Florida Senate - 2013 COMMITTEE AMENDMENT
Bill No. CS for SB 1392
Barcode 726700
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
03/28/2013 .
.
.
.
—————————————————————————————————————————————————————————————————
—————————————————————————————————————————————————————————————————
The Committee on Appropriations (Benacquisto) recommended 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, 2013, 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. Paragraph (c) of subsection (2) of section
44 121.051, Florida Statutes, is amended, present subsections (3)
45 through (9) of that section are renumbered as subsections (4)
46 through (10), respectively, and a new subsection (3) is added to
47 that section, to read:
48 121.051 Participation in the system.—
49 (2) OPTIONAL PARTICIPATION.—
50 (c) Employees of public community colleges or charter
51 technical career centers sponsored by public community colleges,
52 designated in s. 1000.21(3), who are members of the Regular
53 Class of the Florida Retirement System and who comply with the
54 criteria set forth in this paragraph and s. 1012.875 may, in
55 lieu of participating in the Florida Retirement System, elect to
56 withdraw from the system altogether and participate in the State
57 Community College System Optional Retirement Program provided by
58 the employing agency under s. 1012.875.
59 1.a. Through June 30, 2001, the cost to the employer for
60 benefits under the optional retirement program equals the normal
61 cost portion of the employer retirement contribution which would
62 be required if the employee were a member of the pension plan’s
63 Regular Class, plus the portion of the contribution rate
64 required by s. 112.363(8) which would otherwise be assigned to
65 the Retiree Health Insurance Subsidy Trust Fund.
66 b. Effective July 1, 2001, through June 30, 2011, each
67 employer shall contribute on behalf of each member of the
68 optional program an amount equal to 10.43 percent of the
69 employee’s gross monthly compensation. The employer shall deduct
70 an amount for the administration of the program.
71 c. Effective July 1, 2011, through June 30, 2012, each
72 member shall contribute an amount equal to the employee
73 contribution required under s. 121.71(3)(a). The employer shall
74 contribute on behalf of each program member an amount equal to
75 the difference between 10.43 percent of the employee’s gross
76 monthly compensation and the employee’s required contribution
77 based on the employee’s gross monthly compensation.
78 d. Effective July 1, 2012, each member shall contribute an
79 amount equal to the employee contribution required under s.
80 121.71(3)(a). The employer shall contribute on behalf of each
81 program member an amount equal to the difference between 8.15
82 percent of the employee’s gross monthly compensation and the
83 employee’s required contribution based on the employee’s gross
84 monthly compensation.
85 e. The employer shall contribute an additional amount to
86 the Florida Retirement System Trust Fund equal to the unfunded
87 actuarial accrued liability portion of the Regular Class
88 contribution rate.
89 2. The decision to participate in the optional retirement
90 program is irrevocable as long as the employee holds a position
91 eligible for participation, except as provided in subparagraph
92 3. Any service creditable under the Florida Retirement System is
93 retained after the member withdraws from the system; however,
94 additional service credit in the system may not be earned while
95 a member of the optional retirement program.
96 3. An employee who has elected to participate in the
97 optional retirement program shall have one opportunity, at the
98 employee’s discretion, to transfer from the optional retirement
99 program to the pension plan of the Florida Retirement System or
100 to the investment plan established under part II of this
101 chapter, subject to the terms of the applicable optional
102 retirement program contracts.
103 a. If the employee chooses to move to the investment plan,
104 any contributions, interest, and earnings creditable to the
105 employee under the optional retirement program are retained by
106 the employee in the optional retirement program, and the
107 applicable provisions of s. 121.4501(4) govern the election.
108 b. If the employee chooses to move to the pension plan of
109 the Florida Retirement System, the employee shall receive
110 service credit equal to his or her years of service under the
111 optional retirement program.
112 (I) The cost for such credit is the amount representing the
113 present value of the employee’s accumulated benefit obligation
114 for the affected period of service. The cost shall be calculated
115 as if the benefit commencement occurs on the first date the
116 employee becomes eligible for unreduced benefits, using the
117 discount rate and other relevant actuarial assumptions that were
118 used to value the Florida Retirement System Pension Plan
119 liabilities in the most recent actuarial valuation. The
120 calculation must include any service already maintained under
121 the pension plan in addition to the years under the optional
122 retirement program. The present value of any service already
123 maintained must be applied as a credit to total cost resulting
124 from the calculation. The division must ensure that the transfer
125 sum is prepared using a formula and methodology certified by an
126 enrolled actuary.
127 (II) The employee must transfer from his or her optional
128 retirement program account and from other employee moneys as
129 necessary, a sum representing the present value of the
130 employee’s accumulated benefit obligation immediately following
131 the time of such movement, determined assuming that attained
132 service equals the sum of service in the pension plan and
133 service in the optional retirement program.
134 4. Participation in the optional retirement program is
135 limited to employees who satisfy the following eligibility
136 criteria:
137 a. The employee is otherwise eligible for membership or
138 renewed membership in the Regular Class of the Florida
139 Retirement System, as provided in s. 121.021(11) and (12) or s.
140 121.122.
141 b. The employee is employed in a full-time position
142 classified in the Accounting Manual for Florida’s Public
143 Community Colleges as:
144 (I) Instructional; or
145 (II) Executive Management, Instructional Management, or
146 Institutional Management and the community college determines
147 that recruiting to fill a vacancy in the position is to be
148 conducted in the national or regional market, and the duties and
149 responsibilities of the position include the formulation,
150 interpretation, or implementation of policies, or the
151 performance of functions that are unique or specialized within
152 higher education and that frequently support the mission of the
153 community college.
154 c. The employee is employed in a position not included in
155 the Senior Management Service Class of the Florida Retirement
156 System as described in s. 121.055.
157 5. Members of the program are subject to the same
158 reemployment limitations, renewed membership provisions, and
159 forfeiture provisions applicable to regular members of the
160 Florida Retirement System under ss. 121.091(9), 121.122, and
161 121.091(5), respectively. A member who receives a program
162 distribution funded by employer and required employee
163 contributions is deemed to be retired from a state-administered
164 retirement system if the member is subsequently employed with an
165 employer that participates in the Florida Retirement System.
166 6. Eligible community college employees are compulsory
167 members of the Florida Retirement System until, pursuant to s.
168 1012.875, a written election to withdraw from the system and
169 participate in the optional retirement program is filed with the
170 program administrator and received by the division.
171 a. A community college employee whose program eligibility
172 results from initial employment shall be enrolled in the
173 optional retirement program retroactive to the first day of
174 eligible employment. The employer and employee retirement
175 contributions paid through the month of the employee plan change
176 shall be transferred to the community college to the employee’s
177 optional program account, and, effective the first day of the
178 next month, the employer shall pay the applicable contributions
179 based upon subparagraph 1.
180 b. A community college employee whose program eligibility
181 is due to the subsequent designation of the employee’s position
182 as one of those specified in subparagraph 4., or due to the
183 employee’s appointment, promotion, transfer, or reclassification
184 to a position specified in subparagraph 4., must be enrolled in
185 the program on the first day of the first full calendar month
186 that such change in status becomes effective. The employer and
187 employee retirement contributions paid from the effective date
188 through the month of the employee plan change must be
189 transferred to the community college to the employee’s optional
190 program account, and, effective the first day of the next month,
191 the employer shall pay the applicable contributions based upon
192 subparagraph 1.
193 7. Effective July 1, 2003, through December 31, 2008, any
194 member of the optional retirement program who has service credit
195 in the pension plan of the Florida Retirement System for the
196 period between his or her first eligibility to transfer from the
197 pension plan to the optional retirement program and the actual
198 date of transfer may, during employment, transfer to the
199 optional retirement program a sum representing the present value
200 of the accumulated benefit obligation under the defined benefit
201 retirement program for the period of service credit. Upon
202 transfer, all service credit previously earned under the pension
203 plan during this period is nullified for purposes of entitlement
204 to a future benefit under the pension plan.
205 (3) INVESTMENT PLAN MEMBERSHIP COMPULSORY.—
206 (a) Employees initially enrolled on or after July 1, 2014,
207 in positions covered by the Elected Officers’ Class or the
208 Senior Management Service Class are compulsory members of the
209 investment plan, except those eligible to withdraw from the
210 system under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those
211 eligible for optional retirement programs under paragraph
212 (1)(a), paragraph (2)(c), or s. 121.35. Investment plan
213 membership continues if there is subsequent employment in a
214 position covered by another membership class. Membership in the
215 pension plan is not permitted except as provided in s.
216 121.591(2). Employees initially enrolled in the Florida
217 Retirement System prior to July 1, 2014, may retain their
218 membership in the pension plan or investment plan and are
219 eligible to use the election opportunity specified in s.
220 121.4501(4)(f). Employees initially enrolled on or after July 1,
221 2014, are not eligible to use the election opportunity specified
222 in s. 121.4501(4)(f).
223 (b) Employees eligible to withdraw from the system under s.
224 121.052(3)(d) or s. 121.055(1)(b)2. may choose to withdraw from
225 the system or to participate in the investment plan as provided
226 in these sections. Employees eligible for optional retirement
227 programs under paragraph (2)(c) or s. 121.35 may choose to
228 participate in the optional retirement program or the investment
229 plan as provided in this paragraph or this section. Eligible
230 employees required to participate pursuant to (1)(a) in the
231 optional retirement program as provided under s. 121.35 must
232 participate in the investment plan when employed in a position
233 not eligible for the optional retirement program.
234 Section 3. Paragraph (c) of subsection (3) of section
235 121.052, Florida Statutes, is amended to read:
236 121.052 Membership class of elected officers.—
237 (3) PARTICIPATION AND WITHDRAWAL, GENERALLY.—Effective July
238 1, 1990, participation in the Elected Officers’ Class shall be
239 compulsory for elected officers listed in paragraphs (2)(a)-(d)
240 and (f) assuming office on or after said date, unless the
241 elected officer elects membership in another class or withdraws
242 from the Florida Retirement System as provided in paragraphs
243 (3)(a)-(d):
244 (c) Before July 1, 2014, any elected officer may, within 6
245 months after assuming office, or within 6 months after this act
246 becomes a law for serving elected officers, elect membership in
247 the Senior Management Service Class as provided in s. 121.055 in
248 lieu of membership in the Elected Officers’ Class. Any such
249 election made by a county elected officer shall have no effect
250 upon the statutory limit on the number of nonelective full-time
251 positions that may be designated by a local agency employer for
252 inclusion in the Senior Management Service Class under s.
253 121.055(1)(b)1.
254 Section 4. Paragraph (f) of subsection (1) and paragraph
255 (c) of subsection (6) of section 121.055, Florida Statutes, are
256 amended to read:
257 121.055 Senior Management Service Class.—There is hereby
258 established a separate class of membership within the Florida
259 Retirement System to be known as the “Senior Management Service
260 Class,” which shall become effective February 1, 1987.
261 (1)
262 (f) Effective July 1, 1997, through June 30, 2014:
263 1. Except as provided in subparagraphs subparagraph 3. and
264 4., an elected state officer eligible for membership in the
265 Elected Officers’ Class under s. 121.052(2)(a), (b), or (c) who
266 elects membership in the Senior Management Service Class under
267 s. 121.052(3)(c) may, within 6 months after assuming office or
268 within 6 months after this act becomes a law for serving elected
269 state officers, elect to participate in the Senior Management
270 Service Optional Annuity Program, as provided in subsection (6),
271 in lieu of membership in the Senior Management Service Class.
272 2. Except as provided in subparagraphs subparagraph 3. and
273 4., an elected officer of a local agency employer eligible for
274 membership in the Elected Officers’ Class under s. 121.052(2)(d)
275 who elects membership in the Senior Management Service Class
276 under s. 121.052(3)(c) may, within 6 months after assuming
277 office, or within 6 months after this act becomes a law for
278 serving elected officers of a local agency employer, elect to
279 withdraw from the Florida Retirement System, as provided in
280 subparagraph (b)2., in lieu of membership in the Senior
281 Management Service Class.
282 3. A retiree of a state-administered retirement system who
283 is initially reemployed in a regularly established position on
284 or after July 1, 2010, as an elected official eligible for the
285 Elected Officers’ Class may not be enrolled in renewed
286 membership in the Senior Management Service Class or in the
287 Senior Management Service Optional Annuity Program as provided
288 in subsection (6), and may not withdraw from the Florida
289 Retirement System as a renewed member as provided in
290 subparagraph (b)2., as applicable, in lieu of membership in the
291 Senior Management Service Class.
292 4. On or after July 1, 2014, an elected officer eligible
293 for membership in the Elected Officers’ Class may not be
294 enrolled in the Senior Management Service Class or in the Senior
295 Management Service Optional Annuity Program as provided in
296 subsection (6).
297 (6)
298 (c) Participation.—
299 1. An eligible employee who is employed on or before
300 February 1, 1987, may elect to participate in the optional
301 annuity program in lieu of participating in the Senior
302 Management Service Class. Such election must be made in writing
303 and filed with the department and the personnel officer of the
304 employer on or before May 1, 1987. An eligible employee who is
305 employed on or before February 1, 1987, and who fails to make an
306 election to participate in the optional annuity program by May
307 1, 1987, shall be deemed to have elected membership in the
308 Senior Management Service Class.
309 2. Except as provided in subparagraph 6., an employee who
310 becomes eligible to participate in the optional annuity program
311 by reason of initial employment commencing after February 1,
312 1987, may, within 90 days after the date of commencing
313 employment, elect to participate in the optional annuity
314 program. Such election must be made in writing and filed with
315 the personnel officer of the employer. An eligible employee who
316 does not within 90 days after commencing employment elect to
317 participate in the optional annuity program shall be deemed to
318 have elected membership in the Senior Management Service Class.
319 3. A person who is appointed to a position in the Senior
320 Management Service Class and who is a member of an existing
321 retirement system or the Special Risk or Special Risk
322 Administrative Support Classes of the Florida Retirement System
323 may elect to remain in such system or class in lieu of
324 participating in the Senior Management Service Class or optional
325 annuity program. Such election must be made in writing and filed
326 with the department and the personnel officer of the employer
327 within 90 days after such appointment. An eligible employee who
328 fails to make an election to participate in the existing system,
329 the Special Risk Class of the Florida Retirement System, the
330 Special Risk Administrative Support Class of the Florida
331 Retirement System, or the optional annuity program shall be
332 deemed to have elected membership in the Senior Management
333 Service Class.
334 4. Except as provided in subparagraph 5., an employee’s
335 election to participate in the optional annuity program is
336 irrevocable if the employee continues to be employed in an
337 eligible position and continues to meet the eligibility
338 requirements set forth in this paragraph.
339 5. Effective from July 1, 2002, through September 30, 2002,
340 an active employee in a regularly established position who has
341 elected to participate in the Senior Management Service Optional
342 Annuity Program has one opportunity to choose to move from the
343 Senior Management Service Optional Annuity Program to the
344 Florida Retirement System Pension Plan.
345 a. The election must be made in writing and must be filed
346 with the department and the personnel officer of the employer
347 before October 1, 2002, or, in the case of an active employee
348 who is on a leave of absence on July 1, 2002, within 90 days
349 after the conclusion of the leave of absence. This election is
350 irrevocable.
351 b. The employee shall receive service credit under the
352 pension plan equal to his or her years of service under the
353 Senior Management Service Optional Annuity Program. The cost for
354 such credit is the amount representing the present value of that
355 employee’s accumulated benefit obligation for the affected
356 period of service.
357 c. The employee must transfer the total accumulated
358 employer contributions and earnings on deposit in his or her
359 Senior Management Service Optional Annuity Program account. If
360 the transferred amount is not sufficient to pay the amount due,
361 the employee must pay a sum representing the remainder of the
362 amount due. The employee may not retain any employer
363 contributions or earnings from the Senior Management Service
364 Optional Annuity Program account.
365 6. A retiree of a state-administered retirement system who
366 is initially reemployed on or after July 1, 2010, may not renew
367 membership in the Senior Management Service Optional Annuity
368 Program.
369 7. Effective July 1, 2014, the Senior Management Service
370 Optional Annuity Program is closed to new members. Members
371 enrolled in the Senior Management Service Optional Annuity
372 Program before July 1, 2014, may retain their membership in the
373 annuity program.
374 Section 5. Paragraph (a) of subsection (4) of section
375 121.091, Florida Statutes, is amended to read:
376 121.091 Benefits payable under the system.—Benefits may not
377 be paid under this section unless the member has terminated
378 employment as provided in s. 121.021(39)(a) or begun
379 participation in the Deferred Retirement Option Program as
380 provided in subsection (13), and a proper application has been
381 filed in the manner prescribed by the department. The department
382 may cancel an application for retirement benefits when the
383 member or beneficiary fails to timely provide the information
384 and documents required by this chapter and the department’s
385 rules. The department shall adopt rules establishing procedures
386 for application for retirement benefits and for the cancellation
387 of such application when the required information or documents
388 are not received.
389 (4) DISABILITY RETIREMENT BENEFIT.—
390 (a) Disability retirement; entitlement and effective date.—
391 1.a. A member who becomes totally and permanently disabled,
392 as defined in paragraph (b), after completing 5 years of
393 creditable service, or a member who becomes totally and
394 permanently disabled in the line of duty regardless of service,
395 is entitled to a monthly disability benefit; except that any
396 member with less than 5 years of creditable service on July 1,
397 1980, or any person who becomes a member of the Florida
398 Retirement System on or after such date must have completed 10
399 years of creditable service before becoming totally and
400 permanently disabled in order to receive disability retirement
401 benefits for any disability which occurs other than in the line
402 of duty. However, if a member employed on July 1, 1980, who has
403 less than 5 years of creditable service as of that date becomes
404 totally and permanently disabled after completing 5 years of
405 creditable service and is found not to have attained fully
406 insured status for benefits under the federal Social Security
407 Act, such member is entitled to a monthly disability benefit.
408 b. Effective July 1, 2001, a member of the pension plan
409 initially enrolled before July 1, 2014, who becomes totally and
410 permanently disabled, as defined in paragraph (b), after
411 completing 8 years of creditable service, or a member who
412 becomes totally and permanently disabled in the line of duty
413 regardless of service, is entitled to a monthly disability
414 benefit.
415 c. Effective July 1, 2014, a member of the pension plan
416 initially enrolled on or after July 1, 2014, who becomes totally
417 and permanently disabled, as defined in paragraph (b), after
418 completing 10 years of creditable service, or a member who
419 becomes totally and permanently disabled in the line of duty
420 regardless of service, is entitled to a monthly disability
421 benefit.
422 2. If the division has received from the employer the
423 required documentation of the member’s termination of
424 employment, the effective retirement date for a member who
425 applies and is approved for disability retirement shall be
426 established by rule of the division.
427 3. For a member who is receiving Workers’ Compensation
428 payments, the effective disability retirement date may not
429 precede the date the member reaches Maximum Medical Improvement
430 (MMI), unless the member terminates employment before reaching
431 MMI.
432 Section 6. Subsection (1), paragraph (i) of subsection (2),
433 paragraph (b) of subsection (3), subsection (4), paragraph (c)
434 of subsection (5), subsection (8), and paragraphs (a), (b), (c),
435 and (h) of subsection (10) of section 121.4501, Florida
436 Statutes, are amended to read:
437 121.4501 Florida Retirement System Investment Plan.—
438 (1) The Trustees of the State Board of Administration shall
439 establish a defined contribution program called the “Florida
440 Retirement System Investment Plan” or “investment plan” for
441 members of the Florida Retirement System under which retirement
442 benefits will be provided for eligible employees who elect to
443 participate in the program and for employees initially enrolled
444 on or after July 1, 2014, in positions covered by the Elected
445 Officers’ Class or the Senior Management Service Class and are
446 compulsory members of the investment plan unless otherwise
447 eligible to withdraw from the system under s. 121.052(3)(d) or
448 s. 121.055(1)(b)2., or to participate in an optional retirement
449 program under s. 121.051(1)(a), s. 121.051(2)(c), or s. 121.35.
450 Investment plan membership continues if there is subsequent
451 employment in a position covered by another membership class.
452 The retirement benefits shall be provided through member
453 directed investments, in accordance with s. 401(a) of the
454 Internal Revenue Code and related regulations. The employer and
455 employee shall make contributions, as provided in this section
456 and ss. 121.571 and 121.71, to the Florida Retirement System
457 Investment Plan Trust Fund toward the funding of benefits.
458 (2) DEFINITIONS.—As used in this part, the term:
459 (i) “Member” or “employee” means an eligible employee who
460 enrolls in or is defaulted into the investment plan as provided
461 in subsection (4), a terminated Deferred Retirement Option
462 Program member as described in subsection (21), or a beneficiary
463 or alternate payee of a member or employee.
464 (3) RETIREMENT SERVICE CREDIT; TRANSFER OF BENEFITS.—
465 (b) Notwithstanding paragraph (a), an eligible employee who
466 elects to participate in or is defaulted into the investment
467 plan and establishes one or more individual member accounts may
468 elect to transfer to the investment plan a sum representing the
469 present value of the employee’s accumulated benefit obligation
470 under the pension plan, except as provided in paragraph (4)(b).
471 Upon transfer, all service credit earned under the pension plan
472 is nullified for purposes of entitlement to a future benefit
473 under the pension plan. A member may not transfer the
474 accumulated benefit obligation balance from the pension plan
475 after the time period for enrolling in the investment plan has
476 expired.
477 1. For purposes of this subsection, the present value of
478 the member’s accumulated benefit obligation is based upon the
479 member’s estimated creditable service and estimated average
480 final compensation under the pension plan, subject to
481 recomputation under subparagraph 2. For state employees, initial
482 estimates shall be based upon creditable service and average
483 final compensation as of midnight on June 30, 2002; for district
484 school board employees, initial estimates shall be based upon
485 creditable service and average final compensation as of midnight
486 on September 30, 2002; and for local government employees,
487 initial estimates shall be based upon creditable service and
488 average final compensation as of midnight on December 31, 2002.
489 The dates specified are the “estimate date” for these employees.
490 The actuarial present value of the employee’s accumulated
491 benefit obligation shall be based on the following:
492 a. The discount rate and other relevant actuarial
493 assumptions used to value the Florida Retirement System Trust
494 Fund at the time the amount to be transferred is determined,
495 consistent with the factors provided in sub-subparagraphs b. and
496 c.
497 b. A benefit commencement age, based on the member’s
498 estimated creditable service as of the estimate date.
499 c. Except as provided under sub-subparagraph d., for a
500 member initially enrolled:
501 (I) Before July 1, 2011, the benefit commencement age is
502 the younger of the following, but may not be younger than the
503 member’s age as of the estimate date:
504 (A) Age 62; or
505 (B) The age the member would attain if the member completed
506 30 years of service with an employer, assuming the member worked
507 continuously from the estimate date, and disregarding any
508 vesting requirement that would otherwise apply under the pension
509 plan.
510 (II) On or after July 1, 2011, the benefit commencement age
511 is the younger of the following, but may not be younger than the
512 member’s age as of the estimate date:
513 (A) Age 65; or
514 (B) The age the member would attain if the member completed
515 33 years of service with an employer, assuming the member worked
516 continuously from the estimate date, and disregarding any
517 vesting requirement that would otherwise apply under the pension
518 plan.
519 d. For members of the Special Risk Class and for members of
520 the Special Risk Administrative Support Class entitled to retain
521 the special risk normal retirement date:
522 (I) Initially enrolled before July 1, 2011, the benefit
523 commencement age is the younger of the following, but may not be
524 younger than the member’s age as of the estimate date:
525 (A) Age 55; or
526 (B) The age the member would attain if the member completed
527 25 years of service with an employer, assuming the member worked
528 continuously from the estimate date, and disregarding any
529 vesting requirement that would otherwise apply under the pension
530 plan.
531 (II) Initially enrolled on or after July 1, 2011, the
532 benefit commencement age is the younger of the following, but
533 may not be younger than the member’s age as of the estimate
534 date:
535 (A) Age 60; or
536 (B) The age the member would attain if the member completed
537 30 years of service with an employer, assuming the member worked
538 continuously from the estimate date, and disregarding any
539 vesting requirement that would otherwise apply under the pension
540 plan.
541 e. The calculation must disregard vesting requirements and
542 early retirement reduction factors that would otherwise apply
543 under the pension plan.
544 2. For each member who elects to transfer moneys from the
545 pension plan to his or her account in the investment plan, the
546 division shall recompute the amount transferred under
547 subparagraph 1. within 60 days after the actual transfer of
548 funds based upon the member’s actual creditable service and
549 actual final average compensation as of the initial date of
550 participation in the investment plan. If the recomputed amount
551 differs from the amount transferred by $10 or more, the division
552 shall:
553 a. Transfer, or cause to be transferred, from the Florida
554 Retirement System Trust Fund to the member’s account the excess,
555 if any, of the recomputed amount over the previously transferred
556 amount together with interest from the initial date of transfer
557 to the date of transfer under this subparagraph, based upon the
558 effective annual interest equal to the assumed return on the
559 actuarial investment which was used in the most recent actuarial
560 valuation of the system, compounded annually.
561 b. Transfer, or cause to be transferred, from the member’s
562 account to the Florida Retirement System Trust Fund the excess,
563 if any, of the previously transferred amount over the recomputed
564 amount, together with interest from the initial date of transfer
565 to the date of transfer under this subparagraph, based upon 6
566 percent effective annual interest, compounded annually, pro rata
567 based on the member’s allocation plan.
568 3. If contribution adjustments are made as a result of
569 employer errors or corrections, including plan corrections,
570 following recomputation of the amount transferred under
571 subparagraph 1., the member is entitled to the additional
572 contributions or is responsible for returning any excess
573 contributions resulting from the correction. However, any return
574 of such erroneous excess pretax contribution by the plan must be
575 made within the period allowed by the Internal Revenue Service.
576 The present value of the member’s accumulated benefit obligation
577 shall not be recalculated.
578 4. As directed by the member, the state board shall
579 transfer or cause to be transferred the appropriate amounts to
580 the designated accounts within 30 days after the effective date
581 of the member’s participation in the investment plan unless the
582 major financial markets for securities available for a transfer
583 are seriously disrupted by an unforeseen event that causes the
584 suspension of trading on any national securities exchange in the
585 country where the securities were issued. In that event, the 30
586 day period may be extended by a resolution of the state board.
587 Transfers are not commissionable or subject to other fees and
588 may be in the form of securities or cash, as determined by the
589 state board. Such securities are valued as of the date of
590 receipt in the member’s account.
591 5. If the state board or the division receives notification
592 from the United States Internal Revenue Service that this
593 paragraph or any portion of this paragraph will cause the
594 retirement system, or a portion thereof, to be disqualified for
595 tax purposes under the Internal Revenue Code, the portion that
596 will cause the disqualification does not apply. Upon such
597 notice, the state board and the division shall notify the
598 presiding officers of the Legislature.
599 (4) PARTICIPATION; ENROLLMENT.—
600 (a)1. Effective June 1, 2002, through February 28, 2003, a
601 90-day election period was provided to each eligible employee
602 participating in the Florida Retirement System, preceded by a
603 90-day education period, permitting each eligible employee to
604 elect membership in the investment plan, and an employee who
605 failed to elect the investment plan during the election period
606 remained in the pension plan. An eligible employee who was
607 employed in a regularly established position during the election
608 period was granted the option to make one subsequent election,
609 as provided in paragraph (f). With respect to an eligible
610 employee who did not participate in the initial election period
611 or who are initially employee who is employed in a regularly
612 established position after the close of the initial election
613 period but before July 1, 2014, on June 1, 2002, by a state
614 employer:
615 a. Any such employee may elect to participate in the
616 investment plan in lieu of retaining his or her membership in
617 the pension plan. The election must be made in writing or by
618 electronic means and must be filed with the third-party
619 administrator by August 31, 2002, or, in the case of an active
620 employee who is on a leave of absence on April 1, 2002, by the
621 last business day of the 5th month following the month the leave
622 of absence concludes. This election is irrevocable, except as
623 provided in paragraph (g). Upon making such election, the
624 employee shall be enrolled as a member of the investment plan,
625 the employee’s membership in the Florida Retirement System is
626 governed by the provisions of this part, and the employee’s
627 membership in the pension plan terminates. The employee’s
628 enrollment in the investment plan is effective the first day of
629 the month for which a full month’s employer contribution is made
630 to the investment plan.
631 b. Any such employee who fails to elect to participate in
632 the investment plan within the prescribed time period is deemed
633 to have elected to retain membership in the pension plan, and
634 the employee’s option to elect to participate in the investment
635 plan is forfeited.
636 2. With respect to employees who become eligible to
637 participate in the investment plan by reason of employment in a
638 regularly established position with a state employer commencing
639 after April 1, 2002:
640 a. Any such employee shall, by default, be enrolled in the
641 pension plan at the commencement of employment, and may, by the
642 last business day of the 5th month following the employee’s
643 month of hire, elect to participate in the investment plan. The
644 employee’s election must be made in writing or by electronic
645 means and must be filed with the third-party administrator. The
646 election to participate in the investment plan is irrevocable,
647 except as provided in paragraph (f)(g).
648 a.b. If the employee files such election within the
649 prescribed time period, enrollment in the investment plan is
650 effective on the first day of employment. The retirement
651 contributions paid through the month of the employee plan change
652 shall be transferred to the investment program, and, effective
653 the first day of the next month, the employer and employee must
654 pay the applicable contributions based on the employee
655 membership class in the program.
656 b.c. An employee who fails to elect to participate in the
657 investment plan within the prescribed time period is deemed to
658 have elected to retain membership in the pension plan, and the
659 employee’s option to elect to participate in the investment plan
660 is forfeited.
661 2.3. With respect to employees who become eligible to
662 participate in the investment plan pursuant to s.
663 121.051(2)(c)3. or s. 121.35(3)(i), the employee may elect to
664 participate in the investment plan in lieu of retaining his or
665 her membership in the State Community College System Optional
666 Retirement Program or the State University System Optional
667 Retirement Program. The election must be made in writing or by
668 electronic means and must be filed with the third-party
669 administrator. This election is irrevocable, except as provided
670 in paragraph (f)(g). Upon making such election, the employee
671 shall be enrolled as a member in the investment plan, the
672 employee’s membership in the Florida Retirement System is
673 governed by the provisions of this part, and the employee’s
674 participation in the State Community College System Optional
675 Retirement Program or the State University System Optional
676 Retirement Program terminates. The employee’s enrollment in the
677 investment plan is effective on the first day of the month for
678 which a full month’s employer and employee contribution is made
679 to the investment plan.
680 (b)1. With respect to employees who become eligible to
681 participate in the investment plan, except as provided in
682 paragraph (g), by reason of employment in a regularly
683 established position commencing on or after July 1, 2014, any
684 such employee shall be enrolled in the pension plan at the
685 commencement of employment and may, by the last business day of
686 the 5th month following the employee’s month of hire, elect to
687 participate in the pension plan or the investment plan. Eligible
688 employees may make a plan election only if they are earning
689 service credit in an employer-employee relationship consistent
690 with s. 121.021(17)(b), excluding leaves of absence without pay.
691 2. The employee’s election must be made in writing or by
692 electronic means and must be filed with the third-party
693 administrator. The election to participate in the pension plan
694 or investment plan is irrevocable, except as provided in
695 paragraph (f).
696 3. If the employee fails to make an election of the pension
697 plan or investment plan within 5 months following the month of
698 hire, the employee is deemed to have elected the investment plan
699 and will be defaulted into the investment plan retroactively to
700 the employee’s date of employment. The employee’s option to
701 participate in the pension plan is forfeited, except as provided
702 in paragraph (f).
703 4. The amount of the employee and employer contributions
704 paid before the default to the investment plan shall be
705 transferred to the investment plan and shall be placed in a
706 default fund as designated by the State Board of Administration.
707 The employee may move the contributions once an account is
708 activated in the investment plan.
709 5. Effective the first day of the month after an eligible
710 employee makes a plan election of the pension plan or investment
711 plan, or after the month of default to the investment plan, the
712 employee and employer shall pay the applicable contributions
713 based on the employee membership class in the pension plan or
714 investment plan.
715 4. For purposes of this paragraph, “state employer” means
716 any agency, board, branch, commission, community college,
717 department, institution, institution of higher education, or
718 water management district of the state, which participates in
719 the Florida Retirement System for the benefit of certain
720 employees.
721 (b)1. With respect to an eligible employee who is employed
722 in a regularly established position on September 1, 2002, by a
723 district school board employer:
724 a. Any such employee may elect to participate in the
725 investment plan in lieu of retaining his or her membership in
726 the pension plan. The election must be made in writing or by
727 electronic means and must be filed with the third-party
728 administrator by November 30, or, in the case of an active
729 employee who is on a leave of absence on July 1, 2002, by the
730 last business day of the 5th month following the month the leave
731 of absence concludes. This election is irrevocable, except as
732 provided in paragraph (g). Upon making such election, the
733 employee shall be enrolled as a member of the investment plan,
734 the employee’s membership in the Florida Retirement System is
735 governed by the provisions of this part, and the employee’s
736 membership in the pension plan terminates. The employee’s
737 enrollment in the investment plan is effective the first day of
738 the month for which a full month’s employer contribution is made
739 to the investment program.
740 b. Any such employee who fails to elect to participate in
741 the investment plan within the prescribed time period is deemed
742 to have elected to retain membership in the pension plan, and
743 the employee’s option to elect to participate in the investment
744 plan is forfeited.
745 2. With respect to employees who become eligible to
746 participate in the investment plan by reason of employment in a
747 regularly established position with a district school board
748 employer commencing after July 1, 2002:
749 a. Any such employee shall, by default, be enrolled in the
750 pension plan at the commencement of employment, and may, by the
751 last business day of the 5th month following the employee’s
752 month of hire, elect to participate in the investment plan. The
753 employee’s election must be made in writing or by electronic
754 means and must be filed with the third-party administrator. The
755 election to participate in the investment plan is irrevocable,
756 except as provided in paragraph (g).
757 b. If the employee files such election within the
758 prescribed time period, enrollment in the investment plan is
759 effective on the first day of employment. The employer
760 retirement contributions paid through the month of the employee
761 plan change shall be transferred to the investment plan, and,
762 effective the first day of the next month, the employer shall
763 pay the applicable contributions based on the employee
764 membership class in the investment plan.
765 c. Any such employee who fails to elect to participate in
766 the investment plan within the prescribed time period is deemed
767 to have elected to retain membership in the pension plan, and
768 the employee’s option to elect to participate in the investment
769 plan is forfeited.
770 3. For purposes of this paragraph, “district school board
771 employer” means any district school board that participates in
772 the Florida Retirement System for the benefit of certain
773 employees, or a charter school or charter technical career
774 center that participates in the Florida Retirement System as
775 provided in s. 121.051(2)(d).
776 (c)1. With respect to an eligible employee who is employed
777 in a regularly established position on December 1, 2002, by a
778 local employer:
779 a. Any such employee may elect to participate in the
780 investment plan in lieu of retaining his or her membership in
781 the pension plan. The election must be made in writing or by
782 electronic means and must be filed with the third-party
783 administrator by February 28, 2003, or, in the case of an active
784 employee who is on a leave of absence on October 1, 2002, by the
785 last business day of the 5th month following the month the leave
786 of absence concludes. This election is irrevocable, except as
787 provided in paragraph (g). Upon making such election, the
788 employee shall be enrolled as a participant of the investment
789 plan, the employee’s membership in the Florida Retirement System
790 is governed by the provisions of this part, and the employee’s
791 membership in the pension plan terminates. The employee’s
792 enrollment in the investment plan is effective the first day of
793 the month for which a full month’s employer contribution is made
794 to the investment plan.
795 b. Any such employee who fails to elect to participate in
796 the investment plan within the prescribed time period is deemed
797 to have elected to retain membership in the pension plan, and
798 the employee’s option to elect to participate in the investment
799 plan is forfeited.
800 2. With respect to employees who become eligible to
801 participate in the investment plan by reason of employment in a
802 regularly established position with a local employer commencing
803 after October 1, 2002:
804 a. Any such employee shall, by default, be enrolled in the
805 pension plan at the commencement of employment, and may, by the
806 last business day of the 5th month following the employee’s
807 month of hire, elect to participate in the investment plan. The
808 employee’s election must be made in writing or by electronic
809 means and must be filed with the third-party administrator. The
810 election to participate in the investment plan is irrevocable,
811 except as provided in paragraph (g).
812 b. If the employee files such election within the
813 prescribed time period, enrollment in the investment plan is
814 effective on the first day of employment. The employer
815 retirement contributions paid through the month of the employee
816 plan change shall be transferred to the investment plan, and,
817 effective the first day of the next month, the employer shall
818 pay the applicable contributions based on the employee
819 membership class in the investment plan.
820 c. Any such employee who fails to elect to participate in
821 the investment plan within the prescribed time period is deemed
822 to have elected to retain membership in the pension plan, and
823 the employee’s option to elect to participate in the investment
824 plan is forfeited.
825 3. For purposes of this paragraph, “local employer” means
826 any employer not included in paragraph (a) or paragraph (b).
827 (c)(d) Contributions available for self-direction by a
828 member who has not selected one or more specific investment
829 products shall be allocated as prescribed by the state board.
830 The third-party administrator shall notify the member at least
831 quarterly that the member should take an affirmative action to
832 make an asset allocation among the investment products.
833 (d)(e) On or after July 1, 2011, a member of the pension
834 plan who obtains a refund of employee contributions retains his
835 or her prior plan choice upon return to employment in a
836 regularly established position with a participating employer.
837 (e)(f) A member of the investment plan who takes a
838 distribution of any contributions from his or her investment
839 plan account is considered a retiree. A retiree who is initially
840 reemployed in a regularly established position on or after July
841 1, 2010, is not eligible to be enrolled in renewed membership.
842 (f)(g) After the period during which an eligible employee
843 had the choice to elect the pension plan or the investment plan,
844 or the month following the receipt of the eligible employee’s
845 plan election, if sooner, the employee shall have one
846 opportunity, at the employee’s discretion, to choose to move
847 from the pension plan to the investment plan or from the
848 investment plan to the pension plan. Eligible employees may
849 elect to move between plans only if they are earning service
850 credit in an employer-employee relationship consistent with s.
851 121.021(17)(b), excluding leaves of absence without pay.
852 Effective July 1, 2005, such elections are effective on the
853 first day of the month following the receipt of the election by
854 the third-party administrator and are not subject to the
855 requirements regarding an employer-employee relationship or
856 receipt of contributions for the eligible employee in the
857 effective month, except when the election is received by the
858 third-party administrator. This paragraph is contingent upon
859 approval by the Internal Revenue Service. This paragraph is not
860 applicable to compulsory investment plan members under paragraph
861 (g).
862 1. If the employee chooses to move to the investment plan,
863 the provisions of subsection (3) govern the transfer.
864 2. If the employee chooses to move to the pension plan, the
865 employee must transfer from his or her investment plan account,
866 and from other employee moneys as necessary, a sum representing
867 the present value of that employee’s accumulated benefit
868 obligation immediately following the time of such movement,
869 determined assuming that attained service equals the sum of
870 service in the pension plan and service in the investment plan.
871 Benefit commencement occurs on the first date the employee is
872 eligible for unreduced benefits, using the discount rate and
873 other relevant actuarial assumptions that were used to value the
874 pension plan liabilities in the most recent actuarial valuation.
875 For any employee who, at the time of the second election,
876 already maintains an accrued benefit amount in the pension plan,
877 the then-present value of the accrued benefit is deemed part of
878 the required transfer amount. The division must ensure that the
879 transfer sum is prepared using a formula and methodology
880 certified by an enrolled actuary. A refund of any employee
881 contributions or additional member payments made which exceed
882 the employee contributions that would have accrued had the
883 member remained in the pension plan and not transferred to the
884 investment plan is not permitted.
885 3. Notwithstanding subparagraph 2., an employee who chooses
886 to move to the pension plan and who became eligible to
887 participate in the investment plan by reason of employment in a
888 regularly established position with a state employer after June
889 1, 2002; a district school board employer after September 1,
890 2002; or a local employer after December 1, 2002, must transfer
891 from his or her investment plan account, and from other employee
892 moneys as necessary, a sum representing the employee’s actuarial
893 accrued liability. A refund of any employee contributions or
894 additional member participant payments made which exceed the
895 employee contributions that would have accrued had the member
896 remained in the pension plan and not transferred to the
897 investment plan is not permitted.
898 4. An employee’s ability to transfer from the pension plan
899 to the investment plan pursuant to paragraphs (a) and (b)
900 paragraphs (a)-(d), and the ability of a current employee to
901 have an option to later transfer back into the pension plan
902 under subparagraph 2., shall be deemed a significant system
903 amendment. Pursuant to s. 121.031(4), any resulting unfunded
904 liability arising from actual original transfers from the
905 pension plan to the investment plan must be amortized within 30
906 plan years as a separate unfunded actuarial base independent of
907 the reserve stabilization mechanism defined in s. 121.031(3)(f).
908 For the first 25 years, a direct amortization payment may not be
909 calculated for this base. During this 25-year period, the
910 separate base shall be used to offset the impact of employees
911 exercising their second program election under this paragraph.
912 The actuarial funded status of the pension plan will not be
913 affected by such second program elections in any significant
914 manner, after due recognition of the separate unfunded actuarial
915 base. Following the initial 25-year period, any remaining
916 balance of the original separate base shall be amortized over
917 the remaining 5 years of the required 30-year amortization
918 period.
919 5. If the employee chooses to transfer from the investment
920 plan to the pension plan and retains an excess account balance
921 in the investment plan after satisfying the buy-in requirements
922 under this paragraph, the excess may not be distributed until
923 the member retires from the pension plan. The excess account
924 balance may be rolled over to the pension plan and used to
925 purchase service credit or upgrade creditable service in the
926 pension plan.
927 (g)1. All employees initially enrolled on or after July 1,
928 2014, in positions covered by the Elected Officers’ Class or the
929 Senior Management Service Class are compulsory members of the
930 investment plan, except those eligible to withdraw from the
931 system under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those
932 eligible for optional retirement programs under s.
933 121.051(1)(a), s. 121.051(2)(c), or s. 121.35. Employees
934 eligible to withdraw from the system under s. 121.052(3)(d) or
935 s. 121.055(1)(b)2. may choose to withdraw from the system or to
936 participate in the investment plan as provided in those
937 sections. Employees eligible for optional retirement programs
938 under s. 121.051(2)(c) or s. 121.35, except as provided in s.
939 121.051(1)(a), may choose to participate in the optional
940 retirement program or the investment plan as provided in those
941 sections. Investment plan membership continues if there is
942 subsequent employment in a position covered by another
943 membership class. Membership in the pension plan is not
944 permitted except as provided in s. 121.591(2). Employees
945 initially enrolled in the Florida Retirement System prior to
946 July 1, 2014, may retain their membership in the pension plan or
947 investment plan and are eligible to use the election opportunity
948 specified in s. 121.4501(4)(f).
949 2. Employees initially enrolled on or after July 1, 2014,
950 are not permitted to use the election opportunity specified in
951 paragraph (f).
952 3. The amount of retirement contributions paid by the
953 employee and employer, as required under s. 121.72, shall be
954 placed in a default fund as designated by the state board, until
955 an account is activated in the investment plan, at which time
956 the member may move the contributions from the default fund to
957 other funds provided in the investment plan.
958 (5) CONTRIBUTIONS.—
959 (c) The state board, acting as plan fiduciary, must ensure
960 that all plan assets are held in a trust, pursuant to s. 401 of
961 the Internal Revenue Code. The fiduciary must ensure that such
962 contributions are allocated as follows:
963 1. The employer and employee contribution portion earmarked
964 for member accounts shall be used to purchase interests in the
965 appropriate investment vehicles as specified by the member, or
966 in accordance with paragraph (4)(c) (4)(d).
967 2. The employer contribution portion earmarked for
968 administrative and educational expenses shall be transferred to
969 the Florida Retirement System Investment Plan Trust Fund.
970 3. The employer contribution portion earmarked for
971 disability benefits shall be transferred to the Florida
972 Retirement System Trust Fund.
973 (8) INVESTMENT PLAN ADMINISTRATION.—The investment plan
974 shall be administered by the state board and affected employers.
975 The state board may require oaths, by affidavit or otherwise,
976 and acknowledgments from persons in connection with the
977 administration of its statutory duties and responsibilities for
978 the investment plan. An oath, by affidavit or otherwise, may not
979 be required of a member at the time of enrollment.
980 Acknowledgment of an employee’s election to participate in the
981 program shall be no greater than necessary to confirm the
982 employee’s election except for members initially enrolled on or
983 after July 1, 2014, as provided in paragraph (4)(g). The state
984 board shall adopt rules to carry out its statutory duties with
985 respect to administering the investment plan, including
986 establishing the roles and responsibilities of affected state,
987 local government, and education-related employers, the state
988 board, the department, and third-party contractors. The
989 department shall adopt rules necessary to administer the
990 investment plan in coordination with the pension plan and the
991 disability benefits available under the investment plan.
992 (a)1. The state board shall select and contract with a
993 third-party administrator to provide administrative services if
994 those services cannot be competitively and contractually
995 provided by the division. With the approval of the state board,
996 the third-party administrator may subcontract to provide
997 components of the administrative services. As a cost of
998 administration, the state board may compensate any such
999 contractor for its services, in accordance with the terms of the
1000 contract, as is deemed necessary or proper by the board. The
1001 third-party administrator may not be an approved provider or be
1002 affiliated with an approved provider.
1003 2. These administrative services may include, but are not
1004 limited to, enrollment of eligible employees, collection of
1005 employer and employee contributions, disbursement of
1006 contributions to approved providers in accordance with the
1007 allocation directions of members; services relating to
1008 consolidated billing; individual and collective recordkeeping
1009 and accounting; asset purchase, control, and safekeeping; and
1010 direct disbursement of funds to and from the third-party
1011 administrator, the division, the state board, employers,
1012 members, approved providers, and beneficiaries. This section
1013 does not prevent or prohibit a bundled provider from providing
1014 any administrative or customer service, including accounting and
1015 administration of individual member benefits and contributions;
1016 individual member recordkeeping; asset purchase, control, and
1017 safekeeping; direct execution of the member’s instructions as to
1018 asset and contribution allocation; calculation of daily net
1019 asset values; direct access to member account information; or
1020 periodic reporting to members, at least quarterly, on account
1021 balances and transactions, if these services are authorized by
1022 the state board as part of the contract.
1023 (b)1. The state board shall select and contract with one or
1024 more organizations to provide educational services. With
1025 approval of the state board, the organizations may subcontract
1026 to provide components of the educational services. As a cost of
1027 administration, the state board may compensate any such
1028 contractor for its services in accordance with the terms of the
1029 contract, as is deemed necessary or proper by the board. The
1030 education organization may not be an approved provider or be
1031 affiliated with an approved provider.
1032 2. Educational services shall be designed by the state
1033 board and department to assist employers, eligible employees,
1034 members, and beneficiaries in order to maintain compliance with
1035 United States Department of Labor regulations under s. 404(c) of
1036 the Employee Retirement Income Security Act of 1974 and to
1037 assist employees in their choice of pension plan or investment
1038 plan retirement alternatives. Educational services include, but
1039 are not limited to, disseminating educational materials;
1040 providing retirement planning education; explaining the pension
1041 plan and the investment plan; and offering financial planning
1042 guidance on matters such as investment diversification,
1043 investment risks, investment costs, and asset allocation. An
1044 approved provider may also provide educational information,
1045 including retirement planning and investment allocation
1046 information concerning its products and services.
1047 (c)1. In evaluating and selecting a third-party
1048 administrator, the state board shall establish criteria for
1049 evaluating the relative capabilities and qualifications of each
1050 proposed administrator. In developing such criteria, the state
1051 board shall consider:
1052 a. The administrator’s demonstrated experience in providing
1053 administrative services to public or private sector retirement
1054 systems.
1055 b. The administrator’s demonstrated experience in providing
1056 daily valued recordkeeping to defined contribution programs.
1057 c. The administrator’s ability and willingness to
1058 coordinate its activities with employers, the state board, and
1059 the division, and to supply to such employers, the board, and
1060 the division the information and data they require, including,
1061 but not limited to, monthly management reports, quarterly member
1062 reports, and ad hoc reports requested by the department or state
1063 board.
1064 d. The cost-effectiveness and levels of the administrative
1065 services provided.
1066 e. The administrator’s ability to interact with the
1067 members, the employers, the state board, the division, and the
1068 providers; the means by which members may access account
1069 information, direct investment of contributions, make changes to
1070 their accounts, transfer moneys between available investment
1071 vehicles, and transfer moneys between investment products; and
1072 any fees that apply to such activities.
1073 f. Any other factor deemed necessary by the state board.
1074 2. In evaluating and selecting an educational provider, the
1075 state board shall establish criteria under which it shall
1076 consider the relative capabilities and qualifications of each
1077 proposed educational provider. In developing such criteria, the
1078 state board shall consider:
1079 a. Demonstrated experience in providing educational
1080 services to public or private sector retirement systems.
1081 b. Ability and willingness to coordinate its activities
1082 with the employers, the state board, and the division, and to
1083 supply to such employers, the board, and the division the
1084 information and data they require, including, but not limited
1085 to, reports on educational contacts.
1086 c. The cost-effectiveness and levels of the educational
1087 services provided.
1088 d. Ability to provide educational services via different
1089 media, including, but not limited to, the Internet, personal
1090 contact, seminars, brochures, and newsletters.
1091 e. Any other factor deemed necessary by the state board.
1092 3. The establishment of the criteria shall be solely within
1093 the discretion of the state board.
1094 (d) The state board shall develop the form and content of
1095 any contracts to be offered under the investment plan. In
1096 developing the contracts, the board shall consider:
1097 1. The nature and extent of the rights and benefits to be
1098 afforded in relation to the contributions required under the
1099 plan.
1100 2. The suitability of the rights and benefits provided and
1101 the interests of employers in the recruitment and retention of
1102 eligible employees.
1103 (e)1. The state board may contract for professional
1104 services, including legal, consulting, accounting, and actuarial
1105 services, deemed necessary to implement and administer the
1106 investment plan. The state board may enter into a contract with
1107 one or more vendors to provide low-cost investment advice to
1108 members, supplemental to education provided by the third-party
1109 administrator. All fees under any such contract shall be paid by
1110 those members who choose to use the services of the vendor.
1111 2. The department may contract for professional services,
1112 including legal, consulting, accounting, and actuarial services,
1113 deemed necessary to implement and administer the investment plan
1114 in coordination with the pension plan. The department, in
1115 coordination with the state board, may enter into a contract
1116 with the third-party administrator in order to coordinate
1117 services common to the various programs within the Florida
1118 Retirement System.
1119 (f) The third-party administrator may not receive direct or
1120 indirect compensation from an approved provider, except as
1121 specifically provided for in the contract with the state board.
1122 (g) The state board shall receive and resolve member
1123 complaints against the program, the third-party administrator,
1124 or any program vendor or provider; shall resolve any conflict
1125 between the third-party administrator and an approved provider
1126 if such conflict threatens the implementation or administration
1127 of the program or the quality of services to employees; and may
1128 resolve any other conflicts. The third-party administrator shall
1129 retain all member records for at least 5 years for use in
1130 resolving any member conflicts. The state board, the third-party
1131 administrator, or a provider is not required to produce
1132 documentation or an audio recording to justify action taken with
1133 regard to a member if the action occurred 5 or more years before
1134 the complaint is submitted to the state board. It is presumed
1135 that all action taken 5 or more years before the complaint is
1136 submitted was taken at the request of the member and with the
1137 member’s full knowledge and consent. To overcome this
1138 presumption, the member must present documentary evidence or an
1139 audio recording demonstrating otherwise.
1140 (10) EDUCATION COMPONENT.—
1141 (a) The state board, in coordination with the department,
1142 shall provide for an education component for eligible employees
1143 system members in a manner consistent with the provisions of
1144 this subsection section. The education component must be
1145 available to eligible employees at least 90 days prior to the
1146 beginning date of the election period for the employees of the
1147 respective types of employers.
1148 (b) The education component must provide system members
1149 with impartial and balanced information about plan choices
1150 except for members initially enrolled on or after July 1, 2014,
1151 as provided in paragraph (4)(g). The education component must
1152 involve multimedia formats. Program comparisons must, to the
1153 greatest extent possible, be based upon the retirement income
1154 that different retirement programs may provide to the member.
1155 The state board shall monitor the performance of the contract to
1156 ensure that the program is conducted in accordance with the
1157 contract, applicable law, and the rules of the state board.
1158 (c) The state board, in coordination with the department,
1159 shall provide for an initial and ongoing transfer education
1160 component to provide system members except for those members
1161 initially enrolled on or after July 1, 2014, as provided in
1162 paragraph (4)(g), with information necessary to make informed
1163 plan choice decisions. The transfer education component must
1164 include, but is not limited to, information on:
1165 1. The amount of money available to a member to transfer to
1166 the defined contribution program.
1167 2. The features of and differences between the pension plan
1168 and the defined contribution program, both generally and
1169 specifically, as those differences may affect the member.
1170 3. The expected benefit available if the member were to
1171 retire under each of the retirement programs, based on
1172 appropriate alternative sets of assumptions.
1173 4. The rate of return from investments in the defined
1174 contribution program and the period of time over which such rate
1175 of return must be achieved to equal or exceed the expected
1176 monthly benefit payable to the member under the pension plan.
1177 5. The historical rates of return for the investment
1178 alternatives available in the defined contribution programs.
1179 6. The benefits and historical rates of return on
1180 investments available in a typical deferred compensation plan or
1181 a typical plan under s. 403(b) of the Internal Revenue Code for
1182 which the employee may be eligible.
1183 7. The program choices available to employees of the State
1184 University System and the comparative benefits of each available
1185 program, if applicable.
1186 8. Payout options available in each of the retirement
1187 programs.
1188 (h) Pursuant to subsection (8), all Florida Retirement
1189 System employers have an obligation to regularly communicate the
1190 existence of the two Florida Retirement System plans and the
1191 plan choice in the natural course of administering their
1192 personnel functions, using the educational materials supplied by
1193 the state board and the Department of Management Services.
1194 Section 7. Paragraph (b) of subsection (2) of section
1195 121.591, Florida Statutes, is amended to read:
1196 121.591 Payment of benefits.—Benefits may not be paid under
1197 the Florida Retirement System Investment Plan unless the member
1198 has terminated employment as provided in s. 121.021(39)(a) or is
1199 deceased and a proper application has been filed as prescribed
1200 by the state board or the department. Benefits, including
1201 employee contributions, are not payable under the investment
1202 plan for employee hardships, unforeseeable emergencies, loans,
1203 medical expenses, educational expenses, purchase of a principal
1204 residence, payments necessary to prevent eviction or foreclosure
1205 on an employee’s principal residence, or any other reason except
1206 a requested distribution for retirement, a mandatory de minimis
1207 distribution authorized by the administrator, or a required
1208 minimum distribution provided pursuant to the Internal Revenue
1209 Code. The state board or department, as appropriate, may cancel
1210 an application for retirement benefits if the member or
1211 beneficiary fails to timely provide the information and
1212 documents required by this chapter and the rules of the state
1213 board and department. In accordance with their respective
1214 responsibilities, the state board and the department shall adopt
1215 rules establishing procedures for application for retirement
1216 benefits and for the cancellation of such application if the
1217 required information or documents are not received. The state
1218 board and the department, as appropriate, are authorized to cash
1219 out a de minimis account of a member who has been terminated
1220 from Florida Retirement System covered employment for a minimum
1221 of 6 calendar months. A de minimis account is an account
1222 containing employer and employee contributions and accumulated
1223 earnings of not more than $5,000 made under the provisions of
1224 this chapter. Such cash-out must be a complete lump-sum
1225 liquidation of the account balance, subject to the provisions of
1226 the Internal Revenue Code, or a lump-sum direct rollover
1227 distribution paid directly to the custodian of an eligible
1228 retirement plan, as defined by the Internal Revenue Code, on
1229 behalf of the member. Any nonvested accumulations and associated
1230 service credit, including amounts transferred to the suspense
1231 account of the Florida Retirement System Investment Plan Trust
1232 Fund authorized under s. 121.4501(6), shall be forfeited upon
1233 payment of any vested benefit to a member or beneficiary, except
1234 for de minimis distributions or minimum required distributions
1235 as provided under this section. If any financial instrument
1236 issued for the payment of retirement benefits under this section
1237 is not presented for payment within 180 days after the last day
1238 of the month in which it was originally issued, the third-party
1239 administrator or other duly authorized agent of the state board
1240 shall cancel the instrument and credit the amount of the
1241 instrument to the suspense account of the Florida Retirement
1242 System Investment Plan Trust Fund authorized under s.
1243 121.4501(6). Any amounts transferred to the suspense account are
1244 payable upon a proper application, not to include earnings
1245 thereon, as provided in this section, within 10 years after the
1246 last day of the month in which the instrument was originally
1247 issued, after which time such amounts and any earnings
1248 attributable to employer contributions shall be forfeited. Any
1249 forfeited amounts are assets of the trust fund and are not
1250 subject to chapter 717.
1251 (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under
1252 this subsection are payable in lieu of the benefits that would
1253 otherwise be payable under the provisions of subsection (1).
1254 Such benefits must be funded from employer contributions made
1255 under s. 121.571, transferred employee contributions and funds
1256 accumulated pursuant to paragraph (a), and interest and earnings
1257 thereon.
1258 (b) Disability retirement; entitlement.—
1259 1.a. A member of the investment plan initially enrolled
1260 before July 1, 2014, who becomes totally and permanently
1261 disabled, as defined in paragraph (d), after completing 8 years
1262 of creditable service, or a member who becomes totally and
1263 permanently disabled in the line of duty regardless of length of
1264 service, is entitled to a monthly disability benefit.
1265 b. A member of the investment plan initially enrolled on or
1266 after July 1, 2014, who becomes totally and permanently
1267 disabled, as defined in paragraph (d), after completing 10 years
1268 of creditable service, or a member who becomes totally and
1269 permanently disabled in the line of duty regardless of service,
1270 is entitled to a monthly disability benefit.
1271 2. In order for service to apply toward the 8 years of
1272 creditable service required for regular disability benefits, or
1273 toward the creditable service used in calculating a service
1274 based benefit as provided under paragraph (g), the service must
1275 be creditable service as described below:
1276 a. The member’s period of service under the investment plan
1277 shall be considered creditable service, except as provided in
1278 subparagraph d.
1279 b. If the member has elected to retain credit for service
1280 under the pension plan as provided under s. 121.4501(3), all
1281 such service shall be considered creditable service.
1282 c. If the member elects to transfer to his or her member
1283 accounts a sum representing the present value of his or her
1284 retirement credit under the pension plan as provided under s.
1285 121.4501(3), the period of service under the pension plan
1286 represented in the present value amounts transferred shall be
1287 considered creditable service, except as provided in
1288 subparagraph d.
1289 d. If a member has terminated employment and has taken
1290 distribution of his or her funds as provided in subsection (1),
1291 all creditable service represented by such distributed funds is
1292 forfeited for purposes of this subsection.
1293 Section 8. Subsection (3) of section 121.71, Florida
1294 Statutes, is amended to read:
1295 121.71 Uniform rates; process; calculations; levy.—
1296 (3)(a) Required employee retirement contribution rates for
1297 each membership class and subclass of the Florida Retirement
1298 System for the pension plan both retirement plans are as
1299 follows:
1300 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2011
1301
1302 Regular Class 3.00%
1303 Special Risk Class 3.00%
1304 Special Risk Administrative Support Class 3.00%
1305 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 3.00%
1306 Elected Officers’ Class— Justices, Judges 3.00%
1307 Elected Officers’ Class— County Elected Officers 3.00%
1308 Senior Management Service Class 3.00%
1309 DROP 0.00%
1310
1311
1312
1313 (b) Required employee retirement contribution rates for
1314 each membership class and subclass of the Florida Retirement
1315 System for the investment plan are as follows:
1316 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2011Percentage ofGrossCompensation,EffectiveJuly 1, 2014
1317
1318 Regular Class 3.00% 2.00%
1319 Special Risk Class 3.00% 2.00%
1320 Special Risk Administrative Support Class 3.00% 2.00%
1321 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 3.00% 2.00%
1322 Elected Officers’ Class— Justices, Judges 3.00% 2.00%
1323 Elected Officers’ Class— County Elected Officers 3.00% 2.00%
1324 Senior Management Service Class 3.00% 2.00%
1325 Section 9. Paragraph (a) of subsection (4) of section
1326 121.35, Florida Statutes, is amended to read:
1327 121.35 Optional retirement program for the State University
1328 System.—
1329 (4) CONTRIBUTIONS.—
1330 (a)1. Through June 30, 2001, each employer shall contribute
1331 on behalf of each member of the optional retirement program an
1332 amount equal to the normal cost portion of the employer
1333 retirement contribution which would be required if the employee
1334 were a regular member of the Florida Retirement System Pension
1335 Plan, plus the portion of the contribution rate required in s.
1336 112.363(8) that would otherwise be assigned to the Retiree
1337 Health Insurance Subsidy Trust Fund.
1338 2. Effective July 1, 2001, through June 30, 2011, each
1339 employer shall contribute on behalf of each member of the
1340 optional retirement program an amount equal to 10.43 percent of
1341 the employee’s gross monthly compensation.
1342 3. Effective July 1, 2011, through June 30, 2012, each
1343 member of the optional retirement program shall contribute an
1344 amount equal to the employee contribution required in s.
1345 121.71(3)(a). The employer shall contribute on behalf of each
1346 such member an amount equal to the difference between 10.43
1347 percent of the employee’s gross monthly compensation and the
1348 amount equal to the employee’s required contribution based on
1349 the employee’s gross monthly compensation.
1350 4. Effective July 1, 2012, each member of the optional
1351 retirement program shall contribute an amount equal to the
1352 employee contribution required in s. 121.71(3)(a). The employer
1353 shall contribute on behalf of each such member an amount equal
1354 to the difference between 8.15 percent of the employee’s gross
1355 monthly compensation and the amount equal to the employee’s
1356 required contribution based on the employee’s gross monthly
1357 compensation.
1358 5. The payment of the contributions, including
1359 contributions by the employee, shall be made by the employer to
1360 the department, which shall forward the contributions to the
1361 designated company or companies contracting for payment of
1362 benefits for members of the program. However, such contributions
1363 paid on behalf of an employee described in paragraph (3)(c) may
1364 not be forwarded to a company and do not begin to accrue
1365 interest until the employee has executed a contract and notified
1366 the department. The department shall deduct an amount from the
1367 contributions to provide for the administration of this program.
1368 Section 10. Section 238.072, Florida Statutes, is amended
1369 to read:
1370 238.072 Special service provisions for extension
1371 personnel.—All state and county cooperative extension personnel
1372 holding appointments by the United States Department of
1373 Agriculture for extension work in agriculture and home economics
1374 in this state who are joint representatives of the University of
1375 Florida and the United States Department of Agriculture, as
1376 provided in s. 121.051(8) 121.051(7), who are members of the
1377 Teachers’ Retirement System, chapter 238, and who are prohibited
1378 from transferring to and participating in the Florida Retirement
1379 System, chapter 121, may retire with full benefits upon
1380 completion of 30 years of creditable service and shall be
1381 considered to have attained normal retirement age under this
1382 chapter, any law to the contrary notwithstanding. In order to
1383 comply with the provisions of s. 14, Art. X of the State
1384 Constitution, any liability accruing to the Florida Retirement
1385 System Trust Fund as a result of the provisions of this section
1386 shall be paid on an annual basis from the General Revenue Fund.
1387 Section 11. Subsection (11) of section 413.051, Florida
1388 Statutes, is amended to read:
1389 413.051 Eligible blind persons; operation of vending
1390 stands.—
1391 (11) Effective July 1, 1996, blind licensees who remain
1392 members of the Florida Retirement System pursuant to s.
1393 121.051(7)(b)1. 121.051(6)(b)1. shall pay any unappropriated
1394 retirement costs from their net profits or from program income.
1395 Within 30 days after the effective date of this act, each blind
1396 licensee who is eligible to maintain membership in the Florida
1397 Retirement System under s. 121.051(7)(b)1. 121.051(6)(b)1., but
1398 who elects to withdraw from the system as provided in s.
1399 121.051(7)(b)3. 121.051(6)(b)3., must, on or before July 31,
1400 1996, notify the Division of Blind Services and the Department
1401 of Management Services in writing of his or her election to
1402 withdraw. Failure to timely notify the divisions shall be deemed
1403 a decision to remain a compulsory member of the Florida
1404 Retirement System. However, if, at any time after July 1, 1996,
1405 sufficient funds are not paid by a blind licensee to cover the
1406 required contribution to the Florida Retirement System, that
1407 blind licensee shall become ineligible to participate in the
1408 Florida Retirement System on the last day of the first month for
1409 which no contribution is made or the amount contributed is
1410 insufficient to cover the required contribution. For any blind
1411 licensee who becomes ineligible to participate in the Florida
1412 Retirement System as described in this subsection, no creditable
1413 service shall be earned under the Florida Retirement System for
1414 any period following the month that retirement contributions
1415 ceased to be reported. However, any such person may participate
1416 in the Florida Retirement System in the future if employed by a
1417 participating employer in a covered position.
1418 Section 12. Paragraph (a) of subsection (4) of section
1419 1012.875, Florida Statutes, is amended to read:
1420 1012.875 State Community College System Optional Retirement
1421 Program.—Each Florida College System institution may implement
1422 an optional retirement program, if such program is established
1423 therefor pursuant to s. 1001.64(20), under which annuity or
1424 other contracts providing retirement and death benefits may be
1425 purchased by, and on behalf of, eligible employees who
1426 participate in the program, in accordance with s. 403(b) of the
1427 Internal Revenue Code. Except as otherwise provided herein, this
1428 retirement program, which shall be known as the State Community
1429 College System Optional Retirement Program, may be implemented
1430 and administered only by an individual Florida College System
1431 institution or by a consortium of Florida College System
1432 institutions.
1433 (4)(a)1. Through June 30, 2011, each college must
1434 contribute on behalf of each program member an amount equal to
1435 10.43 percent of the employee’s gross monthly compensation.
1436 2. Effective July 1, 2011, through June 30, 2012, each
1437 member shall contribute an amount equal to the employee
1438 contribution required under s. 121.71(3)(a). The employer shall
1439 contribute on behalf of each program member an amount equal to
1440 the difference between 10.43 percent of the employee’s gross
1441 monthly compensation and the employee’s required contribution
1442 based on the employee’s gross monthly compensation.
1443 3. Effective July 1, 2012, each member shall contribute an
1444 amount equal to the employee contribution required under s.
1445 121.71(3)(a). The employer shall contribute on behalf of each
1446 program member an amount equal to the difference between 8.15
1447 percent of the employee’s gross monthly compensation and the
1448 employee’s required contribution based on the employee’s gross
1449 monthly compensation.
1450 4. The college shall deduct an amount approved by the
1451 district board of trustees of the college to provide for the
1452 administration of the optional retirement program. Payment of
1453 this contribution must be made directly by the college or
1454 through the program administrator to the designated company
1455 contracting for payment of benefits to the program member.
1456 Section 13. The Legislature finds that a proper and
1457 legitimate state purpose is served when employees and retirees
1458 of the state and its political subdivisions, and the dependents,
1459 survivors, and beneficiaries of such employees and retirees, are
1460 extended the basic protections afforded by governmental
1461 retirement systems. These persons must be provided benefits that
1462 are fair and adequate and that are managed, administered, and
1463 funded in an actuarially sound manner, as required by s. 14,
1464 Article X of the State Constitution and part VII of chapter 112,
1465 Florida Statutes. Therefore, the Legislature determines and
1466 declares that this act fulfills an important state interest.
1467 Section 14. This act shall take effect July 1, 2014.
1468
1469 ================= T I T L E A M E N D M E N T ================
1470 And the title is amended as follows:
1471 Delete everything before the enacting clause
1472 and insert:
1473 A bill to be entitled
1474 An act relating to retirement; amending s. 121.021,
1475 F.S.; revising the definition of “vested” or
1476 “vesting”; providing that a member initially enrolled
1477 in the Florida Retirement System after a certain date
1478 is vested in the pension plan after 10 years of
1479 creditable service; amending s. 121.051, F.S.;
1480 providing for compulsory membership in the Florida
1481 Retirement System Investment Plan for employees in the
1482 Elected Officers’ Class or the Senior Management
1483 Service Class initially enrolled after a specified
1484 date; conforming cross-references to changes made by
1485 the act; amending s. 121.052, F.S.; prohibiting
1486 members of the Elected Officers’ Class from joining
1487 the Senior Management Service Class after a specified
1488 date; amending s. 121.055, F.S.; prohibiting an
1489 elected official eligible for membership in the
1490 Elected Officers’ Class from enrolling in the Senior
1491 Management Service Class or in the Senior Management
1492 Service Optional Annuity Program; closing the Senior
1493 Management Optional Annuity Program to new members
1494 after a specified date; amending s. 121.091, F.S.;
1495 providing that certain members are entitled to a
1496 monthly disability benefit; revising provisions to
1497 conform to changes made by the act; amending s.
1498 121.4501, F.S.; requiring certain employees initially
1499 enrolled in the Florida Retirement System on or after
1500 a specified date to be compulsory members of the
1501 investment plan; revising the definition of “member”
1502 or “employee”; revising a provision relating to
1503 acknowledgement of an employee’s election to
1504 participate in the investment plan; placing certain
1505 employees in the pension plan from their date of hire
1506 until they are automatically enrolled in the
1507 investment plan or timely elect enrollment in the
1508 pension plan; authorizing certain employees to elect
1509 to participate in the pension plan, rather than the
1510 default investment plan, within a specified time;
1511 providing for the transfer of certain contributions;
1512 revising the education component; deleting the
1513 obligation of system employers to communicate the
1514 existence of both retirement plans; conforming
1515 provisions and cross-references to changes made by the
1516 act; amending s. 121.591, F.S.; revising provisions
1517 relating to disability retirement benefits; amending
1518 s. 121.71, F.S.; decreasing the employee retirement
1519 contribution rates for investment plan members;
1520 amending ss. 121.35, 238.072, 413.051, and 1012.875,
1521 F.S.; conforming cross-references; providing that the
1522 act fulfills an important state interest; providing an
1523 effective date.