Florida Senate - 2009 SB 534
By Senator Fasano
11-00553-09 2009534__
1 A bill to be entitled
2 An act relating to the defined contribution retirement
3 program; amending s. 121.4501, F.S.; changing the name
4 of the Public Employee Optional Retirement Program to
5 the Public Employee Retirement Investment Program;
6 limiting the option of enrolling in the State
7 Retirement System's defined benefit program or defined
8 contribution program to public employees employed
9 before January 1, 2010; requiring public employees
10 employed on or after January 1, 2010, to enroll in the
11 defined contribution program; deleting obsolete
12 provisions relating to the 2002 optional transfer of
13 public employees from the defined benefit program to
14 the defined contribution program; deleting
15 requirements for an educational program that compares
16 retirement programs; amending s. 121.4502, F.S.;
17 changing the name of the Public Employee Optional
18 Retirement Program Trust Fund to the Public Employee
19 Retirement Investment Program Trust Fund; amending ss.
20 110.123, 112.0801, 112.363, 112.65, 121.021, 121.051,
21 121.35, 121.71, 121.72, 121.73, 121.74, 121.77, and
22 121.78, F.S.; conforming cross-references;
23 substituting references to the defined contribution
24 program for references to the Public Employee Optional
25 Retirement Program; amending ss. 121.091, 121.4503,
26 121.571, 121.591, and 121.5911, F.S.; conforming
27 cross-references; substituting the name of the Public
28 Employee Retirement Investment Program and the Public
29 Employee Retirement Investment Program Trust Fund;
30 amending s. 121.055, F.S.; conforming changes relating
31 to the name of the Florida Employee Retirement
32 Investment Program and deleting obsolete provisions;
33 amending s. 121.70, F.S.; changing the name of the
34 Public Employee Optional Retirement Program to the
35 defined contribution program; deleting provisions
36 relating to having a choice in retirement plans;
37 providing a directive to the Division of Statutory
38 Revision; providing an effective date.
39
40 Be It Enacted by the Legislature of the State of Florida:
41
42 Section 1. Section 121.4501, Florida Statutes, is amended
43 to read:
44 121.4501 Public Employee Optional Retirement Investment
45 Program.—
46 (1) The Trustees of the State Board of Administration shall
47 establish a an optional defined contribution retirement program
48 called the Public Employee Retirement Investment Program for
49 members of the Florida Retirement System under which retirement
50 benefits will be provided for eligible employees employed before
51 January 1, 2010, who elect to participate in the program, and
52 for all eligible employees employed on or after January 1, 2010.
53 The retirement benefits to be provided for or on behalf of
54 participants in such optional retirement program shall be
55 provided through employee-directed investments, in accordance
56 with s. 401(a) of the Internal Revenue Code and its related
57 regulations. The employer employers shall make contributions
58 contribute, as provided in this section and, ss. 121.571, and
59 121.71, to the Public Employee Optional Retirement Investment
60 Program Trust Fund toward the funding of such optional benefits.
61 (2) DEFINITIONS.—As used in this part, the term:
62 (a) “Approved provider” or “provider” means a private
63 sector company that is selected and approved by the state board
64 to offer one or more investment products or services to the
65 investment Public Employee Optional Retirement program. The term
66 includes a bundled provider that offers participants a range of
67 individually allocated or unallocated investment products and
68 may offer a range of administrative and customer services, which
69 may include accounting and administration of individual
70 participant benefits and contributions; individual participant
71 recordkeeping; asset purchase, control, and safekeeping; direct
72 execution of the participant's instructions as to asset and
73 contribution allocation; calculation of daily net asset values;
74 direct access to participant account information; periodic
75 reporting to participants, at least quarterly, on account
76 balances and transactions; guidance, advice, and allocation
77 services directly relating to the provider's its own investment
78 options or products, but only if the bundled provider complies
79 with the standard of care of s. 404(a)(1)(A-B) of the Employee
80 Retirement Income Security Act of 1974 (ERISA), and if providing
81 such guidance, advice, or allocation services does not
82 constitute a prohibited transaction under s. 4975(c)(1) of the
83 Internal Revenue Code or s. 406 of ERISA, notwithstanding that
84 such prohibited transaction provisions do not apply to the
85 optional retirement program; a broad array of distribution
86 options; asset allocation; and retirement counseling and
87 education. Private sector companies include investment
88 management companies, insurance companies, depositories, and
89 mutual fund companies.
90 (b) “Average monthly compensation” means one-twelfth of
91 average final compensation as defined in s. 121.021(24).
92 (c) “Covered employment” means employment in a regularly
93 established position as defined in s. 121.021(52).
94 (d) “Defined benefit program” means the defined benefit
95 program of the Florida Retirement System as administered under
96 part I of this chapter “Department” means the Department of
97 Management Services.
98 (e) “District school board employer” means a district
99 school board that participates in the Florida Retirement System
100 for the benefit of certain employees, or a charter school or
101 charter technical career center that participates in the Florida
102 Retirement System as provided under s. 121.051(2)(d).
103 (f)(e) “Division” means the Division of Retirement within
104 the department of Management Services.
105 (g)(f) “Eligible employee” means an officer or employee, as
106 defined in s. 121.021(11), who:
107 1. Is a member of, or is eligible for membership in, the
108 Florida Retirement System, including any renewed member of the
109 Florida Retirement System; or
110 2. Participates in, or is eligible to participate in, the
111 Senior Management Service Optional Annuity Program as
112 established under s. 121.055(6), the State Community College
113 System Optional Retirement Program as established under s.
114 121.051(2)(c), or the State University System Optional
115 Retirement Program established under s. 121.35.
116 The term does not include any member participating in the
117 Deferred Retirement Option Program established under s.
118 121.091(13) or a mandatory participant of the State University
119 System Optional Retirement Program established under s. 121.35.
120 (h)(g) “Employer” means an employer, as defined in s.
121 121.021(10), of an eligible employee.
122 (i) “Investment program” means the Public Employee
123 Retirement Investment Program established under this part.
124 (j) “Local employer” means an employer that is not a state
125 employer or a district school board employer.
126 (k)(h) “Participant” means an eligible employee who is
127 enrolled elects to participate in the investment program, Public
128 Employee Optional Retirement program and enrolls in such
129 optional program as provided in subsection (4) or a terminated
130 Deferred Retirement Option Program participant as described in
131 subsection (22) (21).
132 (i)“ Public Employee Optional Retirement Program,”
133 “optional program,” or “optional retirement program” means the
134 alternative defined contribution retirement program established
135 under this section.
136 (l)(j) “Retiree” means a former participant of the
137 investment Florida Retirement System Public Employee Optional
138 Retirement program who has terminated employment and has taken a
139 distribution as provided in s. 121.591, except for a mandatory
140 distribution of a de minimis account authorized by the state
141 board.
142 (m)(k) “State board” or “board” means the State Board of
143 Administration.
144 (l) “Trustees” means Trustees of the State Board of
145 Administration.
146 (n) “State employer” means an agency, board, branch,
147 commission, community college, department, institution,
148 institution of higher education, or water management district
149 that participates in the Florida Retirement System for the
150 benefit of certain employees.
151 (o)(m) “Vested” or “vesting” means the guarantee that a
152 participant is eligible to receive a retirement benefit upon
153 completion of the required years of service under the Public
154 Employee Optional Retirement Program.
155 (3) ELIGIBILITY; RETIREMENT SERVICE CREDIT; TRANSFER OF
156 BENEFITS.—
157 (a) Participation in the Public Employee Optional
158 Retirement Program is limited to eligible employees.
159 Participation in the optional retirement program is in lieu of
160 participation in the defined benefit program of the Florida
161 Retirement System.
162 (a)(b) An eligible employee who is employed in a regularly
163 established position by a state employer on June 1, 2002; by a
164 district school board employer on September 1, 2002; or by a
165 local employer on December 1, 2002, and who is a member of the
166 defined benefit retirement program of the Florida Retirement
167 System at the time of his or her election to participate in the
168 investment Public Employee Optional Retirement program shall
169 retain all retirement service credit earned under the defined
170 benefit retirement program of the Florida Retirement System as
171 credited under the system and is shall be entitled to a deferred
172 benefit upon termination, if eligible under the system. However,
173 election to participate in the investment Public Employee
174 Optional Retirement program terminates the active membership of
175 the employee in the defined benefit program of the Florida
176 Retirement System, and the service of a participant in the
177 investment Public Employee Optional Retirement program is shall
178 not be creditable under the defined benefit retirement program
179 of the Florida Retirement System for purposes of benefit accrual
180 but is creditable shall be credited for purposes of vesting.
181 (b)(c)1. Notwithstanding paragraph (a), an (b), each
182 eligible employee who elects to participate in the investment
183 Public Employee Optional Retirement program and establishes one
184 or more individual participant accounts under the optional
185 program may elect to transfer to the investment optional program
186 a sum representing the present value of the employee's
187 accumulated benefit obligation under the defined benefit
188 retirement program of the Florida Retirement System. Upon such
189 transfer, all service credit previously earned under the defined
190 benefit program is of the Florida Retirement System shall be
191 nullified for purposes of entitlement to a future benefit under
192 the defined benefit program of the Florida Retirement System. A
193 participant may not transfer is precluded from transferring the
194 accumulated benefit obligation balance from the defined benefit
195 program after the time upon the expiration of the period for
196 enrolling afforded to enroll in the investment optional program.
197 1.2. For purposes of this subsection, the present value of
198 the member's accumulated benefit obligation is based upon the
199 member's estimated creditable service and estimated average
200 final compensation under the defined benefit program, subject to
201 recomputation under subparagraph 2. 3. For state employees
202 enrolling under subparagraph (4)(a)1., initial estimates shall
203 will be based upon creditable service and average final
204 compensation as of midnight on June 30, 2002; for district
205 school board employees enrolling under subparagraph (4)(b)1.,
206 initial estimates shall will be based upon creditable service
207 and average final compensation as of midnight on September 30,
208 2002; and for local government employees enrolling under
209 subparagraph (4)(c)1., initial estimates shall will be based
210 upon creditable service and average final compensation as of
211 midnight on December 31, 2002. The dates respectively specified
212 are above shall be construed as the “estimate date” for these
213 employees. The actuarial present value of the employee's
214 accumulated benefit obligation shall be based on the following:
215 a. The discount rate and other relevant actuarial
216 assumptions used to value the Florida Retirement System Trust
217 Fund at the time the amount to be transferred is determined,
218 consistent with the factors provided in sub-subparagraphs b. and
219 c.
220 b. A benefit commencement age, based on the member's
221 estimated creditable service as of the estimate date. The
222 benefit commencement age is shall be the younger of the
223 following, but may shall not be younger than the member's age as
224 of the estimate date:
225 (I) Age 62; or
226 (II) The age the member would attain if the member
227 completed 30 years of service with an employer, assuming the
228 member worked continuously from the estimate date, and
229 disregarding any vesting requirement that would otherwise apply
230 under the defined benefit program of the Florida Retirement
231 System.
232 c. For members of the Special Risk Class, and for members
233 of the Special Risk Administrative Support Class entitled to
234 retain the special risk normal retirement date, the benefit
235 commencement age is shall be the younger of the following, but
236 may shall not be younger than the member's age as of the
237 estimate date:
238 (I) Age 55; or
239 (II) The age the member would attain if the member
240 completed 25 years of service with an employer, assuming the
241 member worked continuously from the estimate date, and
242 disregarding any vesting requirement that would otherwise apply
243 under the defined benefit program of the Florida Retirement
244 System.
245 d. The calculation must shall disregard vesting
246 requirements and early retirement reduction factors that would
247 otherwise apply under the defined benefit retirement program.
248 2.3. For each participant who elects to transfer moneys
249 from the defined benefit program to his or her account in the
250 investment optional program, the division shall recompute the
251 amount transferred under subparagraph 1. within 2. not later
252 than 60 days after the actual transfer of funds based upon the
253 participant's actual creditable service and actual final average
254 compensation as of the initial date of participation in the
255 investment optional program. If the recomputed amount differs
256 from the amount transferred under subparagraph 2. by $10 or
257 more, the division shall:
258 a. Transfer, or cause to be transferred, from the Florida
259 Retirement System Trust Fund to the participant's account in the
260 optional program the excess, if any, of the recomputed amount
261 over the previously transferred amount together with interest
262 from the initial date of transfer to the date of transfer under
263 this subparagraph, based upon the effective annual interest
264 equal to the assumed return on the actuarial investment which
265 was used in the most recent actuarial valuation of the system,
266 compounded annually.
267 b. Transfer, or cause to be transferred, from the
268 participant's account to the Florida Retirement System Trust
269 Fund the excess, if any, of the previously transferred amount
270 over the recomputed amount, together with interest from the
271 initial date of transfer to the date of transfer under this
272 subparagraph, based upon 6 percent effective annual interest,
273 compounded annually, pro rata based on the participant's
274 allocation plan.
275 3.4. As directed by the participant, the state board shall
276 transfer or cause to be transferred the appropriate amounts to
277 the designated accounts within. The board shall establish
278 transfer procedures by rule, but the actual transfer shall not
279 be later than 30 days after the effective date of the member's
280 participation in the investment optional program unless the
281 major financial markets for securities available for a transfer
282 are seriously disrupted by an unforeseen event that which also
283 causes the suspension of trading on any national securities
284 exchange in the country where the securities are were issued. In
285 that event, the such 30-day period of time may be extended by a
286 resolution of the state board trustees. The state board shall
287 establish transfer procedures by rule. Transfers are not
288 commissionable or subject to other fees and may be in the form
289 of securities or cash, as determined by the state board. Such
290 securities are shall be valued as of the date of receipt in the
291 participant's account.
292 4.5. If the state board or the division receives
293 notification from the United States Internal Revenue Service
294 that this paragraph or any portion of this paragraph will cause
295 the retirement system, or a portion thereof, to be disqualified
296 for tax purposes under the Internal Revenue Code, then the
297 portion that will cause the disqualification does not apply.
298 Upon such notice, the state board and the division shall notify
299 the presiding officers of the Legislature.
300 (4) OPTIONAL PARTICIPATION; ENROLLMENT.—
301 (a)1. With respect to an eligible employee who is employed
302 in a regularly established position by a state employer after on
303 June 1, 2002; by a district school board employer after
304 September 1, 2002; or by a local employer after December 1,
305 2002, but before January 1, 2010, the, by a state employer:
306 a. Any such employee may elect to participate in the Public
307 Employee Optional Retirement Program in lieu of retaining his or
308 her membership in the defined benefit program of the Florida
309 Retirement System. The election must be made in writing or by
310 electronic means and must be filed with the third-party
311 administrator by August 31, 2002, or, in the case of an active
312 employee who is on a leave of absence on April 1, 2002, by the
313 last business day of the 5th month following the month the leave
314 of absence concludes. This election is irrevocable, except as
315 provided in paragraph (e). Upon making such election, the
316 employee shall be enrolled as a participant of the Public
317 Employee Optional Retirement Program, the employee's membership
318 in the Florida Retirement System shall be governed by the
319 provisions of this part, and the employee's membership in the
320 defined benefit program of the Florida Retirement System shall
321 terminate. The employee's enrollment in the Public Employee
322 Optional Retirement Program shall be effective the first day of
323 the month for which a full month's employer contribution is made
324 to the optional program.
325 b. Any such employee who fails to elect to participate in
326 the Public Employee Optional Retirement Program within the
327 prescribed time period is deemed to have elected to retain
328 membership in the defined benefit program of the Florida
329 Retirement System, and the employee's option to elect to
330 participate in the optional program is forfeited.
331 2. With respect to employees who become eligible to
332 participate in the Public Employee Optional Retirement Program
333 by reason of employment in a regularly established position with
334 a state employer commencing after April 1, 2002:
335 a. Any such employee shall, by default, be enrolled in the
336 defined benefit retirement program of the Florida Retirement
337 System at the commencement of employment, and may, by the last
338 business day of the 5th month following the employee's month of
339 hire, elect to participate in the investment Public Employee
340 Optional Retirement program. The employee's election must be
341 made in writing or by electronic means and must be filed with
342 the third-party administrator. The election to participate in
343 the investment optional program is irrevocable, except as
344 provided in paragraph (c) (e).
345 1.b. If the employee files such election within the
346 prescribed time period, enrollment in the investment optional
347 program is shall be effective on the first day of employment.
348 The employer retirement contributions paid through the month of
349 the employee plan change shall be transferred to the investment
350 optional program, and, effective the first day of the next
351 month, the employer must shall pay the applicable contributions
352 based on the employee membership class in the optional program.
353 2.c. An Any such employee who fails to elect to participate
354 in the investment Public Employee Optional Retirement program
355 within the prescribed time period is deemed to have elected to
356 retain membership in the defined benefit program of the Florida
357 Retirement System, and the employee's option to elect to
358 participate in the investment optional program is forfeited.
359 3. With respect to employees who become eligible to
360 participate in the Public Employee Optional Retirement
361 Investment Program pursuant to s. 121.051(2)(c)3. or s.
362 121.35(3)(i), the any such employee may elect to participate in
363 the investment Public Employee Optional Retirement program in
364 lieu of retaining his or her participation in the State
365 Community College System Optional Retirement Program or the
366 State University System Optional Retirement Program. The
367 election must be made in writing or by electronic means and must
368 be filed with the third-party administrator. This election is
369 irrevocable, except as provided in paragraph (c) (e). Upon
370 making such election, the employee shall be enrolled as a
371 participant in of the investment Public Employee Optional
372 Retirement program, the employee's membership in the Florida
373 Retirement System shall be governed by the provisions of this
374 part, and the employee's participation in the State Community
375 College System Optional Retirement Program or the State
376 University System Optional Retirement Program shall terminate.
377 The employee's enrollment in the investment Public Employee
378 Optional Retirement program is shall be effective on the first
379 day of the month for which a full month's employer contribution
380 is made to the investment optional program.
381 4. For purposes of this paragraph, “state employer” means
382 any agency, board, branch, commission, community college,
383 department, institution, institution of higher education, or
384 water management district of the state, which participates in
385 the Florida Retirement System for the benefit of certain
386 employees.
387 (b)1. With respect to an eligible employee who is employed
388 in a regularly established position on September 1, 2002, by a
389 district school board employer:
390 a. Any such employee may elect to participate in the Public
391 Employee Optional Retirement Program in lieu of retaining his or
392 her membership in the defined benefit program of the Florida
393 Retirement System. The election must be made in writing or by
394 electronic means and must be filed with the third-party
395 administrator by November 30, or, in the case of an active
396 employee who is on a leave of absence on July 1, 2002, by the
397 last business day of the 5th month following the month the leave
398 of absence concludes. This election is irrevocable, except as
399 provided in paragraph (e). Upon making such election, the
400 employee shall be enrolled as a participant of the Public
401 Employee Optional Retirement Program, the employee's membership
402 in the Florida Retirement System shall be governed by the
403 provisions of this part, and the employee's membership in the
404 defined benefit program of the Florida Retirement System shall
405 terminate. The employee's enrollment in the Public Employee
406 Optional Retirement Program shall be effective the first day of
407 the month for which a full month's employer contribution is made
408 to the optional program.
409 b. Any such employee who fails to elect to participate in
410 the Public Employee Optional Retirement Program within the
411 prescribed time period is deemed to have elected to retain
412 membership in the defined benefit program of the Florida
413 Retirement System, and the employee's option to elect to
414 participate in the optional program is forfeited.
415 2. With respect to employees who become eligible to
416 participate in the Public Employee Optional Retirement Program
417 by reason of employment in a regularly established position with
418 a district school board employer commencing after July 1, 2002:
419 a. Any such employee shall, by default, be enrolled in the
420 defined benefit retirement program of the Florida Retirement
421 System at the commencement of employment, and may, by the last
422 business day of the 5th month following the employee's month of
423 hire, elect to participate in the Public Employee Optional
424 Retirement Program. The employee's election must be made in
425 writing or by electronic means and must be filed with the third
426 party administrator. The election to participate in the optional
427 program is irrevocable, except as provided in paragraph (e).
428 b. If the employee files such election within the
429 prescribed time period, enrollment in the optional program shall
430 be effective on the first day of employment. The employer
431 retirement contributions paid through the month of the employee
432 plan change shall be transferred to the optional program, and,
433 effective the first day of the next month, the employer shall
434 pay the applicable contributions based on the employee
435 membership class in the optional program.
436 c. Any such employee who fails to elect to participate in
437 the Public Employee Optional Retirement Program within the
438 prescribed time period is deemed to have elected to retain
439 membership in the defined benefit program of the Florida
440 Retirement System, and the employee's option to elect to
441 participate in the optional program is forfeited.
442 3. For purposes of this paragraph, “district school board
443 employer” means any district school board that participates in
444 the Florida Retirement System for the benefit of certain
445 employees, or a charter school or charter technical career
446 center that participates in the Florida Retirement System as
447 provided in s. 121.051(2)(d).
448 (c)1. With respect to an eligible employee who is employed
449 in a regularly established position on December 1, 2002, by a
450 local employer:
451 a. Any such employee may elect to participate in the Public
452 Employee Optional Retirement Program in lieu of retaining his or
453 her membership in the defined benefit program of the Florida
454 Retirement System. The election must be made in writing or by
455 electronic means and must be filed with the third-party
456 administrator by February 28, 2003, or, in the case of an active
457 employee who is on a leave of absence on October 1, 2002, by the
458 last business day of the 5th month following the month the leave
459 of absence concludes. This election is irrevocable, except as
460 provided in paragraph (e). Upon making such election, the
461 employee shall be enrolled as a participant of the Public
462 Employee Optional Retirement Program, the employee's membership
463 in the Florida Retirement System shall be governed by the
464 provisions of this part, and the employee's membership in the
465 defined benefit program of the Florida Retirement System shall
466 terminate. The employee's enrollment in the Public Employee
467 Optional Retirement Program shall be effective the first day of
468 the month for which a full month's employer contribution is made
469 to the optional program.
470 b. Any such employee who fails to elect to participate in
471 the Public Employee Optional Retirement Program within the
472 prescribed time period is deemed to have elected to retain
473 membership in the defined benefit program of the Florida
474 Retirement System, and the employee's option to elect to
475 participate in the optional program is forfeited.
476 2. With respect to employees who become eligible to
477 participate in the Public Employee Optional Retirement Program
478 by reason of employment in a regularly established position with
479 a local employer commencing after October 1, 2002:
480 a. Any such employee shall, by default, be enrolled in the
481 defined benefit retirement program of the Florida Retirement
482 System at the commencement of employment, and may, by the last
483 business day of the 5th month following the employee's month of
484 hire, elect to participate in the Public Employee Optional
485 Retirement Program. The employee's election must be made in
486 writing or by electronic means and must be filed with the third
487 party administrator. The election to participate in the optional
488 program is irrevocable, except as provided in paragraph (e).
489 b. If the employee files such election within the
490 prescribed time period, enrollment in the optional program shall
491 be effective on the first day of employment. The employer
492 retirement contributions paid through the month of the employee
493 plan change shall be transferred to the optional program, and,
494 effective the first day of the next month, the employer shall
495 pay the applicable contributions based on the employee
496 membership class in the optional program.
497 c. Any such employee who fails to elect to participate in
498 the Public Employee Optional Retirement Program within the
499 prescribed time period is deemed to have elected to retain
500 membership in the defined benefit program of the Florida
501 Retirement System, and the employee's option to elect to
502 participate in the optional program is forfeited.
503 3. For purposes of this paragraph, “local employer” means
504 any employer not included in paragraph (a) or paragraph (b).
505 (b)(d) Contributions available for self-direction by a
506 participant who has not selected one or more specific investment
507 products shall be allocated as prescribed by the state board.
508 The third-party administrator shall notify the any such
509 participant at least quarterly that the participant should take
510 an affirmative action to make an asset allocation among the
511 optional program products.
512 (c)(e) After the period during which an eligible employee
513 had the choice to elect the defined benefit program or the
514 investment Public Employee Optional Retirement program, or the
515 month following the receipt of the eligible employee's plan
516 election, if sooner, the employee shall have one opportunity, at
517 the employee's discretion, to choose to move from the defined
518 benefit program to the investment Public Employee Optional
519 Retirement program or from the investment Public Employee
520 Optional Retirement program to the defined benefit program.
521 Eligible employees may elect to move between Florida Retirement
522 System programs only if they are earning service credit in an
523 employer-employee relationship consistent with the requirements
524 under s. 121.021(17)(b), excluding leaves of absence without
525 pay. Effective July 1, 2005, such elections are shall be
526 effective on the first day of the month following the receipt of
527 the election by the third-party administrator and are not
528 subject to the requirements regarding an employer-employee
529 relationship or receipt of contributions for the eligible
530 employee in the effective month, except that the employee must
531 meet the conditions of the previous sentence when the election
532 is received by the third-party administrator. This paragraph is
533 shall be contingent upon approval by from the Internal Revenue
534 Service for including the choice described herein within the
535 programs offered by the Florida Retirement System.
536 1. If the employee chooses to move to the investment Public
537 Employee Optional Retirement program, the applicable provisions
538 of subsection (3) this section shall govern the transfer.
539 2. If the employee chooses to move to the defined benefit
540 program, the employee must transfer from his or her investment
541 Public Employee Optional Retirement program account, and from
542 other employee moneys as necessary, a sum representing the
543 present value of that employee's accumulated benefit obligation
544 immediately following the time of such movement, determined
545 assuming that attained service equals the sum of service in the
546 defined benefit program and service in the investment Public
547 Employee Optional Retirement program. Benefit commencement
548 occurs on the first date the employee is would become eligible
549 for unreduced benefits, using the discount rate and other
550 relevant actuarial assumptions that were used to value the
551 Florida Retirement System defined benefit program plan
552 liabilities in the most recent actuarial valuation. For any
553 employee who, at the time of the second election, already
554 maintains an accrued benefit amount in the defined benefit
555 program plan, the then-present value of the such accrued benefit
556 shall be deemed part of the required transfer amount described
557 in this subparagraph. The division shall ensure that the
558 transfer sum is prepared using a formula and methodology
559 certified by an enrolled actuary.
560 3. Notwithstanding subparagraph 2., an employee who chooses
561 to move to the defined benefit program and who became eligible
562 to participate in the Public Employee Optional Retirement
563 Program by reason of employment in a regularly established
564 position with a state employer after June 1, 2002; a district
565 school board employer after September 1, 2002; or a local
566 employer after December 1, 2002, must transfer from his or her
567 investment Public Employee Optional Retirement program account,
568 and, from other employee moneys as necessary, a sum representing
569 that employee's actuarial accrued liability.
570 4. An employee's Employees' ability to transfer from the
571 Florida Retirement System defined benefit program to the
572 investment Public Employee Optional Retirement program pursuant
573 to paragraphs (a) and (b) (a)-(d), and the ability of a for
574 current employee employees to have an option to later transfer
575 back into the defined benefit program under subparagraph 2.,
576 shall be deemed a significant system amendment. Pursuant to s.
577 121.031(4), any such resulting unfunded liability arising from
578 actual original transfers from the defined benefit program to
579 the investment optional program must shall be amortized within
580 30 plan years as a separate unfunded actuarial base independent
581 of the reserve stabilization mechanism defined in s.
582 121.031(3)(f). For the first 25 years, a no direct amortization
583 payment may not shall be calculated for this base. During this
584 25-year period, the such separate base shall be used to offset
585 the impact of employees exercising their second program election
586 under this paragraph. It is the legislative intent of the
587 Legislature that the actuarial funded status of the Florida
588 Retirement System defined benefit program not be affected plan
589 is neither beneficially nor adversely impacted by such second
590 program elections in any significant manner, after due
591 recognition of the separate unfunded actuarial base. Following
592 this initial 25-year period, any remaining balance of the
593 original separate base shall be amortized over the remaining 5
594 years of the required 30-year amortization period.
595 (6)(5) CONTRIBUTIONS.—
596 (a) Each employer shall contribute on behalf of each
597 participant in the investment Public Employee Optional
598 Retirement program, as provided in part III of this chapter. The
599 state board, acting as plan fiduciary, shall ensure that all
600 plan assets are held in a trust, pursuant to s. 401 of the
601 Internal Revenue Code. The fiduciary shall ensure that said
602 contributions are allocated as follows:
603 1. The portion earmarked for participant accounts shall be
604 used to purchase interests in the appropriate investment
605 vehicles for the accounts of each participant as specified by
606 the participant, or in accordance with paragraph (4)(b) (4)(d).
607 2. The portion earmarked for administrative and educational
608 expenses shall be transferred to the state board.
609 3. The portion earmarked for disability benefits shall be
610 transferred to the department.
611 (b) Employers are responsible for notifying participants
612 regarding maximum contribution levels allowed permitted under
613 the Internal Revenue Code. If a participant contributes to any
614 other tax-deferred plan, the participant he or she is
615 responsible for ensuring that total contributions made to the
616 investment optional program and to any other such plan do not
617 exceed federally permitted maximums.
618 (c) The investment Public Employee Optional Retirement
619 program may accept for deposit into participant accounts
620 contributions in the form of rollovers or direct trustee-to
621 trustee transfers by or on behalf of participants, reasonably
622 determined by the state board to be eligible for rollover or
623 transfer to the investment optional retirement program pursuant
624 to the Internal Revenue Code, if such contributions are made in
625 accordance with rules as may be adopted by the board. Such
626 contributions must shall be accounted for in accordance with any
627 applicable Internal Revenue Code requirements and rules of the
628 state board.
629 (7)(6) VESTING REQUIREMENTS.—
630 (a)1. With respect to employer contributions paid on behalf
631 of the participant to the investment Public Employee Optional
632 Retirement program, plus interest and earnings thereon and less
633 investment fees and administrative charges, a participant is
634 shall be vested after completing 1 work year, as defined in s.
635 121.021(54), with an employer, including any service while the
636 participant was a member of the defined benefit retirement
637 program or an optional retirement program authorized under s.
638 121.051(2)(c) or s. 121.055(6).
639 2. If the participant terminates employment before prior to
640 satisfying the vesting requirements, the nonvested accumulation
641 must shall be transferred from the participant's accounts to the
642 state board for deposit and investment by the state board in its
643 the suspense account in of the Public Employee Optional
644 Retirement Investment Program Trust Fund of the board. If the
645 terminated participant is reemployed as an eligible employee
646 within 5 years, the state board shall transfer to the
647 participant's account any amount of the moneys previously
648 transferred from the participant's accounts to the suspense
649 account, of the Public Employee Optional Retirement Program
650 Trust Fund, plus the actual earnings on such amount while in the
651 suspense account.
652 (b)1. With respect to amounts transferred from the defined
653 benefit program to the investment program, plus interest and
654 earnings, and less investment fees and administrative charges, a
655 participant shall be vested in the amount transferred from the
656 defined benefit program, plus interest and earnings thereon and
657 less administrative charges and investment fees, upon meeting
658 the service requirements for the participant's membership class
659 as set forth in s. 121.021(29). The third-party administrator
660 shall account for such amounts for each participant. The
661 division shall notify the participant and the third-party
662 administrator when the participant has satisfied the vesting
663 period for Florida Retirement System purposes.
664 2. If the participant terminates employment before prior to
665 satisfying the vesting requirements, the nonvested accumulation
666 must shall be transferred from the participant's accounts to the
667 state board for deposit and investment by the board in the
668 suspense account in of the Public Employee Optional Retirement
669 Investment Program Trust Fund of the board. If the terminated
670 participant is reemployed as an eligible employee within 5
671 years, the state board shall transfer to the participant's
672 account any amount of the moneys previously transferred from the
673 participant's accounts to the suspense account of the Public
674 Employee Optional Retirement Program Trust Fund, plus the actual
675 earnings on such amount while in the suspense account.
676 (c) Any nonvested accumulations transferred from a
677 participant's account to the state board's suspense account
678 shall be forfeited by the participant if the participant is not
679 reemployed as an eligible employee within 5 years after
680 termination.
681 (8)(7)BENEFITS.—Under the Public Employee Optional
682 Retirement Investment Program, benefits shall:
683 (a) Benefits shall Be provided in accordance with s. 401(a)
684 of the Internal Revenue Code.
685 (b) Benefits shall Accrue in individual accounts that are
686 participant-directed, portable, and funded by employer
687 contributions and earnings thereon.
688 (c) Benefits shall Be payable in accordance with the
689 provisions of s. 121.591.
690 (9)(8) PROGRAM ADMINISTRATION OF PROGRAM.—
691 (a) The Public Employee Optional Retirement Investment
692 Program shall be administered by the state board and affected
693 employers. The state board is authorized to require oaths, by
694 affidavit or otherwise, and acknowledgments from persons in
695 connection with the administration of its duties and
696 responsibilities under the program this chapter. An No oath, by
697 affidavit or otherwise, may not shall be required of an employee
698 participant at the time of enrollment election. Acknowledgment
699 of an employee's election to participate in the program shall be
700 no greater than necessary to confirm the employee's election.
701 The state board shall adopt rules establishing the roles role
702 and responsibilities of affected state, local government, and
703 education-related employers, the state board, the department,
704 and third-party contractors in administering the investment
705 Public Employee Optional Retirement program. The department
706 shall adopt rules necessary to administer implement the
707 investment optional program in coordination with the defined
708 benefit retirement program and the disability benefits available
709 under the investment optional program.
710 (a)1.(b)1. The state board shall select and contract with a
711 one third-party administrator to provide administrative services
712 if those services cannot be competitively and contractually
713 provided by the division of Retirement within the Department of
714 Management Services. With the approval of the state board, the
715 third-party administrator may subcontract with other
716 organizations or individuals to provide components of the
717 administrative services. As a cost of administration, the state
718 board may compensate any such contractor for its services, in
719 accordance with the terms of the contract, as is deemed
720 necessary or proper by the board. The third-party administrator
721 may not be an approved provider or be affiliated with an
722 approved provider.
723 2. These administrative services may include, but are not
724 limited to, enrollment of eligible employees, collection of
725 employer contributions, disbursement of such contributions to
726 approved providers in accordance with the allocation directions
727 of participants; services relating to consolidated billing;
728 individual and collective recordkeeping and accounting; asset
729 purchase, control, and safekeeping; and direct disbursement of
730 funds to and from the third-party administrator, the division,
731 the state board, employers, participants, approved providers,
732 and beneficiaries. This section does not prevent or prohibit a
733 bundled provider from providing any administrative or customer
734 service, including accounting and administration of individual
735 participant benefits and contributions; individual participant
736 recordkeeping; asset purchase, control, and safekeeping; direct
737 execution of the participant's instructions as to asset and
738 contribution allocation; calculation of daily net asset values;
739 direct access to participant account information; or periodic
740 reporting to participants, at least quarterly, on account
741 balances and transactions, if these services are authorized by
742 the state board as part of the contract.
743 (b)1.3. The state board shall select and contract with one
744 or more organizations to provide educational services. With
745 approval of the state board, the organizations may subcontract
746 with other organizations or individuals to provide components of
747 the educational services. As a cost of administration, the state
748 board may compensate any such contractor for its services in
749 accordance with the terms of the contract, as is deemed
750 necessary or proper by the board. The education organization may
751 not be an approved provider or be affiliated with an approved
752 provider.
753 2.4. Educational services shall be designed by the state
754 board and department to assist employers, eligible employees,
755 participants, and beneficiaries in order to maintain compliance
756 with United States Department of Labor regulations under s.
757 404(c) of the Employee Retirement Income Security Act of 1974
758 and to assist employees in understanding their choice of defined
759 benefit or defined contribution retirement program alternatives.
760 Educational services include, but are not limited to,
761 disseminating educational materials; providing retirement
762 planning education; explaining the differences between the
763 defined benefit retirement plan and the defined contribution
764 retirement programs plan; and offering financial planning
765 guidance on matters such as investment diversification,
766 investment risks, investment costs, and asset allocation. An
767 approved provider may also provide educational information,
768 including retirement planning and investment allocation
769 information concerning its products and services.
770 (c)1. In evaluating and selecting a third-party
771 administrator, the state board shall establish criteria for
772 evaluating under which it shall consider the relative
773 capabilities and qualifications of each proposed administrator.
774 In developing such criteria, the state board shall consider:
775 a. The administrator's demonstrated experience in providing
776 administrative services to public or private sector retirement
777 systems.
778 b. The administrator's demonstrated experience in providing
779 daily valued recordkeeping to defined contribution programs
780 plans.
781 c. The administrator's ability and willingness to
782 coordinate its activities with the Florida Retirement System
783 employers, the state board, and the division, and to supply to
784 such employers, the board, and the division the information and
785 data they require, including, but not limited to, monthly
786 management reports, quarterly participant reports, and ad hoc
787 reports requested by the department or state board.
788 d. The cost-effectiveness and levels of the administrative
789 services provided.
790 e. The administrator's ability to interact with the
791 participants, the employers, the state board, the division, and
792 the providers; the means by which participants may access
793 account information, direct investment of contributions, make
794 changes to their accounts, transfer moneys between available
795 investment vehicles, and transfer moneys between investment
796 products; and any fees that apply to such activities.
797 f. Any other factor deemed necessary by the Trustees of the
798 state board of Administration.
799 2. In evaluating and selecting an educational provider, the
800 state board shall establish criteria under which it shall
801 consider the relative capabilities and qualifications of each
802 proposed educational provider. In developing such criteria, the
803 board shall consider:
804 a. Demonstrated experience in providing educational
805 services to public or private sector retirement systems.
806 b. Ability and willingness to coordinate its activities
807 with the Florida Retirement System employers, the state board,
808 and the division, and to supply to such employers, the board,
809 and the division the information and data they require,
810 including, but not limited to, reports on educational contacts.
811 c. The cost-effectiveness and levels of the educational
812 services provided.
813 d. Ability to provide educational services via different
814 media, including, but not limited to, the Internet, personal
815 contact, seminars, brochures, and newsletters.
816 e. Any other factor deemed necessary by the Trustees of the
817 state board of Administration.
818 3. The establishment of the criteria shall be solely within
819 the discretion of the state board.
820 (d) The state board shall develop the form and content of
821 any contracts to be offered under the investment Public Employee
822 Optional Retirement program. In developing the its contracts,
823 the board shall must consider:
824 1. The nature and extent of the rights and benefits to be
825 afforded in relation to the required contributions required
826 under the program.
827 2. The suitability of the rights and benefits provided to
828 be afforded and the interests of employers in the recruitment
829 and retention of eligible employees.
830 (e)1. The state board may contract with any consultant for
831 professional services, including legal, consulting, accounting,
832 and actuarial services, deemed necessary to implement and
833 administer the investment optional program by the Trustees of
834 the state board of Administration. The board may enter into a
835 contract with one or more vendors to provide low-cost investment
836 advice to participants, supplemental to education provided by
837 the third-party administrator. All fees under any such contract
838 shall be paid by those participants who choose to use the
839 services of the vendor.
840 2. The department may contract with consultants for
841 professional services, including legal, consulting, accounting,
842 and actuarial services, deemed necessary to implement and
843 administer the investment optional program in coordination with
844 the defined benefit program of the Florida Retirement System.
845 The department, in coordination with the state board, may enter
846 into a contract with the third-party administrator in order to
847 coordinate services common to the various programs within the
848 Florida Retirement System.
849 (f) The third-party administrator may shall not receive
850 direct or indirect compensation from an approved provider,
851 except as specifically provided for in the contract with the
852 state board.
853 (g) The state board shall resolve any conflict between the
854 third-party administrator and an approved provider if when such
855 conflict threatens the implementation or administration of the
856 program or the quality of services to employees and may resolve
857 any other conflicts.
858 (10)(9) INVESTMENT OPTIONS OR PRODUCTS; PERFORMANCE
859 REVIEW.—
860 (a) The state board shall develop policy and procedures for
861 selecting, evaluating, and monitoring the performance of
862 approved providers and investment products to which employees
863 may direct retirement contributions under the investment
864 program. In accordance with such policy and procedures, the
865 state board shall designate and contract for a number of
866 investment products as determined by the board. The board shall
867 also select one or more bundled providers, each of which whom
868 may offer multiple investment options and related services, if
869 when such an approach is determined by the board to provide
870 afford value to the participants otherwise not available through
871 individual investment products. Each approved bundled provider
872 may offer investment options that provide participants with the
873 opportunity to invest in each of the following asset classes, to
874 be composed of individual options that represent either a single
875 asset class or a combination thereof: money markets, United
876 States fixed income, United States equities, and foreign stock.
877 The state board shall review and manage all educational
878 materials, contract terms, fee schedules, and other aspects of
879 the approved provider relationships to ensure that no provider
880 is unduly favored or penalized by virtue of its status within
881 the investment program plan.
882 (b) The state board shall consider investment options or
883 products it considers appropriate to give participants the
884 opportunity to accumulate retirement benefits, subject to the
885 following:
886 1. The investment Public Employee Optional Retirement
887 program must offer a diversified mix of low-cost investment
888 products that span the risk-return spectrum and may include a
889 guaranteed account as well as investment products, such as
890 individually allocated guaranteed and variable annuities, which
891 meet the requirements of this subsection and combine the ability
892 to accumulate investment returns with the option of receiving
893 lifetime income consistent with the long-term retirement
894 security of a pension plan and similar to the lifetime-income
895 benefit provided by the Florida Retirement System.
896 2. Investment options or products offered by the group of
897 approved providers may include mutual funds, group annuity
898 contracts, individual retirement annuities, interests in trusts,
899 collective trusts, separate accounts, and other such financial
900 instruments, and may include products that give participants the
901 option of committing their contributions for an extended time
902 period in an effort to obtain returns higher than those that
903 could be obtained from investment products offering full
904 liquidity.
905 3. The state board may shall not contract with a any
906 provider that imposes a front-end, back-end, contingent, or
907 deferred sales charge, or any other fee that limits or restricts
908 the ability of participants to select any investment product
909 available in the investment optional program. This prohibition
910 does not apply to fees or charges that are imposed on
911 withdrawals from products that give participants the option of
912 committing their contributions for an extended time period in an
913 effort to obtain returns higher than those that could be
914 obtained from investment products offering full liquidity,
915 provided that the product in question, net of all fees and
916 charges, produces material benefits relative to other comparable
917 products in the program offering full liquidity.
918 4. Fees or charges for insurance features, such as
919 mortality and expense-risk charges, must be reasonable relative
920 to the benefits provided.
921 (c) In evaluating and selecting approved providers and
922 products, the state board shall establish criteria for
923 evaluating under which it shall consider the relative
924 capabilities and qualifications of each proposed provider
925 company and product. In developing such criteria, the board
926 shall consider the following to the extent such factors may be
927 applied in connection with investment products, services, or
928 providers:
929 1. Experience in the United States providing retirement
930 products and related financial services under a defined
931 contribution retirement program plans.
932 2. Financial strength and stability as which shall be
933 evidenced by the highest ratings assigned by nationally
934 recognized rating services when comparing proposed providers
935 that are so rated.
936 3. Intrastate and interstate portability of the product
937 offered, including early withdrawal options.
938 4. Compliance with the Internal Revenue Code.
939 5. The cost-effectiveness of the product provided and the
940 levels of service supporting the product relative to its
941 benefits and its characteristics, including, without limitation,
942 the level of risk borne by the provider.
943 6. The provider company's ability and willingness to
944 coordinate its activities with Florida Retirement System
945 employers, the department, and the state board, and to supply to
946 the such employers, the department, and the board with the
947 information and data they require.
948 7. The methods available to participants to interact with
949 the provider company; the means by which participants may access
950 account information, direct investment of contributions, make
951 changes to their accounts, transfer moneys between available
952 investment vehicles, and transfer moneys between provider
953 companies; and any fees that apply to such activities.
954 8. The provider company's policies with respect to the
955 transfer of individual account balances, contributions, and
956 earnings thereon, both internally among investment products
957 offered by the provider company and externally between approved
958 providers, as well as any fees, charges, reductions, or
959 penalties that may be applied.
960 9. An evaluation of specific investment products, taking
961 into account each product's experience in meeting its investment
962 return objectives net of all related fees, expenses, and
963 charges, including, but not limited to, investment management
964 fees, loads, distribution and marketing fees, custody fees,
965 recordkeeping fees, education fees, annuity expenses, and
966 consulting fees.
967 10. Organizational factors, including, but not limited to,
968 financial solvency, organizational depth, and experience in
969 providing institutional and retail investment services.
970 (d) As a condition of offering an any investment option or
971 product in the investment optional retirement program, the
972 approved provider must agree to make the investment product or
973 service available under the most beneficial terms offered to any
974 other customer, subject to approval by the Trustees of the state
975 board of Administration.
976 (e) The state board shall regularly review the performance
977 of each approved provider and product and related organizational
978 factors to ensure continued compliance with established
979 selection criteria and with board policy and procedures.
980 Providers and products may be terminated subject to contract
981 provisions. The state board shall adopt procedures to transfer
982 account balances from terminated products or providers to other
983 products or providers in the investment optional program.
984 (f)1. An approved provider shall comply with all applicable
985 federal and state securities and insurance laws and regulations
986 applicable to the provider, as well as with the applicable rules
987 and guidelines of the National Association of Securities Dealers
988 which govern the ethical marketing of investment products. In
989 furtherance of this mandate, an approved provider must agree in
990 its contract with the state board to establish and maintain a
991 compliance education and monitoring system to supervise the
992 activities of all personnel who directly communicate with
993 individual participants and recommend investment products, which
994 system is consistent with rules of the National Association of
995 Securities Dealers.
996 2. Approved provider personnel who directly communicate
997 with individual participants and who recommend investment
998 products shall make an independent and unbiased determination as
999 to whether an investment product is suitable for a particular
1000 participant.
1001 3. The state board shall develop procedures to receive and
1002 resolve participant complaints against a provider or approved
1003 provider personnel, and, if when appropriate, refer such
1004 complaints to the appropriate agency.
1005 4. Approved providers may not sell or in any way distribute
1006 any customer list or participant identification information
1007 generated through their offering of products or services through
1008 the investment optional retirement program.
1009 (11)(10) EDUCATION COMPONENT.—
1010 (a) The state board, in coordination with the department,
1011 shall provide for an education component for eligible employees
1012 system members in a manner consistent with the provisions of
1013 this section. The education component must be available to
1014 eligible employees at least 90 days prior to the beginning date
1015 of the election period for the employees of the respective types
1016 of employers.
1017 (b) The education component must provide system members
1018 with impartial and balanced information about plan choices. The
1019 education component must involve multimedia formats. Program
1020 comparisons must, to the greatest extent possible, be based upon
1021 the retirement income that different retirement programs may
1022 provide to the participant. The board shall monitor the
1023 performance of the contract to ensure that the program is
1024 conducted in accordance with the contract, applicable law, and
1025 the rules of the board.
1026 (c) The board, in coordination with the department, shall
1027 provide for an initial and ongoing transfer education component
1028 to provide system members with information necessary to make
1029 informed plan choice decisions. The transfer education component
1030 must include, but is not limited to, information on:
1031 1. The amount of money available to a member to transfer to
1032 the defined contribution program.
1033 2. The features of and differences between the defined
1034 benefit program and the defined contribution program, both
1035 generally and specifically, as those differences may affect the
1036 member.
1037 3. The expected benefit available if the member were to
1038 retire under each of the retirement programs, based on
1039 appropriate alternative sets of assumptions.
1040 4. The rate of return from investments in the defined
1041 contribution program and the period of time over which such rate
1042 of return must be achieved to equal or exceed the expected
1043 monthly benefit payable to the member under the defined benefit
1044 program.
1045 5. The historical rates of return for the investment
1046 alternatives available in the defined contribution programs.
1047 6. The benefits and historical rates of return on
1048 investments available in a typical deferred compensation plan or
1049 a typical plan under s. 403(b) of the Internal Revenue Code for
1050 which the employee may be eligible.
1051 7. The program choices available to employees of the State
1052 University System and the comparative benefits of each available
1053 program, if applicable.
1054 8. Payout options available in each of the retirement
1055 programs.
1056 (a)(d) An ongoing education and communication component
1057 must provide eligible employees system members with information
1058 necessary to make informed decisions about choices within their
1059 retirement program of membership and in preparation for
1060 retirement. The component must include, but is not limited to,
1061 information concerning:
1062 1. Rights and conditions of membership.
1063 2. Benefit features within the program, options, and
1064 effects of certain decisions.
1065 3. Coordination of contributions and benefits with a
1066 deferred compensation plan under s. 457 or a plan under s.
1067 403(b) of the Internal Revenue Code.
1068 4. Significant program changes.
1069 5. Contribution rates and program funding status.
1070 6. Planning for retirement.
1071 (b)(e) Descriptive materials must be prepared under the
1072 assumption that the employee is an unsophisticated investor, and
1073 all materials used in the education component must be approved
1074 by the state board before prior to dissemination.
1075 (c)(f) The state board and the department shall also
1076 establish a communication component to provide program
1077 information to participating employers and the employers'
1078 personnel and payroll officers and to explain their respective
1079 responsibilities in conjunction with the retirement programs.
1080 (d)(g) Funding for education of new employees may reflect
1081 administrative costs to the investment optional program and the
1082 defined benefit program.
1083 (h) Pursuant to paragraph (8)(a), all Florida Retirement
1084 System employers have an obligation to regularly communicate the
1085 existence of the two Florida Retirement System plans and the
1086 plan choice in the natural course of administering their
1087 personnel functions, using the educational materials supplied by
1088 the state board and the Department of Management Services.
1089 (12)(11) PARTICIPANT INFORMATION REQUIREMENTS.—The state
1090 board shall ensure that each participant is provided a quarterly
1091 statement that accounts for the contributions made on behalf of
1092 the such participant; the interest and investment earnings
1093 thereon; and any fees, penalties, or other deductions that apply
1094 thereto. At a minimum, such statements must:
1095 (a) Indicate the participant's investment options.
1096 (b) State the market value of the account at the close of
1097 the current quarter and previous quarter.
1098 (c) Show account gains and losses for the period and
1099 changes in account accumulation unit values for the quarter
1100 period.
1101 (e) Indicate any account changes due to adjustment of
1102 contribution levels, reallocation of contributions, balance
1103 transfers, or withdrawals.
1104 (f) Set forth any fees, charges, penalties, and deductions
1105 that apply to the account.
1106 (g) Indicate the amount of the account in which the
1107 participant is fully vested and the amount of the account in
1108 which the participant is not vested.
1109 (h) Indicate each investment product's performance relative
1110 to an appropriate market benchmark.
1111 The third-party administrator shall provide quarterly and annual
1112 summary reports to the state board and any other reports
1113 requested by the department or the board. In any solicitation or
1114 offer of coverage under the defined contribution an optional
1115 retirement program, a provider company shall be governed by the
1116 contract readability provisions of s. 627.4145, notwithstanding
1117 s. 627.4145(6)(c). In addition, all descriptive materials must
1118 be prepared under the assumption that the participant is an
1119 unsophisticated investor. Provider companies must maintain an
1120 internal system of quality assurance, have proven functional
1121 systems that are date-calculation compliant, and be subject to a
1122 due-diligence inquiry that proves their capacity and fitness to
1123 undertake service responsibilities.
1124 (13)(12) ADVISORY COUNCIL TO PROVIDE ADVICE AND
1125 ASSISTANCE.—The Investment Advisory Council, created pursuant to
1126 s. 215.444, shall assist the state board in implementing and
1127 administering the Public Employee Optional Retirement Investment
1128 Program. The Investment Advisory council, created pursuant to s.
1129 215.444, shall review the state board's initial recommendations
1130 regarding the criteria to be used in selecting and evaluating
1131 approved providers and investment products. The council may
1132 provide comments on the recommendations to the board within 45
1133 days after receiving the initial recommendations. The state
1134 board shall make the final determination as to whether any
1135 investment provider or product, any contractor, or any and all
1136 contract provisions are shall be approved for the investment
1137 program.
1138 (14)(13) FEDERAL REQUIREMENTS.—
1139 (a) Provisions of This section shall be construed, and the
1140 investment Public Employee Optional Retirement program shall be
1141 administered, so as to comply with the Internal Revenue Code, 26
1142 U.S.C., and specifically with plan qualification requirements
1143 imposed on governmental plans under s. 401(a) of the Internal
1144 Revenue Code. The state board may shall have the power and
1145 authority to adopt rules reasonably necessary to establish or
1146 maintain the qualified status of the investment Optional
1147 Retirement program under the Internal Revenue Code and to
1148 implement and administer the Optional Retirement program in
1149 compliance with the Internal Revenue Code and as designated
1150 under this part; provided however, that the board shall not have
1151 the authority to adopt any rule which makes a substantive change
1152 to the Optional Retirement Program as designed by this part.
1153 (b) Any section or provision of this chapter which is
1154 susceptible to more than one construction shall must be
1155 interpreted in favor of the construction most likely to satisfy
1156 requirements imposed by s. 401(a) of the Internal Revenue Code.
1157 (c) Contributions payable under this section for any
1158 limitation year may not exceed the maximum amount allowable for
1159 qualified defined contribution pension plans under applicable
1160 provisions of the Internal Revenue Code. If an employee who is
1161 enrolled who has elected to participate in the Public Employee
1162 Optional Retirement Investment Program participates in any other
1163 plan that is maintained by the participating employer, benefits
1164 that accrue under the investment Public Employee Optional
1165 Retirement program shall be considered primary for any aggregate
1166 limitation applicable under s. 415 of the Internal Revenue Code.
1167 (15)(14) INVESTMENT POLICY STATEMENT.—
1168 (a) Investment products and approved providers selected for
1169 the investment Public Employee Optional Retirement program must
1170 shall conform with the Public Employee Optional Retirement
1171 Investment Program Investment Policy Statement, herein referred
1172 to as the “statement,” as developed and approved by the Trustees
1173 of the state board of Administration. The statement must
1174 include, among other items, the investment objectives of the
1175 investment Public Employee Optional Retirement program, manager
1176 selection and monitoring guidelines, and performance measurement
1177 criteria. As required from time to time, the executive director
1178 of the state board may present recommended changes in the
1179 statement to the board for approval.
1180 (b) Before Prior to presenting the statement, or any
1181 recommended changes thereto, to the state board, the executive
1182 director of the board shall present such statement or changes to
1183 the Investment Advisory Council for review. The council shall
1184 present the results of its review to the board prior to the
1185 board's final approval of the statement or changes in the
1186 statement.
1187 (16)(15) STATEMENT OF FIDUCIARY STANDARDS AND
1188 RESPONSIBILITIES.—
1189 (a) Investment of optional defined contribution program
1190 retirement plan assets shall be made for the sole interest and
1191 exclusive purpose of providing benefits to plan participants and
1192 beneficiaries and defraying reasonable expenses of administering
1193 the program plan. The program's assets are to be invested, on
1194 behalf of the program participants, with the care, skill, and
1195 diligence that a prudent person acting in a like manner would
1196 undertake. The performance of the investment duties set forth in
1197 this paragraph shall comply with the fiduciary standards set
1198 forth in the Employee Retirement Income Security Act of 1974 at
1199 29 U.S.C. s. 1104(a)(1)(A)-(C). In case of conflict with other
1200 provisions of law authorizing investments, the investment and
1201 fiduciary standards set forth in this subsection shall prevail.
1202 (b) If a participant or beneficiary of the defined
1203 contribution Public Employee Optional Retirement program
1204 exercises control over the assets in his or her account, as
1205 determined by reference to regulations of the United States
1206 Department of Labor under s. 404(c) of the Employee Retirement
1207 Income Security Act of 1974 and all applicable laws governing
1208 the operation of the program, a no program fiduciary is not
1209 shall be liable for any loss to a participant's or beneficiary's
1210 account which results from the such participant's or
1211 beneficiary's exercise of control.
1212 (c) Subparagraph (9)(b)2. (8)(b)4. and paragraph (16)(b)
1213 (15)(b) incorporate the federal law concept of participant
1214 control, established by regulations of the United States
1215 Department of Labor under s. 404(c) of the Employee Retirement
1216 Income Security Act of 1974 (ERISA). The purpose of this
1217 paragraph is to assist employers and the state board of
1218 Administration in maintaining compliance with s. 404(c), while
1219 avoiding unnecessary costs and eroding participant benefits
1220 under the defined contribution Public Employee Optional
1221 Retirement program. Pursuant to 29 C.F.R. s. 2550.404c
1222 1(b)(2)(i)(B)(1)(viii), the state board of Administration or its
1223 designated agents shall deliver to participants of the Public
1224 Employee Optional Retirement Program a copy of the prospectus
1225 most recently provided to the plan, and, pursuant to 29 C.F.R.
1226 s. 2550.404c-1(b)(2)(i)(B)(2)(ii), shall provide such
1227 participants an opportunity to obtain this information, except
1228 that:
1229 1. The requirement to deliver a prospectus shall be deemed
1230 to be satisfied by delivery of a fund profile that contains the
1231 information that would be included in a summary prospectus as
1232 described by Rule 498 under the Securities Act of 1933, 17
1233 C.F.R. s. 230.498. If When the transaction fees, expense
1234 information or other information provided by a mutual fund in
1235 the prospectus does not reflect terms negotiated by the state
1236 board of Administration or its designated agents, the
1237 aforementioned requirement is deemed to be satisfied by delivery
1238 of a separate document described by Rule 498 substituting
1239 accurate information; and
1240 2. Delivery shall be deemed to have been effected if
1241 delivery is through electronic means and the following standards
1242 are satisfied:
1243 a. Electronically-delivered documents are prepared and
1244 provided consistent with style, format, and content requirements
1245 applicable to printed documents;
1246 b. Each participant is provided timely and adequate notice
1247 of the documents that are to be delivered and their significance
1248 thereof, and of the participant's right to obtain a paper copy
1249 of such documents free of charge;
1250 c.(I) Participants have adequate access to the electronic
1251 documents, at locations such as their worksites or public
1252 facilities, and have the ability to convert the documents to
1253 paper free of charge by the state board of Administration, and
1254 the board or its designated agents take appropriate and
1255 reasonable measures to ensure that the system for furnishing
1256 electronic documents results in actual receipt., or
1257 (II) Participants have provided consent to receive
1258 information in electronic format, which consent may be revoked;
1259 and
1260 d. The state board of Administration, or its designated
1261 agent, actually provides paper copies of the documents free of
1262 charge, upon request.
1263 (17)(16) DISABILITY BENEFITS.—For any participant of the
1264 investment optional retirement program who becomes totally and
1265 permanently disabled, benefits must shall be paid in accordance
1266 with the provisions of s. 121.591.
1267 (18)(17) SOCIAL SECURITY COVERAGE.—Social security coverage
1268 shall be provided for all officers and employees who become
1269 participants of the investment optional program. Any
1270 modification of the present agreement with the Social Security
1271 Administration, or referendum required under the Social Security
1272 Act, for the purpose of providing social security coverage for
1273 any member shall be requested by the state agency in compliance
1274 with the applicable provisions of the Social Security Act
1275 governing such coverage. However, retroactive social security
1276 coverage for service before prior to December 1, 1970, with the
1277 employer may shall not be provided for any member who was not
1278 covered under the agreement as of November 30, 1970.
1279 (19)(18) RETIREE HEALTH INSURANCE SUBSIDY.—All officers and
1280 employees who are participants of the investment optional
1281 program are shall be eligible to receive the retiree health
1282 insurance subsidy, subject to the provisions of s. 112.363.
1283 (20)(19) PARTICIPANT RECORDS.—Personal identifying
1284 information of a participant in the investment Public Employee
1285 Optional Retirement program contained in Florida Retirement
1286 System records held by the state board of Administration or the
1287 department of Management Services is exempt from s. 119.07(1)
1288 and s. 24(a), Art. I of the State Constitution.
1289 (21)(20) DESIGNATION OF BENEFICIARIES.—
1290 (a) Each participant may, on a form provided for that
1291 purpose, signed and filed with the third-party administrator,
1292 designate a choice of one or more persons, named sequentially or
1293 jointly, as his or her beneficiary for receiving who shall
1294 receive the benefits, if any, which may be payable pursuant to
1295 this chapter in the event of the participant's death. If no
1296 beneficiary is named in this manner, or if no beneficiary
1297 designated by the participant survives the participant, the
1298 beneficiary shall be the spouse of the deceased, if living. If
1299 the participant's spouse is not alive at the time of the
1300 beneficiary's his or her death, the beneficiary shall be the
1301 living children of the participant. If no children survive, the
1302 beneficiary shall be the participant's father or mother, if
1303 living; otherwise, the beneficiary shall be the participant's
1304 estate. The beneficiary most recently designated by a
1305 participant on a form or letter filed with the third-party
1306 administrator shall be the beneficiary entitled to any benefits
1307 payable at the time of the participant's death. However
1308 Notwithstanding any other provision in this subsection to the
1309 contrary, for a participant who dies before prior to his or her
1310 effective date of retirement, the spouse at the time of death
1311 shall be the participant's beneficiary unless the such
1312 participant designates a different beneficiary as provided in
1313 this subsection subsequent to the participant's most recent
1314 marriage.
1315 (b) If a participant designates a primary beneficiary other
1316 than the participant's spouse, the participant's spouse must
1317 sign the beneficiary designation form to acknowledge the
1318 designation. This requirement does not apply to the designation
1319 of one or more contingent beneficiaries to receive benefits
1320 remaining upon the death of the primary beneficiary or
1321 beneficiaries.
1322 (c) Notwithstanding the participant's designation of
1323 benefits to be paid through a trust to a beneficiary that is a
1324 natural person, and notwithstanding the provisions of the trust,
1325 benefits must shall be paid directly to the beneficiary if the
1326 person is no longer a minor or an incapacitated person as
1327 defined in s. 744.102.
1328 (22)(21) PARTICIPATION BY TERMINATED DEFERRED RETIREMENT
1329 OPTION PROGRAM PARTICIPANTS.—Notwithstanding any other provision
1330 of law to the contrary, participants in the Deferred Retirement
1331 Option Program offered under part I may, after conclusion of
1332 their participation in the program, elect to roll over or
1333 authorize a direct trustee-to-trustee transfer to an account
1334 under the Public Employee Optional Retirement Investment Program
1335 of their Deferred Retirement Option Program proceeds distributed
1336 as provided under s. 121.091(13)(c)5. The transaction must
1337 constitute an “eligible rollover distribution” within the
1338 meaning of s. 402(c)(4) of the Internal Revenue Code.
1339 (a) The investment Public Employee Optional Retirement
1340 program may accept such amounts for deposit into participant
1341 accounts as provided in paragraph (6)(c) (5)(c).
1342 (b) The affected participant shall direct the investment of
1343 his or her investment account; however, unless he or she becomes
1344 a renewed member of the Florida Retirement System under s.
1345 121.122 and elects to participate in the investment Public
1346 Employee Optional Retirement program, employer contributions may
1347 not be made to the participant's account as provided under
1348 paragraph (6)(a) (5)(a).
1349 (c) The state board or the department is not responsible
1350 for locating those persons who may be eligible to participate in
1351 the investment Public Employee Optional Retirement program under
1352 this subsection.
1353 (23)(22) CREDIT FOR MILITARY SERVICE.—Creditable service of
1354 any member of the Public Employee Optional Retirement Investment
1355 Program includes shall include military service in the Armed
1356 Forces of the United States as provided in the conditions
1357 outlined in s. 121.111(1).
1358 Section 2. Section 121.4502, Florida Statutes, is amended
1359 to read:
1360 121.4502 Public Employee Optional Retirement Investment
1361 Program Trust Fund.—
1362 (1) The Public Employee Optional Retirement Investment
1363 Program Trust Fund is created to hold the assets of the Public
1364 Employee Optional Retirement Investment Program in trust for the
1365 exclusive benefit of program such program's participants and
1366 beneficiaries, and for the payment of reasonable administrative
1367 expenses of the program, in accordance with s. 401 of the
1368 Internal Revenue Code, and shall be administered by the State
1369 Board of Administration as trustee. Funds shall be credited to
1370 the trust fund as provided in this part and, to be used for the
1371 purposes of this part. The trust fund is exempt from the service
1372 charges imposed by s. 215.20.
1373 (2) The Public Employee Optional Retirement Investment
1374 Program Trust Fund is a retirement trust fund of the Florida
1375 Retirement System that accounts for retirement plan assets held
1376 by the state in a trustee capacity as a fiduciary for individual
1377 participants in the Public Employee Optional Retirement
1378 Investment Program and, pursuant to s. 19(f), Art. III of the
1379 State Constitution, is not subject to termination.
1380 Section 3. Paragraph (g) of subsection (2) of section
1381 110.123, Florida Statutes, is amended to read:
1382 110.123 State group insurance program.—
1383 (2) DEFINITIONS.—As used in this section, the term:
1384 (g) “Retired state officer or employee” or “retiree” means
1385 any state or state university officer or employee who retires
1386 under a state retirement system or a state optional annuity or
1387 retirement program or is placed on disability retirement, and
1388 who was insured under the state group insurance program at the
1389 time of retirement, and who begins receiving retirement benefits
1390 immediately after retirement from state or state university
1391 office or employment. In addition to these requirements, the
1392 term includes any state officer or state employee who retires
1393 under the defined contribution Public Employee Optional
1394 Retirement program established under part II of chapter 121
1395 shall be considered a “retired state officer or employee” or
1396 “retiree” as used in this section if he or she:
1397 1. Meets the age and service requirements to qualify for
1398 normal retirement as set forth in s. 121.021(29); or
1399 2. Has attained the age specified by s. 72(t)(2)(A)(i) of
1400 the Internal Revenue Code and has 6 years of creditable service.
1401 Section 4. Section 112.0801, Florida Statutes, is amended
1402 to read:
1403 112.0801 Group insurance; participation by retired
1404 employees.—
1405 (1) Any state agency, county, municipality, special
1406 district, community college, or district school board that which
1407 provides life, health, accident, hospitalization, or annuity
1408 insurance, or all of any kinds of such insurance, for its
1409 officers and employees and their dependents upon a group
1410 insurance plan or self-insurance plan shall allow all former
1411 personnel who have retired before prior to October 1, 1987, as
1412 well as those who retire on or after such date, and their
1413 eligible dependents, the option of continuing to participate in
1414 the such group insurance plan or self-insurance plan. Retirees
1415 and their eligible dependents shall be offered the same health
1416 and hospitalization insurance coverage as is offered to active
1417 employees at a premium cost of no more than the premium cost
1418 applicable to active employees. For the retired employees and
1419 their eligible dependents, the cost of any such continued
1420 participation in any type of plan or any of the cost thereof may
1421 be paid by the employer or by the retired employees. To
1422 determine health and hospitalization plan costs, the employer
1423 shall commingle the claims experience of the retiree group with
1424 the claims experience of the active employees; and, for other
1425 types of coverage, the employer may commingle the claims
1426 experience of the retiree group with the claims experience of
1427 active employees. Retirees covered under Medicare may be
1428 experience-rated separately from the retirees not covered by
1429 Medicare and from active employees if, provided that the total
1430 premium does not exceed that of the active group and coverage is
1431 basically the same as for the active group.
1432 (2) For purposes of this section, “retiree” has the same
1433 meaning as in s. 110.123(2). means any officer or employee who
1434 retires under a state retirement system or a state optional
1435 annuity or retirement program or is placed on disability
1436 retirement and who begins receiving retirement benefits
1437 immediately after retirement from employment. In addition to
1438 these requirements, any officer or employee who retires under
1439 the Public Employee Optional Retirement Program established
1440 under part II of chapter 121 shall be considered a “retired
1441 officer or employee” or “retiree” as used in this section if he
1442 or she:
1443 (a) Meets the age and service requirements to qualify for
1444 normal retirement as set forth in s. 121.021(29); or
1445 (b) Has attained the age specified by s. 72(t)(2)(A)(i) of
1446 the Internal Revenue Code and has 6 years of creditable service.
1447 Section 5. Paragraph (b) of subsection (2) and paragraph
1448 (e) of subsection (3) of section 112.363, Florida Statutes, are
1449 amended to read:
1450 112.363 Retiree health insurance subsidy.—
1451 (2) ELIGIBILITY FOR RETIREE HEALTH INSURANCE SUBSIDY.—
1452 (b) For purposes of this section, a person is deemed
1453 retired from a state-administered retirement system if when he
1454 or she terminates employment with all employers participating in
1455 the Florida Retirement System as described in s. 121.021(39)
1456 and:
1457 1. For a participant of the defined contribution Public
1458 Employee Optional Retirement program established under part II
1459 of chapter 121, the participant meets the age or service
1460 requirements to qualify for normal retirement as set forth in s.
1461 121.021(29).
1462 2. For a member of the Florida Retirement System defined
1463 benefit program, or any employee who maintains creditable
1464 service under both the defined benefit program and the defined
1465 contribution Public Employee Optional Retirement program, the
1466 member begins drawing retirement benefits from the defined
1467 benefit program of the Florida Retirement System.
1468 (3) RETIREE HEALTH INSURANCE SUBSIDY AMOUNT.—
1469 (e)1. Beginning July 1, 2001, each eligible retiree of the
1470 defined benefit program of the Florida Retirement System, or, if
1471 the retiree is deceased, his or her beneficiary who is receiving
1472 a monthly benefit from such retiree's account and who is a
1473 spouse, or a person who meets the definition of joint annuitant
1474 in s. 121.021(28), shall receive a monthly retiree health
1475 insurance subsidy payment equal to the number of years of
1476 creditable service, as defined in s. 121.021(17), completed at
1477 the time of retirement multiplied by $5; however, no eligible
1478 retiree or beneficiary may receive a subsidy payment of more
1479 than $150 or less than $30. If there are multiple beneficiaries,
1480 the total payment may must not be greater than the payment to
1481 which the retiree was entitled. The health insurance subsidy
1482 amount payable to any person receiving the retiree health
1483 insurance subsidy payment on July 1, 2001, may shall not be
1484 reduced solely by operation of this subparagraph.
1485 2. Beginning July 1, 2002, each eligible participant of the
1486 defined contribution Public Employee Optional Retirement program
1487 of the Florida Retirement System who has met the requirements of
1488 this section, or, if the participant is deceased, his or her
1489 spouse who is the participant's designated beneficiary, shall
1490 receive a monthly retiree health insurance subsidy payment equal
1491 to the number of years of creditable service, as provided in
1492 this subparagraph, completed at the time of retirement,
1493 multiplied by $5; however, no eligible retiree or beneficiary
1494 may receive a subsidy payment of more than $150 or less than
1495 $30. For purposes of determining a participant's creditable
1496 service used to calculate the health insurance subsidy, a
1497 participant's years of service credit or fraction thereof shall
1498 be based on the participant's work year as defined in s.
1499 121.021(54). Credit must shall be awarded for a full work year
1500 whenever health insurance subsidy contributions have been made
1501 as required by law for each month in the participant's work
1502 year. In addition, all years of creditable service retained
1503 under the Florida Retirement System defined benefit program must
1504 shall be included as creditable service for purposes of this
1505 section. Notwithstanding any other provision in this section to
1506 the contrary, the spouse at the time of death is shall be the
1507 participant's beneficiary unless such participant has designated
1508 a different beneficiary subsequent to the participant's most
1509 recent marriage.
1510 Section 6. Subsection (1) of section 112.65, Florida
1511 Statutes, is amended to read:
1512 112.65 Limitation of benefits.—
1513 (1) ESTABLISHMENT OF PROGRAM.—The normal retirement benefit
1514 or pension payable to a retiree who becomes a member of any
1515 retirement system or plan and who has not previously
1516 participated in such plan, on or after January 1, 1980, may
1517 shall not exceed 100 percent of his or her average final
1518 compensation. However, nothing contained in this section does
1519 not shall apply to supplemental retirement benefits or to
1520 pension increases attributable to cost-of-living increases or
1521 adjustments. For the purposes of this section, benefits accruing
1522 in individual participant accounts established under the defined
1523 contribution Public Employee Optional Retirement program
1524 established in part II of chapter 121, are considered
1525 supplemental benefits. As used in this section, the term
1526 “average final compensation” means the average of the member's
1527 earnings over a period of time which the governmental entity has
1528 established by statute, charter, or ordinance.
1529 Section 7. Subsections (3) and (22) of section 121.021,
1530 Florida Statutes, are amended to read:
1531 121.021 Definitions.—The following words and phrases as
1532 used in this chapter have the respective meanings set forth
1533 unless a different meaning is plainly required by the context:
1534 (3) “System” means the general retirement system
1535 established by this chapter to be known and cited as the
1536 “Florida Retirement System,” including, but not limited to, the
1537 defined benefit retirement program administered under the
1538 provisions of part I of this part chapter and the defined
1539 contribution retirement program known as the Public Employee
1540 Optional Retirement Program and administered under the
1541 provisions of part II of this chapter.
1542 (22) “Compensation” means the monthly salary paid a member
1543 by his or her employer for work performed arising from that
1544 employment.
1545 (b) Under no circumstances shall Compensation for a member
1546 participating in the defined benefit retirement program or the
1547 Public Employee Optional Retirement Investment Program of the
1548 Florida Retirement System may not include:
1549 1. Fees paid professional persons for special or particular
1550 services or include salary payments made from a faculty practice
1551 plan authorized by the Board of Governors of the State
1552 University System for eligible clinical faculty at a college in
1553 a state university that has a faculty practice plan; or
1554 2. Any bonuses, as defined in subsection (47), or other
1555 payments prohibited from inclusion in the member's average final
1556 compensation and defined in subsection (47).
1557 Section 8. Paragraph (c) of subsection (2) of section
1558 121.051, Florida Statutes, is amended to read:
1559 121.051 Participation in the system.—
1560 (2) OPTIONAL PARTICIPATION.—
1561 (c) Employees of public community colleges or charter
1562 technical career centers sponsored by public community colleges,
1563 as designated in s. 1000.21(3), who are members of the Regular
1564 Class of the Florida Retirement System and who comply with the
1565 criteria set forth in this paragraph and in s. 1012.875 may
1566 elect, in lieu of participating in the Florida Retirement
1567 System, to withdraw from the Florida Retirement System
1568 altogether and participate in an optional retirement program
1569 provided by the employing agency under s. 1012.875, to be known
1570 as the State Community College System Optional Retirement
1571 Program. Pursuant thereto:
1572 1. Through June 30, 2001, the cost to the employer for an
1573 such annuity under the optional retirement program shall equal
1574 the normal cost portion of the employer retirement contribution
1575 which would be required if the employee were a member of the
1576 Regular Class defined benefit program, plus the portion of the
1577 contribution rate required by s. 112.363(8) that would otherwise
1578 be assigned to the Retiree Health Insurance Subsidy Trust Fund.
1579 Effective July 1, 2001, each employer shall contribute on behalf
1580 of each participant in the optional program an amount equal to
1581 10.43 percent of the participant's gross monthly compensation.
1582 The employer shall deduct an amount to provide for the
1583 administration of the optional retirement program. The employer
1584 providing the optional program shall contribute an additional
1585 amount to the Florida Retirement System Trust Fund equal to the
1586 unfunded actuarial accrued liability portion of the Regular
1587 Class contribution rate.
1588 2. The decision to participate in the such an optional
1589 retirement program is shall be irrevocable for as long as the
1590 employee holds a position eligible for participation, except as
1591 provided in subparagraph 3. Any service creditable under the
1592 Florida Retirement System is shall be retained after the member
1593 withdraws from the Florida Retirement System; however,
1594 additional service credit in the Florida Retirement System may
1595 shall not be earned while a member of the optional retirement
1596 program.
1597 3. An employee who has elected to participate in the
1598 optional retirement program shall have one opportunity, at the
1599 employee's discretion, to choose to transfer from the optional
1600 retirement program to the defined benefit program of the Florida
1601 Retirement System or to the defined contribution Public Employee
1602 Optional Retirement program established under part II of this
1603 chapter, subject to the terms of the applicable optional
1604 retirement program contracts.
1605 a. If the employee chooses to move to the defined
1606 contribution Public Employee Optional Retirement program, any
1607 contributions, interest, and earnings creditable to the employee
1608 under the State Community College System Optional Retirement
1609 Program shall be retained by the employee in the State Community
1610 College System Optional Retirement Program, and the applicable
1611 provisions of s. 121.4501(4) shall govern the election.
1612 b. If the employee chooses to move to the defined benefit
1613 program of the Florida Retirement System, the employee shall
1614 receive service credit equal to his or her years of service
1615 under the State Community College System Optional Retirement
1616 Program.
1617 (I) The cost for such credit must shall be an amount
1618 representing the present value of that employee's accumulated
1619 benefit obligation for the affected period of service. The cost
1620 shall be calculated as if the benefit commencement occurs on the
1621 first date the employee would become eligible for unreduced
1622 benefits, using the discount rate and other relevant actuarial
1623 assumptions that were used to value the Florida Retirement
1624 System defined benefit program plan liabilities in the most
1625 recent actuarial valuation. The calculation must shall include
1626 any service already maintained under the defined benefit program
1627 plan in addition to the years under the State Community College
1628 System Optional Retirement Program. The present value of any
1629 service already maintained under the defined benefit program
1630 plan shall be applied as a credit to total cost resulting from
1631 the calculation. The division shall ensure that the transfer sum
1632 is prepared using a formula and methodology certified by an
1633 enrolled actuary.
1634 (II) The employee must transfer from his or her State
1635 Community College System Optional Retirement Program account and
1636 from other employee moneys as necessary, a sum representing the
1637 present value of that employee's accumulated benefit obligation
1638 immediately following the time of such movement, determined
1639 assuming that attained service equals the sum of service in the
1640 defined benefit program and service in the State Community
1641 College System Optional Retirement Program.
1642 4. Participation in the optional retirement program is
1643 shall be limited to those employees who satisfy the following
1644 eligibility criteria:
1645 a. The employee is must be otherwise eligible for
1646 membership or renewed membership in the Regular Class of the
1647 Florida Retirement System, as provided in s. 121.021(11) and
1648 (12) or s. 121.122.
1649 b. The employee is must be employed in a full-time position
1650 classified in the Accounting Manual for Florida's Public
1651 Community Colleges as:
1652 (I) Instructional; or
1653 (II) Executive Management, Instructional Management, or
1654 Institutional Management, if a community college determines that
1655 recruiting to fill a vacancy in the position is to be conducted
1656 in the national or regional market, and the duties and
1657 responsibilities of the position include:
1658 (A) The duties and responsibilities of the position include
1659 either The formulation, interpretation, or implementation of
1660 policies; or
1661 (B) The duties and responsibilities of the position include
1662 The performance of functions that are unique or specialized
1663 within higher education and that frequently involve the support
1664 of the mission of the community college.
1665 c. The employee is must be employed in a position not
1666 included in the Senior Management Service Class of the Florida
1667 Retirement System, as described in s. 121.055.
1668 5. Participants in the program are subject to the same
1669 reemployment limitations, renewed membership provisions, and
1670 forfeiture provisions as are applicable to regular members of
1671 the Florida Retirement System under ss. 121.091(9), 121.122, and
1672 121.091(5), respectively.
1673 6. Eligible community college employees are shall be
1674 compulsory members of the Florida Retirement System until,
1675 pursuant to the procedures set forth in s. 1012.875, a written
1676 election to withdraw from the Florida Retirement System and to
1677 participate in the State Community College System Optional
1678 Retirement Program is filed with the program administrator and
1679 received by the division.
1680 a. Any community college employee whose program eligibility
1681 results from initial employment shall be enrolled in the State
1682 Community College System Optional Retirement Program retroactive
1683 to the first day of eligible employment. The employer retirement
1684 contributions paid through the month of the employee plan change
1685 must shall be transferred to the community college for the
1686 employee's optional program account, and, effective the first
1687 day of the next month, the employer shall pay the applicable
1688 contributions based upon subparagraph 1.
1689 b. Any community college employee whose program eligibility
1690 results from a change in status due to the subsequent
1691 designation of the employee's position as one of those specified
1692 in subparagraph 4. or due to the employee's appointment,
1693 promotion, transfer, or reclassification to a position specified
1694 in subparagraph 4. shall be enrolled in the program upon the
1695 first day of the first full calendar month that such change in
1696 status becomes effective. The employer retirement contributions
1697 paid from the effective date through the month of the employee
1698 plan change must shall be transferred to the community college
1699 for the employee's optional program account, and, effective the
1700 first day of the next month, the employer shall pay the
1701 applicable contributions based upon subparagraph 1.
1702 7. Effective July 1, 2003, through December 31, 2008, any
1703 participant of the State Community College System Optional
1704 Retirement Program who has service credit in the defined benefit
1705 plan of the Florida Retirement System for the period between his
1706 or her first eligibility to transfer from the defined benefit
1707 plan to the optional retirement program and the actual date of
1708 transfer may, during his or her employment, elect to transfer to
1709 the optional retirement program a sum representing the present
1710 value of the accumulated benefit obligation under the defined
1711 benefit retirement program for such period of service credit.
1712 Upon such transfer, all such service credit previously earned
1713 under the defined benefit program of the Florida Retirement
1714 System during this period is shall be nullified for purposes of
1715 entitlement to a future benefit under the defined benefit
1716 program of the Florida Retirement System.
1717 Section 9. Paragraph (b) of subsection (1) of section
1718 121.055, Florida Statutes, is amended to read:
1719 121.055 Senior Management Service Class.—There is hereby
1720 established a separate class of membership within the Florida
1721 Retirement System to be known as the “Senior Management Service
1722 Class,” which shall become effective February 1, 1987.
1723 (1)
1724 (b)1. Except as provided in subparagraph 2., effective
1725 January 1, 1990, participation in the Senior Management Service
1726 Class is shall be compulsory for the president of each community
1727 college, the manager of each participating city or county, and
1728 all appointed district school superintendents. Effective January
1729 1, 1994, additional positions may be designated for inclusion in
1730 the Senior Management Service Class of the Florida Retirement
1731 System, provided that:
1732 a. Positions to be included in the class shall be
1733 designated by the local agency employer. Notice of intent to
1734 designate positions for inclusion in the class must shall be
1735 published once a week for 2 consecutive weeks in a newspaper of
1736 general circulation published in the county or counties
1737 affected, as provided in chapter 50.
1738 b. Up to 10 nonelective full-time positions may be
1739 designated for each local agency employer reporting to the
1740 department of Management Services; for local agencies with 100
1741 or more regularly established positions, additional nonelective
1742 full-time positions may be designated, not to exceed 1 percent
1743 of the regularly established positions within the agency.
1744 c. Each position added to the class must be a managerial or
1745 policymaking position filled by an employee who is not subject
1746 to continuing contract and serves at the pleasure of the local
1747 agency employer without civil service protection, and who:
1748 (I) Heads an organizational unit; or
1749 (II) Has responsibility to effect or recommend personnel,
1750 budget, expenditure, or policy decisions in his or her areas of
1751 responsibility.
1752 2. In lieu of participation in the Senior Management
1753 Service Class, members of the Senior Management Service class,
1754 pursuant to the provisions of subparagraph 1., may withdraw from
1755 the Florida Retirement System altogether. The decision to
1756 withdraw from the Florida Retirement System is shall be
1757 irrevocable for as long as the employee holds the such a
1758 position. Any service creditable under the Senior Management
1759 Service Class shall be retained after the member withdraws from
1760 the Florida Retirement System; however, additional service
1761 credit in the Senior Management Service Class may shall not be
1762 earned after such withdrawal. Such members are shall not be
1763 eligible to participate in the Senior Management Service
1764 Optional Annuity Program.
1765 3. Effective January 1, 2006, through June 30, 2006, an
1766 employee who has withdrawn from the Florida Retirement System
1767 under subparagraph 2. has one opportunity to elect to
1768 participate in either the defined benefit program or the Public
1769 Employee Optional Retirement Program of the Florida Retirement
1770 System.
1771 a. If the employee elects to participate in the Public
1772 Employee Optional Retirement Program, membership shall be
1773 prospective, and the applicable provisions of s. 121.4501(4)
1774 shall govern the election.
1775 b. If the employee elects to participate in the defined
1776 benefit program of the Florida Retirement System, the employee
1777 shall, upon payment to the system trust fund of the amount
1778 calculated under sub-sub-subparagraph (I), receive service
1779 credit for prior service based upon the time during which the
1780 employee had withdrawn from the system.
1781 (I) The cost for such credit shall be an amount
1782 representing the actuarial accrued liability for the affected
1783 period of service. The cost shall be calculated using the
1784 discount rate and other relevant actuarial assumptions that were
1785 used to value the Florida Retirement System defined benefit plan
1786 liabilities in the most recent actuarial valuation. The
1787 calculation shall include any service already maintained under
1788 the defined benefit plan in addition to the period of
1789 withdrawal. The actuarial accrued liability attributable to any
1790 service already maintained under the defined benefit plan shall
1791 be applied as a credit to the total cost resulting from the
1792 calculation. The division shall ensure that the transfer sum is
1793 prepared using a formula and methodology certified by an
1794 actuary.
1795 (II) The employee must transfer a sum representing the net
1796 cost owed for the actuarial accrued liability in sub-sub
1797 subparagraph (I) immediately following the time of such
1798 movement, determined assuming that attained service equals the
1799 sum of service in the defined benefit program and the period of
1800 withdrawal.
1801 Section 10. Paragraph (c) of subsection (9) of section
1802 121.091, Florida Statutes, is amended to read:
1803 121.091 Benefits payable under the system.—Benefits may not
1804 be paid under this section unless the member has terminated
1805 employment as provided in s. 121.021(39)(a) or begun
1806 participation in the Deferred Retirement Option Program as
1807 provided in subsection (13), and filed a proper application has
1808 been filed in the manner prescribed by the department. The
1809 department may cancel an application for retirement benefits if
1810 when the member or beneficiary fails to timely provide the
1811 information and documents required by this chapter and the
1812 department's rules. The department shall adopt rules
1813 establishing procedures for application for retirement benefits
1814 and for the cancellation of such application if when the
1815 required information or documents are not received.
1816 (9) EMPLOYMENT AFTER RETIREMENT; LIMITATION.—
1817 (c) The provisions of this subsection apply to a retiree
1818 retirees, as defined in s. 121.4501(2) s. 121.4501(2)(j), of the
1819 Public Employee Optional Retirement Program created in part II,
1820 subject to the following conditions:
1821 1. The retiree Such retirees may not be reemployed with an
1822 employer participating in the Florida Retirement System as
1823 provided in paragraph (b) until such person has been retired for
1824 3 calendar months, unless the participant has reached the normal
1825 retirement requirements of the defined benefit plan as provided
1826 in s. 121.021(29).
1827 2. A Such retiree employed in violation of this subsection,
1828 and any employing agency that knowingly employs or appoints such
1829 person, is shall be jointly and severally liable for
1830 reimbursement of any benefits paid to the retirement trust fund
1831 from which the benefits were paid, including the Retirement
1832 System Trust Fund and the Public Employee Optional Retirement
1833 Investment Program Trust Fund, as appropriate. To avoid
1834 liability, the such employing agency must have a written
1835 statement from the retiree that he or she is not retired from a
1836 state-administered retirement system.
1837 Section 11. Paragraphs (g) and (i) of subsection (3) of
1838 section 121.35, Florida Statutes, are amended to read:
1839 121.35 Optional retirement program for the State University
1840 System.—
1841 (3) ELECTION OF OPTIONAL PROGRAM.—
1842 (g) An eligible employee who is a member of the Florida
1843 Retirement System at the time of election to participate in the
1844 optional retirement program shall retain all retirement service
1845 credit earned under the Florida Retirement System, at the rate
1846 earned. No Additional service credit in the Florida Retirement
1847 System may not shall be earned while the employee participates
1848 in the optional program, and nor shall the employee is not be
1849 eligible for disability retirement under the Florida Retirement
1850 System. An eligible employee may transfer from the Florida
1851 Retirement System to his or her accounts under the State
1852 University System Optional Retirement Program a sum representing
1853 the present value of the employee's accumulated benefit
1854 obligation under the defined benefit program of the Florida
1855 Retirement System for any service credit accrued from the
1856 employee's first eligible transfer date to the optional
1857 retirement program through the actual date of such transfer, if
1858 such service credit was earned in the period from July 1, 1984,
1859 through December 31, 1992. The present value of the employee's
1860 accumulated benefit obligation must shall be calculated as
1861 described in s. 121.4501(3) s. 121.4501(3)(c)2. Upon such
1862 transfer, all such service credit previously earned under the
1863 defined benefit program of the Florida Retirement System during
1864 this period is shall be nullified for purposes of entitlement to
1865 a future benefit under the defined benefit program of the
1866 Florida Retirement System.
1867 (i) Effective January 1, 2008, through December 31, 2008,
1868 except for an employee who is a mandatory participant of the
1869 State University System Optional Retirement Program, an employee
1870 who has elected to participate in the State University System
1871 Optional Retirement Program shall have one opportunity, at the
1872 employee's discretion, to choose to transfer from this program
1873 to the defined benefit program of the Florida Retirement System
1874 or to the Public Employee Optional Retirement Program, subject
1875 to the terms of the applicable contracts of the State University
1876 System Optional Retirement Program.
1877 1. If the employee chooses to move to the defined
1878 contribution Public Employee Optional Retirement program, any
1879 contributions, interest, and earnings creditable to the employee
1880 under the State University System Optional Retirement Program
1881 must shall be retained by the employee in the State University
1882 System Optional Retirement Program, and the applicable
1883 provisions of s. 121.4501(4) shall govern the election.
1884 2. If the employee chooses to move to the defined benefit
1885 program of the Florida Retirement System, the employee shall
1886 receive service credit equal to his or her years of service
1887 under the State University System Optional Retirement Program.
1888 a. The cost for such credit must be in shall be an amount
1889 representing the actuarial accrued liability for the affected
1890 period of service. The cost must shall be calculated using the
1891 discount rate and other relevant actuarial assumptions that were
1892 used to value the Florida Retirement System defined benefit plan
1893 liabilities in the most recent actuarial valuation. The
1894 calculation must shall include any service already maintained
1895 under the defined benefit program plan in addition to the years
1896 under the State University System Optional Retirement Program.
1897 The actuarial accrued liability of any service already
1898 maintained under the defined benefit program must plan shall be
1899 applied as a credit to total cost resulting from the
1900 calculation. The division shall ensure that the transfer sum is
1901 prepared using a formula and methodology certified by an
1902 enrolled actuary.
1903 b. The employee must transfer from his or her State
1904 University System Optional Retirement Program account, and from
1905 other employee moneys as necessary, a sum representing the
1906 actuarial accrued liability immediately following the time of
1907 such movement, determined assuming that attained service equals
1908 the sum of service in the defined benefit program and service in
1909 the State University System Optional Retirement Program.
1910 Section 12. Subsection (1) of Section 121.4503, Florida
1911 Statutes, is amended to read:
1912 121.4503 Florida Retirement System Contributions Clearing
1913 Trust Fund.—
1914 (1) The Florida Retirement System Contributions Clearing
1915 Trust Fund is created as a clearing fund for disbursing employer
1916 contributions to the component plans of the Florida Retirement
1917 System and shall be administered by the Department of Management
1918 Services. Funds shall be credited to the trust fund as provided
1919 in this chapter and shall be held in trust for the contributing
1920 employers until such time as the assets are transferred by the
1921 department to the Florida Retirement System Trust Fund, the
1922 Public Employee Optional Retirement Investment Program Trust
1923 Fund, or other trust funds as authorized by law, to be used for
1924 the purposes of this chapter. The trust fund is exempt from the
1925 service charges imposed by s. 215.20.
1926 Section 13. Section 121.571, Florida Statutes, is amended
1927 to read:
1928 121.571 Contributions.—Contributions to the Public Employee
1929 Optional Retirement Investment Program shall be made as follows:
1930 (1) NONCONTRIBUTORY PLAN.—Each employer shall make
1931 accomplish the monthly contributions required under by s. 121.71
1932 without reducing an by a procedure in which no employee's gross
1933 salary shall be reduced.
1934 (2) CONTRIBUTION RATES GENERALLY.—Contributions to fund the
1935 retirement and disability benefits provided under this part must
1936 shall be based on the uniform contribution rates established by
1937 s. 121.71 and on the membership class or subclass of the
1938 participant. Such contributions must shall be allocated as
1939 provided in ss. 121.72 and 121.73.
1940 (3) CONTRIBUTIONS FOR SOCIAL SECURITY COVERAGE AND FOR
1941 RETIREE HEALTH INSURANCE SUBSIDY.—Contributions required under
1942 s. 121.71 are this section shall be in addition to employer and
1943 member contributions required for social security and the
1944 Retiree Health Insurance Subsidy Trust Fund as required under
1945 provided in ss. 112.363, 121.052, 121.055, and 121.071, as
1946 appropriate.
1947 Section 14. Section 121.591, Florida Statutes, is amended
1948 to read:
1949 121.591 Payment of benefits payable under the Public
1950 Employee Optional Retirement Program of the Florida Retirement
1951 System.—Benefits may not be paid under the Public Employee
1952 Retirement Investment Program this section unless the member has
1953 terminated employment as provided in s. 121.021(39)(a) or is
1954 deceased and a proper application has been filed as in the
1955 manner prescribed by the state board or the department. The
1956 state board or department, as appropriate, may cancel an
1957 application for retirement benefits if when the member or
1958 beneficiary fails to timely provide the information and
1959 documents required by this chapter and the rules of the state
1960 board and department. In accordance with their respective
1961 responsibilities as provided herein, the state board of
1962 Administration and the department of Management Services shall
1963 adopt rules establishing procedures for application for
1964 retirement benefits and for the cancellation of such application
1965 if when the required information or documents are not received.
1966 The state board of Administration and the department of
1967 Management Services, as appropriate, are authorized to cash out
1968 a de minimis account of not more than $5,000 of a participant
1969 who has been terminated from Florida Retirement System covered
1970 employment for a minimum of 6 calendar months. A de minimis
1971 account is an account containing employer contributions and
1972 accumulated earnings of not more than $5,000 made under the
1973 provisions of this chapter. Such cash-out must either be a
1974 complete lump-sum liquidation of the account balance, subject to
1975 the provisions of the Internal Revenue Code, or a lump-sum
1976 direct rollover distribution paid directly to the custodian of
1977 an eligible retirement plan, as defined by the Internal Revenue
1978 Code, on behalf of the participant. If any financial instrument
1979 issued for the payment of retirement benefits under this section
1980 is not presented for payment within 180 days after the last day
1981 of the month in which it was originally issued, the third-party
1982 administrator or other duly authorized agent of the state board
1983 of Administration shall cancel the instrument and credit the
1984 amount of the instrument to the suspense account of the Public
1985 Employee Optional Retirement Investment Program Trust Fund
1986 authorized under s. 121.450(7) s. 121.4501(6). Any such amounts
1987 transferred to the suspense account are payable upon a proper
1988 application, not to include earnings thereon, as provided in
1989 this section, within 10 years after the last day of the month in
1990 which the instrument was originally issued, after which time
1991 such amounts and any earnings are thereon shall be forfeited.
1992 Any such forfeited amounts are assets of the Public Employee
1993 Optional Retirement Program trust fund and are not subject to
1994 the provisions of chapter 717.
1995 (1) NORMAL BENEFITS.—Under the Public Employee Optional
1996 Retirement Investment Program:
1997 (a) Benefits in the form of vested accumulations as
1998 described in s. 121.4501(7) are s. 121.4501(6) shall be payable
1999 under this subsection in accordance with the following terms and
2000 conditions:
2001 1. To the extent vested, Benefits shall be paid payable
2002 only to a participant.
2003 2. Benefits shall be paid by the third-party administrator
2004 or designated approved providers in accordance with the law, the
2005 contracts, and any applicable board rule or policy.
2006 3. To receive benefits under this subsection, The
2007 participant must be terminated from all employment with all
2008 Florida Retirement System employers, as provided in s.
2009 121.021(39).
2010 4. Benefit payments may not be made until the participant
2011 has been terminated for 3 calendar months, except that the state
2012 board may authorize by rule for the distribution of up to 10
2013 percent of the participant's account after being terminated for
2014 1 calendar month if a participant has reached the normal
2015 retirement requirements of the defined benefit plan, as provided
2016 in s. 121.021(29).
2017 5. If a member or former member of the Florida Retirement
2018 System receives an invalid distribution from the Public Employee
2019 Optional Retirement Program Trust Fund, such person must shall
2020 repay the full amount invalid distribution to the trust fund
2021 within 90 days after receipt of final notification by the state
2022 board of Administration or the third-party administrator that
2023 the distribution was invalid. If such person fails to repay the
2024 full invalid distribution within 90 days after receipt of final
2025 notification, the person may be deemed retired from the
2026 investment Public Employee Optional Retirement program by the
2027 state board, as provided pursuant to s. 121.4501(2)(j), and
2028 shall be subject to the provisions of s. 121.122. If such person
2029 is deemed retired by the state board, any joint and several
2030 liability set out in s. 121.091(9)(c)2. is becomes null and
2031 void, and the state board, the department of Management
2032 Services, or the employing agency is not liable for gains on
2033 payroll contributions that have not been deposited to the
2034 person's account in the investment Public Employee Optional
2035 Retirement program, pending resolution of the invalid
2036 distribution. The member or former member who has been deemed
2037 retired or who has been determined by the board to have taken an
2038 invalid distribution may appeal the agency decision through the
2039 complaint process as provided under s. 121.4501(10)(f)3. s.
2040 121.4501(9)(f)3. As used in this subparagraph, the term “invalid
2041 distribution” means any distribution from an account in the
2042 investment Public Employee Optional Retirement program which is
2043 taken in violation of the provisions of this section, s.
2044 121.091(9), or s. 121.4501.
2045 (b) If a participant elects to receive his or her benefits
2046 upon termination of employment, the participant must submit a
2047 written application or an equivalent form to the third-party
2048 administrator indicating his or her preferred distribution date
2049 and selecting an authorized method of distribution as provided
2050 in paragraph (c). The participant may defer receipt of benefits
2051 until he or she chooses to make such application, subject to
2052 federal requirements.
2053 (c) Upon receipt by the third-party administrator of a
2054 properly executed application for distribution of benefits, the
2055 total accumulated benefit shall be payable to the participant,
2056 as:
2057 1. A lump-sum distribution to the participant;
2058 2. A lump-sum direct rollover distribution whereby all
2059 accrued benefits, plus interest and investment earnings, are
2060 paid from the participant's account directly to the custodian of
2061 an eligible retirement plan, as defined in s. 402(c)(8)(B) of
2062 the Internal Revenue Code, on behalf of the participant; or
2063 3. Periodic distributions, as authorized by the state
2064 board.
2065 (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under
2066 this subsection are payable in lieu of the benefits that which
2067 would otherwise be payable under the provisions of subsection
2068 (1). Such benefits must shall be funded entirely from employer
2069 contributions made under s. 121.571, transferred participant
2070 funds accumulated pursuant to paragraph (a), and interest and
2071 earnings thereon. Pursuant thereto:
2072 (a) Transfer of funds.—To qualify for to receive monthly
2073 disability benefits under this subsection:
2074 1. All moneys accumulated in the participant's Public
2075 Employee Optional Retirement Program accounts, including vested
2076 and nonvested accumulations as described in s. 121.4501(7) s.
2077 121.4501(6), must shall be transferred from such individual
2078 accounts to the division of Retirement for deposit in the
2079 disability account of the Florida Retirement System Trust Fund.
2080 Such moneys must shall be separately accounted for separately.
2081 Earnings must shall be credited on an annual basis for amounts
2082 held in the disability accounts of the Florida Retirement System
2083 Trust Fund based on actual earnings of the Florida Retirement
2084 System trust fund.
2085 2. If the participant has retained retirement credit he or
2086 she had earned under the defined benefit program of the Florida
2087 Retirement System as provided in s. 121.4501(3) s.
2088 121.4501(3)(b), a sum representing the actuarial present value
2089 of such credit within the Florida Retirement System Trust Fund
2090 shall be reassigned by the division of Retirement from the
2091 defined benefit program to the disability program as implemented
2092 under this subsection and shall be deposited in the disability
2093 account of the Florida Retirement System trust fund. Such moneys
2094 must shall be separately accounted for separately.
2095 (b) Disability retirement; entitlement.—
2096 1. A participant of the investment Public Employee Optional
2097 Retirement program who becomes totally and permanently disabled,
2098 as defined in paragraph (d) s. 121.091(4)(b), after completing 8
2099 years of creditable service, or a participant who becomes
2100 totally and permanently disabled in the line of duty regardless
2101 of his or her length of service, is shall be entitled to a
2102 monthly disability benefit as provided herein.
2103 2. In order for service to apply toward the 8 years of
2104 creditable service required to vest for regular disability
2105 benefits, or toward the creditable service used in calculating a
2106 service-based benefit as provided for under paragraph (g), the
2107 service must be creditable service as described below:
2108 a. The participant's period of service under the investment
2109 Public Employee Optional Retirement program shall will be
2110 considered creditable service, except as provided in
2111 subparagraph d.
2112 b. If the participant has elected to retain credit for his
2113 or her service under the defined benefit program of the Florida
2114 Retirement System as provided under s. 121.4501(3) s.
2115 121.4501(3)(b), all such service shall will be considered
2116 creditable service.
2117 c. If the participant elects has elected to transfer to his
2118 or her participant accounts a sum representing the present value
2119 of his or her retirement credit under the defined benefit
2120 program as provided under s. 121.4501(3) s. 121.4501(3)(c), the
2121 period of service under the defined benefit program represented
2122 in the present value amounts transferred shall will be
2123 considered creditable service for purposes of vesting for
2124 disability benefits, except as provided in subparagraph d.
2125 d. Whenever a participant has terminated employment and has
2126 taken distribution of his or her funds as provided in subsection
2127 (1), all creditable service represented by such distributed
2128 funds is forfeited for purposes of this subsection.
2129 (c) Disability retirement effective date.—The effective
2130 retirement date for a participant who applies and is approved
2131 for disability retirement shall be established as provided under
2132 s. 121.091(4)(a)2. and 3.
2133 (d) Total and permanent disability.—A participant shall be
2134 considered totally and permanently disabled if, in the opinion
2135 of the division, he or she is prevented, by reason of a
2136 medically determinable physical or mental impairment, from
2137 rendering useful and efficient service as an officer or
2138 employee.
2139 (e) Proof of disability.—The division, Before approving
2140 payment of any disability retirement benefit, the division shall
2141 require proof that the participant is totally and permanently
2142 disabled in the same manner as provided for members of the
2143 defined benefit program of the Florida Retirement System under
2144 s. 121.091(4)(c).
2145 (f) Disability retirement benefit.—Upon the disability
2146 retirement of a participant under this subsection, the
2147 participant shall receive a monthly benefit that begins accruing
2148 shall begin to accrue on the first day of the month of
2149 disability retirement, as approved by the division, and is shall
2150 be payable on the last day of that month and each month
2151 thereafter during his or her lifetime and continued disability.
2152 All disability benefits must payable to such member shall be
2153 paid out of the disability account of the Florida Retirement
2154 System Trust Fund established under this subsection.
2155 (g) Computation of disability retirement benefit.—The
2156 amount of each monthly payment must shall be calculated in the
2157 same manner as provided for members of the defined benefit
2158 program of the Florida Retirement System under s. 121.091(4)(f).
2159 For such purpose, Creditable service under both the defined
2160 benefit program and the investment Public Employee Optional
2161 Retirement program of the Florida Retirement System shall be
2162 applicable as provided under paragraph (b).
2163 (h) Reapplication.—A participant whose initial application
2164 for disability retirement is has been denied may reapply for
2165 disability benefits in the same manner, and under the same
2166 conditions, as provided for members of the defined benefit
2167 program of the Florida Retirement System under s. 121.091(4)(g).
2168 (i) Membership.—Upon approval of a participant's an
2169 application for disability benefits under this subsection, the
2170 applicant shall be transferred to the defined benefit program of
2171 the Florida Retirement System, effective upon his or her
2172 disability retirement effective date.
2173 (j) Option to cancel.—A Any participant whose application
2174 for disability benefits is approved may cancel the his or her
2175 application if for disability benefits, provided that the
2176 cancellation request is received by the division before a
2177 disability retirement warrant has been deposited, cashed, or
2178 received by direct deposit. Upon such cancellation:
2179 1. The participant's transfer to the defined benefit
2180 program under paragraph (i) shall be nullified;
2181 2. The participant shall be retroactively reinstated in the
2182 investment Public Employee Optional Retirement program without
2183 hiatus;
2184 3. All funds transferred to the Florida Retirement System
2185 Trust Fund under paragraph (a) must shall be returned to the
2186 participant accounts from which the such funds were drawn; and
2187 4. The participant may elect to receive the benefit payable
2188 under the provisions of subsection (1) in lieu of disability
2189 benefits as provided under this subsection.
2190 (k) Recovery from disability.—
2191 1. The division may require periodic reexaminations at the
2192 expense of the disability program account of the Florida
2193 Retirement System Trust Fund. Except as otherwise provided in
2194 subparagraph 2., the requirements, procedures, and restrictions
2195 relating to the conduct and review of such reexaminations,
2196 discontinuation or termination of benefits, reentry into
2197 employment, disability retirement after reentry into covered
2198 employment, and all other matters relating to recovery from
2199 disability shall be the same as provided are set forth under s.
2200 121.091(4)(h).
2201 2. Upon recovery from disability, the any recipient of
2202 disability retirement benefits under this subsection shall be
2203 transferred back to the investment program a compulsory member
2204 of the Public Employee Optional Retirement Program of the
2205 Florida Retirement System. The net difference between the
2206 recipient's original account balance transferred to the Florida
2207 Retirement System Trust Fund, including earnings, under
2208 paragraph (a) and total disability benefits paid to such
2209 recipient, if any, shall be determined as provided in sub
2210 subparagraph a.
2211 a. An amount equal to the total benefits paid shall be
2212 subtracted from that portion of the transferred account balance
2213 consisting of vested accumulations as described under s.
2214 121.4501(7) s. 121.4501(6), if any, and an amount equal to the
2215 remainder of benefit amounts paid, if any, shall then be
2216 subtracted from any remaining portion consisting of nonvested
2217 accumulations as described under s. 121.4501(6).
2218 b. Amounts subtracted under sub-subparagraph a. must shall
2219 be retained within the disability account of the Florida
2220 Retirement System Trust Fund. Any remaining account balance
2221 shall be transferred to the third-party administrator for
2222 disposition as provided under sub-subparagraph c. or sub
2223 subparagraph d., as appropriate.
2224 c. If the recipient returns to covered employment,
2225 transferred amounts must shall be deposited in individual
2226 accounts under the investment Public Employee Optional
2227 Retirement program, as directed by the participant. Vested and
2228 nonvested amounts shall be separately accounted for as provided
2229 in s. 121.4501(7) s. 121.4501(6).
2230 d. If the recipient fails to return to covered employment
2231 upon recovery from disability:
2232 (I) Any remaining vested amount must shall be deposited in
2233 individual accounts under the investment Public Employee
2234 Optional Retirement program, as directed by the participant, and
2235 is shall be payable as provided in subsection (1).
2236 (II) Any remaining nonvested amount must shall be held in a
2237 suspense account and is shall be forfeitable after 5 years as
2238 provided in s. 121.4501(7) s. 121.4501(6).
2239 3. If present value was reassigned from the defined benefit
2240 program to the disability program of the Florida Retirement
2241 System as provided under subparagraph (a)2., the full present
2242 value amount must shall be returned to the defined benefit
2243 account within the Florida Retirement System Trust Fund and the
2244 recipient's affected individual's associated retirement credit
2245 under the defined benefit program must shall be reinstated in
2246 full. Any benefit based upon such credit must shall be
2247 calculated as provided in s. 121.091(4)(h)1.
2248 (l) Nonadmissible causes of disability.—A participant is
2249 shall not be entitled to receive a disability retirement benefit
2250 if the disability results from any injury or disease sustained
2251 or inflicted as described in s. 121.091(4)(i).
2252 (m) Disability retirement of justice or judge by order of
2253 Supreme Court.—
2254 1. If a participant is a justice of the Supreme Court,
2255 judge of a district court of appeal, circuit judge, or judge of
2256 a county court who has served for 6 years or more as an elected
2257 constitutional judicial officer, including service as a judicial
2258 officer in any court abolished pursuant to Art. V of the State
2259 Constitution, and who is retired for disability by order of the
2260 Supreme Court upon recommendation of the Judicial Qualifications
2261 Commission pursuant to s. 12, the provisions of Art. V of the
2262 State Constitution, the participant's Option 1 monthly
2263 disability benefit amount as provided in s. 121.091(6)(a)1.
2264 shall be two-thirds of his or her monthly compensation as of the
2265 participant's disability retirement date. The Such a participant
2266 may alternatively elect to receive an actuarially adjusted
2267 disability retirement benefit under any other option as provided
2268 in s. 121.091(6)(a), or to receive the normal benefit payable
2269 under the Public Employee Optional Retirement Program as set
2270 forth in subsection (1).
2271 2. If any justice or judge who is a participant of the
2272 investment Public Employee Optional Retirement program of the
2273 Florida Retirement System is retired for disability by order of
2274 the Supreme Court upon recommendation of the Judicial
2275 Qualifications Commission pursuant to s. 12, the provisions of
2276 Art. V of the State Constitution and elects to receive a monthly
2277 disability benefit under the provisions of this paragraph:
2278 a. Any present value amount that was transferred to his or
2279 her program account and all employer contributions made to such
2280 account on his or her behalf, plus interest and earnings
2281 thereon, must shall be transferred to and deposited in the
2282 disability account of the Florida Retirement System Trust Fund;
2283 and
2284 b. The monthly disability benefits payable under this
2285 paragraph for any affected justice or judge retired from the
2286 Florida Retirement System pursuant to Art. V of the State
2287 Constitution shall be paid from the disability account of the
2288 Florida Retirement System Trust Fund.
2289 (n) Death of retiree or beneficiary.—Upon the death of a
2290 disabled retiree or beneficiary of the retiree thereof who is
2291 receiving monthly disability benefits under this subsection, the
2292 monthly benefits shall be paid through the last day of the month
2293 of death and shall terminate, or be adjusted, if applicable, as
2294 of that date in accordance with the optional form of benefit
2295 selected at the time of retirement. The department of Management
2296 Services may adopt rules necessary to administer this paragraph.
2297 (3) DEATH BENEFITS.—Under the Public Employee Optional
2298 Retirement Investment Program:
2299 (a) Survivor benefits are shall be payable in accordance
2300 with the following terms and conditions:
2301 1. To the extent vested, benefits are shall be payable only
2302 to a participant's beneficiary or beneficiaries as designated by
2303 the participant as provided in s. 121.4501(21) s. 121.4501(20).
2304 2. Benefits must shall be paid by the third-party
2305 administrator or designated approved providers in accordance
2306 with the law, the contracts, and any applicable state board rule
2307 or policy.
2308 3. To receive benefits under this subsection, the
2309 participant must be deceased.
2310 (b) In the event of a participant's death, all vested
2311 accumulations as described in s. 121.4501(7) s. 121.4501(6),
2312 less withholding taxes remitted to the Internal Revenue Service,
2313 shall be distributed, as provided in paragraph (c) or as
2314 described in s. 121.4501(21) s. 121.4501(20), as if the
2315 participant retired on the date of death. No other death
2316 benefits are shall be available for survivors of participants
2317 under the Public Employee Optional Retirement Program, except
2318 for such benefits, or coverage for such benefits, as are
2319 otherwise provided by law or are separately provided afforded by
2320 the employer, at the employer's discretion.
2321 (c) Upon receipt by the third-party administrator of a
2322 properly executed application for distribution of benefits, the
2323 total accumulated benefit is shall be payable by the third-party
2324 administrator to the participant's surviving beneficiary or
2325 beneficiaries, as:
2326 1. A lump-sum distribution payable to the beneficiary or
2327 beneficiaries, or to the deceased participant's estate;
2328 2. An eligible rollover distribution on behalf of the
2329 surviving spouse of a deceased participant, whereby all accrued
2330 benefits, plus interest and investment earnings, are paid from
2331 the deceased participant's account directly to the custodian of
2332 an eligible retirement plan, as described in s. 402(c)(8)(B) of
2333 the Internal Revenue Code, on behalf of the surviving spouse; or
2334 3. A partial lump-sum payment whereby a portion of the
2335 accrued benefit is paid to the deceased participant's surviving
2336 spouse or other designated beneficiaries, less withholding taxes
2337 remitted to the Internal Revenue Service, and the remaining
2338 amount is transferred directly to the custodian of an eligible
2339 retirement plan, as described in s. 402(c)(8)(B) of the Internal
2340 Revenue Code, on behalf of the surviving spouse. The proportions
2341 must be specified by the participant or the surviving
2342 beneficiary.
2343 This paragraph does not abrogate other applicable provisions of
2344 state or federal law providing for payment of death benefits.
2345 (4) LIMITATION ON LEGAL PROCESS.—The benefits payable to
2346 any person under the Public Employee Optional Retirement
2347 Investment Program, and any contributions accumulated under such
2348 program, are not subject to assignment, execution, attachment,
2349 or any legal process, except for qualified domestic relations
2350 orders by a court of competent jurisdiction, income deduction
2351 orders as provided in s. 61.1301, and federal income tax levies.
2352 Section 15. Section 121.5911, Florida Statutes, is amended
2353 to read:
2354 121.5911 Disability retirement program; qualified status;
2355 rulemaking authority.—It is the intent of the Legislature that
2356 the disability retirement program for participants of the Public
2357 Employee Optional Retirement Investment Program as created in
2358 this act must meet all applicable requirements of federal law
2359 for a qualified plan. The department of Management Services
2360 shall seek a private letter ruling from the Internal Revenue
2361 Service on the disability retirement program for participants of
2362 the Public Employee Optional Retirement Program. Consistent with
2363 the private letter ruling, the department of Management Services
2364 shall adopt any necessary rules necessary required to maintain
2365 the qualified status of the disability retirement program and
2366 the Florida Retirement System defined benefit plan.
2367 Section 16. Section 121.70, Florida Statutes, is amended to
2368 read:
2369 121.70 Legislative purpose and intent.—
2370 (1) This part provides for a uniform system for funding
2371 benefits provided under the Florida Retirement System defined
2372 benefit program established under part I of this chapter
2373 (referred to in this part as the defined benefit program) and
2374 under the Public Employee Optional Retirement Investment Program
2375 established under part II of this chapter (referred to in this
2376 part as the defined contribution optional retirement program).
2377 The Legislature recognizes and declares that the Florida
2378 Retirement System is a single retirement system, consisting of
2379 two retirement plans and other nonintegrated programs. Employers
2380 participating in the Florida Retirement System collectively
2381 shall be responsible for making contributions to support the
2382 benefits provided afforded under both programs plans. The As
2383 provided in this part, employers participating in the Florida
2384 Retirement System shall make contributions based upon uniform
2385 contribution rates determined as a percentage of the total
2386 payroll for each class or subclass of Florida Retirement System
2387 membership, irrespective of which retirement program the plan
2388 individual employee is enrolled in employees may elect. This
2389 shall be known as a uniform or blended contribution rate system.
2390 (2) In establishing a uniform contribution rate system, it
2391 is the intent of the Legislature to:
2392 (a) Provide greater stability and certainty in financial
2393 planning and budgeting for Florida Retirement System employers
2394 by eliminating the fiscal instability that would be caused by
2395 dual rates coupled with employee-selected plan participation;
2396 and
2397 (b) Provide greater fiscal equity and uniformity for system
2398 employers by effectively distributing the financial burden and
2399 benefit of short-term system deficits and surpluses,
2400 respectively, in proportion to total system payroll.; and
2401 (c) Allow employees to make their retirement plan selection
2402 decisions free of circumstances that may cause employers to
2403 favor one plan choice over another.
2404 Section 17. Subsection (1) of section 121.71, Florida
2405 Statutes, is amended to read:
2406 121.71 Uniform rates; process; calculations; levy.—
2407 (1) In conducting the system actuarial study required under
2408 s. 121.031, the actuary shall follow all requirements specified
2409 thereunder to determine, by Florida Retirement System employee
2410 membership class, the dollar contribution amounts necessary for
2411 the next forthcoming fiscal year for the defined benefit
2412 program. In addition, the actuary shall determine, by Florida
2413 Retirement System membership class, based on an estimate for the
2414 forthcoming fiscal year of the gross compensation of employees
2415 participating in the defined contribution optional retirement
2416 program, the dollar contribution amounts necessary to make the
2417 allocations required under ss. 121.72 and 121.73. For each
2418 employee membership class and subclass, the actuarial study must
2419 shall establish a uniform rate necessary to fund the benefit
2420 obligations under both Florida Retirement System retirement
2421 plans, by dividing the sum of total dollars required by the
2422 estimated gross compensation of members in both plans.
2423 Section 18. Section 121.72, Florida Statutes, is amended to
2424 read:
2425 121.72 Allocations to optional retirement program
2426 participant accounts; percentage amounts.—
2427 (1) The allocations established in subsection (4) shall
2428 fund retirement benefits under the defined contribution optional
2429 retirement program and shall be transferred monthly by the
2430 Division of Retirement from the Florida Retirement System
2431 Contributions Clearing Trust Fund to the third-party
2432 administrator for deposit in each participating employee's
2433 individual account based on the membership class of the
2434 participant.
2435 (2) The allocations are stated as a percentage of each
2436 defined contribution optional retirement program participant's
2437 gross compensation for the calendar month. A change in a
2438 contribution percentage is effective the first day of the month
2439 for which a full month's employer contribution may be made on or
2440 after the beginning date of the change. Contribution percentages
2441 may be modified by general law.
2442 (3) Employer and participant contributions to participant
2443 accounts shall be accounted for separately. Participant
2444 contributions may be made only if expressly authorized by law.
2445 Interest and investment earnings on contributions shall accrue
2446 on a tax-deferred basis until proceeds are distributed.
2447 (4) Effective July 1, 2002, allocations from the Florida
2448 Retirement System Contributions Clearing Trust Fund to defined
2449 contribution optional retirement program participant accounts
2450 shall be as follows:
2451 Membership Class Percentage of Gross Compensation
2452 Regular Class 9.00%
2453 Special Risk Class 20.00%
2454 Special Risk Administrative Support Class 11.35%
2455 Elected Officers' Class - Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 13.40%
2456 Elected Officers' Class - Justices, Judges 18.90%
2457 Elected Officers' Class - County Elected Officers 16.20%
2458 Senior Management Service Class 10.95%
2459
2460 Section 19. Section 121.73, Florida Statutes, is amended to
2461 read:
2462 121.73 Allocations for optional retirement program
2463 participant disability coverage; percentage amounts.—
2464 (1) The allocations established in subsection (3) shall be
2465 used to provide disability coverage for participants in the
2466 defined contribution optional retirement program and shall be
2467 transferred monthly by the Division of Retirement from the
2468 Florida Retirement System Contributions Clearing Trust Fund to
2469 the disability account of the Florida Retirement System Trust
2470 Fund.
2471 (2) The allocations are stated as a percentage of each
2472 defined contribution optional retirement program participant's
2473 gross compensation for the calendar month. A change in a
2474 contribution percentage is effective the first day of the month
2475 for which a full month's employer contribution may be made on or
2476 after the beginning date of the change. Contribution percentages
2477 may be modified by general law.
2478 (3) Effective July 1, 2002, allocations from the Florida
2479 Retirement System FRS Contribution Clearing Fund to provide
2480 disability coverage for participants in the defined contribution
2481 optional retirement program, and to offset the costs of
2482 administering said coverage, shall be as follows:
2483 Membership Class Percentage of Gross Compensation
2484 Regular Class 0.25%
2485 Special Risk Class 1.33%
2486 Special Risk Administrative Support Class 0.45%
2487 Elected Officers' Class - Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 0.41%
2488 Elected Officers' Class - Justices, Judges 0.73%
2489 Elected Officers' Class - County Elected Officers 0.41%
2490 Senior Management Service Class 0.26%
2491
2492 Section 20. Section 121.74, Florida Statutes, is amended to
2493 read:
2494 121.74 Administrative and educational expenses.—In addition
2495 to contributions required under s. 121.71, employers
2496 participating in the Florida Retirement System shall contribute
2497 an amount equal to 0.05 percent of the payroll reported for each
2498 class or subclass of Florida Retirement System membership, which
2499 amount shall be transferred by the Division of Retirement from
2500 the Florida Retirement System Contributions Clearing Trust Fund
2501 to the State Board of Administration's Administrative Trust Fund
2502 to offset the costs of administering the defined contribution
2503 optional retirement program and the costs of providing
2504 educational services to participants in the defined benefit
2505 program and the defined contribution optional retirement
2506 program. Approval of the Trustees of the State Board of
2507 Administration is required prior to the expenditure of these
2508 funds. Payments for third-party administrative or educational
2509 expenses shall be made only pursuant to the terms of the
2510 approved contracts for such services.
2511 Section 21. Section 121.77, Florida Statutes, is amended to
2512 read:
2513 121.77 Deductions from participant accounts.—The State
2514 Board of Administration may authorize the third-party
2515 administrator to deduct reasonable fees and apply appropriate
2516 charges to defined contribution optional retirement program
2517 participant accounts. In no event may shall administrative and
2518 educational expenses exceed the portion of employer
2519 contributions earmarked for such expenses under this part,
2520 except for reasonable administrative charges assessed against
2521 participant accounts of persons for whom no employer
2522 contributions are made during the calendar quarter. Investment
2523 management fees shall be deducted from participant accounts,
2524 pursuant to the terms of the contract between the provider and
2525 the board.
2526 Section 22. Subsection (3) of section 121.78, Florida
2527 Statutes, is amended to read:
2528 121.78 Payment and distribution of contributions.—
2529 (3)(a) Employer contributions and accompanying payroll data
2530 received after the 5th working day of the month shall be
2531 considered late. The employer shall be assessed by the Division
2532 of Retirement a penalty of 1 percent of the contributions due
2533 for each calendar month or part thereof that the contributions
2534 or accompanying payroll data are late. Proceeds from the 1
2535 percent assessment against contributions made on behalf of
2536 participants of the defined benefit program must shall be
2537 deposited in the Florida Retirement System Trust Fund, and
2538 proceeds from the 1-percent assessment against contributions
2539 made on behalf of participants of the defined contribution
2540 optional retirement program shall be transferred to the third
2541 party administrator for deposit into participant accounts, as
2542 provided in paragraph (b).
2543 (b) If contributions made by an employer on behalf of
2544 participants of the defined contribution optional retirement
2545 program or accompanying payroll data are not received within the
2546 calendar month they are due, including, but not limited to,
2547 contribution adjustments as a result of employer errors or
2548 corrections, and if that delinquency results in market losses to
2549 participants, the employer shall reimburse each participant's
2550 account for market losses resulting from the late contributions.
2551 If a participant has terminated employment and taken a
2552 distribution, the participant is responsible for returning any
2553 excess contributions erroneously provided by employers, adjusted
2554 for any investment gain or loss incurred during the period such
2555 excess contributions were in the participant's Public Employee
2556 Optional Retirement Program account. The State Board of
2557 Administration or its designated agent shall communicate to
2558 terminated participants any obligation to repay such excess
2559 contribution amounts. However, the State Board of
2560 Administration, its designated agents, the Public Employee
2561 Optional Retirement Investment Program Trust Fund, the
2562 Department of Management Services, or the Florida Retirement
2563 System Trust Fund may shall not incur any loss or gain as a
2564 result of an employer's correction of such excess contributions.
2565 The third-party administrator, hired by the state board pursuant
2566 to s. 121.4501(9) s. 121.4501(8), shall calculate the market
2567 losses for each affected participant. If When contributions made
2568 on behalf of participants of the defined contribution optional
2569 retirement program or accompanying payroll data are not received
2570 within the calendar month due, the employer shall also pay the
2571 cost of the third-party administrator's calculation and
2572 reconciliation adjustments resulting from the late
2573 contributions. The third-party administrator shall notify the
2574 employer of the results of the calculations and the total amount
2575 due from the employer for such losses and the costs of
2576 calculation and reconciliation. The employer shall remit to the
2577 division the amount due within 10 working days after the date of
2578 the penalty notice sent by the division. The Division of
2579 Retirement shall transfer said amount to the third-party
2580 administrator, which who shall deposit proceeds from the 1
2581 percent assessment and from individual market losses into
2582 participant accounts, as appropriate. The board is authorized to
2583 adopt rules to implement the provisions regarding late
2584 contributions, late submission of payroll data, the process for
2585 reimbursing participant accounts for resultant market losses,
2586 and the penalties charged to the employers.
2587 (c) Delinquency fees may be waived by the Division of
2588 Retirement, with regard to defined benefit program
2589 contributions, and by the State Board of Administration, with
2590 regard to defined contribution optional retirement program
2591 contributions, only if when, in the opinion of the division or
2592 the board, as appropriate, exceptional circumstances beyond the
2593 employer's control prevented remittance by the prescribed due
2594 date, notwithstanding the employer's good faith efforts to
2595 effect delivery. Such a waiver of delinquency may be granted an
2596 employer only one time each state fiscal year.
2597 Section 23. The Division of Statutory Revision is directed
2598 to redesignate the title of part II of chapter 121, Florida
2599 Statutes, as “Public Employee Retirement Investment Program.”
2600 Section 24. This act shall take effect July 1, 2009.