HB 621

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

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