Florida Senate - 2009 SB 600
By Senator Fasano
11-00524-09 2009600__
1 A bill to be entitled
2 An act relating to the optional retirement program in
3 the State University System; amending s. 121.35, F.S.;
4 revising provisions relating to provider contracts
5 that provide benefits to program participants;
6 increasing the number of companies that may provide
7 contracts from five to seven; providing an effective
8 date.
9
10 Be It Enacted by the Legislature of the State of Florida:
11
12 Section 1. Subsection (1), paragraph (a) of subsection (4),
13 paragraph (a) of subsection (5), and paragraphs (a), (b), and
14 (c) of subsection (6) of section 121.35, Florida Statutes, are
15 amended to read:
16 121.35 Optional retirement program for the State University
17 System.—
18 (1) OPTIONAL RETIREMENT PROGRAM ESTABLISHED.—The department
19 of Management Services shall establish an optional retirement
20 program under which contracts providing retirement and death
21 benefits may be purchased for eligible members of the State
22 University System who elect to participate in the program. The
23 benefits to be provided for or on behalf of participants in such
24 optional retirement program shall be provided through individual
25 contracts or individual certificates issued for group annuity
26 contracts or other contracts, which may be fixed, variable, or a
27 combination thereof; or for other contracts, in accordance with
28 s. 403(b) of the Internal Revenue Code. Any individual contract
29 or certificate must shall state the annuity plan on its face
30 page, and shall include, but not be limited to, a statement of
31 ownership, the contract benefits, annuity income options,
32 limitations, expense charges, and surrender charges, if any. The
33 state shall contribute, as provided in this section, toward the
34 purchase of such optional benefits.
35 (4) CONTRIBUTIONS.—
36 (a) Through June 30, 2001, each employer shall contribute
37 on behalf of each participant in the optional retirement program
38 an amount equal to the normal cost portion of the employer
39 retirement contribution which would be required if the
40 participant were a regular member of the Florida Retirement
41 System defined benefit program, plus the portion of the
42 contribution rate required in s. 112.363(8) that would otherwise
43 be assigned to the Retiree Health Insurance Subsidy Trust Fund.
44 Effective July 1, 2001, each employer shall contribute on behalf
45 of each participant in the optional program an amount equal to
46 10.43 percent of the participant's gross monthly compensation.
47 The department shall deduct an amount approved by the
48 Legislature to provide for the administration of the this
49 program. Contributions shall be paid The payment of the
50 contributions to the optional program which is required by this
51 paragraph for each participant shall be made by the employer to
52 the department, which shall forward the contributions to the
53 designated company or companies contracting for payment of
54 benefits for the participant under the program. However, such
55 contributions paid on behalf of an employee described in
56 paragraph (3)(c) may shall not be forwarded to a company and do
57 shall not begin to accrue interest until the employee has
58 executed a contract with one of the designated companies and
59 notified the department.
60 (5) BENEFITS.—
61 (a) Benefits are shall be payable under the optional
62 retirement program only to vested participants in the program,
63 or their beneficiaries, as designated by the participant in the
64 contract with a provider company, and such benefits shall be
65 paid only by the designated company in accordance with s. 403(b)
66 of the Internal Revenue Code and in accordance with the terms of
67 the annuity contract or other contracts applicable to the
68 participant. Benefits shall accrue in individual accounts that
69 are participant-directed, portable, and funded by employer
70 contributions and the earnings thereon. The participant must be
71 terminated from all employment with all Florida Retirement
72 System employers, as provided in s. 121.021(39), to begin
73 receiving the employer-funded benefit. Benefits funded by
74 employer contributions are shall be payable in accordance with
75 the following terms and conditions:
76 1. Benefits are shall be payable only to a participant, to
77 his or her beneficiaries, or to his or her estate, as designated
78 by the participant.
79 2. Benefits must shall be paid by the provider company or
80 companies in accordance with the law, the provisions of the
81 contract, and any applicable board rule or policy.
82 3. In the event of a participant's death, moneys
83 accumulated by, or on behalf of, the participant, less
84 withholding taxes remitted to the Internal Revenue Service, if
85 any, must shall be distributed to the participant's designated
86 beneficiary or beneficiaries, or to the participant's estate, as
87 if the participant retired on the date of death and, as provided
88 in paragraph (c). No other death benefits are shall be available
89 for survivors of participants under the optional retirement
90 program except for such benefits, or coverage for such benefits
91 which, as are separately provided afforded by the employer, at
92 the employer's discretion.
93 (6) ADMINISTRATION OF PROGRAM.—
94 (a) The optional retirement program authorized by this
95 section shall be administered by the department. The department
96 shall adopt rules establishing the responsibilities of the
97 institutions in the State University System in administering the
98 optional retirement program. The Board of Regents shall, no more
99 than 90 days after July 1, 1983, submit to the department its
100 recommendations for the contracts to be offered by the companies
101 chosen by the department. Effective July 1, 2001, the State
102 Board of Education shall submit to the department its
103 recommendations for the contracts to be offered by the companies
104 chosen by the department. Effective July 1, 2007, the Board of
105 Governors of the State University System shall submit
106 recommendations on contracts to be offered by the department
107 within 90 days after request by the department. The
108 recommendations of the board shall include the following:
109 1. The nature and extent of the rights and benefits in
110 relation to the required contributions; and
111 2. The suitability of the rights and benefits to the needs
112 of the participants and the interests of the institutions in the
113 recruitment and retention of eligible employees.
114 (b) After receiving and considering the recommendations of
115 the Board of Governors of the State University System, the
116 department shall designate up to seven no more than five
117 companies from which contracts may be purchased under the
118 program and shall approve the form and content of the optional
119 retirement program contracts. Any domestic company that was has
120 been designated as of July 1, 2005, shall be included in the
121 seven five companies until expiration of its existing contract
122 with the department. The domestic company may assign its
123 contract with the department to an affiliated qualified company
124 that is wholly owned by the domestic company's parent company
125 and has assumed 100 percent of the responsibility for the
126 contracts purchased from the domestic company.
127 (c) Effective July 1, 1997, The State Board of
128 Administration shall review and make recommendations to the
129 department on the acceptability of all investment products
130 proposed by provider companies of the optional retirement
131 program before they are offered through annuity contracts or
132 other contracts to the participants and may advise the
133 department of any changes necessary to ensure that the optional
134 retirement program offers an acceptable mix of investment
135 products. The department shall make the final determination as
136 to whether an investment product will be approved for the
137 program.
138 Section 2. This act shall take effect July 1, 2009.