Florida Senate - 2014         (PROPOSED COMMITTEE BILL) SPB 7046
       
       
        
       FOR CONSIDERATION By the Committee on Community Affairs
       
       
       
       
       
       578-01704A-14                                         20147046__
    1                        A bill to be entitled                      
    2         An act relating to the Florida Retirement System;
    3         providing a directive to the Division of Law Revision
    4         and Information; creating s. 121.601, F.S.; providing
    5         definitions; creating s. 121.602, F.S.; requiring the
    6         Trustees of the State Board of Administration to
    7         establish the Florida Retirement System Cash Balance
    8         Plan; requiring employees and employers to make
    9         contributions for funding the plan; providing that the
   10         plan provide a lump-sum or annuity benefit; providing
   11         procedures for employees who are members of the
   12         pension plan or investment plan before a certain date
   13         to transfer to the cash balance plan; providing
   14         procedures for employees employed after a certain date
   15         to be enrolled in the investment plan or cash balance
   16         plan; providing for the distribution of employee and
   17         employer contributions and credits to the cash balance
   18         plan; providing for the establishment of employee
   19         annuity savings accounts and employer retirement
   20         annuity accounts; providing vesting requirements;
   21         providing for the payment of benefits, including
   22         disability and death benefits, and the designation of
   23         a beneficiary; providing for the purchase of
   24         creditable service; providing eligibility for the
   25         retiree health insurance subsidy and social security
   26         coverage; providing for the education of members about
   27         the cash balance plan and requiring the state board to
   28         provide certain information to members on a quarterly
   29         basis; requiring the plan to conform to Internal
   30         Revenue Code requirements; authorizing the state board
   31         to adopt rules relating to maintaining federal status;
   32         providing for plan administration and imposing
   33         fiduciary standards on such management; requiring an
   34         annual actuarial analysis of the plan; directing the
   35         Investment Advisory Council to make recommendations to
   36         the board of directors; requiring the development and
   37         adoption of an Investment Policy Statement; amending
   38         s. 112.363, F.S., relating to the retiree health
   39         insurance subsidy; conforming provisions to changes
   40         made by the act; amending ss. 121.011 and 121.012,
   41         F.S.; conforming cross-references; amending s.
   42         121.021, F.S.; revising the definition of “Florida
   43         Retirement System” to conform to changes made by the
   44         act; amending s. 121.051, F.S.; prohibiting employees
   45         from enrolling in the pension plan after a certain
   46         date; providing exceptions; amending s. 121.052, F.S.;
   47         prohibiting elected officials from joining the Senior
   48         Management Service Class after a specified date;
   49         amending s. 121.055, F.S.; prohibiting an elected
   50         official eligible for membership in the Elected
   51         Officers’ Class from enrolling in Senior Management
   52         Service Class or Senior Management Service Optional
   53         Annuity Program; closing the Senior Management Service
   54         Optional Annuity Program to new members after a
   55         specified date; amending s. 121.091, F.S., relating to
   56         benefits payable under the Florida Retirement System;
   57         conforming provisions to changes made by the act;
   58         amending s. 121.151, F.S., relating to the investment
   59         of retirement funds; conforming provisions to changes
   60         made by the act; amending s. 121.35, F.S.; authorizing
   61         participants in the optional retirement program for
   62         the State University System to enroll in the cash
   63         balance plan as of a specified date; amending s.
   64         121.4501, F.S., relating to the Florida Retirement
   65         System Investment Plan; limiting the ability of
   66         members to enroll in the pension plan after a
   67         specified date; consolidating provisions relating to
   68         past plan elections; providing for certain employees
   69         enrolled in the pension or investment plan to transfer
   70         to the cash balance plan; providing for the
   71         administration of the cash balance plan; revising the
   72         education component to include the cash balance plan;
   73         making conforming changes; amending s. 121.70, F.S.,
   74         relating to legislative purposes for funding
   75         retirement benefits; conforming provisions to changes
   76         made by the act; amending s. 121.71, F.S., relating to
   77         the calculation of contribution rates; conforming
   78         provisions to changes made by the act; creating s.
   79         121.721, F.S.; establishing contribution rates for the
   80         cash balance plan; specifying how interest credit
   81         rates are to be calculated; amending s. 121.73, F.S.;
   82         expanding the section relating to allocations for
   83         disability coverage to also include coverage for
   84         members killed in the line of duty; conforming
   85         provisions to changes made by the act; amending s.
   86         121.74, F.S.; conforming provisions to changes made by
   87         the act; amending s. 121.76, F.S.; conforming a
   88         reference; amending s. 121.78, F.S.; revising
   89         provisions relating to the payment and distribution of
   90         contributions to accommodate members of the cash
   91         balance plan; amending s. 213.136, F.S.; conforming
   92         provisions to changes made by the act; amending ss.
   93         238.072, and 413.051, F.S.; conforming cross
   94         references; providing that the act fulfils an
   95         important state interest; adjusting the required
   96         employer contribution rates for the unfunded actuarial
   97         liability of the Florida Retirement System for select
   98         classes; providing a directive to the Division of Law
   99         Revision and Information; requiring the state board to
  100         request a determination letter from the Internal
  101         Revenue Service; providing an effective date.
  102          
  103  Be It Enacted by the Legislature of the State of Florida:
  104  
  105         Section 1. The Division of Law Revision and Information is
  106  directed to redesignate present part III of chapter 121, Florida
  107  Statutes, consisting of ss. 121.70-121.78, Florida Statutes, as
  108  part IV, and to create a new part III of chapter 121, Florida
  109  Statutes, consisting of ss. 121.601 and 121.602, Florida
  110  Statutes, to be entitled “Florida Retirement System Cash Balance
  111  Plan.”
  112         Section 2. Section 121.601, Florida Statutes, is created to
  113  read:
  114         121.601 Definitions.—As used in this part, the term:
  115         (1) “Active member” means a member who is actively employed
  116  by a participating employer.
  117         (2) “Annuity savings account” means the account maintained
  118  for member contributions.
  119         (3)“Approved provider” means a private sector company that
  120  is selected and approved by the state board to offer annuity
  121  products to the cash balance plan.
  122         (4) “Cash balance plan” means the Florida Retirement System
  123  Cash Balance Plan created under this part.
  124         (5) “Covered employment” means employment in a regularly
  125  established position as defined in s. 121.021(52).
  126         (6) “Covered position” means a position with a covered
  127  employer that is eligible for membership in the Florida
  128  Retirement System.
  129         (7) “De minimis account” means an account containing
  130  employer and employee contributions of up to $5,000 made under
  131  this chapter.
  132         (8) “Electronic means” means telephone transmission if the
  133  required information is received on a recorded line, or the
  134  Internet if the required information is captured online.
  135         (9) “Eligible employee” means an officer or employee, as
  136  defined in s. 121.021(11), who:
  137         (a) Is a member of, or is eligible for membership in, the
  138  Florida Retirement System, including a renewed member of the
  139  Florida Retirement System initially enrolled before July 1,
  140  2010; or
  141         (b) Participates in, or is eligible to participate in, the
  142  Senior Management Service Optional Annuity Program established
  143  under s. 121.055(6), the State Community College System Optional
  144  Retirement Program established under s. 121.051(2)(c), or the
  145  State University System Optional Retirement Program established
  146  under s. 121.35.
  147  
  148  The term does not include a member participating in the Deferred
  149  Retirement Option Program established under s. 121.091(13), a
  150  retiree of a state-administered retirement system initially
  151  reemployed in a regularly established position on or after July
  152  1, 2010, or a compulsory participant of the State University
  153  System Optional Retirement Program established under s. 121.35.
  154         (10) “Member” or “employee” means an eligible employee who
  155  enrolls in the cash balance plan as provided in this section, or
  156  a beneficiary or alternate payee of a member or employee.
  157         (11) “Member contributions” or “employee contributions”
  158  means the sum of all amounts deducted from the salary of a
  159  member by his or her employer in accordance with s. 121.71(3)
  160  and credited to his or her individual annuity savings account in
  161  the cash balance plan, plus any interest credits on such amounts
  162  and any contributions specified in s. 121.602(4), (5), and (6).
  163         (12) “Normal retirement age” means the date a member
  164  attains his or her normal retirement date as provided in this
  165  section, or the date a member is vested, whichever is later.
  166         (13)“Normal retirement date” means the date a member
  167  attains normal retirement age and is vested pursuant to this
  168  part.
  169         (14)“Quarter” means the 3-month period ending on the last
  170  business day of September, December, March, and June of each
  171  fiscal year.
  172         (15) “Retiree” means a former member of the cash balance
  173  plan who has terminated employment and taken a benefit as
  174  provided in s. 121.602(8), other than a mandatory distribution
  175  of a de minimis account authorized by the state board or a
  176  minimum required distribution provided pursuant to s. 401(a) of
  177  the Internal Revenue Code.
  178         (16) “Retirement annuity account” means the account
  179  established for the employer credits of a member.
  180         (17) “Terminated” or “termination” occurs when a member
  181  ceases all employment relationships with participating employers
  182  for 3 calendar months. However, if a member is employed by a
  183  participating employer within the next 6 calendar months,
  184  termination is deemed not to have occurred. A leave of absence
  185  constitutes a continuation of the employment relationship,
  186  except that a leave of absence without pay due to disability may
  187  constitute termination if such member applies for and is
  188  approved for disability retirement in accordance with s.
  189  121.602(9). The department or state board may require other
  190  evidence of termination as it deems necessary.
  191         (18) “Vested” or “vesting” means the guarantee that a
  192  member is eligible to receive a future retirement benefit upon
  193  completion of the required years of service for the employee’s
  194  class of membership even though the member may have terminated
  195  covered employment before reaching the normal or early
  196  retirement date. Under the cash balance plan, a member is deemed
  197  to be vested and to have met the required years of service after
  198  completing 5 years of creditable service.
  199         Section 3. Section 121.602, Florida Statutes, is created to
  200  read:
  201         121.602Florida Retirement System Cash Balance Plan.—
  202         (1)CREATION.—The Trustees of the State Board of
  203  Administration shall establish a cash balance program called the
  204  “Florida Retirement System Cash Balance Plan” for members of the
  205  Florida Retirement System under which retirement benefits will
  206  be provided for eligible employees who elect to participate in
  207  the plan.
  208         (a) The plan must be a qualified governmental plan pursuant
  209  to ss. 401(a) and 414(d) of the Internal Revenue Code and
  210  related regulations. Assets of the plan shall be held in trust
  211  for the Florida Retirement System. The employer and employee
  212  shall make contributions, as provided in this section and ss.
  213  121.571 and 121.71, to the Florida Retirement System Cash
  214  Balance Trust Fund for funding the benefits of the plan.
  215         (b) The state board shall establish a retirement annuity
  216  account for each member of the cash balance plan, which shall be
  217  credited with employer credits plus interest credits on the
  218  employer credits. The retirement annuity account shall be used
  219  to determine the amount of a lump-sum distribution or an annuity
  220  benefit for a vested member upon retirement as provided under
  221  this part.
  222         (c) The state board shall establish an annuity savings
  223  account for each member of the plan, which shall be credited
  224  with employee contributions plus interest credits on the
  225  employee contributions. For a vested member, the annuity savings
  226  account shall be used to fund the member’s lump-sum distribution
  227  or annuity benefits upon retirement.
  228         (d) The design and administration of the plan must comply
  229  with all applicable provisions of the Internal Revenue Code. The
  230  Legislature may amend the plan to comply with applicable federal
  231  laws and regulations.
  232         (2) RETIREMENT SERVICE CREDIT; TRANSFER OF BENEFITS.—
  233         (a) A member of the pension plan or the investment plan who
  234  is employed in a regularly established position with a
  235  participating employer may elect to:
  236         1. Retain membership in the pension plan or investment
  237  plan; or
  238         2. Make a one-time transfer to the cash balance plan at any
  239  time during his or her active career under the Florida
  240  Retirement System in which he or she is earning service credit
  241  in an employer-employee relationship consistent with s.
  242  121.021(17)(b), excluding leaves of absence without pay. Such
  243  election is effective the first day of the month following the
  244  receipt of the election by the third-party administrator and is
  245  not subject to requirements regarding an employer-employee
  246  relationship or receipt of contributions for the eligible
  247  employee in the effective month except when the election is
  248  received by the administrator. This one-time career transfer is
  249  irrevocable, and no other subsequent transfer is allowed.
  250         (b)A member who uses the one-time transfer under
  251  subparagraph (a)2. to enroll in the cash balance plan may elect
  252  to:
  253         1. Retain all service credit earned under the pension plan
  254  or the investment plan as credited under the Florida Retirement
  255  System and is entitled to a deferred benefit upon termination
  256  from the pension plan or investment plan. However, the election
  257  to enroll in the cash balance plan terminates the active
  258  membership of the member in the pension plan or investment plan,
  259  and the service of a member who has transferred to the cash
  260  balance plan is creditable for purposes of vesting only, and not
  261  creditable for purposes of benefit accrual under the pension
  262  plan or the investment plan; or
  263         2.Elect to transfer a sum representing the present value
  264  of the member’s accumulated benefit obligation under the pension
  265  plan or the value of the member’s investment plan account to the
  266  cash balance plan. Such election is effective the first day of
  267  the month following receipt of the election by the third-party
  268  administrator. Upon transfer, all service credit earned under
  269  the pension plan or investment plan is nullified for purposes of
  270  entitlement to a future benefit under the pension plan or
  271  investment plan. Any amount transferred, regardless of the
  272  original source of the contributions, shall be deemed to be
  273  employer credits in the cash balance plan.
  274         (c) If the eligible employee elects to transfer his or her
  275  accumulated benefit obligation to the cash balance plan under
  276  subparagraph (b)2., and:
  277         1. The employee is a member of the pension plan, the
  278  employee must transfer the present value of the accumulated
  279  benefit obligation under the pension plan.
  280         a. For purposes of this paragraph, the present value of the
  281  member’s accumulated benefit obligation is based upon the
  282  member’s estimated creditable service and estimated average
  283  final compensation under the pension plan, subject to
  284  recalculation under sub-subparagraph b. The actuarial present
  285  value of the member’s accumulated benefit obligation is based on
  286  the following:
  287         (I) The discount rate and other relevant actuarial
  288  assumptions used to value the Florida Retirement System Trust
  289  Fund at the time the amount to be transferred is determined,
  290  consistent with sub-sub-subparagraph (II).
  291         (II) The member’s benefit commencement age, based on the
  292  member’s estimated creditable service as of the estimate date.
  293         (A)Except as provided under sub-sub-sub-subparagraph (B),
  294  the benefit commencement age is the younger of the following,
  295  which may not be younger than the member’s age as of the
  296  estimate date:
  297         i.For a member initially enrolled before July 1, 2011, age
  298  62 or the age the member would attain if the member completed 30
  299  years of service with an employer, assuming that the member
  300  worked continuously from the estimate date, and disregarding any
  301  vesting requirement that would otherwise apply under the pension
  302  plan.
  303         ii.For a member enrolled on or after July 1, 2011, age 65
  304  or the age the member would attain if the member completed 33
  305  years of service with an employer, assuming that the member
  306  worked continuously from the estimate date, and disregarding any
  307  vesting requirement that would otherwise apply under the pension
  308  plan.
  309         (B) The benefit commencement age for members of the Special
  310  Risk Class and for members of the Special Risk Administrative
  311  Support Class entitled to retain the special risk normal
  312  retirement date is the younger of the following, which may not
  313  be younger than the member’s age as of the estimate date:
  314         i.For a member initially enrolled before July 1, 2011, age
  315  55 or the age the member would attain if the member completed 25
  316  years of service with an employer, assuming that the member
  317  worked continuously from the estimate date, and disregarding any
  318  vesting requirement that would otherwise apply under the pension
  319  plan.
  320         ii.For a member enrolled on or after July 1, 2011, age 60
  321  or the age the member would attain if the member completed 30
  322  years of service with an employer, assuming that the member
  323  worked continuously from the estimate date, and disregarding any
  324  vesting requirement that would otherwise apply under the pension
  325  plan.
  326         (III) The calculation disregards vesting requirements and
  327  early retirement reduction factors that would otherwise apply
  328  under the pension plan.
  329         b.The division shall recalculate the amount transferred
  330  under sub-subparagraph a. within 60 days after the actual
  331  transfer of funds based upon the member’s actual creditable
  332  service and actual final average compensation as of the initial
  333  date of participation in the cash balance plan. If the
  334  recalculated amount differs from the amount transferred by $10
  335  or more, the division shall:
  336         (I) Transfer from the Florida Retirement System Trust Fund
  337  to the member’s account the excess, if any, of the recalculated
  338  amount over the previously transferred amount plus any interest
  339  from the initial date of transfer to the date of transfer under
  340  this subparagraph, based upon the effective annual interest rate
  341  equal to the assumed return on the actuarial investment which
  342  was used in the most recent actuarial valuation of the system,
  343  compounded annually.
  344         (II) Transfer, or cause to be transferred, from the
  345  member’s account to the Florida Retirement System Trust Fund the
  346  excess, if any, of the previously transferred amount over the
  347  recalculated amount, plus any interest from the initial date of
  348  transfer to the date of transfer under this subparagraph, based
  349  upon a 6 percent effective annual interest rate, compounded
  350  annually, pro rata based on the member’s allocation under the
  351  cash balance plan.
  352         c. If contribution adjustments are made due to any employer
  353  errors or corrections, including plan corrections, following
  354  recalculation of the amount transferred under this subparagraph,
  355  the member is entitled to the additional contributions or is
  356  responsible for returning any excess contributions resulting
  357  from the correction. A return of such erroneous excess pretax
  358  contribution by the plan must be made within the period allowed
  359  by the Internal Revenue Service. The present value of the
  360  member’s accumulated benefit obligation may not be recalculated.
  361         2.The employee is a member of the investment plan, the
  362  employee must transfer the sum representing the account balance
  363  of the investment plan as of the transfer date.
  364         a. Upon receipt of the employee contributions from the
  365  member’s investment plan account, the contributions shall be
  366  credited to the annuity savings account of the member.
  367         b. Upon receipt of the employer contributions from the
  368  member’s investment plan account, the contributions shall be
  369  credited to the retirement annuity account of the member.
  370         c. Within 60 days after the transfer date, the third-party
  371  administrator shall transfer any residual contributions due to
  372  the member of the cash balance plan for the benefit of the
  373  member and credited to the retirement annuity account or the
  374  annuity savings account of the member, as applicable.
  375         d. If contribution adjustments are made due to employer
  376  errors or corrections, including plan corrections, following
  377  calculation of the amount transferred under this subparagraph,
  378  the member is entitled to the additional contributions or shall
  379  return any excess contributions resulting from the correction. A
  380  return of such erroneous excess pretax contribution by the plan
  381  must be made within the period allowed by the Internal Revenue
  382  Service.
  383         3. As directed by the member, the state board shall
  384  transfer the appropriate amounts to the cash balance plan within
  385  30 days after the effective date of the member’s participation
  386  in the cash balance plan, unless the major financial markets for
  387  securities available for a transfer are seriously disrupted by
  388  an unforeseen event that causes the suspension of trading on the
  389  national securities exchange in the country where the securities
  390  were issued. In that event, the 30-day period may be extended by
  391  a resolution of the board. Transfers are not commissionable or
  392  subject to other fees and may be in the form of securities or
  393  cash, as determined by the board. Such securities are valued as
  394  of the date of receipt in the member’s account.
  395         4. If the state board receives notification from the
  396  Internal Revenue Service that this paragraph or any portion of
  397  this paragraph will cause the Florida Retirement System, or a
  398  portion thereof, to be disqualified for tax purposes under the
  399  Internal Revenue Code, the portion that will cause the
  400  disqualification does not apply. Upon such notice, the board or
  401  the division shall notify the presiding officers of the
  402  Legislature.
  403         (3) PARTICIPATION; ENROLLMENT.—
  404         (a)An eligible employee who is initially employed on or
  405  after July 1, 2015, in a covered position eligible to
  406  participate in the Special Risk Class and who is earning service
  407  credit in an employer-employee relationship that is consistent
  408  with s. 121.021(17)(b), excluding leaves of absence without pay,
  409  shall be enrolled in the cash balance plan at the commencement
  410  of employment.
  411         1. The employee must elect to participate in the pension
  412  plan, cash balance plan, or investment plan by the last business
  413  day of the 8th month following the employee’s month of hire. The
  414  employee’s election must be in writing or by electronic means
  415  and filed with the third-party administrator.
  416         2. If the employee files such election within the
  417  prescribed time period, enrollment in the pension plan, cash
  418  balance plan, or the investment plan is effective on the 1st day
  419  of employment. The retirement contributions paid through the
  420  month of the employee plan change shall be transferred to the
  421  pension plan, cash balance plan, or investment plan, and,
  422  effective the 1st day of the next month, the employer and
  423  employee shall pay the applicable contributions based on the
  424  employee membership class in the plan.
  425         3. If the employee fails to make an election of the cash
  426  balance plan or investment plan by the last business day of the
  427  8th month following the employee’s month of hire, the employee
  428  is deemed to have elected the investment plan and will be
  429  defaulted into the investment plan retroactively to the
  430  employee’s date of employment.
  431         4. The amount of the employee and employer contributions
  432  paid before the default to the investment plan shall be
  433  transferred to the investment plan and placed in a default fund
  434  as designated by the state board. The employee may move the
  435  contributions once an account is activated in the investment
  436  plan.
  437         (b) An eligible employee who is initially employed on or
  438  after July 1, 2015, in a covered position eligible to
  439  participate in a class other than the Special Risk Class and who
  440  is earning service credit in an employer-employee relationship
  441  that is consistent with s. 121.021(17)(b), excluding leaves of
  442  absence without pay, shall be enrolled in the cash balance plan
  443  at the commencement of employment.
  444         1. The employee must elect to participate in the cash
  445  balance plan or the investment plan by the last business day of
  446  the 8th month following the employee’s month of hire. The
  447  employee’s election must be in writing or by electronic means
  448  and filed with the third-party administrator.
  449         2. If the employee files such election within the
  450  prescribed time period, enrollment in the cash balance plan or
  451  the investment plan is effective on the 1st day of employment.
  452  The retirement contributions paid through the month of the
  453  employee plan change shall be transferred to the cash balance
  454  plan or the investment plan, and, effective the 1st day of the
  455  next month, the employer and employee shall pay the applicable
  456  contributions based on the employee membership class in the
  457  plan.
  458         3. If the employee fails to make an election of the cash
  459  balance plan or investment plan by the last business day of the
  460  8th month following the employee’s month of hire, the employee
  461  is deemed to have elected the investment plan and will be
  462  defaulted into the investment plan retroactively to the
  463  employee’s date of employment.
  464         4. The amount of the employee and employer contributions
  465  paid before the default to the investment plan shall be
  466  transferred to the investment plan and placed in a default fund
  467  as designated by the state board. The employee may move the
  468  contributions once an account is activated in the investment
  469  plan.
  470         (c)An employee who becomes eligible to participate in the
  471  cash balance plan pursuant to s. 121.051(2)(c)3. or s.
  472  121.35(3)(i) may elect to participate in the cash balance plan
  473  in lieu of retaining his or her membership in the State
  474  Community College System Optional Retirement Program or the
  475  State University System Optional Retirement Program.
  476         1. The election must be made in writing or by electronic
  477  means and filed with the third-party administrator.
  478         2. Upon making such election, the employee shall be
  479  enrolled as a member of the cash balance plan, the employee’s
  480  membership in the Florida Retirement System shall be governed by
  481  this part, and the employee’s participation in the State
  482  Community College System Optional Retirement Program or the
  483  State University System Optional Retirement Program terminates.
  484         3. The employee’s enrollment in the cash balance plan is
  485  effective on the first day of the month for which a full month’s
  486  employer and employee contribution is made to the cash balance
  487  plan.
  488         (d) A retiree who is initially reemployed in a regularly
  489  established position on or after July 1, 2010, is not eligible
  490  to be enrolled in renewed membership in the Florida Retirement
  491  System except as provided in s. 121.122.
  492         (4) CONTRIBUTIONS AND CREDITS.—
  493         (a) The employee and employer shall make the required
  494  contributions to the cash balance plan based on a percentage of
  495  the employee’s gross monthly compensation, as provided in s.
  496  121.71.
  497         (b) Employee contributions shall be deposited into the
  498  annuity savings account of the member pursuant to s. 121.721,
  499  and employer contributions shall be deposited into the
  500  retirement savings account pursuant to s. 121.721.
  501         (c) A member may not make voluntary contributions to the
  502  cash balance plan.
  503         (d) The state board, acting as a fiduciary to the cash
  504  balance plan, must ensure that all plan assets are held in a
  505  trust pursuant to s. 401 of the Internal Revenue Code. The
  506  fiduciary must ensure that such contributions are allocated as
  507  follows:
  508         1. The employer and employee contribution portions
  509  earmarked for member retirement annuity and annuity savings
  510  accounts shall be credited to the appropriate account.
  511         2. The employer contribution portion earmarked for
  512  administrative and educational expenses shall be transferred to
  513  the Florida Retirement System Cash Balance Plan Trust Fund.
  514         3. The employer contribution portion earmarked for
  515  disability benefits shall be transferred to the Florida
  516  Retirement System Trust Fund.
  517         4. The employer contribution portions earmarked for
  518  amortization of the unfunded actuarial liability of the pension
  519  plan and the cash balance plan shall be transferred to the
  520  Florida Retirement System Trust Fund.
  521         (e) The third-party administrator shall monitor and notify
  522  employers of the maximum contribution levels allowed for members
  523  under the Internal Revenue Code. If a member contributes to any
  524  other tax-deferred plan, the member must ensure that total
  525  contributions made to the cash balance plan and to any other
  526  such plan do not exceed the federally allowed maximum.
  527         (5) ANNUITY SAVINGS ACCOUNT CREDITS.—A member’s annuity
  528  savings account is the sum of the member’s mandatory credits
  529  plus the interest credits on those credits.
  530         (a) The service credits shall be credited as provided in s.
  531  121.71 on a monthly basis.
  532         (b)The interest credits shall be credited as provided in
  533  s. 121.721. The Legislature reserves the right to prospectively
  534  change the interest credits.
  535         (c) The member’s annuity savings account is vested from the
  536  date the employee becomes a member of the cash balance plan.
  537         (6) EMPLOYER RETIREMENT ANNUITY CREDITS.—A member’s
  538  retirement annuity account is the sum of all employer credits to
  539  the account plus the interest credits on those credits.
  540         (a) The service credits shall be credited on a monthly
  541  basis as provided in s. 121.71.
  542         (b) The interest credits shall be credited as provided in
  543  s. 121.721. The Legislature expressly reserves the right to
  544  prospectively change the interest credits.
  545         (7) VESTING REQUIREMENTS.—
  546         (a) A member is fully and immediately vested in all
  547  employee credits plus interest credits paid to an annuity
  548  savings account as provided in subsection (5).
  549         (b) A member is vested in all employer credits plus
  550  interest credits paid to the retirement annuity account on
  551  behalf of the member as provided in subsection (6), upon
  552  completion of 5 years of creditable service.
  553         1.If a member has not vested in the member’s retirement
  554  annuity account at termination, has not withdrawn such member’s
  555  annuity savings account, and is reemployed as an eligible
  556  employee within 15 years after the member’s most recent
  557  termination, such member’s prior years of service, employer
  558  credits, and interest credits are restored upon reemployment.
  559         2.If a member has not vested in the member’s retirement
  560  annuity account at termination and has not withdrawn such
  561  member’s annuity savings account, but is not reemployed as an
  562  eligible employee within 15 years after the member’s most recent
  563  termination, any nonvested employer credits and interest
  564  credits, including accompanying service credit, are forfeited.
  565         (c)A member is vested in any benefits transferred from the
  566  pension plan or investment plan to the cash balance plan upon
  567  meeting the vesting requirements of the member’s membership
  568  class set forth in s. 121.021(45) or s. 121.4501(6), as
  569  applicable. The third-party administrator shall notify the
  570  member when the member has satisfied the vesting period.
  571         1.If a member has not vested in the benefit transferred
  572  from the pension plan or investment plan at termination of
  573  employment, has not withdrawn such member’s annuity savings
  574  account, and is reemployed as an eligible employee within 15
  575  years after such member’s most recent termination, the member’s
  576  prior years of service, employer credits, and interest credits
  577  are restored upon reemployment.
  578         2. If a member is not vested in the benefit transferred
  579  from the pension plan or investment plan at termination of
  580  employment, has not withdrawn such member’s annuity savings
  581  account, and is not reemployed as an eligible employee within 15
  582  years after such member’s most recent termination, such member’s
  583  prior years of service, employer credits, and interest credits
  584  shall be forfeited.
  585         (d) If the member elects to receive any of his or her
  586  vested annuity savings account upon termination of employment as
  587  provided in s. 121.021(39)(a), except for a mandatory
  588  distribution of a de minimis account authorized by the state
  589  board or a minimum required distribution provided under s.
  590  401(a)(9) of the Internal Revenue Code, the member shall forfeit
  591  all nonvested retirement annuity credits, interest credits, and
  592  accompanying service credit paid on behalf of the member to the
  593  cash balance plan.
  594         (8) BENEFITS PAYMENTS.—
  595         (a) Benefits may not be paid under the cash balance plan
  596  unless the member has terminated employment or is deceased and a
  597  proper application prescribed by the state board has been filed
  598  by the member or beneficiary.
  599         (b) If a member elects to receive his or her benefits upon
  600  termination of employment, the member must submit a written
  601  application or an application by electronic means to the third
  602  party administrator indicating his or her preferred benefit
  603  payment date and selecting an authorized method of benefit
  604  payment as provided in paragraph (d). The member may defer
  605  receipt of benefits until he or she chooses to make such
  606  application, subject to federal requirements.
  607         (c)The state board may cancel an application for
  608  retirement benefits if the member or beneficiary fails to timely
  609  provide the information and documents required by this chapter
  610  and the rules of the board. The state board shall adopt rules
  611  establishing procedures for the application for retirement
  612  benefits and for the cancellation of such application if the
  613  required information or documents are not received.
  614         (d) Upon receipt by the third-party administrator of a
  615  properly executed application for benefit payments, the total
  616  accumulated benefit is payable to the member pro rata across all
  617  Florida Retirement System benefit sources as:
  618         1. A lump-sum or partial benefit payment to the member;
  619         2. A lump-sum direct rollover benefit payment whereby all
  620  accrued benefits, plus interest credits, are paid from the
  621  member’s account directly to the custodian of an eligible
  622  retirement plan, as defined in s. 402(c)(8)(B) of the Internal
  623  Revenue Code, on behalf of the member;
  624         3.An annuity with a guaranteed benefit under any one of
  625  the options offered under the investment plan; or
  626         4.A combination of 1.-3.
  627         (e) The benefit payment method selected by the member or
  628  beneficiary, and the retirement of the member, are final and
  629  irrevocable at the time a benefit payment is cashed, deposited,
  630  or transferred to another financial institution. Any additional
  631  service that remains unclaimed at retirement may not be claimed
  632  or purchased, and the type of retirement may not be changed,
  633  except that if a member recovers from a disability, the member
  634  may subsequently request benefits under subsection (9).
  635         (f) Benefits in the form of vested accumulations as
  636  described in subsection (7) are payable in accordance with all
  637  of the following terms and conditions:
  638         1. Benefits are payable only to a member, an alternate
  639  payee of a qualified domestic relations order, or a beneficiary.
  640         2. Benefits shall be paid by the third-party administrator
  641  or designated approved providers in accordance with the law, the
  642  contracts, and any applicable state board rule or policy.
  643         3. The member must be terminated from all employment as
  644  provided in s. 121.021(39).
  645         4. Benefit payments may not be made until the member has
  646  been terminated for 3 calendar months.
  647         5.If a member or former member of the Florida Retirement
  648  System receives an invalid benefit payment, such person must
  649  repay the full amount within 90 days after receipt of final
  650  notification by the state board or the third-party administrator
  651  that the benefit payment was invalid, or, in lieu of repayment,
  652  the member must terminate employment from all participating
  653  employers.
  654         a. If the member or former member fails to repay the full
  655  invalid benefit payment within 90 days after receipt of final
  656  notification, the person may be deemed retired from the cash
  657  balance plan by the board and is subject to s. 121.122. If such
  658  person is deemed retired, any joint and several liability set
  659  out in s. 121.091(9)(d)2. is void, and the board, the
  660  department, or the employing agency is not liable for interest
  661  credits on contributions that have not been deposited into the
  662  person’s cash balance account in the cash balance plan, pending
  663  resolution of the invalid benefit payment.
  664         b. The member or former member who has been deemed retired
  665  or who has been determined by the board to have taken an invalid
  666  benefit payment may appeal the agency decision through the
  667  complaint process under s. 121.4501(8)(g). As used in this
  668  subparagraph, the term “invalid benefit payment” means any
  669  payment from an account in the cash balance plan which is taken
  670  in violation of this section or s. 121.091(9).
  671         (g) Benefits, including the annuity savings account, are
  672  not payable under the cash balance plan for employee hardships,
  673  unforeseeable emergencies, loans, medical expenses, educational
  674  expenses, purchase of a principal residence, payments necessary
  675  to prevent eviction from or foreclosure on an employee’s
  676  principal residence, or any other reason except a requested
  677  distribution for retirement, a mandatory de minimis account
  678  distribution authorized by the third-party administrator, or a
  679  required minimum distribution provided pursuant to the Internal
  680  Revenue Code.
  681         (h)The state board may cash out a de minimis account of a
  682  member who has been terminated from Florida Retirement System
  683  employment for a minimum of 6 calendar months. Such cash-out
  684  must be a complete lump-sum liquidation of the vested account
  685  balance, subject to the Internal Revenue Code, or a lump-sum
  686  direct rollover distribution paid directly to the custodian of
  687  an eligible retirement plan, as defined by the code, on behalf
  688  of the member.
  689         (i)If any instrument issued for the payment of retirement
  690  benefits under this section is not presented for payment within
  691  180 days after the last day of the month in which it was
  692  originally issued, the third-party administrator or other
  693  authorized agent of the state board shall cancel the instrument
  694  and credit the amount of the instrument to the Florida
  695  Retirement System Cash Balance Plan Trust Fund. Any amounts so
  696  credited to the trust fund, not including earnings thereon, are
  697  payable upon proper application as provided in this section
  698  within 10 years after the last day of the month in which the
  699  financial instrument was originally issued, after which time
  700  such amounts and any earnings attributable to employer
  701  retirement annuity credits are forfeited. Any forfeited amounts
  702  are assets of the trust fund and not subject to chapter 717.
  703         (j) A member may not receive a distribution of employee
  704  contributions if a pending qualified domestic relations order is
  705  filed against the member’s cash balance plan account.
  706         (k) The benefits payable to any person under the cash
  707  balance plan, and any contributions and credits accumulated
  708  under the plan, are not subject to assignment, execution,
  709  attachment, or any legal process, except for qualified domestic
  710  relations orders, income deduction orders as provided in s.
  711  61.1301, and federal income tax levies.
  712         (9) DISABILITY BENEFITS.—
  713         (a) For any member of the cash balance plan who becomes
  714  totally and permanently disabled, benefits must be paid in
  715  accordance with the following:
  716         1.The member may elect to receive benefits pursuant to s.
  717  121.591(2); or
  718         2.The member may elect to receive the vested balance of
  719  his or her cash balance annuity savings account and the vested
  720  balance of his or her retirement annuity account.
  721         (b) Pursuant to s. 121.73, an employer shall contribute a
  722  percentage of gross monthly compensation to provide disability
  723  coverage for active members in the cash balance plan.
  724         (10) DEATH BENEFITS.—Under the cash balance plan:
  725         (a) Survivor benefits of a deceased member are payable in
  726  accordance with the following terms and conditions:
  727         1. To the extent vested, benefits are payable only to a
  728  member’s beneficiary or beneficiaries as designated by the
  729  member as provided in subsection (11).
  730         2. Benefits shall be paid by the third-party administrator
  731  or designated approved providers in accordance with the law, the
  732  contracts, and any applicable rule or policy of the state board.
  733         (b) In the event of a member’s death, all vested
  734  accumulations as described in subsections (5) and (6), less
  735  withholding taxes remitted to the Internal Revenue Service,
  736  shall be distributed as provided in paragraph (c) or as
  737  described in subsection (8) as if the member retired on the date
  738  of death. No other death benefits are available for survivors of
  739  members, except for benefits, or coverage for benefits, as are
  740  otherwise provided by law or separately provided by the
  741  employer, at the employer’s discretion.
  742         (c) Upon receipt by the third-party administrator of a
  743  properly executed application for the distribution of benefits,
  744  the total accumulated benefit is payable by the administrator to
  745  the member’s surviving beneficiary or beneficiaries as:
  746         1. A lump-sum distribution payable to the beneficiary or
  747  beneficiaries as provided in subsection (11);
  748         2. An eligible rollover distribution, if allowed, on behalf
  749  of the surviving beneficiary of a deceased member, whereby all
  750  accrued benefits, plus interest credits, are paid from the
  751  deceased member’s account directly to the custodian of an
  752  eligible retirement plan, as described in s. 402(c)(8)(B) of the
  753  Internal Revenue Code, on behalf of the surviving beneficiary;
  754         3.An annuity with a guaranteed benefit under any one of
  755  the options offered under the investment plan; or
  756         4.A combination of 1.-3.
  757         (d) Notwithstanding any other provision of this chapter:
  758         1. The surviving spouse of any member killed in the line of
  759  duty may receive a monthly benefit equal to one-half of the
  760  monthly salary that was received by the member at the time of
  761  death for the rest of the surviving spouse’s lifetime if all
  762  service and interest credits that have accumulated in the
  763  member’s accounts are transferred to the pension plan; or, if
  764  the member had vested, the surviving spouse may elect to receive
  765  a benefit as provided in paragraph (c). Benefits provided by
  766  this paragraph supersede any other distribution that may have
  767  been provided by the member’s designation of beneficiary.
  768         2. If the surviving spouse of a member killed in the line
  769  of duty dies, the monthly payments that would have been payable
  770  to the surviving spouse had the surviving spouse lived shall be
  771  paid for the use and benefit of the member’s child or children
  772  younger than 18 years of age and unmarried until the 18th
  773  birthday of the member’s youngest child.
  774         3. If a member killed in the line of duty leaves no
  775  surviving spouse but is survived by a child or children younger
  776  than 18 years of age, the benefits normally payable to a
  777  surviving spouse under subparagraph 1. shall be paid for the use
  778  and benefit of the member’s child or children younger than 18
  779  years of age and unmarried until the 18th birthday of the
  780  member’s youngest child.
  781  
  782  This paragraph does not abrogate other applicable provisions of
  783  state or federal law providing for payment of death benefits.
  784         (11)DESIGNATION OF BENEFICIARIES.—Section 121.4501(20)
  785  governs the designation of beneficiaries for the cash balance
  786  plan.
  787         (12)PURCHASE OF CREDITABLE SERVICE.—
  788         (a) Creditable service of a member includes military
  789  service in the Armed Forces of the United States as provided
  790  under s. 121.111(1).
  791         (b) A member may purchase creditable service for up to 2
  792  work years of authorized leaves of absence, including any leaves
  793  of absence covered under the Family Medical Leave Act as
  794  provided under s. 121.121.
  795         (c) Except as provided in this subsection, no other service
  796  for periods of employment may be purchased by or on behalf of a
  797  member.
  798         (13) RETIREE HEALTH INSURANCE SUBSIDY.—All eligible
  799  employees who are members of the cash balance plan are eligible
  800  to receive the retiree health insurance subsidy, subject to s.
  801  112.363.
  802         (14) SOCIAL SECURITY COVERAGE.—Social security coverage
  803  shall be provided for all eligible employees who become members
  804  of the cash balance plan. Any modification of the present
  805  agreement with the Social Security Administration, or referendum
  806  required under the Social Security Act, for the purpose of
  807  providing social security coverage for a member shall be
  808  requested by the state agency in compliance with the applicable
  809  provisions of the Social Security Act. However, retroactive
  810  social security coverage for service with the employer before
  811  December 1, 1970, may not be provided for a member who was not
  812  covered under the agreement as of November 30, 1970.
  813         (15) CASH BALANCE PLAN EDUCATION.—Section 121.4501(10)
  814  governs the education of members who are in the cash balance
  815  plan.
  816         (16) MEMBER INFORMATION REQUIREMENTS.—Each quarter the
  817  state board shall provide each member of the cash balance plan a
  818  quarterly statement of benefits which provides the member with
  819  basic data about the member’s retirement account. At a minimum,
  820  the statement must include:
  821         (a)The member’s accrued service credit;
  822         (b)The member’s balance of the retirement annuity account
  823  and the annuity savings account at the close of the current
  824  quarter and previous quarter;
  825         (c)Itemized account contributions for the quarter;
  826         (d)Any posted interest credits earned on the account;
  827         (e)The amount of the account in which the member is fully
  828  vested; and
  829         (f)The amount of the account in which the member is not
  830  fully vested.
  831         (17) FEDERAL REQUIREMENTS.—
  832         (a) This section shall be construed, and the cash balance
  833  plan shall be administered, so as to comply with the Internal
  834  Revenue Code and specifically with plan qualification
  835  requirements imposed on governmental plans under 26 U.S.C. s.
  836  401(a) of the code. The state board may adopt rules reasonably
  837  necessary to establish or maintain the qualified status of the
  838  cash balance plan under the Internal Revenue Code and to
  839  implement and administer the plan in compliance with the code
  840  and as designated under this part; however, the state board may
  841  not adopt any rule that makes a substantive change to the cash
  842  balance plan as designed under this part.
  843         (b) Any provision of this chapter which is susceptible to
  844  more than one construction shall be interpreted in favor of the
  845  construction most likely to satisfy requirements imposed by s.
  846  401(a) of the Internal Revenue Code.
  847         (c) Credits payable under this section for any limitation
  848  year may not exceed the maximum amount allowable for qualified
  849  cash balance plans under applicable provisions of the Internal
  850  Revenue Code. If an employee who is enrolled in the cash balance
  851  plan participates in any other plan that is maintained by the
  852  participating employer, benefits that accrue under the cash
  853  balance plan are considered primary for any aggregate limitation
  854  applicable under s. 415 of the code.
  855         (18) CASH BALANCE PLAN ADMINISTRATION.—Section 121.4501(8)
  856  also governs the administration of the cash balance plan.
  857         (19) STATEMENT OF FIDUCIARY STANDARDS AND
  858  RESPONSIBILITIES.—Investment of cash balance plan assets shall
  859  be made for the sole interest and exclusive purpose of providing
  860  benefits to members and beneficiaries and defraying reasonable
  861  expenses of administering the plan. The plan’s assets shall be
  862  invested on behalf of the plan members with the care, skill, and
  863  diligence that a prudent person acting in a like manner would
  864  undertake. The performance of the investment duties specified in
  865  this subsection must comply with the fiduciary standards set
  866  forth in the Employee Retirement Income Security Act of 1974 at
  867  29 U.S.C. s. 1104(a)(1)(A)-(C). In case of conflict with other
  868  provisions of law authorizing investments, the investment and
  869  fiduciary standards specified in this subsection prevail.
  870         (20) ACTUARIAL STUDY.Pursuant to s. 121.031, an annual
  871  actuarial valuation and appraisal of the liability of the cash
  872  balance plan shall be conducted, and the required credits
  873  necessary to discharge any liability and maintain the plan on an
  874  actuarial reserve basis shall be provided to the Legislature by
  875  December 31 before the next legislative session. Such study
  876  shall be conducted by a qualified actuary employed or retained
  877  by the state board.
  878         (21)INVESTMENT ADVISORY COUNCIL.—The Investment Advisory
  879  Council, created pursuant to s. 215.444, shall make
  880  recommendations to the board regarding investment policy,
  881  strategy, and procedures for the cash balance plan.
  882         (22) INVESTMENT POLICY STATEMENT.—In making investments for
  883  the cash balance plan pursuant to ss. 215.44-215.53, the board
  884  may not make investments that are not in conformance with the
  885  Florida Retirement System Cash Balance Plan Investment Policy
  886  Statement (IPS) as developed by the executive director and
  887  approved by the board. The IPS must, at a minimum, include the
  888  investment objectives of the Cash Balance Plan Trust Fund, types
  889  of securities in which the board may invest, and evaluation
  890  criteria for measuring the investment performance of the fund.
  891         (a) The executive director of the board may present
  892  recommended changes to the IPS, as necessary, for the board’s
  893  approval.
  894         (b) The executive director shall first present the proposed
  895  IPS and any subsequent recommended changes to the approved IPS
  896  to the Investment Advisory Council for review. The council shall
  897  present the results of its review to the board before the
  898  board’s final approval of the IPS or changes in the IPS.
  899         Section 4. Paragraph (b) of subsection (2) of section
  900  112.363, Florida Statutes, is amended to read:
  901         112.363 Retiree health insurance subsidy.—
  902         (2) ELIGIBILITY FOR RETIREE HEALTH INSURANCE SUBSIDY.—
  903         (b) For purposes of this section, a person is deemed
  904  retired from a state-administered retirement system when he or
  905  she terminates employment with all employers participating in
  906  the Florida Retirement System as described in s. 121.021(39)
  907  and:
  908         1. For a member of the investment plan established under
  909  part II of chapter 121, the member participant meets the age or
  910  service requirements to qualify for normal retirement as set
  911  forth in s. 121.021(29) and meets the definition of retiree in
  912  s. 121.4501(2).
  913         2. For a member of the Florida Retirement System pension
  914  plan established under part I of chapter 121, or an any employee
  915  who maintains creditable service under both the pension plan and
  916  the investment plan or under both the pension plan and the cash
  917  balance plan, the member begins drawing retirement benefits from
  918  the pension plan.
  919         3.For a member of the cash balance plan established under
  920  part III of chapter 121, the member meets the age or service
  921  requirements to qualify for normal retirement as set forth in s.
  922  121.021(29) and meets the definition of retiree in s. 121.601.
  923         4. For a member of both the investment plan and the cash
  924  balance plan, the member meets the definition of retiree in s.
  925  121.601 and begins drawing benefits from the cash balance plan.
  926         Section 5. Paragraph (h) of subsection (3) of section
  927  121.011, Florida Statutes, is amended to read:
  928         121.011 Florida Retirement System.—
  929         (3) PRESERVATION OF RIGHTS.—
  930         (h) Effective July 1, 2011, the retirement system shall
  931  require employer and employee contributions as provided in s.
  932  121.071 and part IV III of this chapter.
  933         Section 6. Section 121.012, Florida Statutes, is amended to
  934  read:
  935         121.012 Inclusive provisions.—The provisions of part I of
  936  this chapter apply shall be applicable to parts II, and III, and
  937  IV to the extent such provisions are not inconsistent with, or
  938  duplicative of, the provisions of parts II, and III, and IV.
  939         Section 7. Subsection (3) of section 121.021, Florida
  940  Statutes, is amended to read:
  941         121.021 Definitions.—The following words and phrases as
  942  used in this chapter have the respective meanings set forth
  943  unless a different meaning is plainly required by the context:
  944         (3) “Florida Retirement System” or “system” means the
  945  general retirement system established by this chapter,
  946  including, but not limited to:,
  947         (a) The defined benefit program administered under this
  948  part, referred to as the “Florida Retirement System Pension
  949  Plan” or “pension plan,; and
  950         (b) The defined contribution program administered under
  951  part II of this chapter, referred to as the “Florida Retirement
  952  System Investment Plan” or “investment plan.; and
  953         (c) The cash balance program established under part III of
  954  this chapter, referred to as the “Florida Retirement System Cash
  955  Balance Plan” or “cash balance plan.”
  956         Section 8. Paragraph (c) of subsection (2) of section
  957  121.051, Florida Statutes, is amended, present subsections (3)
  958  through (9) of that section are redesignated as subsections (4)
  959  through (10), and a new subsection (3) is added to that section,
  960  to read:
  961         121.051 Participation in the system.—
  962         (2) OPTIONAL PARTICIPATION.—
  963         (c) Employees of public community colleges or charter
  964  technical career centers sponsored by public community colleges,
  965  designated in s. 1000.21(3), who are members of the Regular
  966  Class of the Florida Retirement System and who comply with the
  967  criteria set forth in this paragraph and s. 1012.875 may, in
  968  lieu of participating in the Florida Retirement System, elect to
  969  withdraw from the system altogether and participate in the State
  970  Community College System Optional Retirement Program provided by
  971  the employing agency under s. 1012.875.
  972         1.a. Through June 30, 2001, the cost to the employer for
  973  benefits under the optional retirement program equals the normal
  974  cost portion of the employer retirement contribution which would
  975  be required if the employee were a member of the pension plan’s
  976  Regular Class, plus the portion of the contribution rate
  977  required by s. 112.363(8) which would otherwise be assigned to
  978  the Retiree Health Insurance Subsidy Trust Fund.
  979         b. Effective July 1, 2001, through June 30, 2011, each
  980  employer shall contribute on behalf of each member of the
  981  optional program an amount equal to 10.43 percent of the
  982  employee’s gross monthly compensation. The employer shall deduct
  983  an amount for the administration of the program.
  984         c. Effective July 1, 2011, through June 30, 2012, each
  985  member shall contribute an amount equal to the employee
  986  contribution required under s. 121.71(3). The employer shall
  987  contribute on behalf of each program member an amount equal to
  988  the difference between 10.43 percent of the employee’s gross
  989  monthly compensation and the employee’s required contribution
  990  based on the employee’s gross monthly compensation.
  991         d. Effective July 1, 2012, each member shall contribute an
  992  amount equal to the employee contribution required under s.
  993  121.71(3). The employer shall contribute on behalf of each
  994  program member an amount equal to the difference between 8.15
  995  percent of the employee’s gross monthly compensation and the
  996  employee’s required contribution based on the employee’s gross
  997  monthly compensation.
  998         e. The employer shall contribute an additional amount to
  999  the Florida Retirement System Trust Fund equal to the unfunded
 1000  actuarial accrued liability portion of the Regular Class
 1001  contribution rate.
 1002         2. The decision to participate in the optional retirement
 1003  program is irrevocable as long as the employee holds a position
 1004  eligible for participation, except as provided in subparagraph
 1005  3. Any service creditable under the Florida Retirement System is
 1006  retained after the member withdraws from the system; however,
 1007  additional service credit in the system may not be earned while
 1008  a member of the optional retirement program.
 1009         3. Effective July 1, 2003, through June 30, 2015, an
 1010  employee who has elected to participate in the optional
 1011  retirement program shall have one opportunity, at the employee’s
 1012  discretion, to transfer from the optional retirement program to
 1013  the pension plan under this part of the Florida Retirement
 1014  System or to the investment plan established under part II of
 1015  this chapter, subject to the terms of the applicable optional
 1016  retirement program contracts. Except as provided in subsection
 1017  (3), an employee participating in the optional retirement
 1018  program on or after July 1, 2015, is not eligible to transfer to
 1019  the Florida Retirement System.
 1020         a. If the employee chooses to move to the investment plan,
 1021  any contributions, interest, and earnings creditable to the
 1022  employee under the optional retirement program are retained by
 1023  the employee in the optional retirement program, and the
 1024  applicable provisions of s. 121.4501(4) govern the election.
 1025         b. If the employee chooses to move to the pension plan of
 1026  the Florida Retirement System, the employee shall receive
 1027  service credit equal to his or her years of service under the
 1028  optional retirement program.
 1029         (I) The cost for such credit is the amount representing the
 1030  present value of the employee’s accumulated benefit obligation
 1031  for the affected period of service. The cost shall be calculated
 1032  as if the benefit commencement occurs on the first date the
 1033  employee becomes eligible for unreduced benefits, using the
 1034  discount rate and other relevant actuarial assumptions that were
 1035  used to value the Florida Retirement System Pension Plan
 1036  liabilities in the most recent actuarial valuation. The
 1037  calculation must include any service already maintained under
 1038  the pension plan in addition to the years under the optional
 1039  retirement program. The present value of any service already
 1040  maintained must be applied as a credit to total cost resulting
 1041  from the calculation. The division must ensure that the transfer
 1042  sum is prepared using a formula and methodology certified by an
 1043  enrolled actuary.
 1044         (II) The employee shall must transfer from his or her
 1045  optional retirement program account and from other employee
 1046  moneys as necessary, a sum representing the present value of the
 1047  employee’s accumulated benefit obligation immediately following
 1048  the time of such movement, determined assuming that attained
 1049  service equals the sum of service in the pension plan and
 1050  service in the optional retirement program.
 1051         4. Participation in the optional retirement program is
 1052  limited to employees who satisfy the following eligibility
 1053  criteria:
 1054         a. The employee is otherwise eligible for membership or
 1055  renewed membership in the Regular Class of the Florida
 1056  Retirement System, as provided in s. 121.021(11) and (12) or s.
 1057  121.122.
 1058         b. The employee is employed in a full-time position
 1059  classified in the Accounting Manual for Florida’s Public
 1060  Community Colleges as:
 1061         (I) Instructional; or
 1062         (II) Executive Management, Instructional Management, or
 1063  Institutional Management and the community college determines
 1064  that recruiting to fill a vacancy in the position is to be
 1065  conducted in the national or regional market, and the duties and
 1066  responsibilities of the position include the formulation,
 1067  interpretation, or implementation of policies, or the
 1068  performance of functions that are unique or specialized within
 1069  higher education and that frequently support the mission of the
 1070  community college.
 1071         c. The employee is employed in a position not included in
 1072  the Senior Management Service Class of the Florida Retirement
 1073  System as described in s. 121.055.
 1074         5. Members of the program are subject to the same
 1075  reemployment limitations, renewed membership provisions, and
 1076  forfeiture provisions applicable to regular members of the
 1077  Florida Retirement System under ss. 121.091(9), 121.122, and
 1078  121.091(5), respectively. A member who receives a program
 1079  distribution funded by employer and required employee
 1080  contributions is deemed to be retired from a state-administered
 1081  retirement system if the member is subsequently employed with an
 1082  employer that participates in the Florida Retirement System.
 1083         6. Eligible community college employees are compulsory
 1084  members of the Florida Retirement System until, pursuant to s.
 1085  1012.875, a written election to withdraw from the system and
 1086  participate in the optional retirement program is filed with the
 1087  program administrator and received by the division.
 1088         a. A community college employee whose program eligibility
 1089  results from initial employment shall be enrolled in the
 1090  optional retirement program retroactive to the first day of
 1091  eligible employment. The employer and employee retirement
 1092  contributions paid through the month of the employee plan change
 1093  shall be transferred to the community college to the employee’s
 1094  optional program account, and, effective the first day of the
 1095  next month, the employer shall pay the applicable contributions
 1096  based upon subparagraph 1.
 1097         b. A community college employee whose program eligibility
 1098  is due to the subsequent designation of the employee’s position
 1099  as one of those specified in subparagraph 4., or due to the
 1100  employee’s appointment, promotion, transfer, or reclassification
 1101  to a position specified in subparagraph 4., must be enrolled in
 1102  the program on the first day of the first full calendar month
 1103  that such change in status becomes effective. The employer and
 1104  employee retirement contributions paid from the effective date
 1105  through the month of the employee plan change must be
 1106  transferred to the community college to the employee’s optional
 1107  program account, and, effective the first day of the next month,
 1108  the employer shall pay the applicable contributions based upon
 1109  subparagraph 1.
 1110         7. Effective July 1, 2003, through December 31, 2008, any
 1111  member of the optional retirement program who has service credit
 1112  in the pension plan of the Florida Retirement System for the
 1113  period between his or her first eligibility to transfer from the
 1114  pension plan to the optional retirement program and the actual
 1115  date of transfer may, during employment, transfer to the
 1116  optional retirement program a sum representing the present value
 1117  of the accumulated benefit obligation under the defined benefit
 1118  retirement program for the period of service credit. Upon
 1119  transfer, all service credit previously earned under the pension
 1120  plan during this period is nullified for purposes of entitlement
 1121  to a future benefit under the pension plan.
 1122         (3) OPTIONAL PLAN MEMBERSHIP IN FLORIDA RETIREMENT SYSTEM.—
 1123         (a) Effective July 1, 2015, all eligible employees, except
 1124  those eligible to withdraw from the Florida Retirement System
 1125  under s. 121.052(3)(d) or s. 121.055(1)(b)2. or those eligible
 1126  for optional retirement programs under s. 121.051(1)(a), s.
 1127  121.051(2)(c), or s. 121.35, who initially enrolled on or after
 1128  July 1, 2015, are not eligible to enroll in the pension plan.
 1129         (b) Employees eligible to withdraw from the Florida
 1130  Retirement System under s. 121.052(3)(d) or s. 121.055(1)(b)2.
 1131  may withdraw from the system or participate in the investment
 1132  plan or the cash balance plan as provided under those sections.
 1133  Employees eligible for optional retirement programs under s.
 1134  121.051(2)(c) or s. 121.35 may participate in the optional
 1135  retirement program, the investment plan, or the cash balance
 1136  plan as provided under those sections. Eligible employees
 1137  required to participate in the optional retirement program under
 1138  s. 121.35 pursuant to s. 121.051(1)(a) must elect to participate
 1139  in the investment plan or the cash balance plan if employed in a
 1140  position not eligible for the optional retirement program.
 1141         Section 9. Paragraph (c) of subsection (3) of section
 1142  121.052, Florida Statutes, is amended to read:
 1143         121.052 Membership class of elected officers.—
 1144         (3) PARTICIPATION AND WITHDRAWAL, GENERALLY.—Effective July
 1145  1, 1990, participation in the Elected Officers’ Class shall be
 1146  compulsory for elected officers listed in paragraphs (2)(a)-(d)
 1147  and (f) assuming office on or after said date, unless the
 1148  elected officer elects membership in another class or withdraws
 1149  from the Florida Retirement System as provided in paragraphs
 1150  (3)(a)-(d):
 1151         (c) Before July 1, 2015, an any elected officer may, within
 1152  6 months after assuming office, or within 6 months after this
 1153  act becomes a law for serving elected officers, elect membership
 1154  in the Senior Management Service Class as provided in s. 121.055
 1155  in lieu of membership in the Elected Officers’ Class. Any Such
 1156  election does not affect made by a county elected officer shall
 1157  have no effect upon the statutory limit on the number of
 1158  nonelective full-time positions that may be designated by a
 1159  local agency employer for inclusion in the Senior Management
 1160  Service Class under s. 121.055(1)(b)1.
 1161         Section 10. Paragraph (f) of subsection (1) and paragraph
 1162  (c) of subsection (6) of section 121.055, Florida Statutes, are
 1163  amended to read:
 1164         121.055 Senior Management Service Class.—There is hereby
 1165  established a separate class of membership within the Florida
 1166  Retirement System to be known as the “Senior Management Service
 1167  Class,” which shall become effective February 1, 1987.
 1168         (1)
 1169         (f) Effective July 1, 1997, through June 30, 2015:
 1170         1. Except as provided in subparagraphs subparagraph 3. and
 1171  4., an elected state officer eligible for membership in the
 1172  Elected Officers’ Class under s. 121.052(2)(a), (b), or (c) who
 1173  elects membership in the Senior Management Service Class under
 1174  s. 121.052(3)(c) may, within 6 months after assuming office or
 1175  within 6 months after this act becomes a law for serving elected
 1176  state officers, elect to participate in the Senior Management
 1177  Service Optional Annuity Program, as provided in subsection (6),
 1178  in lieu of membership in the Senior Management Service Class.
 1179         2. Except as provided in subparagraphs subparagraph 3. and
 1180  4., an elected officer of a local agency employer eligible for
 1181  membership in the Elected Officers’ Class under s. 121.052(2)(d)
 1182  who elects membership in the Senior Management Service Class
 1183  under s. 121.052(3)(c) may, within 6 months after assuming
 1184  office, or within 6 months after this act becomes a law for
 1185  serving elected officers of a local agency employer, elect to
 1186  withdraw from the Florida Retirement System, as provided in
 1187  subparagraph (b)2., in lieu of membership in the Senior
 1188  Management Service Class.
 1189         3. A retiree of a state-administered retirement system who
 1190  is initially reemployed in a regularly established position on
 1191  or after July 1, 2010, as an elected official eligible for the
 1192  Elected Officers’ Class may not be enrolled in renewed
 1193  membership in the Senior Management Service Class or in the
 1194  Senior Management Service Optional Annuity Program as provided
 1195  in subsection (6), and may not withdraw from the Florida
 1196  Retirement System as a renewed member as provided in
 1197  subparagraph (b)2., as applicable, in lieu of membership in the
 1198  Senior Management Service Class.
 1199         4. On or after July 1, 2015, an elected officer eligible
 1200  for membership in the Elected Officers’ Class may not be
 1201  enrolled in the Senior Management Service Class or in the Senior
 1202  Management Service Optional Annuity Program except as provided
 1203  in subsection (6).
 1204         (6)
 1205         (c) Participation.—
 1206         1. An eligible employee who is employed on or before
 1207  February 1, 1987, may elect to participate in the optional
 1208  annuity program in lieu of participating in the Senior
 1209  Management Service Class. Such election must be made in writing
 1210  and filed with the department and the personnel officer of the
 1211  employer on or before May 1, 1987. An eligible employee who is
 1212  employed on or before February 1, 1987, and who fails to make an
 1213  election to participate in the optional annuity program by May
 1214  1, 1987, shall be deemed to have elected membership in the
 1215  Senior Management Service Class.
 1216         2. Except as provided in subparagraph 6., an employee who
 1217  becomes eligible to participate in the optional annuity program
 1218  by reason of initial employment commencing after February 1,
 1219  1987, may, within 90 days after the date of commencing
 1220  employment, elect to participate in the optional annuity
 1221  program. Such election must be made in writing and filed with
 1222  the personnel officer of the employer. An eligible employee who
 1223  does not within 90 days after commencing employment elect to
 1224  participate in the optional annuity program shall be deemed to
 1225  have elected membership in the Senior Management Service Class.
 1226         3. A person who is appointed to a position in the Senior
 1227  Management Service Class and who is a member of an existing
 1228  retirement system or the Special Risk or Special Risk
 1229  Administrative Support Classes of the Florida Retirement System
 1230  may elect to remain in such system or class in lieu of
 1231  participating in the Senior Management Service Class or optional
 1232  annuity program. Such election must be made in writing and filed
 1233  with the department and the personnel officer of the employer
 1234  within 90 days after such appointment. An eligible employee who
 1235  fails to make an election to participate in the existing system,
 1236  the Special Risk Class of the Florida Retirement System, the
 1237  Special Risk Administrative Support Class of the Florida
 1238  Retirement System, or the optional annuity program shall be
 1239  deemed to have elected membership in the Senior Management
 1240  Service Class.
 1241         4. Except as provided in subparagraph 5., an employee’s
 1242  election to participate in the optional annuity program is
 1243  irrevocable if the employee continues to be employed in an
 1244  eligible position and continues to meet the eligibility
 1245  requirements set forth in this paragraph.
 1246         5. Effective from July 1, 2002, through September 30, 2002,
 1247  an active employee in a regularly established position who has
 1248  elected to participate in the Senior Management Service Optional
 1249  Annuity Program has one opportunity to choose to move from the
 1250  Senior Management Service Optional Annuity Program to the
 1251  Florida Retirement System Pension Plan.
 1252         a. The election must be made in writing and must be filed
 1253  with the department and the personnel officer of the employer
 1254  before October 1, 2002, or, in the case of an active employee
 1255  who is on a leave of absence on July 1, 2002, within 90 days
 1256  after the conclusion of the leave of absence. This election is
 1257  irrevocable.
 1258         b. The employee shall receive service credit under the
 1259  pension plan equal to his or her years of service under the
 1260  Senior Management Service Optional Annuity Program. The cost for
 1261  such credit is the amount representing the present value of that
 1262  employee’s accumulated benefit obligation for the affected
 1263  period of service.
 1264         c. The employee must transfer the total accumulated
 1265  employer contributions and earnings on deposit in his or her
 1266  Senior Management Service Optional Annuity Program account. If
 1267  the transferred amount is not sufficient to pay the amount due,
 1268  the employee must pay a sum representing the remainder of the
 1269  amount due. The employee may not retain any employer
 1270  contributions or earnings from the Senior Management Service
 1271  Optional Annuity Program account.
 1272         6. A retiree of a state-administered retirement system who
 1273  is initially reemployed on or after July 1, 2010, may not renew
 1274  membership in the Senior Management Service Optional Annuity
 1275  Program.
 1276         7. Effective July 1, 2015, the Senior Management Service
 1277  Optional Annuity Program is closed to new members. Members
 1278  enrolled in the program before July 1, 2015, may retain their
 1279  membership in the program.
 1280         Section 11. Paragraph (d) of subsection (9) of section
 1281  121.091, Florida Statutes, is amended to read:
 1282         121.091 Benefits payable under the system.—Benefits may not
 1283  be paid under this section unless the member has terminated
 1284  employment as provided in s. 121.021(39)(a) or begun
 1285  participation in the Deferred Retirement Option Program as
 1286  provided in subsection (13), and a proper application has been
 1287  filed in the manner prescribed by the department. The department
 1288  may cancel an application for retirement benefits when the
 1289  member or beneficiary fails to timely provide the information
 1290  and documents required by this chapter and the department’s
 1291  rules. The department shall adopt rules establishing procedures
 1292  for application for retirement benefits and for the cancellation
 1293  of such application when the required information or documents
 1294  are not received.
 1295         (9) EMPLOYMENT AFTER RETIREMENT; LIMITATION.—
 1296         (d) This subsection applies to a retiree retirees, as
 1297  defined in s. 121.4501(2), of the Florida Retirement System
 1298  Investment Plan and s. 121.601 of the Florida Retirement System
 1299  Cash Balance Plan, subject to the following conditions:
 1300         1. A retiree may not be reemployed with an employer
 1301  participating in the Florida Retirement System until such person
 1302  has been retired for 6 calendar months.
 1303         2. A retiree employed in violation of this subsection and
 1304  an employer that employs or appoints such person are jointly and
 1305  severally liable for reimbursement of any benefits paid to the
 1306  retirement trust fund from which the benefits were paid. The
 1307  employer must have a written statement from the retiree that he
 1308  or she is not retired from a state-administered retirement
 1309  system.
 1310         Section 12. Section 121.151, Florida Statutes, is amended
 1311  to read:
 1312         121.151 Investments.—The Board of Administration, created
 1313  by authority of the State Constitution, shall invest and
 1314  reinvest available funds of the System Trust Fund and the
 1315  Florida Retirement System Cash Balance Plan Trust Fund in
 1316  accordance with the provisions of ss. 215.44-215.53.
 1317         Section 13. Paragraph (c) of subsection (3) of section
 1318  121.35, Florida Statutes, is amended to read:
 1319         121.35 Optional retirement program for the State University
 1320  System.—
 1321         (3) ELECTION OF OPTIONAL PROGRAM.—
 1322         (c) An Any employee who becomes eligible to participate in
 1323  the optional retirement program on or after January 1, 1993,
 1324  shall be a compulsory participant of the program unless such
 1325  employee elects membership in the Florida Retirement System.
 1326  Such election must shall be made in writing and filed with the
 1327  personnel officer of the employer. An Any eligible employee who
 1328  fails to make such election within the prescribed time period
 1329  shall be deemed to have elected to participate in the optional
 1330  retirement program.
 1331         1. An Any employee whose optional retirement program
 1332  eligibility results from initial employment before July 1, 2015,
 1333  shall be enrolled in the program at the commencement of
 1334  employment. If, within 90 days after commencement of employment,
 1335  the employee elects membership in the Florida Retirement System,
 1336  such membership is shall be effective retroactive to the date of
 1337  commencement of employment as provided in s. 121.4501(4).
 1338         2. An employee whose optional retirement program
 1339  eligibility results from initial employment on or after July 1,
 1340  2015, shall be enrolled in the program at the commencement of
 1341  employment. If, within 90 days after commencement of employment,
 1342  the employee elects membership in the Florida Retirement System,
 1343  such membership is effective retroactive to the date of
 1344  commencing employment as provided in s. 121.602(3).
 1345         3.2.An Any employee whose optional retirement program
 1346  eligibility results from a change in status due to the
 1347  subsequent designation of the employee’s position as one of
 1348  those specified in paragraph (2)(a) or due to the employee’s
 1349  appointment, promotion, transfer, or reclassification to a
 1350  position specified in paragraph (2)(a) shall be enrolled in the
 1351  optional retirement program upon such change in status and shall
 1352  be notified by the employer of such action. If, within 90 days
 1353  after the date of such notification, the employee elects to
 1354  retain membership in the Florida Retirement System, such
 1355  continuation of membership is shall be retroactive to the date
 1356  of the change in status.
 1357         4.3. Notwithstanding subparagraphs 1., 2., and 3. the
 1358  provisions of this paragraph, effective July 1, 1997, an any
 1359  employee who is eligible to participate in the Optional
 1360  Retirement Program and who fails to execute a contract with one
 1361  of the approved companies and to notify the department in
 1362  writing as provided in subsection (4) within 90 days after the
 1363  date of eligibility shall be deemed to have elected membership
 1364  in the Florida Retirement System, except as provided in s.
 1365  121.051(1)(a). This provision shall also applies apply to an any
 1366  employee who terminates employment in an eligible position
 1367  before executing the required investment annuity contract and
 1368  notifying the department. Such membership is shall be
 1369  retroactive to the date of eligibility, and all appropriate
 1370  contributions shall be transferred to the Florida Retirement
 1371  System Trust Fund and the Health Insurance Subsidy Trust Fund.
 1372         Section 14. Subsection (4), paragraph (a) of subsection
 1373  (5), paragraphs (c), (g), and (h) of subsection (10), and
 1374  paragraph (a) of subsection (15) of section 121.4501, Florida
 1375  Statutes, are amended to read:
 1376         121.4501 Florida Retirement System Investment Plan.—
 1377         (4) PARTICIPATION; ENROLLMENT.—
 1378         (a)1. Effective June 1, 2002, through February 28, 2003, a
 1379  90-day election period was provided to each eligible employee
 1380  participating in the Florida Retirement System, preceded by a
 1381  90-day education period, allowing each eligible employee to
 1382  elect membership in the investment plan; an employee who failed
 1383  to elect the investment plan during the election period remained
 1384  in the pension plan. An eligible employee who was employed in a
 1385  regularly established position during the election period was
 1386  granted the option to make one subsequent election, as provided
 1387  in paragraph (e). With respect to an eligible employee who did
 1388  not participate in the initial election period or who is
 1389  employed initially in a regularly established position after the
 1390  close of the initial election period but before July 1, 2015, on
 1391  June 1, 2002, by a state employer:
 1392         a. Any such employee may elect to participate in the
 1393  investment plan in lieu of retaining his or her membership in
 1394  the pension plan. The election must be made in writing or by
 1395  electronic means and must be filed with the third-party
 1396  administrator by August 31, 2002, or, in the case of an active
 1397  employee who is on a leave of absence on April 1, 2002, by the
 1398  last business day of the 5th month following the month the leave
 1399  of absence concludes. This election is irrevocable, except as
 1400  provided in paragraph (g). Upon making such election, the
 1401  employee shall be enrolled as a member of the investment plan,
 1402  the employee’s membership in the Florida Retirement System is
 1403  governed by the provisions of this part, and the employee’s
 1404  membership in the pension plan terminates. The employee’s
 1405  enrollment in the investment plan is effective the first day of
 1406  the month for which a full month’s employer contribution is made
 1407  to the investment plan.
 1408         b. Any such employee who fails to elect to participate in
 1409  the investment plan within the prescribed time period is deemed
 1410  to have elected to retain membership in the pension plan, and
 1411  the employee’s option to elect to participate in the investment
 1412  plan is forfeited.
 1413         2. With respect to employees who become eligible to
 1414  participate in the investment plan by reason of employment in a
 1415  regularly established position with a state employer commencing
 1416  after April 1, 2002:
 1417         a. Any such employee shall, by default, be enrolled in the
 1418  pension plan at the commencement of employment, and may, by the
 1419  last business day of the 5th month following the employee’s
 1420  month of hire, elect to participate in the investment plan. The
 1421  employee’s election must be made in writing or by electronic
 1422  means and must be filed with the third-party administrator. The
 1423  election to participate in the investment plan is irrevocable,
 1424  except as provided in paragraph (e) (g).
 1425         a.b. If the employee files such election within the
 1426  prescribed time period, enrollment in the investment plan is
 1427  effective on the first day of employment. The retirement
 1428  contributions paid through the month of the employee plan change
 1429  shall be transferred to the investment program, and, effective
 1430  the first day of the next month, the employer and employee must
 1431  pay the applicable contributions based on the employee
 1432  membership class in the program.
 1433         b.c. An employee who fails to elect to participate in the
 1434  investment plan within the prescribed time period is deemed to
 1435  have elected to retain membership in the pension plan, and the
 1436  employee’s option to elect to participate in the investment plan
 1437  is forfeited.
 1438         2.3. With respect to employees who become eligible to
 1439  participate in the investment plan pursuant to s.
 1440  121.051(2)(c)3. or s. 121.35(3)(i), the employee may elect to
 1441  participate in the investment plan in lieu of retaining his or
 1442  her membership in the State Community College System Optional
 1443  Retirement Program or the State University System Optional
 1444  Retirement Program. The election must be made in writing or by
 1445  electronic means and must be filed with the third-party
 1446  administrator. This election is irrevocable, except as provided
 1447  in paragraph (g). Upon making such election, the employee shall
 1448  be enrolled as a member in the investment plan, the employee’s
 1449  membership in the Florida Retirement System is governed by the
 1450  provisions of this part, and the employee’s participation in the
 1451  State Community College System Optional Retirement Program or
 1452  the State University System Optional Retirement Program
 1453  terminates. The employee’s enrollment in the investment plan is
 1454  effective on the first day of the month for which a full month’s
 1455  employer and employee contribution is made to the investment
 1456  plan.
 1457         4. For purposes of this paragraph, “state employer” means
 1458  any agency, board, branch, commission, community college,
 1459  department, institution, institution of higher education, or
 1460  water management district of the state, which participates in
 1461  the Florida Retirement System for the benefit of certain
 1462  employees.
 1463         (b)1. With respect to an eligible employee who is employed
 1464  in a regularly established position on September 1, 2002, by a
 1465  district school board employer:
 1466         a. Any such employee may elect to participate in the
 1467  investment plan in lieu of retaining his or her membership in
 1468  the pension plan. The election must be made in writing or by
 1469  electronic means and must be filed with the third-party
 1470  administrator by November 30, or, in the case of an active
 1471  employee who is on a leave of absence on July 1, 2002, by the
 1472  last business day of the 5th month following the month the leave
 1473  of absence concludes. This election is irrevocable, except as
 1474  provided in paragraph (g). Upon making such election, the
 1475  employee shall be enrolled as a member of the investment plan,
 1476  the employee’s membership in the Florida Retirement System is
 1477  governed by the provisions of this part, and the employee’s
 1478  membership in the pension plan terminates. The employee’s
 1479  enrollment in the investment plan is effective the first day of
 1480  the month for which a full month’s employer contribution is made
 1481  to the investment program.
 1482         b. Any such employee who fails to elect to participate in
 1483  the investment plan within the prescribed time period is deemed
 1484  to have elected to retain membership in the pension plan, and
 1485  the employee’s option to elect to participate in the investment
 1486  plan is forfeited.
 1487         2. With respect to employees who become eligible to
 1488  participate in the investment plan by reason of employment in a
 1489  regularly established position with a district school board
 1490  employer commencing after July 1, 2002:
 1491         a. Any such employee shall, by default, be enrolled in the
 1492  pension plan at the commencement of employment, and may, by the
 1493  last business day of the 5th month following the employee’s
 1494  month of hire, elect to participate in the investment plan. The
 1495  employee’s election must be made in writing or by electronic
 1496  means and must be filed with the third-party administrator. The
 1497  election to participate in the investment plan is irrevocable,
 1498  except as provided in paragraph (g).
 1499         b. If the employee files such election within the
 1500  prescribed time period, enrollment in the investment plan is
 1501  effective on the first day of employment. The employer
 1502  retirement contributions paid through the month of the employee
 1503  plan change shall be transferred to the investment plan, and,
 1504  effective the first day of the next month, the employer shall
 1505  pay the applicable contributions based on the employee
 1506  membership class in the investment plan.
 1507         c. Any such employee who fails to elect to participate in
 1508  the investment plan within the prescribed time period is deemed
 1509  to have elected to retain membership in the pension plan, and
 1510  the employee’s option to elect to participate in the investment
 1511  plan is forfeited.
 1512         3. For purposes of this paragraph, “district school board
 1513  employer” means any district school board that participates in
 1514  the Florida Retirement System for the benefit of certain
 1515  employees, or a charter school or charter technical career
 1516  center that participates in the Florida Retirement System as
 1517  provided in s. 121.051(2)(d).
 1518         (c)1. With respect to an eligible employee who is employed
 1519  in a regularly established position on December 1, 2002, by a
 1520  local employer:
 1521         a. Any such employee may elect to participate in the
 1522  investment plan in lieu of retaining his or her membership in
 1523  the pension plan. The election must be made in writing or by
 1524  electronic means and must be filed with the third-party
 1525  administrator by February 28, 2003, or, in the case of an active
 1526  employee who is on a leave of absence on October 1, 2002, by the
 1527  last business day of the 5th month following the month the leave
 1528  of absence concludes. This election is irrevocable, except as
 1529  provided in paragraph (g). Upon making such election, the
 1530  employee shall be enrolled as a participant of the investment
 1531  plan, the employee’s membership in the Florida Retirement System
 1532  is governed by the provisions of this part, and the employee’s
 1533  membership in the pension plan terminates. The employee’s
 1534  enrollment in the investment plan is effective the first day of
 1535  the month for which a full month’s employer contribution is made
 1536  to the investment plan.
 1537         b. Any such employee who fails to elect to participate in
 1538  the investment plan within the prescribed time period is deemed
 1539  to have elected to retain membership in the pension plan, and
 1540  the employee’s option to elect to participate in the investment
 1541  plan is forfeited.
 1542         2. With respect to employees who become eligible to
 1543  participate in the investment plan by reason of employment in a
 1544  regularly established position with a local employer commencing
 1545  after October 1, 2002:
 1546         a. Any such employee shall, by default, be enrolled in the
 1547  pension plan at the commencement of employment, and may, by the
 1548  last business day of the 5th month following the employee’s
 1549  month of hire, elect to participate in the investment plan. The
 1550  employee’s election must be made in writing or by electronic
 1551  means and must be filed with the third-party administrator. The
 1552  election to participate in the investment plan is irrevocable,
 1553  except as provided in paragraph (g).
 1554         b. If the employee files such election within the
 1555  prescribed time period, enrollment in the investment plan is
 1556  effective on the first day of employment. The employer
 1557  retirement contributions paid through the month of the employee
 1558  plan change shall be transferred to the investment plan, and,
 1559  effective the first day of the next month, the employer shall
 1560  pay the applicable contributions based on the employee
 1561  membership class in the investment plan.
 1562         c. Any such employee who fails to elect to participate in
 1563  the investment plan within the prescribed time period is deemed
 1564  to have elected to retain membership in the pension plan, and
 1565  the employee’s option to elect to participate in the investment
 1566  plan is forfeited.
 1567         3. For purposes of this paragraph, “local employer” means
 1568  any employer not included in paragraph (a) or paragraph (b).
 1569         (b)(d) Contributions available for self-direction by a
 1570  member who has not selected one or more specific investment
 1571  products shall be allocated as prescribed by the state board.
 1572  The third-party administrator shall notify the member at least
 1573  quarterly that the member should take an affirmative action to
 1574  make an asset allocation among the investment products.
 1575         (c)(e) On or after July 1, 2011, a member of the pension
 1576  plan who obtains a refund of employee contributions retains his
 1577  or her prior plan choice upon return to employment in a
 1578  regularly established position with a participating employer.
 1579         (d)(f) A member of the investment plan who takes a
 1580  distribution of any contributions from his or her investment
 1581  plan account is considered a retiree. A retiree who is initially
 1582  reemployed in a regularly established position on or after July
 1583  1, 2010, is not eligible to be enrolled in renewed membership.
 1584         (e)(g) After the period during which an eligible employee,
 1585  who initially enrolled before July 1, 2015, had the choice to
 1586  elect the pension plan or the investment plan, or the month
 1587  following the receipt of the eligible employee’s plan election,
 1588  if sooner, the employee shall have one opportunity, at the
 1589  employee’s discretion, to choose to move from the pension plan
 1590  to the investment plan or from the investment plan to the
 1591  pension plan. Eligible employees may elect to move between plans
 1592  only if they are earning service credit in an employer-employee
 1593  relationship consistent with s. 121.021(17)(b), excluding leaves
 1594  of absence without pay. Effective July 1, 2005, such elections
 1595  are effective on the first day of the month following the
 1596  receipt of the election by the third-party administrator and are
 1597  not subject to the requirements regarding an employer-employee
 1598  relationship or receipt of contributions for the eligible
 1599  employee in the effective month, except when the election is
 1600  received by the third-party administrator. This paragraph is
 1601  contingent upon approval by the Internal Revenue Service.
 1602         1. If the employee chooses to move to the investment plan,
 1603  the provisions of subsection (3) govern the transfer.
 1604         2. If the employee chooses to move to the pension plan, the
 1605  employee must transfer from his or her investment plan account,
 1606  and from other employee moneys as necessary, a sum representing
 1607  the present value of that employee’s accumulated benefit
 1608  obligation immediately following the time of such movement,
 1609  determined assuming that attained service equals the sum of
 1610  service in the pension plan and service in the investment plan.
 1611  Benefit commencement occurs on the first date the employee is
 1612  eligible for unreduced benefits, using the discount rate and
 1613  other relevant actuarial assumptions that were used to value the
 1614  pension plan liabilities in the most recent actuarial valuation.
 1615  For an any employee who, at the time of the second election,
 1616  already maintains an accrued benefit amount in the pension plan,
 1617  the then-present value of the accrued benefit is deemed part of
 1618  the required transfer amount. The division must ensure that the
 1619  transfer sum is prepared using a formula and methodology
 1620  certified by an enrolled actuary. A refund of any employee
 1621  contributions or additional member payments made which exceed
 1622  the employee contributions that would have accrued had the
 1623  member remained in the pension plan and not transferred to the
 1624  investment plan is not permitted.
 1625         3. Notwithstanding subparagraph 2., an employee who chooses
 1626  to move to the pension plan and who became eligible to
 1627  participate in the investment plan by reason of employment in a
 1628  regularly established position with a state employer after June
 1629  1, 2002; a district school board employer after September 1,
 1630  2002; or a local employer after December 1, 2002, must transfer
 1631  from his or her investment plan account, and from other employee
 1632  moneys as necessary, a sum representing the employee’s actuarial
 1633  accrued liability. A refund of any employee contributions or
 1634  additional member participant payments made which exceed the
 1635  employee contributions that would have accrued had the member
 1636  remained in the pension plan and not transferred to the
 1637  investment plan is not permitted.
 1638         4. An employee’s ability to transfer from the pension plan
 1639  to the investment plan pursuant to paragraph (a) and this
 1640  paragraph paragraphs (a)-(d), and the ability of a current
 1641  employee to have an option to later transfer back into the
 1642  pension plan under subparagraph 2., shall be deemed a
 1643  significant system amendment. Pursuant to s. 121.031(4), any
 1644  resulting unfunded liability arising from actual original
 1645  transfers from the pension plan to the investment plan must be
 1646  amortized within 30 plan years as a separate unfunded actuarial
 1647  base independent of the reserve stabilization mechanism defined
 1648  in s. 121.031(3)(f). For the first 25 years, a direct
 1649  amortization payment may not be calculated for this base. During
 1650  this 25-year period, the separate base shall be used to offset
 1651  the impact of employees exercising their second program election
 1652  under this paragraph. The actuarial funded status of the pension
 1653  plan is will not be affected by such second program elections in
 1654  any significant manner, after due recognition of the separate
 1655  unfunded actuarial base. Following the initial 25-year period,
 1656  any remaining balance of the original separate base shall be
 1657  amortized over the remaining 5 years of the required 30-year
 1658  amortization period.
 1659         5. If the employee chooses to transfer from the investment
 1660  plan to the pension plan and retains an excess account balance
 1661  in the investment plan after satisfying the buy-in requirements
 1662  under this paragraph, the excess may not be distributed until
 1663  the member retires from the pension plan. The excess account
 1664  balance may be rolled over to the pension plan and used to
 1665  purchase service credit or upgrade creditable service in the
 1666  pension plan.
 1667         (f) An employee initially enrolled before July 1, 2015,
 1668  shall have one opportunity in his or her working career, at the
 1669  employee’s discretion, to transfer from the pension plan to the
 1670  cash balance plan or from the investment plan to the cash
 1671  balance plan as provided in s. 121.602(2). An eligible employee
 1672  may elect to transfer between plans only if he or she is earning
 1673  service credit in an employer-employee relationship consistent
 1674  with s. 121.021(17)(b), excluding leaves of absence without pay.
 1675  Such elections are effective on the first day of the month
 1676  following the receipt of the election by the third-party
 1677  administrator and are not subject to the requirements regarding
 1678  an employer-employee relationship or receipt of contributions
 1679  for the eligible employee in the effective month, except when
 1680  the election is received by the administrator. This one-time
 1681  career transfer is irrevocable, and no other transfer is
 1682  allowed. If the employee chooses to transfer from the investment
 1683  plan or from the pension plan to the cash balance plan, s.
 1684  121.602(2) governs the transfer.
 1685         (g) An employee initially enrolled on or after July 1,
 1686  2015, is not eligible to enroll in the pension plan.
 1687         (5) CONTRIBUTIONS.—
 1688         (a) The employee and employer shall make the required
 1689  contributions to the investment plan based on a percentage of
 1690  the employee’s gross monthly compensation, as provided in part
 1691  IV III of this chapter.
 1692         (10) EDUCATION COMPONENT.—
 1693         (c) The state board, in coordination with the department,
 1694  shall provide for an initial and ongoing transfer education
 1695  component to provide system members with information necessary
 1696  to make informed plan choice decisions. The transfer education
 1697  component must include, but is not limited to, information on:
 1698         1. The amount of money available to a member for
 1699  transferring to the investment plan or the cash balance plan to
 1700  transfer to the defined contribution program.
 1701         2. The features of and differences between the pension
 1702  plan, the investment plan, and the cash balance plan and the
 1703  defined contribution program, both generally and specifically,
 1704  as those differences may affect the member.
 1705         3. The expected benefit available if the member were to
 1706  retire under each of the retirement plans programs, based on
 1707  appropriate alternative sets of assumptions.
 1708         4. The rate of return from investments in the investment
 1709  plan defined contribution program and the period of time over
 1710  which such rate of return must be achieved to equal or exceed
 1711  the expected monthly benefit payable to the member under the
 1712  pension plan or the benefit payable to the member under the cash
 1713  balance plan.
 1714         5. The historical rates of return for the investment
 1715  alternatives available in the investment plan defined
 1716  contribution programs.
 1717         6. The benefits and historical rates of return on
 1718  investments available in a typical deferred compensation plan or
 1719  a typical plan under s. 403(b) of the Internal Revenue Code for
 1720  which the employee may be eligible.
 1721         7. The program choices available to employees of the State
 1722  University System and the comparative benefits of each available
 1723  program, if applicable.
 1724         8. Payout options available in each of the retirement plans
 1725  programs.
 1726         (g) Funding for education of new employees may reflect
 1727  administrative costs to the investment plan and the cash balance
 1728  pension plan.
 1729         (h) Pursuant to subsection (8), all Florida Retirement
 1730  System employers have an obligation to regularly communicate the
 1731  existence of the two Florida Retirement System plans and the
 1732  plan choice in the natural course of administering their
 1733  personnel functions, using the educational materials supplied by
 1734  the state board and the Department of Management Services.
 1735         (15) STATEMENT OF FIDUCIARY STANDARDS AND
 1736  RESPONSIBILITIES.—
 1737         (a) Investment of defined contribution plan assets shall be
 1738  made for the sole interest and exclusive purpose of providing
 1739  benefits to members and beneficiaries and defraying reasonable
 1740  expenses of administering the plan. The plan’s program’s assets
 1741  shall be invested on behalf of the program members with the
 1742  care, skill, and diligence that a prudent person acting in a
 1743  like manner would undertake. The performance of the investment
 1744  duties set forth in this paragraph must shall comply with the
 1745  fiduciary standards set forth in the Employee Retirement Income
 1746  Security Act of 1974 at 29 U.S.C. s. 1104(a)(1)(A)-(C). In case
 1747  of conflict with other provisions of law authorizing
 1748  investments, the investment and fiduciary standards set forth in
 1749  this subsection shall prevail.
 1750         Section 15. Section 121.70, Florida Statutes, is amended to
 1751  read:
 1752         121.70 Legislative purpose and intent.—
 1753         (1) This part provides for a uniform system for funding
 1754  benefits provided under the Florida Retirement System Pension
 1755  Plan established under part I of this chapter, (referred to in
 1756  this part as the pension plan) and under the Florida Retirement
 1757  System Investment Plan established under part II of this
 1758  chapter, and under the Florida Retirement System Cash Balance
 1759  Plan established under part III of this chapter (referred to in
 1760  this part as the investment plan). The Legislature recognizes
 1761  and declares that the Florida Retirement System is a single
 1762  retirement system, consisting of three two retirement plans and
 1763  other nonintegrated programs. Employees and employers
 1764  participating in the Florida Retirement System collectively
 1765  shall make shall be responsible for making contributions to
 1766  support the benefits provided under the three both plans. The
 1767  employees and employers shall make contributions based upon a
 1768  uniform or blended contribution rate system rates determined as
 1769  a percentage of the employee’s gross monthly compensation for
 1770  the employee’s class or subclass of Florida Retirement System
 1771  membership, irrespective of the retirement plan in which the
 1772  individual employee is enrolled. This shall be known as a
 1773  uniform or blended contribution rate system.
 1774         (2) In establishing a uniform contribution rate system, it
 1775  is the intent of the Legislature to:
 1776         (a) Provide greater stability and certainty in financial
 1777  planning and budgeting for Florida Retirement System employers
 1778  by eliminating the fiscal instability that would be caused by
 1779  multiple dual rates coupled with employee-selected plan
 1780  participation;
 1781         (b) Provide greater fiscal equity and uniformity for system
 1782  employers by effectively distributing the financial burden and
 1783  benefit of short-term system deficits and surpluses,
 1784  respectively, in proportion to total system payroll; and
 1785         (c) Allow employees to make their retirement plan selection
 1786  decisions free of circumstances that may cause employers to
 1787  favor one plan choice over another.
 1788         Section 16. Subsections (1), (3), (4), and (5) of section
 1789  121.71, Florida Statutes, are amended to read:
 1790         121.71 Uniform rates; process; calculations; levy.—
 1791         (1) In conducting the system actuarial study required under
 1792  s. 121.031, the actuary shall follow all specified requirements
 1793  specified to determine, by Florida Retirement System employee
 1794  membership class, the dollar contribution amounts necessary for
 1795  the next fiscal year for the pension plan and the cash balance
 1796  plan as determined by independent valuations of each plan. In
 1797  addition, The actuary shall also determine, by Florida
 1798  Retirement System membership class, based on an estimate for the
 1799  next fiscal year of the gross compensation of employees
 1800  participating in the investment plan, the dollar contribution
 1801  amounts necessary to make the allocations required under ss.
 1802  121.72 and 121.73. For each employee membership class and
 1803  subclass, the actuarial study must establish a uniform rate
 1804  necessary to fund the benefit obligations under the both Florida
 1805  Retirement System retirement plans by dividing the sum of total
 1806  dollars required by the estimated gross compensation of members
 1807  in the both plans.
 1808         (3) Required employee retirement contribution rates for
 1809  each membership class and subclass of the Florida Retirement
 1810  System for the both retirement plans are as follows:
 1811  
 1812  Membership Class            Percentage ofGrossCompensation,EffectiveJuly 1, 2011
 1813  
 1814  Regular Class                                3.00%                  
 1815  Special Risk Class                           3.00%                  
 1816  Special Risk Administrative Support Class                 3.00%                  
 1817  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders                 3.00%                  
 1818  Elected Officers’ Class— Justices, Judges                 3.00%                  
 1819  Elected Officers’ Class— County Elected Officers                 3.00%                  
 1820  Senior Management Service Class                 3.00%                  
 1821  DROP                                         0.00%                  
 1822         (4) Required employer retirement contribution rates for
 1823  each membership class and subclass of the Florida Retirement
 1824  System for both retirement plans are as follows:
 1825  
 1826  Membership Class            Percentage ofGrossCompensation,EffectiveJuly 1, 2013
 1827  
 1828  Regular Class                                3.53%                  
 1829  Special Risk Class                           11.00%                 
 1830  Special Risk Administrative Support Class                 4.17%                  
 1831  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders                 6.52%                  
 1832  Elected Officers’ Class— Justices, Judges                 10.05%                 
 1833  Elected Officers’ Class— County Elected Officers                 8.44%                  
 1834  Senior Management Class                      4.81%                  
 1835  DROP                                         4.63%                  
 1836         (5) In order to address unfunded actuarial liabilities of
 1837  the system, the required employer retirement contribution rates
 1838  for each membership class and subclass of the Florida Retirement
 1839  System for both retirement plans are as follows:
 1840  
 1841  Membership Class            Percentage ofGrossCompensation,EffectiveJuly 1, 2013
 1842  
 1843  Regular Class                                2.19%                  
 1844  Special Risk Class                           6.83%                  
 1845  Special Risk Administrative Support Class                 30.56%                 
 1846  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders                 24.85%                 
 1847  Elected Officers’ Class— Justices, Judges                 17.00%                 
 1848  Elected Officers’ Class— County Elected Officers                 23.36%                 
 1849  Senior Management Service Class                 12.27%                 
 1850  DROP                                         7.01%                  
 1851         Section 17. Section 121.721, Florida Statutes, is created
 1852  to read:
 1853         121.721 Credits to cash balance plan member accounts and
 1854  interest on accounts; percentage amounts.—
 1855         (1)The service credits established in this section shall
 1856  be used to fund retirement benefits under the cash balance plan
 1857  and shall be transferred monthly by the Division of Retirement
 1858  from the Florida Retirement System Contributions Clearing Trust
 1859  Fund to the Cash Balance Plan Trust Fund and credited to each
 1860  participating member’s account based on the membership class of
 1861  the member.
 1862         (2)The service credits are stated as a percentage of each
 1863  cash balance plan member’s gross compensation for the calendar
 1864  month. A change in a contribution percentage is effective the
 1865  1st day of the month for which retirement contributions may be
 1866  made on or after the beginning date of the change. Credit
 1867  percentages may be modified by general law.
 1868         (3)Employer and member credits as provided under s.
 1869  121.602(5) and (6) shall be accounted for separately.
 1870         (4) Credit allocations from the Florida Retirement System
 1871  Contributions Clearing Account Trust Fund to the cash balance
 1872  plan member annuity savings account for each member of the cash
 1873  balance plan are as follows:
 1874  
 1875  Membership Class            Percentageof GrossCompensation,EffectiveJuly 1, 2015
 1876  
 1877  Regular Class                                3.00%                  
 1878  Special Risk Class                           3.00%                  
 1879  Special Risk Administrative Support Class                 3.00%                  
 1880  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers,State Attorneys, Public Defenders                 3.00%                  
 1881  Elected Officers’ Class— Justices, Judges                 3.00%                  
 1882  Elected Officers’ Class— County Elected Officers                 3.00%                  
 1883  Senior Management Service Class                 3.00%                  
 1884         (5)Service credit allocations from the Florida Retirement
 1885  System Contributions Clearing Account Trust Fund to the cash
 1886  balance plan employer retirement annuity account for each member
 1887  of the cash balance plan are as follows:
 1888  Membership Class              Percentageof GrossCompensation,EffectiveJuly 1, 2015
 1889  
 1890  Regular Class                                  3.05%                 
 1891  Special Risk Class                             9.30%                 
 1892  Special Risk Administrative Support Class                 3.05%                 
 1893  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders                 5.58%                 
 1894  Elected Officers’ Class— Justices, Judges                 9.11%                 
 1895  Elected Officers’ Class— County Elected Officers                 7.55%                 
 1896  Senior Management Service Class                 4.28%                 
 1897         (6)(a) Beginning July 1, 2015, each member of the cash
 1898  balance plan may be credited with interest credits on the
 1899  balance of the member’s accounts.
 1900         (b) Effective July 1, 2015, the guaranteed interest credits
 1901  payable on the balance of each member’s retirement annuity
 1902  account and annuity savings account accrues at an effective
 1903  annual rate of 2 percent, compounded monthly and credited
 1904  monthly based on the prior month’s accumulated ending balances.
 1905  Such interest credits must be posted to member accounts by the
 1906  15th business day of the following month.
 1907         (c) Effective July 1, 2015, additional interest credits
 1908  shall be credited as follows:
 1909         1. If the annual rate of return on investments of the cash
 1910  balance plan assets for the prior plan year did not exceed 2
 1911  percent, no additional interest credits shall be allowed.
 1912         2. If the annual rate of return on investments of the cash
 1913  balance plan assets for the prior plan year was greater than 2
 1914  percent, additional interest credits are payable on each
 1915  member’s retirement annuity account and annuity savings account
 1916  equal to 75 percent of the difference between the annual rate of
 1917  return and 2 percent.
 1918         3. All additional interest credits payable under this
 1919  paragraph shall be allocated on the 15th business day of
 1920  November following the close of the plan year based on the
 1921  member’s account balances as of the preceding June 30.
 1922         (d) To be eligible for an interest credit, the member must
 1923  have an account balance at the time the interest credit is
 1924  posted to the account. Interest credits may not be awarded to a
 1925  member who has taken a full distribution of the member’s
 1926  accounts or who has annuitized the member’s accumulated total
 1927  account balance before interest credits are posted.
 1928         (e) Notwithstanding paragraphs (b) and (c), interest
 1929  credits may not be granted on the member’s nonvested account
 1930  balances following the end of the second plan year after the
 1931  member has terminated without meeting the vesting requirements
 1932  of the cash balance plan.
 1933         Section 18. Section 121.73, Florida Statutes, is amended to
 1934  read:
 1935         121.73 Allocations for member disability coverage and
 1936  coverage for members killed in the line of duty; percentage
 1937  amounts.—
 1938         (1) The allocations established in:
 1939         (a) Subsection (3) shall be used to provide disability
 1940  coverage for members in the investment plan and shall be
 1941  transferred monthly by the Division of Retirement from the
 1942  Florida Retirement System Contributions Clearing Trust Fund to
 1943  the disability account of the Florida Retirement System Trust
 1944  Fund.
 1945         (b) Subsection (4) shall be used to provide disability
 1946  coverage for members in the cash balance plan and transferred
 1947  monthly by the Division of Retirement from the Florida
 1948  Retirement System Contributions Clearing Trust Fund to the
 1949  disability account of the Florida Retirement System Cash Balance
 1950  Plan Trust Fund.
 1951         (2) The allocations contained in this section are stated as
 1952  a percentage of each investment plan or cash balance plan
 1953  member’s gross compensation for the calendar month. A change in
 1954  a contribution percentage is effective the 1st first day of the
 1955  month for which retirement contributions may be made on or after
 1956  the beginning date of the change. Contribution percentages may
 1957  be modified by general law.
 1958         (3) Effective July 1, 2002, allocations from the Florida
 1959  Retirement System Contributions Clearing Trust Fund to provide
 1960  disability coverage for members in the investment plan, and to
 1961  offset the costs of administering such said coverage, are as
 1962  follows:
 1963  
 1964  Membership Class                  Percentage of Gross Compensation  
 1965  
 1966  Regular Class                                   0.25%               
 1967  Special Risk Class                              1.33%               
 1968  Special Risk Administrative Support Class               0.45%               
 1969  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders               0.41%               
 1970  Elected Officers’ Class— Justices, Judges               0.73%               
 1971  Elected Officers’ Class— County Elected Officers               0.41%               
 1972  Senior Management Service Class                 0.26%               
 1973         (4) Allocations from the Florida Retirement System
 1974  Contributions Clearing Trust Fund to provide disability coverage
 1975  for members in the cash balance plan and to offset costs of
 1976  administering such coverage, are as follows:
 1977  
 1978  Membership Class                 Percentage of GrossCompensationEffective July 1, 2015
 1979  
 1980  Regular Class                                   0.26%               
 1981  Special Risk Class                              0.95%               
 1982  Special Risk Administrative Support Class               0.26%               
 1983  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders               0.24%               
 1984  Elected Officers’ Class— Justices, Judges               0.47%               
 1985  Elected Officers’ Class— County Elected Officers               0.27%               
 1986  Senior Management Service Class                 0.21%               
 1987         (5) The allocations established in this subsection shall be
 1988  transferred monthly by the Division of Retirement from the
 1989  Florida Retirement System Contributions Clearing Trust Fund to
 1990  the in-line-of-duty death account of the Florida Retirement
 1991  System Cash Balance Plan Trust Fund and shall be used to provide
 1992  coverage for members of the cash balance plan killed in the line
 1993  of duty. The allocations are as follows:
 1994  
 1995  Membership Class                 Percentage of GrossCompensationEffective July 1, 2015
 1996  
 1997  Regular Class                                   0.09%               
 1998  Special Risk Class                              0.25%               
 1999  Special Risk Administrative Support Class               0.09%               
 2000  Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders               0.14%               
 2001  Elected Officers’ Class— Justices, Judges               0.18%               
 2002  Elected Officers’ Class— County Elected Officers               0.16%               
 2003  Senior Management Service Class                 0.11%               
 2004  
 2005         Section 19. Section 121.74, Florida Statutes, is amended to
 2006  read:
 2007         121.74 Administrative and educational expenses.—In addition
 2008  to contributions required to fund member accounts under ss.
 2009  121.71 and 121.73, effective July 1, 2010, through June 30,
 2010  2014, employers participating in the Florida Retirement System
 2011  shall contribute an employer assessment amount equal to 0.03
 2012  percent of the payroll reported for each class or subclass of
 2013  Florida Retirement System membership. Effective July 1, 2014,
 2014  the employer assessment is the contribution rate shall be 0.04
 2015  percent of the payroll reported for each class or subclass of
 2016  membership. The amount assessed contributed shall be transferred
 2017  by the Division of Retirement from the Florida Retirement System
 2018  Contributions Clearing Trust Fund to the State Board of
 2019  Administration’s Administrative Trust Fund to offset the costs
 2020  of administering the investment plan and the cash balance plan
 2021  and the costs of providing educational services to members of
 2022  the Florida Retirement System. Approval of the trustees is
 2023  required before the expenditure of these funds. Payments for
 2024  third-party administrative or educational expenses shall be made
 2025  only pursuant to the terms of the approved contracts for such
 2026  services.
 2027         Section 20. Section 121.76, Florida Statutes, is amended to
 2028  read:
 2029         121.76 Contributions for social security and for retiree
 2030  health insurance subsidy.—Contributions required under this part
 2031  shall be made or deducted, as may be appropriate, for each pay
 2032  period and are in addition to employer and member contributions
 2033  required for social security and the Retiree Health Insurance
 2034  Subsidy Trust Fund as provided under parts I and II of this
 2035  chapter.
 2036         Section 21. Subsection (3) of section 121.78, Florida
 2037  Statutes, is amended to read:
 2038         121.78 Payment and distribution of contributions.—
 2039         (3)(a) Employee and employer contributions and accompanying
 2040  payroll data received after the 5th working day of the month are
 2041  considered late. The division employer shall assess the employer
 2042  be assessed by the division of Retirement a penalty of 1 percent
 2043  of the contributions due for each calendar month or part thereof
 2044  that the contributions or accompanying payroll data are late.
 2045  Proceeds from the 1 percent assessment against contributions
 2046  made on behalf of members of the pension plan shall must be
 2047  deposited in the Florida Retirement System Trust Fund, and
 2048  proceeds from the 1 percent assessment against contributions
 2049  made on behalf of members of the investment plan shall be
 2050  transferred to the third-party administrator for deposit into
 2051  member accounts, as provided in paragraph (c). Proceeds from the
 2052  assessment made on behalf of members of the cash balance plan
 2053  shall be credited to the Florida Retirement System Cash Balance
 2054  Plan Trust Fund.
 2055         (b) Retirement contributions paid for a prior period shall
 2056  be charged a delinquent fee of 1 percent for each calendar month
 2057  or part thereof that the contributions should have been paid.
 2058  This includes prior period contributions due to incorrect wages
 2059  and contributions from an earlier report or wages and
 2060  contributions that should have been reported but were not. The
 2061  delinquent assessments may not be waived. Proceeds from the
 2062  delinquent fee made on behalf of members of the pension plan
 2063  shall be deposited into the Florida Retirement System Trust
 2064  Fund. Proceeds from the delinquent fee made on behalf of members
 2065  of the investment plan shall be transferred to the third-party
 2066  administrator for deposit into member accounts. Proceeds from
 2067  the delinquent fee made on behalf of members of the cash balance
 2068  plan shall be deposited into the Florida Retirement System Cash
 2069  Balance Plan Trust Fund to be credited to the annuity savings
 2070  account and retirement savings accounts of the members.
 2071         (c) If employee contributions or contributions made by an
 2072  employer on behalf of members of the investment plan or
 2073  accompanying payroll data are not received within the calendar
 2074  month they are due, including, but not limited to, contribution
 2075  adjustments as a result of employer errors or corrections, and
 2076  if that delinquency results in market losses to members, the
 2077  employer shall reimburse each member’s account for market losses
 2078  resulting from the late contributions. If a member has
 2079  terminated employment and taken a distribution, the member is
 2080  responsible for returning any excess contributions erroneously
 2081  provided by employers, adjusted for any investment gain or loss
 2082  incurred during the period such excess contributions were in the
 2083  member’s account. The state board or its designated agent shall
 2084  communicate to terminated members any obligation to repay such
 2085  excess contribution amounts. However, the state board, its
 2086  designated agents, the Florida Retirement System Investment Plan
 2087  Trust Fund, the department, or the Florida Retirement System
 2088  Trust Fund may not incur any loss or gain as a result of an
 2089  employer’s correction of such excess contributions. The third
 2090  party administrator, hired by the state board pursuant to s.
 2091  121.4501(8), shall calculate the market losses for each affected
 2092  member. If contributions made on behalf of members of the
 2093  investment plan or accompanying payroll data are not received
 2094  within the calendar month due, the employer shall also pay the
 2095  cost of the third-party administrator’s calculation and
 2096  reconciliation adjustments resulting from the late
 2097  contributions. The third-party administrator shall notify the
 2098  employer of the results of the calculations and the total amount
 2099  due from the employer for such losses and the costs of
 2100  calculation and reconciliation. The employer shall remit to the
 2101  division of Retirement the amount due within 30 working days
 2102  after the date of the penalty notice sent by the division. The
 2103  division shall transfer that amount to the third-party
 2104  administrator, which shall deposit proceeds from the 1 percent
 2105  assessment and from individual market losses into member
 2106  accounts, as appropriate. The state board may adopt rules to
 2107  administer the provisions regarding late contributions, late
 2108  submission of payroll data, the process for reimbursing member
 2109  accounts for resultant market losses, and the penalties charged
 2110  to the employers.
 2111         (d) If a cash balance plan member has terminated employment
 2112  and taken a benefit payment, the member is responsible for
 2113  returning any excess contributions erroneously provided by
 2114  employers. The state board or its designated agent shall
 2115  communicate to terminated members their obligation to repay
 2116  excess contribution amounts. However, the state board, its
 2117  designated agents, the Florida Retirement System Cash Balance
 2118  Plan Trust Fund, or the department may not incur any loss as a
 2119  result of an employer’s correction of the excess contributions.
 2120         (e)(d) If employee contributions reported by an employer on
 2121  behalf of members are reduced as a result of employer errors or
 2122  corrections, and the member has terminated employment and taken
 2123  a refund, or distribution, or benefit payment, the employer
 2124  shall be billed and is responsible for recovering from the
 2125  member any excess contributions erroneously provided by the
 2126  employer.
 2127         (f)(e)Assessments Delinquency fees specified in paragraph
 2128  (a) may be waived by the division, with regard to pension plan
 2129  contributions, and by the state board, with regard to investment
 2130  plan or cash balance plan contributions, only if, in the opinion
 2131  of the division or the board, as appropriate, exceptional
 2132  circumstances beyond the employer’s control prevented remittance
 2133  by the prescribed due date notwithstanding the employer’s good
 2134  faith efforts to effect delivery. Such a waiver of delinquency
 2135  may be granted an employer only once each plan year.
 2136         (g)(f) If the employer submits excess employer or employee
 2137  contributions, the employer shall receive a credit to be applied
 2138  against future contributions owed. The employer is responsible
 2139  for reimbursing the member for any excess contributions
 2140  submitted if a any return of such an erroneous excess pretax
 2141  contribution by the program is made within 1 year after making
 2142  erroneous contributions or such other period allowed under
 2143  applicable Internal Revenue guidance.
 2144         (h)(g) If contributions made by an employer on behalf of
 2145  members in the investment plan are delayed in posting to member
 2146  accounts due to acts of God beyond the control of the division
 2147  of Retirement, the state board, or the third-party
 2148  administrator, as applicable, market losses resulting from the
 2149  late contributions are not payable to the members.
 2150         Section 22. Subsection (10) of section 216.136, Florida
 2151  Statutes, is amended to read:
 2152         216.136 Consensus estimating conferences; duties and
 2153  principals.—
 2154         (10) FLORIDA RETIREMENT SYSTEM ACTUARIAL ASSUMPTION
 2155  CONFERENCE.—The Florida Retirement System Actuarial Assumption
 2156  Conference shall develop official information with respect to
 2157  the economic and noneconomic assumptions and funding methods of
 2158  the Florida Retirement System necessary to perform the system
 2159  actuarial studies study undertaken pursuant to ss. s. 121.031(3)
 2160  and 121.602(20). Such information must shall include: an
 2161  analysis of the actuarial assumptions and actuarial methods used
 2162  in the studies study and a determination of whether changes to
 2163  the assumptions or methods need to be made due to experience
 2164  changes or revised future forecasts.
 2165         Section 23. Section 238.072, Florida Statutes, is amended
 2166  to read:
 2167         238.072 Special service provisions for extension
 2168  personnel.—All state and county cooperative extension personnel
 2169  holding appointments by the United States Department of
 2170  Agriculture for extension work in agriculture and home economics
 2171  in this state who are joint representatives of the University of
 2172  Florida and the United States Department of Agriculture, as
 2173  provided in s. 121.051(8) s. 121.051(7), who are members of the
 2174  Teachers’ Retirement System, chapter 238, and who are prohibited
 2175  from transferring to and participating in the Florida Retirement
 2176  System, chapter 121, may retire with full benefits upon
 2177  completion of 30 years of creditable service and shall be
 2178  considered to have attained normal retirement age under this
 2179  chapter, any law to the contrary notwithstanding. In order to
 2180  comply with the provisions of s. 14, Art. X of the State
 2181  Constitution, any liability accruing to the Florida Retirement
 2182  System Trust Fund as a result of the provisions of this section
 2183  shall be paid on an annual basis from the General Revenue Fund.
 2184         Section 24. Subsection (11) of section 413.051, Florida
 2185  Statutes, is amended to read:
 2186         413.051 Eligible blind persons; operation of vending
 2187  stands.—
 2188         (11) Effective July 1, 1996, blind licensees who remain
 2189  members of the Florida Retirement System pursuant to s.
 2190  121.051(7)(b)1. must s. 121.051(6)(b)1. shall pay any
 2191  unappropriated retirement costs from their net profits or from
 2192  program income. Within 30 days after the effective date of this
 2193  act, Each blind licensee who is eligible to maintain membership
 2194  in the Florida Retirement System under s. 121.051(7)(b)1. s.
 2195  121.051(6)(b)1., but who elects to withdraw from the system as
 2196  provided in s. 121.051(7)(b)3. s. 121.051(6)(b)3., must, on or
 2197  before July 31, 1996, notify the Division of Blind Services and
 2198  the Department of Management Services in writing of his or her
 2199  election to withdraw. Failure to timely notify the divisions
 2200  shall be deemed a decision to remain a compulsory member of the
 2201  Florida Retirement System. However, if, at any time after July
 2202  1, 1996, sufficient funds are not paid by a blind licensee to
 2203  cover the required contribution to the Florida Retirement
 2204  System, that blind licensee shall become ineligible to
 2205  participate in the Florida Retirement System on the last day of
 2206  the first month for which no contribution is made or the amount
 2207  contributed is insufficient to cover the required contribution.
 2208  For any blind licensee who becomes ineligible to participate in
 2209  the Florida Retirement System as described in this subsection,
 2210  no creditable service shall be earned under the Florida
 2211  Retirement System for any period following the month that
 2212  retirement contributions ceased to be reported. However, any
 2213  such person may participate in the Florida Retirement System in
 2214  the future if employed by a participating employer in a covered
 2215  position.
 2216         Section 25. The Legislature finds that a proper and
 2217  legitimate state purpose is served when employees and retirees
 2218  of the state and its political subdivisions, and the dependents,
 2219  survivors, and beneficiaries of such employees and retirees, are
 2220  extended the basic protections afforded by governmental
 2221  retirement systems. These persons must be provided benefits that
 2222  are fair and adequate and that are managed, administered, and
 2223  funded in an actuarially sound manner, as required by s. 14,
 2224  Article X of the State Constitution and part VII of chapter 112,
 2225  Florida Statutes. Therefore, the Legislature determines and
 2226  declares that this act fulfills an important state interest.
 2227         Section 26. (1) Effective July 1, 2015, in order to fund
 2228  the benefit changes provided in this act, the required employer
 2229  contribution rates for the unfunded actuarial liability of the
 2230  Florida Retirement System established in s. 121.75(5), Florida
 2231  Statutes, shall be adjusted as follows:
 2232         (a) Elected Officers’ Class.—Rates for Legislators, the
 2233  Governor, the Lieutenant Governor, Cabinet Officers, State
 2234  Attorneys, and Public Defenders shall be increased by _.__
 2235  percentage points.
 2236         (b)Elected Officers’ Class.Rates for County Elected
 2237  Officers shall be increased by _.__ percentage points.
 2238         (c)Senior Management Service Class.—Rates for the Senior
 2239  Management Service Class shall be increased by __.__ percentage
 2240  points.
 2241         (2)The adjustments provided in subsection (1) are in
 2242  addition to all other changes to such contribution rates which
 2243  may be enacted into law to take effect on July 1, 2013, and July
 2244  1, 2015. The Division of Law Revision and Information is
 2245  requested to adjust accordingly the contribution rates provided
 2246  in s. 121.71, Florida Statutes.
 2247         Section 27. (1) The State Board of Administration shall
 2248  request a determination letter as soon as practicable from the
 2249  Internal Revenue Service as to whether this act or any portion
 2250  of this act will cause the Florida Retirement System to be
 2251  disqualified for tax purposes under the Internal Revenue Code.
 2252  If the Internal Revenue Service refuses to act upon such
 2253  request, a legal opinion from a qualified tax attorney or firm
 2254  may be substituted for the determination letter.
 2255         (2) If the board receives notification from the Internal
 2256  Revenue Service that this act or any portion of this act will
 2257  cause the Florida Retirement System to be disqualified, the
 2258  portion that will cause the disqualification does not apply.
 2259  Upon such notice, the board shall notify the presiding officers
 2260  of the Legislature.
 2261         Section 28. This act shall take effect July 1, 2015.