENT.--

18         (e)  After the period during which an eligible employee

19  had the choice to elect the defined benefit program or the

20  Public Employee Optional Retirement Program, or the month

21  following the receipt of the eligible employee's plan election

22  selection effective date, if sooner, the employee shall have

23  one opportunity, at the employee's discretion, to choose to

24  move from the defined benefit program to the Public Employee

25  Optional Retirement Program or from the Public Employee

26  Optional Retirement Program to the defined benefit program.

27  Eligible employees may elect to move between Florida

28  Retirement System programs only if they are earning service

29  credit in an employer-employee relationship consistent with

30  the requirements under s. 121.021(17)(b), excluding leaves of

31  absence without pay. Effective July 1, 2005, such elections


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 1  shall be effective on the first day of the month following the

 2  receipt of the election by the third-party administrator and

 3  are not subject to the requirements regarding an

 4  employer-employee relationship or receipt of contributions for

 5  the eligible employee in the effective month, except that the

 6  employee must meet the conditions of the previous sentence

 7  when the election is received by the third-party

 8  administrator. This paragraph shall be contingent upon

 9  approval from the Internal Revenue Service for including the

10  choice described herein within the programs offered by the

11  Florida Retirement System.

12         1.  If the employee chooses to move to the Public

13  Employee Optional Retirement Program, the applicable

14  provisions of this section shall govern the transfer.

15         2.  If the employee chooses to move to the defined

16  benefit program, the employee must transfer from his or her

17  Public Employee Optional Retirement Program account and from

18  other employee moneys as necessary, a sum representing the

19  present value of that employee's accumulated benefit

20  obligation immediately following the time of such movement,

21  determined assuming that attained service equals the sum of

22  service in the defined benefit program and service in the

23  Public Employee Optional Retirement Program. Benefit

24  commencement occurs on the first date the employee would

25  become eligible for unreduced benefits, using the discount

26  rate and other relevant actuarial assumptions that were used

27  to value the Florida Retirement System defined benefit plan

28  liabilities in the most recent actuarial valuation. For any

29  employee who, at the time of the second election, already

30  maintains an accrued benefit amount in the defined benefit

31  plan, the then-present value of such accrued benefit shall be


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 1  deemed part of the required transfer amount described in this

 2  subparagraph. The division shall ensure that the transfer sum

 3  is prepared using a formula and methodology certified by an

 4  enrolled actuary.

 5         3.  Notwithstanding subparagraph 2., an employee who

 6  chooses to move to the defined benefit program and who became

 7  eligible to participate in the Public Employee Optional

 8  Retirement Program by reason of employment in a regularly

 9  established position with a state employer after June 1, 2002;

10  a district school board employer after September 1, 2002; or a

11  local employer after December 1, 2002, must transfer from his

12  or her Public Employee Optional Retirement Program account

13  and, from other employee moneys as necessary, a sum

14  representing that employee's actuarial accrued liability.

15         4.  Employees' ability to transfer from the Florida

16  Retirement System defined benefit program to the Public

17  Employee Optional Retirement Program pursuant to paragraphs

18  (a) through (d), and the ability for current employees to have

19  an option to later transfer back into the defined benefit

20  program under subparagraph 2., shall be deemed a significant

21  system amendment. Pursuant to s. 121.031(4), any such

22  resulting unfunded liability arising from actual original

23  transfers from the defined benefit program to the optional

24  program shall be amortized within 30 plan years as a separate

25  unfunded actuarial base independent of the reserve

26  stabilization mechanism defined in s. 121.031(3)(f). For the

27  first 25 years, no direct amortization payment shall be

28  calculated for this base. During this 25-year period, such

29  separate base shall be used to offset the impact of employees

30  exercising their second program election under this paragraph.

31  It is the legislative intent that the actuarial funded status


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 1  of the Florida Retirement System defined benefit plan is

 2  neither beneficially nor adversely impacted by such second

 3  program elections in any significant manner, after due

 4  recognition of the separate unfunded actuarial base. Following

 5  this initial 25-year period, any remaining balance of the

 6  original separate base shall be amortized over the remaining 5

 7  years of the required 30-year amortization period.

 8         (8)  ADMINISTRATION OF PROGRAM.--

 9         (c)1.  In evaluating and selecting a third-party

10  administrator, the board shall establish criteria under which

11  it shall consider the relative capabilities and qualifications

12  of each proposed administrator. In developing such criteria,

13  the board shall consider:

14         a.  The administrator's demonstrated experience in

15  providing administrative services to public or private sector

16  retirement systems.

17         b.  The administrator's demonstrated experience in

18  providing daily valued recordkeeping to defined contribution

19  plans.

20         c.  The administrator's ability and willingness to

21  coordinate its activities with the Florida Retirement System

22  employers, the board, and the division, and to supply to such

23  employers, the board, and the division the information and

24  data they require, including, but not limited to, monthly

25  management reports, quarterly participant reports, and ad hoc

26  reports requested by the department or board.

27         d.  The cost-effectiveness and levels of the

28  administrative services provided.

29         e.  The administrator's ability to interact with the

30  participants, the employers, the board, the division, and the

31  providers; the means by which participants may access account


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 1  information, direct investment of contributions, make changes

 2  to their accounts, transfer moneys between available

 3  investment vehicles, and transfer moneys between investment

 4  products; and any fees that apply to such activities.

 5         f.  Any other factor deemed necessary by the Trustees

 6  of the State Board of Administration.

 7         g.  The recommendations of the Public Employee Optional

 8  Retirement Program Advisory Committee established in

 9  subsection (12).

10         2.  In evaluating and selecting an educational

11  provider, the board shall establish criteria under which it

12  shall consider the relative capabilities and qualifications of

13  each proposed educational provider. In developing such

14  criteria, the board shall consider:

15         a.  Demonstrated experience in providing educational

16  services to public or private sector retirement systems.

17         b.  Ability and willingness to coordinate its

18  activities with the Florida Retirement System employers, the

19  board, and the division, and to supply to such employers, the

20  board, and the division the information and data they require,

21  including, but not limited to, reports on educational

22  contacts.

23         c.  The cost-effectiveness and levels of the

24  educational services provided.

25         d.  Ability to provide educational services via

26  different media, including, but not limited to, the Internet,

27  personal contact, seminars, brochures, and newsletters.

28         e.  Any other factor deemed necessary by the Trustees

29  of the State Board of Administration.

30  

31  


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 1         f.  The recommendations of the Public Employee Optional

 2  Retirement Program Advisory Committee established in

 3  subsection (12).

 4         3.  The establishment of the criteria shall be solely

 5  within the discretion of the board.

 6         (12)  ADVISORY COUNCIL COMMITTEES TO PROVIDE ADVICE AND

 7  ASSISTANCE.--The Investment Advisory Council shall assist the

 8  board in implementing and administering the Public Employee

 9  Optional Retirement Program. The Investment Advisory Council,

10  created pursuant to s. 215.444, shall review the board's

11  initial recommendations regarding the criteria to be used in

12  selecting and evaluating approved providers and investment

13  products. The council may provide comments on the

14  recommendations to the board within 45 days after receiving

15  the initial recommendations. The board shall make the final

16  determination as to whether any investment provider or

17  product, any contractor, or any and all contract provisions

18  shall be approved for the program.

19         (20)  DESIGNATION OF BENEFICIARIES.--

20         (a)  Each participant may, on a form provided for that

21  purpose, signed and filed with the third-party administrator,

22  designate a choice of one or more persons, named sequentially

23  or jointly, as his or her beneficiary who shall receive the

24  benefits, if any, which may be payable pursuant to this

25  chapter in the event of the participant's death. If no

26  beneficiary is named in this manner, or if no beneficiary

27  designated by the participant survives the participant, the

28  beneficiary shall be the spouse of the deceased, if living. If

29  the participant's spouse is not alive at his or her death, the

30  beneficiary shall be the living children of the participant.

31  If no children survive, the beneficiary shall be the


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 1  participant's father or mother, if living; otherwise, the

 2  beneficiary shall be the participant's estate. The beneficiary

 3  most recently designated by a participant on a form or letter

 4  filed with the third-party administrator shall be the

 5  beneficiary entitled to any benefits payable at the time of

 6  the participant's death. Notwithstanding any other provision

 7  in this subsection to the contrary, for a participant who dies

 8  prior to his or her effective date of retirement, the spouse

 9  at the time of death shall be the participant's beneficiary

10  unless such participant designates a different beneficiary as

11  provided in this subsection subsequent to the participant's

12  most recent marriage.

13         (b)  If a participant designates a primary beneficiary

14  other than the participant's spouse, the participant's spouse

15  must sign the beneficiary designation form to acknowledge the

16  designation. This requirement does not apply to the

17  designation of one or more contingent beneficiaries to receive

18  benefits remaining upon the death of the primary beneficiary

19  or beneficiaries.

20         (c)  Notwithstanding the participant's designation of

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

22  natural person, and notwithstanding the provisions of the

23  trust, benefits shall be paid directly to the beneficiary if

24  such person is no longer a minor or incapacitated as defined

25  in s. 744.102(11) and (12).

26         (21)  PARTICIPATION BY TERMINATED DEFERRED RETIREMENT

27  OPTION PROGRAM PARTICIPANTS.--Notwithstanding any provision of

28  law to the contrary, participants in the Deferred Retirement

29  Option Program offered under part I may, after conclusion of

30  their participation in the program, elect to roll over or

31  authorize a direct trustee-to-trustee transfer to an account


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 1  under the Public Employee Optional Retirement Program of their

 2  Deferred Retirement Option Program proceeds distributed as

 3  provided under s. 121.091(13)(c)5. The transaction must

 4  constitute an "eligible rollover distribution" within the

 5  meaning of s. 402(c)(4) of the Internal Revenue Code.

 6         (a)  The Public Employee Optional Retirement Program

 7  may accept such amounts for deposit into participant accounts

 8  as provided in paragraph (5)(c).

 9         (b)  The affected participant shall direct the

10  investment of his or her investment account; however, unless

11  he or she becomes a renewed member of the Florida Retirement

12  System under s. 121.122 and elects to participate in the

13  Public Employee Optional Retirement Program, employer

14  contributions may not be made to the participant's account as

15  provided under paragraph (5)(a).

16         (c)  The state board or the department is not

17  responsible for locating those persons who may be eligible to

18  participate in the Public Employee Optional Retirement Program

19  under this subsection.

20         Section 5.  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  department. The state board or department, as appropriate, may

29  cancel an application for retirement benefits when the member

30  or beneficiary fails to timely provide the information and

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


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 1  board and department. In accordance with their respective

 2  responsibilities as provided herein, the State Board of

 3  Administration and the Department of Management Services shall

 4  adopt rules establishing procedures for application for

 5  retirement benefits and for the cancellation of such

 6  application when the required information or documents are not

 7  received. The State Board of Administration and the Department

 8  of Management Services, as appropriate, are authorized to cash

 9  out a de minimis account of a participant who has been

10  terminated from Florida Retirement System covered employment

11  for a minimum of 6 calendar months. A de minimis account is an

12  account containing employer contributions and accumulated

13  earnings of not more than $5,000 made under the provisions of

14  this chapter. Such cash-out must either be a complete lump-sum

15  liquidation of the account balance, subject to the provisions

16  of the Internal Revenue Code, or a lump-sum direct rollover

17  distribution paid directly to the custodian of an eligible

18  retirement plan, as defined by the Internal Revenue Code, on

19  behalf of the participant. If any financial instrument issued

20  for the payment of retirement benefits under this section is

21  not presented for payment within 180 days after the last day

22  of the month in which it was originally issued, the

23  third-party administrator or other duly authorized agent of

24  the State Board of Administration shall cancel the instrument

25  and credit the amount of the instrument to the suspense

26  account of the Public Employee Optional Retirement Program

27  Trust Fund authorized under s. 121.4501(6). Any such amounts

28  transferred to the suspense account are payable upon a proper

29  application, not to include earnings thereon, as provided in

30  this section, within 10 years after the last day of the month

31  in which the instrument was originally issued, after which


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 1  time such amounts and any earnings thereon shall be forfeited.

 2  Any such forfeited amounts are assets of the Public Employee

 3  Optional Retirement Program Trust Fund and are not subject to

 4  the provisions of chapter 717.

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

 6  Optional Retirement Program:

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

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

 9  subsection in accordance with the following terms and

10  conditions:

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

12  only to a participant.

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

14  administrator or designated approved providers in accordance

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

16  policy.

17         3.  To receive benefits under this subsection, the

18  participant must be terminated from all employment with all

19  Florida Retirement System employers, as provided in s.

20  121.021(39).

21         4.  Benefit payments may not be made until the

22  participant has been terminated for 3 calendar months, except

23  that the board may authorize by rule for the distribution of

24  up to 10 percent of the participant's account after being

25  terminated for 1 calendar month if a participant has reached

26  the normal retirement requirements of the defined benefit

27  plan, as provided in s. 121.021(29).

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

29  benefits upon termination of employment, the participant must

30  submit a written application or an equivalent form to the

31  third-party administrator indicating his or her preferred


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 1  distribution date and selecting an authorized method of

 2  distribution as provided in paragraph (c). The participant may

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

 4  application, subject to federal requirements.

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

 6  properly executed application for distribution of benefits,

 7  the total accumulated benefit shall be payable to the

 8  participant, as:

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

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

11  accrued benefits, plus interest and investment earnings, are

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

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

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

15         3.  Periodic distributions, as authorized by the state

16  board.

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

18  under this subsection are payable in lieu of the benefits

19  which would otherwise be payable under the provisions of

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

21  employer contributions made under s. 121.571, transferred

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

23  interest and earnings thereon. Pursuant thereto:

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

25  disability benefits under this subsection:

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

27  Employee Optional Retirement Program accounts, including

28  vested and nonvested accumulations as described in s.

29  121.4501(6), shall be transferred from such individual

30  accounts to the Division of Retirement for deposit in the

31  disability account of the Florida Retirement System Trust


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

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

 3  disability accounts of the Florida Retirement System Trust

 4  Fund based on actual earnings of the Florida Retirement System

 5  Trust Fund.

 6         2.  If the participant has retained retirement credit

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

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

 9  sum representing the actuarial present value of such credit

10  within the Florida Retirement System Trust Fund shall be

11  reassigned by the Division of Retirement from the defined

12  benefit program to the disability program as implemented under

13  this subsection and shall be deposited in the disability

14  account of the Florida Retirement System Trust Fund. Such

15  moneys shall be separately accounted for.

16         (b)  Disability retirement; entitlement.--

17         1.  A participant of the Public Employee Optional

18  Retirement Program who becomes totally and permanently

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

20  years of creditable service, or a participant who becomes

21  totally and permanently disabled in the line of duty

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

23  to a monthly disability benefit as provided herein.

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

25  service required to vest for regular disability benefits, or

26  toward the creditable service used in calculating a

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

28  service must be creditable service as described below:

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

30  Public Employee Optional Retirement Program will be considered

31  creditable service, except as provided in subparagraph d.


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

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

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

 4  all such service will be considered creditable service.

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

 6  or her participant accounts a sum representing the present

 7  value of his or her retirement credit under the defined

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

 9  period of service under the defined benefit program

10  represented in the present value amounts transferred will be

11  considered creditable service for purposes of vesting for

12  disability benefits, except as provided in subparagraph d.

13         d.  Whenever a participant has terminated employment

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

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

16  distributed funds is forfeited for purposes of this

17  subsection.

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

19  effective retirement date for a participant who applies and is

20  approved for disability retirement shall be established as

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

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

23  shall be considered totally and permanently disabled if, in

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

25  of a medically determinable physical or mental impairment,

26  from rendering useful and efficient service as an officer or

27  employee.

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

29  approving payment of any disability retirement benefit, shall

30  require proof that the participant is totally and permanently

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


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 1  defined benefit program of the Florida Retirement System under

 2  s. 121.091(4)(c).

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

 4  disability retirement of a participant under this subsection,

 5  the participant shall receive a monthly benefit that shall

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

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

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

 9  his or her lifetime and continued disability. All disability

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

11  disability account of the Florida Retirement System Trust Fund

12  established under this subsection.

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

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

15  manner as provided for members of the defined benefit program

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

17  such purpose, creditable service under both the defined

18  benefit program and the Public Employee Optional Retirement

19  Program of the Florida Retirement System shall be applicable

20  as provided under paragraph (b).

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

22  application for disability retirement has been denied may

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

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

25  benefit program of the Florida Retirement System under s.

26  121.091(4)(g).

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

28  disability benefits under this subsection, the applicant shall

29  be transferred to the defined benefit program of the Florida

30  Retirement System, effective upon his or her disability

31  retirement effective date.


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

 2  application for disability benefits is approved may cancel his

 3  or her application for disability benefits, provided that the

 4  cancellation request is received by the division before a

 5  disability retirement warrant has been deposited, cashed, or

 6  received by direct deposit. Upon such cancellation:

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

 8  program under paragraph (i) shall be nullified;

 9         2.  The participant shall be retroactively reinstated

10  in the Public Employee Optional Retirement Program without

11  hiatus;

12         3.  All funds transferred to the Florida Retirement

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

14  participant accounts from which such funds were drawn; and

15         4.  The participant may elect to receive the benefit

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

17  disability benefits as provided under this subsection.

18         (k)  Recovery from disability.--

19         1.  The division may require periodic reexaminations at

20  the expense of the disability program account of the Florida

21  Retirement System Trust Fund. Except as otherwise provided in

22  subparagraph 2., the requirements, procedures, and

23  restrictions relating to the conduct and review of such

24  reexaminations, discontinuation or termination of benefits,

25  reentry into employment, disability retirement after reentry

26  into covered employment, and all other matters relating to

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

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

29         2.  Upon recovery from disability, any recipient of

30  disability retirement benefits under this subsection shall be

31  a compulsory member of the Public Employee Optional Retirement


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 1  Program of the Florida Retirement System. The net difference

 2  between the recipient's original account balance transferred

 3  to the Florida Retirement System Trust Fund, including

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

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

 6  provided in sub-subparagraph a.

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

 8  subtracted from that portion of the transferred account

 9  balance consisting of vested accumulations as described under

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

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

12  any remaining portion consisting of nonvested accumulations as

13  described under s. 121.4501(6).

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

15  be retained within the disability account of the Florida

16  Retirement System Trust Fund. Any remaining account balance

17  shall be transferred to the third-party administrator for

18  disposition as provided under sub-subparagraph c. or

19  sub-subparagraph d., as appropriate.

20         c.  If the recipient returns to covered employment,

21  transferred amounts shall be deposited in individual accounts

22  under the Public Employee Optional Retirement Program, as

23  directed by the participant. Vested and nonvested amounts

24  shall be separately accounted for as provided in s.

25  121.4501(6).

26         d.  If the recipient fails to return to covered

27  employment upon recovery from disability:

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

29  individual accounts under the Public Employee Optional

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

31  be payable as provided in subsection (1).


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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 Department of Management

30  Services may adopt rules necessary to administer this

31  paragraph.


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

 2  Optional Retirement Program:

 3         (a)  Survivor benefits shall be payable in accordance

 4  with the following terms and conditions:

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

 6  only to a participant's beneficiary or beneficiaries as

 7  designated by the participant as provided in s. 121.4501(20).

 8  If a participant designates a primary beneficiary other than

 9  the participant's spouse, the participant's spouse shall be

10  notified of the designation. This requirement shall not apply

11  to the designation of one or more contingent beneficiaries to

12  receive any benefits remaining upon the death of the primary

13  beneficiary or beneficiaries.

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

15  administrator or designated approved providers in accordance

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

17  policy.

18         3.  To receive benefits under this subsection, the

19  participant must be deceased.

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

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

22  taxes remitted to the Internal Revenue Service, shall be

23  distributed, as provided in paragraph (c) or as described in

24  s. 121.4501(20), to the participant's designated beneficiary

25  or beneficiaries, or to the participant's estate, as if the

26  participant retired on the date of death. No other death

27  benefits shall be available for survivors of participants

28  under the Public Employee Optional Retirement Program, except

29  for such benefits, or coverage for such benefits, as are

30  otherwise provided by law or are separately afforded by the

31  employer, at the employer's discretion.


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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 by the

 4  third-party administrator to the participant's surviving

 5  beneficiary or beneficiaries, as:

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

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

 8         2.  An eligible rollover distribution on behalf of the

 9  surviving spouse of a deceased participant, whereby all

10  accrued benefits, plus interest and investment earnings, are

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

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

13  402(c)(8)(B) of the Internal Revenue Code, on behalf of the

14  surviving spouse; or

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

16  accrued benefit is paid to the deceased participant's

17  surviving spouse or other designated beneficiaries, less

18  withholding taxes remitted to the Internal Revenue Service,

19  and the remaining amount is transferred directly to the

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

21  402(c)(8)(B) of the Internal Revenue Code, on behalf of the

22  surviving spouse. The proportions must be specified by the

23  participant or the surviving beneficiary.

24  

25  This paragraph does not abrogate other applicable provisions

26  of state or federal law providing for payment of death

27  benefits.

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

29  to any person under the Public Employee Optional Retirement

30  Program, and any contributions accumulated under such program,

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


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




    ENROLLED

    2005 Legislature                         CS for CS for SB 1446



 1  legal process, except for qualified domestic relations orders

 2  by a court of competent jurisdiction, income deduction orders

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

 4         Section 6.  Paragraph (k) is added to subsection (2) of

 5  section 215.47, Florida Statutes, to read:

 6         215.47  Investments; authorized securities; loan of

 7  securities.--Subject to the limitations and conditions of the

 8  State Constitution or of the trust agreement relating to a

 9  trust fund, moneys available for investments under ss.

10  215.44-215.53 may be invested as follows:

11         (2)  With no more than 25 percent of any fund in:

12         (k)  Asset-backed securities not otherwise authorized

13  by this section.

14         Section 7.  This act shall take effect July 1, 2005.

15  

16  

17  

18  

19  

20  

21  

22  

23  

24  

25  

26  

27  

28  

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31  


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