House Bill hb1947e1

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                                          HB 1947, First Engrossed



  1                      A bill to be entitled

  2         An act relating to the Florida Retirement

  3         System; amending s. 121.0515, F.S.; including

  4         fire prevention training or firefighting duties

  5         among eligibility requirements for special risk

  6         classification; revising criteria for

  7         membership in the special risk class to include

  8         emergency medical technicians and paramedics

  9         having supervisory or command authority over

10         other emergency medical technicians and

11         paramedics or having supervisory or command

12         authority over such supervisory or command

13         personnel; amending s. 121.053, F.S.;

14         authorizing elected officers participating in

15         DROP to terminate participation in DROP and

16         enroll in a subclass of the Elected Officers'

17         Class; amending s. 121.4501, F.S.; redefining

18         the term "approved provider"; providing

19         requirements for the State Board of

20         Administration in carrying out its duties under

21         the program; providing requirements for

22         approved providers regarding federal and state

23         laws and regulations, and for communications

24         with participants; providing requirements for

25         the appointment of the executive director of

26         the State Board of Administration; amending s.

27         121.4501, F.S.; providing additional

28         definitions; providing for payment of benefits

29         pursuant to s. 121.591, F.S.; amending s.

30         121.571, F.S.; revising employer contribution

31         rates to disability accounts; creating s.


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                                          HB 1947, First Engrossed



  1         121.591, F.S.; providing for payment of normal

  2         benefits, disability retirement benefits, and

  3         death benefits under the Public Employee

  4         Optional Retirement Program; providing

  5         requirements, criteria, procedures, and

  6         limitations; providing for disability benefits

  7         for certain justices and judges; limiting

  8         application of legal process to such benefits;

  9         providing a declaration of important state

10         interest; providing an effective date.

11

12  Be It Enacted by the Legislature of the State of Florida:

13

14         Section 1.  Subsection (2) of section 121.0515, Florida

15  Statutes, is amended to read:

16         121.0515  Special risk membership.--

17         (2)  CRITERIA.--A member, to be designated as a special

18  risk member, must meet the following criteria:

19         (a)  The member must be employed as a law enforcement

20  officer and be certified, or required to be certified, in

21  compliance with s. 943.1395; however, sheriffs and elected

22  police chiefs shall be excluded from meeting the certification

23  requirements of this paragraph.  In addition, the member's

24  duties and responsibilities must include the pursuit,

25  apprehension, and arrest of law violators or suspected law

26  violators; or the member must be an active member of a bomb

27  disposal unit whose primary responsibility is the location,

28  handling, and disposal of explosive devices; or the member

29  must be the supervisor or command officer of a member or

30  members who have such responsibilities; provided, however,

31  administrative support personnel, including, but not limited


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                                          HB 1947, First Engrossed



  1  to, those whose primary duties and responsibilities are in

  2  accounting, purchasing, legal, and personnel, shall not be

  3  included;

  4         (b)  The member must be employed as a firefighter and

  5  be certified, or required to be certified, in compliance with

  6  s. 633.35 and be employed solely within the fire department of

  7  the employer or agency of state government.  In addition, the

  8  member's duties and responsibilities must include on-the-scene

  9  fighting of fires, fire prevention or firefighter training, or

10  direct supervision of firefighting units, fire prevention or

11  firefighter training, or the member must be the supervisor or

12  command officer of a member or members who have such

13  responsibilities; provided, however, administrative support

14  personnel, including, but not limited to, those whose primary

15  duties and responsibilities are in accounting, purchasing,

16  legal, and personnel, shall not be included;

17         (c)  The member must be employed as a correctional

18  officer and be certified, or required to be certified, in

19  compliance with s. 943.1395.  In addition, the member's

20  primary duties and responsibilities must be the custody, and

21  physical restraint when necessary, of prisoners or inmates

22  within a prison, jail, or other criminal detention facility,

23  or while on work detail outside the facility, or while being

24  transported; or the member must be the supervisor or command

25  officer of a member or members who have such responsibilities;

26  provided, however, administrative support personnel,

27  including, but not limited to, those whose primary duties and

28  responsibilities are in accounting, purchasing, legal, and

29  personnel, shall not be included; however, wardens and

30  assistant wardens, as defined by rule, shall participate in

31  the Special Risk Class;


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                                          HB 1947, First Engrossed



  1         (d)  The member must be employed by a licensed Advance

  2  Life Support (ALS) or Basic Life Support (BLS) employer as an

  3  emergency medical technician or a paramedic and be certified

  4  in compliance with s. 401.27.  In addition, the member's

  5  primary duties and responsibilities must include on-the-scene

  6  emergency medical care or direct supervision of emergency

  7  medical technicians or paramedics, or the member must be the

  8  supervisor or command officer of one or more members who have

  9  such responsibility. However, administrative support

10  personnel, including, but not limited to, those whose primary

11  responsibilities are in accounting, purchasing, legal, and

12  personnel, shall not be included;

13         (e)  The member must be employed as a community-based

14  correctional probation officer and be certified, or required

15  to be certified, in compliance with s. 943.1395.  In addition,

16  the member's primary duties and responsibilities must be the

17  supervised custody, surveillance, control, investigation, and

18  counseling of assigned inmates, probationers, parolees, or

19  community controllees within the community; or the member must

20  be the supervisor of a member or members who have such

21  responsibilities. Administrative support personnel, including,

22  but not limited to, those whose primary duties and

23  responsibilities are in accounting, purchasing, legal

24  services, and personnel management, shall not be included;

25  however, probation and parole circuit and deputy circuit

26  administrators shall participate in the Special Risk Class; or

27         (f)  The member must be employed in one of the

28  following classes and must spend at least 75 percent of his or

29  her time performing duties which involve contact with patients

30  or inmates in a correctional or forensic facility or

31  institution:


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                                          HB 1947, First Engrossed



  1         1.  Dietitian (class codes 5203 and 5204).

  2         2.  Public health nutrition consultant (class code

  3  5224).

  4         3.  Psychological specialist (class codes 5230 and

  5  5231).

  6         4.  Psychologist (class code 5234).

  7         5.  Senior psychologist (class codes 5237 and 5238).

  8         6.  Regional mental health consultant (class code

  9  5240).

10         7.  Psychological Services Director--DCF (class code

11  5242).

12         8.  Pharmacist (class codes 5245 and 5246).

13         9.  Senior pharmacist (class codes 5248 and 5249).

14         10.  Dentist (class code 5266).

15         11.  Senior dentist (class code 5269).

16         12.  Registered nurse (class codes 5290 and 5291).

17         13.  Senior registered nurse (class codes 5292 and

18  5293).

19         14.  Registered nurse specialist (class codes 5294 and

20  5295).

21         15.  Clinical associate (class codes 5298 and 5299).

22         16.  Advanced registered nurse practitioner (class

23  codes 5297 and 5300).

24         17.  Advanced registered nurse practitioner specialist

25  (class codes 5304 and 5305).

26         18.  Registered nurse supervisor (class codes 5306 and

27  5307).

28         19.  Senior registered nurse supervisor (class codes

29  5308 and 5309).

30         20.  Registered nursing consultant (class codes 5312

31  and 5313).


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                                          HB 1947, First Engrossed



  1         21.  Quality management program supervisor (class code

  2  5314).

  3         22.  Executive nursing director (class codes 5320 and

  4  5321).

  5         23.  Speech and hearing therapist (class code 5406); or

  6         24.  Pharmacy manager (class code 5251).

  7         Section 2.  Paragraph (b) of subsection (1) of section

  8  121.053, Florida Statutes, is amended to read:

  9         121.053  Participation in the Elected Officers' Class

10  for retired members.--

11         (1)

12         (b)  Any retired member of the Florida Retirement

13  System, or any existing system as defined in s. 121.021(2),

14  who, on or after July 1, 1990, is serving in, or is elected or

15  appointed to, an elective office covered by the Elected

16  Officers' Class shall be enrolled in the appropriate subclass

17  of the Elected Officers' Class of the Florida Retirement

18  System, and applicable contributions shall be paid into the

19  Florida Retirement System Trust Fund as provided in s.

20  121.052(7).  Pursuant thereto:

21         1.  Any such retired member shall be eligible to

22  continue to receive retirement benefits as well as

23  compensation for the elected officer service for as long as he

24  or she remains in an elective office covered by the Elected

25  Officers' Class.

26         2.  If any such member serves in an elective office

27  covered by the Elected Officers' Class and becomes vested

28  under that class, he or she shall be entitled to receive an

29  additional retirement benefit for such elected officer

30  service.

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                                          HB 1947, First Engrossed



  1         3.  Such member shall be entitled to purchase

  2  additional retirement credit in the Elected Officers' Class

  3  for any postretirement service performed in an elected

  4  position eligible for the Elected Officers' Class prior to

  5  July 1, 1990, or in the Regular Class for any postretirement

  6  service performed in any other regularly established position

  7  prior to July 1, 1991, by paying the applicable Elected

  8  Officers' Class or Regular Class employee and employer

  9  contributions for the period being claimed, plus 4 percent

10  interest compounded annually from the first year of service

11  claimed until July 1, 1975, and 6.5 percent interest

12  compounded thereafter, until full payment is made to the

13  Florida Retirement System Trust Fund. The contribution for

14  postretirement Regular Class service between July 1, 1985, and

15  July 1, 1991, for which the reemployed retiree contribution

16  was paid, shall be the difference between such contribution

17  and the total applicable contribution for the period being

18  claimed, plus interest. The employer of such member may pay

19  the applicable employer contribution in lieu of the member. If

20  a member does not wish to claim credit for all of the

21  postretirement service for which he or she is eligible, the

22  service the member claims must be the most recent service.

23         4.  Creditable service for which credit was received,

24  or which remained unclaimed, at retirement may not be claimed

25  or applied toward service credit earned following renewed

26  membership. However, service earned in accordance with the

27  renewed membership provisions in s. 121.122 may be used in

28  conjunction with creditable service earned under this

29  paragraph, provided applicable vesting requirements and other

30  existing statutory conditions required by this chapter are

31  met.


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                                          HB 1947, First Engrossed



  1         5.  Any elected officer who is a participating member

  2  of DROP may terminate participation at any time during the

  3  60-month DROP participation period and elect to enroll in the

  4  appropriate subclass of the Elected Officers' Class, including

  5  participating in the Senior Management Service Class,

  6  effective the first day of the following month.

  7         Section 3.  Subsection (1), paragraph (a) of subsection

  8  (2), paragraph (e) of subsection (4), paragraph (b) of

  9  subsection (8), and paragraphs (a) and (b) of subsection (9)

10  of section 121.4501, Florida Statutes, are amended, and

11  paragraph (f) is added to subsection (9) of said section, to

12  read:

13         121.4501  Public Employee Optional Retirement

14  Program.--

15         (1)  The Trustees of the State Board of Administration

16  shall establish an optional defined contribution retirement

17  program for members of the Florida Retirement System under

18  which retirement benefits will be provided for eligible

19  employees who elect to participate in the program. The

20  benefits to be provided for or on behalf of participants in

21  such optional retirement program shall be provided through

22  employee-directed investments, in accordance with s. 401(a) of

23  the Internal Revenue Code and its related regulations. The

24  employers shall contribute, as provided in this section and s.

25  121.571, to the Public Employee Optional Retirement Program

26  Trust Fund toward the funding of such optional benefits.

27         (2)  DEFINITIONS.--As used in this section, the term:

28         (a)  "Approved provider" or "provider" means a private

29  sector company that is selected and approved by the state

30  board to offer one or more investment products or services to

31  the Public Employee Optional Retirement Program, including a


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                                          HB 1947, First Engrossed



  1  "bundled provider" that offers participants a range of

  2  individually allocated or unallocated investment products and

  3  may offer a range of administrative and customer services,

  4  which may include accounting and administration of individual

  5  participant benefits and contributions; individual participant

  6  recordkeeping; asset purchase, control, and safekeeping;

  7  direct execution of the participant's instructions as to asset

  8  and contribution allocation; calculation of daily net asset

  9  values; direct access to participant account information;

10  periodic reporting to participants, at least quarterly, on

11  account balances and transactions; direct advice and guidance

12  on its investments options; a broad array of distribution

13  options; and asset allocation and retirement counseling and

14  education. Private sector companies include investment

15  management companies, insurance companies, depositories, and

16  mutual fund companies.

17         (4)  PARTICIPATION; ENROLLMENT.--

18         (e)  After the period during which an eligible employee

19  had the choice to elect the defined benefit program or the

20  Public Employee Optional Retirement Program, the employee

21  shall have one opportunity, that is, a second election, at the

22  employee's discretion, to choose to move from the defined

23  benefit program to the Public Employee Optional Retirement

24  Program or from the Public Employee Optional Retirement

25  Program to the defined benefit program. This paragraph shall

26  be contingent upon approval from the Internal Revenue Service

27  for including the choice described herein within the programs

28  offered by the Florida Retirement System.

29         1.  If the employee chooses to move to the Public

30  Employee Optional Retirement Program, the applicable

31  provisions of this section shall govern the transfer.


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                                          HB 1947, First Engrossed



  1         2.  If the employee chooses to move from the Public

  2  Employee Optional Retirement Program to the defined benefit

  3  program, the employee must transfer from his or her optional

  4  program Public Employee Optional Retirement Program account

  5  and from other employee moneys as necessary, a sum

  6  representing all contributions that would have been made to

  7  the defined benefit plan for that employee and the actual

  8  return that would have been earned on those contributions had

  9  they been invested in the defined benefit program.

10

11  If, at the time of a member's election to transfer to the

12  defined benefit program, the member's optional program account

13  does not contain the total amount required to be transferred

14  to the defined benefit program, the member must pay the

15  remaining balance. If the member's optional program account

16  contains more than the amount required to be transferred to

17  the defined benefit program, such additional amount shall

18  remain in the member's optional program account.

19         (8)  ADMINISTRATION OF PROGRAM.--

20         (b)1.  The state board shall select and contract with

21  one third-party administrator to provide administrative

22  services, where those services do not duplicate services

23  provided by the Division of Retirement within the Department

24  of Management Services. With the approval of the state board,

25  the third-party administrator may subcontract with other

26  organizations or individuals to provide components of the

27  administrative services. As a cost of administration, the

28  board may compensate any such contractor for its services, in

29  accordance with the terms of the contract, as is deemed

30  necessary or proper by the board. The third-party

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                                          HB 1947, First Engrossed



  1  administrator may not be an approved provider or be affiliated

  2  with an approved provider.

  3         2.  These administrative services may include, but are

  4  not limited to, enrollment of eligible employees, collection

  5  of employer contributions, disbursement of such contributions

  6  to approved providers in accordance with the allocation

  7  directions of participants; services relating to consolidated

  8  billing; individual and collective recordkeeping and

  9  accounting; asset purchase, control, and safekeeping; and

10  direct disbursement of funds to and from the third-party

11  administrator, the division, the board, employers,

12  participants, approved providers, and beneficiaries. Nothing

13  in this section shall prevent or prohibit a bundled provider

14  from providing any administrative or customer service,

15  including accounting and administration of individual

16  participant benefits and contributions; individual participant

17  recordkeeping; asset purchase, control, and safekeeping;

18  direct execution of the participant's instructions as to asset

19  and contribution allocation; calculation of daily net asset

20  values; direct access to participant account information;

21  periodic reporting to participants, at least quarterly, on

22  account balances and transactions.

23         3.  The state board shall select and contract with one

24  or more organizations to provide educational services. With

25  approval of the board, the organizations may subcontract with

26  other organizations or individuals to provide components of

27  the educational services. As a cost of administration, the

28  board may compensate any such contractor for its services in

29  accordance with the terms of the contract, as is deemed

30  necessary or proper by the board. The education organization

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                                          HB 1947, First Engrossed



  1  may not be an approved provider or be affiliated with an

  2  approved provider.

  3         4.  Educational services shall be designed by the board

  4  and department to assist employers, eligible employees,

  5  participants, and beneficiaries in order to maintain

  6  compliance with United States Department of Labor regulations

  7  under s. 404(c) of the Employee Retirement Income Security Act

  8  of 1974 and to assist employees in their choice of defined

  9  benefit or defined contribution retirement alternatives.

10  Educational services include, but are not limited to,

11  disseminating educational materials; providing retirement

12  planning education; explaining the differences between the

13  defined benefit retirement plan and the defined contribution

14  retirement plan; and offering financial planning guidance on

15  matters such as investment diversification, investment risks,

16  investment costs, and asset allocation. An approved provider

17  may also provide educational information, including retirement

18  planning and investment allocation information concerning its

19  products and services.

20         (9)  INVESTMENT OPTIONS OR PRODUCTS; PERFORMANCE

21  REVIEW.--

22         (a)  The board shall develop policy and procedures for

23  selecting, evaluating, and monitoring the performance of

24  approved providers and investment products to which employees

25  may direct retirement contributions under the program. In

26  accordance with such policy and procedures, the board shall

27  designate and contract for a number of investment products as

28  determined by the board. The board shall also select one or

29  more bundled providers, each of whom who offer nine multiple

30  investment options and related services products when such an

31  approach is determined by the board to afford value to the


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                                          HB 1947, First Engrossed



  1  participants otherwise not available through individual

  2  investment products. Each approved bundled provider may offer

  3  investment options that provide participants with the

  4  opportunity to invest in each of the following asset classes,

  5  to be composed of individual options that represent either a

  6  single asset class or a combination thereof: money markets,

  7  U.S. fixed income, U.S. equities, and foreign stock. The board

  8  shall review and manage all educational materials, contract

  9  terms, fee schedules, and other aspects of the approved

10  provider relationships to ensure that no provider is unduly

11  favored or penalized by virtue of its status within the plan.

12         (b)  The board shall consider investment options or

13  products it considers appropriate to give participants the

14  opportunity to accumulate retirement benefits, subject to the

15  following:

16         1.  The Public Employee Optional Retirement Program

17  must offer a diversified mix of low-cost investment products

18  that span the risk-return spectrum, and may include a

19  guaranteed account as well as investment products such as

20  individually allocated guaranteed and variable annuities, that

21  meet the requirements of this subsection and that combine the

22  ability to accumulate investment returns with the option of

23  receiving lifetime income consistent with the long-term

24  retirement security of a pension plan and similar to the

25  lifetime income benefit provided by the Florida Retirement

26  System.

27         2.  Investment options or products offered by the group

28  of approved providers may include mutual funds, group annuity

29  contracts, individual retirement annuities, interests in

30  trusts, collective trusts, separate accounts, and other such

31  financial instruments, and shall include products that give


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                                          HB 1947, First Engrossed



  1  participants the option of committing their contributions for

  2  an extended time period in an effort to obtain higher returns

  3  than could be obtained from investment products offering full

  4  liquidity.

  5         3.  The board shall not contract with any provider that

  6  imposes a front-end, back-end, contingent, or deferred sales

  7  charge, or any other fee that limits or restricts the ability

  8  of participants to select any investment product available in

  9  the optional program. This prohibition shall not apply to fees

10  or charges that are imposed on withdrawals from products that

11  give participants the option of committing their contributions

12  for an extended time period in an effort to obtain higher

13  returns than could be obtained from investment products

14  offering full liquidity, provided that the product in

15  question, net of all fees and charges, produces material

16  benefits relative to other comparable products in the program

17  offering full liquidity.

18         4.  Fees or charges for insurance features, such as

19  mortality and expense risk charges, shall be reasonable

20  relative to the benefits provided.

21         (f)1.  An approved provider shall comply with all

22  applicable federal and state securities and insurance laws and

23  regulations, as well as the applicable rules and guidelines of

24  the National Association of Securities Dealers (NASD)

25  governing the ethical marketing of investment products. In

26  furtherance of this mandate, an approved provider must agree

27  in its contract with the board to establish and maintain a

28  compliance education and monitoring system to supervise the

29  activities of all personnel who directly communicate with

30  individual participants and recommend investment products,

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                                          HB 1947, First Engrossed



  1  which system is consistent with National Association of

  2  Security Dealers rules.

  3         2.  Approved provider personnel who directly

  4  communicate with individual participants and who recommend

  5  investment products shall make an independent and unbiased

  6  determination as to whether an investment product is suitable

  7  for a particular participant.

  8         3.  The board shall develop procedures to receive and

  9  resolve participant complaints against a provider or approved

10  provider personnel, and, when appropriate, refer such

11  complaints to the appropriate regulatory agency.

12         4.  Approved providers are prohibited from selling or

13  in any way distributing any customer list or participant

14  identification information generated through their offering of

15  products or services through the optional retirement program.

16         Section 4.  The appointment of the executive director

17  of the State Board of Administration shall be subject to the

18  approval by a majority vote of the Board of Trustees of the

19  State Board of Administration and the Governor must vote on

20  the prevailing side. Such appointment must be reaffirmed in

21  the same manner by the Board of Trustees on an annual basis.

22         Section 5.  Paragraphs (b) through (j) of subsection

23  (2) of section 121.4501, Florida Statutes, are redesignated as

24  paragraphs (d) through (l), respectively, new paragraphs (b)

25  and (c) are added to said subsection, and subsections (7) and

26  (16) of said section are amended, to read:

27         121.4501  Public Employee Optional Retirement

28  Program.--

29         (2)  DEFINITIONS.--As used in this section, the term:

30         (b)  "Average monthly compensation" means one-twelfth

31  of average final compensation as defined in s. 121.021(24).


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                                          HB 1947, First Engrossed



  1         (c)  "Covered employment" means employment in a

  2  regularly established position as defined in s. 121.021(52).

  3         (7)  BENEFITS.--Under the Public Employee Optional

  4  Retirement Program:

  5         (a)  Benefits shall be provided in accordance with s.

  6  401(a) of the Internal Revenue Code.

  7         (b)  Benefits shall accrue in individual accounts that

  8  are participant-directed, portable, and funded by employer

  9  contributions and earnings thereon.

10         (c)  Benefits shall be payable in accordance with s.

11  121.591. the following terms and conditions:

12         1.  To the extent vested, benefits shall be payable

13  only to a participant, or to his or her beneficiaries as

14  designated by the participant.

15         2.  Benefits shall be paid by the third-party

16  administrator or designated approved providers in accordance

17  with the law, the contracts, and any applicable board rule or

18  policy.

19         3.  To begin receiving the benefits, the participant

20  must be terminated from all employment with all Florida

21  Retirement System employers, as provided in s. 121.021(39), or

22  the participant must be deceased. If a participant elects to

23  receive his or her benefits upon termination of employment,

24  the participant must submit a written application to the

25  third-party administrator indicating his or her preferred

26  distribution date and selecting an authorized method of

27  distribution as provided in paragraph (d). The participant may

28  defer receipt of benefits until he or she chooses to make such

29  application, subject to federal requirements.

30         4.  In the event of a participant's death, moneys

31  accumulated by, or on behalf of, the participant, less


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                                          HB 1947, First Engrossed



  1  withholding taxes remitted to the Internal Revenue Service,

  2  shall be distributed to the participant's designated

  3  beneficiary or beneficiaries, or to the participant's estate,

  4  as if the participant retired on the date of death, as

  5  provided in paragraph (e). No other death benefits shall be

  6  available for survivors of participants under the Public

  7  Employee Optional Retirement Program, except for such

  8  benefits, or coverage for such benefits, as are separately

  9  afforded by the employer, at the employer's discretion.

10         (d)  Upon receipt by the third-party administrator of a

11  properly executed application for distribution of benefits,

12  the total accumulated benefit shall be payable to the

13  participant, as:

14         1.  A lump-sum distribution to the participant;

15         2.  A lump-sum direct rollover distribution whereby all

16  accrued benefits, plus interest and investment earnings, are

17  paid from the participant's account directly to the custodian

18  of an eligible retirement plan, as defined in s. 402(c)(8)(B)

19  of the Internal Revenue Code, on behalf of the participant; or

20         3.  Periodic distributions, as authorized by the state

21  board.

22         (e)  Survivor benefits shall be payable as:

23         1.  A lump-sum distribution payable to the

24  beneficiaries, or to the deceased participant's estate;

25         2.  An eligible rollover distribution on behalf of the

26  surviving spouse of a deceased participant, whereby all

27  accrued benefits, plus interest and investment earnings, are

28  paid from the deceased participant's account directly to the

29  custodian of an individual retirement account or an individual

30  retirement annuity, as described in s. 402(c)(9) of the

31  Internal Revenue Code, on behalf of the surviving spouse; or


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                                          HB 1947, First Engrossed



  1         3.  A partial lump-sum payment whereby a portion of the

  2  accrued benefit is paid to the deceased participant's

  3  surviving spouse or other designated beneficiaries, less

  4  withholding taxes remitted to the Internal Revenue Service,

  5  and the remaining amount is transferred directly to the

  6  custodian of an individual retirement account or an individual

  7  retirement annuity, as described in s. 402(c)(9) of the

  8  Internal Revenue Code, on behalf of the surviving spouse. The

  9  proportions must be specified by the participant or the

10  surviving beneficiary.

11

12  This paragraph does not abrogate other applicable provisions

13  of state or federal law providing for payment of death

14  benefits.

15         (f)  The benefits payable to any person under the

16  Public Employee Optional Retirement Program, and any

17  contributions accumulated under such program, are not subject

18  to assignment, execution, attachment, or any legal process,

19  except for qualified domestic relations orders by a court of

20  competent jurisdiction, income deduction orders as provided in

21  s. 61.1301, and federal income tax levies.

22         (16)  DISABILITY BENEFITS.--For any participant of the

23  optional retirement program who becomes totally and

24  permanently disabled, benefits shall be paid in accordance

25  with s. 121.591 as defined in s. 121.091(4)(b), the

26  participant shall be entitled to receive those moneys that

27  have accrued in his or her participant account.  It is the

28  intent of the Legislature to design a disability benefit for

29  participants of the optional program similar to those

30  disability benefits afforded defined benefit program members.

31  The department is directed to study the potential options of


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                                          HB 1947, First Engrossed



  1  such coverage, including self-insurance and commercial

  2  coverage, the alternative methods of administering such

  3  benefits, and the fiscal impacts on the employees and

  4  employers, and to make recommendations to the Legislature by

  5  January 15, 2001.

  6         Section 6.  Subsection (3) of section 121.571, Florida

  7  Statutes, is amended to read:

  8         121.571  Contributions.--Contributions to the Public

  9  Employee Optional Retirement Program shall be made as follows:

10         (3)  CONTRIBUTIONS TO DISABILITY ACCOUNT.--

11         (a)  All contributions made on behalf of a participant

12  pursuant to this subsection shall be transferred by the

13  employer to the third-party administrator for deposit in the

14  Public Employee Disability Trust Fund administered by the

15  Division of Retirement. Such contributions, less any fees or

16  charges authorized by the Legislature to offset the costs of

17  administering the disability component of the optional

18  retirement program, shall be used to provide disability

19  coverage for participants in the optional retirement program.

20         (b)  Disability contributions for Regular Class members

21  of the optional retirement plan are as follows:

22

23  Dates of Contribution                      Employers

24  Rate Changes

25  Effective July 1, 2002:                    0.25% 0.39%

26

27         (c)  Disability contributions for Special Risk Class

28  members of the optional retirement plan are as follows:

29

30  Dates of Contribution                      Employers

31  Rate Changes


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                                          HB 1947, First Engrossed



  1  Effective July 1, 2002:                    1.33% 1.25%

  2

  3         (d)  Disability contributions for Special Risk

  4  Administrative Support Class members of the optional

  5  retirement plan are as follows:

  6

  7  Dates of Contribution                      Employers

  8  Rate Changes

  9  Effective July 1, 2002:                    0.45% 0.73%

10

11         (e)  Disability contributions for Elected Officers'

12  Class members of the optional retirement plan are as follows:

13

14  Dates of Contribution                      Employers

15  Rate Changes

16  Effective July 1, 2002:

17    Legislators                              0.41% 0.61%

18    Governor, Lt. Governor,                  0.41% 0.61%

19      Cabinet Officers

20    State Attorneys, Public                  0.41% 0.61%

21      Defenders

22    Justices, Judges                         0.73% 1.45%

23    County Elected Officers                  0.41% 0.86%

24

25         (f)  Disability contributions for Senior Management

26  Service Class members of the optional retirement plan are as

27  follows:

28

29  Dates of Contribution                      Employers

30  Rate Changes

31


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                                          HB 1947, First Engrossed



  1  Effective July 1, 2002:                    0.26% 0.50%

  2

  3         Section 7.  Section 121.591, Florida Statutes, is

  4  created to read:

  5         121.591  Benefits payable under the Public Employee

  6  Optional Retirement Program of the Florida Retirement

  7  System.--Benefits may not be paid under this section unless

  8  the member has terminated employment as provided in s.

  9  121.021(39)(a) or is deceased and a proper application has

10  been filed in the manner prescribed by the state board or the

11  department. The state board or the department, as appropriate,

12  may cancel an application for retirement benefits when the

13  member or beneficiary fails to timely provide the information

14  and documents required by this chapter and the rules of the

15  state board and the department. In accordance with their

16  respective responsibilities as provided in this section, the

17  state board and the department shall adopt rules establishing

18  procedures for application for retirement benefits and for the

19  cancellation of such application when the required information

20  or documents are not received.

21         (1)  NORMAL BENEFIT.--Under the optional program:

22         (a)  Benefits, in the form of vested accumulations as

23  described in s. 121.4501(6), shall be payable under this

24  subsection as follows:

25         1.  To the extent vested, benefits shall be payable

26  only to a participant.

27         2.  Benefits shall be paid by the third-party

28  administrator or designated approved providers in accordance

29  with the law, the contracts, and any applicable board rule or

30  policy.

31


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                                          HB 1947, First Engrossed



  1         3.  To receive benefits under this subsection, the

  2  participant must be terminated from all employment with all

  3  Florida Retirement System employers, as provided in s.

  4  121.021(39).

  5         (b)  If a participant elects to receive his or her

  6  benefits upon termination of employment, the participant must

  7  submit a written application to the third-party administrator

  8  indicating his or her preferred distribution date and

  9  selecting an authorized method of distribution as provided in

10  paragraph (c). The participant may defer receipt of benefits

11  until he or she chooses to make such application, subject to

12  federal requirements.

13         (c)  Upon receipt by the third-party administrator of a

14  properly executed application for distribution of benefits,

15  the total accumulated benefit shall be payable to the

16  participant as:

17         1.  A lump-sum distribution to the participant;

18         2.  A lump-sum direct rollover distribution whereby all

19  accrued benefits, plus interest and investment earnings, are

20  paid from the participant's account directly to the custodian

21  of an eligible retirement plan, as defined in s. 402(c)(8)(B)

22  of the Internal Revenue Code, as amended, on behalf of the

23  participant; or

24         3.  Periodic distributions, as authorized by the state

25  board.

26         (2)  DISABILITY RETIREMENT BENEFIT.--Benefits provided

27  under this subsection are payable in lieu of the benefits

28  which would otherwise be payable under the provisions of

29  subsection (1).

30         (a)1.  If the participant has no credit under the

31  defined benefit program of the Florida Retirement System or


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                                          HB 1947, First Engrossed



  1  such credit has been nullified as provided under s.

  2  121.4501(3)(c), all moneys accumulated in the participant's

  3  optional program account, including vested and nonvested

  4  accumulations as described in s. 121.4501(6), shall be

  5  transferred from such individual account to the Division of

  6  Retirement for deposit into the Public Employee Disability

  7  Trust Fund; or

  8         2.  If the participant is a former member of the

  9  defined benefit program of the Florida Retirement System who

10  elected to retain the retirement credit he or she had earned

11  under that program as provided in s. 121.4501(3)(b), a sum

12  representing the actuarial present value of such credit shall

13  be transferred by the Division of Retirement from the Florida

14  Retirement System Trust Fund to the Public Employee Disability

15  Trust Fund. In addition, all moneys accumulated in the

16  participant's optional program account, including vested and

17  nonvested accumulations as described in s. 121.4501(6), shall

18  be transferred from such individual account to the Division of

19  Retirement for deposit into the Public Employee Disability

20  Trust Fund.

21         (b)1.  A participant of the optional program who

22  becomes totally and permanently disabled, as defined in

23  paragraph (d), after completing 8 years of creditable service,

24  or a participant who becomes totally and permanently disabled

25  in the line of duty regardless of his or her length of

26  service, shall be entitled to a monthly disability benefit as

27  provided in this subsection.

28         2.  For purposes of this subsection, the 8 years of

29  creditable service required to vest for regular disability

30  benefits must be creditable service under the defined benefit

31


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                                          HB 1947, First Engrossed



  1  program of the Florida Retirement System or service under the

  2  optional program, subject to the following conditions:

  3         a.  In the case of present value transfers to a

  4  participant's account under s. 121.4501(3)(c), the period of

  5  service under the defined benefit program represented in the

  6  present value amounts transferred shall only be considered

  7  creditable service for purposes of vesting for disability

  8  benefits as long as such funds remain in the participant's

  9  accounts under the optional program.

10         b.  In the case of contributions made to a

11  participant's accounts under s. 121.4501(5), the period of

12  service under the optional program shall only be considered

13  creditable service for purposes of vesting for disability

14  benefits as long as such funds remain in the participant's

15  accounts under the optional program.

16

17  If a participant terminates employment and takes distribution

18  of such funds as provided in subsection (1), all credit for

19  the service represented by such distributed funds is forfeited

20  for purposes of qualifying for disability benefits under this

21  subsection.

22         (c)1.  If the division has received from the employer

23  the required documentation of the participant's termination of

24  employment, the effective retirement date for a participant

25  who applies and is approved for disability retirement shall be

26  established by rule of the division.

27         2.  For a participant who is receiving workers'

28  compensation payments, the effective disability retirement

29  date may not precede the date the participant reaches maximum

30  medical improvement, unless the participant terminates

31  employment prior to reaching maximum medical improvement.


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                                          HB 1947, First Engrossed



  1         (d)  A participant shall be considered totally and

  2  permanently disabled if, in the opinion of the division, he or

  3  she is prevented by reason of a medically determinable

  4  physical or mental impairment from rendering useful and

  5  efficient service as an officer or employee.

  6         (e)  The division, before approving payment of any

  7  disability retirement benefit, shall require proof that the

  8  participant is totally and permanently disabled as follows:

  9         1.  Such proof shall include the certification of the

10  participant's total and permanent disability by two licensed

11  physicians in this state and such other evidence of disability

12  as the division may require, including reports from vocational

13  rehabilitation, evaluation, or testing specialists who have

14  evaluated the applicant for employment.

15         2.  It shall be documented that:

16         a.  The participant's medical condition occurred or

17  became symptomatic during the time the participant was

18  employed in an employee/employer relationship with his or her

19  employer.

20         b.  The participant was totally and permanently

21  disabled at the time he or she terminated covered employment.

22         c.  The participant has not been employed with any

23  other employer after such termination.

24         3.  If the application is for in-line-of-duty

25  disability, in addition to the requirements of subparagraph

26  2., it must be documented by competent medical evidence that

27  the disability was caused by a job-related illness or accident

28  which occurred while the participant was in an

29  employee/employer relationship with his or her employer.

30         4.  The unavailability of an employment position that

31  the participant is physically and mentally capable of


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                                          HB 1947, First Engrossed



  1  performing shall not be considered as proof of total and

  2  permanent disability.

  3         (f)  A participant whose application for regular

  4  disability has been denied and who has filed an appeal to the

  5  State Retirement Commission under s. 121.23 may elect, if

  6  eligible, to receive disability benefits as provided under

  7  paragraphs (g) and (h) while her or she is awaiting the

  8  decision on appeal, to the extent such benefit payments are

  9  covered by funds deposited in the Public Employee Disability

10  Trust Fund pursuant to subparagraph 1. or 2. of paragraph

11  (2)(a).  In that event:

12         1.  If the regular disability benefits are subsequently

13  approved, disability benefits will continue to be paid to the

14  terminated participant as provided under this subsection.

15         2.  If disability benefits are later denied as a result

16  of the appeal:

17         a.  The remainder of any vested accumulations on

18  deposit in the Public Employee Disability Trust Fund, less the

19  sum of the total amount paid in monthly disability benefits

20  while the appeal was pending and any withholding taxes

21  remitted to the Internal Revenue Service, shall be transferred

22  to the third party administrator for distribution to the

23  terminated participant as provided under subsection (1).

24         b.  The remainder of any nonvested accumulations on

25  deposit in the Public Employee Disability Trust Fund, less the

26  sum of the total amount paid in monthly disability benefits

27  while the appeal was pending and any withholding taxes

28  remitted to the Internal Revenue Service, shall be transferred

29  to the State Board Of Administration and shall be held in the

30  suspense account of the Public Employee Optional Retirement

31


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                                          HB 1947, First Engrossed



  1  Program Trust Fund, in accordance with s. 121.4501(6)(a)2. or

  2  (b)2., as appropriate.

  3         (g)  Upon the disability retirement of a participant

  4  under this subsection, the participant shall receive a monthly

  5  benefit that shall begin to accrue on the first day of the

  6  month of disability retirement, as approved by the division,

  7  and shall be payable on the last day of that month and each

  8  month thereafter during his or her lifetime and continued

  9  disability.

10         (h)  The amount of each monthly payment shall be

11  computed in the same manner as that computed for a normal

12  retirement benefit but shall be based on disability option

13  actuarial equivalency tables and the average monthly

14  compensation and creditable service of the participant as of

15  his or her disability retirement date, subject to the

16  following:

17         1.  If the participant's disability occurred in the

18  line of duty, the monthly Option 1 benefit shall be a minimum

19  of:

20         a.  Forty-two percent of the participant's average

21  monthly compensation as of the disability retirement date; or

22         b.  Sixty-five percent of the participant's average

23  monthly compensation as of the disability retirement date for

24  a participant of the special risk class who retires on or

25  after July 1, 2002.

26         2.  If the participant's disability occurred other than

27  in the line of duty, the monthly Option 1 benefit shall be a

28  minimum of 25 percent of the participant's average monthly

29  compensation as of the disability retirement date.

30         (i)  A participant whose initial application for

31  disability retirement has been denied may reapply for


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                                          HB 1947, First Engrossed



  1  disability benefits. However, such participant's reapplication

  2  may be considered only if the participant presents new medical

  3  evidence of a medical condition that existed prior to the

  4  participant's termination of employment. The division may

  5  prescribe by rule procedures for reapplication and for review

  6  and approval or disapproval of reapplication.

  7         (j)  Nothing in this subsection shall be construed to

  8  prevent a participant who has been approved for a disability

  9  retirement benefit payable under this subsection from electing

10  to receive, in lieu of the benefit payable under this

11  subsection, the benefit payable to him or her under the

12  provisions of subsection (1), provided such election is made

13  prior to the deposit or cashing of a disability retirement

14  warrant or receipt of such warrant by electronic funds

15  transfer in accordance with the participant's authorization of

16  direct deposit of such funds.

17         (k)  The division may require periodic reexaminations

18  at the expense of the Public Employee Disability Trust Fund.

19  The division may adopt rules establishing procedures for

20  conducting and review of such reexaminations. If the division

21  finds that a participant who is receiving disability benefits

22  is no longer disabled, the division shall direct that the

23  disability benefits be discontinued and no further benefits

24  shall be payable under this subsection. The decision of the

25  division on this question shall be final and binding. Upon

26  termination of the monthly disability benefit:

27         1.  If such participant does not reenter covered

28  employment following recovery from disability and had not

29  satisfied the vesting requirement as of the disability

30  retirement date for any or all of the moneys which had

31  accumulated in his or her participant accounts, the remainder


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                                          HB 1947, First Engrossed



  1  of the nonvested accumulation as described under subparagraph

  2  5., if any, shall be held in a suspense account in the Public

  3  Employee Disability Trust Fund.

  4         a.  If the participant returns to covered employment as

  5  an eligible employee as defined in s. 121.4501(2) within 5

  6  years after the date of recovery, the division shall transfer

  7  any such moneys held in the suspense account, plus interest

  8  calculated at an effective annual rate of 6 percent, to the

  9  State Board of Administration for deposit in the participant's

10  individual account under the optional program, as directed by

11  the participant.

12         b.  If the participant fails to return to covered

13  employment within 5 years after recovery, any such moneys held

14  in the suspense account in the Public Employee Disability

15  Trust Fund shall be forfeited.

16         2.  If such participant does not reenter covered

17  employment following recovery from disability but had

18  satisfied vesting requirements as of the disability retirement

19  date for any or all of the moneys which had accumulated in his

20  or her accounts under the optional program, the amount

21  representing the remainder of his or her vested accumulation

22  as described under subparagraph 5., if any, shall be

23  transferred from the Public Employee Disability Trust Fund to

24  the Public Employee Optional Retirement Program Trust Fund and

25  shall be payable as provided in subsection (1).

26         3.  If such participant returns to covered employment

27  following recovery from disability as a participant in the

28  optional program, the amount representing the remainder of his

29  or her nonvested accumulation or the remainder of his or her

30  vested accumulation as described under subparagraph 5., if

31  any, shall be transferred from the Public Employee Disability


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                                          HB 1947, First Engrossed



  1  Trust Fund to the third-party administrator for deposit in the

  2  participant's individual investment accounts as directed by

  3  the participant. Vested accumulations shall be accounted for

  4  separately from nonvested accumulations.

  5         4.  If such participant reenters covered employment as

  6  a member of the defined benefit program of the Florida

  7  Retirement System, and is continuously employed for a minimum

  8  of 1 year of creditable service, he or she may claim as

  9  creditable service the months during which he or she was

10  receiving a disability benefit, upon payment of the required

11  contributions as provided in s. 121.091(4)(h)1.d.

12         5.  As used in reference to funds deposited in the

13  Public Employee Disability Trust Fund under paragraph (a):

14         a.  The term "remainder of the nonvested accumulation"

15  means all employer contributions deposited on behalf of a

16  participant who had not met the vesting requirement set forth

17  in s. 121.4501(6)(a)1. as of his or her disability retirement

18  date and any transferred present value amount deposited on

19  behalf of a participant who had not met the vesting

20  requirement set forth in s. 121.4501(6)(b)1. as of his or her

21  disability retirement date, plus interest and earnings

22  thereon, less the total amount of disability benefits received

23  by that participant.

24         b.  The term "remainder of the vested accumulation"

25  means all employer contributions deposited on behalf of any

26  participant who had met the vesting requirement set forth in

27  s. 121.4501(6)(a)1. as of his or her disability retirement

28  date and any transferred present value amount deposited on

29  behalf of any participant who had met the vesting requirement

30  set forth in s. 121.4501(6)(b)1. as of his or her disability

31  retirement date, plus interest and earnings thereon, less the


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                                          HB 1947, First Engrossed



  1  total amount of disability benefits received by that

  2  participant.

  3         (l)  Both the participant receiving disability benefits

  4  who reenters employment and the employer employing such

  5  disability retiree shall notify the division immediately upon

  6  reemployment and the division shall terminate such

  7  participant's disability benefits, effective upon the first

  8  day of the month following the month in which notification of

  9  recovery is received. If the participant is reemployed with a

10  Florida Retirement System employer at the time of benefit

11  termination and he or she has received disability retirement

12  benefit and salary payments concurrently prior to notifying

13  the division, he or she may elect within 30 days to:

14         1.  Retain the retirement benefits received prior to

15  termination of disability benefits and begin receiving

16  retirement service credit effective upon the date of

17  termination of benefits; or

18         2.  Repay, within 12 months after his or her decision

19  to receive service credit, the retirement benefits received

20  for each month of reemployment prior to termination of

21  disability benefits and begin receiving retirement service

22  credit effective upon the date of reemployment. Any such

23  unpaid benefits shall have compound interest of 6.5 percent

24  added each June 30.

25

26  A participant may not receive both retirement service credit

27  for employment and retirement benefits for the same month.

28         (m)  If, after recovery from disability and reentry

29  into covered employment, the participant again becomes

30  disabled and is again approved for disability retirement, the

31  Option 1 monthly retirement benefit shall not be less than the


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                                          HB 1947, First Engrossed



  1  Option 1 monthly benefit calculated at the time of the

  2  previous disability, plus any cost-of-living increases payable

  3  up to the time the disability benefit was terminated upon his

  4  or her reentry into covered employment.

  5         (n)  A participant shall not be entitled to receive any

  6  disability retirement benefit if the disability is a result

  7  of:

  8         1.  Injury or disease sustained by the participant

  9  while willfully participating in a riot, civil insurrection,

10  or other act of violence or while committing a felony;

11         2.  Injury or disease sustained by the participant

12  after his or her employment has terminated; or

13         3.  Intentional, self-inflicted injury.

14         (o)1.  If a participant is a justice of the Supreme

15  Court, judge of a district court of appeal, circuit judge, or

16  judge of a county court who has served for 6 years or more as

17  an elected constitutional judicial officer, including service

18  as a judicial officer in any court abolished pursuant to Art.

19  V of the State Constitution, and who is retired for disability

20  by order of the Supreme Court upon recommendation of the

21  Judicial Qualifications Commission pursuant to the provisions

22  of Art. V of the State Constitution, the participant's Option

23  1 monthly disability benefit amount as provided in s.

24  121.091(6)(a)1. shall be two-thirds of his or her monthly

25  compensation as of the participant's disability retirement

26  date. Such a participant may alternatively elect to receive an

27  actuarially adjusted disability retirement benefit under any

28  other option as provided in s. 121.091(6)(a), or to receive

29  the normal benefit payable under the optional program as set

30  forth under subsection (1).

31


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                                          HB 1947, First Engrossed



  1         2.  If any justice or judge who is a participant of the

  2  optional program is retired for disability by order of the

  3  Supreme Court upon recommendation of the Judicial

  4  Qualifications Commission pursuant to the provisions of Art. V

  5  of the State Constitution and elects to receive a monthly

  6  disability benefit under the provisions of this paragraph:

  7         a.  Any present value amount which was transferred to

  8  his or her program account and all employer contributions made

  9  to such account on his or her behalf, plus interest and

10  earnings thereon, shall be transferred to and deposited in the

11  Public Employee Disability Trust Fund.

12         b.  The monthly benefits payable under this paragraph

13  for any affected justice or judge retired from the Florida

14  Retirement System pursuant to Art. V of the State Constitution

15  shall be paid from the Public Employee Disability Trust Fund.

16         (3)  DEATH BENEFITS.--Under the optional program:

17         (a)  Survivor benefits shall be payable in accordance

18  with the following terms and conditions:

19         1.  To the extent vested, benefits shall be payable

20  only to a participant's beneficiary or beneficiaries as

21  designated by the participant.

22         2.  Benefits shall be paid by the third-party

23  administrator or designated approved providers in accordance

24  with the law, the contracts, and any applicable board rule or

25  policy.

26         3.  To receive benefits under this subsection, the

27  participant must be deceased.

28         (b)  In the event of a participant's death, all vested

29  accumulations as described in s. 121.4501(6), less withholding

30  taxes remitted to the Internal Revenue Service, shall be

31  distributed, as provided in paragraph (c), to the


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                                          HB 1947, First Engrossed



  1  participant's designated beneficiary or beneficiaries, or to

  2  the participant's estate, as if the participant retired on the

  3  date of death. No other death benefits shall be available for

  4  survivors of participants under the optional program, except

  5  for such benefits, or coverage for such benefits, as are

  6  otherwise provided by law or are separately afforded by the

  7  employer, at the employer's discretion.

  8         (c)  Upon receipt by the third-party administrator of a

  9  properly executed application for distribution of benefits,

10  the total accumulated benefit shall be payable by the

11  third-party administrator to the participant's surviving

12  beneficiary or beneficiaries as:

13         1.  A lump-sum distribution payable to the beneficiary

14  or beneficiaries or to the deceased participant's estate;

15         2.  An eligible rollover distribution on behalf of the

16  surviving spouse of a deceased participant, whereby all

17  accrued benefits, plus interest and investment earnings, are

18  paid from the deceased participant's account directly to the

19  custodian of an individual retirement account or an individual

20  retirement annuity, as described in s. 402(c)(9) of the

21  Internal Revenue Code, on behalf of the surviving spouse; or

22         3.  A partial lump-sum payment whereby a portion of the

23  accrued benefit is paid to the deceased participant's

24  surviving spouse or other designated beneficiaries, less

25  withholding taxes remitted to the Internal Revenue Service,

26  and the remaining amount is transferred directly to the

27  custodian of an individual retirement account or an individual

28  retirement annuity, as described in s. 402(c)(9) of the

29  Internal Revenue Code, on behalf of the surviving spouse. The

30  proportions must be specified by the participant or the

31  surviving beneficiary.


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                                          HB 1947, First Engrossed



  1

  2  This paragraph does not abrogate other applicable provisions

  3  of state or federal law providing for payment of death

  4  benefits.

  5         (4)  LIMITATION ON LEGAL PROCESS.--The benefits payable

  6  to any person under the optional program and any contributions

  7  accumulated under such program are not subject to assignment,

  8  execution, attachment, or any legal process, except for

  9  qualified domestic relations orders by a court of competent

10  jurisdiction, income deduction orders as provided in s.

11  61.1301, and federal income tax levies.

12         Section 8.  The Legislature finds that a proper and

13  legitimate state purpose is served when employees and retirees

14  of the state and of its political subdivisions, and the

15  dependents, survivors, and beneficiaries of such employees and

16  retirees, are extended the basic protections afforded by

17  governmental retirement systems that provide fair and adequate

18  benefits that are managed, administered, and funded in an

19  actuarially sound manner, as required by section 14, Article X

20  of the State Constitution and part VII of chapter 112, Florida

21  Statutes. Therefore, the Legislature determines and declares

22  that this act fulfills an important state interest.

23         Section 9.  This act shall take effect July 1, 2001.

24

25

26

27

28

29

30

31


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