HB 1815

CS

CHAMBER ACTION

1	The State Administration Council recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to state financial matters; amending s.
7	121.021, F.S.; redefining the term "termination"; amending
8	s. 121.091, F.S.; providing reemployment requirements for
9	the Public Employee Optional Retirement Program; amending
10	s. 121.35, F.S.; changing the requirements of the
11	Department of Management Services' designation of a fifth
12	company to provide services under the state university
13	optional retirement program; amending s. 121.4501, F.S.;
14	redefining the terms "eligible employee" and "participant"
15	for purposes of the Public Employee Optional Retirement
16	Program; prescribing certain conditions on participation
17	in the program; deleting references to the program's
18	advisory committees; prescribing procedures for, and
19	certain presumptions relating to, designation of
20	beneficiaries; providing for participation by terminated
21	DROP participants; amending s. 121.591, F.S.; providing
22	for cancellation of certain payment instruments under the
23	program when not presented for payment; providing for
24	payment upon subsequent application and for forfeiture
25	when not claimed within a certain period; providing for
26	designation of beneficiaries for death benefits; amending
27	s. 215.47, F.S.; authorizing investments in asset-backed
28	securities; providing an effective date.
29
30	Be It Enacted by the Legislature of the State of Florida:
31
32	Section 1.  Subsection (39) of section 121.021, Florida
33	Statutes, is amended to read:
34	121.021  Definitions.--The following words and phrases as
35	used in this chapter have the respective meanings set forth
36	unless a different meaning is plainly required by the context:
37	(39)(a)  "Termination" occurs, except as provided in
38	paragraph (b), when a member ceases all employment relationships
39	with employers under this system, as defined in subsection (10),
40	but in the event a member should be employed by any such
41	employer within the next calendar month, termination shall be
42	deemed not to have occurred. A leave of absence shall constitute
43	a continuation of the employment relationship, except that a
44	leave of absence without pay due to disability may constitute
45	termination for a member, if such member makes application for
46	and is approved for disability retirement in accordance with s.
47	121.091(4). The department or State Board of Administration may
48	require other evidence of termination as it deems necessary.
49	(b)  "Termination" for a member electing to participate
50	under the Deferred Retirement Option Program occurs when the
51	Deferred Retirement Option Program participant ceases all
52	employment relationships with employers under this system in
53	accordance with s. 121.091(13), but in the event the Deferred
54	Retirement Option Program participant should be employed by any
55	such employer within the next calendar month, termination will
56	be deemed not to have occurred, except as provided in s.
57	121.091(13)(b)4.c. A leave of absence shall constitute a
58	continuation of the employment relationship.
59	Section 2.  Paragraph (c) is added to subsection (9) of
60	section 121.091, Florida Statutes, to read:
61	121.091  Benefits payable under the system.--Benefits may
62	not be paid under this section unless the member has terminated
63	employment as provided in s. 121.021(39)(a) or begun
64	participation in the Deferred Retirement Option Program as
65	provided in subsection (13), and a proper application has been
66	filed in the manner prescribed by the department. The department
67	may cancel an application for retirement benefits when the
68	member or beneficiary fails to timely provide the information
69	and documents required by this chapter and the department's
70	rules. The department shall adopt rules establishing procedures
71	for application for retirement benefits and for the cancellation
72	of such application when the required information or documents
73	are not received.
74	(9)  EMPLOYMENT AFTER RETIREMENT; LIMITATION.--
75	(c)  The provisions of this subsection apply to retirees,
76	as defined in s. 121.4501(2)(j), of the Public Employee Optional
77	Retirement Program created in part II, subject to the following
78	conditions:
79	1.  Such retirees may not be reemployed with an employer
80	participating in the Florida Retirement System as provided in
81	paragraph (b) until such retiree has been retired for 3 calendar
82	months, unless the retiree has reached the normal retirement
83	requirements of the defined benefit plan as provided in s.
84	121.021(29).
85	2.  Such retiree employed in violation of this subsection
86	and any employing agency that knowingly employs or appoints such
87	retiree shall be jointly and severally liable for reimbursement
88	of any benefits paid to the retirement trust fund from which the
89	benefits were paid, including the Florida Retirement System
90	Trust Fund and the Public Employee Optional Retirement Program
91	Trust Fund, as appropriate. To avoid liability, such employing
92	agency shall have a written statement from the retiree that he
93	or she is not retired from a state-administered retirement
94	system.
95	Section 3.  Paragraph (b) of subsection (6) of section
96	121.35, Florida Statutes, is amended to read:
97	121.35  Optional retirement program for the State
98	University System.--
99	(6)  ADMINISTRATION OF PROGRAM.--
100	(b)  After receiving and considering the recommendations of
101	the State Board of Education, the department shall designate no
102	more than five four companies from which contracts may be
103	purchased under the program and shall approve the form and
104	content of the optional retirement program contracts. Any
105	domestic company which has been designated as of July 1, 2005,
106	shall be included in the five companies until expiration of its
107	existing contract with the department. The domestic company may
108	assign its contract with the department to an affiliated
109	qualified company which is wholly owned by the domestic
110	company's parent company and which has assumed 100 percent of
111	the responsibility for the contracts purchased from the domestic
112	company. Upon application by a qualified Florida domestic
113	company, the department shall give reasonable notice to all
114	other such companies that it intends to designate one of such
115	companies as a fifth company from which contracts may be
116	purchased pursuant to this section and that they may apply for
117	such designation prior to the deadline established by said
118	notice. At least 60 days after giving such notice and upon
119	receipt of the recommendation of the State Board of Education,
120	the department shall so designate one of such companies as the
121	fifth company from which such contracts may be purchased.
122	Section 4.  Paragraphs (f) and (h) of subsection (2),
123	paragraph (e) of subsection (4), paragraph (c) of subsection
124	(8), and subsection (12) of section 121.4501, Florida Statutes,
125	are amended, and subsections (20) and (21) are added to that
126	section, to read:
127	121.4501  Public Employee Optional Retirement Program.--
128	(2)  DEFINITIONS.--As used in this part, the term:
129	(f)  "Eligible employee" means an officer or employee, as
130	defined in s. 121.021(11), who:
131	1.  Is a member of, or is eligible for membership in, the
132	Florida Retirement System, including any renewed member of the
133	Florida Retirement System;
134	2.  Participates in, or is eligible to participate in, the
135	Senior Management Service Optional Annuity Program as
136	established under s. 121.055(6) or the State Community College
137	Optional Retirement Program as established under s.
138	121.051(2)(c); or
139	3.  Is eligible to participate in, but does not participate
140	in, the State University System Optional Retirement Program
141	established under s. 121.35.
142
143	The term does not include any member participating in the
144	Deferred Retirement Option Program established under s.
145	121.091(13) or any employee participating in an optional
146	retirement program established under s. 121.051(2)(c) or s.
147	121.35.
148	(h)  "Participant" means an eligible employee who elects to
149	participate in the Public Employee Optional Retirement Program
150	and enrolls in such optional program as provided in subsection
151	(4) or a terminated Deferred Retirement Option Program
152	participant as described in subsection (21).
153	(4)  PARTICIPATION; ENROLLMENT.--
154	(e)  After the period during which an eligible employee had
155	the choice to elect the defined benefit program or the Public
156	Employee Optional Retirement Program, or the month following the
157	receipt of the eligible employee's plan election selection
158	effective date, if sooner, the employee shall have one
159	opportunity, at the employee's discretion, to choose to move
160	from the defined benefit program to the Public Employee Optional
161	Retirement Program or from the Public Employee Optional
162	Retirement Program to the defined benefit program. Eligible
163	employees may elect to move between Florida Retirement System
164	programs only if they are earning service credit in an employer-
165	employee relationship consistent with the requirements under s.
166	121.021(17)(b), excluding leaves of absence without pay.
167	Effective July 1, 2005, such elections shall be effective on the
168	first day of the month following the receipt of the election by
169	the third-party administrator and are not subject to the
170	requirements regarding an employer-employee relationship or
171	receipt of contributions for the eligible employee in the
172	effective month, except that the employee must meet the
173	conditions of the previous sentence when the election is
174	received by the third-party administrator. This paragraph shall
175	be contingent upon approval from the Internal Revenue Service
176	for including the choice described herein within the programs
177	offered by the Florida Retirement System.
178	1.  If the employee chooses to move to the Public Employee
179	Optional Retirement Program, the applicable provisions of this
180	section shall govern the transfer.
181	2.  If the employee chooses to move to the defined benefit
182	program, the employee must transfer from his or her Public
183	Employee Optional Retirement Program account and from other
184	employee moneys as necessary, a sum representing the present
185	value of that employee's accumulated benefit obligation
186	immediately following the time of such movement, determined
187	assuming that attained service equals the sum of service in the
188	defined benefit program and service in the Public Employee
189	Optional Retirement Program. Benefit commencement occurs on the
190	first date the employee would become eligible for unreduced
191	benefits, using the discount rate and other relevant actuarial
192	assumptions that were used to value the Florida Retirement
193	System defined benefit plan liabilities in the most recent
194	actuarial valuation. For any employee who, at the time of the
195	second election, already maintains an accrued benefit amount in
196	the defined benefit plan, the then-present value of such accrued
197	benefit shall be deemed part of the required transfer amount
198	described in this subparagraph. The division shall ensure that
199	the transfer sum is prepared using a formula and methodology
200	certified by an enrolled actuary.
201	3.  Notwithstanding subparagraph 2., an employee who
202	chooses to move to the defined benefit program and who became
203	eligible to participate in the Public Employee Optional
204	Retirement Program by reason of employment in a regularly
205	established position with a state employer after June 1, 2002; a
206	district school board employer after September 1, 2002; or a
207	local employer after December 1, 2002, must transfer from his or
208	her Public Employee Optional Retirement Program account and,
209	from other employee moneys as necessary, a sum representing that
210	employee's actuarial accrued liability.
211	4.  Employees' ability to transfer from the Florida
212	Retirement System defined benefit program to the Public Employee
213	Optional Retirement Program pursuant to paragraphs (a) through
214	(d), and the ability for current employees to have an option to
215	later transfer back into the defined benefit program under
216	subparagraph 2., shall be deemed a significant system amendment.
217	Pursuant to s. 121.031(4), any such resulting unfunded liability
218	arising from actual original transfers from the defined benefit
219	program to the optional program shall be amortized within 30
220	plan years as a separate unfunded actuarial base independent of
221	the reserve stabilization mechanism defined in s. 121.031(3)(f).
222	For the first 25 years, no direct amortization payment shall be
223	calculated for this base. During this 25-year period, such
224	separate base shall be used to offset the impact of employees
225	exercising their second program election under this paragraph.
226	It is the legislative intent that the actuarial funded status of
227	the Florida Retirement System defined benefit plan is neither
228	beneficially nor adversely impacted by such second program
229	elections in any significant manner, after due recognition of
230	the separate unfunded actuarial base. Following this initial 25-
231	year period, any remaining balance of the original separate base
232	shall be amortized over the remaining 5 years of the required
233	30-year amortization period.
234	(8)  ADMINISTRATION OF PROGRAM.--
235	(c)1.  In evaluating and selecting a third-party
236	administrator, the board shall establish criteria under which it
237	shall consider the relative capabilities and qualifications of
238	each proposed administrator. In developing such criteria, the
239	board shall consider:
240	a.  The administrator's demonstrated experience in
241	providing administrative services to public or private sector
242	retirement systems.
243	b.  The administrator's demonstrated experience in
244	providing daily valued recordkeeping to defined contribution
245	plans.
246	c.  The administrator's ability and willingness to
247	coordinate its activities with the Florida Retirement System
248	employers, the board, and the division, and to supply to such
249	employers, the board, and the division the information and data
250	they require, including, but not limited to, monthly management
251	reports, quarterly participant reports, and ad hoc reports
252	requested by the department or board.
253	d.  The cost-effectiveness and levels of the administrative
254	services provided.
255	e.  The administrator's ability to interact with the
256	participants, the employers, the board, the division, and the
257	providers; the means by which participants may access account
258	information, direct investment of contributions, make changes to
259	their accounts, transfer moneys between available investment
260	vehicles, and transfer moneys between investment products; and
261	any fees that apply to such activities.
262	f.  Any other factor deemed necessary by the Trustees of
263	the State Board of Administration.
264	g.  The recommendations of the Public Employee Optional
265	Retirement Program Advisory Committee established in subsection
266	(12).
267	2.  In evaluating and selecting an educational provider,
268	the board shall establish criteria under which it shall consider
269	the relative capabilities and qualifications of each proposed
270	educational provider. In developing such criteria, the board
271	shall consider:
272	a.  Demonstrated experience in providing educational
273	services to public or private sector retirement systems.
274	b.  Ability and willingness to coordinate its activities
275	with the Florida Retirement System employers, the board, and the
276	division, and to supply to such employers, the board, and the
277	division the information and data they require, including, but
278	not limited to, reports on educational contacts.
279	c.  The cost-effectiveness and levels of the educational
280	services provided.
281	d.  Ability to provide educational services via different
282	media, including, but not limited to, the Internet, personal
283	contact, seminars, brochures, and newsletters.
284	e.  Any other factor deemed necessary by the Trustees of
285	the State Board of Administration.
286	f.  The recommendations of the Public Employee Optional
287	Retirement Program Advisory Committee established in subsection
288	(12).
289	3.  The establishment of the criteria shall be solely
290	within the discretion of the board.
291	(12)  ADVISORY COUNCIL COMMITTEES TO PROVIDE ADVICE AND
292	ASSISTANCE.--The Investment Advisory Council shall assist the
293	board in implementing and administering the Public Employee
294	Optional Retirement Program. The Investment Advisory Council,
295	created pursuant to s. 215.444, shall review the board's initial
296	recommendations regarding the criteria to be used in selecting
297	and evaluating approved providers and investment products. The
298	council may provide comments on the recommendations to the board
299	within 45 days after receiving the initial recommendations. The
300	board shall make the final determination as to whether any
301	investment provider or product, any contractor, or any and all
302	contract provisions shall be approved for the program.
303	(20)  DESIGNATION OF BENEFICIARIES.--
304	(a)  Each participant may, on a form provided for that
305	purpose, signed and filed with the third-party administrator,
306	designate a choice of one or more persons, named sequentially or
307	jointly, as his or her beneficiary who shall receive the
308	benefits, if any, which may be payable pursuant to this chapter
309	in the event of the participant's death. If no beneficiary is
310	named in this manner, or if no beneficiary designated by the
311	participant survives the participant, the beneficiary shall be
312	the spouse of the deceased, if living. If the participant's
313	spouse is not alive at his or her death, the beneficiary shall
314	be the living children of the participant. If no children
315	survive, the beneficiary shall be the participant's father or
316	mother, if living; otherwise, the beneficiary shall be the
317	participant's estate. The beneficiary most recently designated
318	by a participant on a form or letter filed with the third-party
319	administrator shall be the beneficiary entitled to any benefits
320	payable at the time of the participant's death. Notwithstanding
321	any other provision in this subsection to the contrary, for a
322	participant who dies prior to his or her effective date of
323	retirement, the spouse at the time of death shall be the
324	participant's beneficiary unless such participant designates a
325	different beneficiary as provided in this subsection subsequent
326	to the participant's most recent marriage.
327	(b)  If a participant designates a primary beneficiary
328	other than the participant's spouse, the participant's spouse
329	must sign the beneficiary designation form to acknowledge the
330	designation. This requirement does not apply to the designation
331	of one or more contingent beneficiaries to receive benefits
332	remaining upon the death of the primary beneficiary or
333	beneficiaries.
334	(c)  Notwithstanding the participant's designation of
335	benefits to be paid through a trust to a beneficiary that is a
336	natural person, and notwithstanding the provisions of the trust,
337	benefits shall be paid directly to the beneficiary if such
338	person is no longer a minor or incapacitated as defined in s.
339	744.102(11) and (12).
340	(21)  PARTICIPATION BY TERMINATED DEFERRED RETIREMENT
341	OPTION PROGRAM PARTICIPANTS.--Notwithstanding any provision of
342	law to the contrary, participants in the Deferred Retirement
343	Option Program offered under part I may, after conclusion of
344	their participation in the program, elect to roll over or
345	authorize a direct trustee-to-trustee transfer to an account
346	under the Public Employee Optional Retirement Program of their
347	Deferred Retirement Option Program proceeds distributed as
348	provided under s. 121.091(13)(c)5. The transaction must
349	constitute an "eligible rollover distribution" within the
350	meaning of s. 402(c)(4) of the Internal Revenue Code.
351	(a)  The Public Employee Optional Retirement Program may
352	accept such amounts for deposit into participant accounts as
353	provided in paragraph (5)(c).
354	(b)  The affected participant shall direct the investment
355	of his or her investment account; however, unless he or she
356	becomes a renewed member of the Florida Retirement System under
357	s. 121.122 and elects to participate in the Public Employee
358	Optional Retirement Program, employer contributions may not be
359	made to the participant's account as provided under paragraph
360	(5)(a).
361	(c)  The state board or the department is not responsible
362	for locating those persons who may be eligible to participate in
363	the Public Employee Optional Retirement Program under this
364	subsection.
365	Section 5.  Section 121.591, Florida Statutes, is amended
366	to read:
367	121.591  Benefits payable under the Public Employee
368	Optional Retirement Program of the Florida Retirement
369	System.--Benefits may not be paid under this section unless the
370	member has terminated employment as provided in s.
371	121.021(39)(a) or is deceased and a proper application has been
372	filed in the manner prescribed by the state board or the
373	department. The state board or department, as appropriate, may
374	cancel an application for retirement benefits when the member or
375	beneficiary fails to timely provide the information and
376	documents required by this chapter and the rules of the state
377	board and department. In accordance with their respective
378	responsibilities as provided herein, the State Board of
379	Administration and the Department of Management Services shall
380	adopt rules establishing procedures for application for
381	retirement benefits and for the cancellation of such application
382	when the required information or documents are not received. The
383	State Board of Administration and the Department of Management
384	Services, as appropriate, are authorized to cash out a de
385	minimis account of a participant who has been terminated from
386	Florida Retirement System covered employment for a minimum of 6
387	calendar months. A de minimis account is an account containing
388	employer contributions and accumulated earnings of not more than
389	$5,000 made under the provisions of this chapter. Such cash-out
390	must either be a complete lump-sum liquidation of the account
391	balance, subject to the provisions of the Internal Revenue Code,
392	or a lump-sum direct rollover distribution paid directly to the
393	custodian of an eligible retirement plan, as defined by the
394	Internal Revenue Code, on behalf of the participant. If any
395	financial instrument issued for the payment of retirement
396	benefits under this section is not presented for payment within
397	180 days after the last day of the month in which it was
398	originally issued, the third-party administrator or other duly
399	authorized agent of the State Board of Administration shall
400	cancel the instrument and credit the amount of the instrument to
401	the suspense account of the Public Employee Optional Retirement
402	Program Trust Fund authorized under s. 121.4501(6). Any such
403	amounts transferred to the suspense account are payable upon a
404	proper application, not to include earnings thereon, as provided
405	in this section, within 10 years after the last day of the month
406	in which the instrument was originally issued, after which time
407	such amounts and any earnings thereon shall be forfeited. Any
408	such forfeited amounts are assets of the Public Employee
409	Optional Retirement Program Trust Fund and are not subject to
410	the provisions of chapter 717.
411	(1)  NORMAL BENEFITS.--Under the Public Employee Optional
412	Retirement Program:
413	(a)  Benefits in the form of vested accumulations as
414	described in s. 121.4501(6) shall be payable under this
415	subsection in accordance with the following terms and
416	conditions:
417	1.  To the extent vested, benefits shall be payable only to
418	a participant.
419	2.  Benefits shall be paid by the third-party administrator
420	or designated approved providers in accordance with the law, the
421	contracts, and any applicable board rule or policy.
422	3.  To receive benefits under this subsection, the
423	participant must be terminated from all employment with all
424	Florida Retirement System employers, as provided in s.
425	121.021(39).
426	4.  Benefit payments may not be made until the participant
427	has been terminated for 3 calendar months, except that the board
428	may authorize by rule for the distribution of up to 10 percent
429	of the participant's account after the participant has been
430	terminated for 1 calendar month if the participant has reached
431	the normal retirement requirements of the defined benefit plan,
432	as provided in s. 121.021(29).
433	(b)  If a participant elects to receive his or her benefits
434	upon termination of employment, the participant must submit a
435	written application or an equivalent form to the third-party
436	administrator indicating his or her preferred distribution date
437	and selecting an authorized method of distribution as provided
438	in paragraph (c). The participant may defer receipt of benefits
439	until he or she chooses to make such application, subject to
440	federal requirements.
441	(c)  Upon receipt by the third-party administrator of a
442	properly executed application for distribution of benefits, the
443	total accumulated benefit shall be payable to the participant,
444	as:
445	1.  A lump-sum distribution to the participant;
446	2.  A lump-sum direct rollover distribution whereby all
447	accrued benefits, plus interest and investment earnings, are
448	paid from the participant's account directly to the custodian of
449	an eligible retirement plan, as defined in s. 402(c)(8)(B) of
450	the Internal Revenue Code, on behalf of the participant; or
451	3.  Periodic distributions, as authorized by the state
452	board.
453	(2)  DISABILITY RETIREMENT BENEFITS.--Benefits provided
454	under this subsection are payable in lieu of the benefits which
455	would otherwise be payable under the provisions of subsection
456	(1). Such benefits shall be funded entirely from employer
457	contributions made under s. 121.571, transferred participant
458	funds accumulated pursuant to paragraph (a), and interest and
459	earnings thereon. Pursuant thereto:
460	(a)  Transfer of funds.--To qualify to receive monthly
461	disability benefits under this subsection:
462	1.  All moneys accumulated in the participant's Public
463	Employee Optional Retirement Program accounts, including vested
464	and nonvested accumulations as described in s. 121.4501(6),
465	shall be transferred from such individual accounts to the
466	Division of Retirement for deposit in the disability account of
467	the Florida Retirement System Trust Fund. Such moneys shall be
468	separately accounted for. Earnings shall be credited on an
469	annual basis for amounts held in the disability accounts of the
470	Florida Retirement System Trust Fund based on actual earnings of
471	the Florida Retirement System Trust Fund.
472	2.  If the participant has retained retirement credit he or
473	she had earned under the defined benefit program of the Florida
474	Retirement System as provided in s. 121.4501(3)(b), a sum
475	representing the actuarial present value of such credit within
476	the Florida Retirement System Trust Fund shall be reassigned by
477	the Division of Retirement from the defined benefit program to
478	the disability program as implemented under this subsection and
479	shall be deposited in the disability account of the Florida
480	Retirement System Trust Fund. Such moneys shall be separately
481	accounted for.
482	(b)  Disability retirement; entitlement.--
483	1.  A participant of the Public Employee Optional
484	Retirement Program who becomes totally and permanently disabled,
485	as defined in s. 121.091(4)(b), after completing 8 years of
486	creditable service, or a participant who becomes totally and
487	permanently disabled in the line of duty regardless of his or
488	her length of service, shall be entitled to a monthly disability
489	benefit as provided herein.
490	2.  In order for service to apply toward the 8 years of
491	service required to vest for regular disability benefits, or
492	toward the creditable service used in calculating a service-
493	based benefit as provided for under paragraph (g), the service
494	must be creditable service as described below:
495	a.  The participant's period of service under the Public
496	Employee Optional Retirement Program will be considered
497	creditable service, except as provided in subparagraph d.
498	b.  If the participant has elected to retain credit for his
499	or her service under the defined benefit program of the Florida
500	Retirement System as provided under s. 121.4501(3)(b), all such
501	service will be considered creditable service.
502	c.  If the participant has elected to transfer to his or
503	her participant accounts a sum representing the present value of
504	his or her retirement credit under the defined benefit program
505	as provided under s. 121.4501(3)(c), the period of service under
506	the defined benefit program represented in the present value
507	amounts transferred will be considered creditable service for
508	purposes of vesting for disability benefits, except as provided
509	in subparagraph d.
510	d.  Whenever a participant has terminated employment and
511	has taken distribution of his or her funds as provided in
512	subsection (1), all creditable service represented by such
513	distributed funds is forfeited for purposes of this subsection.
514	(c)  Disability retirement effective date.--The effective
515	retirement date for a participant who applies and is approved
516	for disability retirement shall be established as provided under
517	s. 121.091(4)(a)2. and 3.
518	(d)  Total and permanent disability.--A participant shall
519	be considered totally and permanently disabled if, in the
520	opinion of the division, he or she is prevented, by reason of a
521	medically determinable physical or mental impairment, from
522	rendering useful and efficient service as an officer or
523	employee.
524	(e)  Proof of disability.--The division, before approving
525	payment of any disability retirement benefit, shall require
526	proof that the participant is totally and permanently disabled
527	in the same manner as provided for members of the defined
528	benefit program of the Florida Retirement System under s.
529	121.091(4)(c).
530	(f)  Disability retirement benefit.--Upon the disability
531	retirement of a participant under this subsection, the
532	participant shall receive a monthly benefit that shall begin to
533	accrue on the first day of the month of disability retirement,
534	as approved by the division, and shall be payable on the last
535	day of that month and each month thereafter during his or her
536	lifetime and continued disability. All disability benefits
537	payable to such member shall be paid out of the disability
538	account of the Florida Retirement System Trust Fund established
539	under this subsection.
540	(g)  Computation of disability retirement benefit.--The
541	amount of each monthly payment shall be calculated in the same
542	manner as provided for members of the defined benefit program of
543	the Florida Retirement System under s. 121.091(4)(f). For such
544	purpose, creditable service under both the defined benefit
545	program and the Public Employee Optional Retirement Program of
546	the Florida Retirement System shall be applicable as provided
547	under paragraph (b).
548	(h)  Reapplication.--A participant whose initial
549	application for disability retirement has been denied may
550	reapply for disability benefits in the same manner, and under
551	the same conditions, as provided for members of the defined
552	benefit program of the Florida Retirement System under s.
553	121.091(4)(g).
554	(i)  Membership.--Upon approval of an application for
555	disability benefits under this subsection, the applicant shall
556	be transferred to the defined benefit program of the Florida
557	Retirement System, effective upon his or her disability
558	retirement effective date.
559	(j)  Option to cancel.--Any participant whose application
560	for disability benefits is approved may cancel his or her
561	application for disability benefits, provided that the
562	cancellation request is received by the division before a
563	disability retirement warrant has been deposited, cashed, or
564	received by direct deposit. Upon such cancellation:
565	1.  The participant's transfer to the defined benefit
566	program under paragraph (i) shall be nullified;
567	2.  The participant shall be retroactively reinstated in
568	the Public Employee Optional Retirement Program without hiatus;
569	3.  All funds transferred to the Florida Retirement System
570	Trust Fund under paragraph (a) shall be returned to the
571	participant accounts from which such funds were drawn; and
572	4.  The participant may elect to receive the benefit
573	payable under the provisions of subsection (1) in lieu of
574	disability benefits as provided under this subsection.
575	(k)  Recovery from disability.--
576	1.  The division may require periodic reexaminations at the
577	expense of the disability program account of the Florida
578	Retirement System Trust Fund. Except as otherwise provided in
579	subparagraph 2., the requirements, procedures, and restrictions
580	relating to the conduct and review of such reexaminations,
581	discontinuation or termination of benefits, reentry into
582	employment, disability retirement after reentry into covered
583	employment, and all other matters relating to recovery from
584	disability shall be the same as are set forth under s.
585	121.091(4)(h).
586	2.  Upon recovery from disability, any recipient of
587	disability retirement benefits under this subsection shall be a
588	compulsory member of the Public Employee Optional Retirement
589	Program of the Florida Retirement System. The net difference
590	between the recipient's original account balance transferred to
591	the Florida Retirement System Trust Fund, including earnings,
592	under paragraph (a) and total disability benefits paid to such
593	recipient, if any, shall be determined as provided in sub-
594	subparagraph a.
595	a.  An amount equal to the total benefits paid shall be
596	subtracted from that portion of the transferred account balance
597	consisting of vested accumulations as described under s.
598	121.4501(6), if any, and an amount equal to the remainder of
599	benefit amounts paid, if any, shall then be subtracted from any
600	remaining portion consisting of nonvested accumulations as
601	described under s. 121.4501(6).
602	b.  Amounts subtracted under sub-subparagraph a. shall be
603	retained within the disability account of the Florida Retirement
604	System Trust Fund. Any remaining account balance shall be
605	transferred to the third-party administrator for disposition as
606	provided under sub-subparagraph c. or sub-subparagraph d., as
607	appropriate.
608	c.  If the recipient returns to covered employment,
609	transferred amounts shall be deposited in individual accounts
610	under the Public Employee Optional Retirement Program, as
611	directed by the participant. Vested and nonvested amounts shall
612	be separately accounted for as provided in s. 121.4501(6).
613	d.  If the recipient fails to return to covered employment
614	upon recovery from disability:
615	(I)  Any remaining vested amount shall be deposited in
616	individual accounts under the Public Employee Optional
617	Retirement Program, as directed by the participant, and shall be
618	payable as provided in subsection (1).
619	(II)  Any remaining nonvested amount shall be held in a
620	suspense account and shall be forfeitable after 5 years as
621	provided in s. 121.4501(6).
622	3.  If present value was reassigned from the defined
623	benefit program to the disability program of the Florida
624	Retirement System as provided under subparagraph (a)2., the full
625	present value amount shall be returned to the defined benefit
626	account within the Florida Retirement System Trust Fund and the
627	affected individual's associated retirement credit under the
628	defined benefit program shall be reinstated in full. Any benefit
629	based upon such credit shall be calculated as provided in s.
630	121.091(4)(h)1.
631	(l)  Nonadmissible causes of disability.--A participant
632	shall not be entitled to receive a disability retirement benefit
633	if the disability results from any injury or disease sustained
634	or inflicted as described in s. 121.091(4)(i).
635	(m)  Disability retirement of justice or judge by order of
636	Supreme Court.--
637	1.  If a participant is a justice of the Supreme Court,
638	judge of a district court of appeal, circuit judge, or judge of
639	a county court who has served for 6 years or more as an elected
640	constitutional judicial officer, including service as a judicial
641	officer in any court abolished pursuant to Art. V of the State
642	Constitution, and who is retired for disability by order of the
643	Supreme Court upon recommendation of the Judicial Qualifications
644	Commission pursuant to the provisions of Art. V of the State
645	Constitution, the participant's Option 1 monthly disability
646	benefit amount as provided in s. 121.091(6)(a)1. shall be two-
647	thirds of his or her monthly compensation as of the
648	participant's disability retirement date.  Such a participant
649	may alternatively elect to receive an actuarially adjusted
650	disability retirement benefit under any other option as provided
651	in s. 121.091(6)(a), or to receive the normal benefit payable
652	under the Public Employee Optional Retirement Program as set
653	forth in subsection (1).
654	2.  If any justice or judge who is a participant of the
655	Public Employee Optional Retirement Program of the Florida
656	Retirement System is retired for disability by order of the
657	Supreme Court upon recommendation of the Judicial Qualifications
658	Commission pursuant to the provisions of Art. V of the State
659	Constitution and elects to receive a monthly disability benefit
660	under the provisions of this paragraph:
661	a.  Any present value amount that was transferred to his or
662	her program account and all employer contributions made to such
663	account on his or her behalf, plus interest and earnings
664	thereon, shall be transferred to and deposited in the disability
665	account of the Florida Retirement System Trust Fund; and
666	b.  The monthly benefits payable under this paragraph for
667	any affected justice or judge retired from the Florida
668	Retirement System pursuant to Art. V of the State Constitution
669	shall be paid from the disability account of the Florida
670	Retirement System Trust Fund.
671	(n)  Death of retiree or beneficiary.--Upon the death of a
672	disabled retiree or beneficiary thereof who is receiving monthly
673	benefits under this subsection, the monthly benefits shall be
674	paid through the last day of the month of death and shall
675	terminate, or be adjusted, if applicable, as of that date in
676	accordance with the optional form of benefit selected at the
677	time of retirement. The Department of Management Services may
678	adopt rules necessary to administer this paragraph.
679	(3)  DEATH BENEFITS.--Under the Public Employee Optional
680	Retirement Program:
681	(a)  Survivor benefits shall be payable in accordance with
682	the following terms and conditions:
683	1.  To the extent vested, benefits shall be payable only to
684	a participant's beneficiary or beneficiaries as designated by
685	the participant as provided in s. 121.4501(20). If a participant
686	designates a primary beneficiary other than the participant's
687	spouse, the participant's spouse shall be notified of the
688	designation. This requirement shall not apply to the designation
689	of one or more contingent beneficiaries to receive any benefits
690	remaining upon the death of the primary beneficiary or
691	beneficiaries.
692	2.  Benefits shall be paid by the third-party administrator
693	or designated approved providers in accordance with the law, the
694	contracts, and any applicable board rule or policy.
695	3.  To receive benefits under this subsection, the
696	participant must be deceased.
697	(b)  In the event of a participant's death, all vested
698	accumulations as described in s. 121.4501(6), less withholding
699	taxes remitted to the Internal Revenue Service, shall be
700	distributed, as provided in paragraph (c) or as described in s.
701	121.4501(20), to the participant's designated beneficiary or
702	beneficiaries, or to the participant's estate, as if the
703	participant retired on the date of death. No other death
704	benefits shall be available for survivors of participants under
705	the Public Employee Optional Retirement Program, except for such
706	benefits, or coverage for such benefits, as are otherwise
707	provided by law or are separately afforded by the employer, at
708	the employer's discretion.
709	(c)  Upon receipt by the third-party administrator of a
710	properly executed application for distribution of benefits, the
711	total accumulated benefit shall be payable by the third-party
712	administrator to the participant's surviving beneficiary or
713	beneficiaries, as:
714	1.  A lump-sum distribution payable to the beneficiary or
715	beneficiaries, or to the deceased participant's estate;
716	2.  An eligible rollover distribution on behalf of the
717	surviving spouse of a deceased participant, whereby all accrued
718	benefits, plus interest and investment earnings, are paid from
719	the deceased participant's account directly to the custodian of
720	an eligible retirement plan, as described in s. 402(c)(8)(B) of
721	the Internal Revenue Code, on behalf of the surviving spouse; or
722	3.  A partial lump-sum payment whereby a portion of the
723	accrued benefit is paid to the deceased participant's surviving
724	spouse or other designated beneficiaries, less withholding taxes
725	remitted to the Internal Revenue Service, and the remaining
726	amount is transferred directly to the custodian of an eligible
727	retirement plan, as described in s. 402(c)(8)(B) of the Internal
728	Revenue Code, on behalf of the surviving spouse. The proportions
729	must be specified by the participant or the surviving
730	beneficiary.
731
732	This paragraph does not abrogate other applicable provisions of
733	state or federal law providing for payment of death benefits.
734	(4)  LIMITATION ON LEGAL PROCESS.--The benefits payable to
735	any person under the Public Employee Optional Retirement
736	Program, and any contributions accumulated under such program,
737	are not subject to assignment, execution, attachment, or any
738	legal process, except for qualified domestic relations orders by
739	a court of competent jurisdiction, income deduction orders as
740	provided in s. 61.1301, and federal income tax levies.
741	Section 6.  Paragraph (k) is added to subsection (2) of
742	section 215.47, Florida Statutes, to read:
743	215.47  Investments; authorized securities; loan of
744	securities.--Subject to the limitations and conditions of the
745	State Constitution or of the trust agreement relating to a trust
746	fund, moneys available for investments under ss. 215.44-215.53
747	may be invested as follows:
748	(2)  With no more than 25 percent of any fund in:
749	(k)  Asset-backed securities not otherwise authorized by
750	this section.
751	Section 7.  This act shall take effect July 1, 2005.

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