Florida Senate - 2010 SB 660
By Senator Fasano
11-00585A-10 2010660__
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, 2011; requiring public employees
10 employed on or after January 1, 2011, 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, 2011, who elect to participate in the program, and
52 for all eligible employees employed on or after January 1, 2011.
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 administered under part
96 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, 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 initially enrolled before July 1,
110 2010; or
111 2. Participates in, or is eligible to participate in, the
112 Senior Management Service Optional Annuity Program as
113 established under s. 121.055(6), the State Community College
114 System Optional Retirement Program as established under s.
115 121.051(2)(c), or the State University System Optional
116 Retirement Program established under s. 121.35.
117
118 The term does not include any member participating in the
119 Deferred Retirement Option Program established under s.
120 121.091(13), a retiree of a state-administered retirement system
121 initially reemployed on or after July 1, 2010, or a mandatory
122 participant of the State University System Optional Retirement
123 Program established under s. 121.35.
124 (h)(g) “Employer” means an employer, as defined in s.
125 121.021(10), of an eligible employee.
126 (i) “Investment program” means the Public Employee
127 Retirement Investment Program established under this part.
128 (j) “Local employer” means an employer that is not a state
129 employer or a district school board employer.
130 (k)(h) “Participant” means an eligible employee who is
131 enrolled elects to participate in the investment program, Public
132 Employee Optional Retirement program and enrolls in such
133 optional program as provided in subsection (4) or a terminated
134 Deferred Retirement Option Program participant as described in
135 subsection (22) (21).
136 (i)“ Public Employee Optional Retirement Program,”
137 “optional program,” or “optional retirement program” means the
138 alternative defined contribution retirement program established
139 under this section.
140 (l)(j) “Retiree” means a former participant of the
141 investment Florida Retirement System Public Employee Optional
142 Retirement program who has terminated employment and has taken a
143 distribution as provided in s. 121.591, except for a mandatory
144 distribution of a de minimis account authorized by the state
145 board.
146 (k) “State board” or “board” means the State Board of
147 Administration.
148 (l) “Trustees” means Trustees of the State Board of
149 Administration.
150 (m) “State employer” means an agency, board, branch,
151 commission, community college, department, institution,
152 institution of higher education, or water management district
153 that participates in the Florida Retirement System for the
154 benefit of certain employees.
155 (n)(m) “Vested” or “vesting” means the guarantee that a
156 participant is eligible to receive a retirement benefit upon
157 completion of the required years of service under the Public
158 Employee Optional Retirement Program.
159 (3) ELIGIBILITY; RETIREMENT SERVICE CREDIT; TRANSFER OF
160 BENEFITS.—
161 (a) Participation in the Public Employee Optional
162 Retirement Program is limited to eligible employees.
163 Participation in the optional retirement program is in lieu of
164 participation in the defined benefit program of the Florida
165 Retirement System.
166 (a)(b) An eligible employee who is employed in a regularly
167 established position by a state employer on June 1, 2002; by a
168 district school board employer on September 1, 2002; or by a
169 local employer on December 1, 2002, and who is a member of the
170 defined benefit retirement program of the Florida Retirement
171 System at the time of his or her election to participate in the
172 investment Public Employee Optional Retirement program shall
173 retain all retirement service credit earned under the defined
174 benefit retirement program of the Florida Retirement System as
175 credited under the system and is shall be entitled to a deferred
176 benefit upon termination, if eligible under the system. However,
177 election to participate in the investment Public Employee
178 Optional Retirement program terminates the active membership of
179 the employee in the defined benefit program of the Florida
180 Retirement System, and the service of a participant in the
181 investment Public Employee Optional Retirement program is shall
182 not be creditable under the defined benefit retirement program
183 of the Florida Retirement System for purposes of benefit accrual
184 but is creditable shall be credited for purposes of vesting.
185 (b)(c)1. Notwithstanding paragraph (a), an (b), each
186 eligible employee who elects to participate in the investment
187 Public Employee Optional Retirement program and establishes one
188 or more individual participant accounts under the optional
189 program may elect to transfer to the investment optional program
190 a sum representing the present value of the employee’s
191 accumulated benefit obligation under the defined benefit
192 retirement program of the Florida Retirement System. Upon such
193 transfer, all service credit previously earned under the defined
194 benefit program is of the Florida Retirement System shall be
195 nullified for purposes of entitlement to a future benefit under
196 the defined benefit program of the Florida Retirement System. A
197 participant may not transfer is precluded from transferring the
198 accumulated benefit obligation balance from the defined benefit
199 program after the time upon the expiration of the period for
200 enrolling afforded to enroll in the investment optional program.
201 1.2. For purposes of this subsection, the present value of
202 the member’s accumulated benefit obligation is based upon the
203 member’s estimated creditable service and estimated average
204 final compensation under the defined benefit program, subject to
205 recomputation under subparagraph 2. 3. For state employees
206 enrolling under subparagraph (4)(a)1., initial estimates shall
207 will be based upon creditable service and average final
208 compensation as of midnight on June 30, 2002; for district
209 school board employees enrolling under subparagraph (4)(b)1.,
210 initial estimates shall will be based upon creditable service
211 and average final compensation as of midnight on September 30,
212 2002; and for local government employees enrolling under
213 subparagraph (4)(c)1., initial estimates shall will be based
214 upon creditable service and average final compensation as of
215 midnight on December 31, 2002. The dates respectively specified
216 are above shall be construed as the “estimate date” for these
217 employees. The actuarial present value of the employee’s
218 accumulated benefit obligation shall be based on the following:
219 a. The discount rate and other relevant actuarial
220 assumptions used to value the Florida Retirement System Trust
221 Fund at the time the amount to be transferred is determined,
222 consistent with the factors provided in sub-subparagraphs b. and
223 c.
224 b. A benefit commencement age, based on the member’s
225 estimated creditable service as of the estimate date. The
226 benefit commencement age is shall be the younger of the
227 following, but may shall not be younger than the member’s age as
228 of the estimate date:
229 (I) Age 62; or
230 (II) The age the member would attain if the member
231 completed 30 years of service with an employer, assuming the
232 member worked continuously from the estimate date, and
233 disregarding any vesting requirement that would otherwise apply
234 under the defined benefit program of the Florida Retirement
235 System.
236 c. For members of the Special Risk Class, and for members
237 of the Special Risk Administrative Support Class entitled to
238 retain the special risk normal retirement date, the benefit
239 commencement age is shall be the younger of the following, but
240 may shall not be younger than the member’s age as of the
241 estimate date:
242 (I) Age 55; or
243 (II) The age the member would attain if the member
244 completed 25 years of service with an employer, assuming the
245 member worked continuously from the estimate date, and
246 disregarding any vesting requirement that would otherwise apply
247 under the defined benefit program of the Florida Retirement
248 System.
249 d. The calculation must shall disregard vesting
250 requirements and early retirement reduction factors that would
251 otherwise apply under the defined benefit retirement program.
252 2.3. For each participant who elects to transfer moneys
253 from the defined benefit program to his or her account in the
254 investment optional program, the division shall recompute the
255 amount transferred under subparagraph 1. within 2. not later
256 than 60 days after the actual transfer of funds based upon the
257 participant’s actual creditable service and actual final average
258 compensation as of the initial date of participation in the
259 investment optional program. If the recomputed amount differs
260 from the amount transferred under subparagraph 2. by $10 or
261 more, the division shall:
262 a. Transfer, or cause to be transferred, from the Florida
263 Retirement System Trust Fund to the participant’s account in the
264 optional program the excess, if any, of the recomputed amount
265 over the previously transferred amount together with interest
266 from the initial date of transfer to the date of transfer under
267 this subparagraph, based upon the effective annual interest
268 equal to the assumed return on the actuarial investment which
269 was used in the most recent actuarial valuation of the system,
270 compounded annually.
271 b. Transfer, or cause to be transferred, from the
272 participant’s account to the Florida Retirement System Trust
273 Fund the excess, if any, of the previously transferred amount
274 over the recomputed amount, together with interest from the
275 initial date of transfer to the date of transfer under this
276 subparagraph, based upon 6 percent effective annual interest,
277 compounded annually, pro rata based on the participant’s
278 allocation plan.
279 3.4. As directed by the participant, the state board shall
280 transfer or cause to be transferred the appropriate amounts to
281 the designated accounts within. The board shall establish
282 transfer procedures by rule, but the actual transfer shall not
283 be later than 30 days after the effective date of the member’s
284 participation in the investment optional program unless the
285 major financial markets for securities available for a transfer
286 are seriously disrupted by an unforeseen event that which also
287 causes the suspension of trading on any national securities
288 exchange in the country where the securities are were issued. In
289 that event, the such 30-day period of time may be extended by a
290 resolution of the state board trustees. The state board shall
291 establish transfer procedures by rule. Transfers are not
292 commissionable or subject to other fees and may be in the form
293 of securities or cash, as determined by the state board. Such
294 securities are shall be valued as of the date of receipt in the
295 participant’s account.
296 4.5. If the state board or the division receives
297 notification from the United States Internal Revenue Service
298 that this paragraph or any portion of this paragraph will cause
299 the retirement system, or a portion thereof, to be disqualified
300 for tax purposes under the Internal Revenue Code, then the
301 portion that will cause the disqualification does not apply.
302 Upon such notice, the state board and the division shall notify
303 the presiding officers of the Legislature.
304 (4) OPTIONAL PARTICIPATION; ENROLLMENT.—
305 (a)1. With respect to an eligible employee who is employed
306 in a regularly established position by a state employer after on
307 June 1, 2002; by a district school board employer after
308 September 1, 2002; or by a local employer after December 1,
309 2002, but before January 1, 2011, the, by a state employer:
310 a. Any such employee may elect to participate in the Public
311 Employee Optional Retirement Program in lieu of retaining his or
312 her membership in the defined benefit program of the Florida
313 Retirement System. The election must be made in writing or by
314 electronic means and must be filed with the third-party
315 administrator by August 31, 2002, or, in the case of an active
316 employee who is on a leave of absence on April 1, 2002, by the
317 last business day of the 5th month following the month the leave
318 of absence concludes. This election is irrevocable, except as
319 provided in paragraph (e). Upon making such election, the
320 employee shall be enrolled as a participant of the Public
321 Employee Optional Retirement Program, the employee’s membership
322 in the Florida Retirement System shall be governed by the
323 provisions of this part, and the employee’s membership in the
324 defined benefit program of the Florida Retirement System shall
325 terminate. The employee’s enrollment in the Public Employee
326 Optional Retirement Program shall be effective the first day of
327 the month for which a full month’s employer contribution is made
328 to the optional program.
329 b. Any such employee who fails to elect to participate in
330 the Public Employee Optional Retirement Program within the
331 prescribed time period is deemed to have elected to retain
332 membership in the defined benefit program of the Florida
333 Retirement System, and the employee’s option to elect to
334 participate in the optional program is forfeited.
335 2. With respect to employees who become eligible to
336 participate in the Public Employee Optional Retirement Program
337 by reason of employment in a regularly established position with
338 a state employer commencing after April 1, 2002:
339 a. Any such employee shall, by default, be enrolled in the
340 defined benefit retirement program of the Florida Retirement
341 System at the commencement of employment, and may, by the last
342 business day of the 5th month following the employee’s month of
343 hire, elect to participate in the investment Public Employee
344 Optional Retirement program. The employee’s election must be
345 made in writing or by electronic means and must be filed with
346 the third-party administrator. The election to participate in
347 the investment optional program is irrevocable, except as
348 provided in paragraph (c) (e).
349 1.b. If the employee files such election within the
350 prescribed time period, enrollment in the investment optional
351 program is shall be effective on the first day of employment.
352 The employer retirement contributions paid through the month of
353 the employee plan change shall be transferred to the investment
354 optional program, and, effective the first day of the next
355 month, the employer must shall pay the applicable contributions
356 based on the employee membership class in the optional program.
357 2.c. An Any such employee who fails to elect to participate
358 in the investment Public Employee Optional Retirement program
359 within the prescribed time period is deemed to have elected to
360 retain membership in the defined benefit program of the Florida
361 Retirement System, and the employee’s option to elect to
362 participate in the investment optional program is forfeited.
363 3. With respect to employees who become eligible to
364 participate in the Public Employee Optional Retirement
365 Investment Program pursuant to s. 121.051(2)(c)3. or s.
366 121.35(3)(i), the any such employee may elect to participate in
367 the investment Public Employee Optional Retirement program in
368 lieu of retaining his or her participation in the State
369 Community College System Optional Retirement Program or the
370 State University System Optional Retirement Program. The
371 election must be made in writing or by electronic means and must
372 be filed with the third-party administrator. This election is
373 irrevocable, except as provided in paragraph (c) (e). Upon
374 making such election, the employee shall be enrolled as a
375 participant in of the investment Public Employee Optional
376 Retirement program, the employee’s membership in the Florida
377 Retirement System shall be governed by the provisions of this
378 part, and the employee’s participation in the State Community
379 College System Optional Retirement Program or the State
380 University System Optional Retirement Program shall terminate.
381 The employee’s enrollment in the investment Public Employee
382 Optional Retirement program is shall be effective on the first
383 day of the month for which a full month’s employer contribution
384 is made to the investment optional program.
385 4. For purposes of this paragraph, “state employer” means
386 any agency, board, branch, commission, community college,
387 department, institution, institution of higher education, or
388 water management district of the state, which participates in
389 the Florida Retirement System for the benefit of certain
390 employees.
391 (b)1. With respect to an eligible employee who is employed
392 in a regularly established position on September 1, 2002, by a
393 district school board employer:
394 a. Any such employee may elect to participate in the Public
395 Employee Optional Retirement Program in lieu of retaining his or
396 her membership in the defined benefit program of the Florida
397 Retirement System. The election must be made in writing or by
398 electronic means and must be filed with the third-party
399 administrator by November 30, or, in the case of an active
400 employee who is on a leave of absence on July 1, 2002, by the
401 last business day of the 5th month following the month the leave
402 of absence concludes. This election is irrevocable, except as
403 provided in paragraph (e). Upon making such election, the
404 employee shall be enrolled as a participant of the Public
405 Employee Optional Retirement Program, the employee’s membership
406 in the Florida Retirement System shall be governed by the
407 provisions of this part, and the employee’s membership in the
408 defined benefit program of the Florida Retirement System shall
409 terminate. The employee’s enrollment in the Public Employee
410 Optional Retirement Program shall be effective the first day of
411 the month for which a full month’s employer contribution is made
412 to the optional program.
413 b. Any such employee who fails to elect to participate in
414 the Public Employee Optional Retirement Program within the
415 prescribed time period is deemed to have elected to retain
416 membership in the defined benefit program of the Florida
417 Retirement System, and the employee’s option to elect to
418 participate in the optional program is forfeited.
419 2. With respect to employees who become eligible to
420 participate in the Public Employee Optional Retirement Program
421 by reason of employment in a regularly established position with
422 a district school board employer commencing after July 1, 2002:
423 a. Any such employee shall, by default, be enrolled in the
424 defined benefit retirement program of the Florida Retirement
425 System at the commencement of employment, and may, by the last
426 business day of the 5th month following the employee’s month of
427 hire, elect to participate in the Public Employee Optional
428 Retirement Program. The employee’s election must be made in
429 writing or by electronic means and must be filed with the third
430 party administrator. The election to participate in the optional
431 program is irrevocable, except as provided in paragraph (e).
432 b. If the employee files such election within the
433 prescribed time period, enrollment in the optional program shall
434 be effective on the first day of employment. The employer
435 retirement contributions paid through the month of the employee
436 plan change shall be transferred to the optional program, and,
437 effective the first day of the next month, the employer shall
438 pay the applicable contributions based on the employee
439 membership class in the optional program.
440 c. Any such employee who fails to elect to participate in
441 the Public Employee Optional Retirement Program within the
442 prescribed time period is deemed to have elected to retain
443 membership in the defined benefit program of the Florida
444 Retirement System, and the employee’s option to elect to
445 participate in the optional program is forfeited.
446 3. For purposes of this paragraph, “district school board
447 employer” means any district school board that participates in
448 the Florida Retirement System for the benefit of certain
449 employees, or a charter school or charter technical career
450 center that participates in the Florida Retirement System as
451 provided in s. 121.051(2)(d).
452 (c)1. With respect to an eligible employee who is employed
453 in a regularly established position on December 1, 2002, by a
454 local employer:
455 a. Any such employee may elect to participate in the Public
456 Employee Optional Retirement Program in lieu of retaining his or
457 her membership in the defined benefit program of the Florida
458 Retirement System. The election must be made in writing or by
459 electronic means and must be filed with the third-party
460 administrator by February 28, 2003, or, in the case of an active
461 employee who is on a leave of absence on October 1, 2002, by the
462 last business day of the 5th month following the month the leave
463 of absence concludes. This election is irrevocable, except as
464 provided in paragraph (e). Upon making such election, the
465 employee shall be enrolled as a participant of the Public
466 Employee Optional Retirement Program, the employee’s membership
467 in the Florida Retirement System shall be governed by the
468 provisions of this part, and the employee’s membership in the
469 defined benefit program of the Florida Retirement System shall
470 terminate. The employee’s enrollment in the Public Employee
471 Optional Retirement Program shall be effective the first day of
472 the month for which a full month’s employer contribution is made
473 to the optional program.
474 b. Any such employee who fails to elect to participate in
475 the Public Employee Optional Retirement Program within the
476 prescribed time period is deemed to have elected to retain
477 membership in the defined benefit program of the Florida
478 Retirement System, and the employee’s option to elect to
479 participate in the optional program is forfeited.
480 2. With respect to employees who become eligible to
481 participate in the Public Employee Optional Retirement Program
482 by reason of employment in a regularly established position with
483 a local employer commencing after October 1, 2002:
484 a. Any such employee shall, by default, be enrolled in the
485 defined benefit retirement program of the Florida Retirement
486 System at the commencement of employment, and may, by the last
487 business day of the 5th month following the employee’s month of
488 hire, elect to participate in the Public Employee Optional
489 Retirement Program. The employee’s election must be made in
490 writing or by electronic means and must be filed with the third
491 party administrator. The election to participate in the optional
492 program is irrevocable, except as provided in paragraph (e).
493 b. If the employee files such election within the
494 prescribed time period, enrollment in the optional program shall
495 be effective on the first day of employment. The employer
496 retirement contributions paid through the month of the employee
497 plan change shall be transferred to the optional program, and,
498 effective the first day of the next month, the employer shall
499 pay the applicable contributions based on the employee
500 membership class in the optional program.
501 c. Any such employee who fails to elect to participate in
502 the Public Employee Optional Retirement Program within the
503 prescribed time period is deemed to have elected to retain
504 membership in the defined benefit program of the Florida
505 Retirement System, and the employee’s option to elect to
506 participate in the optional program is forfeited.
507 3. For purposes of this paragraph, “local employer” means
508 any employer not included in paragraph (a) or paragraph (b).
509 (b)(d) Contributions available for self-direction by a
510 participant who has not selected one or more specific investment
511 products shall be allocated as prescribed by the state board.
512 The third-party administrator shall notify the any such
513 participant at least quarterly that the participant should take
514 an affirmative action to make an asset allocation among the
515 optional program products.
516 (c)(e) After the period during which an eligible employee
517 had the choice to elect the defined benefit program or the
518 investment Public Employee Optional Retirement program, or the
519 month following the receipt of the eligible employee’s plan
520 election, if sooner, the employee shall have one opportunity, at
521 the employee’s discretion, to choose to move from the defined
522 benefit program to the investment Public Employee Optional
523 Retirement program or from the investment Public Employee
524 Optional Retirement program to the defined benefit program.
525 Eligible employees may elect to move between Florida Retirement
526 System programs only if they are earning service credit in an
527 employer-employee relationship consistent with the requirements
528 under s. 121.021(17)(b), excluding leaves of absence without
529 pay. Effective July 1, 2005, such elections are shall be
530 effective on the first day of the month following the receipt of
531 the election by the third-party administrator and are not
532 subject to the requirements regarding an employer-employee
533 relationship or receipt of contributions for the eligible
534 employee in the effective month, except that the employee must
535 meet the conditions of the previous sentence when the election
536 is received by the third-party administrator. This paragraph is
537 shall be contingent upon approval by from the Internal Revenue
538 Service for including the choice described herein within the
539 programs offered by the Florida Retirement System.
540 1. If the employee chooses to move to the investment Public
541 Employee Optional Retirement program, the applicable provisions
542 of subsection (3) this section shall govern the transfer.
543 2. If the employee chooses to move to the defined benefit
544 program, the employee must transfer from his or her investment
545 Public Employee Optional Retirement program account, and from
546 other employee moneys as necessary, a sum representing the
547 present value of that employee’s accumulated benefit obligation
548 immediately following the time of such movement, determined
549 assuming that attained service equals the sum of service in the
550 defined benefit program and service in the investment Public
551 Employee Optional Retirement program. Benefit commencement
552 occurs on the first date the employee is would become eligible
553 for unreduced benefits, using the discount rate and other
554 relevant actuarial assumptions that were used to value the
555 Florida Retirement System defined benefit program plan
556 liabilities in the most recent actuarial valuation. For any
557 employee who, at the time of the second election, already
558 maintains an accrued benefit amount in the defined benefit
559 program plan, the then-present value of the such accrued benefit
560 shall be deemed part of the required transfer amount described
561 in this subparagraph. The division shall ensure that the
562 transfer sum is prepared using a formula and methodology
563 certified by an enrolled actuary.
564 3. Notwithstanding subparagraph 2., an employee who chooses
565 to move to the defined benefit program and who became eligible
566 to participate in the Public Employee Optional Retirement
567 Program by reason of employment in a regularly established
568 position with a state employer after June 1, 2002; a district
569 school board employer after September 1, 2002; or a local
570 employer after December 1, 2002, must transfer from his or her
571 investment Public Employee Optional Retirement program account,
572 and, from other employee moneys as necessary, a sum representing
573 that employee’s actuarial accrued liability.
574 4. An employee’s Employees’ ability to transfer from the
575 Florida Retirement System defined benefit program to the
576 investment Public Employee Optional Retirement program pursuant
577 to paragraphs (a) and (b) (a)-(d), and the ability of a for
578 current employee employees to have an option to later transfer
579 back into the defined benefit program under subparagraph 2.,
580 shall be deemed a significant system amendment. Pursuant to s.
581 121.031(4), any such resulting unfunded liability arising from
582 actual original transfers from the defined benefit program to
583 the investment optional program must shall be amortized within
584 30 plan years as a separate unfunded actuarial base independent
585 of the reserve stabilization mechanism defined in s.
586 121.031(3)(f). For the first 25 years, a no direct amortization
587 payment may not shall be calculated for this base. During this
588 25-year period, the such separate base shall be used to offset
589 the impact of employees exercising their second program election
590 under this paragraph. It is the legislative intent of the
591 Legislature that the actuarial funded status of the Florida
592 Retirement System defined benefit program not be affected plan
593 is neither beneficially nor adversely impacted by such second
594 program elections in any significant manner, after due
595 recognition of the separate unfunded actuarial base. Following
596 this initial 25-year period, any remaining balance of the
597 original separate base shall be amortized over the remaining 5
598 years of the required 30-year amortization period.
599 (5) CONTRIBUTIONS.—
600 (a) Each employer shall contribute on behalf of each
601 participant in the investment Public Employee Optional
602 Retirement program, as provided in part III of this chapter. The
603 state board, acting as plan fiduciary, shall ensure that all
604 plan assets are held in a trust, pursuant to s. 401 of the
605 Internal Revenue Code. The fiduciary shall ensure that said
606 contributions are allocated as follows:
607 1. The portion earmarked for participant accounts shall be
608 used to purchase interests in the appropriate investment
609 vehicles for the accounts of each participant as specified by
610 the participant, or in accordance with paragraph (4)(b) (4)(d).
611 2. The portion earmarked for administrative and educational
612 expenses shall be transferred to the state board.
613 3. The portion earmarked for disability benefits shall be
614 transferred to the department.
615 (b) Employers are responsible for notifying participants
616 regarding maximum contribution levels allowed permitted under
617 the Internal Revenue Code. If a participant contributes to any
618 other tax-deferred plan, the participant he or she is
619 responsible for ensuring that total contributions made to the
620 investment optional program and to any other such plan do not
621 exceed federally permitted maximums.
622 (c) The investment Public Employee Optional Retirement
623 program may accept for deposit into participant accounts
624 contributions in the form of rollovers or direct trustee-to
625 trustee transfers by or on behalf of participants, reasonably
626 determined by the state board to be eligible for rollover or
627 transfer to the investment optional retirement program pursuant
628 to the Internal Revenue Code, if such contributions are made in
629 accordance with rules as may be adopted by the board. Such
630 contributions must shall be accounted for in accordance with any
631 applicable Internal Revenue Code requirements and rules of the
632 state board.
633 (6) VESTING REQUIREMENTS.—
634 (a)1. With respect to employer contributions paid on behalf
635 of the participant to the investment Public Employee Optional
636 Retirement program, plus interest and earnings thereon and less
637 investment fees and administrative charges, a participant is
638 shall be vested after completing 1 work year, as defined in s.
639 121.021(54), with an employer, including any service while the
640 participant was a member of the defined benefit retirement
641 program or an optional retirement program authorized under s.
642 121.051(2)(c) or s. 121.055(6).
643 2. If the participant terminates employment before prior to
644 satisfying the vesting requirements, the nonvested accumulation
645 must shall be transferred from the participant’s accounts to the
646 state board for deposit and investment by the state board in its
647 the suspense account in of the Public Employee Optional
648 Retirement Investment Program Trust Fund of the board. If the
649 terminated participant is reemployed as an eligible employee
650 within 5 years, the state board shall transfer to the
651 participant’s account any amount of the moneys previously
652 transferred from the participant’s accounts to the suspense
653 account of the Public Employee Optional Retirement Program Trust
654 Fund, plus the actual earnings on such amount while in the
655 suspense account.
656 (b)1. With respect to amounts transferred from the defined
657 benefit program to the investment program, plus interest and
658 earnings, and less investment fees and administrative charges, a
659 participant shall be vested in the amount transferred from the
660 defined benefit program, plus interest and earnings thereon and
661 less administrative charges and investment fees, upon meeting
662 the service requirements for the participant’s membership class
663 as set forth in s. 121.021(29). The third-party administrator
664 shall account for such amounts for each participant. The
665 division shall notify the participant and the third-party
666 administrator when the participant has satisfied the vesting
667 period for Florida Retirement System purposes.
668 2. If the participant terminates employment before prior to
669 satisfying the vesting requirements, the nonvested accumulation
670 must shall be transferred from the participant’s accounts to the
671 state board for deposit and investment by the board in the
672 suspense account in of the Public Employee Optional Retirement
673 Investment Program Trust Fund of the board. If the terminated
674 participant is reemployed as an eligible employee within 5
675 years, the state board shall transfer to the participant’s
676 account any amount of the moneys previously transferred from the
677 participant’s accounts to the suspense account of the Public
678 Employee Optional Retirement Program Trust Fund, plus the actual
679 earnings on such amount while in the suspense account.
680 (c) Any nonvested accumulations transferred from a
681 participant’s account to the state board’s suspense account
682 shall be forfeited by the participant if the participant is not
683 reemployed as an eligible employee within 5 years after
684 termination.
685 (7) BENEFITS.—Under the Public Employee Optional Retirement
686 Investment Program, benefits shall:
687 (a) Benefits shall Be provided in accordance with s. 401(a)
688 of the Internal Revenue Code.
689 (b) Benefits shall Accrue in individual accounts that are
690 participant-directed, portable, and funded by employer
691 contributions and earnings thereon.
692 (c) Benefits shall Be payable in accordance with the
693 provisions of s. 121.591.
694 (8) PROGRAM ADMINISTRATION OF PROGRAM.—
695 (a) The Public Employee Optional Retirement Investment
696 Program shall be administered by the state board and affected
697 employers. The state board is authorized to require oaths, by
698 affidavit or otherwise, and acknowledgments from persons in
699 connection with the administration of its duties and
700 responsibilities under the program this chapter. An No oath, by
701 affidavit or otherwise, may not shall be required of an employee
702 participant at the time of enrollment election. Acknowledgment
703 of an employee’s election to participate in the program shall be
704 no greater than necessary to confirm the employee’s election.
705 The state board shall adopt rules establishing the roles role
706 and responsibilities of affected state, local government, and
707 education-related employers, the state board, the department,
708 and third-party contractors in administering the investment
709 Public Employee Optional Retirement program. The department
710 shall adopt rules necessary to administer implement the
711 investment optional program in coordination with the defined
712 benefit retirement program and the disability benefits available
713 under the investment optional program.
714 (a)(b)1. The state board shall select and contract with a
715 one third-party administrator to provide administrative services
716 if those services cannot be competitively and contractually
717 provided by the division of Retirement within the Department of
718 Management Services. With the approval of the state board, the
719 third-party administrator may subcontract with other
720 organizations or individuals to provide components of the
721 administrative services. As a cost of administration, the state
722 board may compensate any such contractor for its services, in
723 accordance with the terms of the contract, as is deemed
724 necessary or proper by the board. The third-party administrator
725 may not be an approved provider or be affiliated with an
726 approved provider.
727 2. These administrative services may include, but are not
728 limited to, enrollment of eligible employees, collection of
729 employer contributions, disbursement of such contributions to
730 approved providers in accordance with the allocation directions
731 of participants; services relating to consolidated billing;
732 individual and collective recordkeeping and accounting; asset
733 purchase, control, and safekeeping; and direct disbursement of
734 funds to and from the third-party administrator, the division,
735 the state board, employers, participants, approved providers,
736 and beneficiaries. This section does not prevent or prohibit a
737 bundled provider from providing any administrative or customer
738 service, including accounting and administration of individual
739 participant benefits and contributions; individual participant
740 recordkeeping; asset purchase, control, and safekeeping; direct
741 execution of the participant’s instructions as to asset and
742 contribution allocation; calculation of daily net asset values;
743 direct access to participant account information; or periodic
744 reporting to participants, at least quarterly, on account
745 balances and transactions, if these services are authorized by
746 the state board as part of the contract.
747 (b)1.3. The state board shall select and contract with one
748 or more organizations to provide educational services. With
749 approval of the state board, the organizations may subcontract
750 with other organizations or individuals to provide components of
751 the educational services. As a cost of administration, the state
752 board may compensate any such contractor for its services in
753 accordance with the terms of the contract, as is deemed
754 necessary or proper by the board. The education organization may
755 not be an approved provider or be affiliated with an approved
756 provider.
757 2.4. Educational services shall be designed by the state
758 board and department to assist employers, eligible employees,
759 participants, and beneficiaries in order to maintain compliance
760 with United States Department of Labor regulations under s.
761 404(c) of the Employee Retirement Income Security Act of 1974
762 and to assist employees in understanding their choice of defined
763 benefit or defined contribution retirement program alternatives.
764 Educational services include, but are not limited to,
765 disseminating educational materials; providing retirement
766 planning education; explaining the differences between the
767 defined benefit retirement plan and the defined contribution
768 retirement programs plan; and offering financial planning
769 guidance on matters such as investment diversification,
770 investment risks, investment costs, and asset allocation. An
771 approved provider may also provide educational information,
772 including retirement planning and investment allocation
773 information concerning its products and services.
774 (c)1. In evaluating and selecting a third-party
775 administrator, the state board shall establish criteria for
776 evaluating under which it shall consider the relative
777 capabilities and qualifications of each proposed administrator.
778 In developing such criteria, the state board shall consider:
779 a. The administrator’s demonstrated experience in providing
780 administrative services to public or private sector retirement
781 systems.
782 b. The administrator’s demonstrated experience in providing
783 daily valued recordkeeping to defined contribution programs
784 plans.
785 c. The administrator’s ability and willingness to
786 coordinate its activities with the Florida Retirement System
787 employers, the state board, and the division, and to supply to
788 such employers, the board, and the division the information and
789 data they require, including, but not limited to, monthly
790 management reports, quarterly participant reports, and ad hoc
791 reports requested by the department or state board.
792 d. The cost-effectiveness and levels of the administrative
793 services provided.
794 e. The administrator’s ability to interact with the
795 participants, the employers, the state board, the division, and
796 the providers; the means by which participants may access
797 account information, direct investment of contributions, make
798 changes to their accounts, transfer moneys between available
799 investment vehicles, and transfer moneys between investment
800 products; and any fees that apply to such activities.
801 f. Any other factor deemed necessary by the Trustees of the
802 state board of Administration.
803 2. In evaluating and selecting an educational provider, the
804 state board shall establish criteria under which it shall
805 consider the relative capabilities and qualifications of each
806 proposed educational provider. In developing such criteria, the
807 board shall consider:
808 a. Demonstrated experience in providing educational
809 services to public or private sector retirement systems.
810 b. Ability and willingness to coordinate its activities
811 with the Florida Retirement System employers, the state board,
812 and the division, and to supply to such employers, the board,
813 and the division the information and data they require,
814 including, but not limited to, reports on educational contacts.
815 c. The cost-effectiveness and levels of the educational
816 services provided.
817 d. Ability to provide educational services via different
818 media, including, but not limited to, the Internet, personal
819 contact, seminars, brochures, and newsletters.
820 e. Any other factor deemed necessary by the Trustees of the
821 state board of Administration.
822 3. The establishment of the criteria shall be solely within
823 the discretion of the state board.
824 (d) The state board shall develop the form and content of
825 any contracts to be offered under the investment Public Employee
826 Optional Retirement program. In developing the its contracts,
827 the board shall must consider:
828 1. The nature and extent of the rights and benefits to be
829 afforded in relation to the required contributions required
830 under the program.
831 2. The suitability of the rights and benefits provided to
832 be afforded and the interests of employers in the recruitment
833 and retention of eligible employees.
834 (e)1. The state board may contract with any consultant for
835 professional services, including legal, consulting, accounting,
836 and actuarial services, deemed necessary to implement and
837 administer the investment optional program by the Trustees of
838 the state board of Administration. The board may enter into a
839 contract with one or more vendors to provide low-cost investment
840 advice to participants, supplemental to education provided by
841 the third-party administrator. All fees under any such contract
842 shall be paid by those participants who choose to use the
843 services of the vendor.
844 2. The department may contract with consultants for
845 professional services, including legal, consulting, accounting,
846 and actuarial services, deemed necessary to implement and
847 administer the investment optional program in coordination with
848 the defined benefit program of the Florida Retirement System.
849 The department, in coordination with the state board, may enter
850 into a contract with the third-party administrator in order to
851 coordinate services common to the various programs within the
852 Florida Retirement System.
853 (f) The third-party administrator may shall not receive
854 direct or indirect compensation from an approved provider,
855 except as specifically provided for in the contract with the
856 state board.
857 (g) The state board shall resolve any conflict between the
858 third-party administrator and an approved provider if when such
859 conflict threatens the implementation or administration of the
860 program or the quality of services to employees and may resolve
861 any other conflicts.
862 (9) INVESTMENT OPTIONS OR PRODUCTS; PERFORMANCE REVIEW.—
863 (a) The state board shall develop policy and procedures for
864 selecting, evaluating, and monitoring the performance of
865 approved providers and investment products to which employees
866 may direct retirement contributions under the investment
867 program. In accordance with such policy and procedures, the
868 state board shall designate and contract for a number of
869 investment products as determined by the board. The board shall
870 also select one or more bundled providers, each of which whom
871 may offer multiple investment options and related services, if
872 when such an approach is determined by the board to provide
873 afford value to the participants otherwise not available through
874 individual investment products. Each approved bundled provider
875 may offer investment options that provide participants with the
876 opportunity to invest in each of the following asset classes, to
877 be composed of individual options that represent either a single
878 asset class or a combination thereof: money markets, United
879 States fixed income, United States equities, and foreign stock.
880 The state board shall review and manage all educational
881 materials, contract terms, fee schedules, and other aspects of
882 the approved provider relationships to ensure that no provider
883 is unduly favored or penalized by virtue of its status within
884 the investment program plan.
885 (b) The state board shall consider investment options or
886 products it considers appropriate to give participants the
887 opportunity to accumulate retirement benefits, subject to the
888 following:
889 1. The investment Public Employee Optional Retirement
890 program must offer a diversified mix of low-cost investment
891 products that span the risk-return spectrum and may include a
892 guaranteed account as well as investment products, such as
893 individually allocated guaranteed and variable annuities, which
894 meet the requirements of this subsection and combine the ability
895 to accumulate investment returns with the option of receiving
896 lifetime income consistent with the long-term retirement
897 security of a pension plan and similar to the lifetime-income
898 benefit provided by the Florida Retirement System.
899 2. Investment options or products offered by the group of
900 approved providers may include mutual funds, group annuity
901 contracts, individual retirement annuities, interests in trusts,
902 collective trusts, separate accounts, and other such financial
903 instruments, and may include products that give participants the
904 option of committing their contributions for an extended time
905 period in an effort to obtain returns higher than those that
906 could be obtained from investment products offering full
907 liquidity.
908 3. The state board may shall not contract with a any
909 provider that imposes a front-end, back-end, contingent, or
910 deferred sales charge, or any other fee that limits or restricts
911 the ability of participants to select any investment product
912 available in the investment optional program. This prohibition
913 does not apply to fees or charges that are imposed on
914 withdrawals from products that give participants the option of
915 committing their contributions for an extended time period in an
916 effort to obtain returns higher than those that could be
917 obtained from investment products offering full liquidity,
918 provided that the product in question, net of all fees and
919 charges, produces material benefits relative to other comparable
920 products in the program offering full liquidity.
921 4. Fees or charges for insurance features, such as
922 mortality and expense-risk charges, must be reasonable relative
923 to the benefits provided.
924 (c) In evaluating and selecting approved providers and
925 products, the state board shall establish criteria for
926 evaluating under which it shall consider the relative
927 capabilities and qualifications of each proposed provider
928 company and product. In developing such criteria, the board
929 shall consider the following to the extent such factors may be
930 applied in connection with investment products, services, or
931 providers:
932 1. Experience in the United States providing retirement
933 products and related financial services under a defined
934 contribution retirement program plans.
935 2. Financial strength and stability as which shall be
936 evidenced by the highest ratings assigned by nationally
937 recognized rating services when comparing proposed providers
938 that are so rated.
939 3. Intrastate and interstate portability of the product
940 offered, including early withdrawal options.
941 4. Compliance with the Internal Revenue Code.
942 5. The cost-effectiveness of the product provided and the
943 levels of service supporting the product relative to its
944 benefits and its characteristics, including, without limitation,
945 the level of risk borne by the provider.
946 6. The provider company’s ability and willingness to
947 coordinate its activities with Florida Retirement System
948 employers, the department, and the state board, and to supply to
949 the such employers, the department, and the board with the
950 information and data they require.
951 7. The methods available to participants to interact with
952 the provider company; the means by which participants may access
953 account information, direct investment of contributions, make
954 changes to their accounts, transfer moneys between available
955 investment vehicles, and transfer moneys between provider
956 companies; and any fees that apply to such activities.
957 8. The provider company’s policies with respect to the
958 transfer of individual account balances, contributions, and
959 earnings thereon, both internally among investment products
960 offered by the provider company and externally between approved
961 providers, as well as any fees, charges, reductions, or
962 penalties that may be applied.
963 9. An evaluation of specific investment products, taking
964 into account each product’s experience in meeting its investment
965 return objectives net of all related fees, expenses, and
966 charges, including, but not limited to, investment management
967 fees, loads, distribution and marketing fees, custody fees,
968 recordkeeping fees, education fees, annuity expenses, and
969 consulting fees.
970 10. Organizational factors, including, but not limited to,
971 financial solvency, organizational depth, and experience in
972 providing institutional and retail investment services.
973 (d) By March 1, 2010, the state board shall identify and
974 offer at least one terror-free investment product that allocates
975 its funds among securities not subject to divestiture as
976 provided in s. 215.473 if the investment product is deemed by
977 the board to be consistent with prudent investor standards. No
978 person may bring a civil, criminal, or administrative action
979 against an approved provider; the state board; or any employee,
980 officer, director, or trustee of such provider based upon the
981 divestiture of any security or the offering of a terror-free
982 investment product as specified in this paragraph.
983 (e) As a condition of offering an any investment option or
984 product in the investment optional retirement program, the
985 approved provider must agree to make the investment product or
986 service available under the most beneficial terms offered to any
987 other customer, subject to approval by the Trustees of the state
988 board of Administration.
989 (f) The state board shall regularly review the performance
990 of each approved provider and product and related organizational
991 factors to ensure continued compliance with established
992 selection criteria and with board policy and procedures.
993 Providers and products may be terminated subject to contract
994 provisions. The state board shall adopt procedures to transfer
995 account balances from terminated products or providers to other
996 products or providers in the investment optional program.
997 (g)1. An approved provider shall comply with all applicable
998 federal and state securities and insurance laws and regulations
999 applicable to the provider, as well as with the applicable rules
1000 and guidelines of the National Association of Securities Dealers
1001 which govern the ethical marketing of investment products. In
1002 furtherance of this mandate, an approved provider must agree in
1003 its contract with the state board to establish and maintain a
1004 compliance education and monitoring system to supervise the
1005 activities of all personnel who directly communicate with
1006 individual participants and recommend investment products, which
1007 system is consistent with rules of the National Association of
1008 Securities Dealers.
1009 2. Approved provider personnel who directly communicate
1010 with individual participants and who recommend investment
1011 products shall make an independent and unbiased determination as
1012 to whether an investment product is suitable for a particular
1013 participant.
1014 3. The state board shall develop procedures to receive and
1015 resolve participant complaints against a provider or approved
1016 provider personnel, and, if when appropriate, refer such
1017 complaints to the appropriate agency.
1018 4. Approved providers may not sell or in any way distribute
1019 any customer list or participant identification information
1020 generated through their offering of products or services through
1021 the investment optional retirement program.
1022 (10) EDUCATION COMPONENT.—
1023 (a) The state board, in coordination with the department,
1024 shall provide for an education component for eligible employees
1025 system members in a manner consistent with the provisions of
1026 this section. The education component must be available to
1027 eligible employees at least 90 days prior to the beginning date
1028 of the election period for the employees of the respective types
1029 of employers.
1030 (b) The education component must provide system members
1031 with impartial and balanced information about plan choices. The
1032 education component must involve multimedia formats. Program
1033 comparisons must, to the greatest extent possible, be based upon
1034 the retirement income that different retirement programs may
1035 provide to the participant. The board shall monitor the
1036 performance of the contract to ensure that the program is
1037 conducted in accordance with the contract, applicable law, and
1038 the rules of the board.
1039 (c) The board, in coordination with the department, shall
1040 provide for an initial and ongoing transfer education component
1041 to provide system members with information necessary to make
1042 informed plan choice decisions. The transfer education component
1043 must include, but is not limited to, information on:
1044 1. The amount of money available to a member to transfer to
1045 the defined contribution program.
1046 2. The features of and differences between the defined
1047 benefit program and the defined contribution program, both
1048 generally and specifically, as those differences may affect the
1049 member.
1050 3. The expected benefit available if the member were to
1051 retire under each of the retirement programs, based on
1052 appropriate alternative sets of assumptions.
1053 4. The rate of return from investments in the defined
1054 contribution program and the period of time over which such rate
1055 of return must be achieved to equal or exceed the expected
1056 monthly benefit payable to the member under the defined benefit
1057 program.
1058 5. The historical rates of return for the investment
1059 alternatives available in the defined contribution programs.
1060 6. The benefits and historical rates of return on
1061 investments available in a typical deferred compensation plan or
1062 a typical plan under s. 403(b) of the Internal Revenue Code for
1063 which the employee may be eligible.
1064 7. The program choices available to employees of the State
1065 University System and the comparative benefits of each available
1066 program, if applicable.
1067 8. Payout options available in each of the retirement
1068 programs.
1069 (a)(d) An ongoing education and communication component
1070 must provide eligible employees system members with information
1071 necessary to make informed decisions about choices within their
1072 retirement program of membership and in preparation for
1073 retirement. The component must include, but is not limited to,
1074 information concerning:
1075 1. Rights and conditions of membership.
1076 2. Benefit features within the program, options, and
1077 effects of certain decisions.
1078 3. Coordination of contributions and benefits with a
1079 deferred compensation plan under s. 457 or a plan under s.
1080 403(b) of the Internal Revenue Code.
1081 4. Significant program changes.
1082 5. Contribution rates and program funding status.
1083 6. Planning for retirement.
1084 (b)(e) Descriptive materials must be prepared under the
1085 assumption that the employee is an unsophisticated investor, and
1086 all materials used in the education component must be approved
1087 by the state board before prior to dissemination.
1088 (c)(f) The state board and the department shall also
1089 establish a communication component to provide program
1090 information to participating employers and the employers’
1091 personnel and payroll officers and to explain their respective
1092 responsibilities in conjunction with the retirement programs.
1093 (d)(g) Funding for education of new employees may reflect
1094 administrative costs to the investment optional program and the
1095 defined benefit program.
1096 (h) Pursuant to paragraph (8)(a), all Florida Retirement
1097 System employers have an obligation to regularly communicate the
1098 existence of the two Florida Retirement System plans and the
1099 plan choice in the natural course of administering their
1100 personnel functions, using the educational materials supplied by
1101 the state board and the Department of Management Services.
1102 (11) PARTICIPANT INFORMATION REQUIREMENTS.—The state board
1103 shall ensure that each participant is provided a quarterly
1104 statement that accounts for the contributions made on behalf of
1105 the such participant; the interest and investment earnings
1106 thereon; and any fees, penalties, or other deductions that apply
1107 thereto. At a minimum, such statements must:
1108 (a) Indicate the participant’s investment options.
1109 (b) State the market value of the account at the close of
1110 the current quarter and previous quarter.
1111 (c) Show account gains and losses for the period and
1112 changes in account accumulation unit values for the quarter
1113 period.
1114 (e) Indicate any account changes due to adjustment of
1115 contribution levels, reallocation of contributions, balance
1116 transfers, or withdrawals.
1117 (f) Set forth any fees, charges, penalties, and deductions
1118 that apply to the account.
1119 (g) Indicate the amount of the account in which the
1120 participant is fully vested and the amount of the account in
1121 which the participant is not vested.
1122 (h) Indicate each investment product’s performance relative
1123 to an appropriate market benchmark.
1124
1125 The third-party administrator shall provide quarterly and annual
1126 summary reports to the state board and any other reports
1127 requested by the department or the board. In any solicitation or
1128 offer of coverage under the defined contribution an optional
1129 retirement program, a provider company shall be governed by the
1130 contract readability provisions of s. 627.4145, notwithstanding
1131 s. 627.4145(6)(c). In addition, all descriptive materials must
1132 be prepared under the assumption that the participant is an
1133 unsophisticated investor. Provider companies must maintain an
1134 internal system of quality assurance, have proven functional
1135 systems that are date-calculation compliant, and be subject to a
1136 due-diligence inquiry that proves their capacity and fitness to
1137 undertake service responsibilities.
1138 (12) ADVISORY COUNCIL TO PROVIDE ADVICE AND ASSISTANCE.—The
1139 Investment Advisory Council, created pursuant to s. 215.444,
1140 shall assist the state board in implementing and administering
1141 the Public Employee Optional Retirement Investment Program. The
1142 Investment Advisory council, created pursuant to s. 215.444,
1143 shall review the state board’s initial recommendations regarding
1144 the criteria to be used in selecting and evaluating approved
1145 providers and investment products. The council may provide
1146 comments on the recommendations to the board within 45 days
1147 after receiving the initial recommendations. The state board
1148 shall make the final determination as to whether any investment
1149 provider or product, any contractor, or any and all contract
1150 provisions are shall be approved for the investment program.
1151 (13) FEDERAL REQUIREMENTS.—
1152 (a) Provisions of This section shall be construed, and the
1153 investment Public Employee Optional Retirement program shall be
1154 administered, so as to comply with the Internal Revenue Code, 26
1155 U.S.C., and specifically with plan qualification requirements
1156 imposed on governmental plans under s. 401(a) of the Internal
1157 Revenue Code. The state board may shall have the power and
1158 authority to adopt rules reasonably necessary to establish or
1159 maintain the qualified status of the investment Optional
1160 Retirement program under the Internal Revenue Code and to
1161 implement and administer the Optional Retirement program in
1162 compliance with the Internal Revenue Code and as designated
1163 under this part; provided however, that the board shall not have
1164 the authority to adopt any rule which makes a substantive change
1165 to the Optional Retirement Program as designed by this part.
1166 (b) Any section or provision of this chapter which is
1167 susceptible to more than one construction shall must be
1168 interpreted in favor of the construction most likely to satisfy
1169 requirements imposed by s. 401(a) of the Internal Revenue Code.
1170 (c) Contributions payable under this section for any
1171 limitation year may not exceed the maximum amount allowable for
1172 qualified defined contribution pension plans under applicable
1173 provisions of the Internal Revenue Code. If an employee who is
1174 enrolled who has elected to participate in the Public Employee
1175 Optional Retirement Investment Program participates in any other
1176 plan that is maintained by the participating employer, benefits
1177 that accrue under the investment Public Employee Optional
1178 Retirement program shall be considered primary for any aggregate
1179 limitation applicable under s. 415 of the Internal Revenue Code.
1180 (14) INVESTMENT POLICY STATEMENT.—
1181 (a) Investment products and approved providers selected for
1182 the investment Public Employee Optional Retirement program must
1183 shall conform with the Public Employee Optional Retirement
1184 Investment Program Investment Policy Statement, herein referred
1185 to as the “statement,” as developed and approved by the Trustees
1186 of the state board of Administration. The statement must
1187 include, among other items, the investment objectives of the
1188 investment Public Employee Optional Retirement program, manager
1189 selection and monitoring guidelines, and performance measurement
1190 criteria. As required from time to time, the executive director
1191 of the state board may present recommended changes in the
1192 statement to the board for approval.
1193 (b) Before Prior to presenting the statement, or any
1194 recommended changes thereto, to the state board, the executive
1195 director of the board shall present such statement or changes to
1196 the Investment Advisory Council for review. The council shall
1197 present the results of its review to the board prior to the
1198 board’s final approval of the statement or changes in the
1199 statement.
1200 (15) STATEMENT OF FIDUCIARY STANDARDS AND
1201 RESPONSIBILITIES.—
1202 (a) Investment of optional defined contribution program
1203 retirement plan assets shall be made for the sole interest and
1204 exclusive purpose of providing benefits to plan participants and
1205 beneficiaries and defraying reasonable expenses of administering
1206 the program plan. The program’s assets shall are to be invested,
1207 on behalf of the program participants, with the care, skill, and
1208 diligence that a prudent person acting in a like manner would
1209 undertake. The performance of the investment duties set forth in
1210 this paragraph shall comply with the fiduciary standards set
1211 forth in the Employee Retirement Income Security Act of 1974 at
1212 29 U.S.C. s. 1104(a)(1)(A)-(C). In case of conflict with other
1213 provisions of law authorizing investments, the investment and
1214 fiduciary standards set forth in this subsection shall prevail.
1215 (b) If a participant or beneficiary of the defined
1216 contribution Public Employee Optional Retirement program
1217 exercises control over the assets in his or her account, as
1218 determined by reference to regulations of the United States
1219 Department of Labor under s. 404(c) of the Employee Retirement
1220 Income Security Act of 1974 and all applicable laws governing
1221 the operation of the program, a no program fiduciary is not
1222 shall be liable for any loss to a participant’s or beneficiary’s
1223 account which results from the such participant’s or
1224 beneficiary’s exercise of control.
1225 (c) Subparagraph (8)(b)2. (8)(b)4. and paragraph (15)(b)
1226 incorporate the federal law concept of participant control,
1227 established by regulations of the United States Department of
1228 Labor under s. 404(c) of the Employee Retirement Income Security
1229 Act of 1974 (ERISA). The purpose of this paragraph is to assist
1230 employers and the state board of Administration in maintaining
1231 compliance with s. 404(c), while avoiding unnecessary costs and
1232 eroding participant benefits under the defined contribution
1233 Public Employee Optional Retirement program. Pursuant to 29
1234 C.F.R. s. 2550.404c-1(b)(2)(i)(B)(1)(viii), the state board of
1235 Administration or its designated agents shall deliver to
1236 participants of the defined contribution Public Employee
1237 Optional Retirement program a copy of the prospectus most
1238 recently provided to the plan, and, pursuant to 29 C.F.R. s.
1239 2550.404c-1(b)(2)(i)(B)(2)(ii), shall provide such participants
1240 an opportunity to obtain this information, except that:
1241 1. The requirement to deliver a prospectus shall be deemed
1242 to be satisfied by delivery of a fund profile that contains the
1243 information that would be included in a summary prospectus as
1244 described by Rule 498 under the Securities Act of 1933, 17
1245 C.F.R. s. 230.498. If When the transaction fees, expense
1246 information, or other information provided by a mutual fund in
1247 the prospectus does not reflect terms negotiated by the state
1248 board of Administration or its designated agents, the
1249 aforementioned requirement is deemed to be satisfied by delivery
1250 of a separate document described by Rule 498 substituting
1251 accurate information; and
1252 2. Delivery shall be deemed to have been effected if
1253 delivery is through electronic means and the following standards
1254 are satisfied:
1255 a. Electronically-delivered documents are prepared and
1256 provided consistent with style, format, and content requirements
1257 applicable to printed documents;
1258 b. Each participant is provided timely and adequate notice
1259 of the documents that are to be delivered and their significance
1260 thereof, and of the participant’s right to obtain a paper copy
1261 of such documents free of charge;
1262 c.(I) Participants have adequate access to the electronic
1263 documents, at locations such as their worksites or public
1264 facilities, and have the ability to convert the documents to
1265 paper free of charge by the state board of Administration, and
1266 the board or its designated agents take appropriate and
1267 reasonable measures to ensure that the system for furnishing
1268 electronic documents results in actual receipt., or
1269 (II) Participants have provided consent to receive
1270 information in electronic format, which consent may be revoked;
1271 and
1272 d. The state board of Administration, or its designated
1273 agent, actually provides paper copies of the documents free of
1274 charge, upon request.
1275 (16) DISABILITY BENEFITS.—For any participant of the
1276 investment optional retirement program who becomes totally and
1277 permanently disabled, benefits must shall be paid in accordance
1278 with the provisions of s. 121.591.
1279 (17) SOCIAL SECURITY COVERAGE.—Social security coverage
1280 shall be provided for all officers and employees who become
1281 participants of the investment optional program. Any
1282 modification of the present agreement with the Social Security
1283 Administration, or referendum required under the Social Security
1284 Act, for the purpose of providing social security coverage for
1285 any member shall be requested by the state agency in compliance
1286 with the applicable provisions of the Social Security Act
1287 governing such coverage. However, retroactive social security
1288 coverage for service before prior to December 1, 1970, with the
1289 employer may shall not be provided for any member who was not
1290 covered under the agreement as of November 30, 1970.
1291 (18) RETIREE HEALTH INSURANCE SUBSIDY.—All officers and
1292 employees who are participants of the investment optional
1293 program are shall be eligible to receive the retiree health
1294 insurance subsidy, subject to the provisions of s. 112.363.
1295 (19) PARTICIPANT RECORDS.—Personal identifying information
1296 of a participant in the investment Public Employee Optional
1297 Retirement program contained in Florida Retirement System
1298 records held by the state board of Administration or the
1299 department of Management Services is exempt from s. 119.07(1)
1300 and s. 24(a), Art. I of the State Constitution.
1301 (20) DESIGNATION OF BENEFICIARIES.—
1302 (a) Each participant may, on a form provided for that
1303 purpose, signed and filed with the third-party administrator,
1304 designate a choice of one or more persons, named sequentially or
1305 jointly, as his or her beneficiary for receiving who shall
1306 receive the benefits, if any, which may be payable pursuant to
1307 this chapter in the event of the participant’s death. If no
1308 beneficiary is named in this manner, or if no beneficiary
1309 designated by the participant survives the participant, the
1310 beneficiary shall be the spouse of the deceased, if living. If
1311 the participant’s spouse is not alive at the time of the
1312 beneficiary’s his or her death, the beneficiary shall be the
1313 living children of the participant. If no children survive, the
1314 beneficiary shall be the participant’s father or mother, if
1315 living; otherwise, the beneficiary shall be the participant’s
1316 estate. The beneficiary most recently designated by a
1317 participant on a form or letter filed with the third-party
1318 administrator shall be the beneficiary entitled to any benefits
1319 payable at the time of the participant’s death. However
1320 Notwithstanding any other provision in this subsection to the
1321 contrary, for a participant who dies before prior to his or her
1322 effective date of retirement, the spouse at the time of death
1323 shall be the participant’s beneficiary unless the such
1324 participant designates a different beneficiary as provided in
1325 this subsection subsequent to the participant’s most recent
1326 marriage.
1327 (b) If a participant designates a primary beneficiary other
1328 than the participant’s spouse, the participant’s spouse must
1329 sign the beneficiary designation form to acknowledge the
1330 designation. This requirement does not apply to the designation
1331 of one or more contingent beneficiaries to receive benefits
1332 remaining upon the death of the primary beneficiary or
1333 beneficiaries.
1334 (c) Notwithstanding the participant’s designation of
1335 benefits to be paid through a trust to a beneficiary that is a
1336 natural person, and notwithstanding the provisions of the trust,
1337 benefits must shall be paid directly to the beneficiary if the
1338 person is no longer a minor or an incapacitated person as
1339 defined in s. 744.102.
1340 (21) PARTICIPATION BY TERMINATED DEFERRED RETIREMENT OPTION
1341 PROGRAM PARTICIPANTS.—Notwithstanding any other provision of law
1342 to the contrary, participants in the Deferred Retirement Option
1343 Program offered under part I may, after conclusion of their
1344 participation in the program, elect to roll over or authorize a
1345 direct trustee-to-trustee transfer to an account under the
1346 Public Employee Optional Retirement Investment Program of their
1347 Deferred Retirement Option Program proceeds distributed as
1348 provided under s. 121.091(13)(c)5. The transaction must
1349 constitute an “eligible rollover distribution” within the
1350 meaning of s. 402(c)(4) of the Internal Revenue Code.
1351 (a) The investment Public Employee Optional Retirement
1352 program may accept such amounts for deposit into participant
1353 accounts as provided in paragraph (5)(c).
1354 (b) The affected participant shall direct the investment of
1355 his or her investment account; however, unless he or she becomes
1356 a renewed member of the Florida Retirement System under s.
1357 121.122 and elects to participate in the investment Public
1358 Employee Optional Retirement program, employer contributions may
1359 not be made to the participant’s account as provided under
1360 paragraph (5)(a).
1361 (c) The state board or the department is not responsible
1362 for locating those persons who may be eligible to participate in
1363 the investment Public Employee Optional Retirement program under
1364 this subsection.
1365 (22) CREDIT FOR MILITARY SERVICE.—Creditable service of any
1366 member of the Public Employee Optional Retirement Investment
1367 Program includes shall include military service in the Armed
1368 Forces of the United States as provided in the conditions
1369 outlined in s. 121.111(1).
1370 Section 2. Section 121.4502, Florida Statutes, is amended
1371 to read:
1372 121.4502 Public Employee Optional Retirement Investment
1373 Program Trust Fund.—
1374 (1) The Public Employee Optional Retirement Investment
1375 Program Trust Fund is created to hold the assets of the Public
1376 Employee Optional Retirement Investment Program in trust for the
1377 exclusive benefit of program such program’s participants and
1378 beneficiaries, and for the payment of reasonable administrative
1379 expenses of the program, in accordance with s. 401 of the
1380 Internal Revenue Code, and shall be administered by the State
1381 Board of Administration as trustee. Funds shall be credited to
1382 the trust fund as provided in this part and, to be used for the
1383 purposes of this part. The trust fund is exempt from the service
1384 charges imposed by s. 215.20.
1385 (2) The Public Employee Optional Retirement Investment
1386 Program Trust Fund is a retirement trust fund of the Florida
1387 Retirement System that accounts for retirement plan assets held
1388 by the state in a trustee capacity as a fiduciary for individual
1389 participants in the Public Employee Optional Retirement
1390 Investment Program and, pursuant to s. 19(f), Art. III of the
1391 State Constitution, is not subject to termination.
1392 Section 3. Paragraph (g) of subsection (2) of section
1393 110.123, Florida Statutes, is amended to read:
1394 110.123 State group insurance program.—
1395 (2) DEFINITIONS.—As used in this section, the term:
1396 (g) “Retired state officer or employee” or “retiree” means
1397 any state or state university officer or employee who retires
1398 under a state retirement system or a state optional annuity or
1399 retirement program or is placed on disability retirement, and
1400 who was insured under the state group insurance program at the
1401 time of retirement, and who begins receiving retirement benefits
1402 immediately after retirement from state or state university
1403 office or employment. In addition to these requirements, the
1404 term includes any state officer or state employee who retires
1405 under the defined contribution Public Employee Optional
1406 Retirement program established under part II of chapter 121
1407 shall be considered a “retired state officer or employee” or
1408 “retiree” as used in this section if he or she:
1409 1. Meets the age and service requirements to qualify for
1410 normal retirement as set forth in s. 121.021(29); or
1411 2. Has attained the age specified by s. 72(t)(2)(A)(i) of
1412 the Internal Revenue Code and has 6 years of creditable service.
1413 Section 4. Section 112.0801, Florida Statutes, is amended
1414 to read:
1415 112.0801 Group insurance; participation by retired
1416 employees.—
1417 (1) Any state agency, county, municipality, special
1418 district, community college, or district school board that which
1419 provides life, health, accident, hospitalization, or annuity
1420 insurance, or all of any kinds of such insurance, for its
1421 officers and employees and their dependents upon a group
1422 insurance plan or self-insurance plan shall allow all former
1423 personnel who have retired before prior to October 1, 1987, as
1424 well as those who retire on or after such date, and their
1425 eligible dependents, the option of continuing to participate in
1426 the such group insurance plan or self-insurance plan. Retirees
1427 and their eligible dependents shall be offered the same health
1428 and hospitalization insurance coverage as is offered to active
1429 employees at a premium cost of no more than the premium cost
1430 applicable to active employees. For the retired employees and
1431 their eligible dependents, the cost of any such continued
1432 participation in any type of plan or any of the cost thereof may
1433 be paid by the employer or by the retired employees. To
1434 determine health and hospitalization plan costs, the employer
1435 shall commingle the claims experience of the retiree group with
1436 the claims experience of the active employees; and, for other
1437 types of coverage, the employer may commingle the claims
1438 experience of the retiree group with the claims experience of
1439 active employees. Retirees covered under Medicare may be
1440 experience-rated separately from the retirees not covered by
1441 Medicare and from active employees if, provided that the total
1442 premium does not exceed that of the active group and coverage is
1443 basically the same as for the active group.
1444 (2) For purposes of this section, “retiree” has the same
1445 meaning as in s. 110.123(2). means any officer or employee who
1446 retires under a state retirement system or a state optional
1447 annuity or retirement program or is placed on disability
1448 retirement and who begins receiving retirement benefits
1449 immediately after retirement from employment. In addition to
1450 these requirements, any officer or employee who retires under
1451 the Public Employee Optional Retirement Program established
1452 under part II of chapter 121 shall be considered a “retired
1453 officer or employee” or “retiree” as used in this section if he
1454 or she:
1455 (a) Meets the age and service requirements to qualify for
1456 normal retirement as set forth in s. 121.021(29); or
1457 (b) Has attained the age specified by s. 72(t)(2)(A)(i) of
1458 the Internal Revenue Code and has 6 years of creditable service.
1459 Section 5. Paragraph (b) of subsection (2) and paragraph
1460 (e) of subsection (3) of section 112.363, Florida Statutes, are
1461 amended to read:
1462 112.363 Retiree health insurance subsidy.—
1463 (2) ELIGIBILITY FOR RETIREE HEALTH INSURANCE SUBSIDY.—
1464 (b) For purposes of this section, a person is deemed
1465 retired from a state-administered retirement system when he or
1466 she terminates employment with all employers participating in
1467 the Florida Retirement System as described in s. 121.021(39)
1468 and:
1469 1. For a participant of the defined contribution Public
1470 Employee Optional Retirement program established under part II
1471 of chapter 121, the participant meets the age or service
1472 requirements to qualify for normal retirement as set forth in s.
1473 121.021(29).
1474 2. For a member of the Florida Retirement System defined
1475 benefit program, or any employee who maintains creditable
1476 service under both the defined benefit program and the defined
1477 contribution Public Employee Optional Retirement program, the
1478 member begins drawing retirement benefits from the defined
1479 benefit program of the Florida Retirement System.
1480 (3) RETIREE HEALTH INSURANCE SUBSIDY AMOUNT.—
1481 (e)1. Beginning July 1, 2001, each eligible retiree of the
1482 defined benefit program of the Florida Retirement System, or, if
1483 the retiree is deceased, his or her beneficiary who is receiving
1484 a monthly benefit from such retiree’s account and who is a
1485 spouse, or a person who meets the definition of joint annuitant
1486 in s. 121.021(28), shall receive a monthly retiree health
1487 insurance subsidy payment equal to the number of years of
1488 creditable service, as defined in s. 121.021(17), completed at
1489 the time of retirement multiplied by $5; however, no eligible
1490 retiree or beneficiary may receive a subsidy payment of more
1491 than $150 or less than $30. If there are multiple beneficiaries,
1492 the total payment may must not be greater than the payment to
1493 which the retiree was entitled. The health insurance subsidy
1494 amount payable to any person receiving the retiree health
1495 insurance subsidy payment on July 1, 2001, may shall not be
1496 reduced solely by operation of this subparagraph.
1497 2. Beginning July 1, 2002, each eligible participant of the
1498 defined contribution Public Employee Optional Retirement program
1499 of the Florida Retirement System who has met the requirements of
1500 this section, or, if the participant is deceased, his or her
1501 spouse who is the participant’s designated beneficiary, shall
1502 receive a monthly retiree health insurance subsidy payment equal
1503 to the number of years of creditable service, as provided in
1504 this subparagraph, completed at the time of retirement,
1505 multiplied by $5; however, no eligible retiree or beneficiary
1506 may receive a subsidy payment of more than $150 or less than
1507 $30. For purposes of determining a participant’s creditable
1508 service used to calculate the health insurance subsidy, a
1509 participant’s years of service credit or fraction thereof shall
1510 be based on the participant’s work year as defined in s.
1511 121.021(54). Credit must shall be awarded for a full work year
1512 whenever health insurance subsidy contributions have been made
1513 as required by law for each month in the participant’s work
1514 year. In addition, all years of creditable service retained
1515 under the Florida Retirement System defined benefit program must
1516 shall be included as creditable service for purposes of this
1517 section. Notwithstanding any other provision in this section to
1518 the contrary, the spouse at the time of death is shall be the
1519 participant’s beneficiary unless such participant has designated
1520 a different beneficiary subsequent to the participant’s most
1521 recent marriage.
1522 Section 6. Subsection (1) of section 112.65, Florida
1523 Statutes, is amended to read:
1524 112.65 Limitation of benefits.—
1525 (1) ESTABLISHMENT OF PROGRAM.—The normal retirement benefit
1526 or pension payable to a retiree who becomes a member of any
1527 retirement system or plan and who has not previously
1528 participated in such plan, on or after January 1, 1980, may
1529 shall not exceed 100 percent of his or her average final
1530 compensation. However, nothing contained in this section does
1531 not shall apply to supplemental retirement benefits or to
1532 pension increases attributable to cost-of-living increases or
1533 adjustments. For the purposes of this section, benefits accruing
1534 in individual participant accounts established under the defined
1535 contribution Public Employee Optional Retirement program
1536 established in part II of chapter 121 are considered
1537 supplemental benefits. As used in this section, the term
1538 “average final compensation” means the average of the member’s
1539 earnings over a period of time which the governmental entity has
1540 established by statute, charter, or ordinance.
1541 Section 7. Subsection (3) and paragraph (b) of subsection
1542 (22) of section 121.021, Florida Statutes, are amended to read:
1543 121.021 Definitions.—The following words and phrases as
1544 used in this chapter have the respective meanings set forth
1545 unless a different meaning is plainly required by the context:
1546 (3) “System” means the general retirement system
1547 established by this chapter to be known and cited as the
1548 “Florida Retirement System,” including, but not limited to, the
1549 defined benefit retirement program administered under the
1550 provisions of part I of this part chapter and the defined
1551 contribution retirement program known as the Public Employee
1552 Optional Retirement Program and administered under the
1553 provisions of part II of this chapter.
1554 (22) “Compensation” means the monthly salary paid a member
1555 by his or her employer for work performed arising from that
1556 employment.
1557 (b) Under no circumstances shall Compensation for a member
1558 participating in the defined benefit retirement program or the
1559 Public Employee Optional Retirement Investment Program of the
1560 Florida Retirement System may not include:
1561 1. Fees paid professional persons for special or particular
1562 services or include salary payments made from a faculty practice
1563 plan authorized by the Board of Governors of the State
1564 University System for eligible clinical faculty at a college in
1565 a state university that has a faculty practice plan; or
1566 2. Any bonuses or other payments prohibited from inclusion
1567 in the member’s average final compensation and defined in
1568 subsection (47).
1569 Section 8. Paragraph (c) of subsection (2) of section
1570 121.051, Florida Statutes, is amended to read:
1571 121.051 Participation in the system.—
1572 (2) OPTIONAL PARTICIPATION.—
1573 (c) Employees of public community colleges or charter
1574 technical career centers sponsored by public community colleges,
1575 designated in s. 1000.21(3), who are members of the Regular
1576 Class of the Florida Retirement System and who comply with the
1577 criteria set forth in this paragraph and s. 1012.875 may, in
1578 lieu of participating in the Florida Retirement System, elect to
1579 withdraw from the system altogether and participate in the State
1580 Community College System Optional Retirement Program provided by
1581 the employing agency under s. 1012.875.
1582 1. Through June 30, 2001, the cost to the employer for an
1583 such annuity under the optional retirement program equals the
1584 normal cost portion of the employer retirement contribution
1585 which would be required if the employee were a member of the
1586 Regular Class defined benefit program, plus the portion of the
1587 contribution rate required by s. 112.363(8) which would
1588 otherwise be assigned to the Retiree Health Insurance Subsidy
1589 Trust Fund. Effective July 1, 2001, each employer shall
1590 contribute on behalf of each participant in the optional program
1591 an amount equal to 10.43 percent of the participant’s gross
1592 monthly compensation. The employer shall deduct an amount for
1593 the administration of the program. The employer shall contribute
1594 an additional amount to the Florida Retirement System Trust Fund
1595 equal to the unfunded actuarial accrued liability portion of the
1596 Regular Class contribution rate.
1597 2. The decision to participate in the an optional
1598 retirement program is irrevocable as long as the employee holds
1599 a position eligible for participation, except as provided in
1600 subparagraph 3. Any service creditable under the Florida
1601 Retirement System is retained after the member withdraws from
1602 the system; however, additional service credit in the system may
1603 not be earned while a member of the optional retirement program.
1604 3. An employee who has elected to participate in the
1605 optional retirement program shall have one opportunity, at the
1606 employee’s discretion, to transfer from the optional retirement
1607 program to the defined benefit program of the Florida Retirement
1608 System or to the defined contribution program established under
1609 part II of this chapter Public Employee Optional Retirement
1610 Program, subject to the terms of the applicable optional
1611 retirement program contracts.
1612 a. If the employee chooses to move to the defined
1613 contribution Public Employee Optional Retirement program, any
1614 contributions, interest, and earnings creditable to the employee
1615 under the State Community College System optional retirement
1616 program are retained by the employee in the State Community
1617 College System optional retirement program, and the applicable
1618 provisions of s. 121.4501(4) govern the election.
1619 b. If the employee chooses to move to the defined benefit
1620 program of the Florida Retirement System, the employee shall
1621 receive service credit equal to his or her years of service
1622 under the State Community College System optional retirement
1623 program.
1624 (I) The cost for such credit is the amount representing the
1625 present value of the employee’s accumulated benefit obligation
1626 for the affected period of service. The cost shall be calculated
1627 as if the benefit commencement occurs on the first date the
1628 employee becomes eligible for unreduced benefits, using the
1629 discount rate and other relevant actuarial assumptions that were
1630 used to value the Florida Retirement System defined benefit
1631 program plan liabilities in the most recent actuarial valuation.
1632 The calculation must include any service already maintained
1633 under the defined benefit program plan in addition to the years
1634 under the State Community College System optional retirement
1635 program. The present value of any service already maintained
1636 must be applied as a credit to total cost resulting from the
1637 calculation. The division shall ensure that the transfer sum is
1638 prepared using a formula and methodology certified by an
1639 enrolled actuary.
1640 (II) The employee must transfer from his or her State
1641 Community College System optional retirement program account and
1642 from other employee moneys as necessary, a sum representing the
1643 present value of the employee’s accumulated benefit obligation
1644 immediately following the time of such movement, determined
1645 assuming that attained service equals the sum of service in the
1646 defined benefit program and service in the State Community
1647 College System optional retirement program.
1648 4. Participation in the optional retirement program is
1649 limited to employees who satisfy the following eligibility
1650 criteria:
1651 a. The employee is must be otherwise eligible for
1652 membership or renewed membership in the Regular Class of the
1653 Florida Retirement System, as provided in s. 121.021(11) and
1654 (12) or s. 121.122.
1655 b. The employee is must be employed in a full-time position
1656 classified in the Accounting Manual for Florida’s Public
1657 Community Colleges as:
1658 (I) Instructional; or
1659 (II) Executive Management, Instructional Management, or
1660 Institutional Management and the, if a community college
1661 determines that recruiting to fill a vacancy in the position is
1662 to be conducted in the national or regional market, and the
1663 duties and responsibilities of the position include the
1664 formulation, interpretation, or implementation of policies, or
1665 the performance of functions that are unique or specialized
1666 within higher education and that frequently support the mission
1667 of the community college.
1668 c. The employee is must be employed in a position not
1669 included in the Senior Management Service Class of the Florida
1670 Retirement System, as described in s. 121.055.
1671 5. Participants in the program are subject to the same
1672 reemployment limitations, renewed membership provisions, and
1673 forfeiture provisions as are applicable to regular members of
1674 the Florida Retirement System under ss. 121.091(9), 121.122, and
1675 121.091(5), respectively. A participant who receives a program
1676 distribution funded by employer contributions shall be deemed to
1677 be retired from a state-administered retirement system if the
1678 participant is subsequently employed with an employer that
1679 participates in the Florida Retirement System.
1680 6. Eligible community college employees are compulsory
1681 members of the Florida Retirement System until, pursuant to s.
1682 1012.875, a written election to withdraw from the system and
1683 participate in the State Community College System optional
1684 retirement program is filed with the program administrator and
1685 received by the division.
1686 a. A community college employee whose program eligibility
1687 results from initial employment shall must be enrolled in the
1688 State Community College System optional retirement program
1689 retroactive to the first day of eligible employment. The
1690 employer retirement contributions paid through the month of the
1691 employee plan change shall be transferred to the community
1692 college to the employee’s optional program account, and,
1693 effective the first day of the next month, the employer shall
1694 pay the applicable contributions based upon subparagraph 1.
1695 b. A community college employee whose program eligibility
1696 is due to the subsequent designation of the employee’s position
1697 as one of those specified in subparagraph 4., or due to the
1698 employee’s appointment, promotion, transfer, or reclassification
1699 to a position specified in subparagraph 4., must be enrolled in
1700 the program on the first day of the first full calendar month
1701 that such change in status becomes effective. The employer
1702 retirement contributions paid from the effective date through
1703 the month of the employee plan change must be transferred to the
1704 community college to the employee’s optional program account,
1705 and, effective the first day of the next month, the employer
1706 shall pay the applicable contributions based upon subparagraph
1707 1.
1708 7. Effective July 1, 2003, through December 31, 2008, any
1709 participant in of the State Community College System optional
1710 retirement program who has service credit in the defined benefit
1711 program plan of the Florida Retirement System for the period
1712 between his or her first eligibility to transfer from the
1713 defined benefit program plan to the optional retirement program
1714 and the actual date of transfer may, during employment, transfer
1715 to the optional retirement program a sum representing the
1716 present value of the accumulated benefit obligation under the
1717 defined benefit retirement program for the period of service
1718 credit. Upon transfer, all service credit previously earned
1719 under the defined benefit program of the Florida Retirement
1720 System during this period is nullified for purposes of
1721 entitlement to a future benefit under the defined benefit
1722 program of the Florida Retirement System.
1723 Section 9. Paragraph (b) of subsection (1) of section
1724 121.055, Florida Statutes, is amended to read:
1725 121.055 Senior Management Service Class.—There is hereby
1726 established a separate class of membership within the Florida
1727 Retirement System to be known as the “Senior Management Service
1728 Class,” which shall become effective February 1, 1987.
1729 (1)
1730 (b)1. Except as provided in subparagraph 2., effective
1731 January 1, 1990, participation in the Senior Management Service
1732 Class is shall be compulsory for the president of each community
1733 college, the manager of each participating city or county, and
1734 all appointed district school superintendents. Effective January
1735 1, 1994, additional positions may be designated for inclusion in
1736 the Senior Management Service Class of the Florida Retirement
1737 System, provided that:
1738 a. Positions to be included in the class shall be
1739 designated by the local agency employer. Notice of intent to
1740 designate positions for inclusion in the class shall be
1741 published once a week for 2 consecutive weeks in a newspaper of
1742 general circulation published in the county or counties
1743 affected, as provided in chapter 50.
1744 b. Up to 10 nonelective full-time positions may be
1745 designated for each local agency employer reporting to the
1746 department of Management Services; for local agencies with 100
1747 or more regularly established positions, additional nonelective
1748 full-time positions may be designated, not to exceed 1 percent
1749 of the regularly established positions within the agency.
1750 c. Each position added to the class must be a managerial or
1751 policymaking position filled by an employee who is not subject
1752 to continuing contract and serves at the pleasure of the local
1753 agency employer without civil service protection, and who:
1754 (I) Heads an organizational unit; or
1755 (II) Has responsibility to effect or recommend personnel,
1756 budget, expenditure, or policy decisions in his or her areas of
1757 responsibility.
1758 2. In lieu of participation in the Senior Management
1759 Service Class, members of the Senior Management Service class,
1760 pursuant to the provisions of subparagraph 1., may withdraw from
1761 the Florida Retirement System altogether. The decision to
1762 withdraw from the Florida Retirement System is shall be
1763 irrevocable for as long as the employee holds the such a
1764 position. Any service creditable under the Senior Management
1765 Service Class shall be retained after the member withdraws from
1766 the Florida Retirement System; however, additional service
1767 credit in the Senior Management Service Class may shall not be
1768 earned after such withdrawal. Such members are shall not be
1769 eligible to participate in the Senior Management Service
1770 Optional Annuity Program.
1771 3. Effective January 1, 2006, through June 30, 2006, an
1772 employee who has withdrawn from the Florida Retirement System
1773 under subparagraph 2. has one opportunity to elect to
1774 participate in either the defined benefit program or the Public
1775 Employee Optional Retirement Program of the Florida Retirement
1776 System.
1777 a. If the employee elects to participate in the Public
1778 Employee Optional Retirement Program, membership shall be
1779 prospective, and the applicable provisions of s. 121.4501(4)
1780 shall govern the election.
1781 b. If the employee elects to participate in the defined
1782 benefit program of the Florida Retirement System, the employee
1783 shall, upon payment to the system trust fund of the amount
1784 calculated under sub-sub-subparagraph (I), receive service
1785 credit for prior service based upon the time during which the
1786 employee had withdrawn from the system.
1787 (I) The cost for such credit shall be an amount
1788 representing the actuarial accrued liability for the affected
1789 period of service. The cost shall be calculated using the
1790 discount rate and other relevant actuarial assumptions that were
1791 used to value the Florida Retirement System defined benefit plan
1792 liabilities in the most recent actuarial valuation. The
1793 calculation shall include any service already maintained under
1794 the defined benefit plan in addition to the period of
1795 withdrawal. The actuarial accrued liability attributable to any
1796 service already maintained under the defined benefit plan shall
1797 be applied as a credit to the total cost resulting from the
1798 calculation. The division shall ensure that the transfer sum is
1799 prepared using a formula and methodology certified by an
1800 actuary.
1801 (II) The employee must transfer a sum representing the net
1802 cost owed for the actuarial accrued liability in sub-sub
1803 subparagraph (I) immediately following the time of such
1804 movement, determined assuming that attained service equals the
1805 sum of service in the defined benefit program and the period of
1806 withdrawal.
1807 Section 10. Paragraph (d) of subsection (9) of section
1808 121.091, Florida Statutes, is amended to read:
1809 121.091 Benefits payable under the system.—Benefits may not
1810 be paid under this section unless the member has terminated
1811 employment as provided in s. 121.021(39)(a) or begun
1812 participation in the Deferred Retirement Option Program as
1813 provided in subsection (13), and a proper application has been
1814 filed in the manner prescribed by the department. The department
1815 may cancel an application for retirement benefits when the
1816 member or beneficiary fails to timely provide the information
1817 and documents required by this chapter and the department’s
1818 rules. The department shall adopt rules establishing procedures
1819 for application for retirement benefits and for the cancellation
1820 of such application when the required information or documents
1821 are not received.
1822 (9) EMPLOYMENT AFTER RETIREMENT; LIMITATION.—
1823 (d) The provisions of this subsection apply to retirees, as
1824 defined in s. 121.4501(2), of the Public Employee Optional
1825 Retirement Program, subject to the following conditions:
1826 1. The retiree retirees may not be reemployed with an
1827 employer participating in the Florida Retirement System until
1828 such person has been retired for 6 calendar months.
1829 2. A retiree employed in violation of this subsection and
1830 an employer that employs or appoints such person are jointly and
1831 severally liable for reimbursement of any benefits paid to the
1832 retirement trust fund from which the benefits were paid,
1833 including the Retirement System Trust Fund and the Public
1834 Employee Optional Retirement Investment Program Trust Fund, as
1835 appropriate. The employer must have a written statement from the
1836 retiree that he or she is not retired from a state-administered
1837 retirement system.
1838 Section 11. Paragraphs (g) and (i) of subsection (3) of
1839 section 121.35, Florida Statutes, are amended to read:
1840 121.35 Optional retirement program for the State University
1841 System.—
1842 (3) ELECTION OF OPTIONAL PROGRAM.—
1843 (g) An eligible employee who is a member of the Florida
1844 Retirement System at the time of election to participate in the
1845 optional retirement program shall retain all retirement service
1846 credit earned under the Florida Retirement System, at the rate
1847 earned. No Additional service credit in the Florida Retirement
1848 System may not shall be earned while the employee participates
1849 in the optional program, and nor shall the employee is not be
1850 eligible for disability retirement under the Florida Retirement
1851 System. An eligible employee may transfer from the Florida
1852 Retirement System to his or her accounts under the State
1853 University System Optional Retirement Program a sum representing
1854 the present value of the employee’s accumulated benefit
1855 obligation under the defined benefit program of the Florida
1856 Retirement System for any service credit accrued from the
1857 employee’s first eligible transfer date to the optional
1858 retirement program through the actual date of such transfer, if
1859 such service credit was earned in the period from July 1, 1984,
1860 through December 31, 1992. The present value of the employee’s
1861 accumulated benefit obligation shall be calculated as described
1862 in s. 121.4501(3) s. 121.4501(3)(c)2. Upon such transfer, all
1863 such service credit previously earned under the defined benefit
1864 program of the Florida Retirement System during this period is
1865 shall be nullified for purposes of entitlement to a future
1866 benefit under the defined benefit program of the Florida
1867 Retirement System.
1868 (i) Effective January 1, 2008, through December 31, 2008,
1869 except for an employee who is a mandatory participant of the
1870 State University System Optional Retirement Program, an employee
1871 who has elected to participate in the State University System
1872 Optional Retirement Program shall have one opportunity, at the
1873 employee’s discretion, to choose to transfer from this program
1874 to the defined benefit program of the Florida Retirement System
1875 or to the Public Employee Optional Retirement Program, subject
1876 to the terms of the applicable contracts of the State University
1877 System Optional Retirement Program.
1878 1. If the employee chooses to move to the defined
1879 contribution Public Employee Optional Retirement program, any
1880 contributions, interest, and earnings creditable to the employee
1881 under the State University System Optional Retirement Program
1882 must shall be retained by the employee in the State University
1883 System Optional Retirement Program, and the applicable
1884 provisions of s. 121.4501(4) shall govern the election.
1885 2. If the employee chooses to move to the defined benefit
1886 program of the Florida Retirement System, the employee shall
1887 receive service credit equal to his or her years of service
1888 under the State University System Optional Retirement Program.
1889 a. The cost for such credit must be in shall be an amount
1890 representing the actuarial accrued liability for the affected
1891 period of service. The cost must shall be calculated using the
1892 discount rate and other relevant actuarial assumptions that were
1893 used to value the Florida Retirement System defined benefit plan
1894 liabilities in the most recent actuarial valuation. The
1895 calculation must shall include any service already maintained
1896 under the defined benefit program plan in addition to the years
1897 under the State University System Optional Retirement Program.
1898 The actuarial accrued liability of any service already
1899 maintained under the defined benefit program must plan shall be
1900 applied as a credit to total cost resulting from the
1901 calculation. The division shall ensure that the transfer sum is
1902 prepared using a formula and methodology certified by an
1903 enrolled actuary.
1904 b. The employee must transfer from his or her State
1905 University System Optional Retirement Program account, and from
1906 other employee moneys as necessary, a sum representing the
1907 actuarial accrued liability immediately following the time of
1908 such movement, determined assuming that attained service equals
1909 the sum of service in the defined benefit program and service in
1910 the State University System Optional Retirement Program.
1911 Section 12. Subsection (1) of section 121.4503, Florida
1912 Statutes, is amended to read:
1913 121.4503 Florida Retirement System Contributions Clearing
1914 Trust Fund.—
1915 (1) The Florida Retirement System Contributions Clearing
1916 Trust Fund is created as a clearing fund for disbursing employer
1917 contributions to the component plans of the Florida Retirement
1918 System and shall be administered by the Department of Management
1919 Services. Funds shall be credited to the trust fund as provided
1920 in this chapter and shall be held in trust for the contributing
1921 employers until such time as the assets are transferred by the
1922 department to the Florida Retirement System Trust Fund, the
1923 Public Employee Optional Retirement Investment Program Trust
1924 Fund, or other trust funds as authorized by law, to be used for
1925 the purposes of this chapter. The trust fund is exempt from the
1926 service charges imposed by s. 215.20.
1927 Section 13. Section 121.571, Florida Statutes, is amended
1928 to read:
1929 121.571 Contributions.—Contributions to the Public Employee
1930 Optional Retirement Investment Program shall be made as follows:
1931 (1) NONCONTRIBUTORY PLAN.—Each employer shall make
1932 accomplish the monthly contributions required under by s. 121.71
1933 without reducing an by a procedure in which no employee’s gross
1934 salary shall be reduced.
1935 (2) CONTRIBUTION RATES GENERALLY.—Contributions to fund the
1936 retirement and disability benefits provided under this part must
1937 shall be based on the uniform contribution rates established by
1938 s. 121.71 and on the membership class or subclass of the
1939 participant. Such contributions must shall be allocated as
1940 provided in ss. 121.72 and 121.73.
1941 (3) CONTRIBUTIONS FOR SOCIAL SECURITY COVERAGE AND FOR
1942 RETIREE HEALTH INSURANCE SUBSIDY.—Contributions required under
1943 s. 121.71 are this section shall be in addition to employer and
1944 member contributions required for social security and the
1945 Retiree Health Insurance Subsidy Trust Fund as required under
1946 provided in ss. 112.363, 121.052, 121.055, and 121.071, as
1947 appropriate.
1948 Section 14. Section 121.591, Florida Statutes, is amended
1949 to read:
1950 121.591 Payment of benefits payable under the Public
1951 Employee Optional Retirement Program of the Florida Retirement
1952 System.—Benefits may not be paid under the Public Employee
1953 Retirement Investment Program this section unless the member has
1954 terminated employment as provided in s. 121.021(39)(a) or is
1955 deceased and a proper application has been filed as in the
1956 manner prescribed by the state board or the department. The
1957 state board or department, as appropriate, may cancel an
1958 application for retirement benefits if when the member or
1959 beneficiary fails to timely provide the information and
1960 documents required by this chapter and the rules of the state
1961 board and department. In accordance with their respective
1962 responsibilities as provided herein, the state board of
1963 Administration and the department of Management Services shall
1964 adopt rules establishing procedures for application for
1965 retirement benefits and for the cancellation of such application
1966 if when the required information or documents are not received.
1967 The state board of Administration and the department of
1968 Management Services, as appropriate, are authorized to cash out
1969 a de minimis account of not more than $5,000 of a participant
1970 who has been terminated from Florida Retirement System covered
1971 employment for a minimum of 6 calendar months. A de minimis
1972 account is an account containing employer contributions and
1973 accumulated earnings of not more than $5,000 made under the
1974 provisions of this chapter. Such cash-out must either be a
1975 complete lump-sum liquidation of the account balance, subject to
1976 the provisions of the Internal Revenue Code, or a lump-sum
1977 direct rollover distribution paid directly to the custodian of
1978 an eligible retirement plan, as defined by the Internal Revenue
1979 Code, on behalf of the participant. If any financial instrument
1980 issued for the payment of retirement benefits under this section
1981 is not presented for payment within 180 days after the last day
1982 of the month in which it was originally issued, the third-party
1983 administrator or other duly authorized agent of the state board
1984 of Administration shall cancel the instrument and credit the
1985 amount of the instrument to the suspense account of the Public
1986 Employee Optional Retirement Investment Program Trust Fund
1987 authorized under s. 121.4501(6). Any such amounts transferred to
1988 the suspense account are payable upon a proper application, not
1989 to include earnings thereon, as provided in this section, within
1990 10 years after the last day of the month in which the instrument
1991 was originally issued, after which time such amounts and any
1992 earnings are thereon shall be forfeited. Any such forfeited
1993 amounts are assets of the Public Employee Optional Retirement
1994 Program trust fund and are not subject to the provisions of
1995 chapter 717.
1996 (1) NORMAL BENEFITS.—Under the Public Employee Optional
1997 Retirement Investment Program:
1998 (a) Benefits in the form of vested accumulations as
1999 described in s. 121.4501(6) are payable under this subsection in
2000 accordance with the following terms and conditions:
2001 1. To the extent vested, Benefits are payable only to a
2002 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, The participant must be terminated
2007 from all employment with all Florida Retirement System
2008 employers, as provided in s. 121.021(39).
2009 4. Benefit payments may not be made until the participant
2010 has been terminated for 3 calendar months, except that the state
2011 board may authorize by rule for the distribution of up to 10
2012 percent of the participant’s account after being terminated for
2013 1 calendar month if the participant has reached the normal
2014 retirement date as defined in s. 121.021 of the defined benefit
2015 plan.
2016 5. If a member or former member of the Florida Retirement
2017 System receives an invalid distribution from the Public Employee
2018 Optional Retirement Program Trust Fund, such person must repay
2019 the full amount invalid distribution to the trust fund within 90
2020 days after receipt of final notification by the state board or
2021 the third-party administrator that the distribution was invalid.
2022 If such person fails to repay the full invalid distribution
2023 within 90 days after receipt of final notification, the person
2024 may be deemed retired from the investment optional retirement
2025 program by the state board, as provided pursuant to s.
2026 121.4501(2)(j), and is subject to s. 121.122. If such person is
2027 deemed retired by the state board, any joint and several
2028 liability set out in s. 121.091(9)(d)2. is becomes null and
2029 void, and the state board, the department, or the employing
2030 agency is not liable for gains on payroll contributions that
2031 have not been deposited to the person’s account in the
2032 investment retirement program, pending resolution of the invalid
2033 distribution. The member or former member who has been deemed
2034 retired or who has been determined by the state board to have
2035 taken an invalid distribution may appeal the agency decision
2036 through the complaint process as provided under s.
2037 121.4501(9)(g)3. As used in this subparagraph, the term “invalid
2038 distribution” means any distribution from an account in the
2039 investment optional retirement program which is taken in
2040 violation of this section, s. 121.091(9), or s. 121.4501.
2041 (b) If a participant elects to receive his or her benefits
2042 upon termination of employment as defined in s. 121.021, the
2043 participant must submit a written application or an equivalent
2044 form to the third-party administrator indicating his or her
2045 preferred distribution date and selecting an authorized method
2046 of distribution as provided in paragraph (c). The participant
2047 may defer receipt of benefits until he or she chooses to make
2048 such application, subject to federal requirements.
2049 (c) Upon receipt by the third-party administrator of a
2050 properly executed application for distribution of benefits, the
2051 total accumulated benefit is shall be payable to the
2052 participant, as:
2053 1. A lump-sum distribution to the participant;
2054 2. A lump-sum direct rollover distribution whereby all
2055 accrued benefits, plus interest and investment earnings, are
2056 paid from the participant’s account directly to the custodian of
2057 an eligible retirement plan, as defined in s. 402(c)(8)(B) of
2058 the Internal Revenue Code, on behalf of the participant; or
2059 3. Periodic distributions, as authorized by the state
2060 board.
2061 (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under
2062 this subsection are payable in lieu of the benefits that which
2063 would otherwise be payable under the provisions of subsection
2064 (1). Such benefits must shall be funded entirely from employer
2065 contributions made under s. 121.571, transferred participant
2066 funds accumulated pursuant to paragraph (a), and interest and
2067 earnings thereon. Pursuant thereto:
2068 (a) Transfer of funds.— To qualify for to receive monthly
2069 disability benefits under this subsection:
2070 1. All moneys accumulated in the participant’s Public
2071 Employee Optional Retirement Program accounts, including vested
2072 and nonvested accumulations as described in s. 121.4501(6), must
2073 shall be transferred from such individual accounts to the
2074 division of Retirement for deposit in the disability account of
2075 the Florida Retirement System Trust Fund. Such moneys must shall
2076 be separately accounted for separately. Earnings must shall be
2077 credited on an annual basis for amounts held in the disability
2078 accounts of the Florida Retirement System Trust Fund based on
2079 actual earnings of the Florida Retirement System trust fund.
2080 2. If the participant has retained retirement credit he or
2081 she had earned under the defined benefit program of the Florida
2082 Retirement System as provided in s. 121.4501(3) s.
2083 121.4501(3)(b), a sum representing the actuarial present value
2084 of such credit within the Florida Retirement System Trust Fund
2085 shall be reassigned by the division of Retirement from the
2086 defined benefit program to the disability program as implemented
2087 under this subsection and shall be deposited in the disability
2088 account of the Florida Retirement System trust fund. Such moneys
2089 must shall be separately accounted for separately.
2090 (b) Disability retirement; entitlement.—
2091 1. A participant of the investment Public Employee Optional
2092 Retirement program who becomes totally and permanently disabled,
2093 as defined in paragraph (d) s. 121.091(4)(b), after completing 8
2094 years of creditable service, or a participant who becomes
2095 totally and permanently disabled in the line of duty regardless
2096 of his or her length of service, is shall be entitled to a
2097 monthly disability benefit as provided herein.
2098 2. In order for service to apply toward the 8 years of
2099 creditable service required to vest for regular disability
2100 benefits, or toward the creditable service used in calculating a
2101 service-based benefit as provided for under paragraph (g), the
2102 service must be creditable service as described below:
2103 a. The participant’s period of service under the investment
2104 Public Employee Optional Retirement program shall will be
2105 considered creditable service, except as provided in
2106 subparagraph d.
2107 b. If the participant has elected to retain credit for his
2108 or her service under the defined benefit program of the Florida
2109 Retirement System as provided under s. 121.4501(3) s.
2110 121.4501(3)(b), all such service shall will be considered
2111 creditable service.
2112 c. If the participant elects has elected to transfer to his
2113 or her participant accounts a sum representing the present value
2114 of his or her retirement credit under the defined benefit
2115 program as provided under s. 121.4501(3) s. 121.4501(3)(c), the
2116 period of service under the defined benefit program represented
2117 in the present value amounts transferred shall will be
2118 considered creditable service for purposes of vesting for
2119 disability benefits, except as provided in subparagraph d.
2120 d. Whenever a participant has terminated employment and has
2121 taken distribution of his or her funds as provided in subsection
2122 (1), all creditable service represented by such distributed
2123 funds is forfeited for purposes of this subsection.
2124 (c) Disability retirement effective date.—The effective
2125 retirement date for a participant who applies and is approved
2126 for disability retirement shall be established as provided under
2127 s. 121.091(4)(a)2. and 3.
2128 (d) Total and permanent disability.—A participant shall be
2129 considered totally and permanently disabled if, in the opinion
2130 of the division, he or she is prevented, by reason of a
2131 medically determinable physical or mental impairment, from
2132 rendering useful and efficient service as an officer or
2133 employee.
2134 (e) Proof of disability.—The division, Before approving
2135 payment of any disability retirement benefit, the division shall
2136 require proof that the participant is totally and permanently
2137 disabled in the same manner as provided for members of the
2138 defined benefit program of the Florida Retirement System under
2139 s. 121.091(4)(c).
2140 (f) Disability retirement benefit.—Upon the disability
2141 retirement of a participant under this subsection, the
2142 participant shall receive a monthly benefit that begins accruing
2143 shall begin to accrue on the first day of the month of
2144 disability retirement, as approved by the division, and is shall
2145 be payable on the last day of that month and each month
2146 thereafter during his or her lifetime and continued disability.
2147 All disability benefits must payable to such member shall be
2148 paid out of the disability account of the Florida Retirement
2149 System Trust Fund established under this subsection.
2150 (g) Computation of disability retirement benefit.—The
2151 amount of each monthly payment must shall be calculated in the
2152 same manner as provided for members of the defined benefit
2153 program of the Florida Retirement System under s. 121.091(4)(f).
2154 For such purpose, Creditable service under both the defined
2155 benefit program and the investment Public Employee Optional
2156 Retirement program of the Florida Retirement System shall be
2157 applicable as provided under paragraph (b).
2158 (h) Reapplication.—A participant whose initial application
2159 for disability retirement is has been denied may reapply for
2160 disability benefits in the same manner, and under the same
2161 conditions, as provided for members of the defined benefit
2162 program of the Florida Retirement System under s. 121.091(4)(g).
2163 (i) Membership.—Upon approval of a participant’s an
2164 application for disability benefits under this subsection, the
2165 applicant shall be transferred to the defined benefit program of
2166 the Florida Retirement System, effective upon his or her
2167 disability retirement effective date.
2168 (j) Option to cancel.—A Any participant whose application
2169 for disability benefits is approved may cancel the his or her
2170 application if for disability benefits, provided that the
2171 cancellation request is received by the division before a
2172 disability retirement warrant has been deposited, cashed, or
2173 received by direct deposit. Upon such cancellation:
2174 1. The participant’s transfer to the defined benefit
2175 program under paragraph (i) shall be nullified;
2176 2. The participant shall be retroactively reinstated in the
2177 investment Public Employee Optional Retirement program without
2178 hiatus;
2179 3. All funds transferred to the Florida Retirement System
2180 Trust Fund under paragraph (a) must shall be returned to the
2181 participant accounts from which the such funds were drawn; and
2182 4. The participant may elect to receive the benefit payable
2183 under the provisions of subsection (1) in lieu of disability
2184 benefits as provided under this subsection.
2185 (k) Recovery from disability.—
2186 1. The division may require periodic reexaminations at the
2187 expense of the disability program account of the Florida
2188 Retirement System Trust Fund. Except as otherwise provided in
2189 subparagraph 2., the requirements, procedures, and restrictions
2190 relating to the conduct and review of such reexaminations,
2191 discontinuation or termination of benefits, reentry into
2192 employment, disability retirement after reentry into covered
2193 employment, and all other matters relating to recovery from
2194 disability shall be the same as provided are set forth under s.
2195 121.091(4)(h).
2196 2. Upon recovery from disability, the any recipient of
2197 disability retirement benefits under this subsection shall be
2198 transferred back to the investment program a compulsory member
2199 of the Public Employee Optional Retirement Program of the
2200 Florida Retirement System. The net difference between the
2201 recipient’s original account balance transferred to the Florida
2202 Retirement System Trust Fund, including earnings, under
2203 paragraph (a) and total disability benefits paid to such
2204 recipient, if any, shall be determined as provided in sub
2205 subparagraph a.
2206 a. An amount equal to the total benefits paid shall be
2207 subtracted from that portion of the transferred account balance
2208 consisting of vested accumulations as described under s.
2209 121.4501(6), if any, and an amount equal to the remainder of
2210 benefit amounts paid, if any, shall then be subtracted from any
2211 remaining portion consisting of nonvested accumulations as
2212 described under s. 121.4501(6).
2213 b. Amounts subtracted under sub-subparagraph a. must shall
2214 be retained within the disability account of the Florida
2215 Retirement System Trust Fund. Any remaining account balance
2216 shall be transferred to the third-party administrator for
2217 disposition as provided under sub-subparagraph c. or sub
2218 subparagraph d., as appropriate.
2219 c. If the recipient returns to covered employment,
2220 transferred amounts must shall be deposited in individual
2221 accounts under the investment Public Employee Optional
2222 Retirement program, as directed by the participant. Vested and
2223 nonvested amounts shall be separately accounted for as provided
2224 in s. 121.4501(6).
2225 d. If the recipient fails to return to covered employment
2226 upon recovery from disability:
2227 (I) Any remaining vested amount must shall be deposited in
2228 individual accounts under the investment Public Employee
2229 Optional Retirement program, as directed by the participant, and
2230 is shall be payable as provided in subsection (1).
2231 (II) Any remaining nonvested amount must shall be held in a
2232 suspense account and is shall be forfeitable after 5 years as
2233 provided in s. 121.4501(6).
2234 3. If present value was reassigned from the defined benefit
2235 program to the disability program of the Florida Retirement
2236 System as provided under subparagraph (a)2., the full present
2237 value amount must shall be returned to the defined benefit
2238 account within the Florida Retirement System Trust Fund and the
2239 recipient’s affected individual’s associated retirement credit
2240 under the defined benefit program must shall be reinstated in
2241 full. Any benefit based upon such credit must shall be
2242 calculated as provided in s. 121.091(4)(h)1.
2243 (l) Nonadmissible causes of disability.—A participant is
2244 shall not be entitled to receive a disability retirement benefit
2245 if the disability results from any injury or disease sustained
2246 or inflicted as described in s. 121.091(4)(i).
2247 (m) Disability retirement of justice or judge by order of
2248 Supreme Court.—
2249 1. If a participant is a justice of the Supreme Court,
2250 judge of a district court of appeal, circuit judge, or judge of
2251 a county court who has served for 6 years or more as an elected
2252 constitutional judicial officer, including service as a judicial
2253 officer in any court abolished pursuant to Art. V of the State
2254 Constitution, and who is retired for disability by order of the
2255 Supreme Court upon recommendation of the Judicial Qualifications
2256 Commission pursuant to s. 12, the provisions of Art. V of the
2257 State Constitution, the participant’s Option 1 monthly
2258 disability benefit amount as provided in s. 121.091(6)(a)1.
2259 shall be two-thirds of his or her monthly compensation as of the
2260 participant’s disability retirement date. The Such a participant
2261 may alternatively elect to receive an actuarially adjusted
2262 disability retirement benefit under any other option as provided
2263 in s. 121.091(6)(a), or to receive the normal benefit payable
2264 under the Public Employee Optional Retirement Program as set
2265 forth in subsection (1).
2266 2. If any justice or judge who is a participant of the
2267 investment Public Employee Optional Retirement program of the
2268 Florida Retirement System is retired for disability by order of
2269 the Supreme Court upon recommendation of the Judicial
2270 Qualifications Commission pursuant to s. 12, the provisions of
2271 Art. V of the State Constitution and elects to receive a monthly
2272 disability benefit under the provisions of this paragraph:
2273 a. Any present value amount that was transferred to his or
2274 her program account and all employer contributions made to such
2275 account on his or her behalf, plus interest and earnings
2276 thereon, must shall be transferred to and deposited in the
2277 disability account of the Florida Retirement System Trust Fund;
2278 and
2279 b. The monthly disability benefits payable under this
2280 paragraph for any affected justice or judge retired from the
2281 Florida Retirement System pursuant to Art. V of the State
2282 Constitution shall be paid from the disability account of the
2283 Florida Retirement System Trust Fund.
2284 (n) Death of retiree or beneficiary.—Upon the death of a
2285 disabled retiree or beneficiary of the retiree thereof who is
2286 receiving monthly disability benefits under this subsection, the
2287 monthly benefits shall be paid through the last day of the month
2288 of death and shall terminate, or be adjusted, if applicable, as
2289 of that date in accordance with the optional form of benefit
2290 selected at the time of retirement. The department of Management
2291 Services may adopt rules necessary to administer this paragraph.
2292 (3) DEATH BENEFITS.—Under the Public Employee Optional
2293 Retirement Investment Program:
2294 (a) Survivor benefits are shall be payable in accordance
2295 with the following terms and conditions:
2296 1. To the extent vested, benefits are shall be payable only
2297 to a participant’s beneficiary or beneficiaries as designated by
2298 the participant as provided in s. 121.4501(20).
2299 2. Benefits must shall be paid by the third-party
2300 administrator or designated approved providers in accordance
2301 with the law, the contracts, and any applicable state board rule
2302 or policy.
2303 3. To receive benefits under this subsection, the
2304 participant must be deceased.
2305 (b) In the event of a participant’s death, all vested
2306 accumulations as described in s. 121.4501(6), less withholding
2307 taxes remitted to the Internal Revenue Service, shall be
2308 distributed, as provided in paragraph (c) or as described in s.
2309 121.4501(20), as if the participant retired on the date of
2310 death. No other death benefits are shall be available for
2311 survivors of participants under the Public Employee Optional
2312 Retirement Program, except for such benefits, or coverage for
2313 such benefits, as are otherwise provided by law or are
2314 separately provided afforded by the employer, at the employer’s
2315 discretion.
2316 (c) Upon receipt by the third-party administrator of a
2317 properly executed application for distribution of benefits, the
2318 total accumulated benefit is shall be payable by the third-party
2319 administrator to the participant’s surviving beneficiary or
2320 beneficiaries, as:
2321 1. A lump-sum distribution payable to the beneficiary or
2322 beneficiaries, or to the deceased participant’s estate;
2323 2. An eligible rollover distribution on behalf of the
2324 surviving spouse of a deceased participant, whereby all accrued
2325 benefits, plus interest and investment earnings, are paid from
2326 the deceased participant’s account directly to the custodian of
2327 an eligible retirement plan, as described in s. 402(c)(8)(B) of
2328 the Internal Revenue Code, on behalf of the surviving spouse; or
2329 3. A partial lump-sum payment whereby a portion of the
2330 accrued benefit is paid to the deceased participant’s surviving
2331 spouse or other designated beneficiaries, less withholding taxes
2332 remitted to the Internal Revenue Service, and the remaining
2333 amount is transferred directly to the custodian of an eligible
2334 retirement plan, as described in s. 402(c)(8)(B) of the Internal
2335 Revenue Code, on behalf of the surviving spouse. The proportions
2336 must be specified by the participant or the surviving
2337 beneficiary.
2338
2339 This paragraph does not abrogate other applicable provisions of
2340 state or federal law providing for payment of death benefits.
2341 (4) LIMITATION ON LEGAL PROCESS.—The benefits payable to
2342 any person under the Public Employee Optional Retirement
2343 Investment Program, and any contributions accumulated under such
2344 program, are not subject to assignment, execution, attachment,
2345 or any legal process, except for qualified domestic relations
2346 orders by a court of competent jurisdiction, income deduction
2347 orders as provided in s. 61.1301, and federal income tax levies.
2348 Section 15. Section 121.5911, Florida Statutes, is amended
2349 to read:
2350 121.5911 Disability retirement program; qualified status;
2351 rulemaking authority.—It is the intent of the Legislature that
2352 the disability retirement program for participants of the Public
2353 Employee Optional Retirement Investment Program as created in
2354 this act must meet all applicable requirements of federal law
2355 for a qualified plan. The department of Management Services
2356 shall seek a private letter ruling from the Internal Revenue
2357 Service on the disability retirement program for participants of
2358 the Public Employee Optional Retirement Program. Consistent with
2359 the private letter ruling, the department of Management Services
2360 shall adopt any necessary rules necessary required to maintain
2361 the qualified status of the disability retirement program and
2362 the Florida Retirement System defined benefit program plan.
2363 Section 16. Section 121.70, Florida Statutes, is amended to
2364 read:
2365 121.70 Legislative purpose and intent.—
2366 (1) This part provides for a uniform system for funding
2367 benefits provided under the Florida Retirement System defined
2368 benefit program established under part I of this chapter
2369 (referred to in this part as the defined benefit program) and
2370 under the Public Employee Optional Retirement Investment Program
2371 established under part II of this chapter (referred to in this
2372 part as the defined contribution optional retirement program).
2373 The Legislature recognizes and declares that the Florida
2374 Retirement System is a single retirement system, consisting of
2375 two retirement plans and other nonintegrated programs. Employers
2376 participating in the Florida Retirement System collectively
2377 shall be responsible for making contributions to support the
2378 benefits provided afforded under both programs plans. The As
2379 provided in this part, employers participating in the Florida
2380 Retirement System shall make contributions based upon uniform
2381 contribution rates determined as a percentage of the total
2382 payroll for each class or subclass of Florida Retirement System
2383 membership, irrespective of which retirement program the plan
2384 individual employee is enrolled in employees may elect. This
2385 shall be known as a uniform or blended contribution rate system.
2386 (2) In establishing a uniform contribution rate system, it
2387 is the intent of the Legislature to:
2388 (a) Provide greater stability and certainty in financial
2389 planning and budgeting for Florida Retirement System employers
2390 by eliminating the fiscal instability that would be caused by
2391 dual rates coupled with employee-selected plan participation;
2392 and
2393 (b) Provide greater fiscal equity and uniformity for system
2394 employers by effectively distributing the financial burden and
2395 benefit of short-term system deficits and surpluses,
2396 respectively, in proportion to total system payroll.; and
2397 (c) Allow employees to make their retirement plan selection
2398 decisions free of circumstances that may cause employers to
2399 favor one plan choice over another.
2400 Section 17. Subsection (1) of section 121.71, Florida
2401 Statutes, is amended to read:
2402 121.71 Uniform rates; process; calculations; levy.—
2403 (1) In conducting the system actuarial study required under
2404 s. 121.031, the actuary shall follow all requirements specified
2405 thereunder to determine, by Florida Retirement System employee
2406 membership class, the dollar contribution amounts necessary for
2407 the next forthcoming fiscal year for the defined benefit
2408 program. In addition, the actuary shall determine, by Florida
2409 Retirement System membership class, based on an estimate for the
2410 forthcoming fiscal year of the gross compensation of employees
2411 participating in the defined contribution optional retirement
2412 program, the dollar contribution amounts necessary to make the
2413 allocations required under ss. 121.72 and 121.73. For each
2414 employee membership class and subclass, the actuarial study must
2415 shall establish a uniform rate necessary to fund the benefit
2416 obligations under both Florida Retirement System retirement
2417 plans by dividing the sum of total dollars required by the
2418 estimated gross compensation of members in both plans.
2419 Section 18. Section 121.72, Florida Statutes, is amended to
2420 read:
2421 121.72 Allocations to defined contribution optional
2422 retirement program participant accounts; percentage amounts.—
2423 (1) The allocations established in subsection (4) shall
2424 fund retirement benefits under the defined contribution optional
2425 retirement program and shall be transferred monthly by the
2426 Division of Retirement from the Florida Retirement System
2427 Contributions Clearing Trust Fund to the third-party
2428 administrator for deposit in each participating employee’s
2429 individual account based on the membership class of the
2430 participant.
2431 (2) The allocations are stated as a percentage of each
2432 defined contribution optional retirement program participant’s
2433 gross compensation for the calendar month. A change in a
2434 contribution percentage is effective the first day of the month
2435 for which a full month’s employer contribution may be made on or
2436 after the beginning date of the change. Contribution percentages
2437 may be modified by general law.
2438 (3) Employer and participant contributions to participant
2439 accounts shall be accounted for separately. Participant
2440 contributions may be made only if expressly authorized by law.
2441 Interest and investment earnings on contributions shall accrue
2442 on a tax-deferred basis until proceeds are distributed.
2443 (4) Effective July 1, 2002, allocations from the Florida
2444 Retirement System Contributions Clearing Trust Fund to defined
2445 contribution optional retirement program participant accounts
2446 shall be as follows:
2447 Membership Class Percentage of Gross Compensation
2448 Regular Class 9.00%
2449 Special Risk Class 20.00%
2450 Special Risk Administrative Support Class 11.35%
2451 Elected Officers’ Class - Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 13.40%
2452 Elected Officers’ Class - Justices, Judges 18.90%
2453 Elected Officers’ Class - County Elected Officers 16.20%
2454 Senior Management Service Class 10.95%
2455 Section 19. Section 121.73, Florida Statutes, is amended to
2456 read:
2457 121.73 Allocations for optional retirement program
2458 participant disability coverage; percentage amounts.—
2459 (1) The allocations established in subsection (3) shall be
2460 used to provide disability coverage for participants in the
2461 defined contribution optional retirement program and shall be
2462 transferred monthly by the Division of Retirement from the
2463 Florida Retirement System Contributions Clearing Trust Fund to
2464 the disability account of the Florida Retirement System Trust
2465 Fund.
2466 (2) The allocations are stated as a percentage of each
2467 defined contribution optional retirement program participant’s
2468 gross compensation for the calendar month. A change in a
2469 contribution percentage is effective the first day of the month
2470 for which a full month’s employer contribution may be made on or
2471 after the beginning date of the change. Contribution percentages
2472 may be modified by general law.
2473 (3) Effective July 1, 2002, allocations from the Florida
2474 Retirement System FRS Contribution Clearing Fund to provide
2475 disability coverage for participants in the defined contribution
2476 optional retirement program, and to offset the costs of
2477 administering said coverage, shall be as follows:
2478 Membership Class Percentage of Gross Compensation
2479 Regular Class 0.25%
2480 Special Risk Class 1.33%
2481 Special Risk Administrative Support Class 0.45%
2482 Elected Officers’ Class - Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 0.41%
2483 Elected Officers’ Class - Justices, Judges 0.73%
2484 Elected Officers’ Class - County Elected Officers 0.41%
2485 Senior Management Service Class 0.26%
2486 Section 20. Section 121.74, Florida Statutes, is amended to
2487 read:
2488 121.74 Administrative and educational expenses.—In addition
2489 to contributions required under s. 121.71, employers
2490 participating in the Florida Retirement System shall contribute
2491 an amount equal to 0.05 percent of the payroll reported for each
2492 class or subclass of Florida Retirement System membership, which
2493 amount shall be transferred by the Division of Retirement from
2494 the Florida Retirement System Contributions Clearing Trust Fund
2495 to the State Board of Administration’s Administrative Trust Fund
2496 to offset the costs of administering the defined contribution
2497 optional retirement program and the costs of providing
2498 educational services to participants in the defined benefit
2499 program and the defined contribution optional retirement
2500 program. Approval of the Trustees of the State Board of
2501 Administration is required prior to the expenditure of these
2502 funds. Payments for third-party administrative or educational
2503 expenses shall be made only pursuant to the terms of the
2504 approved contracts for such services.
2505 Section 21. Section 121.77, Florida Statutes, is amended to
2506 read:
2507 121.77 Deductions from participant accounts.— The State
2508 Board of Administration may authorize the third-party
2509 administrator to deduct reasonable fees and apply appropriate
2510 charges to defined contribution optional retirement program
2511 participant accounts. In no event may shall administrative and
2512 educational expenses exceed the portion of employer
2513 contributions earmarked for such expenses under this part,
2514 except for reasonable administrative charges assessed against
2515 participant accounts of persons for whom no employer
2516 contributions are made during the calendar quarter. Investment
2517 management fees shall be deducted from participant accounts,
2518 pursuant to the terms of the contract between the provider and
2519 the board.
2520 Section 22. Subsection (3) of section 121.78, Florida
2521 Statutes, is amended to read:
2522 121.78 Payment and distribution of contributions.—
2523 (3)(a) Employer contributions and accompanying payroll data
2524 received after the 5th working day of the month shall be
2525 considered late. The employer shall be assessed by the Division
2526 of Retirement a penalty of 1 percent of the contributions due
2527 for each calendar month or part thereof that the contributions
2528 or accompanying payroll data are late. Proceeds from the 1
2529 percent assessment against contributions made on behalf of
2530 participants of the defined benefit program must shall be
2531 deposited in the Florida Retirement System Trust Fund, and
2532 proceeds from the 1-percent assessment against contributions
2533 made on behalf of participants of the defined contribution
2534 optional retirement program shall be transferred to the third
2535 party administrator for deposit into participant accounts, as
2536 provided in paragraph (b).
2537 (b) If contributions made by an employer on behalf of
2538 participants of the defined contribution optional retirement
2539 program or accompanying payroll data are not received within the
2540 calendar month they are due, including, but not limited to,
2541 contribution adjustments as a result of employer errors or
2542 corrections, and if that delinquency results in market losses to
2543 participants, the employer shall reimburse each participant’s
2544 account for market losses resulting from the late contributions.
2545 If a participant has terminated employment and taken a
2546 distribution, the participant is responsible for returning any
2547 excess contributions erroneously provided by employers, adjusted
2548 for any investment gain or loss incurred during the period such
2549 excess contributions were in the participant’s Public Employee
2550 Optional Retirement Program account. The State Board of
2551 Administration or its designated agent shall communicate to
2552 terminated participants any obligation to repay such excess
2553 contribution amounts. However, the State Board of
2554 Administration, its designated agents, the Public Employee
2555 Optional Retirement Investment Program Trust Fund, the
2556 Department of Management Services, or the Florida Retirement
2557 System Trust Fund may shall not incur any loss or gain as a
2558 result of an employer’s correction of such excess contributions.
2559 The third-party administrator, hired by the state board pursuant
2560 to s. 121.4501(8), shall calculate the market losses for each
2561 affected participant. If When contributions made on behalf of
2562 participants of the defined contribution optional retirement
2563 program or accompanying payroll data are not received within the
2564 calendar month due, the employer shall also pay the cost of the
2565 third-party administrator’s calculation and reconciliation
2566 adjustments resulting from the late contributions. The third
2567 party administrator shall notify the employer of the results of
2568 the calculations and the total amount due from the employer for
2569 such losses and the costs of calculation and reconciliation. The
2570 employer shall remit to the division the amount due within 10
2571 working days after the date of the penalty notice sent by the
2572 division. The Division of Retirement shall transfer said amount
2573 to the third-party administrator, which who shall deposit
2574 proceeds from the 1-percent assessment and from individual
2575 market losses into participant accounts, as appropriate. The
2576 state board may is authorized to adopt rules to administer
2577 implement the provisions regarding late contributions, late
2578 submission of payroll data, the process for reimbursing
2579 participant accounts for resultant market losses, and the
2580 penalties charged to the employers.
2581 (c) Delinquency fees may be waived by the Division of
2582 Retirement, with regard to defined benefit program
2583 contributions, and by the State Board of Administration, with
2584 regard to defined contribution optional retirement program
2585 contributions, only if when, in the opinion of the division or
2586 the board, as appropriate, exceptional circumstances beyond the
2587 employer’s control prevented remittance by the prescribed due
2588 date, notwithstanding the employer’s good faith efforts to
2589 effect delivery. Such a waiver of delinquency may be granted an
2590 employer only one time each state fiscal year.
2591 Section 23. The Division of Statutory Revision is requested
2592 to rename the title of part II of chapter 121, Florida Statutes,
2593 as “Public Employee Retirement Investment Program.”
2594 Section 24. This act shall take effect July 1, 2010.