CS/HB 621

1
A bill to be entitled
2An act relating to the optional retirement program for the
3State University System; amending s. 121.35, F.S.;
4revising provisions relating to provider contracts that
5provide benefits to program participants; revising
6provisions relating to contributions employers are
7required to make on behalf of participants; revising
8provisions relating to contract recommendations the Board
9of Governors and State Board of Education are required to
10submit to the Department of Management Services;
11increasing the number of companies that may provide
12contracts from five to seven; deleting obsolete
13provisions; providing an effective date.
14
15Be 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),
19and (c) of subsection (6) of section 121.35, Florida Statutes,
20are amended to read:
21     121.35  Optional retirement program for the State
22University System.--
23     (1)  OPTIONAL RETIREMENT PROGRAM ESTABLISHED.--The
24department of Management Services shall establish an optional
25retirement program under which contracts providing retirement
26and death benefits may be purchased for eligible members of the
27State University System who elect to participate in the program.
28The benefits to be provided for or on behalf of participants in
29such optional retirement program shall be provided through
30individual contracts or individual certificates issued for group
31annuity contracts or other contracts, which may be fixed,
32variable, or a combination thereof; or through other contracts,
33in accordance with s. 403(b) of the Internal Revenue Code. Any
34individual contract or certificate must shall state the annuity
35plan on its face page, and shall include, but not be limited to,
36a statement of ownership, the contract benefits, annuity income
37options, limitations, expense charges, and surrender charges, if
38any. The state shall contribute, as provided in this section,
39toward the purchase of such optional benefits.
40     (4)  CONTRIBUTIONS.--
41     (a)  Through June 30, 2001, each employer shall contribute
42on behalf of each participant in the optional retirement program
43an amount equal to the normal cost portion of the employer
44retirement contribution which would be required if the
45participant were a regular member of the Florida Retirement
46System defined benefit program, plus the portion of the
47contribution rate required in s. 112.363(8) that would otherwise
48be assigned to the Retiree Health Insurance Subsidy Trust Fund.
49Effective July 1, 2001, each employer shall contribute on behalf
50of each participant in the optional program an amount equal to
5110.43 percent of the participant's gross monthly compensation.
52The department shall deduct an amount approved by the
53Legislature to provide for the administration of the this
54program. Contributions shall be paid The payment of the
55contributions to the optional program which is required by this
56paragraph for each participant shall be made by the employer to
57the department, which shall forward the contributions to the
58designated company or companies contracting for payment of
59benefits for the participant under the program. However, such
60contributions paid on behalf of an employee described in
61paragraph (3)(c) may shall not be forwarded to a company and do
62shall not begin to accrue interest until the employee has
63executed a contract with one of the designated companies and
64notified the department.
65     (5)  BENEFITS.--
66     (a)  Benefits are shall be payable under the optional
67retirement program only to vested participants in the program,
68or their beneficiaries, as designated by the participant in the
69contract with a provider company, and such benefits shall be
70paid only by the designated company in accordance with s. 403(b)
71of the Internal Revenue Code and in accordance with the terms of
72the annuity contract or other contracts applicable to the
73participant. Benefits shall accrue in individual accounts that
74are participant-directed, portable, and funded by employer
75contributions and the earnings thereon. The participant must be
76terminated from all employment with all Florida Retirement
77System employers, as provided in s. 121.021(39), to begin
78receiving the employer-funded benefit. Benefits funded by
79employer contributions are shall be payable in accordance with
80the following terms and conditions:
81     1.  Benefits are shall be payable only to a participant, to
82his or her beneficiaries, or to his or her estate, as designated
83by the participant.
84     2.  Benefits must shall be paid by the provider company or
85companies in accordance with the law, the provisions of the
86contract, and any applicable board rule or policy.
87     3.  In the event of a participant's death, moneys
88accumulated by, or on behalf of, the participant, less
89withholding taxes remitted to the Internal Revenue Service, if
90any, must shall be distributed to the participant's designated
91beneficiary or beneficiaries, or to the participant's estate, as
92if the participant retired on the date of death and, as provided
93in paragraph (c). No other death benefits are shall be available
94for survivors of participants under the optional retirement
95program except for such benefits, or coverage for such benefits
96which, as are separately provided afforded by the employer, at
97the employer's discretion.
98     (6)  ADMINISTRATION OF PROGRAM.--
99     (a)  The optional retirement program authorized by this
100section shall be administered by the department. The department
101shall adopt rules establishing the responsibilities of the
102institutions in the State University System in administering the
103optional retirement program. The Board of Regents shall, no more
104than 90 days after July 1, 1983, submit to the department its
105recommendations for the contracts to be offered by the companies
106chosen by the department. Effective July 1, 2001, the State
107Board of Education shall submit to the department its
108recommendations for the contracts to be offered by the companies
109chosen by the department. Effective July 1, 2007, the Board of
110Governors of the State University System shall submit
111recommendations on contracts to be offered by the department
112within 90 days after request by the department. The
113recommendations of the board shall include the following:
114     1.  The nature and extent of the rights and benefits in
115relation to the required contributions; and
116     2.  The suitability of the rights and benefits to the needs
117of the participants and the interests of the institutions in the
118recruitment and retention of eligible employees.
119     (b)  After receiving and considering the recommendations of
120the Board of Governors of the State University System, the
121department shall designate up to seven no more than five
122companies from which contracts may be purchased under the
123program and shall approve the form and content of the optional
124retirement program contracts. Any domestic company that was has
125been designated as of July 1, 2005, shall be included in the
126seven five companies until expiration of its existing contract
127with the department. The domestic company may assign its
128contract with the department to an affiliated qualified company
129that is wholly owned by the domestic company's parent company
130and has assumed 100 percent of the responsibility for the
131contracts purchased from the domestic company.
132     (c)  Effective July 1, 1997, The State Board of
133Administration shall review and make recommendations to the
134department on the acceptability of all investment products
135proposed by provider companies of the optional retirement
136program before they are offered through annuity contracts or
137other contracts to the participants and may advise the
138department of any changes necessary to ensure that the optional
139retirement program offers an acceptable mix of investment
140products. The department shall make the final determination as
141to whether an investment product will be approved for the
142program.
143     Section 2.  This act shall take effect July 1, 2009.


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