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Florida Senate - 2002 CS for SB 2132
By the Committee on Governmental Oversight and Productivity;
and Senator Sanderson
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1 A bill to be entitled
2 An act relating to the Florida Retirement
3 System; amending s. 110.123, F.S.; redefining
4 the term "retired state officer or employee" or
5 "retiree" to include an officer or employee who
6 retires under the Public Employee Optional
7 Retirement Program under certain circumstances;
8 amending s. 110.205, F.S.; granting senior
9 management service benefits to county health
10 department directors and administrators;
11 amending ss. 121.052, 121.055, and 121.071,
12 F.S.; making the date for payment of retirement
13 contributions consistent under the Florida
14 Retirement System defined benefit and defined
15 contribution programs; providing eligibility of
16 certain officials for membership in the Senior
17 Management Service Class of the Florida
18 Retirement System; amending s. 121.35, F.S.;
19 authorizing contributions to the optional
20 retirement program in the form of rollovers or
21 direct trustee-to-trustee transfers; expanding
22 the methods for disbursing benefits; amending
23 s. 121.4501, F.S., relating to the Public
24 Employee Optional Retirement Program; updating
25 definitions; establishing dates on which
26 present value calculations are based;
27 conforming election provisions for local
28 government employees to provisions applicable
29 to other employees; providing for the effective
30 date of enrollment for certain employers;
31 providing for the transfer of contributions
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1 under certain circumstances; transferring
2 certain provisions relating to payment of
3 benefits to s. 121.591, F.S., as created in the
4 act; amending s. 121.571, F.S., relating to
5 employer contributions to the Public Employee
6 Optional Retirement Program; adjusting rates;
7 making the date for payment of retirement
8 contributions consistent under the Florida
9 Retirement System defined benefit and defined
10 contribution programs; creating s. 121.591,
11 F.S., relating to benefits payable under the
12 Public Employee Optional Retirement Program;
13 providing for payment of the normal benefit
14 upon termination; providing for disability
15 retirement benefits; providing for transfer of
16 certain funds; specifying eligibility
17 requirements; providing procedure and required
18 documentation; providing for computation of the
19 disability benefit; providing for
20 reapplication; providing for membership;
21 providing an option to cancel; providing for
22 reexamination and other matters relating to
23 recovery from disability; providing
24 nonadmissible causes of disability; providing
25 for disability retirement of justices or
26 judges; providing for payment of death
27 benefits; providing for spousal notification in
28 certain cases; updating death benefit
29 distribution provisions to conform to recent
30 changes in federal law; providing protection of
31 benefits from assignment, execution, etc.;
2
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1 providing a declaration of important state
2 interest; authorizing the Department of
3 Management Services to contract with a private
4 company to administer the disability benefit
5 program; authorizing the department to provide
6 for an alternative method to administer and
7 fund disability benefits; requiring the
8 department to seek a private letter ruling from
9 the Internal Revenue Service with respect to
10 the disability retirement program; providing
11 rulemaking authority; providing an effective
12 date.
13
14 Be It Enacted by the Legislature of the State of Florida:
15
16 Section 1. Paragraph (g) of subsection (2), paragraph
17 (g) of subsection (3), and paragraph (h) of subsection (4) of
18 section 110.123, Florida Statutes, are amended to read:
19 110.123 State group insurance program.--
20 (2) DEFINITIONS.--As used in this section, the term:
21 (g) "Retired state officer or employee" or "retiree"
22 means any state officer or state employee who retires under a
23 state retirement system or a state optional annuity or
24 retirement program or is placed on disability retirement, and
25 who was insured under the state group insurance program at the
26 time of retirement, and who begins receiving retirement
27 benefits immediately after retirement from state office or
28 employment. In addition to these requirements, any state
29 officer or state employee who retires under the Public
30 Employee Optional Retirement Program established under part II
31
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1 of chapter 121 shall be considered a "retired state officer or
2 employee" or "retiree" as used in this section if he or she:
3 1. Meets the age and service requirements to qualify
4 for normal retirement as set forth in s. 121.021(29); or
5 2. Has attained the age specified by s. 72(t)(2)(A)(i)
6 of the Internal Revenue Code and has 6 years of creditable
7 service.
8 (3) STATE GROUP INSURANCE PROGRAM.--
9 (g) Participation by individuals in the program shall
10 be available to all state officers, full-time state employees,
11 and part-time state employees; and such participation in the
12 program or any plan thereof shall be voluntary. Participation
13 in the program shall also be available to retired state
14 officers and employees, as defined in paragraph (2)(g), who
15 elect at the time of retirement to continue coverage under the
16 program, but they may elect to continue all or only part of
17 the coverage they had at the time of retirement. A surviving
18 spouse may elect to continue coverage only under the state
19 group health insurance plan or a health maintenance
20 organization plan.
21 (4) PAYMENT OF PREMIUMS; CONTRIBUTION BY STATE;
22 LIMITATION ON ACTIONS TO PAY AND COLLECT PREMIUMS.--
23 (h) State employees may participate in the state group
24 health insurance plan at the time of receiving their state
25 retirement benefits.
26 Section 2. Paragraphs (j) and (q) of subsection (2) of
27 section 110.205, Florida Statutes, are amended to read:
28 110.205 Career service; exemptions.--
29 (2) EXEMPT POSITIONS.--The exempt positions that are
30 not covered by this part include the following:
31
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1 (j) The appointed secretaries, assistant secretaries,
2 deputy secretaries, and deputy assistant secretaries of all
3 departments; the executive directors, assistant executive
4 directors, deputy executive directors, and deputy assistant
5 executive directors of all departments; and the directors of
6 all divisions and those positions determined by the department
7 to have managerial responsibilities comparable to such
8 positions, which positions include, but are not limited to,
9 program directors, assistant program directors, district
10 administrators, deputy district administrators, the Director
11 of Central Operations Services of the Department of Children
12 and Family Services, and the State Transportation Planner,
13 State Highway Engineer, State Public Transportation
14 Administrator, district secretaries, district directors of
15 planning and programming, production, and operations, and the
16 managers of the offices specified in s. 20.23(3)(d)2., of the
17 Department of Transportation. Unless otherwise fixed by law,
18 the department shall set the salary and benefits of these
19 positions in accordance with the rules of the Senior
20 Management Service; and the county health department directors
21 and county health department administrators of the Department
22 of Health.
23 (q) The staff directors, assistant staff directors,
24 district program managers, district program coordinators,
25 district subdistrict administrators, district administrative
26 services directors, district attorneys, and the Deputy
27 Director of Central Operations Services of the Department of
28 Children and Family Services and the county health department
29 directors and county health department administrators of the
30 Department of Health. Unless otherwise fixed by law, the
31 department shall establish the salary range and benefits for
5
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1 these positions in accordance with the rules of the Selected
2 Exempt Service.
3 Section 3. Subsection (7) of section 121.052, Florida
4 Statutes, as amended by chapter 2001-262, Laws of Florida, is
5 amended to read:
6 121.052 Membership class of elected officers.--
7 (7) CONTRIBUTIONS.--
8 (a) The following table states the required retirement
9 contribution rates for members of the Elected Officers' Class
10 and their employers in terms of a percentage of the member's
11 gross compensation. A change in a contribution rate is
12 effective with the first salary paid on or after the beginning
13 date of the change. Contributions shall be made or deducted as
14 may be appropriate for each pay period and are in addition to
15 the contributions required for social security and the Retiree
16 Health Insurance Subsidy Trust Fund.
17
18 Dates of Contribution
19 Rate Changes Members Employers
20 Effective July 1, 2001
21 Legislators 0% 15.14%
22 Governor, Lt. Governor, Cabinet
23 Officers 0% 15.14%
24 State Attorneys, Public Defenders 0% 15.14%
25 Justices, Judges 0% 20.61%
26 County Elected Officers 0% 17.61%
27
28 (b) The employer paying the salary of a member of the
29 Elected Officers' Class shall contribute an amount as
30 specified in this subsection which shall constitute the entire
31 employer retirement contribution with respect to such member.
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1 The employer shall also withhold one-half of the entire
2 contribution of the member required for social security
3 coverage.
4 (c) The following table states the required employer
5 contribution on behalf of each member of the Elected Officers'
6 Class in terms of a percentage of the member's gross
7 compensation. Such contribution constitutes the entire health
8 insurance subsidy contribution with respect to the member. A
9 change in the contribution rate is effective with the first
10 salary paid on or after the beginning date of the change. The
11 retiree health insurance subsidy contribution rate is as
12 follows:
13
14 Dates of Contribution Contribution
15 Rate Changes Rate
16
17 October 1, 1987, through December 31, 1988 0.24%
18 January 1, 1989, through December 31, 1993 0.48%
19 January 1, 1994, through December 31, 1994 0.56%
20 January 1, 1995, through June 30, 1998 0.66%
21 July 1, 1998, through June 30, 2001 0.94%
22 Effective July 1, 2001 1.11%
23
24 Such contributions and accompanying payroll data are due and
25 payable no later than the 5th working day of the month
26 immediately following the month during which the payroll
27 period ended and shall be deposited by the administrator in
28 the Retiree Health Insurance Subsidy Trust Fund.
29 Section 4. Paragraph (h) of subsection (1) and
30 subsection (3) of section 121.055, Florida Statutes, as
31
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1 amended by chapter 2001-262, Laws of Florida, are amended to
2 read:
3 121.055 Senior Management Service Class.--There is
4 hereby established a separate class of membership within the
5 Florida Retirement System to be known as the "Senior
6 Management Service Class," which shall become effective
7 February 1, 1987.
8 (1)
9 (h)1. Except as provided in subparagraph 3., effective
10 January 1, 1994, participation in the Senior Management
11 Service Class shall be compulsory for the State Courts
12 Administrator and the Deputy State Courts Administrators, the
13 Clerk of the Supreme Court, the Marshal of the Supreme Court,
14 the Executive Director of the Justice Administrative
15 Commission, the Capital Collateral Regional Counsels, the
16 clerks of the district courts of appeals, the marshals of the
17 district courts of appeals, and the trial court administrator
18 and the Chief Deputy Court Administrator in each judicial
19 circuit. Effective January 1, 1994, additional positions in
20 the offices of the state attorney and public defender in each
21 judicial circuit may be designated for inclusion in the Senior
22 Management Service Class of the Florida Retirement System,
23 provided that:
24 a. Positions to be included in the class shall be
25 designated by the state attorney or public defender, as
26 appropriate. Notice of intent to designate positions for
27 inclusion in the class shall be published once a week for 2
28 consecutive weeks in a newspaper of general circulation
29 published in the county or counties affected, as provided in
30 chapter 50.
31
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1 b. One nonelective full-time position may be
2 designated for each state attorney and public defender
3 reporting to the Department of Management Services; for
4 agencies with 200 or more regularly established positions
5 under the state attorney or public defender, additional
6 nonelective full-time positions may be designated, not to
7 exceed 0.5 percent of the regularly established positions
8 within the agency.
9 c. Each position added to the class must be a
10 managerial or policymaking position filled by an employee who
11 serves at the pleasure of the state attorney or public
12 defender without civil service protection, and who:
13 (I) Heads an organizational unit; or
14 (II) Has responsibility to effect or recommend
15 personnel, budget, expenditure, or policy decisions in his or
16 her areas of responsibility.
17 2. Participation in this class shall be compulsory,
18 except as provided in subparagraph 3., for any judicial
19 employee who holds a position designated for coverage in the
20 Senior Management Service Class, and such participation shall
21 continue until the employee terminates employment in a covered
22 position. Effective January 1, 2001, participation in this
23 class is compulsory for assistant state attorneys, assistant
24 statewide prosecutors, assistant public defenders, and
25 assistant capital collateral regional counsels. Effective
26 January 1, 2002, participation in this class is compulsory for
27 assistant attorneys general.
28 3. In lieu of participation in the Senior Management
29 Service Class, such members, excluding assistant state
30 attorneys, assistant public defenders, assistant statewide
31 prosecutors, assistant attorneys general, and assistant
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1 capital collateral regional counsels, may participate in the
2 Senior Management Service Optional Annuity Program as
3 established in subsection (6).
4 (3)(a) The following table states the required
5 retirement contribution rates for members of the Senior
6 Management Service Class and their employers in terms of a
7 percentage of the member's gross compensation. A change in the
8 contribution rate is effective with the first salary paid on
9 or after the beginning date of the change. Contributions
10 shall be made for each pay period and are in addition to the
11 contributions required for social security and the Retiree
12 Health Insurance Subsidy Trust Fund.
13
14 Dates of Contribution
15 Rate Changes Members Employers
16 Effective July 1, 2001 0% 11.73%
17
18 (b) The employer paying the salary of a member of the
19 Senior Management Service Class shall contribute an amount as
20 specified in this section which shall constitute the entire
21 employer retirement contribution with respect to such member.
22 The employer shall also withhold one-half of the entire
23 contribution of the member required for social security
24 coverage.
25 (c) The following table states the required employer
26 contribution on behalf of each member of the Senior Management
27 Service Class in terms of a percentage of the member's gross
28 compensation. Such contribution constitutes the entire health
29 insurance subsidy contribution with respect to the member. A
30 change in the contribution rate is effective with the first
31 salary paid on or after the beginning date of the change. The
10
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1 retiree health insurance subsidy contribution rate is as
2 follows:
3
4 Dates of Contribution Contribution
5 Rate Changes Rate
6 October 1, 1987, through December 31, 1988 0.24%
7 January 1, 1989, through December 31, 1993 0.48%
8 January 1, 1994, through December 31, 1994 0.56%
9 January 1, 1995, through June 30, 1998 0.66%
10 July 1, 1998, through June 30, 2001 0.94%
11 Effective July 1, 2001 1.11%
12
13 Such contributions and accompanying payroll data are due and
14 payable no later than the 5th working day of the month
15 immediately following the month during which the payroll
16 period ended and shall be deposited by the administrator in
17 the Retiree Health Insurance Subsidy Trust Fund.
18 Section 5. Subsection (5) of section 121.071, Florida
19 Statutes, as amended by chapter 2001-262, Laws of Florida, is
20 amended to read:
21 121.071 Contributions.--Contributions to the system
22 shall be made as follows:
23 (5) Contributions made in accordance with subsections
24 (1), (2), (3), and (4) shall be paid by the employer into the
25 system trust funds in accordance with rules adopted by the
26 administrator pursuant to chapter 120, except as may be
27 otherwise specified herein.
28 (a)1. Effective October 1, 1978, such contributions
29 are due and payable no later than the 25th day of the month
30 immediately following the month during which the payroll
31 period ended. The department may, by rule, establish a
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1 different due date, which shall supersede the date specified
2 herein; however, such due date may not be established earlier
3 than the 20th day of the month immediately following the month
4 during which the payroll period ended.
5 2. Effective July 1, 2002, contributions paid under
6 subsections (1) and (4) and accompanying payroll data are due
7 and payable no later than the 5th working day of the month
8 immediately following the month during which the payroll
9 period ended. Effective January 1, 1984, contributions made in
10 accordance with subsection (3) shall be paid by the employer
11 into the system trust fund in accordance with rules adopted by
12 the administrator pursuant to chapter 120. For any payroll
13 period ending any day of the month before the 16th day of the
14 month, such contributions are due and payable no later than
15 the 20th day of the month; and, for any payroll periods ending
16 any day of the month after the 15th day of the month, such
17 contributions are due and payable no later than the 5th day of
18 the next month.
19 (b) Contributions received in the offices of the
20 department after the prescribed date shall be considered
21 delinquent unless, in the opinion of the department,
22 exceptional circumstances beyond an employer's control
23 prevented remittance by the prescribed due date
24 notwithstanding such employer's good faith efforts to effect
25 delivery; and, with respect to retirement contributions due
26 under subsections (1) and (4), each employer shall be assessed
27 a delinquent fee of 1 percent of the contributions due for
28 each calendar month or part thereof that the contributions are
29 delinquent. Such a waiver of the delinquency fee by the
30 department may be granted an employer only one time each
31 fiscal year. Delinquent social security contributions shall be
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1 assessed a delinquent fee as authorized by s. 650.05(4). The
2 delinquent fee assessable for an employer's first delinquency
3 after July 1, 1984, shall be as specified in s. 650.05(4),
4 and, beginning with the second delinquency in any fiscal year
5 by the employer subsequent to July 1, 1984, all subsequent
6 delinquency fees shall be assessed against the employer at
7 twice the applicable percentage rate specified in s.
8 650.05(4).
9 Section 6. Section 121.35, Florida Statutes, is
10 amended to read:
11 121.35 Optional retirement program for the State
12 University System.--
13 (1) OPTIONAL RETIREMENT PROGRAM ESTABLISHED.--The
14 Department of Management Services shall establish an optional
15 retirement program under which contracts providing retirement
16 and death benefits may be purchased for eligible members of
17 the State University System who elect to participate in the
18 program. The benefits to be provided for or on behalf of
19 participants in such optional retirement program shall be
20 provided through individual contracts or individual
21 certificates issued for group annuity or other contracts,
22 which may be fixed, variable, or a combination thereof, in
23 accordance with s. 403(b) of the Internal Revenue Code. Any
24 individual contract or certificate shall state the annuity
25 plan on its face page, and shall include, but not be limited
26 to, a statement of ownership, the contract benefits, annuity
27 income options, limitations, expense charges, and surrender
28 charges, if any. The state shall contribute, as provided in
29 this section, toward the purchase of such optional benefits.
30 (2) ELIGIBILITY FOR PARTICIPATION IN OPTIONAL
31 PROGRAM.--
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1 (a) Participation in the optional retirement program
2 provided by this section shall be limited to persons who are
3 otherwise eligible for membership in the Florida Retirement
4 System; who are employed or appointed for no less than one
5 academic year; and who are employed in one of the following
6 State University System positions:
7 1. Positions classified as instructional and research
8 faculty which are exempt from the career service under the
9 provisions of s. 110.205(2)(d).
10 2. Positions classified as administrative and
11 professional which are exempt from the career service under
12 the provisions of s. 110.205(2)(d).
13 3. The Chancellor and the university presidents.
14 (b) For purposes of this section, both the appointees
15 and employees are referred to as "employees," and the
16 "employer" of an appointee or employee is the individual
17 institution within the State University System or the State
18 Board of Education Regents, whichever is appropriate with
19 respect to the particular employee or appointee.
20 (c) For purposes of this section, the Department of
21 Management Services is referred to as the "department."
22 (d) For purposes of this section, the authority
23 granted to the State Board of Education Regents may be
24 exercised by the board or by the Chancellor of the Division of
25 Colleges and Universities State University System.
26 (3) ELECTION OF OPTIONAL PROGRAM.--
27 (a) Any eligible employee who is employed on or before
28 March 1, 1984, may elect to participate in the optional
29 retirement program in lieu of participation in the Florida
30 Retirement System. Such election shall be made in writing and
31 filed with the division and the personnel officer of the
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1 employer on or before June 1, 1984. Upon such election,
2 participation in the optional program will take effect July 1,
3 1984, and election to so participate will terminate the
4 membership of the employee in the Florida Retirement System.
5 Any eligible employee who is employed on or before March 1,
6 1984, and who fails to make an election to participate in the
7 optional program by June 1, 1984, shall be deemed to have
8 elected to retain membership in the Florida Retirement System.
9 (b)1. Any employee who becomes eligible to participate
10 in the optional retirement program by reason of initial
11 employment commencing after March 1, 1984, but before January
12 1, 1993, may, within 90 days after the date of commencement of
13 employment, elect to participate in the optional program. Such
14 election shall be made in writing and filed with the personnel
15 officer of the employer. The eligible employees described in
16 this subparagraph shall be enrolled in the Florida Retirement
17 System at the commencement of employment, with the exception
18 of those employees who file an election with the personnel
19 officer of the employer prior to the submission of the initial
20 payroll for the employee. For such employees, participation
21 will be effective on the first day of employment or on July 1,
22 1984, whichever is later. If an eligible employee, as
23 described in this subparagraph, files an election to
24 participate in the optional program within 90 days after the
25 commencement of employment, but after the submission by the
26 employer of the initial payroll for the employee, the
27 employee's participation in the optional program will not be
28 effective until the first day of the month for which a full
29 month's employer contribution may be made, or until July 1,
30 1984, whichever is later. Any eligible employee who does not
31 within 90 days after commencement of such employment elect to
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1 participate in the optional program shall be deemed to have
2 elected to retain membership in the Florida Retirement System.
3 2. Any employee who after March 1, 1984, but before
4 January 1, 1993, becomes eligible to participate in the
5 optional program by reason of a change in status due to the
6 subsequent designation of the employee's position as one of
7 those specified in paragraph (2)(a) or due to the employee's
8 appointment, promotion, transfer, or reclassification to a
9 position specified in paragraph (2)(a) may elect to
10 participate in the optional program. Such employee shall be
11 notified by the employer of the change in his or her
12 eligibility status. Such employee may, within 90 days after
13 the date of such notification, file with the personnel officer
14 of the employer an election in writing to participate in the
15 optional program in lieu of participation in the Florida
16 Retirement System. Upon such election, participation in the
17 optional program will be effective on the first day of the
18 month for which a full month's employer contribution may be
19 made or on July 1, 1984, whichever is later. Election to so
20 participate shall terminate the membership of the employee in
21 the Florida Retirement System. Any eligible employee who does
22 not within 90 days after notification of his or her
23 eligibility to participate in the optional program elect to
24 participate in the program shall be deemed to have elected to
25 retain membership in the Florida Retirement System.
26 (c) Any employee who becomes eligible to participate
27 in the optional retirement program on or after January 1,
28 1993, shall be a compulsory participant of the program unless
29 such employee elects membership in the Florida Retirement
30 System. Such election shall be made in writing and filed with
31 the personnel officer of the employer. Any eligible employee
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1 who fails to make such election within the prescribed time
2 period shall be deemed to have elected to participate in the
3 optional retirement program.
4 1. Any employee whose optional retirement program
5 eligibility results from initial employment shall be enrolled
6 in the program at the commencement of employment. If, within
7 90 days after commencement of employment, the employee elects
8 membership in the Florida Retirement System, such membership
9 shall be effective retroactive to the date of commencement of
10 employment.
11 2. Any employee whose optional retirement program
12 eligibility results from a change in status due to the
13 subsequent designation of the employee's position as one of
14 those specified in paragraph (2)(a) or due to the employee's
15 appointment, promotion, transfer, or reclassification to a
16 position specified in paragraph (2)(a) shall be enrolled in
17 the optional retirement program upon such change in status and
18 shall be notified by the employer of such action. If, within
19 90 days after the date of such notification, the employee
20 elects to retain membership in the Florida Retirement System,
21 such continuation of membership shall be retroactive to the
22 date of the change in status.
23 3. Notwithstanding the provisions of this paragraph,
24 effective July 1, 1997, any employee who is eligible to
25 participate in the Optional Retirement Program and who fails
26 to execute a an annuity contract with one of the approved
27 companies and to notify the department in writing as provided
28 in subsection (4) within 90 days after of the date of
29 eligibility shall be deemed to have elected membership in the
30 Florida Retirement System, except as provided in s.
31 121.051(1)(a). This provision shall also apply to any employee
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1 who terminates employment in an eligible position before
2 executing the required annuity contract and notifying the
3 department. Such membership shall be retroactive to the date
4 of eligibility, and all appropriate contributions shall be
5 transferred to the Florida Retirement System Trust Fund and
6 the Health Insurance Subsidy Trust Fund.
7 (d) Participants shall be fully and immediately vested
8 in the optional retirement program only upon execution of a an
9 annuity contract.
10 (e) The election by an eligible employee to
11 participate in the optional retirement program shall be
12 irrevocable for so long as the employee continues to meet the
13 eligibility requirements specified in subsection (2), except
14 as provided in paragraph (h). In the event that an employee
15 participates in the optional retirement program for 90 days or
16 more and is subsequently employed in an administrative or
17 professional position which has been determined by the
18 department, under subparagraph (2)(a)2., to be not otherwise
19 eligible for participation in the optional retirement program,
20 the employee shall continue participation in the optional
21 program so long as the employee meets the other eligibility
22 requirements for the program, except as provided in paragraph
23 (h).
24 (f) If an employee becomes ineligible to continue
25 participation in the optional retirement program under
26 subsection (2), the employee shall thereafter participate in
27 the Florida Retirement System if he or she is otherwise
28 eligible.
29 (g) An eligible employee who is a member of the
30 Florida Retirement System at the time of election to
31 participate in the optional retirement program shall retain
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1 all retirement service credit earned under the Florida
2 Retirement System, at the rate earned. No additional service
3 credit in the Florida Retirement System shall be earned while
4 the employee participates in the optional program, nor shall
5 the employee be eligible for disability retirement under the
6 Florida Retirement System.
7 (h) A participant in the optional retirement program
8 may not participate in more than one state-administered
9 retirement system, plan, or class simultaneously. Except as
10 provided in s. 121.052(6)(d), a participant who is or becomes
11 dually employed in two or more positions covered by the
12 Florida Retirement System, one of which is eligible for the
13 optional program and one of which is not, may remain a member
14 of the optional program and contributions shall be paid as
15 required only on the salary earned in the position eligible
16 for the optional program during such period of dual
17 employment; or, within 90 days after becoming dually employed,
18 he or she may elect membership in the Regular Class of the
19 Florida Retirement System in lieu of the optional program and
20 contributions shall be paid as required on the total salary
21 received for all employment. At retirement, the average final
22 compensation used to calculate any benefits for which the
23 member becomes eligible under the Florida Retirement System
24 shall be based on all salary reported for both positions
25 during such period of dual employment. When such member
26 ceases to be dually employed, he or she may, within 90 days,
27 elect to remain in the Florida Retirement System class for
28 which he or she is eligible or to again become a participant
29 in the optional retirement program. Failure to elect
30 membership in the optional program within 90 days shall result
31 in compulsory membership in the Florida Retirement System,
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1 except that a member filling a faculty position under a
2 faculty practice plan at the University of Florida or the
3 Medical Center at the University of South Florida shall again
4 participate in the optional retirement program as required in
5 s. 121.051(1)(a).
6 (4) CONTRIBUTIONS.--
7 (a) Through June 30, 2001, each employer shall
8 contribute on behalf of each participant in the optional
9 retirement program an amount equal to the normal cost portion
10 of the employer retirement contribution which would be
11 required if the participant were a regular member of the
12 Florida Retirement System defined benefit program, plus the
13 portion of the contribution rate required in s. 112.363(8)
14 that would otherwise be assigned to the Retiree Health
15 Insurance Subsidy Trust Fund. Effective July 1, 2001, each
16 employer shall contribute on behalf of each participant in the
17 optional program an amount equal to 10.43 percent of the
18 participant's gross monthly compensation. The department shall
19 deduct an amount approved by the Legislature to provide for
20 the administration of this program. The payment of the
21 contributions to the optional program which is required by
22 this paragraph for each participant shall be made by the
23 employer to the department, which shall forward the
24 contributions to the designated company or companies
25 contracting for payment of benefits for the participant under
26 the program. However, such contributions paid on behalf of an
27 employee described in paragraph (3)(c) shall not be forwarded
28 to a company and shall not begin to accrue interest until the
29 employee has executed an annuity contract and notified the
30 department.
31
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1 (b) Each employer shall contribute on behalf of each
2 participant in the optional retirement program an amount equal
3 to the unfunded actuarial accrued liability portion of the
4 employer contribution which would be required for members of
5 the Florida Retirement System. This contribution shall be
6 paid to the department for transfer to the Florida Retirement
7 System Trust Fund.
8 (c) An Optional Retirement Program Trust Fund shall be
9 established in the State Treasury and administered by the
10 department to make payments to the provider companies on
11 behalf of the optional retirement program participants, and to
12 transfer the unfunded liability portion of the state optional
13 retirement program contributions to the Florida Retirement
14 System Trust Fund.
15 (d) Contributions required for social security by each
16 employer and each participant, in the amount required for
17 social security coverage as now or hereafter may be provided
18 by the federal Social Security Act, shall be maintained for
19 each participant in the optional retirement program and shall
20 be in addition to the retirement contributions specified in
21 this subsection.
22 (e) Each participant in the optional retirement
23 program who has executed a an annuity contract may contribute
24 by way of salary reduction or deduction a percentage amount of
25 the participant's gross compensation not to exceed the
26 percentage amount contributed by the employer to the optional
27 program, but in no case may such contribution exceed federal
28 limitations. Payment of the participant's contributions shall
29 be made by the financial officer of the employer to the
30 division which shall forward the contributions to the
31 designated company or companies contracting for payment of
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1 benefits for the participant under the program. A participant
2 may not make, through salary reduction, any voluntary employee
3 contributions to any other plan under s. 403(b) of the
4 Internal Revenue Code, with the exception of a custodial
5 account under s. 403(b)(7) of the Internal Revenue Code, until
6 he or she has made an employee contribution to his or her
7 optional program equal to the employer contribution. A
8 participant is responsible for monitoring his or her
9 individual tax-deferred income to ensure he or she does not
10 exceed the maximum deferral amounts permitted under the
11 Internal Revenue Code.
12 (f) The Optional Retirement Trust Fund may accept for
13 deposit into participant contracts contributions in the form
14 of rollovers or direct trustee-to-trustee transfers by or on
15 behalf of participants who are reasonably determined by the
16 department to be eligible for rollover or transfer to the
17 optional retirement program pursuant to the Internal Revenue
18 Code, if such contributions are made in accordance with rules
19 adopted by the department. Such contributions shall be
20 accounted for in accordance with any applicable requirements
21 of the Internal Revenue Code and rules of the department.
22 (5) BENEFITS.--
23 (a) Benefits shall be payable under the optional
24 retirement program only to vested participants in the program,
25 or their beneficiaries as designated by the participant in the
26 contract with a provider company, and such benefits shall be
27 paid only by the designated company in accordance with s.
28 403(b) of the Internal Revenue Code and in accordance with the
29 terms of the annuity contract or contracts applicable to the
30 participant. Benefits shall accrue in individual accounts that
31 are participant-directed, portable, and funded by employer
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1 contributions and the earnings thereon. The participant must
2 be terminated from all employment with all Florida Retirement
3 System employers, as provided in s. 121.021(39), to begin
4 receiving the employer-funded benefit. Benefits funded by
5 employer contributions shall be payable in accordance with the
6 following terms and conditions only as a lifetime annuity to
7 the participant, his or her beneficiary, or his or her estate,
8 except for:
9 1. Benefits shall be payable only to a participant, to
10 his or her beneficiaries, or to his or her estate, as
11 designated by the participant.
12 2. Benefits shall be paid by the provider company or
13 companies in accordance with the law, the provisions of the
14 contract, and any applicable board rule or policy.
15 3. In the event of a participant's death, moneys
16 accumulated by, or on behalf of, the participant, less
17 withholding taxes remitted to the Internal Revenue Service, if
18 any, shall be distributed to the participant's designated
19 beneficiary or beneficiaries, or to the participant's estate,
20 as if the participant retired on the date of death, as
21 provided in paragraph (c). No other death benefits shall be
22 available for survivors of participants under the optional
23 retirement program except for such benefits, or coverage for
24 such benefits, as are separately afforded by the employer, at
25 the employer's discretion.
26 (b) Upon receipt by the provider company of a properly
27 executed application for distribution of benefits, the total
28 accumulated benefit shall be payable to the participant, as:
29 1. A lump-sum distribution to the participant;
30 2. A lump-sum direct rollover distribution whereby all
31 accrued benefits, plus interest and investment earnings, are
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1 paid from the participant's account directly to an eligible
2 retirement plan, as defined in s. 402(c)(8)(B) of the Internal
3 Revenue Code, on behalf of the participant;
4 3. Periodic distributions;
5 4. A partial lump-sum payment whereby a portion of the
6 accrued benefit is paid to the participant and the remaining
7 amount is transferred to an eligible retirement plan, as
8 defined in s. 402(c)(8)(B) of the Internal Revenue Code, on
9 behalf of the participant; or
10 5. Such other distribution options as are provided for
11 in the participant's optional retirement program contract.
12 (c) Survivor benefits shall be payable as:
13 1. A lump-sum distribution payable to the
14 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 an
19 eligible retirement plan, as described in s. 402(c)(8)(B) of
20 the Internal Revenue Code, on behalf of the surviving spouse;
21 3. Such other distribution options as are provided for
22 in the participant's optional retirement program contract; or
23 4. 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, if
27 any, and the remaining amount is transferred directly to an
28 eligible retirement plan, as described in s.402(c)(8)(B) of
29 the Internal Revenue Code, on behalf of the surviving spouse.
30 The proportions must be specified by the participant or the
31 surviving beneficiary.
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1
2 This paragraph does not abrogate other applicable provisions
3 of state or federal law providing payment of death benefits.
4 1. A lump-sum payment to the beneficiary upon the
5 death of the participant; or
6 2. A cash-out of a de minimis account upon the request
7 of a former participant who has been terminated for a minimum
8 of 6 months from the employment that entitled him or her to
9 optional retirement program participation. A de minimis
10 account is an account with a provider company containing
11 employer contributions and accumulated earnings of not more
12 than $5,000 made under the provisions of this chapter. Such
13 cash-out must be a complete liquidation of the account balance
14 with that company and is subject to the provisions of the
15 Internal Revenue Code.
16 (d)(b) The benefits payable to any person under the
17 optional retirement program, and any contribution accumulated
18 under such program, shall not be subject to assignment,
19 execution, or attachment or to any legal process whatsoever.
20 (e)(c) A participant who chooses to receive his or her
21 benefits upon termination of employment shall have
22 responsibility to notify the provider company of the date on
23 which he or she wishes benefits the annuity funded by employer
24 contributions to begin. Benefits may be deferred until such
25 time as the participant chooses to make such application.
26 (f)(d) Benefits funded by the participant's personal
27 contributions may be paid out at any time and in any form
28 within the limits provided in the contract between the
29 participant and his or her provider company. The participant
30 shall notify the provider company regarding the date and
31
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1 provisions under which he or she wants to receive the
2 employee-funded portion of the plan.
3 (6) ADMINISTRATION OF PROGRAM.--
4 (a) The optional retirement program authorized by this
5 section shall be administered by the department. The
6 department shall adopt rules establishing the responsibilities
7 of the State Board of Education Regents and institutions in
8 the State University System in administering the optional
9 retirement program. The State Board of Education Regents
10 shall, no more than 90 days after July 1, 1983, submit to the
11 department its recommendations for the annuity contracts to be
12 offered by the companies chosen by the department. The
13 recommendations of the board shall include the following:
14 1. The nature and extent of the rights and benefits in
15 relation to the required contributions; and
16 2. The suitability of the rights and benefits to the
17 needs of the participants and the interests of the
18 institutions in the recruitment and retention of eligible
19 employees.
20 (b) After receiving and considering the
21 recommendations of the State Board of Education Regents, the
22 department shall designate no more than four companies from
23 which annuity contracts may be purchased under the program and
24 shall approve the form and content of the optional retirement
25 program contracts. Upon application by a qualified Florida
26 domestic company, the department shall give reasonable notice
27 to all other such companies that it intends to designate one
28 of such companies as a fifth company from which annuity
29 contracts may be purchased pursuant to this section and that
30 they may apply for such designation prior to the deadline
31 established by said notice. At least 60 days after giving such
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1 notice and upon receipt of the recommendation of the State
2 Board of Education Regents, the department shall so designate
3 one of such companies as the fifth company from which such
4 contracts may be purchased.
5 (c) Effective July 1, 1997, the State Board of
6 Administration shall review and make recommendations to the
7 department on the acceptability of all investment products
8 proposed by provider companies of the optional retirement
9 program before they are offered through annuity contracts to
10 the participants and may advise the department of any changes
11 necessary to ensure that the optional retirement program
12 offers an acceptable mix of investment products. The
13 department shall make the final determination as to whether an
14 investment product will be approved for the program.
15 (d) The provisions of each contract applicable to a
16 participant in the optional retirement program shall be
17 contained in a written program description which shall include
18 a report of pertinent financial and actuarial information on
19 the solvency and actuarial soundness of the program and the
20 benefits applicable to the participant. Such description
21 shall be furnished by the companies to each participant in the
22 program and to the department upon commencement of
23 participation in the program and annually thereafter.
24 (e) The department shall ensure that each participant
25 in the optional retirement program is provided an accounting
26 of the total contribution and the annual contribution made by
27 and on behalf of such participant.
28 Section 7. Subsection (2), paragraph (c) of subsection
29 (3), paragraphs (a), (b), and (c) of subsection (4), and
30 subsections (7) and (16) of section 121.4501, Florida
31
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1 Statutes, as amended by chapter 2001-235, Laws of Florida, are
2 amended to read:
3 121.4501 Public Employee Optional Retirement
4 Program.--
5 (2) DEFINITIONS.--As used in this part section, the
6 term:
7 (a) "Approved provider" or "provider" means a private
8 sector company that is selected and approved by the state
9 board to offer one or more investment products or services to
10 the Public Employee Optional Retirement Program. The term
11 includes a bundled provider that offers participants a range
12 of individually allocated or unallocated investment products
13 and may offer a range of administrative and customer services,
14 which may include accounting and administration of individual
15 participant benefits and contributions; individual participant
16 recordkeeping; asset purchase, control, and safekeeping;
17 direct execution of the participant's instructions as to asset
18 and contribution allocation; calculation of daily net asset
19 values; direct access to participant account information;
20 periodic reporting to participants, at least quarterly, on
21 account balances and transactions; guidance, advice, and
22 allocation services directly relating to its own investment
23 options or products, but only if the bundled provider complies
24 with the standard of care of s. 404(a)(1)(A-B) of the Employee
25 Retirement Income Security Act of 1974 (ERISA) and if
26 providing such guidance, advice, or allocation services does
27 not constitute a prohibited transaction under s. 4975(c)(1) of
28 the Internal Revenue Code or s. 406 of ERISA, notwithstanding
29 that such prohibited transaction provisions do not apply to
30 the optional retirement program; a broad array of distribution
31 options; asset allocation; and retirement counseling and
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1 education. Private sector companies include investment
2 management companies, insurance companies, depositories, and
3 mutual fund companies.
4 (b) "Average monthly compensation" means one-twelfth
5 of average final compensation as defined in s. 121.021(24).
6 (c) "Covered employment" means employment in a
7 regularly established position as defined in s. 121.021(52).
8 (d)(b) "Department" means the Department of Management
9 Services.
10 (e)(c) "Division" means the Division of Retirement
11 within the Department of Management Services.
12 (f)(d) "Eligible employee" means an officer or
13 employee, as defined in s. 121.021(11), who:
14 1. Is a member of, or is eligible for membership in,
15 the Florida Retirement System;
16 2. Participates in, or is eligible to participate in,
17 the Senior Management Service Optional Annuity Program as
18 established under s. 121.055(6); or
19 3. Is eligible to participate in, but does not
20 participate in, the State University System Optional
21 Retirement Program established under s. 121.35 or the State
22 Community College System Optional Retirement Program
23 established under s. 121.051(2)(c).
24
25 The term does not include any renewed member of the Florida
26 Retirement System, any member participating in the Deferred
27 Retirement Option Program established under s. 121.091(13), or
28 any employee participating in an optional retirement program
29 established under s. 121.051(2)(c) or s. 121.35.
30 (g)(e) "Employer" means an employer, as defined in s.
31 121.021(10), of an eligible employee.
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1 (h)(f) "Participant" means an eligible employee who
2 elects to participate in the Public Employee Optional
3 Retirement Program and enrolls in such optional program as
4 provided in subsection (4).
5 (i)(g) "Public Employee Optional Retirement Program,"
6 "optional program," or "optional retirement program" means the
7 alternative defined contribution retirement program
8 established under this section.
9 (j)(h) "State board" or "board" means the State Board
10 of Administration.
11 (k)(i) "Trustees" means Trustees of the State Board of
12 Administration.
13 (l)(j) "Vested" or "vesting" means the guarantee that
14 a participant is eligible to receive a retirement benefit upon
15 completion of the required years of service under the Public
16 Employee Optional Retirement Program.
17 (3) ELIGIBILITY; RETIREMENT SERVICE CREDIT.--
18 (c)1. Notwithstanding paragraph (b), each eligible
19 employee who elects to participate in the Public Employee
20 Optional Retirement Program and establishes one or more
21 individual participant accounts under the optional program may
22 elect to transfer to the optional program a sum representing
23 the present value of the employee's accumulated benefit
24 obligation under the defined benefit retirement program of the
25 Florida Retirement System. Upon such transfer, all service
26 credit previously earned under the defined benefit program of
27 the Florida Retirement System shall be nullified for purposes
28 of entitlement to a future benefit under the defined benefit
29 program of the Florida Retirement System. A participant is
30 precluded from transferring the accumulated benefit obligation
31
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1 balance from the defined benefit program upon the expiration
2 of the period afforded to enroll in the optional program.
3 2. For purposes of this subsection, the present value
4 of the member's accumulated benefit obligation is based upon
5 the member's estimated creditable service and estimated
6 average final compensation under the defined benefit program,
7 subject to recomputation under subparagraph 3. For state
8 employees enrolling under subparagraph (4)(a)1., initial
9 estimates will be based upon creditable service and average
10 final compensation as of midnight on June 30, 2002; for
11 district school board employees enrolling under subparagraph
12 (4)(b)1., initial estimates will be based upon creditable
13 service and average final compensation as of midnight on
14 September 30, 2002; and for local government employees
15 enrolling under subparagraph (4)(c)1., initial estimates will
16 be based upon creditable service and average final
17 compensation as of midnight on December 31, 2002. The dates
18 respectively specified above shall be construed as the
19 "estimate date" for these employees of the day prior to the
20 opening of the election window for the employee. The actuarial
21 present value of the employee's accumulated benefit obligation
22 shall be based on the following:
23 a. The discount rate and other relevant actuarial
24 assumptions used to value the Florida Retirement System Trust
25 Fund at the time the amount to be transferred is determined,
26 consistent with the factors provided in sub-subparagraphs b.
27 and c.
28 b. A benefit commencement age, based on the member's
29 estimated creditable service as of the estimate date midnight
30 on May 31, 2002. The benefit commencement age shall be the
31
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1 younger of the following, but shall not be younger than the
2 member's age as of the estimate date midnight on May 31, 2002:
3 (I) Age 62; or
4 (II) The age the member would attain if the member
5 completed 30 years of service with an employer, assuming the
6 member worked continuously from the estimate date May 31,
7 2002, and disregarding any vesting requirement that would
8 otherwise apply under the defined benefit program of the
9 Florida Retirement System.
10 c. For members of the Special Risk Class and for
11 members of the Special Risk Administrative Support Class
12 entitled to retain special risk normal retirement date, the
13 benefit commencement age shall be the younger of the
14 following, but shall not be younger than the member's age as
15 of the estimate date midnight on May 31, 2002:
16 (I) Age 55; or
17 (II) The age the member would attain if the member
18 completed 25 years of service with an employer, assuming the
19 member worked continuously from the estimate date May 31,
20 2002, and disregarding any vesting requirement that would
21 otherwise apply under the defined benefit program of the
22 Florida Retirement System.
23 d. The calculation shall disregard vesting
24 requirements and early retirement reduction factors that would
25 otherwise apply under the defined benefit retirement program.
26 3. For each participant who elects to transfer moneys
27 from the defined benefit program to his or her account in the
28 optional program, the division shall recompute the amount
29 transferred under subparagraph 2. not later than 60 days after
30 the actual transfer of funds based upon the participant's
31 actual creditable service and actual final average
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1 compensation as of the initial date of participation in the
2 optional program. If the recomputed amount differs from the
3 amount transferred under subparagraph 2. by $10 or more, the
4 division shall:
5 a. Transfer, or cause to be transferred, from the
6 Florida Retirement System Trust Fund to the participant's
7 account in the optional program the excess, if any, of the
8 recomputed amount over the previously transferred amount
9 together with interest from the initial date of transfer to
10 the date of transfer under this subparagraph, based upon 8
11 percent effective annual interest, compounded annually.
12 b. Transfer, or cause to be transferred, from the
13 participant's account to the Florida Retirement System Trust
14 Fund the excess, if any, of the previously transferred amount
15 over the recomputed amount, together with interest from the
16 initial date of transfer to the date of transfer under this
17 subparagraph, based upon 6 percent effective annual interest,
18 compounded annually, pro rata based on the participant's
19 allocation plan.
20 4. As directed by the participant, the board shall
21 transfer or cause to be transferred the appropriate amounts to
22 the designated accounts. The board shall establish transfer
23 procedures by rule, but the actual transfer shall not be later
24 than 30 days after the effective date of the member's
25 participation in the optional program. Transfers are not
26 commissionable or subject to other fees and may be in the form
27 of securities or cash as determined by the state board. Such
28 securities shall be valued as of the date of receipt in the
29 participant's account.
30 5. If the board or the division receives notification
31 from the United States Internal Revenue Service that this
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1 paragraph or any portion of this paragraph will cause the
2 retirement system, or a portion thereof, to be disqualified
3 for tax purposes under the Internal Revenue Code, then the
4 portion that will cause the disqualification does not apply.
5 Upon such notice, the state board and the division shall
6 notify the presiding officers of the Legislature.
7 (4) PARTICIPATION; ENROLLMENT.--
8 (a)1. With respect to an eligible employee who is
9 employed in a regularly established position on June 1, 2002,
10 by a state employer:
11 a. Any such employee may elect to participate in the
12 Public Employee Optional Retirement Program in lieu of
13 retaining his or her membership in the defined benefit program
14 of the Florida Retirement System. The election must be made in
15 writing or by electronic means and must be filed with the
16 third-party administrator by August 31, department and the
17 personnel officer of the employer within 90 days after June 1,
18 2002, or, in the case of an active employee who is on a leave
19 of absence on April June 1, 2002, by August 31, 2002, or
20 within 90 days after the conclusion of the leave of absence,
21 whichever is later. This election is irrevocable, except as
22 provided in paragraph (e). Upon making such election, the
23 employee shall be enrolled as a participant of the Public
24 Employee Optional Retirement Program, the employee's
25 membership in the Florida Retirement System shall be governed
26 by the provisions of this part, and the employee's membership
27 in the defined benefit program of the Florida Retirement
28 System shall terminate. The employee's enrollment in the
29 Public Employee Optional Retirement Program shall be effective
30 the first day of the month for which a full month's employer
31 contribution is made to the optional program.
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1 b. Any such employee who fails to elect to participate
2 in the Public Employee Optional Retirement Program within the
3 prescribed time period 90 days is deemed to have elected to
4 retain membership in the defined benefit program of the
5 Florida Retirement System, and the employee's option to elect
6 to participate in the optional program is forfeited.
7 2. With respect to employees who become eligible to
8 participate in the Public Employee Optional Retirement Program
9 by reason of employment in a regularly established position
10 with a state employer commencing after April June 1, 2002:
11 a. Any such employee shall, by default, be enrolled in
12 the defined benefit retirement program of the Florida
13 Retirement System at the commencement of employment, and may,
14 by the end of the 5th month following the employee's month of
15 hire within 180 days after employment commences, elect to
16 participate in the Public Employee Optional Retirement
17 Program. The employee's election must be made in writing or by
18 electronic means and must be filed with the third-party
19 administrator personnel officer of the employer. The election
20 to participate in the optional program is irrevocable, except
21 as provided in paragraph (e).
22 b. If the employee files such election before the
23 initial payroll is submitted for the employee, enrollment in
24 the Public Employee Optional Retirement Program shall be
25 effective on the first day of employment.
26 b.c. If the employee files such election within the
27 prescribed time period 180 days after employment commences,
28 but after the initial payroll is submitted for the employee,
29 enrollment in the optional program shall be effective on the
30 first day of employment the month for which a full month's
31 employer contribution is made to the optional program. The
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1 employer retirement contributions paid through the month of
2 the employee plan change shall be transferred to the optional
3 program, and, effective the first day of the next month, the
4 employer shall pay the applicable contributions based on the
5 employee membership class in the optional program.
6 c.d. Any such employee who fails to elect to
7 participate in the Public Employee Optional Retirement Program
8 within the prescribed time period 180 days is deemed to have
9 elected to retain membership in the defined benefit program of
10 the Florida Retirement System, and the employee's option to
11 elect to participate in the optional program is forfeited.
12 3. For purposes of this paragraph, "state employer"
13 means any agency, board, branch, commission, community
14 college, department, institution, institution of higher
15 education, or water management district of the state, which
16 participates in the Florida Retirement System for the benefit
17 of certain employees.
18 (b)1. With respect to an eligible employee who is
19 employed in a regularly established position on September 1,
20 2002, by a district school board employer:
21 a. Any such employee may elect to participate in the
22 Public Employee Optional Retirement Program in lieu of
23 retaining his or her membership in the defined benefit program
24 of the Florida Retirement System. The election must be made in
25 writing or by electronic means and must be filed with the
26 third-party administrator by November 30 department and the
27 personnel officer of the employer within 90 days after
28 September 1, 2002, or, in the case of an active employee who
29 is on a leave of absence on July September 1, 2002, by
30 November 30, 2002, or within 90 days after the conclusion of
31 the leave of absence, whichever is later. This election is
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1 irrevocable, except as provided in paragraph (e). Upon making
2 such election, the employee shall be enrolled as a participant
3 of the Public Employee Optional Retirement Program, the
4 employee's membership in the Florida Retirement System shall
5 be governed by the provisions of this part, and the employee's
6 membership in the defined benefit program of the Florida
7 Retirement System shall terminate. The employee's enrollment
8 in the Public Employee Optional Retirement Program shall be
9 effective the first day of the month for which a full month's
10 employer contribution is made to the optional program.
11 b. Any such employee who fails to elect to participate
12 in the Public Employee Optional Retirement Program within the
13 prescribed time period 90 days is deemed to have elected to
14 retain membership in the defined benefit program of the
15 Florida Retirement System, and the employee's option to elect
16 to participate in the optional program is forfeited.
17 2. With respect to employees who become eligible to
18 participate in the Public Employee Optional Retirement Program
19 by reason of employment in a regularly established position
20 with a district school board employer commencing after July
21 September 1, 2002:
22 a. Any such employee shall, by default, be enrolled in
23 the defined benefit retirement program of the Florida
24 Retirement System at the commencement of employment, and may,
25 by the end of the 5th month following the employee's month of
26 hire within 180 days after employment commences, elect to
27 participate in the Public Employee Optional Retirement
28 Program. The employee's election must be made in writing or by
29 electronic means and must be filed with the third-party
30 administrator personnel officer of the employer. The election
31
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1 to participate in the optional program is irrevocable, except
2 as provided in paragraph (e).
3 b. If the employee files such election before the
4 initial payroll is submitted for the employee, enrollment in
5 the Public Employee Optional Retirement Program shall be
6 effective on the first day of employment.
7 b.c. If the employee files such election within the
8 prescribed time period 180 days after employment commences,
9 but after the initial payroll is submitted for the employee,
10 enrollment in the optional program shall be effective on the
11 first day of employment the month for which a full month's
12 employer contribution is made to the optional program. The
13 employer retirement contributions paid through the month of
14 the employee plan change shall be transferred to the optional
15 program, and, effective the first day of the next month, the
16 employer shall pay the applicable contributions based on the
17 employee membership class in the optional program.
18 c.d. Any such employee who fails to elect to
19 participate in the Public Employee Optional Retirement Program
20 within the prescribed time period 180 days is deemed to have
21 elected to retain membership in the defined benefit program of
22 the Florida Retirement System, and the employee's option to
23 elect to participate in the optional program is forfeited.
24 3. For purposes of this paragraph, "district school
25 board employer" means any district school board that
26 participates in the Florida Retirement System for the benefit
27 of certain employees, or a charter school or charter technical
28 career center that participates in the Florida Retirement
29 System as provided in s. 121.051(2)(d).
30
31
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1 (c)1. With respect to an eligible employee who is
2 employed in a regularly established position on December 1,
3 2002, by a local employer:
4 a. Any such employee may elect to participate in the
5 Public Employee Optional Retirement Program in lieu of
6 retaining his or her membership in the defined benefit program
7 of the Florida Retirement System. The election must be made in
8 writing or by electronic means and must be filed with the
9 third-party administrator by February 28, 2003, department and
10 the personnel officer of the employer within 90 days after
11 December 1, 2002 or, in the case of an active employee who is
12 on a leave of absence on October December 1, 2002, by February
13 28, 2003, or within 90 days after the conclusion of the leave
14 of absence, whichever is later. This election is irrevocable,
15 except as provided in paragraph (e). Upon making such
16 election, the employee shall be enrolled as a participant of
17 the Public Employee Optional Retirement Program, the
18 employee's membership in the Florida Retirement System shall
19 be governed by the provisions of this part, and the employee's
20 membership in the defined benefit program of the Florida
21 Retirement System shall terminate. The employee's enrollment
22 in the Public Employee Optional Retirement Program shall be
23 effective the first day of the month for which a full month's
24 employer contribution is made to the optional program.
25 b. Any such employee who fails to elect to participate
26 in the Public Employee Optional Retirement Program within the
27 prescribed time period 90 days is deemed to have elected to
28 retain membership in the defined benefit program of the
29 Florida Retirement System, and the employee's option to elect
30 to participate in the optional program is forfeited.
31
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1 2. With respect to employees who become eligible to
2 participate in the Public Employee Optional Retirement Program
3 by reason of employment in a regularly established position
4 with a local employer commencing after October December 1,
5 2002:
6 a. Any such employee shall, by default, be enrolled in
7 the defined benefit retirement program of the Florida
8 Retirement System at the commencement of employment, and may,
9 by the end of the 5th month following the employee's month of
10 hire within 180 days after employment commences, elect to
11 participate in the Public Employee Optional Retirement
12 Program. The employee's election must be made in writing or by
13 electronic means and must be filed with the third-party
14 administrator personnel officer of the employer. The election
15 to participate in the optional program is irrevocable, except
16 as provided in paragraph (e).
17 b. If the employee files such election before the
18 initial payroll is submitted for the employee, enrollment in
19 the Public Employee Optional Retirement Program shall be
20 effective on the first day of employment.
21 b.c. If the employee files such election within the
22 prescribed time period 180 days after employment commences,
23 but after the initial payroll is submitted for the employee,
24 enrollment in the optional program shall be effective on the
25 first day of employment the month for which a full month's
26 employer contribution is made to the optional program. The
27 employer retirement contributions paid through the month of
28 the employee plan change shall be transferred to the optional
29 program, and, effective the first day of the next month, the
30 employer shall pay the applicable contributions based on the
31 employee membership class in the optional program.
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1 c.d. Any such employee who fails to elect to
2 participate in the Public Employee Optional Retirement Program
3 within the prescribed time period 180 days is deemed to have
4 elected to retain membership in the defined benefit program of
5 the Florida Retirement System, and the employee's option to
6 elect to participate in the optional program is forfeited.
7 3. For purposes of this paragraph, "local employer"
8 means any employer not included in paragraph (a) or paragraph
9 (b).
10 (7) BENEFITS.--Under the Public Employee Optional
11 Retirement Program:
12 (a) Benefits shall be provided in accordance with s.
13 401(a) of the Internal Revenue Code.
14 (b) Benefits shall accrue in individual accounts that
15 are participant-directed, portable, and funded by employer
16 contributions and earnings thereon.
17 (c) Benefits shall be payable in accordance with the
18 provisions of s. 121.591. following terms and conditions:
19 1. To the extent vested, benefits shall be payable
20 only to a participant, or to his or her 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 begin receiving the benefits, the participant
27 must be terminated from all employment with all Florida
28 Retirement System employers, as provided in s. 121.021(39), or
29 the participant must be deceased. If a participant elects to
30 receive his or her benefits upon termination of employment,
31 the participant must submit a written application to the
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1 third-party administrator indicating his or her preferred
2 distribution date and selecting an authorized method of
3 distribution as provided in paragraph (d). The participant may
4 defer receipt of benefits until he or she chooses to make such
5 application, subject to federal requirements.
6 4. In the event of a participant's death, moneys
7 accumulated by, or on behalf of, the participant, less
8 withholding taxes remitted to the Internal Revenue Service,
9 shall be distributed to the participant's designated
10 beneficiary or beneficiaries, or to the participant's estate,
11 as if the participant retired on the date of death, as
12 provided in paragraph (e). No other death benefits shall be
13 available for survivors of participants under the Public
14 Employee Optional Retirement Program, except for such
15 benefits, or coverage for such benefits, as are separately
16 afforded by the employer, at the employer's discretion.
17 (d) Upon receipt by the third-party administrator of a
18 properly executed application for distribution of benefits,
19 the total accumulated benefit shall be payable to the
20 participant, as:
21 1. A lump-sum distribution to the participant;
22 2. A lump-sum direct rollover distribution whereby all
23 accrued benefits, plus interest and investment earnings, are
24 paid from the participant's account directly to the custodian
25 of an eligible retirement plan, as defined in s. 402(c)(8)(B)
26 of the Internal Revenue Code, on behalf of the participant; or
27 3. Periodic distributions, as authorized by the state
28 board.
29 (e) Survivor benefits shall be payable as:
30 1. A lump-sum distribution payable to the
31 beneficiaries, or to the deceased participant's estate;
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1 2. An eligible rollover distribution on behalf of the
2 surviving spouse of a deceased participant, whereby all
3 accrued benefits, plus interest and investment earnings, are
4 paid from the deceased participant's account directly to the
5 custodian of an individual retirement account or an individual
6 retirement annuity, as described in s. 402(c)(9) of the
7 Internal Revenue Code, on behalf of the surviving spouse; or
8 3. A partial lump-sum payment whereby a portion of the
9 accrued benefit is paid to the deceased participant's
10 surviving spouse or other designated beneficiaries, less
11 withholding taxes remitted to the Internal Revenue Service,
12 and the remaining amount is transferred directly to the
13 custodian of an individual retirement account or an individual
14 retirement annuity, as described in s. 402(c)(9) of the
15 Internal Revenue Code, on behalf of the surviving spouse. The
16 proportions must be specified by the participant or the
17 surviving beneficiary.
18
19 This paragraph does not abrogate other applicable provisions
20 of state or federal law providing for payment of death
21 benefits.
22 (f) The benefits payable to any person under the
23 Public Employee Optional Retirement Program, and any
24 contributions accumulated under such program, are not subject
25 to assignment, execution, attachment, or any legal process,
26 except for qualified domestic relations orders by a court of
27 competent jurisdiction, income deduction orders as provided in
28 s. 61.1301, and federal income tax levies.
29 (16) DISABILITY BENEFITS.--For any participant of the
30 optional retirement program who becomes totally and
31 permanently disabled, benefits shall be paid in accordance
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1 with the provisions of s. 121.591 as defined in s.
2 121.091(4)(b), the participant shall be entitled to receive
3 those moneys that have accrued in his or her participant
4 account. It is the intent of the Legislature to design a
5 disability benefit for participants of the optional program
6 similar to those disability benefits afforded defined benefit
7 program members. The department is directed to study the
8 potential options of such coverage, including self-insurance
9 and commercial coverage, the alternative methods of
10 administering such benefits, and the fiscal impacts on the
11 employees and employers, and to make recommendations to the
12 Legislature by January 15, 2001.
13 Section 8. Subsections (3) and (7) of section 121.571,
14 Florida Statutes, are amended to read:
15 121.571 Contributions.--Contributions to the Public
16 Employee Optional Retirement Program shall be made as follows:
17 (3) CONTRIBUTIONS TO DISABILITY ACCOUNT.--
18 (a) All contributions made on behalf of a participant
19 pursuant to this subsection shall be transferred by the
20 employer to the third-party administrator for deposit in the
21 disability account of the Florida Retirement System Public
22 Employee Disability Trust Fund administered by the Division of
23 Retirement. Such contributions, less any fees or charges
24 authorized by the Legislature to offset the costs of
25 administering the disability component of the optional
26 retirement program, shall be separately accounted for and
27 shall be used to provide disability coverage for participants
28 in the optional retirement program.
29 (b) Disability contributions for Regular Class members
30 of the optional retirement plan are as follows:
31
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1 Dates of Contribution Employers
2 Rate Changes
3 Effective July 1, 2002: 0.25% 0.39%
4
5 (c) Disability contributions for Special Risk Class
6 members of the optional retirement plan are as follows:
7
8 Dates of Contribution Employers
9 Rate Changes
10 Effective July 1, 2002: 1.33% 1.25%
11
12 (d) Disability contributions for Special Risk
13 Administrative Support Class members of the optional
14 retirement plan are as follows:
15
16 Dates of Contribution Employers
17 Rate Changes
18 Effective July 1, 2002: 0.45% 0.73%
19
20 (e) Disability contributions for Elected Officers'
21 Class members of the optional retirement plan are as follows:
22
23 Dates of Contribution Employers
24 Rate Changes
25 Effective July 1, 2002:
26 Legislators 0.41% 0.61%
27 Governor, Lt. Governor, 0.41% 0.61%
28 Cabinet Officers
29 State Attorneys, Public 0.41% 0.61%
30 Defenders
31 Justices, Judges 0.73% 1.45%
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1 County Elected Officers 0.41% 0.86%
2
3 (f) Disability contributions for Senior Management
4 Service Class members of the optional retirement plan are as
5 follows:
6
7 Dates of Contribution Employers
8 Rate Changes
9 Effective July 1, 2002: 0.26% 0.50%
10
11 (7) PAYMENT AND DISTRIBUTION OF
12 CONTRIBUTIONS.--Contributions made pursuant to this section
13 and accompanying payroll data are due and payable shall be
14 paid by the employer to the third-party administrator by
15 electronic funds transfer or electronic data transfer no later
16 than the 5th working day of the month immediately following
17 the month during which the payroll period ended. The board and
18 the third-party administrator shall ensure that the
19 contributions are distributed to the appropriate trust funds
20 or participant accounts in a timely manner.
21 Section 9. Section 121.591, Florida Statutes, is
22 created to read:
23 121.591 Benefits payable under the Public Employee
24 Optional Retirement Program of the Florida Retirement
25 System.--Benefits may not be paid under this section unless
26 the member has terminated employment as provided in s.
27 121.021(39)(a) or is deceased and a proper application has
28 been filed in the manner prescribed by the state board or the
29 department. The state board or department, as appropriate, may
30 cancel an application for retirement benefits when the member
31 or beneficiary fails to timely provide the information and
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1 documents required by this chapter and the rules of the state
2 board and department. In accordance with their respective
3 responsibilities as provided herein, the State Board of
4 Administration and the Department of Management Services shall
5 adopt rules establishing procedures for application for
6 retirement benefits and for the cancellation of such
7 application when the required information or documents are not
8 received.
9 (1) NORMAL BENEFITS.--Under the Public Employee
10 Optional Retirement Program:
11 (a) Benefits in the form of vested accumulations as
12 described in s. 121.4501(6) shall be payable under this
13 subsection in accordance with the following terms and
14 conditions:
15 1. To the extent vested, benefits shall be payable
16 only to a participant.
17 2. Benefits shall be paid by the third-party
18 administrator or designated approved providers in accordance
19 with the law, the contracts, and any applicable board rule or
20 policy.
21 3. To receive benefits under this subsection, the
22 participant must be terminated from all employment with all
23 Florida Retirement System employers, as provided in s.
24 121.021(39).
25 (b) If a participant elects to receive his or her
26 benefits upon termination of employment, the participant must
27 submit a written application to the third-party administrator
28 indicating his or her preferred distribution date and
29 selecting an authorized method of distribution as provided in
30 paragraph (c). The participant may defer receipt of benefits
31
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1 until he or she chooses to make such application, subject to
2 federal requirements.
3 (c) Upon receipt by the third-party administrator of a
4 properly executed application for distribution of benefits,
5 the total accumulated benefit shall be payable to the
6 participant, as:
7 1. A lump-sum distribution to the participant;
8 2. A lump-sum direct rollover distribution whereby all
9 accrued benefits, plus interest and investment earnings, are
10 paid from the participant's account directly to the custodian
11 of an eligible retirement plan, as defined in s. 402(c)(8)(B)
12 of the Internal Revenue Code, on behalf of the participant; or
13 3. Periodic distributions, as authorized by the state
14 board.
15 (2) DISABILITY RETIREMENT BENEFITS.--Benefits provided
16 under this subsection are payable in lieu of the benefits
17 which would otherwise be payable under the provisions of
18 subsection (1). Such benefits shall be funded entirely from
19 employer contributions made under s. 121.571, transferred
20 participant funds accumulated pursuant to paragraph (a), and
21 interest and earnings thereon. Pursuant thereto:
22 (a) Transfer of funds.--To qualify to receive monthly
23 disability benefits under this subsection:
24 1. All moneys accumulated in the participant's Public
25 Employee Optional Retirement Program accounts, including
26 vested and nonvested accumulations as described in s.
27 121.4501(6), shall be transferred from such individual
28 accounts to the Division of Retirement for deposit in the
29 disability account of the Florida Retirement System Trust
30 Fund. Such moneys shall be separately accounted for. Earnings
31 shall be credited on an annual basis for amounts held in the
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1 disability accounts of the Florida Retirement System Trust
2 Fund based on actual earnings of the Florida Retirement System
3 Trust Fund.
4 2. If the participant has retained retirement credit
5 he or she had earned under the defined benefit program of the
6 Florida Retirement System as provided in s. 121.4501(3)(b), a
7 sum representing the actuarial present value of such credit
8 within the Florida Retirement System Trust Fund shall be
9 reassigned by the Division of Retirement from the defined
10 benefit program to the disability program as implemented under
11 this subsection and shall be deposited in the disability
12 account of the Florida Retirement System Trust Fund. Such
13 moneys shall be separately accounted for.
14 (b) Disability retirement; entitlement.--
15 1. A participant of the Public Employee Optional
16 Retirement Program who becomes totally and permanently
17 disabled, as defined in s. 121.091(4)(b), after completing 8
18 years of creditable service, or a participant who becomes
19 totally and permanently disabled in the line of duty
20 regardless of his or her length of service, shall be entitled
21 to a monthly disability benefit as provided herein.
22 2. In order for service to apply toward the 8 years of
23 service required to vest for regular disability benefits, or
24 toward the creditable service used in calculating a
25 service-based benefit as provided for under paragraph (g), the
26 service must be creditable service as described below:
27 a. The participant's period of service under the
28 Public Employee Optional Retirement Program will be considered
29 creditable service, except as provided in subparagraph d.
30 b. If the participant has elected to retain credit for
31 his or her service under the defined benefit program of the
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1 Florida Retirement System as provided under s. 121.4501(3)(b),
2 all such service will be considered creditable service.
3 c. If the participant has elected to transfer to his
4 or her participant accounts a sum representing the present
5 value of his or her retirement credit under the defined
6 benefit program as provided under s. 121.4501(3)(c), the
7 period of service under the defined benefit program
8 represented in the present value amounts transferred will be
9 considered creditable service for purposes of vesting for
10 disability benefits, except as provided in subparagraph d.
11 d. Whenever a participant has terminated employment
12 and has taken distribution of his or her funds as provided in
13 subsection (1), all creditable service represented by such
14 distributed funds is forfeited for purposes of this
15 subsection.
16 (c) Disability retirement effective date.--The
17 effective retirement date for a participant who applies and is
18 approved for disability retirement shall be established as
19 provided under s. 121.091(4)(a)2. and 3.
20 (d) Total and permanent disability.--A participant
21 shall be considered totally and permanently disabled if, in
22 the opinion of the division, he or she is prevented, by reason
23 of a medically determinable physical or mental impairment,
24 from rendering useful and efficient service as an officer or
25 employee.
26 (e) Proof of disability.--The division, before
27 approving payment of any disability retirement benefit, shall
28 require proof that the participant is totally and permanently
29 disabled in the same manner as provided for members of the
30 defined benefit program of the Florida Retirement System under
31 s. 121.091(4)(c).
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1 (f) Disability retirement benefit.--Upon the
2 disability retirement of a participant under this subsection,
3 the participant shall receive a monthly benefit that shall
4 begin to accrue on the first day of the month of disability
5 retirement, as approved by the division, and shall be payable
6 on the last day of that month and each month thereafter during
7 his or her lifetime and continued disability. All disability
8 benefits payable to such member shall be paid out of the
9 disability account of the Florida Retirement System Trust Fund
10 established under this subsection.
11 (g) Computation of disability retirement benefit.--The
12 amount of each monthly payment shall be calculated in the same
13 manner as provided for members of the defined benefit program
14 of the Florida Retirement System under s. 121.091(4)(f). For
15 such purpose, creditable service under both the defined
16 benefit program and the Public Employee Optional Retirement
17 Program of the Florida Retirement System shall be applicable
18 as provided under paragraph (b).
19 (h) Reapplication.--A participant whose initial
20 application for disability retirement has been denied may
21 reapply for disability benefits in the same manner, and under
22 the same conditions, as provided for members of the defined
23 benefit program of the Florida Retirement System under s.
24 121.091(4)(g).
25 (i) Membership.--Upon approval of an application for
26 disability benefits under this subsection, the applicant shall
27 be transferred to the defined benefit program of the Florida
28 Retirement System, effective upon his or her disability
29 retirement effective date.
30 (j) Option to cancel.--Any participant whose
31 application for disability benefits is approved may cancel his
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1 or her application for disability benefits, provided that the
2 cancellation request is received by the division before a
3 disability retirement warrant has been deposited, cashed, or
4 received by direct deposit. Upon such cancellation:
5 1. The participant's transfer to the defined benefit
6 program under paragraph (i) shall be nullified;
7 2. The participant shall be retroactively reinstated
8 in the Public Employee Optional Retirement Program without
9 hiatus;
10 3. All funds transferred to the Florida Retirement
11 System Trust Fund under paragraph (a) shall be returned to the
12 participant accounts from which such funds were drawn; and
13 4. The participant may elect to receive the benefit
14 payable under the provisions of subsection (1) in lieu of
15 disability benefits as provided under this subsection.
16 (k) Recovery from disability.--
17 1. The division may require periodic reexaminations at
18 the expense of the disability program account of the Florida
19 Retirement System Trust Fund. Except as otherwise provided in
20 subparagraph 2., the requirements, procedures, and
21 restrictions relating to the conduct and review of such
22 reexaminations, discontinuation or termination of benefits,
23 reentry into employment, disability retirement after reentry
24 into covered employment, and all other matters relating to
25 recovery from disability shall be the same as are set forth
26 under s. 121.091(4)(h).
27 2. Upon recovery from disability, any recipient of
28 disability retirement benefits under this subsection shall be
29 a compulsory member of the Public Employee Optional Retirement
30 Program of the Florida Retirement System. The net difference
31 between the recipient's original account balance transferred
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1 to the Florida Retirement System Trust Fund, including
2 earnings, under paragraph (a) and total disability benefits
3 paid to such recipient, if any, shall be determined as
4 provided in sub-subparagraph a.
5 a. An amount equal to the total benefits paid shall be
6 subtracted from that portion of the transferred account
7 balance consisting of vested accumulations as described under
8 s. 121.4501(6), if any, and an amount equal to the remainder
9 of benefit amounts paid, if any, shall then be subtracted from
10 any remaining portion consisting of nonvested accumulations as
11 described under s. 121.4501(6).
12 b. Amounts subtracted under sub-subparagraph a. shall
13 be retained within the disability account of the Florida
14 Retirement System Trust Fund. Any remaining account balance
15 shall be transferred to the third-party administrator for
16 disposition as provided under sub-subparagraph c. or
17 sub-subparagraph d., as appropriate.
18 c. If the recipient returns to covered employment,
19 transferred amounts shall be deposited in individual accounts
20 under the Public Employee Optional Retirement Program, as
21 directed by the participant. Vested and nonvested amounts
22 shall be separately accounted for as provided in s.
23 121.4501(6).
24 d. If the recipient fails to return to covered
25 employment upon recovery from disability:
26 (I) Any remaining vested amount shall be deposited in
27 individual accounts under the Public Employee Optional
28 Retirement Program, as directed by the participant, and shall
29 be payable as provided in subsection (1).
30
31
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1 (II) Any remaining nonvested amount shall be held in a
2 suspense account and shall be forfeitable after 5 years as
3 provided in s. 121.4501(6).
4 3. If present value was reassigned from the defined
5 benefit program to the disability program of the Florida
6 Retirement System as provided under subparagraph (a)2., the
7 full present value amount shall be returned to the defined
8 benefit account within the Florida Retirement System Trust
9 Fund and the affected individual's associated retirement
10 credit under the defined benefit program shall be reinstated
11 in full. Any benefit based upon such credit shall be
12 calculated as provided in s. 121.091(4)(h)1.
13 (l) Nonadmissible causes of disability.--A participant
14 shall not be entitled to receive a disability retirement
15 benefit if the disability results from any injury or disease
16 sustained or inflicted as described in s. 121.091(4)(i).
17 (m) Disability retirement of justice or judge by order
18 of Supreme Court.--
19 1. If a participant is a justice of the Supreme Court,
20 judge of a district court of appeal, circuit judge, or judge
21 of a county court who has served for 6 years or more as an
22 elected constitutional judicial officer, including service as
23 a judicial officer in any court abolished pursuant to Article
24 V of the State Constitution, and who is retired for disability
25 by order of the Supreme Court upon recommendation of the
26 Judicial Qualifications Commission pursuant to the provisions
27 of Article V of the State Constitution, the participant's
28 Option 1 monthly disability benefit amount as provided in s.
29 121.091(6)(a)1. shall be two-thirds of his or her monthly
30 compensation as of the participant's disability retirement
31 date. Such a participant may alternatively elect to receive
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1 an actuarially adjusted disability retirement benefit under
2 any other option as provided in s. 121.091(6)(a), or to
3 receive the normal benefit payable under the Public Employee
4 Optional Retirement Program as set forth in subsection (1).
5 2. If any justice or judge who is a participant of the
6 Public Employee Optional Retirement Program of the Florida
7 Retirement System is retired for disability by order of the
8 Supreme Court upon recommendation of the Judicial
9 Qualifications Commission pursuant to the provisions of
10 Article V of the State Constitution and elects to receive a
11 monthly disability benefit under the provisions of this
12 paragraph:
13 a. Any present value amount that was transferred to
14 his or her program account and all employer contributions made
15 to such account on his or her behalf, plus interest and
16 earnings thereon, shall be transferred to and deposited in the
17 disability account of the Florida Retirement System Trust
18 Fund; and
19 b. The monthly benefits payable under this paragraph
20 for any affected justice or judge retired from the Florida
21 Retirement System pursuant to Article V of the State
22 Constitution shall be paid from the disability account of the
23 Florida Retirement System Trust Fund.
24 (n) Upon the death of a disabled retiree or
25 beneficiary thereof who is receiving monthly benefits under
26 this subsection, the monthly benefits shall be paid through
27 the last day of the month of death and shall terminate, or be
28 adjusted, if applicable, as of that date in accordance with
29 the optional form of benefit selected at the time of
30 retirement. The deceased disabled retiree's beneficiary shall
31 also receive the amount of the participant's remaining account
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1 balance, if any, in the Florida Retirement System Trust Fund.
2 The Department of Management Services may adopt rules
3 necessary to administer this paragraph.
4 (3) DEATH BENEFITS.--Under the Public Employee
5 Optional Retirement Program:
6 (a) Survivor benefits shall be payable in accordance
7 with the following terms and conditions:
8 1. To the extent vested, benefits shall be payable
9 only to a participant's beneficiary or beneficiaries as
10 designated by the participant. If a participant designates a
11 primary beneficiary other than the participant's spouse, the
12 participant's spouse shall be notified of the designation.
13 This requirement shall not apply to the designation of one or
14 more contingent beneficiaries to receive any benefits
15 remaining upon the death of the primary beneficiary or
16 beneficiaries.
17 2. Benefits shall be paid by the third-party
18 administrator or designated approved providers in accordance
19 with the law, the contracts, and any applicable board rule or
20 policy.
21 3. To receive benefits under this subsection, the
22 participant must be deceased.
23 (b) In the event of a participant's death, all vested
24 accumulations as described in s. 121.4501(6), less withholding
25 taxes remitted to the Internal Revenue Service, shall be
26 distributed, as provided in paragraph (c), to the
27 participant's designated beneficiary or beneficiaries, or to
28 the participant's estate, as if the participant retired on the
29 date of death. No other death benefits shall be available for
30 survivors of participants under the Public Employee Optional
31 Retirement Program, except for such benefits, or coverage for
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1 such benefits, as are otherwise provided by law or are
2 separately afforded by the employer, at the employer's
3 discretion.
4 (c) Upon receipt by the third-party administrator of a
5 properly executed application for distribution of benefits,
6 the total accumulated benefit shall be payable by the
7 third-party administrator to the participant's surviving
8 beneficiary or beneficiaries, as:
9 1. A lump-sum distribution payable to the beneficiary
10 or beneficiaries, or to the deceased participant's estate;
11 2. An eligible rollover distribution on behalf of the
12 surviving spouse of a deceased participant, whereby all
13 accrued benefits, plus interest and investment earnings, are
14 paid from the deceased participant's account directly to the
15 custodian of an eligible retirement plan, as described in s.
16 402(c)(8)(B) of the Internal Revenue Code, on behalf of the
17 surviving spouse; or
18 3. A partial lump-sum payment whereby a portion of the
19 accrued benefit is paid to the deceased participant's
20 surviving spouse or other designated beneficiaries, less
21 withholding taxes remitted to the Internal Revenue Service,
22 and the remaining amount is transferred directly to the
23 custodian of an eligible retirement plan, as described in s.
24 402(c)(8)(B) of the Internal Revenue Code, on behalf of the
25 surviving spouse. The proportions must be specified by the
26 participant or the surviving beneficiary.
27
28 This paragraph does not abrogate other applicable provisions
29 of state or federal law providing for payment of death
30 benefits.
31
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1 (4) LIMITATION ON LEGAL PROCESS.--The benefits payable
2 to any person under the Public Employee Optional Retirement
3 Program, and any contributions accumulated under such program,
4 are not subject to assignment, execution, attachment, or any
5 legal process, except for qualified domestic relations orders
6 by a court of competent jurisdiction, income deduction orders
7 as provided in s. 61.1301, and federal income tax levies.
8 Section 10. The Legislature finds that a proper and
9 legitimate state purpose is served when employees and retirees
10 of the state and of its political subdivisions, and the
11 dependents, survivors, and beneficiaries of such employees and
12 retirees, are extended the basic protections afforded by
13 governmental retirement systems that provide fair and adequate
14 benefits that are managed, administered, and funded in an
15 actuarially sound manner, as required by s. 14, Art. X of the
16 State Constitution and part VII of chapter 112, Florida
17 Statutes. Therefore, the Legislature hereby determines and
18 declares that this act fulfills an important state interest.
19 Section 11. Notwithstanding any provision to the
20 contrary and the authority of the Department of Management
21 Services, the Department of Management Services may contract
22 with a private-sector company selected and approved by the
23 department for services to administer the disability benefit
24 program. Not later than March 1, 2003, the department may
25 provide to the Legislature for its approval an alternative
26 method for administering and funding disability benefits for
27 participants in the Public Employee Optional Retirement
28 Program and the Florida Retirement System, including through
29 commercial insurance coverage.
30 Section 12. It is the intent of the Legislature that
31 the disability retirement program for participants of the
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1 Public Employee Optional Retirement Program as created in this
2 act must meet all applicable requirements of federal law for a
3 qualified plan. The Department of Management Services shall
4 seek a private letter ruling from the Internal Revenue Service
5 on the disability retirement program for participants of the
6 Public Employee Optional Retirement Program. Consistent with
7 the private letter ruling, the Department of Management
8 Services shall adopt any necessary rules required to maintain
9 the qualified status of the disability retirement program and
10 the Florida Retirement System defined benefit plan.
11 Section 13. This act shall take effect July 1, 2002.
12
13 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
14 Senate Bill 2132
15
16 The Committee Substitute changes the implementing dates for
account balance transfers to the alternative investment plan
17 for public employees. It permits employees in the university
system optional annuity program to have the same distribution
18 options as those provided participants in the new plan. The
Committee Substitute authorizes a study of the administration
19 of the disability benefits plan including private
administration or use of commercial insurance.
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