Benefits may not be paid under the Florida Retirement System Investment Plan unless the member has terminated employment as provided in s. 121.021(39)(a) or is deceased and a proper application has been filed as prescribed by the state board or the department. Benefits, including employee contributions, are not payable under the investment plan for employee hardships, unforeseeable emergencies, loans, medical expenses, educational expenses, purchase of a principal residence, payments necessary to prevent eviction or foreclosure on an employee’s principal residence, or any other reason except a requested distribution for retirement, a mandatory de minimis distribution authorized by the administrator, or a required minimum distribution provided pursuant to the Internal Revenue Code. The state board or department, as appropriate, may cancel an application for retirement benefits if the member or beneficiary fails to timely provide the information and documents required by this chapter and the rules of the state board and department. In accordance with their respective responsibilities, the state board and the department shall adopt rules establishing procedures for application for retirement benefits and for the cancellation of such application if the required information or documents are not received. The state board and the department, as appropriate, are authorized to cash out a de minimis account of a member who has been terminated from Florida Retirement System covered employment for a minimum of 6 calendar months. A de minimis account is an account containing employer and employee contributions and accumulated earnings of not more than $5,000 made under the provisions of this chapter. Such cash-out must be a complete lump-sum liquidation of the account balance, subject to the provisions of the Internal Revenue Code, or a lump-sum direct rollover distribution paid directly to the custodian of an eligible retirement plan, as defined by the Internal Revenue Code, on behalf of the member. Any nonvested accumulations and associated service credit, including amounts transferred to the suspense account of the Florida Retirement System Investment Plan Trust Fund authorized under s. 121.4501(6), shall be forfeited upon payment of any vested benefit to a member or beneficiary, except for de minimis distributions or minimum required distributions as provided under this section. If any financial instrument issued for the payment of retirement benefits under this section is not presented for payment within 180 days after the last day of the month in which it was originally issued, the third-party administrator or other duly authorized agent of the state board shall cancel the instrument and credit the amount of the instrument to the suspense account of the Florida Retirement System Investment Plan Trust Fund authorized under s. 121.4501(6). Any amounts transferred to the suspense account are payable upon a proper application, not to include earnings thereon, as provided in this section, within 10 years after the last day of the month in which the instrument was originally issued, after which time such amounts and any earnings attributable to employer contributions shall be forfeited. Any forfeited amounts are assets of the trust fund and are not subject to chapter 717. (1) NORMAL BENEFITS.—Under the investment plan: (a) Benefits in the form of vested accumulations as described in s. 121.4501(6) are payable under this subsection in accordance with the following terms and conditions:
1. Benefits are payable only to a member, an alternate payee of a qualified domestic relations order, or a beneficiary.
2. Benefits shall be paid by the third-party administrator or designated approved providers in accordance with the law, the contracts, and any applicable board rule or policy.
3. The member must be terminated from all employment with all Florida Retirement System employers, as provided in s. 121.021(39). 4. Benefit payments may not be made until the member has been terminated for 3 calendar months, except that the state board may authorize by rule for the distribution of up to 10 percent of the member’s account after being terminated for 1 calendar month if the member has reached the normal retirement date as defined in s. 121.021. 5. If a member or former member of the Florida Retirement System receives an invalid distribution, such person must either repay the full amount within 90 days after receipt of final notification by the state board or the third-party administrator that the distribution was invalid, or, in lieu of repayment, the member must terminate employment from all participating employers. If such person fails to repay the full invalid distribution within 90 days after receipt of final notification, the person may be deemed retired from the investment plan by the state board and is subject to s. 121.122. If such person is deemed retired, any joint and several liability set out in s. 121.091(9)(d)2. is void, and the state board, the department, or the employing agency is not liable for gains on payroll contributions that have not been deposited to the person’s account in the investment plan, pending resolution of the invalid distribution. The member or former member who has been deemed retired or who has been determined by the state board to have taken an invalid distribution may appeal the agency decision through the complaint process as provided under s. 121.4501(9)(g)3. As used in this subparagraph, the term “invalid distribution” means any distribution from an account in the investment plan which is taken in violation of this section, s. 121.091(9), or s. 121.4501. (b) If a member elects to receive his or her benefits upon termination of employment as defined in s. 121.021, the member must submit a written application or an application by electronic means to the third-party administrator indicating his or her preferred distribution date and selecting an authorized method of distribution as provided in paragraph (c). The member may defer receipt of benefits until he or she chooses to make such application, subject to federal requirements. (c) Upon receipt by the third-party administrator of a properly executed application for distribution of benefits, the total accumulated benefit is payable to the member pro rata across all Florida Retirement System benefit sources as:
1. A lump-sum or partial distribution to the member;
2. A lump-sum direct rollover distribution whereby all accrued benefits, plus interest and investment earnings, are paid from the member’s account directly to the custodian of an eligible retirement plan, as defined in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the member; or
3. Periodic distributions, as authorized by the state board.
(d) The distribution payment method selected by the member or beneficiary, and the retirement of the member or beneficiary, is final and irrevocable at the time a benefit distribution payment is cashed, deposited, or transferred to another financial institution. Any additional service that remains unclaimed at retirement may not be claimed or purchased, and the type of retirement may not be changed, except that if a member recovers from a disability, the member may subsequently request benefits under subsection (2).
(e) A member may not receive a distribution of employee contributions if a pending qualified domestic relations order is filed against the member’s investment plan account.
(2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under this subsection are payable in lieu of the benefits that would otherwise be payable under the provisions of subsection (1). Such benefits must be funded from employer contributions made under s. 121.571, transferred employee contributions and funds accumulated pursuant to paragraph (a), and interest and earnings thereon. (a) Transfer of funds.—To qualify to receive monthly disability benefits under this subsection: 1. All moneys accumulated in the member’s account, including vested and nonvested accumulations as described in s. 121.4501(6), must be transferred from such individual accounts to the division for deposit in the disability account of the Florida Retirement System Trust Fund. Such moneys must be accounted for separately. Earnings must be credited on an annual basis for amounts held in the disability accounts of the Florida Retirement System Trust Fund based on actual earnings of the trust fund. 2. If the member has retained retirement credit earned under the pension plan as provided in s. 121.4501(3), a sum representing the actuarial present value of such credit within the Florida Retirement System Trust Fund shall be reassigned by the division from the pension plan to the disability program as implemented under this subsection and shall be deposited in the disability account of the trust fund. Such moneys must be accounted for separately. (b) Disability retirement; entitlement.—
1. A member of the investment plan who becomes totally and permanently disabled, as defined in paragraph (d), after completing 8 years of creditable service, or a member who becomes totally and permanently disabled in the line of duty regardless of length of service, is entitled to a monthly disability benefit.
2. In order for service to apply toward the 8 years of creditable service required for regular disability benefits, or toward the creditable service used in calculating a service-based benefit as provided under paragraph (g), the service must be creditable service as described below:
a. The member’s period of service under the investment plan shall be considered creditable service, except as provided in subparagraph d.
b. If the member has elected to retain credit for service under the pension plan as provided under s. 121.4501(3), all such service shall be considered creditable service. c. If the member elects to transfer to his or her member accounts a sum representing the present value of his or her retirement credit under the pension plan as provided under s. 121.4501(3), the period of service under the pension plan represented in the present value amounts transferred shall be considered creditable service, except as provided in subparagraph d.
d. If a member has terminated employment and has taken distribution of his or her funds as provided in subsection (1), all creditable service represented by such distributed funds is forfeited for purposes of this subsection.
(c) Disability retirement effective date.—The effective retirement date for a member who applies and is approved for disability retirement shall be established as provided under s. 121.091(4)(a)2. and 3.
(d) Total and permanent disability.—A member shall be considered totally and permanently disabled if, in the opinion of the division, he or she is prevented, by reason of a medically determinable physical or mental impairment, from rendering useful and efficient service as an officer or employee.
(e) Proof of disability.— Before approving payment of any disability retirement benefit, the division shall require proof that the member is totally and permanently disabled as provided under s. 121.091(4)(c).
(f) Disability retirement benefit.—Upon the disability retirement of a member under this subsection, the member shall receive a monthly benefit that begins accruing on the first day of the month of disability retirement, as approved by the division, and is payable on the last day of that month and each month thereafter during his or her lifetime and continued disability. All disability benefits must be paid out of the disability account of the Florida Retirement System Trust Fund established under this subsection.
(g) Computation of disability retirement benefit.—The amount of each monthly payment must be calculated as provided under s. 121.091(4)(f). Creditable service under both the pension plan and the investment plan shall be applicable as provided under paragraph (b). (h) Reapplication.—A member whose initial application for disability retirement is denied may reapply for disability benefits as provided in s. 121.091(4)(g).
(i) Membership.—Upon approval of a member’s application for disability benefits, the member shall be transferred to the pension plan, effective upon his or her disability retirement effective date.
(j) Option to cancel.—A member whose application for disability benefits is approved may cancel the application if the cancellation request is received by the division before a disability retirement warrant has been deposited, cashed, or received by direct deposit. Upon cancellation:
1. The member’s transfer to the pension plan under paragraph (i) shall be nullified;
2. The member shall be retroactively reinstated in the investment plan without hiatus;
3. All funds transferred to the Florida Retirement System Trust Fund under paragraph (a) must be returned to the member accounts from which the funds were drawn; and
4. The member may elect to receive the benefit payable under subsection (1) in lieu of disability benefits.
(k) Recovery from disability.— 1. The division may require periodic reexaminations at the expense of the disability program account of the Florida Retirement System Trust Fund. Except as provided in subparagraph 2., all other matters relating to recovery from disability shall be as provided under s. 121.091(4)(h). 2. Upon recovery from disability, the recipient of disability retirement benefits under this subsection shall be a compulsory member of the investment plan. The net difference between the recipient’s original account balance transferred to the Florida Retirement System Trust Fund, including earnings and total disability benefits paid to such recipient, if any, shall be determined as provided in sub-subparagraph a. a. An amount equal to the total benefits paid shall be subtracted from that portion of the transferred account balance consisting of vested accumulations as described under s. 121.4501(6), if any, and an amount equal to the remainder of benefit amounts paid, if any, shall be subtracted from any remaining nonvested accumulations.
b. Amounts subtracted under sub-subparagraph a. must be retained within the disability account of the Florida Retirement System Trust Fund. Any remaining account balance shall be transferred to the third-party administrator for disposition as provided under sub-subparagraph c. or sub-subparagraph d., as appropriate.
c. If the recipient returns to covered employment, transferred amounts must be deposited in individual accounts under the investment plan, as directed by the member. Vested and nonvested amounts shall be accounted for separately as provided in s. 121.4501(6). d. If the recipient fails to return to covered employment upon recovery from disability:
(I) Any remaining vested amount must be deposited in individual accounts under the investment plan, as directed by the member, and is payable as provided in subsection (1).
(II) Any remaining nonvested amount must be held in a suspense account and is forfeitable after 5 years as provided in s. 121.4501(6). 3. If present value was reassigned from the pension plan to the disability program as provided under subparagraph (a)2., the full present value amount must be returned to the defined benefit account within the Florida Retirement System Trust Fund and the member’s associated retirement credit under the pension plan must be reinstated in full. Any benefit based upon such credit must be calculated as provided in s. 121.091(4)(h)1. (l) Nonadmissible causes of disability.—A member is not entitled to a disability retirement benefit if the disability results from any injury or disease as described in s. 121.091(4)(i). (m) Disability retirement of justice or judge by order of Supreme Court.— 1. If a member is a justice of the Supreme Court, judge of a district court of appeal, circuit judge, or judge of a county court who has served for the years equal to, or greater than, the vesting requirement in s. 121.021(45) as an elected constitutional judicial officer, including service as a judicial officer in any court abolished pursuant to Art. V of the State Constitution, and who is retired for disability pursuant to s. 12, Art. V of the State Constitution, the member’s Option 1 monthly disability benefit amount as provided in s. 121.091(6)(a)1. shall be two-thirds of his or her monthly compensation as of the member’s disability retirement date. The member may alternatively elect to receive an actuarially adjusted disability retirement benefit under any other option as provided in s. 121.091(6)(a) or to receive the normal benefit payable under subsection (1). 2. If any justice or judge who is a member of the investment plan is retired for disability pursuant to s. 12, Art. V of the State Constitution and elects to receive a monthly disability benefit under the provisions of this paragraph:
a. Any present value amount that was transferred to his or her investment plan account and all employer and employee contributions made to such account on his or her behalf, plus interest and earnings thereon, must be transferred to and deposited in the disability account of the Florida Retirement System Trust Fund; and
b. The monthly disability benefits payable under this paragraph shall be paid from the disability account of the Florida Retirement System Trust Fund.
(n) Death of retiree or beneficiary.—Upon the death of a disabled retiree or beneficiary of the retiree who is receiving monthly disability benefits under this subsection, the monthly benefits shall be paid through the last day of the month of death and shall terminate, or be adjusted, if applicable, as of that date in accordance with the optional form of benefit selected at the time of retirement. The department may adopt rules necessary to administer this paragraph.
(3) DEATH BENEFITS.—Under the Florida Retirement System Investment Plan: (a) Survivor benefits are payable in accordance with the following terms and conditions: 1. To the extent vested, benefits are payable only to a member’s beneficiary or beneficiaries as designated by the member as provided in s. 121.4501(20).
2. Benefits shall be paid by the third-party administrator or designated approved providers in accordance with the law, the contracts, and any applicable state board rule or policy.
3. To receive benefits, the member must be deceased.
(b) In the event of a member’s death, all vested accumulations as described in s. 121.4501(6), less withholding taxes remitted to the Internal Revenue Service, shall be distributed, as provided in paragraph (c) or as described in s. 121.4501(20), as if the member retired on the date of death. No other death benefits are available for survivors of members, except for benefits, or coverage for benefits, as are otherwise provided by law or separately provided by the employer, at the employer’s discretion. (c) Upon receipt by the third-party administrator of a properly executed application for distribution of benefits, the total accumulated benefit is payable by the third-party administrator to the member’s surviving beneficiary or beneficiaries, as:
1. A lump-sum distribution payable to the beneficiary or beneficiaries, or to the deceased member’s estate;
2. An eligible rollover distribution, if permitted, on behalf of the surviving spouse of a deceased member, whereby all accrued benefits, plus interest and investment earnings, are paid from the deceased member’s account directly to the custodian of an eligible retirement plan, as described in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the surviving spouse; or
3. A partial lump-sum payment whereby a portion of the accrued benefit is paid to the deceased member’s surviving spouse or other designated beneficiaries, less withholding taxes remitted to the Internal Revenue Service, and the remaining amount is transferred directly to the custodian of an eligible retirement plan, if permitted, as described in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the surviving spouse. The proportions must be specified by the member or the surviving beneficiary.
This paragraph does not abrogate other applicable provisions of state or federal law providing for payment of death benefits.
(4) LIMITATION ON LEGAL PROCESS.—The benefits payable to any person under the Florida Retirement System Investment Plan, and any contributions accumulated under the plan, are not subject to assignment, execution, attachment, or any legal process, except for qualified domestic relations orders by a court of competent jurisdiction, income deduction orders as provided in s. 61.1301, and federal income tax levies. 1Note.—Section 41, ch. 2011-68, provides that:
“(1) Effective upon this act becoming a law, the State Board of Administration and the Department of Management Services shall request, as soon as practicable, a determination letter and private letter ruling from the United States Internal Revenue Service. If the United States Internal Revenue Service refuses to act upon a request for a private letter ruling, then a legal opinion from a qualified tax attorney or firm may be substituted for such private letter ruling.
“(2) If the board or the department receives notification from the United States Internal Revenue Service that this act or any portion of this act will cause the Florida Retirement System, or a portion thereof, to be disqualified for tax purposes under the Internal Revenue Code, then the portion that will cause the disqualification does not apply. Upon receipt of such notice, the state board and the department shall notify the presiding officers of the Legislature.”