House Bill hb0347e1
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CS/HB 347, First Engrossed
1 A bill to be entitled
2 An act relating to the Public Employee Optional
3 Retirement Program; creating the "Officer
4 Malcolm Thompson Act"; providing legislative
5 intent; amending s. 121.091, F.S.; revising
6 provisions relating to benefits payable for
7 total and permanent disability for certain
8 Special Risk Class members of the Florida
9 Retirement System who are injured in the line
10 of duty; amending ss. 175.191 and 185.18, F.S.;
11 providing minimum retirement benefits payable
12 to certain Special Risk Class members who are
13 injured in the line of duty and who are totally
14 and permanently disabled due to such injury;
15 amending s. 121.4501, F.S.; redefining the term
16 "approved provider"; providing requirements for
17 the State Board of Administration in carrying
18 out its duties under the program; providing
19 requirements for approved providers regarding
20 federal and state laws and regulations, and for
21 communications with participants; providing
22 requirements for the appointment of the
23 executive director of the State Board of
24 Administration; amending s. 121.4501, F.S.;
25 providing additional definitions; providing for
26 payment of benefits pursuant to s. 121.591,
27 F.S.; amending s. 121.571, F.S.; revising
28 employer contribution rates to disability
29 accounts; creating s. 121.591, F.S.; providing
30 for payment of normal benefits, disability
31 retirement benefits, and death benefits under
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CS/HB 347, First Engrossed
1 the Public Employee Optional Retirement
2 Program; providing requirements, criteria,
3 procedures, and limitations; providing for
4 disability benefits for certain justices and
5 judges; limiting application of legal process
6 to such benefits; providing a declaration of
7 important state interest; providing an
8 effective date.
9
10 Be It Enacted by the Legislature of the State of Florida:
11
12 Section 1. It is hereby declared by the Legislature
13 that firefighters, paramedics, emergency medical technicians,
14 and police officers, as hereinafter defined, perform state and
15 municipal functions; that it is their duty to protect life and
16 property at their own risk and peril; that it is their duty to
17 continuously instruct school personnel, public officials, and
18 private citizens about safety; and that their activities are
19 vital to the public safety. Therefore, the Legislature
20 declares that it is a proper and legitimate state purpose to
21 provide a uniform retirement system for the benefit of
22 firefighters, paramedics, emergency medical technicians, and
23 police officers as hereinafter defined and intends, in
24 implementing the provisions of Section 14, Article X of the
25 State Constitution as they relate to municipal and special
26 district pension trust fund systems and plans, that such
27 retirement systems or plans be managed, administered,
28 operated, and funded in such manner as to maximize the
29 protection of pension trust funds. Pursuant to Section 18,
30 Article VII of the State Constitution, the Legislature hereby
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1 determines and declares that the provisions of this act
2 fulfill an important state interest.
3 Section 2. Paragraph (b) of subsection (4) of section
4 121.091, Florida Statutes, is amended to read:
5 121.091 Benefits payable under the system.--Benefits
6 may not be paid under this section unless the member has
7 terminated employment as provided in s. 121.021(39)(a) or
8 begun participation in the Deferred Retirement Option Program
9 as provided in subsection (13), and a proper application has
10 been filed in the manner prescribed by the department. The
11 department may cancel an application for retirement benefits
12 when the member or beneficiary fails to timely provide the
13 information and documents required by this chapter and the
14 department's rules. The department shall adopt rules
15 establishing procedures for application for retirement
16 benefits and for the cancellation of such application when the
17 required information or documents are not received.
18 (4) DISABILITY RETIREMENT BENEFIT.--
19 (b) Total and permanent disability.--A member shall be
20 considered totally and permanently disabled if, in the opinion
21 of the administrator, he or she is prevented, by reason of a
22 medically determinable physical or mental impairment, from
23 rendering useful and efficient service as an officer or
24 employee. A Special Risk Class member who is an officer as
25 defined in s. 943.10(1), (2), or (3); a firefighter as defined
26 in s. 633.30(1); an emergency medical technician as defined in
27 s. 401.23(11); or a paramedic as defined in s. 401.23(17) who
28 is catastrophically injured as defined in s. 440.02(37) in the
29 line of duty as a result of a felonious act of another shall
30 be considered totally and permanently disabled and unable to
31 render useful and efficient service as an officer, unless the
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1 administrator can provide documented competent medical
2 evidence that the officer is able to render useful and
3 efficient service as an officer. For purposes of this
4 subsection, the term "officer" includes law enforcement
5 officers, correctional officers, correctional probation
6 officers, firefighters, emergency medical technicians, and
7 paramedics.
8 Section 3. Subsection (5) of section 175.191, Florida
9 Statutes, is amended to read:
10 175.191 Disability retirement.--For any municipality,
11 special fire control district, chapter plan, local law
12 municipality, local law special fire control district, or
13 local law plan under this chapter:
14 (5) The benefit payable to a firefighter who retires
15 from the service of a municipality or special fire control
16 district due to total and permanent disability as a direct
17 result of a disability is the monthly income payable for 10
18 years certain and life for which, if the firefighter's
19 disability occurred in the line of duty, his or her monthly
20 benefit shall be the accrued retirement benefit, but shall not
21 be less than 42 percent of his or her average monthly salary
22 at the time of disability. If after 10 years of service the
23 disability is other than in the line of duty, the
24 firefighter's monthly benefit shall be the accrued normal
25 retirement benefit, but shall not be less than 25 percent of
26 his or her average monthly salary at the time of disability.
27 Notwithstanding any provision to the contrary, the monthly
28 retirement benefit payable to a firefighter, emergency medical
29 technician, or paramedic who retires from service due to total
30 and permanent disability as a result of a catastrophic injury
31 as defined in s. 440.02(37) where such injury is a result of a
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1 felonious act of another shall be the accrued retirement
2 benefit but shall not be less than 80 percent of his or her
3 average monthly salary at the time of disability.
4 Section 4. Subsection (5) of section 185.18, Florida
5 Statutes, is amended to read:
6 185.18 Disability retirement.--For any municipality,
7 chapter plan, local law municipality, or local law plan under
8 this chapter:
9 (5) The benefit payable to a police officer who
10 retires from the service of the city with a total and
11 permanent disability as a result of a disability is the
12 monthly income payable for 10 years certain and life for
13 which, if the police officer's disability occurred in the line
14 of duty, his or her monthly benefit shall be the accrued
15 retirement benefit, but shall not be less than 42 percent of
16 his or her average monthly compensation as of the police
17 officer's disability retirement date. If after 10 years of
18 service the disability is other than in the line of duty, the
19 police officer's monthly benefit shall be the accrued normal
20 retirement benefit, but shall not be less than 25 percent of
21 his or her average monthly compensation as of the police
22 officer's disability retirement date. Notwithstanding any
23 provision to the contrary, the monthly retirement benefit
24 payable to a police officer who retires from service due to
25 total and permanent disability as a result of a catastrophic
26 injury as defined in s. 440.02(37) where such injury is a
27 result of a felonious act of another shall be the accrued
28 retirement benefit but shall not be less than 80 percent of
29 the officer's average monthly compensation as of the officer's
30 disability retirement date.
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1 Section 5. Subsection (1), paragraph (a) of subsection
2 (2), paragraph (e) of subsection (4), paragraph (b) of
3 subsection (8), and paragraphs (a) and (b) of subsection (9)
4 of section 121.4501, Florida Statutes, are amended, and
5 paragraph (f) is added to subsection (9) of said section, to
6 read:
7 121.4501 Public Employee Optional Retirement
8 Program.--
9 (1) The Trustees of the State Board of Administration
10 shall establish an optional defined contribution retirement
11 program for members of the Florida Retirement System under
12 which retirement benefits will be provided for eligible
13 employees who elect to participate in the program. The
14 benefits to be provided for or on behalf of participants in
15 such optional retirement program shall be provided through
16 employee-directed investments, in accordance with s. 401(a) of
17 the Internal Revenue Code and its related regulations. The
18 employers shall contribute, as provided in this section and s.
19 121.571, to the Public Employee Optional Retirement Program
20 Trust Fund toward the funding of such optional benefits.
21 (2) DEFINITIONS.--As used in this section, the term:
22 (a) "Approved provider" or "provider" means a private
23 sector company that is selected and approved by the state
24 board to offer one or more investment products or services to
25 the Public Employee Optional Retirement Program, including a
26 "bundled provider" that offers participants a range of
27 individually allocated or unallocated investment products and
28 may offer a range of administrative and customer services,
29 which may include accounting and administration of individual
30 participant benefits and contributions; individual participant
31 recordkeeping; asset purchase, control, and safekeeping;
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1 direct execution of the participant's instructions as to asset
2 and contribution allocation; calculation of daily net asset
3 values; direct access to participant account information;
4 periodic reporting to participants, at least quarterly, on
5 account balances and transactions; direct advice and guidance
6 on its investments options; a broad array of distribution
7 options; and asset allocation and retirement counseling and
8 education. Private sector companies include investment
9 management companies, insurance companies, depositories, and
10 mutual fund companies.
11 (4) PARTICIPATION; ENROLLMENT.--
12 (e) After the period during which an eligible employee
13 had the choice to elect the defined benefit program or the
14 Public Employee Optional Retirement Program, the employee
15 shall have one opportunity, that is, a second election, at the
16 employee's discretion, to choose to move from the defined
17 benefit program to the Public Employee Optional Retirement
18 Program or from the Public Employee Optional Retirement
19 Program to the defined benefit program. This paragraph shall
20 be contingent upon approval from the Internal Revenue Service
21 for including the choice described herein within the programs
22 offered by the Florida Retirement System.
23 1. If the employee chooses to move to the Public
24 Employee Optional Retirement Program, the applicable
25 provisions of this section shall govern the transfer.
26 2. If the employee chooses to move from the Public
27 Employee Optional Retirement Program to the defined benefit
28 program, the employee must transfer from his or her optional
29 program Public Employee Optional Retirement Program account
30 and from other employee moneys as necessary, a sum
31 representing all contributions that would have been made to
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1 the defined benefit plan for that employee and the actual
2 return that would have been earned on those contributions had
3 they been invested in the defined benefit program.
4
5 If, at the time of a member's election to transfer to the
6 defined benefit program, the member's optional program account
7 does not contain the total amount required to be transferred
8 to the defined benefit program, the member must pay the
9 remaining balance. If the member's optional program account
10 contains more than the amount required to be transferred to
11 the defined benefit program, such additional amount shall
12 remain in the member's optional program account.
13 (8) ADMINISTRATION OF PROGRAM.--
14 (b)1. The state board shall select and contract with
15 one third-party administrator to provide administrative
16 services, where those services do not duplicate services
17 provided by the Division of Retirement within the Department
18 of Management Services. With the approval of the state board,
19 the third-party administrator may subcontract with other
20 organizations or individuals to provide components of the
21 administrative services. As a cost of administration, the
22 board may compensate any such contractor for its services, in
23 accordance with the terms of the contract, as is deemed
24 necessary or proper by the board. The third-party
25 administrator may not be an approved provider or be affiliated
26 with an approved provider.
27 2. These administrative services may include, but are
28 not limited to, enrollment of eligible employees, collection
29 of employer contributions, disbursement of such contributions
30 to approved providers in accordance with the allocation
31 directions of participants; services relating to consolidated
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1 billing; individual and collective recordkeeping and
2 accounting; asset purchase, control, and safekeeping; and
3 direct disbursement of funds to and from the third-party
4 administrator, the division, the board, employers,
5 participants, approved providers, and beneficiaries. Nothing
6 in this section shall prevent or prohibit a bundled provider
7 from providing any administrative or customer service,
8 including accounting and administration of individual
9 participant benefits and contributions; individual participant
10 recordkeeping; asset purchase, control, and safekeeping;
11 direct execution of the participant's instructions as to asset
12 and contribution allocation; calculation of daily net asset
13 values; direct access to participant account information;
14 periodic reporting to participants, at least quarterly, on
15 account balances and transactions.
16 3. The state board shall select and contract with one
17 or more organizations to provide educational services. With
18 approval of the board, the organizations may subcontract with
19 other organizations or individuals to provide components of
20 the educational services. As a cost of administration, the
21 board may compensate any such contractor for its services in
22 accordance with the terms of the contract, as is deemed
23 necessary or proper by the board. The education organization
24 may not be an approved provider or be affiliated with an
25 approved provider.
26 4. Educational services shall be designed by the board
27 and department to assist employers, eligible employees,
28 participants, and beneficiaries in order to maintain
29 compliance with United States Department of Labor regulations
30 under s. 404(c) of the Employee Retirement Income Security Act
31 of 1974 and to assist employees in their choice of defined
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1 benefit or defined contribution retirement alternatives.
2 Educational services include, but are not limited to,
3 disseminating educational materials; providing retirement
4 planning education; explaining the differences between the
5 defined benefit retirement plan and the defined contribution
6 retirement plan; and offering financial planning guidance on
7 matters such as investment diversification, investment risks,
8 investment costs, and asset allocation. An approved provider
9 may also provide educational information, including retirement
10 planning and investment allocation information concerning its
11 products and services.
12 (9) INVESTMENT OPTIONS OR PRODUCTS; PERFORMANCE
13 REVIEW.--
14 (a) The board shall develop policy and procedures for
15 selecting, evaluating, and monitoring the performance of
16 approved providers and investment products to which employees
17 may direct retirement contributions under the program. In
18 accordance with such policy and procedures, the board shall
19 designate and contract for a number of investment products as
20 determined by the board. The board shall also select one or
21 more bundled providers, each of whom who offer nine multiple
22 investment options and related services products when such an
23 approach is determined by the board to afford value to the
24 participants otherwise not available through individual
25 investment products. Each approved bundled provider may offer
26 investment options that provide participants with the
27 opportunity to invest in each of the following asset classes,
28 to be composed of individual options that represent either a
29 single asset class or a combination thereof: money markets,
30 U.S. fixed income, U.S. equities, and foreign stock. The board
31 shall review and manage all educational materials, contract
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1 terms, fee schedules, and other aspects of the approved
2 provider relationships to ensure that no provider is unduly
3 favored or penalized by virtue of its status within the plan.
4 (b) The board shall consider investment options or
5 products it considers appropriate to give participants the
6 opportunity to accumulate retirement benefits, subject to the
7 following:
8 1. The Public Employee Optional Retirement Program
9 must offer a diversified mix of low-cost investment products
10 that span the risk-return spectrum, and may include a
11 guaranteed account as well as investment products such as
12 individually allocated guaranteed and variable annuities, that
13 meet the requirements of this subsection and that combine the
14 ability to accumulate investment returns with the option of
15 receiving lifetime income consistent with the long-term
16 retirement security of a pension plan and similar to the
17 lifetime income benefit provided by the Florida Retirement
18 System.
19 2. Investment options or products offered by the group
20 of approved providers may include mutual funds, group annuity
21 contracts, individual retirement annuities, interests in
22 trusts, collective trusts, separate accounts, and other such
23 financial instruments, and shall include products that give
24 participants the option of committing their contributions for
25 an extended time period in an effort to obtain higher returns
26 than could be obtained from investment products offering full
27 liquidity.
28 3. The board shall not contract with any provider that
29 imposes a front-end, back-end, contingent, or deferred sales
30 charge, or any other fee that limits or restricts the ability
31 of participants to select any investment product available in
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1 the optional program. This prohibition shall not apply to fees
2 or charges that are imposed on withdrawals from products that
3 give participants the option of committing their contributions
4 for an extended time period in an effort to obtain higher
5 returns than could be obtained from investment products
6 offering full liquidity, provided that the product in
7 question, net of all fees and charges, produces material
8 benefits relative to other comparable products in the program
9 offering full liquidity.
10 4. Fees or charges for insurance features, such as
11 mortality and expense risk charges, shall be reasonable
12 relative to the benefits provided.
13 (f)1. An approved provider shall comply with all
14 applicable federal and state securities and insurance laws and
15 regulations, as well as the applicable rules and guidelines of
16 the National Association of Securities Dealers (NASD)
17 governing the ethical marketing of investment products. In
18 furtherance of this mandate, an approved provider must agree
19 in its contract with the board to establish and maintain a
20 compliance education and monitoring system to supervise the
21 activities of all personnel who directly communicate with
22 individual participants and recommend investment products,
23 which system is consistent with National Association of
24 Security Dealers rules.
25 2. Approved provider personnel who directly
26 communicate with individual participants and who recommend
27 investment products shall make an independent and unbiased
28 determination as to whether an investment product is suitable
29 for a particular participant.
30 3. The board shall develop procedures to receive and
31 resolve participant complaints against a provider or approved
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1 provider personnel, and, when appropriate, refer such
2 complaints to the appropriate regulatory agency.
3 4. Approved providers are prohibited from selling or
4 in any way distributing any customer list or participant
5 identification information generated through their offering of
6 products or services through the optional retirement program.
7 Section 6. The appointment of the executive director
8 of the State Board of Administration shall be subject to the
9 approval by a majority vote of the Board of Trustees of the
10 State Board of Administration and the Governor must vote on
11 the prevailing side. Such appointment must be reaffirmed in
12 the same manner by the Board of Trustees on an annual basis.
13 Section 7. Paragraphs (b) through (j) of subsection
14 (2) of section 121.4501, Florida Statutes, are redesignated as
15 paragraphs (d) through (l), respectively, new paragraphs (b)
16 and (c) are added to said subsection, and subsections (7) and
17 (16) of said section are amended, to read:
18 121.4501 Public Employee Optional Retirement
19 Program.--
20 (2) DEFINITIONS.--As used in this section, the term:
21 (b) "Average monthly compensation" means one-twelfth
22 of average final compensation as defined in s. 121.021(24).
23 (c) "Covered employment" means employment in a
24 regularly established position as defined in s. 121.021(52).
25 (7) BENEFITS.--Under the Public Employee Optional
26 Retirement Program:
27 (a) Benefits shall be provided in accordance with s.
28 401(a) of the Internal Revenue Code.
29 (b) Benefits shall accrue in individual accounts that
30 are participant-directed, portable, and funded by employer
31 contributions and earnings thereon.
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1 (c) Benefits shall be payable in accordance with s.
2 121.591. the following terms and conditions:
3 1. To the extent vested, benefits shall be payable
4 only to a participant, or to his or her beneficiaries as
5 designated by the participant.
6 2. Benefits shall be paid by the third-party
7 administrator or designated approved providers in accordance
8 with the law, the contracts, and any applicable board rule or
9 policy.
10 3. To begin receiving the benefits, the participant
11 must be terminated from all employment with all Florida
12 Retirement System employers, as provided in s. 121.021(39), or
13 the participant must be deceased. If a participant elects to
14 receive his or her benefits upon termination of employment,
15 the participant must submit a written application to the
16 third-party administrator indicating his or her preferred
17 distribution date and selecting an authorized method of
18 distribution as provided in paragraph (d). The participant may
19 defer receipt of benefits until he or she chooses to make such
20 application, subject to federal requirements.
21 4. In the event of a participant's death, moneys
22 accumulated by, or on behalf of, the participant, less
23 withholding taxes remitted to the Internal Revenue Service,
24 shall be distributed to the participant's designated
25 beneficiary or beneficiaries, or to the participant's estate,
26 as if the participant retired on the date of death, as
27 provided in paragraph (e). No other death benefits shall be
28 available for survivors of participants under the Public
29 Employee Optional Retirement Program, except for such
30 benefits, or coverage for such benefits, as are separately
31 afforded by the employer, at the employer's discretion.
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1 (d) Upon receipt by the third-party administrator of a
2 properly executed application for distribution of benefits,
3 the total accumulated benefit shall be payable to the
4 participant, as:
5 1. A lump-sum distribution to the participant;
6 2. A lump-sum direct rollover distribution whereby all
7 accrued benefits, plus interest and investment earnings, are
8 paid from the participant's account directly to the custodian
9 of an eligible retirement plan, as defined in s. 402(c)(8)(B)
10 of the Internal Revenue Code, on behalf of the participant; or
11 3. Periodic distributions, as authorized by the state
12 board.
13 (e) Survivor benefits shall be payable as:
14 1. A lump-sum distribution payable to the
15 beneficiaries, or to the deceased participant's estate;
16 2. An eligible rollover distribution on behalf of the
17 surviving spouse of a deceased participant, whereby all
18 accrued benefits, plus interest and investment earnings, are
19 paid from the deceased participant's account directly to the
20 custodian of an individual retirement account or an individual
21 retirement annuity, as described in s. 402(c)(9) of the
22 Internal Revenue Code, on behalf of the surviving spouse; or
23 3. A partial lump-sum payment whereby a portion of the
24 accrued benefit is paid to the deceased participant's
25 surviving spouse or other designated beneficiaries, less
26 withholding taxes remitted to the Internal Revenue Service,
27 and the remaining amount is transferred directly to the
28 custodian of an individual retirement account or an individual
29 retirement annuity, as described in s. 402(c)(9) of the
30 Internal Revenue Code, on behalf of the surviving spouse. The
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1 proportions must be specified by the participant or the
2 surviving beneficiary.
3
4 This paragraph does not abrogate other applicable provisions
5 of state or federal law providing for payment of death
6 benefits.
7 (f) The benefits payable to any person under the
8 Public Employee Optional Retirement Program, and any
9 contributions accumulated under such program, are not subject
10 to assignment, execution, attachment, or any legal process,
11 except for qualified domestic relations orders by a court of
12 competent jurisdiction, income deduction orders as provided in
13 s. 61.1301, and federal income tax levies.
14 (16) DISABILITY BENEFITS.--For any participant of the
15 optional retirement program who becomes totally and
16 permanently disabled, benefits shall be paid in accordance
17 with s. 121.591 as defined in s. 121.091(4)(b), the
18 participant shall be entitled to receive those moneys that
19 have accrued in his or her participant account. It is the
20 intent of the Legislature to design a disability benefit for
21 participants of the optional program similar to those
22 disability benefits afforded defined benefit program members.
23 The department is directed to study the potential options of
24 such coverage, including self-insurance and commercial
25 coverage, the alternative methods of administering such
26 benefits, and the fiscal impacts on the employees and
27 employers, and to make recommendations to the Legislature by
28 January 15, 2001.
29 Section 8. Subsection (3) of section 121.571, Florida
30 Statutes, is amended to read:
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1 121.571 Contributions.--Contributions to the Public
2 Employee Optional Retirement Program shall be made as follows:
3 (3) CONTRIBUTIONS TO DISABILITY ACCOUNT.--
4 (a) All contributions made on behalf of a participant
5 pursuant to this subsection shall be transferred by the
6 employer to the third-party administrator for deposit in the
7 Public Employee Disability Trust Fund administered by the
8 Division of Retirement. Such contributions, less any fees or
9 charges authorized by the Legislature to offset the costs of
10 administering the disability component of the optional
11 retirement program, shall be used to provide disability
12 coverage for participants in the optional retirement program.
13 (b) Disability contributions for Regular Class members
14 of the optional retirement plan are as follows:
15
16 Dates of Contribution Employers
17 Rate Changes
18 Effective July 1, 2002: 0.25% 0.39%
19
20 (c) Disability contributions for Special Risk Class
21 members of the optional retirement plan are as follows:
22
23 Dates of Contribution Employers
24 Rate Changes
25 Effective July 1, 2002: 1.33% 1.25%
26
27 (d) Disability contributions for Special Risk
28 Administrative Support Class members of the optional
29 retirement plan are as follows:
30
31
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1 Dates of Contribution Employers
2 Rate Changes
3 Effective July 1, 2002: 0.45% 0.73%
4
5 (e) Disability contributions for Elected Officers'
6 Class members of the optional retirement plan are as follows:
7
8 Dates of Contribution Employers
9 Rate Changes
10 Effective July 1, 2002:
11 Legislators 0.41% 0.61%
12 Governor, Lt. Governor, 0.41% 0.61%
13 Cabinet Officers
14 State Attorneys, Public 0.41% 0.61%
15 Defenders
16 Justices, Judges 0.73% 1.45%
17 County Elected Officers 0.41% 0.86%
18
19 (f) Disability contributions for Senior Management
20 Service Class members of the optional retirement plan are as
21 follows:
22
23 Dates of Contribution Employers
24 Rate Changes
25
26 Effective July 1, 2002: 0.26% 0.50%
27
28 Section 9. Section 121.591, Florida Statutes, is
29 created to read:
30 121.591 Benefits payable under the Public Employee
31 Optional Retirement Program of the Florida Retirement
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1 System.--Benefits may not be paid under this section unless
2 the member has terminated employment as provided in s.
3 121.021(39)(a) or is deceased and a proper application has
4 been filed in the manner prescribed by the state board or the
5 department. The state board or the department, as appropriate,
6 may cancel an application for retirement benefits when the
7 member or beneficiary fails to timely provide the information
8 and documents required by this chapter and the rules of the
9 state board and the department. In accordance with their
10 respective responsibilities as provided in this section, the
11 state board and the department shall adopt rules establishing
12 procedures for application for retirement benefits and for the
13 cancellation of such application when the required information
14 or documents are not received.
15 (1) NORMAL BENEFIT.--Under the optional program:
16 (a) Benefits, in the form of vested accumulations as
17 described in s. 121.4501(6), shall be payable under this
18 subsection as follows:
19 1. To the extent vested, benefits shall be payable
20 only to a participant.
21 2. Benefits shall be paid by the third-party
22 administrator or designated approved providers in accordance
23 with the law, the contracts, and any applicable board rule or
24 policy.
25 3. To receive benefits under this subsection, the
26 participant must be terminated from all employment with all
27 Florida Retirement System employers, as provided in s.
28 121.021(39).
29 (b) If a participant elects to receive his or her
30 benefits upon termination of employment, the participant must
31 submit a written application to the third-party administrator
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1 indicating his or her preferred distribution date and
2 selecting an authorized method of distribution as provided in
3 paragraph (c). The participant may defer receipt of benefits
4 until he or she chooses to make such application, subject to
5 federal requirements.
6 (c) Upon receipt by the third-party administrator of a
7 properly executed application for distribution of benefits,
8 the total accumulated benefit shall be payable to the
9 participant as:
10 1. A lump-sum distribution to the participant;
11 2. A lump-sum direct rollover distribution whereby all
12 accrued benefits, plus interest and investment earnings, are
13 paid from the participant's account directly to the custodian
14 of an eligible retirement plan, as defined in s. 402(c)(8)(B)
15 of the Internal Revenue Code, as amended, on behalf of the
16 participant; or
17 3. Periodic distributions, as authorized by the state
18 board.
19 (2) DISABILITY RETIREMENT BENEFIT.--Benefits provided
20 under this subsection are payable in lieu of the benefits
21 which would otherwise be payable under the provisions of
22 subsection (1).
23 (a)1. If the participant has no credit under the
24 defined benefit program of the Florida Retirement System or
25 such credit has been nullified as provided under s.
26 121.4501(3)(c), all moneys accumulated in the participant's
27 optional program account, including vested and nonvested
28 accumulations as described in s. 121.4501(6), shall be
29 transferred from such individual account to the Division of
30 Retirement for deposit into the Public Employee Disability
31 Trust Fund; or
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1 2. If the participant is a former member of the
2 defined benefit program of the Florida Retirement System who
3 elected to retain the retirement credit he or she had earned
4 under that program as provided in s. 121.4501(3)(b), a sum
5 representing the actuarial present value of such credit shall
6 be transferred by the Division of Retirement from the Florida
7 Retirement System Trust Fund to the Public Employee Disability
8 Trust Fund. In addition, all moneys accumulated in the
9 participant's optional program account, including vested and
10 nonvested accumulations as described in s. 121.4501(6), shall
11 be transferred from such individual account to the Division of
12 Retirement for deposit into the Public Employee Disability
13 Trust Fund.
14 (b)1. A participant of the optional program who
15 becomes totally and permanently disabled, as defined in
16 paragraph (d), after completing 8 years of creditable service,
17 or a participant who becomes totally and permanently disabled
18 in the line of duty regardless of his or her length of
19 service, shall be entitled to a monthly disability benefit as
20 provided in this subsection.
21 2. For purposes of this subsection, the 8 years of
22 creditable service required to vest for regular disability
23 benefits must be creditable service under the defined benefit
24 program of the Florida Retirement System or service under the
25 optional program, subject to the following conditions:
26 a. In the case of present value transfers to a
27 participant's account under s. 121.4501(3)(c), the period of
28 service under the defined benefit program represented in the
29 present value amounts transferred shall only be considered
30 creditable service for purposes of vesting for disability
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1 benefits as long as such funds remain in the participant's
2 accounts under the optional program.
3 b. In the case of contributions made to a
4 participant's accounts under s. 121.4501(5), the period of
5 service under the optional program shall only be considered
6 creditable service for purposes of vesting for disability
7 benefits as long as such funds remain in the participant's
8 accounts under the optional program.
9
10 If a participant terminates employment and takes distribution
11 of such funds as provided in subsection (1), all credit for
12 the service represented by such distributed funds is forfeited
13 for purposes of qualifying for disability benefits under this
14 subsection.
15 (c)1. If the division has received from the employer
16 the required documentation of the participant's termination of
17 employment, the effective retirement date for a participant
18 who applies and is approved for disability retirement shall be
19 established by rule of the division.
20 2. For a participant who is receiving workers'
21 compensation payments, the effective disability retirement
22 date may not precede the date the participant reaches maximum
23 medical improvement, unless the participant terminates
24 employment prior to reaching maximum medical improvement.
25 (d) A participant shall be considered totally and
26 permanently disabled if, in the opinion of the division, he or
27 she is prevented by reason of a medically determinable
28 physical or mental impairment from rendering useful and
29 efficient service as an officer or employee.
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1 (e) The division, before approving payment of any
2 disability retirement benefit, shall require proof that the
3 participant is totally and permanently disabled as follows:
4 1. Such proof shall include the certification of the
5 participant's total and permanent disability by two licensed
6 physicians in this state and such other evidence of disability
7 as the division may require, including reports from vocational
8 rehabilitation, evaluation, or testing specialists who have
9 evaluated the applicant for employment.
10 2. It shall be documented that:
11 a. The participant's medical condition occurred or
12 became symptomatic during the time the participant was
13 employed in an employee/employer relationship with his or her
14 employer.
15 b. The participant was totally and permanently
16 disabled at the time he or she terminated covered employment.
17 c. The participant has not been employed with any
18 other employer after such termination.
19 3. If the application is for in-line-of-duty
20 disability, in addition to the requirements of subparagraph
21 2., it must be documented by competent medical evidence that
22 the disability was caused by a job-related illness or accident
23 which occurred while the participant was in an
24 employee/employer relationship with his or her employer.
25 4. The unavailability of an employment position that
26 the participant is physically and mentally capable of
27 performing shall not be considered as proof of total and
28 permanent disability.
29 (f) A participant whose application for regular
30 disability retirement has been denied and who has filed an
31 appeal to the State Retirement Commission under s. 121.23 may,
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1 if eligible, elect to terminate employment and take
2 distribution of benefits as provided under subsection (1)
3 while he or she is awaiting the decision on the appeal. In
4 that event:
5 1. If disability benefits are later approved as a
6 result of the appeal, to receive the disability benefit
7 payable under this subsection, the participant shall first
8 repay to the division for deposit in the Public Employee
9 Disability Trust Fund the total amount withdrawn under
10 subsection (1), less the amount that would have otherwise been
11 payable as a monthly disability benefit while the appeal was
12 pending if the application had been initially approved.
13 2. If the appeal is later denied, no further benefits
14 are payable to the terminated participant.
15 (g) Upon the disability retirement of a participant
16 under this subsection, the participant shall receive a monthly
17 benefit that shall begin to accrue on the first day of the
18 month of disability retirement, as approved by the division,
19 and shall be payable on the last day of that month and each
20 month thereafter during his or her lifetime and continued
21 disability.
22 (h) The amount of each monthly payment shall be
23 computed in the same manner as that computed for a normal
24 retirement benefit but shall be based on disability option
25 actuarial equivalency tables and the average monthly
26 compensation and creditable service of the participant as of
27 his or her disability retirement date, subject to the
28 following:
29 1. If the participant's disability occurred in the
30 line of duty, the monthly Option 1 benefit shall be a minimum
31 of:
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1 a. Forty-two percent of the participant's average
2 monthly compensation as of the disability retirement date; or
3 b. Sixty-five percent of the participant's average
4 monthly compensation as of the disability retirement date for
5 a participant of the special risk class who retires on or
6 after July 1, 2002.
7 2. If the participant's disability occurred other than
8 in the line of duty, the monthly Option 1 benefit shall be a
9 minimum of 25 percent of the participant's average monthly
10 compensation as of the disability retirement date.
11 (i) A participant whose initial application for
12 disability retirement has been denied may reapply for
13 disability benefits. However, such participant's reapplication
14 may be considered only if the participant presents new medical
15 evidence of a medical condition that existed prior to the
16 participant's termination of employment. The division may
17 prescribe by rule procedures for reapplication and for review
18 and approval or disapproval of reapplication.
19 (j) Nothing in this subsection shall be construed to
20 prevent a participant who has been approved for a disability
21 retirement benefit payable under this subsection from electing
22 to receive, in lieu of the benefit payable under this
23 subsection, the benefit payable to him or her under the
24 provisions of subsection (1), provided such election is made
25 prior to the deposit or cashing of a disability retirement
26 warrant or receipt of such warrant by electronic funds
27 transfer in accordance with the participant's authorization of
28 direct deposit of such funds.
29 (k) The division may require periodic reexaminations
30 at the expense of the Public Employee Disability Trust Fund.
31 The division may adopt rules establishing procedures for
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1 conducting and review of such reexaminations. If the division
2 finds that a participant who is receiving disability benefits
3 is no longer disabled, the division shall direct that the
4 disability benefits be discontinued and no further benefits
5 shall be payable under this subsection. The decision of the
6 division on this question shall be final and binding. Upon
7 termination of the monthly disability benefit:
8 1. If such participant does not reenter covered
9 employment following recovery from disability and had not
10 satisfied the vesting requirement as of the disability
11 retirement date for any or all of the moneys which had
12 accumulated in his or her participant accounts, the remainder
13 of the nonvested accumulation as described under subparagraph
14 5., if any, shall be held in a suspense account in the Public
15 Employee Disability Trust Fund.
16 a. If the participant returns to covered employment as
17 an eligible employee as defined in s. 121.4501(2) within 5
18 years after the date of recovery, the division shall transfer
19 any such moneys held in the suspense account, plus interest
20 calculated at an effective annual rate of 6 percent, to the
21 State Board of Administration for deposit in the participant's
22 individual account under the optional program, as directed by
23 the participant.
24 b. If the participant fails to return to covered
25 employment within 5 years after recovery, any such moneys held
26 in the suspense account in the Public Employee Disability
27 Trust Fund shall be forfeited.
28 2. If such participant does not reenter covered
29 employment following recovery from disability but had
30 satisfied vesting requirements as of the disability retirement
31 date for any or all of the moneys which had accumulated in his
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1 or her accounts under the optional program, the amount
2 representing the remainder of his or her vested accumulation
3 as described under subparagraph 5., if any, shall be
4 transferred from the Public Employee Disability Trust Fund to
5 the Public Employee Optional Retirement Program Trust Fund and
6 shall be payable as provided in subsection (1).
7 3. If such participant returns to covered employment
8 following recovery from disability as a participant in the
9 optional program, the amount representing the remainder of his
10 or her nonvested accumulation or the remainder of his or her
11 vested accumulation as described under subparagraph 5., if
12 any, shall be transferred from the Public Employee Disability
13 Trust Fund to the third-party administrator for deposit in the
14 participant's individual investment accounts as directed by
15 the participant. Vested accumulations shall be accounted for
16 separately from nonvested accumulations.
17 4. If such participant reenters covered employment as
18 a member of the defined benefit program of the Florida
19 Retirement System, and is continuously employed for a minimum
20 of 1 year of creditable service, he or she may claim as
21 creditable service the months during which he or she was
22 receiving a disability benefit, upon payment of the required
23 contributions as provided in s. 121.091(4)(h)1.d.
24 5. As used in reference to funds deposited in the
25 Public Employee Disability Trust Fund under paragraph (a):
26 a. The term "remainder of the nonvested accumulation"
27 means all employer contributions deposited on behalf of a
28 participant who had not met the vesting requirement set forth
29 in s. 121.4501(6)(a)1. as of his or her disability retirement
30 date and any transferred present value amount deposited on
31 behalf of a participant who had not met the vesting
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CS/HB 347, First Engrossed
1 requirement set forth in s. 121.4501(6)(b)1. as of his or her
2 disability retirement date, plus interest and earnings
3 thereon, less the total amount of disability benefits received
4 by that participant.
5 b. The term "remainder of the vested accumulation"
6 means all employer contributions deposited on behalf of any
7 participant who had met the vesting requirement set forth in
8 s. 121.4501(6)(a)1. as of his or her disability retirement
9 date and any transferred present value amount deposited on
10 behalf of any participant who had met the vesting requirement
11 set forth in s. 121.4501(6)(b)1. as of his or her disability
12 retirement date, plus interest and earnings thereon, less the
13 total amount of disability benefits received by that
14 participant.
15 (l) Both the participant receiving disability benefits
16 who reenters employment and the employer employing such
17 disability retiree shall notify the division immediately upon
18 reemployment and the division shall terminate such
19 participant's disability benefits, effective upon the first
20 day of the month following the month in which notification of
21 recovery is received. If the participant is reemployed with a
22 Florida Retirement System employer at the time of benefit
23 termination and he or she has received disability retirement
24 benefit and salary payments concurrently prior to notifying
25 the division, he or she may elect within 30 days to:
26 1. Retain the retirement benefits received prior to
27 termination of disability benefits and begin receiving
28 retirement service credit effective upon the date of
29 termination of benefits; or
30 2. Repay, within 12 months after his or her decision
31 to receive service credit, the retirement benefits received
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CS/HB 347, First Engrossed
1 for each month of reemployment prior to termination of
2 disability benefits and begin receiving retirement service
3 credit effective upon the date of reemployment. Any such
4 unpaid benefits shall have compound interest of 6.5 percent
5 added each June 30.
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7 A participant may not receive both retirement service credit
8 for employment and retirement benefits for the same month.
9 (m) If, after recovery from disability and reentry
10 into covered employment, the participant again becomes
11 disabled and is again approved for disability retirement, the
12 Option 1 monthly retirement benefit shall not be less than the
13 Option 1 monthly benefit calculated at the time of the
14 previous disability, plus any cost-of-living increases payable
15 up to the time the disability benefit was terminated upon his
16 or her reentry into covered employment.
17 (n) A participant shall not be entitled to receive any
18 disability retirement benefit if the disability is a result
19 of:
20 1. Injury or disease sustained by the participant
21 while willfully participating in a riot, civil insurrection,
22 or other act of violence or while committing a felony;
23 2. Injury or disease sustained by the participant
24 after his or her employment has terminated; or
25 3. Intentional, self-inflicted injury.
26 (o)1. If a participant is a justice of the Supreme
27 Court, judge of a district court of appeal, circuit judge, or
28 judge of a county court who has served for 6 years or more as
29 an elected constitutional judicial officer, including service
30 as a judicial officer in any court abolished pursuant to Art.
31 V of the State Constitution, and who is retired for disability
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1 by order of the Supreme Court upon recommendation of the
2 Judicial Qualifications Commission pursuant to the provisions
3 of Art. V of the State Constitution, the participant's Option
4 1 monthly disability benefit amount as provided in s.
5 121.091(6)(a)1. shall be two-thirds of his or her monthly
6 compensation as of the participant's disability retirement
7 date. Such a participant may alternatively elect to receive an
8 actuarially adjusted disability retirement benefit under any
9 other option as provided in s. 121.091(6)(a), or to receive
10 the normal benefit payable under the optional program as set
11 forth under subsection (1).
12 2. If any justice or judge who is a participant of the
13 optional program is retired for disability by order of the
14 Supreme Court upon recommendation of the Judicial
15 Qualifications Commission pursuant to the provisions of Art. V
16 of the State Constitution and elects to receive a monthly
17 disability benefit under the provisions of this paragraph:
18 a. Any present value amount which was transferred to
19 his or her program account and all employer contributions made
20 to such account on his or her behalf, plus interest and
21 earnings thereon, shall be transferred to and deposited in the
22 Public Employee Disability Trust Fund.
23 b. The monthly benefits payable under this paragraph
24 for any affected justice or judge retired from the Florida
25 Retirement System pursuant to Art. V of the State Constitution
26 shall be paid from the Public Employee Disability Trust Fund.
27 (3) DEATH BENEFITS.--Under the optional program:
28 (a) Survivor benefits shall be payable in accordance
29 with the following terms and conditions:
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1 1. To the extent vested, benefits shall be payable
2 only to a participant's beneficiary or beneficiaries as
3 designated by the participant.
4 2. Benefits shall be paid by the third-party
5 administrator or designated approved providers in accordance
6 with the law, the contracts, and any applicable board rule or
7 policy.
8 3. To receive benefits under this subsection, the
9 participant must be deceased.
10 (b) In the event of a participant's death, all vested
11 accumulations as described in s. 121.4501(6), less withholding
12 taxes remitted to the Internal Revenue Service, shall be
13 distributed, as provided in paragraph (c), to the
14 participant's designated beneficiary or beneficiaries, or to
15 the participant's estate, as if the participant retired on the
16 date of death. No other death benefits shall be available for
17 survivors of participants under the optional program, except
18 for such benefits, or coverage for such benefits, as are
19 otherwise provided by law or are separately afforded by the
20 employer, at the employer's discretion.
21 (c) Upon receipt by the third-party administrator of a
22 properly executed application for distribution of benefits,
23 the total accumulated benefit shall be payable by the
24 third-party administrator to the participant's surviving
25 beneficiary or beneficiaries as:
26 1. A lump-sum distribution payable to the beneficiary
27 or beneficiaries or to the deceased participant's estate;
28 2. An eligible rollover distribution on behalf of the
29 surviving spouse of a deceased participant, whereby all
30 accrued benefits, plus interest and investment earnings, are
31 paid from the deceased participant's account directly to the
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CS/HB 347, First Engrossed
1 custodian of an individual retirement account or an individual
2 retirement annuity, as described in s. 402(c)(9) of the
3 Internal Revenue Code, on behalf of the surviving spouse; or
4 3. A partial lump-sum payment whereby a portion of the
5 accrued benefit is paid to the deceased participant's
6 surviving spouse or other designated beneficiaries, less
7 withholding taxes remitted to the Internal Revenue Service,
8 and the remaining amount is transferred directly to the
9 custodian of an individual retirement account or an individual
10 retirement annuity, as described in s. 402(c)(9) of the
11 Internal Revenue Code, on behalf of the surviving spouse. The
12 proportions must be specified by the participant or the
13 surviving beneficiary.
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15 This paragraph does not abrogate other applicable provisions
16 of state or federal law providing for payment of death
17 benefits.
18 (4) LIMITATION ON LEGAL PROCESS.--The benefits payable
19 to any person under the optional program and any contributions
20 accumulated under such program are not subject to assignment,
21 execution, attachment, or any legal process, except for
22 qualified domestic relations orders by a court of competent
23 jurisdiction, income deduction orders as provided in s.
24 61.1301, and federal income tax levies.
25 Section 10. The Legislature finds that a proper and
26 legitimate state purpose is served when employees and retirees
27 of the state and of its political subdivisions, and the
28 dependents, survivors, and beneficiaries of such employees and
29 retirees, are extended the basic protections afforded by
30 governmental retirement systems that provide fair and adequate
31 benefits that are managed, administered, and funded in an
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CS/HB 347, First Engrossed
1 actuarially sound manner, as required by section 14, Article X
2 of the State Constitution and part VII of chapter 112, Florida
3 Statutes. Therefore, the Legislature determines and declares
4 that this act fulfills an important state interest.
5 Section 11. This act shall take effect upon becoming a
6 law.
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