Florida Senate - 2019                                     SB 402
       
       
        
       By Senator Gruters
       
       
       
       
       
       23-00460A-19                                           2019402__
    1                        A bill to be entitled                      
    2         An act relating to employment after retirement of
    3         school district personnel; amending s. 121.021, F.S.;
    4         revising the definition of “termination” to conform to
    5         changes made by the act; amending s. 121.091, F.S.;
    6         establishing an exception to reemployment after
    7         retirement limitations to authorize retired
    8         instructional staff to be employed as substitute
    9         teachers before meeting the definition of termination;
   10         prohibiting the accrual of additional retirement
   11         service credit and renewed membership during such
   12         period of reemployment; amending ss. 121.122, 121.591,
   13         and 1012.33, F.S.; conforming provisions and a cross
   14         reference to changes made by the act; requiring the
   15         State Board of Administration and the Department of
   16         Management Services to request a determination letter
   17         and private letter ruling from the United States
   18         Internal Revenue Service; providing for
   19         nonapplicability of the act, or portions thereof,
   20         under specified circumstances; providing effective
   21         dates.
   22          
   23  Be It Enacted by the Legislature of the State of Florida:
   24  
   25         Section 1. Subsection (39) of section 121.021, Florida
   26  Statutes, is amended to read:
   27         121.021 Definitions.—The following words and phrases as
   28  used in this chapter have the respective meanings set forth
   29  unless a different meaning is plainly required by the context:
   30         (39)(a) “Termination” occurs, except as provided in
   31  paragraph (b), when a member ceases all employment relationships
   32  with participating employers, however:
   33         1. For retirements effective before July 1, 2010, if a
   34  member is employed by any such employer within the next calendar
   35  month, termination shall be deemed not to have occurred. A leave
   36  of absence constitutes a continuation of the employment
   37  relationship, except that a leave of absence without pay due to
   38  disability may constitute termination if such member makes
   39  application for and is approved for disability retirement in
   40  accordance with s. 121.091(4). The department or state board may
   41  require other evidence of termination as it deems necessary.
   42         2. For retirements effective on or after July 1, 2010, if a
   43  member is employed by any such employer within the next 6
   44  calendar months, termination shall be deemed not to have
   45  occurred unless the member is employed as a substitute teacher
   46  following retirement in accordance with ss. 121.091(9)(g) and
   47  1012.33(8)(b). A leave of absence constitutes a continuation of
   48  the employment relationship, except that a leave of absence
   49  without pay due to disability may constitute termination if such
   50  member makes application for and is approved for disability
   51  retirement in accordance with s. 121.091(4). The department or
   52  state board may require other evidence of termination as it
   53  deems necessary.
   54         (b) “Termination” for a member electing to participate in
   55  the Deferred Retirement Option Program occurs when the program
   56  participant ceases all employment relationships with
   57  participating employers in accordance with s. 121.091(13),
   58  however:
   59         1. For termination dates occurring before July 1, 2010, if
   60  the member is employed by any such employer within the next
   61  calendar month, termination will be deemed not to have occurred,
   62  except as provided in s. 121.091(13)(b)4.c. A leave of absence
   63  shall constitute a continuation of the employment relationship.
   64         2. For termination dates occurring on or after July 1,
   65  2010, if the member becomes employed by any such employer within
   66  the next 6 calendar months, termination will be deemed not to
   67  have occurred, except as provided in s. 121.091(13)(b)4.c. or if
   68  the member is employed as a substitute teacher following
   69  retirement in accordance with ss. 121.091(9)(g) and
   70  1012.33(8)(b). A leave of absence constitutes a continuation of
   71  the employment relationship.
   72         (c) Effective July 1, 2011, “termination” for a member
   73  receiving a refund of employee contributions occurs when a
   74  member ceases all employment relationships with participating
   75  employers for 3 calendar months. A leave of absence constitutes
   76  a continuation of the employment relationship.
   77         Section 2. Paragraphs (c) and (d) of subsection (9) of
   78  section 121.091, Florida Statutes, are amended, and paragraph
   79  (g) is added to that subsection, to read:
   80         121.091 Benefits payable under the system.—Benefits may not
   81  be paid under this section unless the member has terminated
   82  employment as provided in s. 121.021(39)(a) or begun
   83  participation in the Deferred Retirement Option Program as
   84  provided in subsection (13), and a proper application has been
   85  filed in the manner prescribed by the department. The department
   86  may cancel an application for retirement benefits when the
   87  member or beneficiary fails to timely provide the information
   88  and documents required by this chapter and the department’s
   89  rules. The department shall adopt rules establishing procedures
   90  for application for retirement benefits and for the cancellation
   91  of such application when the required information or documents
   92  are not received.
   93         (9) EMPLOYMENT AFTER RETIREMENT; LIMITATION.—
   94         (c) Any person whose retirement is effective on or after
   95  July 1, 2010, or whose participation in the Deferred Retirement
   96  Option Program terminates on or after July 1, 2010, who is
   97  retired under this chapter, except under the disability
   98  retirement provisions of subsection (4) or as provided in s.
   99  121.053, may be reemployed by an employer that participates in a
  100  state-administered retirement system and receive retirement
  101  benefits and compensation from that employer. However, a person
  102  may not be reemployed by an employer participating in the
  103  Florida Retirement System before meeting the definition of
  104  termination in s. 121.021 and may not receive both a salary from
  105  the employer and retirement benefits for 6 calendar months after
  106  meeting the definition of termination, except as provided in
  107  paragraph (f) or paragraph (g). However, a DROP participant
  108  shall continue employment and receive a salary during the period
  109  of participation in the Deferred Retirement Option Program, as
  110  provided in subsection (13).
  111         1. The reemployed retiree may not renew membership in the
  112  Florida Retirement System, except as provided in s. 121.122.
  113         2. The employer shall pay retirement contributions in an
  114  amount equal to the unfunded actuarial liability portion of the
  115  employer contribution that would be required for active members
  116  of the Florida Retirement System in addition to the
  117  contributions required by s. 121.76.
  118         3. A retiree initially reemployed in violation of this
  119  paragraph and an employer that employs or appoints such person
  120  are jointly and severally liable for reimbursement of any
  121  retirement benefits paid to the retirement trust fund from which
  122  the benefits were paid, including the Florida Retirement System
  123  Trust Fund and the Florida Retirement System Investment Plan
  124  Trust Fund, as appropriate. The employer must have a written
  125  statement from the employee that he or she is not retired from a
  126  state-administered retirement system. Retirement benefits shall
  127  remain suspended until repayment is made. Benefits suspended
  128  beyond the end of the retiree’s 6-month reemployment limitation
  129  period shall apply toward the repayment of benefits received in
  130  violation of this paragraph.
  131         (d) This subsection applies to retirees, as defined in s.
  132  121.4501(2), of the Florida Retirement System Investment Plan,
  133  subject to the following conditions:
  134         1. Except as provided in subparagraph 2., a retiree may not
  135  be reemployed with an employer participating in the Florida
  136  Retirement System until such person has been retired for 6
  137  calendar months.
  138         2. A retiree may be reemployed as a substitute teacher
  139  following retirement in accordance with the requirements of
  140  paragraph (g) and s. 1012.33(8)(b).
  141         3. A retiree employed in violation of this subsection and
  142  an employer that employs or appoints such person are jointly and
  143  severally liable for reimbursement of any benefits paid to the
  144  retirement trust fund from which the benefits were paid. The
  145  employer must have a written statement from the retiree that he
  146  or she is not retired from a state-administered retirement
  147  system.
  148         (g) A retiree who was employed as instructional staff of a
  149  school district may be reemployed as a substitute teacher
  150  following retirement or DROP termination and may receive
  151  compensation from the employer and retirement benefits before
  152  meeting the definition of termination in s. 121.021, as
  153  authorized under s. 1012.33(8)(b). Reemployed instructional
  154  staff may not receive additional retirement service credit for
  155  such employment and may not renew membership in the Florida
  156  Retirement System during such period of employment.
  157         Section 3. Subsection (6) is added to section 121.122,
  158  Florida Statutes, to read:
  159         121.122 Renewed membership in system.—
  160         (6) If a retiree otherwise eligible for renewed membership
  161  in accordance with subsections (3), (4), and (5) is reemployed
  162  as a substitute teacher pursuant to ss. 121.091(9)(g) and
  163  1012.33(8)(b) before meeting the definition of termination in s.
  164  121.021, such retiree must cease all employment relationships,
  165  including service as a substitute teacher, with participating
  166  employers for 6 calendar months in order to be enrolled as a
  167  renewed member if subsequently reemployed in a regularly
  168  established position.
  169         Section 4. Paragraph (a) of subsection (1) of section
  170  121.591, Florida Statutes, is amended to read:
  171         121.591 Payment of benefits.—Benefits may not be paid under
  172  the Florida Retirement System Investment Plan unless the member
  173  has terminated employment as provided in s. 121.021(39)(a) or is
  174  deceased and a proper application has been filed as prescribed
  175  by the state board or the department. Benefits, including
  176  employee contributions, are not payable under the investment
  177  plan for employee hardships, unforeseeable emergencies, loans,
  178  medical expenses, educational expenses, purchase of a principal
  179  residence, payments necessary to prevent eviction or foreclosure
  180  on an employee’s principal residence, or any other reason except
  181  a requested distribution for retirement, a mandatory de minimis
  182  distribution authorized by the administrator, or a required
  183  minimum distribution provided pursuant to the Internal Revenue
  184  Code. The state board or department, as appropriate, may cancel
  185  an application for retirement benefits if the member or
  186  beneficiary fails to timely provide the information and
  187  documents required by this chapter and the rules of the state
  188  board and department. In accordance with their respective
  189  responsibilities, the state board and the department shall adopt
  190  rules establishing procedures for application for retirement
  191  benefits and for the cancellation of such application if the
  192  required information or documents are not received. The state
  193  board and the department, as appropriate, are authorized to cash
  194  out a de minimis account of a member who has been terminated
  195  from Florida Retirement System covered employment for a minimum
  196  of 6 calendar months. A de minimis account is an account
  197  containing employer and employee contributions and accumulated
  198  earnings of not more than $5,000 made under the provisions of
  199  this chapter. Such cash-out must be a complete lump-sum
  200  liquidation of the account balance, subject to the provisions of
  201  the Internal Revenue Code, or a lump-sum direct rollover
  202  distribution paid directly to the custodian of an eligible
  203  retirement plan, as defined by the Internal Revenue Code, on
  204  behalf of the member. Any nonvested accumulations and associated
  205  service credit, including amounts transferred to the suspense
  206  account of the Florida Retirement System Investment Plan Trust
  207  Fund authorized under s. 121.4501(6), shall be forfeited upon
  208  payment of any vested benefit to a member or beneficiary, except
  209  for de minimis distributions or minimum required distributions
  210  as provided under this section. If any financial instrument
  211  issued for the payment of retirement benefits under this section
  212  is not presented for payment within 180 days after the last day
  213  of the month in which it was originally issued, the third-party
  214  administrator or other duly authorized agent of the state board
  215  shall cancel the instrument and credit the amount of the
  216  instrument to the suspense account of the Florida Retirement
  217  System Investment Plan Trust Fund authorized under s.
  218  121.4501(6). Any amounts transferred to the suspense account are
  219  payable upon a proper application, not to include earnings
  220  thereon, as provided in this section, within 10 years after the
  221  last day of the month in which the instrument was originally
  222  issued, after which time such amounts and any earnings
  223  attributable to employer contributions shall be forfeited. Any
  224  forfeited amounts are assets of the trust fund and are not
  225  subject to chapter 717.
  226         (1) NORMAL BENEFITS.—Under the investment plan:
  227         (a) Benefits in the form of vested accumulations as
  228  described in s. 121.4501(6) are payable under this subsection in
  229  accordance with the following terms and conditions:
  230         1. Benefits are payable only to a member, an alternate
  231  payee of a qualified domestic relations order, or a beneficiary.
  232         2. Benefits shall be paid by the third-party administrator
  233  or designated approved providers in accordance with the law, the
  234  contracts, and any applicable board rule or policy.
  235         3. The member must be terminated from all employment with
  236  all Florida Retirement System employers, as provided in s.
  237  121.021(39).
  238         4. Benefit payments may not be made until the member has
  239  been terminated for 3 calendar months, except that the state
  240  board may authorize by rule for the distribution of up to 10
  241  percent of the member’s account after being terminated for 1
  242  calendar month if the member has reached the normal retirement
  243  date as defined in s. 121.021.
  244         5. If a member or former member of the Florida Retirement
  245  System receives an invalid distribution, such person must either
  246  repay the full amount within 90 days after receipt of final
  247  notification by the state board or the third-party administrator
  248  that the distribution was invalid, or, in lieu of repayment, the
  249  member must terminate employment from all participating
  250  employers. If such person fails to repay the full invalid
  251  distribution within 90 days after receipt of final notification,
  252  the person may be deemed retired from the investment plan by the
  253  state board and is subject to s. 121.122. If such person is
  254  deemed retired, any joint and several liability set out in s.
  255  121.091(9)(d)3. s. 121.091(9)(d)2. is void, and the state board,
  256  the department, or the employing agency is not liable for gains
  257  on payroll contributions that have not been deposited to the
  258  person’s account in the investment plan, pending resolution of
  259  the invalid distribution. The member or former member who has
  260  been deemed retired or who has been determined by the state
  261  board to have taken an invalid distribution may appeal the
  262  agency decision through the complaint process as provided under
  263  s. 121.4501(9)(g)3. As used in this subparagraph, the term
  264  “invalid distribution” means any distribution from an account in
  265  the investment plan which is taken in violation of this section,
  266  s. 121.091(9), or s. 121.4501.
  267         Section 5. Subsection (8) of section 1012.33, Florida
  268  Statutes, is amended to read:
  269         1012.33 Contracts with instructional staff, supervisors,
  270  and school principals.—
  271         (8) Notwithstanding any other provision of law, a retired
  272  member may interrupt retirement and be reemployed in any public
  273  school as:
  274         (a) Instructional personnel under a 1-year probationary
  275  contract as defined in s. 1012.335(1). If the retiree
  276  successfully completes the probationary contract, the district
  277  school board may reemploy the retiree under an annual contract
  278  as defined in s. 1012.335(1). The retiree is not eligible for a
  279  professional service contract.
  280         (b) A substitute teacher, if employed as instructional
  281  staff of a school district before retirement or termination from
  282  the Deferred Retirement Option Program, and receive compensation
  283  from that employer and retirement benefits. The reemployed
  284  substitute teacher may not receive additional retirement service
  285  credit for such employment and may not renew membership in the
  286  Florida Retirement System during such period of employment.
  287         Section 6. (1) Effective upon this act becoming a law, the
  288  State Board of Administration and the Department of Management
  289  Services shall request, as soon as practicable, a determination
  290  letter and private letter ruling from the United States Internal
  291  Revenue Service. If the United States Internal Revenue Service
  292  refuses to act upon a request for a private letter ruling, a
  293  legal opinion from a qualified tax attorney or firm may be
  294  substituted for the private letter ruling.
  295         (2) If the state board or the department receives
  296  notification from the United States Internal Revenue Service
  297  that this act or any portion of this act will cause the Florida
  298  Retirement System, or a portion thereof, to be disqualified for
  299  tax purposes under the Internal Revenue Code, the act or any
  300  portion thereof which will cause the disqualification does not
  301  apply. Upon receipt of such notice, the state board and the
  302  department shall notify the presiding officers of the
  303  Legislature.
  304         Section 7. Except as otherwise expressly provided in this
  305  act and except for this section, which shall take effect upon
  306  becoming a law, this act shall take effect January 1, 2020.