Florida Senate - 2013                          SENATOR AMENDMENT
       Bill No. CS for CS for HB 7011
       
       
       
       
       
       
                                Barcode 773000                          
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
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                  Floor: WD            .                                
             04/29/2013 06:14 PM       .                                
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       Senator Simpson moved the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Subsection (45) of section 121.021, Florida
    6  Statutes, is amended to read:
    7         121.021 Definitions.—The following words and phrases as
    8  used in this chapter have the respective meanings set forth
    9  unless a different meaning is plainly required by the context:
   10         (45) “Vested” or “vesting” means the guarantee that a
   11  member is eligible to receive a future retirement benefit upon
   12  completion of the required years of creditable service for the
   13  employee’s class of membership, even though the member may have
   14  terminated covered employment before reaching normal or early
   15  retirement date. Being vested does not entitle a member to a
   16  disability benefit. Provisions governing entitlement to
   17  disability benefits are set forth under s. 121.091(4).
   18         (a) Effective July 1, 2001, through June 30, 2011, a 6-year
   19  vesting requirement shall be implemented for the Florida
   20  Retirement System Pension Plan:
   21         1. Any member employed in a regularly established position
   22  on July 1, 2001, who completes or has completed a total of 6
   23  years of creditable service is considered vested.
   24         2. Any member initially enrolled in the Florida Retirement
   25  System before July 1, 2001, but not employed in a regularly
   26  established position on July 1, 2001, shall be deemed vested
   27  upon completion of 6 years of creditable service if such member
   28  is employed in a covered position for at least 1 work year after
   29  July 1, 2001. However, a member is not required to complete more
   30  years of creditable service than would have been required for
   31  that member to vest under retirement laws in effect before July
   32  1, 2001.
   33         3. Any member initially enrolled in the Florida Retirement
   34  System on July 1, 2001, through June 30, 2011, shall be deemed
   35  vested upon completion of 6 years of creditable service.
   36         (b) Any member initially enrolled in the Florida Retirement
   37  System on or after July 1, 2011, through June 30, 2014, shall be
   38  vested in the pension plan upon completion of 8 years of
   39  creditable service.
   40         (c) Any member initially enrolled in the Florida Retirement
   41  System on or after July 1, 2014, shall be vested in the pension
   42  plan upon completion of 10 years of creditable service.
   43         Section 2. Present subsections (3) through (9) of section
   44  121.051, Florida Statutes, are renumbered as subsections (4)
   45  through (10), respectively, and a new subsection (3) is added to
   46  that section, to read:
   47         121.051 Participation in the system.—
   48         (3) INVESTMENT PLAN MEMBERSHIP COMPULSORY.—
   49         (a) Employees initially enrolled on or after July 1, 2014,
   50  in positions covered by the Elected Officers’ Class or the
   51  Senior Management Service Class are compulsory members of the
   52  investment plan, except those eligible to withdraw from the
   53  system under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those
   54  eligible for optional retirement programs under paragraph
   55  (1)(a), paragraph (2)(c), or s. 121.35. Investment plan
   56  membership continues if there is subsequent employment in a
   57  position covered by another membership class. Membership in the
   58  pension plan is not permitted except as provided in s.
   59  121.591(2). Employees initially enrolled in the Florida
   60  Retirement System prior to July 1, 2014, may retain their
   61  membership in the pension plan or investment plan and are
   62  eligible to use the election opportunity specified in s.
   63  121.4501(4)(f). Employees initially enrolled on or after July 1,
   64  2014, are not eligible to use the election opportunity specified
   65  in s. 121.4501(4)(f).
   66         (b) Employees eligible to withdraw from the system under s.
   67  121.052(3)(d) or s. 121.055(1)(b)2. may choose to withdraw from
   68  the system or to participate in the investment plan as provided
   69  in these sections. Employees eligible for optional retirement
   70  programs under paragraph (2)(c) or s. 121.35 may choose to
   71  participate in the optional retirement program or the investment
   72  plan as provided in this paragraph or this section. Eligible
   73  employees required to participate pursuant to (1)(a) in the
   74  optional retirement program as provided under s. 121.35 must
   75  participate in the investment plan when employed in a position
   76  not eligible for the optional retirement program.
   77         Section 3. Paragraph (c) of subsection (3) of section
   78  121.052, Florida Statutes, is amended to read:
   79         121.052 Membership class of elected officers.—
   80         (3) PARTICIPATION AND WITHDRAWAL, GENERALLY.—Effective July
   81  1, 1990, participation in the Elected Officers’ Class shall be
   82  compulsory for elected officers listed in paragraphs (2)(a)-(d)
   83  and (f) assuming office on or after said date, unless the
   84  elected officer elects membership in another class or withdraws
   85  from the Florida Retirement System as provided in paragraphs
   86  (3)(a)-(d):
   87         (c) Before July 1, 2014, any elected officer may, within 6
   88  months after assuming office, or within 6 months after this act
   89  becomes a law for serving elected officers, elect membership in
   90  the Senior Management Service Class as provided in s. 121.055 in
   91  lieu of membership in the Elected Officers’ Class. Any such
   92  election made by a county elected officer shall have no effect
   93  upon the statutory limit on the number of nonelective full-time
   94  positions that may be designated by a local agency employer for
   95  inclusion in the Senior Management Service Class under s.
   96  121.055(1)(b)1.
   97         Section 4. Paragraph (f) of subsection (1) and paragraph
   98  (c) of subsection (6) of section 121.055, Florida Statutes, are
   99  amended to read:
  100         121.055 Senior Management Service Class.—There is hereby
  101  established a separate class of membership within the Florida
  102  Retirement System to be known as the “Senior Management Service
  103  Class,” which shall become effective February 1, 1987.
  104         (1)
  105         (f) Effective July 1, 1997, through June 30, 2014:
  106         1. Except as provided in subparagraphs subparagraph 3. and
  107  4., an elected state officer eligible for membership in the
  108  Elected Officers’ Class under s. 121.052(2)(a), (b), or (c) who
  109  elects membership in the Senior Management Service Class under
  110  s. 121.052(3)(c) may, within 6 months after assuming office or
  111  within 6 months after this act becomes a law for serving elected
  112  state officers, elect to participate in the Senior Management
  113  Service Optional Annuity Program, as provided in subsection (6),
  114  in lieu of membership in the Senior Management Service Class.
  115         2. Except as provided in subparagraphs subparagraph 3. and
  116  4., an elected officer of a local agency employer eligible for
  117  membership in the Elected Officers’ Class under s. 121.052(2)(d)
  118  who elects membership in the Senior Management Service Class
  119  under s. 121.052(3)(c) may, within 6 months after assuming
  120  office, or within 6 months after this act becomes a law for
  121  serving elected officers of a local agency employer, elect to
  122  withdraw from the Florida Retirement System, as provided in
  123  subparagraph (b)2., in lieu of membership in the Senior
  124  Management Service Class.
  125         3. A retiree of a state-administered retirement system who
  126  is initially reemployed in a regularly established position on
  127  or after July 1, 2010, as an elected official eligible for the
  128  Elected Officers’ Class may not be enrolled in renewed
  129  membership in the Senior Management Service Class or in the
  130  Senior Management Service Optional Annuity Program as provided
  131  in subsection (6), and may not withdraw from the Florida
  132  Retirement System as a renewed member as provided in
  133  subparagraph (b)2., as applicable, in lieu of membership in the
  134  Senior Management Service Class.
  135         4. On or after July 1, 2014, an elected officer eligible
  136  for membership in the Elected Officers’ Class may not be
  137  enrolled in the Senior Management Service Class or in the Senior
  138  Management Service Optional Annuity Program as provided in
  139  subsection (6).
  140         (6)
  141         (c) Participation.—
  142         1. An eligible employee who is employed on or before
  143  February 1, 1987, may elect to participate in the optional
  144  annuity program in lieu of participating in the Senior
  145  Management Service Class. Such election must be made in writing
  146  and filed with the department and the personnel officer of the
  147  employer on or before May 1, 1987. An eligible employee who is
  148  employed on or before February 1, 1987, and who fails to make an
  149  election to participate in the optional annuity program by May
  150  1, 1987, shall be deemed to have elected membership in the
  151  Senior Management Service Class.
  152         2. Except as provided in subparagraph 6., an employee who
  153  becomes eligible to participate in the optional annuity program
  154  by reason of initial employment commencing after February 1,
  155  1987, may, within 90 days after the date of commencing
  156  employment, elect to participate in the optional annuity
  157  program. Such election must be made in writing and filed with
  158  the personnel officer of the employer. An eligible employee who
  159  does not within 90 days after commencing employment elect to
  160  participate in the optional annuity program shall be deemed to
  161  have elected membership in the Senior Management Service Class.
  162         3. A person who is appointed to a position in the Senior
  163  Management Service Class and who is a member of an existing
  164  retirement system or the Special Risk or Special Risk
  165  Administrative Support Classes of the Florida Retirement System
  166  may elect to remain in such system or class in lieu of
  167  participating in the Senior Management Service Class or optional
  168  annuity program. Such election must be made in writing and filed
  169  with the department and the personnel officer of the employer
  170  within 90 days after such appointment. An eligible employee who
  171  fails to make an election to participate in the existing system,
  172  the Special Risk Class of the Florida Retirement System, the
  173  Special Risk Administrative Support Class of the Florida
  174  Retirement System, or the optional annuity program shall be
  175  deemed to have elected membership in the Senior Management
  176  Service Class.
  177         4. Except as provided in subparagraph 5., an employee’s
  178  election to participate in the optional annuity program is
  179  irrevocable if the employee continues to be employed in an
  180  eligible position and continues to meet the eligibility
  181  requirements set forth in this paragraph.
  182         5. Effective from July 1, 2002, through September 30, 2002,
  183  an active employee in a regularly established position who has
  184  elected to participate in the Senior Management Service Optional
  185  Annuity Program has one opportunity to choose to move from the
  186  Senior Management Service Optional Annuity Program to the
  187  Florida Retirement System Pension Plan.
  188         a. The election must be made in writing and must be filed
  189  with the department and the personnel officer of the employer
  190  before October 1, 2002, or, in the case of an active employee
  191  who is on a leave of absence on July 1, 2002, within 90 days
  192  after the conclusion of the leave of absence. This election is
  193  irrevocable.
  194         b. The employee shall receive service credit under the
  195  pension plan equal to his or her years of service under the
  196  Senior Management Service Optional Annuity Program. The cost for
  197  such credit is the amount representing the present value of that
  198  employee’s accumulated benefit obligation for the affected
  199  period of service.
  200         c. The employee must transfer the total accumulated
  201  employer contributions and earnings on deposit in his or her
  202  Senior Management Service Optional Annuity Program account. If
  203  the transferred amount is not sufficient to pay the amount due,
  204  the employee must pay a sum representing the remainder of the
  205  amount due. The employee may not retain any employer
  206  contributions or earnings from the Senior Management Service
  207  Optional Annuity Program account.
  208         6. A retiree of a state-administered retirement system who
  209  is initially reemployed on or after July 1, 2010, may not renew
  210  membership in the Senior Management Service Optional Annuity
  211  Program.
  212         7. Effective July 1, 2014, the Senior Management Service
  213  Optional Annuity Program is closed to new members. Members
  214  enrolled in the Senior Management Service Optional Annuity
  215  Program before July 1, 2014, may retain their membership in the
  216  annuity program.
  217         Section 5. Paragraph (a) of subsection (4) of section
  218  121.091, Florida Statutes, is amended to read:
  219         121.091 Benefits payable under the system.—Benefits may not
  220  be paid under this section unless the member has terminated
  221  employment as provided in s. 121.021(39)(a) or begun
  222  participation in the Deferred Retirement Option Program as
  223  provided in subsection (13), and a proper application has been
  224  filed in the manner prescribed by the department. The department
  225  may cancel an application for retirement benefits when the
  226  member or beneficiary fails to timely provide the information
  227  and documents required by this chapter and the department’s
  228  rules. The department shall adopt rules establishing procedures
  229  for application for retirement benefits and for the cancellation
  230  of such application when the required information or documents
  231  are not received.
  232         (4) DISABILITY RETIREMENT BENEFIT.—
  233         (a) Disability retirement; entitlement and effective date.—
  234         1.a. A member who becomes totally and permanently disabled,
  235  as defined in paragraph (b), after completing 5 years of
  236  creditable service, or a member who becomes totally and
  237  permanently disabled in the line of duty regardless of service,
  238  is entitled to a monthly disability benefit; except that any
  239  member with less than 5 years of creditable service on July 1,
  240  1980, or any person who becomes a member of the Florida
  241  Retirement System on or after such date must have completed 10
  242  years of creditable service before becoming totally and
  243  permanently disabled in order to receive disability retirement
  244  benefits for any disability which occurs other than in the line
  245  of duty. However, if a member employed on July 1, 1980, who has
  246  less than 5 years of creditable service as of that date becomes
  247  totally and permanently disabled after completing 5 years of
  248  creditable service and is found not to have attained fully
  249  insured status for benefits under the federal Social Security
  250  Act, such member is entitled to a monthly disability benefit.
  251         b. Effective July 1, 2001, a member of the pension plan
  252  initially enrolled before July 1, 2014, who becomes totally and
  253  permanently disabled, as defined in paragraph (b), after
  254  completing 8 years of creditable service, or a member who
  255  becomes totally and permanently disabled in the line of duty
  256  regardless of service, is entitled to a monthly disability
  257  benefit.
  258         c. Effective July 1, 2014, a member of the pension plan
  259  initially enrolled on or after July 1, 2014, who becomes totally
  260  and permanently disabled, as defined in paragraph (b), after
  261  completing 10 years of creditable service, or a member who
  262  becomes totally and permanently disabled in the line of duty
  263  regardless of service, is entitled to a monthly disability
  264  benefit.
  265         2. If the division has received from the employer the
  266  required documentation of the member’s termination of
  267  employment, the effective retirement date for a member who
  268  applies and is approved for disability retirement shall be
  269  established by rule of the division.
  270         3. For a member who is receiving Workers’ Compensation
  271  payments, the effective disability retirement date may not
  272  precede the date the member reaches Maximum Medical Improvement
  273  (MMI), unless the member terminates employment before reaching
  274  MMI.
  275         Section 6. Subsection (1), paragraph (i) of subsection (2),
  276  paragraph (b) of subsection (3), subsection (4), paragraph (c)
  277  of subsection (5), subsection (8), and paragraphs (a), (b), (c),
  278  and (h) of subsection (10) of section 121.4501, Florida
  279  Statutes, are amended to read:
  280         121.4501 Florida Retirement System Investment Plan.—
  281         (1) The Trustees of the State Board of Administration shall
  282  establish a defined contribution program called the “Florida
  283  Retirement System Investment Plan” or “investment plan” for
  284  members of the Florida Retirement System under which retirement
  285  benefits will be provided for eligible employees who elect to
  286  participate in the program and for employees initially enrolled
  287  on or after July 1, 2014, in positions covered by the Elected
  288  Officers’ Class or the Senior Management Service Class and are
  289  compulsory members of the investment plan unless otherwise
  290  eligible to withdraw from the system under s. 121.052(3)(d) or
  291  s. 121.055(1)(b)2., or to participate in an optional retirement
  292  program under s. 121.051(1)(a), s. 121.051(2)(c), or s. 121.35.
  293  Investment plan membership continues if there is subsequent
  294  employment in a position covered by another membership class.
  295  The retirement benefits shall be provided through member
  296  directed investments, in accordance with s. 401(a) of the
  297  Internal Revenue Code and related regulations. The employer and
  298  employee shall make contributions, as provided in this section
  299  and ss. 121.571 and 121.71, to the Florida Retirement System
  300  Investment Plan Trust Fund toward the funding of benefits.
  301         (2) DEFINITIONS.—As used in this part, the term:
  302         (i) “Member” or “employee” means an eligible employee who
  303  enrolls in or is defaulted into the investment plan as provided
  304  in subsection (4), a terminated Deferred Retirement Option
  305  Program member as described in subsection (21), or a beneficiary
  306  or alternate payee of a member or employee.
  307         (3) RETIREMENT SERVICE CREDIT; TRANSFER OF BENEFITS.—
  308         (b) Notwithstanding paragraph (a), an eligible employee who
  309  elects to participate in or is defaulted into the investment
  310  plan and establishes one or more individual member accounts may
  311  elect to transfer to the investment plan a sum representing the
  312  present value of the employee’s accumulated benefit obligation
  313  under the pension plan, except as provided in paragraph (4)(b).
  314  Upon transfer, all service credit earned under the pension plan
  315  is nullified for purposes of entitlement to a future benefit
  316  under the pension plan. A member may not transfer the
  317  accumulated benefit obligation balance from the pension plan
  318  after the time period for enrolling in the investment plan has
  319  expired.
  320         1. For purposes of this subsection, the present value of
  321  the member’s accumulated benefit obligation is based upon the
  322  member’s estimated creditable service and estimated average
  323  final compensation under the pension plan, subject to
  324  recomputation under subparagraph 2. For state employees, initial
  325  estimates shall be based upon creditable service and average
  326  final compensation as of midnight on June 30, 2002; for district
  327  school board employees, initial estimates shall be based upon
  328  creditable service and average final compensation as of midnight
  329  on September 30, 2002; and for local government employees,
  330  initial estimates shall be based upon creditable service and
  331  average final compensation as of midnight on December 31, 2002.
  332  The dates specified are the “estimate date” for these employees.
  333  The actuarial present value of the employee’s accumulated
  334  benefit obligation shall be based on the following:
  335         a. The discount rate and other relevant actuarial
  336  assumptions used to value the Florida Retirement System Trust
  337  Fund at the time the amount to be transferred is determined,
  338  consistent with the factors provided in sub-subparagraphs b. and
  339  c.
  340         b. A benefit commencement age, based on the member’s
  341  estimated creditable service as of the estimate date.
  342         c. Except as provided under sub-subparagraph d., for a
  343  member initially enrolled:
  344         (I) Before July 1, 2011, the benefit commencement age is
  345  the younger of the following, but may not be younger than the
  346  member’s age as of the estimate date:
  347         (A) Age 62; or
  348         (B) The age the member would attain if the member completed
  349  30 years of service with an employer, assuming the member worked
  350  continuously from the estimate date, and disregarding any
  351  vesting requirement that would otherwise apply under the pension
  352  plan.
  353         (II) On or after July 1, 2011, the benefit commencement age
  354  is the younger of the following, but may not be younger than the
  355  member’s age as of the estimate date:
  356         (A) Age 65; or
  357         (B) The age the member would attain if the member completed
  358  33 years of service with an employer, assuming the member worked
  359  continuously from the estimate date, and disregarding any
  360  vesting requirement that would otherwise apply under the pension
  361  plan.
  362         d. For members of the Special Risk Class and for members of
  363  the Special Risk Administrative Support Class entitled to retain
  364  the special risk normal retirement date:
  365         (I) Initially enrolled before July 1, 2011, the benefit
  366  commencement age is the younger of the following, but may not be
  367  younger than the member’s age as of the estimate date:
  368         (A) Age 55; or
  369         (B) The age the member would attain if the member completed
  370  25 years of service with an employer, assuming the member worked
  371  continuously from the estimate date, and disregarding any
  372  vesting requirement that would otherwise apply under the pension
  373  plan.
  374         (II) Initially enrolled on or after July 1, 2011, the
  375  benefit commencement age is the younger of the following, but
  376  may not be younger than the member’s age as of the estimate
  377  date:
  378         (A) Age 60; or
  379         (B) The age the member would attain if the member completed
  380  30 years of service with an employer, assuming the member worked
  381  continuously from the estimate date, and disregarding any
  382  vesting requirement that would otherwise apply under the pension
  383  plan.
  384         e. The calculation must disregard vesting requirements and
  385  early retirement reduction factors that would otherwise apply
  386  under the pension plan.
  387         2. For each member who elects to transfer moneys from the
  388  pension plan to his or her account in the investment plan, the
  389  division shall recompute the amount transferred under
  390  subparagraph 1. within 60 days after the actual transfer of
  391  funds based upon the member’s actual creditable service and
  392  actual final average compensation as of the initial date of
  393  participation in the investment plan. If the recomputed amount
  394  differs from the amount transferred by $10 or more, the division
  395  shall:
  396         a. Transfer, or cause to be transferred, from the Florida
  397  Retirement System Trust Fund to the member’s account the excess,
  398  if any, of the recomputed amount over the previously transferred
  399  amount together with interest from the initial date of transfer
  400  to the date of transfer under this subparagraph, based upon the
  401  effective annual interest equal to the assumed return on the
  402  actuarial investment which was used in the most recent actuarial
  403  valuation of the system, compounded annually.
  404         b. Transfer, or cause to be transferred, from the member’s
  405  account to the Florida Retirement System Trust Fund the excess,
  406  if any, of the previously transferred amount over the recomputed
  407  amount, together with interest from the initial date of transfer
  408  to the date of transfer under this subparagraph, based upon 6
  409  percent effective annual interest, compounded annually, pro rata
  410  based on the member’s allocation plan.
  411         3. If contribution adjustments are made as a result of
  412  employer errors or corrections, including plan corrections,
  413  following recomputation of the amount transferred under
  414  subparagraph 1., the member is entitled to the additional
  415  contributions or is responsible for returning any excess
  416  contributions resulting from the correction. However, any return
  417  of such erroneous excess pretax contribution by the plan must be
  418  made within the period allowed by the Internal Revenue Service.
  419  The present value of the member’s accumulated benefit obligation
  420  shall not be recalculated.
  421         4. As directed by the member, the state board shall
  422  transfer or cause to be transferred the appropriate amounts to
  423  the designated accounts within 30 days after the effective date
  424  of the member’s participation in the investment plan unless the
  425  major financial markets for securities available for a transfer
  426  are seriously disrupted by an unforeseen event that causes the
  427  suspension of trading on any national securities exchange in the
  428  country where the securities were issued. In that event, the 30
  429  day period may be extended by a resolution of the state board.
  430  Transfers are not commissionable or subject to other fees and
  431  may be in the form of securities or cash, as determined by the
  432  state board. Such securities are valued as of the date of
  433  receipt in the member’s account.
  434         5. If the state board or the division receives notification
  435  from the United States Internal Revenue Service that this
  436  paragraph or any portion of this paragraph will cause the
  437  retirement system, or a portion thereof, to be disqualified for
  438  tax purposes under the Internal Revenue Code, the portion that
  439  will cause the disqualification does not apply. Upon such
  440  notice, the state board and the division shall notify the
  441  presiding officers of the Legislature.
  442         (4) PARTICIPATION; ENROLLMENT.—
  443         (a)1. Effective June 1, 2002, through February 28, 2003, a
  444  90-day election period was provided to each eligible employee
  445  participating in the Florida Retirement System, preceded by a
  446  90-day education period, permitting each eligible employee to
  447  elect membership in the investment plan, and an employee who
  448  failed to elect the investment plan during the election period
  449  remained in the pension plan. An eligible employee who was
  450  employed in a regularly established position during the election
  451  period was granted the option to make one subsequent election,
  452  as provided in paragraph (f). With respect to an eligible
  453  employee who did not participate in the initial election period
  454  or who are initially employee who is employed in a regularly
  455  established position after the close of the initial election
  456  period but before July 1, 2014, on June 1, 2002, by a state
  457  employer:
  458         a. Any such employee may elect to participate in the
  459  investment plan in lieu of retaining his or her membership in
  460  the pension plan. The election must be made in writing or by
  461  electronic means and must be filed with the third-party
  462  administrator by August 31, 2002, or, in the case of an active
  463  employee who is on a leave of absence on April 1, 2002, by the
  464  last business day of the 5th month following the month the leave
  465  of absence concludes. This election is irrevocable, except as
  466  provided in paragraph (g). Upon making such election, the
  467  employee shall be enrolled as a member of the investment plan,
  468  the employee’s membership in the Florida Retirement System is
  469  governed by the provisions of this part, and the employee’s
  470  membership in the pension plan terminates. The employee’s
  471  enrollment in the investment plan is effective the first day of
  472  the month for which a full month’s employer contribution is made
  473  to the investment plan.
  474         b. Any such employee who fails to elect to participate in
  475  the investment plan within the prescribed time period is deemed
  476  to have elected to retain membership in the pension plan, and
  477  the employee’s option to elect to participate in the investment
  478  plan is forfeited.
  479         2. With respect to employees who become eligible to
  480  participate in the investment plan by reason of employment in a
  481  regularly established position with a state employer commencing
  482  after April 1, 2002:
  483         a. Any such employee shall, by default, be enrolled in the
  484  pension plan at the commencement of employment, and may, by the
  485  last business day of the 5th month following the employee’s
  486  month of hire, elect to participate in the investment plan. The
  487  employee’s election must be made in writing or by electronic
  488  means and must be filed with the third-party administrator. The
  489  election to participate in the investment plan is irrevocable,
  490  except as provided in paragraph (f)(g).
  491         a.b. If the employee files such election within the
  492  prescribed time period, enrollment in the investment plan is
  493  effective on the first day of employment. The retirement
  494  contributions paid through the month of the employee plan change
  495  shall be transferred to the investment program, and, effective
  496  the first day of the next month, the employer and employee must
  497  pay the applicable contributions based on the employee
  498  membership class in the program.
  499         b.c. An employee who fails to elect to participate in the
  500  investment plan within the prescribed time period is deemed to
  501  have elected to retain membership in the pension plan, and the
  502  employee’s option to elect to participate in the investment plan
  503  is forfeited.
  504         2.3. With respect to employees who become eligible to
  505  participate in the investment plan pursuant to s.
  506  121.051(2)(c)3. or s. 121.35(3)(i), the employee may elect to
  507  participate in the investment plan in lieu of retaining his or
  508  her membership in the State Community College System Optional
  509  Retirement Program or the State University System Optional
  510  Retirement Program. The election must be made in writing or by
  511  electronic means and must be filed with the third-party
  512  administrator. This election is irrevocable, except as provided
  513  in paragraph (f) (g). Upon making such election, the employee
  514  shall be enrolled as a member in the investment plan, the
  515  employee’s membership in the Florida Retirement System is
  516  governed by the provisions of this part, and the employee’s
  517  participation in the State Community College System Optional
  518  Retirement Program or the State University System Optional
  519  Retirement Program terminates. The employee’s enrollment in the
  520  investment plan is effective on the first day of the month for
  521  which a full month’s employer and employee contribution is made
  522  to the investment plan.
  523         (b) With respect to employees who become eligible to
  524  participate in the investment plan, except as provided in
  525  paragraph (g), by reason of employment in a regularly
  526  established position commencing on or after July 1, 2014, any
  527  such employee shall be enrolled in the pension plan at the
  528  commencement of employment and may, by the last business day of
  529  the 7th month following the employee’s month of hire, elect to
  530  participate in the pension plan or the investment plan. Eligible
  531  employees may make a plan election only if they are earning
  532  service credit in an employer-employee relationship consistent
  533  with s. 121.021(17)(b), excluding leaves of absence without pay.
  534         1. The employee’s election must be made in writing or by
  535  electronic means and must be filed with the third-party
  536  administrator. The election to participate in the pension plan
  537  or investment plan is irrevocable, except as provided in
  538  paragraph (f).
  539         2. If the employee fails to make an election of the pension
  540  plan or investment plan within 7 months following the month of
  541  hire, the employee is deemed to have elected the investment plan
  542  and will be defaulted into the investment plan retroactively to
  543  the employee’s date of employment. The employee’s option to
  544  participate in the pension plan is forfeited, except as provided
  545  in paragraph (f).
  546         3. The amount of the employee and employer contributions
  547  paid before the default to the investment plan shall be
  548  transferred to the investment plan and shall be placed in a
  549  default fund as designated by the State Board of Administration.
  550  The employee may move the contributions once an account is
  551  activated in the investment plan.
  552         4. Effective the first day of the month after an eligible
  553  employee makes a plan election of the pension plan or investment
  554  plan, or after the month of default to the investment plan, the
  555  employee and employer shall pay the applicable contributions
  556  based on the employee membership class in the pension plan or
  557  investment plan.
  558         4. For purposes of this paragraph, “state employer” means
  559  any agency, board, branch, commission, community college,
  560  department, institution, institution of higher education, or
  561  water management district of the state, which participates in
  562  the Florida Retirement System for the benefit of certain
  563  employees.
  564         (b)1. With respect to an eligible employee who is employed
  565  in a regularly established position on September 1, 2002, by a
  566  district school board employer:
  567         a. Any such employee may elect to participate in the
  568  investment plan in lieu of retaining his or her membership in
  569  the pension plan. The election must be made in writing or by
  570  electronic means and must be filed with the third-party
  571  administrator by November 30, or, in the case of an active
  572  employee who is on a leave of absence on July 1, 2002, by the
  573  last business day of the 5th month following the month the leave
  574  of absence concludes. This election is irrevocable, except as
  575  provided in paragraph (g). Upon making such election, the
  576  employee shall be enrolled as a member of the investment plan,
  577  the employee’s membership in the Florida Retirement System is
  578  governed by the provisions of this part, and the employee’s
  579  membership in the pension plan terminates. The employee’s
  580  enrollment in the investment plan is effective the first day of
  581  the month for which a full month’s employer contribution is made
  582  to the investment program.
  583         b. Any such employee who fails to elect to participate in
  584  the investment plan within the prescribed time period is deemed
  585  to have elected to retain membership in the pension plan, and
  586  the employee’s option to elect to participate in the investment
  587  plan is forfeited.
  588         2. With respect to employees who become eligible to
  589  participate in the investment plan by reason of employment in a
  590  regularly established position with a district school board
  591  employer commencing after July 1, 2002:
  592         a. Any such employee shall, by default, be enrolled in the
  593  pension plan at the commencement of employment, and may, by the
  594  last business day of the 5th month following the employee’s
  595  month of hire, elect to participate in the investment plan. The
  596  employee’s election must be made in writing or by electronic
  597  means and must be filed with the third-party administrator. The
  598  election to participate in the investment plan is irrevocable,
  599  except as provided in paragraph (g).
  600         b. If the employee files such election within the
  601  prescribed time period, enrollment in the investment plan is
  602  effective on the first day of employment. The employer
  603  retirement contributions paid through the month of the employee
  604  plan change shall be transferred to the investment plan, and,
  605  effective the first day of the next month, the employer shall
  606  pay the applicable contributions based on the employee
  607  membership class in the investment plan.
  608         c. Any such employee who fails to elect to participate in
  609  the investment plan within the prescribed time period is deemed
  610  to have elected to retain membership in the pension plan, and
  611  the employee’s option to elect to participate in the investment
  612  plan is forfeited.
  613         3. For purposes of this paragraph, “district school board
  614  employer” means any district school board that participates in
  615  the Florida Retirement System for the benefit of certain
  616  employees, or a charter school or charter technical career
  617  center that participates in the Florida Retirement System as
  618  provided in s. 121.051(2)(d).
  619         (c)1. With respect to an eligible employee who is employed
  620  in a regularly established position on December 1, 2002, by a
  621  local employer:
  622         a. Any such employee may elect to participate in the
  623  investment plan in lieu of retaining his or her membership in
  624  the pension plan. The election must be made in writing or by
  625  electronic means and must be filed with the third-party
  626  administrator by February 28, 2003, or, in the case of an active
  627  employee who is on a leave of absence on October 1, 2002, by the
  628  last business day of the 5th month following the month the leave
  629  of absence concludes. This election is irrevocable, except as
  630  provided in paragraph (g). Upon making such election, the
  631  employee shall be enrolled as a participant of the investment
  632  plan, the employee’s membership in the Florida Retirement System
  633  is governed by the provisions of this part, and the employee’s
  634  membership in the pension plan terminates. The employee’s
  635  enrollment in the investment plan is effective the first day of
  636  the month for which a full month’s employer contribution is made
  637  to the investment plan.
  638         b. Any such employee who fails to elect to participate in
  639  the investment plan within the prescribed time period is deemed
  640  to have elected to retain membership in the pension plan, and
  641  the employee’s option to elect to participate in the investment
  642  plan is forfeited.
  643         2. With respect to employees who become eligible to
  644  participate in the investment plan by reason of employment in a
  645  regularly established position with a local employer commencing
  646  after October 1, 2002:
  647         a. Any such employee shall, by default, be enrolled in the
  648  pension plan at the commencement of employment, and may, by the
  649  last business day of the 5th month following the employee’s
  650  month of hire, elect to participate in the investment plan. The
  651  employee’s election must be made in writing or by electronic
  652  means and must be filed with the third-party administrator. The
  653  election to participate in the investment plan is irrevocable,
  654  except as provided in paragraph (g).
  655         b. If the employee files such election within the
  656  prescribed time period, enrollment in the investment plan is
  657  effective on the first day of employment. The employer
  658  retirement contributions paid through the month of the employee
  659  plan change shall be transferred to the investment plan, and,
  660  effective the first day of the next month, the employer shall
  661  pay the applicable contributions based on the employee
  662  membership class in the investment plan.
  663         c. Any such employee who fails to elect to participate in
  664  the investment plan within the prescribed time period is deemed
  665  to have elected to retain membership in the pension plan, and
  666  the employee’s option to elect to participate in the investment
  667  plan is forfeited.
  668         3. For purposes of this paragraph, “local employer” means
  669  any employer not included in paragraph (a) or paragraph (b).
  670         (c)(d) Contributions available for self-direction by a
  671  member who has not selected one or more specific investment
  672  products shall be allocated as prescribed by the state board.
  673  The third-party administrator shall notify the member at least
  674  quarterly that the member should take an affirmative action to
  675  make an asset allocation among the investment products.
  676         (d)(e) On or after July 1, 2011, a member of the pension
  677  plan who obtains a refund of employee contributions retains his
  678  or her prior plan choice upon return to employment in a
  679  regularly established position with a participating employer.
  680         (e)(f) A member of the investment plan who takes a
  681  distribution of any contributions from his or her investment
  682  plan account is considered a retiree. A retiree who is initially
  683  reemployed in a regularly established position on or after July
  684  1, 2010, is not eligible to be enrolled in renewed membership.
  685         (f)(g) After the period during which an eligible employee
  686  had the choice to elect the pension plan or the investment plan,
  687  or the month following the receipt of the eligible employee’s
  688  plan election, if sooner, the employee shall have one
  689  opportunity, at the employee’s discretion, to choose to move
  690  from the pension plan to the investment plan or from the
  691  investment plan to the pension plan. Eligible employees may
  692  elect to move between plans only if they are earning service
  693  credit in an employer-employee relationship consistent with s.
  694  121.021(17)(b), excluding leaves of absence without pay.
  695  Effective July 1, 2005, such elections are effective on the
  696  first day of the month following the receipt of the election by
  697  the third-party administrator and are not subject to the
  698  requirements regarding an employer-employee relationship or
  699  receipt of contributions for the eligible employee in the
  700  effective month, except when the election is received by the
  701  third-party administrator. This paragraph is contingent upon
  702  approval by the Internal Revenue Service. This paragraph does
  703  not apply to compulsory investment plan members under paragraph
  704  (g).
  705         1. If the employee chooses to move to the investment plan,
  706  the provisions of subsection (3) govern the transfer.
  707         2. If the employee chooses to move to the pension plan, the
  708  employee must transfer from his or her investment plan account,
  709  and from other employee moneys as necessary, a sum representing
  710  the present value of that employee’s accumulated benefit
  711  obligation immediately following the time of such movement,
  712  determined assuming that attained service equals the sum of
  713  service in the pension plan and service in the investment plan.
  714  Benefit commencement occurs on the first date the employee is
  715  eligible for unreduced benefits, using the discount rate and
  716  other relevant actuarial assumptions that were used to value the
  717  pension plan liabilities in the most recent actuarial valuation.
  718  For any employee who, at the time of the second election,
  719  already maintains an accrued benefit amount in the pension plan,
  720  the then-present value of the accrued benefit is deemed part of
  721  the required transfer amount. The division must ensure that the
  722  transfer sum is prepared using a formula and methodology
  723  certified by an enrolled actuary. A refund of any employee
  724  contributions or additional member payments made which exceed
  725  the employee contributions that would have accrued had the
  726  member remained in the pension plan and not transferred to the
  727  investment plan is not permitted.
  728         3. Notwithstanding subparagraph 2., an employee who chooses
  729  to move to the pension plan and who became eligible to
  730  participate in the investment plan by reason of employment in a
  731  regularly established position with a state employer after June
  732  1, 2002; a district school board employer after September 1,
  733  2002; or a local employer after December 1, 2002, must transfer
  734  from his or her investment plan account, and from other employee
  735  moneys as necessary, a sum representing the employee’s actuarial
  736  accrued liability. A refund of any employee contributions or
  737  additional member participant payments made which exceed the
  738  employee contributions that would have accrued had the member
  739  remained in the pension plan and not transferred to the
  740  investment plan is not permitted.
  741         4. An employee’s ability to transfer from the pension plan
  742  to the investment plan pursuant to paragraphs (a) and (b)
  743  paragraphs (a)-(d), and the ability of a current employee to
  744  have an option to later transfer back into the pension plan
  745  under subparagraph 2., shall be deemed a significant system
  746  amendment. Pursuant to s. 121.031(4), any resulting unfunded
  747  liability arising from actual original transfers from the
  748  pension plan to the investment plan must be amortized within 30
  749  plan years as a separate unfunded actuarial base independent of
  750  the reserve stabilization mechanism defined in s. 121.031(3)(f).
  751  For the first 25 years, a direct amortization payment may not be
  752  calculated for this base. During this 25-year period, the
  753  separate base shall be used to offset the impact of employees
  754  exercising their second program election under this paragraph.
  755  The actuarial funded status of the pension plan will not be
  756  affected by such second program elections in any significant
  757  manner, after due recognition of the separate unfunded actuarial
  758  base. Following the initial 25-year period, any remaining
  759  balance of the original separate base shall be amortized over
  760  the remaining 5 years of the required 30-year amortization
  761  period.
  762         5. If the employee chooses to transfer from the investment
  763  plan to the pension plan and retains an excess account balance
  764  in the investment plan after satisfying the buy-in requirements
  765  under this paragraph, the excess may not be distributed until
  766  the member retires from the pension plan. The excess account
  767  balance may be rolled over to the pension plan and used to
  768  purchase service credit or upgrade creditable service in the
  769  pension plan.
  770         (g) All employees initially enrolled on or after July 1,
  771  2014, in positions covered by the Elected Officers’ Class or the
  772  Senior Management Service Class are compulsory members of the
  773  investment plan, except those eligible to withdraw from the
  774  system under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those
  775  eligible for optional retirement programs under s.
  776  121.051(1)(a), s. 121.051(2)(c), or s. 121.35. Employees
  777  eligible to withdraw from the system under s. 121.052(3)(d) or
  778  s. 121.055(1)(b)2., may choose to withdraw from the system or to
  779  participate in the investment plan as provided in those
  780  sections. Employees eligible for optional retirement programs
  781  under s. 121.051(2)(c) or s. 121.35, except as provided in s.
  782  121.051(1)(a), may choose to participate in the optional
  783  retirement program or the investment plan as provided in those
  784  sections. Investment plan membership continues if there is
  785  subsequent employment in a position covered by another
  786  membership class. Membership in the pension plan is not
  787  permitted except as provided in s. 121.591(2). Employees
  788  initially enrolled in the Florida Retirement System prior to
  789  July 1, 2014, may retain their membership in the pension plan or
  790  investment plan and are eligible to use the election opportunity
  791  specified in s. 121.4501(4)(f).
  792         1. Officers and employees initially enrolled on or after
  793  July 1, 2014, who are in positions within the Elected Officers’
  794  Class or the Senior Management Service Class are not permitted
  795  to use the election opportunity specified in paragraph (f).
  796         2. The amount of retirement contributions paid by the
  797  employee and employer, as required under s. 121.72, shall be
  798  placed in a default fund as designated by the state board, until
  799  an account is activated in the investment plan, at which time
  800  the member may move the contributions from the default fund to
  801  other funds provided in the investment plan.
  802         (5) CONTRIBUTIONS.—
  803         (c) The state board, acting as plan fiduciary, must ensure
  804  that all plan assets are held in a trust, pursuant to s. 401 of
  805  the Internal Revenue Code. The fiduciary must ensure that such
  806  contributions are allocated as follows:
  807         1. The employer and employee contribution portion earmarked
  808  for member accounts shall be used to purchase interests in the
  809  appropriate investment vehicles as specified by the member, or
  810  in accordance with paragraph (4)(c) (4)(d).
  811         2. The employer contribution portion earmarked for
  812  administrative and educational expenses shall be transferred to
  813  the Florida Retirement System Investment Plan Trust Fund.
  814         3. The employer contribution portion earmarked for
  815  disability benefits shall be transferred to the Florida
  816  Retirement System Trust Fund.
  817         (8) INVESTMENT PLAN ADMINISTRATION.—The investment plan
  818  shall be administered by the state board and affected employers.
  819  The state board may require oaths, by affidavit or otherwise,
  820  and acknowledgments from persons in connection with the
  821  administration of its statutory duties and responsibilities for
  822  the investment plan. An oath, by affidavit or otherwise, may not
  823  be required of a member at the time of enrollment.
  824  Acknowledgment of an employee’s election to participate in the
  825  program shall be no greater than necessary to confirm the
  826  employee’s election except for members initially enrolled on or
  827  after July 1, 2014, as provided in paragraph (4)(g). The state
  828  board shall adopt rules to carry out its statutory duties with
  829  respect to administering the investment plan, including
  830  establishing the roles and responsibilities of affected state,
  831  local government, and education-related employers, the state
  832  board, the department, and third-party contractors. The
  833  department shall adopt rules necessary to administer the
  834  investment plan in coordination with the pension plan and the
  835  disability benefits available under the investment plan.
  836         (a)1. The state board shall select and contract with a
  837  third-party administrator to provide administrative services if
  838  those services cannot be competitively and contractually
  839  provided by the division. With the approval of the state board,
  840  the third-party administrator may subcontract to provide
  841  components of the administrative services. As a cost of
  842  administration, the state board may compensate any such
  843  contractor for its services, in accordance with the terms of the
  844  contract, as is deemed necessary or proper by the board. The
  845  third-party administrator may not be an approved provider or be
  846  affiliated with an approved provider.
  847         2. These administrative services may include, but are not
  848  limited to, enrollment of eligible employees, collection of
  849  employer and employee contributions, disbursement of
  850  contributions to approved providers in accordance with the
  851  allocation directions of members; services relating to
  852  consolidated billing; individual and collective recordkeeping
  853  and accounting; asset purchase, control, and safekeeping; and
  854  direct disbursement of funds to and from the third-party
  855  administrator, the division, the state board, employers,
  856  members, approved providers, and beneficiaries. This section
  857  does not prevent or prohibit a bundled provider from providing
  858  any administrative or customer service, including accounting and
  859  administration of individual member benefits and contributions;
  860  individual member recordkeeping; asset purchase, control, and
  861  safekeeping; direct execution of the member’s instructions as to
  862  asset and contribution allocation; calculation of daily net
  863  asset values; direct access to member account information; or
  864  periodic reporting to members, at least quarterly, on account
  865  balances and transactions, if these services are authorized by
  866  the state board as part of the contract.
  867         (b)1. The state board shall select and contract with one or
  868  more organizations to provide educational services. With
  869  approval of the state board, the organizations may subcontract
  870  to provide components of the educational services. As a cost of
  871  administration, the state board may compensate any such
  872  contractor for its services in accordance with the terms of the
  873  contract, as is deemed necessary or proper by the board. The
  874  education organization may not be an approved provider or be
  875  affiliated with an approved provider.
  876         2. Educational services shall be designed by the state
  877  board and department to assist employers, eligible employees,
  878  members, and beneficiaries in order to maintain compliance with
  879  United States Department of Labor regulations under s. 404(c) of
  880  the Employee Retirement Income Security Act of 1974 and to
  881  assist employees in their choice of pension plan or investment
  882  plan retirement alternatives. Educational services include, but
  883  are not limited to, disseminating educational materials;
  884  providing retirement planning education; explaining the pension
  885  plan and the investment plan; and offering financial planning
  886  guidance on matters such as investment diversification,
  887  investment risks, investment costs, and asset allocation. An
  888  approved provider may also provide educational information,
  889  including retirement planning and investment allocation
  890  information concerning its products and services.
  891         (c)1. In evaluating and selecting a third-party
  892  administrator, the state board shall establish criteria for
  893  evaluating the relative capabilities and qualifications of each
  894  proposed administrator. In developing such criteria, the state
  895  board shall consider:
  896         a. The administrator’s demonstrated experience in providing
  897  administrative services to public or private sector retirement
  898  systems.
  899         b. The administrator’s demonstrated experience in providing
  900  daily valued recordkeeping to defined contribution programs.
  901         c. The administrator’s ability and willingness to
  902  coordinate its activities with employers, the state board, and
  903  the division, and to supply to such employers, the board, and
  904  the division the information and data they require, including,
  905  but not limited to, monthly management reports, quarterly member
  906  reports, and ad hoc reports requested by the department or state
  907  board.
  908         d. The cost-effectiveness and levels of the administrative
  909  services provided.
  910         e. The administrator’s ability to interact with the
  911  members, the employers, the state board, the division, and the
  912  providers; the means by which members may access account
  913  information, direct investment of contributions, make changes to
  914  their accounts, transfer moneys between available investment
  915  vehicles, and transfer moneys between investment products; and
  916  any fees that apply to such activities.
  917         f. Any other factor deemed necessary by the state board.
  918         2. In evaluating and selecting an educational provider, the
  919  state board shall establish criteria under which it shall
  920  consider the relative capabilities and qualifications of each
  921  proposed educational provider. In developing such criteria, the
  922  state board shall consider:
  923         a. Demonstrated experience in providing educational
  924  services to public or private sector retirement systems.
  925         b. Ability and willingness to coordinate its activities
  926  with the employers, the state board, and the division, and to
  927  supply to such employers, the board, and the division the
  928  information and data they require, including, but not limited
  929  to, reports on educational contacts.
  930         c. The cost-effectiveness and levels of the educational
  931  services provided.
  932         d. Ability to provide educational services via different
  933  media, including, but not limited to, the Internet, personal
  934  contact, seminars, brochures, and newsletters.
  935         e. Any other factor deemed necessary by the state board.
  936         3. The establishment of the criteria shall be solely within
  937  the discretion of the state board.
  938         (d) The state board shall develop the form and content of
  939  any contracts to be offered under the investment plan. In
  940  developing the contracts, the board shall consider:
  941         1. The nature and extent of the rights and benefits to be
  942  afforded in relation to the contributions required under the
  943  plan.
  944         2. The suitability of the rights and benefits provided and
  945  the interests of employers in the recruitment and retention of
  946  eligible employees.
  947         (e)1. The state board may contract for professional
  948  services, including legal, consulting, accounting, and actuarial
  949  services, deemed necessary to implement and administer the
  950  investment plan. The state board may enter into a contract with
  951  one or more vendors to provide low-cost investment advice to
  952  members, supplemental to education provided by the third-party
  953  administrator. All fees under any such contract shall be paid by
  954  those members who choose to use the services of the vendor.
  955         2. The department may contract for professional services,
  956  including legal, consulting, accounting, and actuarial services,
  957  deemed necessary to implement and administer the investment plan
  958  in coordination with the pension plan. The department, in
  959  coordination with the state board, may enter into a contract
  960  with the third-party administrator in order to coordinate
  961  services common to the various programs within the Florida
  962  Retirement System.
  963         (f) The third-party administrator may not receive direct or
  964  indirect compensation from an approved provider, except as
  965  specifically provided for in the contract with the state board.
  966         (g) The state board shall receive and resolve member
  967  complaints against the program, the third-party administrator,
  968  or any program vendor or provider; shall resolve any conflict
  969  between the third-party administrator and an approved provider
  970  if such conflict threatens the implementation or administration
  971  of the program or the quality of services to employees; and may
  972  resolve any other conflicts. The third-party administrator shall
  973  retain all member records for at least 5 years for use in
  974  resolving any member conflicts. The state board, the third-party
  975  administrator, or a provider is not required to produce
  976  documentation or an audio recording to justify action taken with
  977  regard to a member if the action occurred 5 or more years before
  978  the complaint is submitted to the state board. It is presumed
  979  that all action taken 5 or more years before the complaint is
  980  submitted was taken at the request of the member and with the
  981  member’s full knowledge and consent. To overcome this
  982  presumption, the member must present documentary evidence or an
  983  audio recording demonstrating otherwise.
  984         (10) EDUCATION COMPONENT.—
  985         (a) The state board, in coordination with the department,
  986  shall provide for an education component for eligible employees
  987  system members in a manner consistent with the provisions of
  988  this subsection section. The education component must be
  989  available to eligible employees at least 90 days prior to the
  990  beginning date of the election period for the employees of the
  991  respective types of employers.
  992         (b) The education component must provide system members
  993  with impartial and balanced information about plan choices
  994  except for members initially enrolled on or after July 1, 2014,
  995  as provided in paragraph (4)(g). The education component must
  996  involve multimedia formats. Program comparisons must, to the
  997  greatest extent possible, be based upon the retirement income
  998  that different retirement programs may provide to the member.
  999  The state board shall monitor the performance of the contract to
 1000  ensure that the program is conducted in accordance with the
 1001  contract, applicable law, and the rules of the state board.
 1002         (c) The state board, in coordination with the department,
 1003  shall provide for an initial and ongoing transfer education
 1004  component to provide system members except for those members
 1005  initially enrolled on or after July 1, 2014, as provided in
 1006  paragraph (4)(g), with information necessary to make informed
 1007  plan choice decisions. The transfer education component must
 1008  include, but is not limited to, information on:
 1009         1. The amount of money available to a member to transfer to
 1010  the defined contribution program.
 1011         2. The features of and differences between the pension plan
 1012  and the defined contribution program, both generally and
 1013  specifically, as those differences may affect the member.
 1014         3. The expected benefit available if the member were to
 1015  retire under each of the retirement programs, based on
 1016  appropriate alternative sets of assumptions.
 1017         4. The rate of return from investments in the defined
 1018  contribution program and the period of time over which such rate
 1019  of return must be achieved to equal or exceed the expected
 1020  monthly benefit payable to the member under the pension plan.
 1021         5. The historical rates of return for the investment
 1022  alternatives available in the defined contribution programs.
 1023         6. The benefits and historical rates of return on
 1024  investments available in a typical deferred compensation plan or
 1025  a typical plan under s. 403(b) of the Internal Revenue Code for
 1026  which the employee may be eligible.
 1027         7. The program choices available to employees of the State
 1028  University System and the comparative benefits of each available
 1029  program, if applicable.
 1030         8. Payout options available in each of the retirement
 1031  programs.
 1032         (h) Pursuant to subsection (8), all Florida Retirement
 1033  System employers have an obligation to regularly communicate the
 1034  existence of the two Florida Retirement System plans and the
 1035  plan choice in the natural course of administering their
 1036  personnel functions, using the educational materials supplied by
 1037  the state board and the Department of Management Services.
 1038         Section 7. Paragraph (b) of subsection (2) of section
 1039  121.591, Florida Statutes, is amended to read:
 1040         121.591 Payment of benefits.—Benefits may not be paid under
 1041  the Florida Retirement System Investment Plan unless the member
 1042  has terminated employment as provided in s. 121.021(39)(a) or is
 1043  deceased and a proper application has been filed as prescribed
 1044  by the state board or the department. Benefits, including
 1045  employee contributions, are not payable under the investment
 1046  plan for employee hardships, unforeseeable emergencies, loans,
 1047  medical expenses, educational expenses, purchase of a principal
 1048  residence, payments necessary to prevent eviction or foreclosure
 1049  on an employee’s principal residence, or any other reason except
 1050  a requested distribution for retirement, a mandatory de minimis
 1051  distribution authorized by the administrator, or a required
 1052  minimum distribution provided pursuant to the Internal Revenue
 1053  Code. The state board or department, as appropriate, may cancel
 1054  an application for retirement benefits if the member or
 1055  beneficiary fails to timely provide the information and
 1056  documents required by this chapter and the rules of the state
 1057  board and department. In accordance with their respective
 1058  responsibilities, the state board and the department shall adopt
 1059  rules establishing procedures for application for retirement
 1060  benefits and for the cancellation of such application if the
 1061  required information or documents are not received. The state
 1062  board and the department, as appropriate, are authorized to cash
 1063  out a de minimis account of a member who has been terminated
 1064  from Florida Retirement System covered employment for a minimum
 1065  of 6 calendar months. A de minimis account is an account
 1066  containing employer and employee contributions and accumulated
 1067  earnings of not more than $5,000 made under the provisions of
 1068  this chapter. Such cash-out must be a complete lump-sum
 1069  liquidation of the account balance, subject to the provisions of
 1070  the Internal Revenue Code, or a lump-sum direct rollover
 1071  distribution paid directly to the custodian of an eligible
 1072  retirement plan, as defined by the Internal Revenue Code, on
 1073  behalf of the member. Any nonvested accumulations and associated
 1074  service credit, including amounts transferred to the suspense
 1075  account of the Florida Retirement System Investment Plan Trust
 1076  Fund authorized under s. 121.4501(6), shall be forfeited upon
 1077  payment of any vested benefit to a member or beneficiary, except
 1078  for de minimis distributions or minimum required distributions
 1079  as provided under this section. If any financial instrument
 1080  issued for the payment of retirement benefits under this section
 1081  is not presented for payment within 180 days after the last day
 1082  of the month in which it was originally issued, the third-party
 1083  administrator or other duly authorized agent of the state board
 1084  shall cancel the instrument and credit the amount of the
 1085  instrument to the suspense account of the Florida Retirement
 1086  System Investment Plan Trust Fund authorized under s.
 1087  121.4501(6). Any amounts transferred to the suspense account are
 1088  payable upon a proper application, not to include earnings
 1089  thereon, as provided in this section, within 10 years after the
 1090  last day of the month in which the instrument was originally
 1091  issued, after which time such amounts and any earnings
 1092  attributable to employer contributions shall be forfeited. Any
 1093  forfeited amounts are assets of the trust fund and are not
 1094  subject to chapter 717.
 1095         (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under
 1096  this subsection are payable in lieu of the benefits that would
 1097  otherwise be payable under the provisions of subsection (1).
 1098  Such benefits must be funded from employer contributions made
 1099  under s. 121.571, transferred employee contributions and funds
 1100  accumulated pursuant to paragraph (a), and interest and earnings
 1101  thereon.
 1102         (b) Disability retirement; entitlement.—
 1103         1.a. A member of the investment plan initially enrolled
 1104  before July 1, 2014, who becomes totally and permanently
 1105  disabled, as defined in paragraph (d), after completing 8 years
 1106  of creditable service, or a member who becomes totally and
 1107  permanently disabled in the line of duty regardless of length of
 1108  service, is entitled to a monthly disability benefit.
 1109         b. A member of the investment plan initially enrolled on or
 1110  after July 1, 2014, who becomes totally and permanently
 1111  disabled, as defined in paragraph (d), after completing 10 years
 1112  of creditable service, or a member who becomes totally and
 1113  permanently disabled in the line of duty regardless of service,
 1114  is entitled to a monthly disability benefit.
 1115         2. In order for service to apply toward the 8 years of
 1116  creditable service required for regular disability benefits, or
 1117  toward the creditable service used in calculating a service
 1118  based benefit as provided under paragraph (g), the service must
 1119  be creditable service as described below:
 1120         a. The member’s period of service under the investment plan
 1121  shall be considered creditable service, except as provided in
 1122  subparagraph d.
 1123         b. If the member has elected to retain credit for service
 1124  under the pension plan as provided under s. 121.4501(3), all
 1125  such service shall be considered creditable service.
 1126         c. If the member elects to transfer to his or her member
 1127  accounts a sum representing the present value of his or her
 1128  retirement credit under the pension plan as provided under s.
 1129  121.4501(3), the period of service under the pension plan
 1130  represented in the present value amounts transferred shall be
 1131  considered creditable service, except as provided in
 1132  subparagraph d.
 1133         d. If a member has terminated employment and has taken
 1134  distribution of his or her funds as provided in subsection (1),
 1135  all creditable service represented by such distributed funds is
 1136  forfeited for purposes of this subsection.
 1137         Section 8. Section 238.072, Florida Statutes, is amended to
 1138  read:
 1139         238.072 Special service provisions for extension
 1140  personnel.—All state and county cooperative extension personnel
 1141  holding appointments by the United States Department of
 1142  Agriculture for extension work in agriculture and home economics
 1143  in this state who are joint representatives of the University of
 1144  Florida and the United States Department of Agriculture, as
 1145  provided in s. 121.051(8) 121.051(7), who are members of the
 1146  Teachers’ Retirement System, chapter 238, and who are prohibited
 1147  from transferring to and participating in the Florida Retirement
 1148  System, chapter 121, may retire with full benefits upon
 1149  completion of 30 years of creditable service and shall be
 1150  considered to have attained normal retirement age under this
 1151  chapter, any law to the contrary notwithstanding. In order to
 1152  comply with the provisions of s. 14, Art. X of the State
 1153  Constitution, any liability accruing to the Florida Retirement
 1154  System Trust Fund as a result of the provisions of this section
 1155  shall be paid on an annual basis from the General Revenue Fund.
 1156         Section 9. Subsection (11) of section 413.051, Florida
 1157  Statutes, is amended to read:
 1158         413.051 Eligible blind persons; operation of vending
 1159  stands.—
 1160         (11) Effective July 1, 1996, blind licensees who remain
 1161  members of the Florida Retirement System pursuant to s.
 1162  121.051(7)(b)1., 121.051(6)(b)1. shall pay any unappropriated
 1163  retirement costs from their net profits or from program income.
 1164  Within 30 days after the effective date of this act, each blind
 1165  licensee who is eligible to maintain membership in the Florida
 1166  Retirement System under s. 121.051(7)(b)1. 121.051(6)(b)1., but
 1167  who elects to withdraw from the system as provided in s.
 1168  121.051(7)(b)3. 121.051(6)(b)3., must, on or before July 31,
 1169  1996, notify the Division of Blind Services and the Department
 1170  of Management Services in writing of his or her election to
 1171  withdraw. Failure to timely notify the divisions shall be deemed
 1172  a decision to remain a compulsory member of the Florida
 1173  Retirement System. However, if, at any time after July 1, 1996,
 1174  sufficient funds are not paid by a blind licensee to cover the
 1175  required contribution to the Florida Retirement System, that
 1176  blind licensee shall become ineligible to participate in the
 1177  Florida Retirement System on the last day of the first month for
 1178  which no contribution is made or the amount contributed is
 1179  insufficient to cover the required contribution. For any blind
 1180  licensee who becomes ineligible to participate in the Florida
 1181  Retirement System as described in this subsection, no creditable
 1182  service shall be earned under the Florida Retirement System for
 1183  any period following the month that retirement contributions
 1184  ceased to be reported. However, any such person may participate
 1185  in the Florida Retirement System in the future if employed by a
 1186  participating employer in a covered position.
 1187         Section 10. Effective upon July 1, 2013, the Pension Reform
 1188  Study Committee is created for the purpose of reviewing,
 1189  analyzing, and evaluating the sustainability of the Florida
 1190  Retirement System and to recommend reforms to maintain and
 1191  enhance the long-term viability and sustainability of the
 1192  system.
 1193         (1) The study committee shall be composed of six members:
 1194         (a) Three members of the Senate appointed by the President
 1195  of the Senate.
 1196         (b) Three members of the House of Representatives appointed
 1197  by the Speaker of the House of Representatives.
 1198         (2) Members of the study committee must be appointed by
 1199  July 31, 2013. By August 31, 2013, the study committee shall
 1200  meet to establish procedures for the conduct of its business and
 1201  to elect a chair and vice chair. The study committee shall meet
 1202  at the call of the chair. A majority of the members constitutes
 1203  a quorum, and a quorum is necessary for the purpose of voting on
 1204  any action or recommendation of the study committee. All
 1205  meetings shall be held in Tallahassee, unless otherwise decided
 1206  by the study committee; however, no more than two such meetings
 1207  may be held in other locations for the purpose of taking public
 1208  testimony.
 1209         (3) The President of the Senate and the Speaker of the
 1210  House of Representatives shall designate legislative staff
 1211  knowledgeable in public pensions and the Florida Retirement
 1212  System to assist the study committee and provide all necessary
 1213  data collection, analysis, research, and support services.
 1214         (4) Study committee members shall serve without
 1215  compensation but are entitled to be reimbursed for per diem and
 1216  travel expenses as provided under s. 112.061, Florida Statutes.
 1217         (5) In reviewing, analyzing, and evaluating the
 1218  sustainability of the Florida Retirement System, and
 1219  recommending reforms to maintain and enhance the long-term
 1220  viability and sustainability of the system, the study committee
 1221  shall, at a minimum, consider the funding structure of the
 1222  system, system funding levels, benefits provided, and the
 1223  benefits of reforming the system structure, which must include
 1224  the benefits of providing a hybrid or cash-balance option in
 1225  lieu of or in addition to the current plan choices.
 1226         (6) The study committee shall submit a final report of its
 1227  recommendations to the President of the Senate and the Speaker
 1228  of the House of Representatives by January 1, 2014.
 1229         Section 11. The Legislature finds that a proper and
 1230  legitimate state purpose is served when employees and retirees
 1231  of the state and its political subdivisions, and the dependents,
 1232  survivors, and beneficiaries of such employees and retirees, are
 1233  extended the basic protections afforded by governmental
 1234  retirement systems. These persons must be provided benefits that
 1235  are fair and adequate and that are managed, administered, and
 1236  funded in an actuarially sound manner, as required by s. 14,
 1237  Article X of the State Constitution and part VII of chapter 112,
 1238  Florida Statutes. Therefore, the Legislature determines and
 1239  declares that this act fulfills an important state interest.
 1240         Section 12. Except as otherwise expressly provided in this
 1241  act and except for this section, which shall take effect July 1,
 1242  2013, this act shall take effect July 1, 2014.
 1243  
 1244  ================= T I T L E  A M E N D M E N T ================
 1245         And the title is amended as follows:
 1246         Delete everything before the enacting clause
 1247  and insert:
 1248                        A bill to be entitled                      
 1249         An act relating to retirement; amending s. 121.021,
 1250         F.S.; revising the definition of “vested” or
 1251         “vesting”; providing that a member initially enrolled
 1252         in the Florida Retirement System after a certain date
 1253         is vested in the pension plan after 10 years of
 1254         creditable service; amending s. 121.051, F.S.;
 1255         providing for compulsory membership in the Florida
 1256         Retirement System Investment Plan for employees in the
 1257         Elected Officers’ Class or the Senior Management
 1258         Service Class initially enrolled after a specified
 1259         date; amending s. 121.052, F.S.; prohibiting members
 1260         of the Elected Officers’ Class from joining the Senior
 1261         Management Service Class after a specified date;
 1262         amending s. 121.055, F.S.; prohibiting an elected
 1263         official eligible for membership in the Elected
 1264         Officers’ Class from enrolling in the Senior
 1265         Management Service Class or in the Senior Management
 1266         Service Optional Annuity Program; closing the Senior
 1267         Management Optional Annuity Program to new members
 1268         after a specified date; amending s. 121.091, F.S.;
 1269         providing that certain members are entitled to a
 1270         monthly disability benefit; revising provisions to
 1271         conform to changes made by the act; amending s.
 1272         121.4501, F.S.; requiring certain employees initially
 1273         enrolled in the Florida Retirement System on or after
 1274         a specified date to be compulsory members of the
 1275         investment plan; revising the definition of “member”
 1276         or “employee”; revising a provision relating to
 1277         acknowledgement of an employee’s election to
 1278         participate in the investment plan; placing certain
 1279         employees in the pension plan from their date of hire
 1280         until they are automatically enrolled in the
 1281         investment plan or timely elect enrollment in the
 1282         pension plan; authorizing certain employees to elect
 1283         to participate in the pension plan, rather than the
 1284         default investment plan, within a specified time;
 1285         providing for the transfer of certain contributions;
 1286         revising the education component; deleting the
 1287         obligation of system employers to communicate the
 1288         existence of both retirement plans; conforming
 1289         provisions and cross-references to changes made by the
 1290         act; amending s. 121.591, F.S.; revising provisions
 1291         relating to disability retirement benefits; amending
 1292         ss. 238.072 and 413.051, F.S.; conforming cross
 1293         references; creating a Pension Reform Study Committee
 1294         to evaluate and provide recommendations relating to
 1295         the Florida Retirement System; providing for
 1296         membership; requiring a report to the Legislature;
 1297         providing for termination; providing that the act
 1298         fulfills an important state interest; providing
 1299         effective dates.