HB 1815

1
A bill to be entitled
2An act relating to state financial matters; amending s.
3121.021, F.S.; redefining the term "termination"; amending
4s. 121.091, F.S.; providing reemployment requirements for
5the Public Employee Optional Retirement Program; amending
6s. 121.4501, F.S.; redefining the terms "eligible
7employee" and "participant" for purposes of the Public
8Employee Optional Retirement Program; prescribing certain
9conditions on participation in the program; deleting
10references to the program's advisory committees;
11prescribing procedures for, and certain presumptions
12relating to, designation of beneficiaries; providing for
13participation by terminated DROP participants; amending s.
14121.591, F.S.; providing for cancellation of certain
15payment instruments under the program when not presented
16for payment; providing for payment upon subsequent
17application and for forfeiture when not claimed within a
18certain period; providing for designation of beneficiaries
19for death benefits; amending s. 215.47, F.S.; authorizing
20investments in asset-backed securities; providing an
21effective date.
22
23Be It Enacted by the Legislature of the State of Florida:
24
25     Section 1.  Subsection (39) of section 121.021, Florida
26Statutes, is amended to read:
27     121.021  Definitions.--The following words and phrases as
28used in this chapter have the respective meanings set forth
29unless a different meaning is plainly required by the context:
30     (39)(a)  "Termination" occurs, except as provided in
31paragraph (b), when a member ceases all employment relationships
32with employers under this system, as defined in subsection (10),
33but in the event a member should be employed by any such
34employer within the next calendar month, termination shall be
35deemed not to have occurred. A leave of absence shall constitute
36a continuation of the employment relationship, except that a
37leave of absence without pay due to disability may constitute
38termination for a member, if such member makes application for
39and is approved for disability retirement in accordance with s.
40121.091(4). The department or State Board of Administration may
41require other evidence of termination as it deems necessary.
42     (b)  "Termination" for a member electing to participate
43under the Deferred Retirement Option Program occurs when the
44Deferred Retirement Option Program participant ceases all
45employment relationships with employers under this system in
46accordance with s. 121.091(13), but in the event the Deferred
47Retirement Option Program participant should be employed by any
48such employer within the next calendar month, termination will
49be deemed not to have occurred, except as provided in s.
50121.091(13)(b)4.c. A leave of absence shall constitute a
51continuation of the employment relationship.
52     Section 2.  Paragraph (c) is added to subsection (9) of
53section 121.091, Florida Statutes, to read:
54     121.091  Benefits payable under the system.--Benefits may
55not be paid under this section unless the member has terminated
56employment as provided in s. 121.021(39)(a) or begun
57participation in the Deferred Retirement Option Program as
58provided in subsection (13), and a proper application has been
59filed in the manner prescribed by the department. The department
60may cancel an application for retirement benefits when the
61member or beneficiary fails to timely provide the information
62and documents required by this chapter and the department's
63rules. The department shall adopt rules establishing procedures
64for application for retirement benefits and for the cancellation
65of such application when the required information or documents
66are not received.
67     (9)  EMPLOYMENT AFTER RETIREMENT; LIMITATION.--
68     (c)  The provisions of this subsection apply to retirees,
69as defined in s. 121.4501(2)(j), of the Public Employee Optional
70Retirement Program created in part II, subject to the following
71conditions:
72     1.  Such retirees may not be reemployed with an employer
73participating in the Florida Retirement System as provided in
74paragraph (b) until such retiree has been retired for 3 calendar
75months, unless the retiree has reached the normal retirement
76requirements of the defined benefit plan as provided in s.
77121.021(29).
78     2.  Such retiree employed in violation of this subsection
79and any employing agency that knowingly employs or appoints such
80retiree shall be jointly and severally liable for reimbursement
81of any benefits paid to the retirement trust fund from which the
82benefits were paid, including the Florida Retirement System
83Trust Fund and the Public Employee Optional Retirement Program
84Trust Fund, as appropriate. To avoid liability, such employing
85agency shall have a written statement from the retiree that he
86or she is not retired from a state-administered retirement
87system.
88     Section 3.  Paragraphs (f) and (h) of subsection (2),
89paragraph (e) of subsection (4), paragraph (c) of subsection
90(8), and subsection (12) of section 121.4501, Florida Statutes,
91are amended, and subsections (20) and (21) are added to that
92section, to read:
93     121.4501  Public Employee Optional Retirement Program.--
94     (2)  DEFINITIONS.--As used in this part, the term:
95     (f)  "Eligible employee" means an officer or employee, as
96defined in s. 121.021(11), who:
97     1.  Is a member of, or is eligible for membership in, the
98Florida Retirement System, including any renewed member of the
99Florida Retirement System;
100     2.  Participates in, or is eligible to participate in, the
101Senior Management Service Optional Annuity Program as
102established under s. 121.055(6) or the State Community College
103Optional Retirement Program as established under s.
104121.051(2)(c); or
105     3.  Is eligible to participate in, but does not participate
106in, the State University System Optional Retirement Program
107established under s. 121.35.
108
109The term does not include any member participating in the
110Deferred Retirement Option Program established under s.
111121.091(13) or any employee participating in an optional
112retirement program established under s. 121.051(2)(c) or s.
113121.35.
114     (h)  "Participant" means an eligible employee who elects to
115participate in the Public Employee Optional Retirement Program
116and enrolls in such optional program as provided in subsection
117(4) or a terminated Deferred Retirement Option Program
118participant as described in subsection (21).
119     (4)  PARTICIPATION; ENROLLMENT.--
120     (e)  After the period during which an eligible employee had
121the choice to elect the defined benefit program or the Public
122Employee Optional Retirement Program, or the month following the
123receipt of the eligible employee's plan election selection
124effective date, if sooner, the employee shall have one
125opportunity, at the employee's discretion, to choose to move
126from the defined benefit program to the Public Employee Optional
127Retirement Program or from the Public Employee Optional
128Retirement Program to the defined benefit program. Eligible
129employees may elect to move between Florida Retirement System
130programs only if they are earning service credit in an employer-
131employee relationship consistent with the requirements under s.
132121.021(17)(b), excluding leaves of absence without pay.
133Effective July 1, 2005, such elections shall be effective on the
134first day of the month following the receipt of the election by
135the third-party administrator and are not subject to the
136requirements regarding an employer-employee relationship or
137receipt of contributions for the eligible employee in the
138effective month, except that the employee must meet the
139conditions of the previous sentence when the election is
140received by the third-party administrator. This paragraph shall
141be contingent upon approval from the Internal Revenue Service
142for including the choice described herein within the programs
143offered by the Florida Retirement System.
144     1.  If the employee chooses to move to the Public Employee
145Optional Retirement Program, the applicable provisions of this
146section shall govern the transfer.
147     2.  If the employee chooses to move to the defined benefit
148program, the employee must transfer from his or her Public
149Employee Optional Retirement Program account and from other
150employee moneys as necessary, a sum representing the present
151value of that employee's accumulated benefit obligation
152immediately following the time of such movement, determined
153assuming that attained service equals the sum of service in the
154defined benefit program and service in the Public Employee
155Optional Retirement Program. Benefit commencement occurs on the
156first date the employee would become eligible for unreduced
157benefits, using the discount rate and other relevant actuarial
158assumptions that were used to value the Florida Retirement
159System defined benefit plan liabilities in the most recent
160actuarial valuation. For any employee who, at the time of the
161second election, already maintains an accrued benefit amount in
162the defined benefit plan, the then-present value of such accrued
163benefit shall be deemed part of the required transfer amount
164described in this subparagraph. The division shall ensure that
165the transfer sum is prepared using a formula and methodology
166certified by an enrolled actuary.
167     3.  Notwithstanding subparagraph 2., an employee who
168chooses to move to the defined benefit program and who became
169eligible to participate in the Public Employee Optional
170Retirement Program by reason of employment in a regularly
171established position with a state employer after June 1, 2002; a
172district school board employer after September 1, 2002; or a
173local employer after December 1, 2002, must transfer from his or
174her Public Employee Optional Retirement Program account and,
175from other employee moneys as necessary, a sum representing that
176employee's actuarial accrued liability.
177     4.  Employees' ability to transfer from the Florida
178Retirement System defined benefit program to the Public Employee
179Optional Retirement Program pursuant to paragraphs (a) through
180(d), and the ability for current employees to have an option to
181later transfer back into the defined benefit program under
182subparagraph 2., shall be deemed a significant system amendment.
183Pursuant to s. 121.031(4), any such resulting unfunded liability
184arising from actual original transfers from the defined benefit
185program to the optional program shall be amortized within 30
186plan years as a separate unfunded actuarial base independent of
187the reserve stabilization mechanism defined in s. 121.031(3)(f).
188For the first 25 years, no direct amortization payment shall be
189calculated for this base. During this 25-year period, such
190separate base shall be used to offset the impact of employees
191exercising their second program election under this paragraph.
192It is the legislative intent that the actuarial funded status of
193the Florida Retirement System defined benefit plan is neither
194beneficially nor adversely impacted by such second program
195elections in any significant manner, after due recognition of
196the separate unfunded actuarial base. Following this initial 25-
197year period, any remaining balance of the original separate base
198shall be amortized over the remaining 5 years of the required
19930-year amortization period.
200     (8)  ADMINISTRATION OF PROGRAM.--
201     (c)1.  In evaluating and selecting a third-party
202administrator, the board shall establish criteria under which it
203shall consider the relative capabilities and qualifications of
204each proposed administrator. In developing such criteria, the
205board shall consider:
206     a.  The administrator's demonstrated experience in
207providing administrative services to public or private sector
208retirement systems.
209     b.  The administrator's demonstrated experience in
210providing daily valued recordkeeping to defined contribution
211plans.
212     c.  The administrator's ability and willingness to
213coordinate its activities with the Florida Retirement System
214employers, the board, and the division, and to supply to such
215employers, the board, and the division the information and data
216they require, including, but not limited to, monthly management
217reports, quarterly participant reports, and ad hoc reports
218requested by the department or board.
219     d.  The cost-effectiveness and levels of the administrative
220services provided.
221     e.  The administrator's ability to interact with the
222participants, the employers, the board, the division, and the
223providers; the means by which participants may access account
224information, direct investment of contributions, make changes to
225their accounts, transfer moneys between available investment
226vehicles, and transfer moneys between investment products; and
227any fees that apply to such activities.
228     f.  Any other factor deemed necessary by the Trustees of
229the State Board of Administration.
230     g.  The recommendations of the Public Employee Optional
231Retirement Program Advisory Committee established in subsection
232(12).
233     2.  In evaluating and selecting an educational provider,
234the board shall establish criteria under which it shall consider
235the relative capabilities and qualifications of each proposed
236educational provider. In developing such criteria, the board
237shall consider:
238     a.  Demonstrated experience in providing educational
239services to public or private sector retirement systems.
240     b.  Ability and willingness to coordinate its activities
241with the Florida Retirement System employers, the board, and the
242division, and to supply to such employers, the board, and the
243division the information and data they require, including, but
244not limited to, reports on educational contacts.
245     c.  The cost-effectiveness and levels of the educational
246services provided.
247     d.  Ability to provide educational services via different
248media, including, but not limited to, the Internet, personal
249contact, seminars, brochures, and newsletters.
250     e.  Any other factor deemed necessary by the Trustees of
251the State Board of Administration.
252     f.  The recommendations of the Public Employee Optional
253Retirement Program Advisory Committee established in subsection
254(12).
255     3.  The establishment of the criteria shall be solely
256within the discretion of the board.
257     (12)  ADVISORY COUNCIL COMMITTEES TO PROVIDE ADVICE AND
258ASSISTANCE.--The Investment Advisory Council shall assist the
259board in implementing and administering the Public Employee
260Optional Retirement Program. The Investment Advisory Council,
261created pursuant to s. 215.444, shall review the board's initial
262recommendations regarding the criteria to be used in selecting
263and evaluating approved providers and investment products. The
264council may provide comments on the recommendations to the board
265within 45 days after receiving the initial recommendations. The
266board shall make the final determination as to whether any
267investment provider or product, any contractor, or any and all
268contract provisions shall be approved for the program.
269     (20)  DESIGNATION OF BENEFICIARIES.--
270     (a)  Each participant may, on a form provided for that
271purpose, signed and filed with the third-party administrator,
272designate a choice of one or more persons, named sequentially or
273jointly, as his or her beneficiary who shall receive the
274benefits, if any, which may be payable pursuant to this chapter
275in the event of the participant's death. If no beneficiary is
276named in this manner, or if no beneficiary designated by the
277participant survives the participant, the beneficiary shall be
278the spouse of the deceased, if living. If the participant's
279spouse is not alive at his or her death, the beneficiary shall
280be the living children of the participant. If no children
281survive, the beneficiary shall be the participant's father or
282mother, if living; otherwise, the beneficiary shall be the
283participant's estate. The beneficiary most recently designated
284by a participant on a form or letter filed with the third-party
285administrator shall be the beneficiary entitled to any benefits
286payable at the time of the participant's death. Notwithstanding
287any other provision in this subsection to the contrary, for a
288participant who dies prior to his or her effective date of
289retirement, the spouse at the time of death shall be the
290participant's beneficiary unless such participant designates a
291different beneficiary as provided in this subsection subsequent
292to the participant's most recent marriage.
293     (b)  If a participant designates a primary beneficiary
294other than the participant's spouse, the participant's spouse
295must sign the beneficiary designation form to acknowledge the
296designation. This requirement does not apply to the designation
297of one or more contingent beneficiaries to receive benefits
298remaining upon the death of the primary beneficiary or
299beneficiaries.
300     (c)  Notwithstanding the participant's designation of
301benefits to be paid through a trust to a beneficiary that is a
302natural person, and notwithstanding the provisions of the trust,
303benefits shall be paid directly to the beneficiary if such
304person is no longer a minor or incapacitated as defined in s.
305744.102(11) and (12).
306     (21)  PARTICIPATION BY TERMINATED DEFERRED RETIREMENT
307OPTION PROGRAM PARTICIPANTS.--Notwithstanding any provision of
308law to the contrary, participants in the Deferred Retirement
309Option Program offered under part I may, after conclusion of
310their participation in the program, elect to roll over or
311authorize a direct trustee-to-trustee transfer to an account
312under the Public Employee Optional Retirement Program of their
313Deferred Retirement Option Program proceeds distributed as
314provided under s. 121.091(13)(c)5. The transaction must
315constitute an "eligible rollover distribution" within the
316meaning of s. 402(c)(4) of the Internal Revenue Code.
317     (a)  The Public Employee Optional Retirement Program may
318accept such amounts for deposit into participant accounts as
319provided in paragraph (5)(c).
320     (b)  The affected participant shall direct the investment
321of his or her investment account; however, unless he or she
322becomes a renewed member of the Florida Retirement System under
323s. 121.122 and elects to participate in the Public Employee
324Optional Retirement Program, employer contributions may not be
325made to the participant's account as provided under paragraph
326(5)(a).
327     (c)  The state board or the department is not responsible
328for locating those persons who may be eligible to participate in
329the Public Employee Optional Retirement Program under this
330subsection.
331     Section 4.  Section 121.591, Florida Statutes, is amended
332to read:
333     121.591  Benefits payable under the Public Employee
334Optional Retirement Program of the Florida Retirement
335System.--Benefits may not be paid under this section unless the
336member has terminated employment as provided in s.
337121.021(39)(a) or is deceased and a proper application has been
338filed in the manner prescribed by the state board or the
339department. The state board or department, as appropriate, may
340cancel an application for retirement benefits when the member or
341beneficiary fails to timely provide the information and
342documents required by this chapter and the rules of the state
343board and department. In accordance with their respective
344responsibilities as provided herein, the State Board of
345Administration and the Department of Management Services shall
346adopt rules establishing procedures for application for
347retirement benefits and for the cancellation of such application
348when the required information or documents are not received. The
349State Board of Administration and the Department of Management
350Services, as appropriate, are authorized to cash out a de
351minimis account of a participant who has been terminated from
352Florida Retirement System covered employment for a minimum of 6
353calendar months. A de minimis account is an account containing
354employer contributions and accumulated earnings of not more than
355$5,000 made under the provisions of this chapter. Such cash-out
356must either be a complete lump-sum liquidation of the account
357balance, subject to the provisions of the Internal Revenue Code,
358or a lump-sum direct rollover distribution paid directly to the
359custodian of an eligible retirement plan, as defined by the
360Internal Revenue Code, on behalf of the participant. If any
361financial instrument issued for the payment of retirement
362benefits under this section is not presented for payment within
363180 days after the last day of the month in which it was
364originally issued, the third-party administrator or other duly
365authorized agent of the State Board of Administration shall
366cancel the instrument and credit the amount of the instrument to
367the suspense account of the Public Employee Optional Retirement
368Program Trust Fund authorized under s. 121.4501(6). Any such
369amounts transferred to the suspense account are payable upon a
370proper application, not to include earnings thereon, as provided
371in this section, within 5 years after the last day of the month
372in which the instrument was originally issued, after which time
373such amounts and any earnings thereon shall be forfeited. Any
374such forfeited amounts are assets of the Public Employee
375Optional Retirement Program Trust Fund and are not subject to
376the provisions of chapter 717.
377     (1)  NORMAL BENEFITS.--Under the Public Employee Optional
378Retirement Program:
379     (a)  Benefits in the form of vested accumulations as
380described in s. 121.4501(6) shall be payable under this
381subsection in accordance with the following terms and
382conditions:
383     1.  To the extent vested, benefits shall be payable only to
384a participant.
385     2.  Benefits shall be paid by the third-party administrator
386or designated approved providers in accordance with the law, the
387contracts, and any applicable board rule or policy.
388     3.  To receive benefits under this subsection, the
389participant must be terminated from all employment with all
390Florida Retirement System employers, as provided in s.
391121.021(39).
392     4.  Benefit payments may not be made until the participant
393has been terminated for 3 calendar months, except that the board
394may authorize by rule for the distribution of up to 10 percent
395of the participant's account after the participant has been
396terminated for 1 calendar month if the participant has reached
397the normal retirement requirements of the defined benefit plan,
398as provided in s. 121.021(29).
399     (b)  If a participant elects to receive his or her benefits
400upon termination of employment, the participant must submit a
401written application or an equivalent form to the third-party
402administrator indicating his or her preferred distribution date
403and selecting an authorized method of distribution as provided
404in paragraph (c). The participant may defer receipt of benefits
405until he or she chooses to make such application, subject to
406federal requirements.
407     (c)  Upon receipt by the third-party administrator of a
408properly executed application for distribution of benefits, the
409total accumulated benefit shall be payable to the participant,
410as:
411     1.  A lump-sum distribution to the participant;
412     2.  A lump-sum direct rollover distribution whereby all
413accrued benefits, plus interest and investment earnings, are
414paid from the participant's account directly to the custodian of
415an eligible retirement plan, as defined in s. 402(c)(8)(B) of
416the Internal Revenue Code, on behalf of the participant; or
417     3.  Periodic distributions, as authorized by the state
418board.
419     (2)  DISABILITY RETIREMENT BENEFITS.--Benefits provided
420under this subsection are payable in lieu of the benefits which
421would otherwise be payable under the provisions of subsection
422(1). Such benefits shall be funded entirely from employer
423contributions made under s. 121.571, transferred participant
424funds accumulated pursuant to paragraph (a), and interest and
425earnings thereon. Pursuant thereto:
426     (a)  Transfer of funds.--To qualify to receive monthly
427disability benefits under this subsection:
428     1.  All moneys accumulated in the participant's Public
429Employee Optional Retirement Program accounts, including vested
430and nonvested accumulations as described in s. 121.4501(6),
431shall be transferred from such individual accounts to the
432Division of Retirement for deposit in the disability account of
433the Florida Retirement System Trust Fund. Such moneys shall be
434separately accounted for. Earnings shall be credited on an
435annual basis for amounts held in the disability accounts of the
436Florida Retirement System Trust Fund based on actual earnings of
437the Florida Retirement System Trust Fund.
438     2.  If the participant has retained retirement credit he or
439she had earned under the defined benefit program of the Florida
440Retirement System as provided in s. 121.4501(3)(b), a sum
441representing the actuarial present value of such credit within
442the Florida Retirement System Trust Fund shall be reassigned by
443the Division of Retirement from the defined benefit program to
444the disability program as implemented under this subsection and
445shall be deposited in the disability account of the Florida
446Retirement System Trust Fund. Such moneys shall be separately
447accounted for.
448     (b)  Disability retirement; entitlement.--
449     1.  A participant of the Public Employee Optional
450Retirement Program who becomes totally and permanently disabled,
451as defined in s. 121.091(4)(b), after completing 8 years of
452creditable service, or a participant who becomes totally and
453permanently disabled in the line of duty regardless of his or
454her length of service, shall be entitled to a monthly disability
455benefit as provided herein.
456     2.  In order for service to apply toward the 8 years of
457service required to vest for regular disability benefits, or
458toward the creditable service used in calculating a service-
459based benefit as provided for under paragraph (g), the service
460must be creditable service as described below:
461     a.  The participant's period of service under the Public
462Employee Optional Retirement Program will be considered
463creditable service, except as provided in subparagraph d.
464     b.  If the participant has elected to retain credit for his
465or her service under the defined benefit program of the Florida
466Retirement System as provided under s. 121.4501(3)(b), all such
467service will be considered creditable service.
468     c.  If the participant has elected to transfer to his or
469her participant accounts a sum representing the present value of
470his or her retirement credit under the defined benefit program
471as provided under s. 121.4501(3)(c), the period of service under
472the defined benefit program represented in the present value
473amounts transferred will be considered creditable service for
474purposes of vesting for disability benefits, except as provided
475in subparagraph d.
476     d.  Whenever a participant has terminated employment and
477has taken distribution of his or her funds as provided in
478subsection (1), all creditable service represented by such
479distributed funds is forfeited for purposes of this subsection.
480     (c)  Disability retirement effective date.--The effective
481retirement date for a participant who applies and is approved
482for disability retirement shall be established as provided under
483s. 121.091(4)(a)2. and 3.
484     (d)  Total and permanent disability.--A participant shall
485be considered totally and permanently disabled if, in the
486opinion of the division, he or she is prevented, by reason of a
487medically determinable physical or mental impairment, from
488rendering useful and efficient service as an officer or
489employee.
490     (e)  Proof of disability.--The division, before approving
491payment of any disability retirement benefit, shall require
492proof that the participant is totally and permanently disabled
493in the same manner as provided for members of the defined
494benefit program of the Florida Retirement System under s.
495121.091(4)(c).
496     (f)  Disability retirement benefit.--Upon the disability
497retirement of a participant under this subsection, the
498participant shall receive a monthly benefit that shall begin to
499accrue on the first day of the month of disability retirement,
500as approved by the division, and shall be payable on the last
501day of that month and each month thereafter during his or her
502lifetime and continued disability. All disability benefits
503payable to such member shall be paid out of the disability
504account of the Florida Retirement System Trust Fund established
505under this subsection.
506     (g)  Computation of disability retirement benefit.--The
507amount of each monthly payment shall be calculated in the same
508manner as provided for members of the defined benefit program of
509the Florida Retirement System under s. 121.091(4)(f). For such
510purpose, creditable service under both the defined benefit
511program and the Public Employee Optional Retirement Program of
512the Florida Retirement System shall be applicable as provided
513under paragraph (b).
514     (h)  Reapplication.--A participant whose initial
515application for disability retirement has been denied may
516reapply for disability benefits in the same manner, and under
517the same conditions, as provided for members of the defined
518benefit program of the Florida Retirement System under s.
519121.091(4)(g).
520     (i)  Membership.--Upon approval of an application for
521disability benefits under this subsection, the applicant shall
522be transferred to the defined benefit program of the Florida
523Retirement System, effective upon his or her disability
524retirement effective date.
525     (j)  Option to cancel.--Any participant whose application
526for disability benefits is approved may cancel his or her
527application for disability benefits, provided that the
528cancellation request is received by the division before a
529disability retirement warrant has been deposited, cashed, or
530received by direct deposit. Upon such cancellation:
531     1.  The participant's transfer to the defined benefit
532program under paragraph (i) shall be nullified;
533     2.  The participant shall be retroactively reinstated in
534the Public Employee Optional Retirement Program without hiatus;
535     3.  All funds transferred to the Florida Retirement System
536Trust Fund under paragraph (a) shall be returned to the
537participant accounts from which such funds were drawn; and
538     4.  The participant may elect to receive the benefit
539payable under the provisions of subsection (1) in lieu of
540disability benefits as provided under this subsection.
541     (k)  Recovery from disability.--
542     1.  The division may require periodic reexaminations at the
543expense of the disability program account of the Florida
544Retirement System Trust Fund. Except as otherwise provided in
545subparagraph 2., the requirements, procedures, and restrictions
546relating to the conduct and review of such reexaminations,
547discontinuation or termination of benefits, reentry into
548employment, disability retirement after reentry into covered
549employment, and all other matters relating to recovery from
550disability shall be the same as are set forth under s.
551121.091(4)(h).
552     2.  Upon recovery from disability, any recipient of
553disability retirement benefits under this subsection shall be a
554compulsory member of the Public Employee Optional Retirement
555Program of the Florida Retirement System. The net difference
556between the recipient's original account balance transferred to
557the Florida Retirement System Trust Fund, including earnings,
558under paragraph (a) and total disability benefits paid to such
559recipient, if any, shall be determined as provided in sub-
560subparagraph a.
561     a.  An amount equal to the total benefits paid shall be
562subtracted from that portion of the transferred account balance
563consisting of vested accumulations as described under s.
564121.4501(6), if any, and an amount equal to the remainder of
565benefit amounts paid, if any, shall then be subtracted from any
566remaining portion consisting of nonvested accumulations as
567described under s. 121.4501(6).
568     b.  Amounts subtracted under sub-subparagraph a. shall be
569retained within the disability account of the Florida Retirement
570System Trust Fund. Any remaining account balance shall be
571transferred to the third-party administrator for disposition as
572provided under sub-subparagraph c. or sub-subparagraph d., as
573appropriate.
574     c.  If the recipient returns to covered employment,
575transferred amounts shall be deposited in individual accounts
576under the Public Employee Optional Retirement Program, as
577directed by the participant. Vested and nonvested amounts shall
578be separately accounted for as provided in s. 121.4501(6).
579     d.  If the recipient fails to return to covered employment
580upon recovery from disability:
581     (I)  Any remaining vested amount shall be deposited in
582individual accounts under the Public Employee Optional
583Retirement Program, as directed by the participant, and shall be
584payable as provided in subsection (1).
585     (II)  Any remaining nonvested amount shall be held in a
586suspense account and shall be forfeitable after 5 years as
587provided in s. 121.4501(6).
588     3.  If present value was reassigned from the defined
589benefit program to the disability program of the Florida
590Retirement System as provided under subparagraph (a)2., the full
591present value amount shall be returned to the defined benefit
592account within the Florida Retirement System Trust Fund and the
593affected individual's associated retirement credit under the
594defined benefit program shall be reinstated in full. Any benefit
595based upon such credit shall be calculated as provided in s.
596121.091(4)(h)1.
597     (l)  Nonadmissible causes of disability.--A participant
598shall not be entitled to receive a disability retirement benefit
599if the disability results from any injury or disease sustained
600or inflicted as described in s. 121.091(4)(i).
601     (m)  Disability retirement of justice or judge by order of
602Supreme Court.--
603     1.  If a participant is a justice of the Supreme Court,
604judge of a district court of appeal, circuit judge, or judge of
605a county court who has served for 6 years or more as an elected
606constitutional judicial officer, including service as a judicial
607officer in any court abolished pursuant to Art. V of the State
608Constitution, and who is retired for disability by order of the
609Supreme Court upon recommendation of the Judicial Qualifications
610Commission pursuant to the provisions of Art. V of the State
611Constitution, the participant's Option 1 monthly disability
612benefit amount as provided in s. 121.091(6)(a)1. shall be two-
613thirds of his or her monthly compensation as of the
614participant's disability retirement date.  Such a participant
615may alternatively elect to receive an actuarially adjusted
616disability retirement benefit under any other option as provided
617in s. 121.091(6)(a), or to receive the normal benefit payable
618under the Public Employee Optional Retirement Program as set
619forth in subsection (1).
620     2.  If any justice or judge who is a participant of the
621Public Employee Optional Retirement Program of the Florida
622Retirement System is retired for disability by order of the
623Supreme Court upon recommendation of the Judicial Qualifications
624Commission pursuant to the provisions of Art. V of the State
625Constitution and elects to receive a monthly disability benefit
626under the provisions of this paragraph:
627     a.  Any present value amount that was transferred to his or
628her program account and all employer contributions made to such
629account on his or her behalf, plus interest and earnings
630thereon, shall be transferred to and deposited in the disability
631account of the Florida Retirement System Trust Fund; and
632     b.  The monthly benefits payable under this paragraph for
633any affected justice or judge retired from the Florida
634Retirement System pursuant to Art. V of the State Constitution
635shall be paid from the disability account of the Florida
636Retirement System Trust Fund.
637     (n)  Death of retiree or beneficiary.--Upon the death of a
638disabled retiree or beneficiary thereof who is receiving monthly
639benefits under this subsection, the monthly benefits shall be
640paid through the last day of the month of death and shall
641terminate, or be adjusted, if applicable, as of that date in
642accordance with the optional form of benefit selected at the
643time of retirement. The Department of Management Services may
644adopt rules necessary to administer this paragraph.
645     (3)  DEATH BENEFITS.--Under the Public Employee Optional
646Retirement Program:
647     (a)  Survivor benefits shall be payable in accordance with
648the following terms and conditions:
649     1.  To the extent vested, benefits shall be payable only to
650a participant's beneficiary or beneficiaries as designated by
651the participant as provided in s. 121.4501(20). If a participant
652designates a primary beneficiary other than the participant's
653spouse, the participant's spouse shall be notified of the
654designation. This requirement shall not apply to the designation
655of one or more contingent beneficiaries to receive any benefits
656remaining upon the death of the primary beneficiary or
657beneficiaries.
658     2.  Benefits shall be paid by the third-party administrator
659or designated approved providers in accordance with the law, the
660contracts, and any applicable board rule or policy.
661     3.  To receive benefits under this subsection, the
662participant must be deceased.
663     (b)  In the event of a participant's death, all vested
664accumulations as described in s. 121.4501(6), less withholding
665taxes remitted to the Internal Revenue Service, shall be
666distributed, as provided in paragraph (c) or as described in s.
667121.4501(20), to the participant's designated beneficiary or
668beneficiaries, or to the participant's estate, as if the
669participant retired on the date of death. No other death
670benefits shall be available for survivors of participants under
671the Public Employee Optional Retirement Program, except for such
672benefits, or coverage for such benefits, as are otherwise
673provided by law or are separately afforded by the employer, at
674the employer's discretion.
675     (c)  Upon receipt by the third-party administrator of a
676properly executed application for distribution of benefits, the
677total accumulated benefit shall be payable by the third-party
678administrator to the participant's surviving beneficiary or
679beneficiaries, as:
680     1.  A lump-sum distribution payable to the beneficiary or
681beneficiaries, or to the deceased participant's estate;
682     2.  An eligible rollover distribution on behalf of the
683surviving spouse of a deceased participant, whereby all accrued
684benefits, plus interest and investment earnings, are paid from
685the deceased participant's account directly to the custodian of
686an eligible retirement plan, as described in s. 402(c)(8)(B) of
687the Internal Revenue Code, on behalf of the surviving spouse; or
688     3.  A partial lump-sum payment whereby a portion of the
689accrued benefit is paid to the deceased participant's surviving
690spouse or other designated beneficiaries, less withholding taxes
691remitted to the Internal Revenue Service, and the remaining
692amount is transferred directly to the custodian of an eligible
693retirement plan, as described in s. 402(c)(8)(B) of the Internal
694Revenue Code, on behalf of the surviving spouse. The proportions
695must be specified by the participant or the surviving
696beneficiary.
697
698This paragraph does not abrogate other applicable provisions of
699state or federal law providing for payment of death benefits.
700     (4)  LIMITATION ON LEGAL PROCESS.--The benefits payable to
701any person under the Public Employee Optional Retirement
702Program, and any contributions accumulated under such program,
703are not subject to assignment, execution, attachment, or any
704legal process, except for qualified domestic relations orders by
705a court of competent jurisdiction, income deduction orders as
706provided in s. 61.1301, and federal income tax levies.
707     Section 5.  Paragraph (k) is added to subsection (2) of
708section 215.47, Florida Statutes, to read:
709     215.47  Investments; authorized securities; loan of
710securities.--Subject to the limitations and conditions of the
711State Constitution or of the trust agreement relating to a trust
712fund, moneys available for investments under ss. 215.44-215.53
713may be invested as follows:
714     (2)  With no more than 25 percent of any fund in:
715     (k)  Asset-backed securities not otherwise authorized by
716this section.
717     Section 6.  This act shall take effect July 1, 2005.


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