Florida Senate - 2009 SB 2488
By Senator Deutch
30-00746A-09 20092488__
1 A bill to be entitled
2 An act relating to investment products for public
3 employees; amending ss. 112.215, 121.055, 121.35,
4 121.4501, 175.071, 185.06, 218.415, and 1012.875,
5 F.S.; requiring public employee deferred compensation
6 plans, the state employee Senior Management Service
7 Optional Annuity Program, the State University
8 Optional Retirement Program, the Public Employee
9 Optional Retirement Program, firefighters' pension
10 plans, police officers retirement trust funds, local
11 government investment plans, and the State Community
12 College System Optional Retirement Program to identify
13 and divest of any scrutinized companies by a certain
14 date; providing an effective date.
15
16 Be It Enacted by the Legislature of the State of Florida:
17
18 Section 1. Paragraph (f) is added to subsection (4) of
19 section 112.215, Florida Statutes, to read:
20 112.215 Government employees; deferred compensation
21 program.—
22 (4)
23 (f) As provided in s. 215.473, the governing body of each
24 investment provider participating in an approved deferred
25 compensation plan shall identify and publicly report any direct
26 or indirect holdings it may have in any scrutinized company, as
27 defined in that section, and proceed to sell, redeem, divest, or
28 withdraw all publicly traded securities it may have in such
29 company beginning January 1, 2010. The divestiture of any such
30 security must be completed by March 1, 2010. The governing body
31 and its named officers or investment advisors may not be deemed
32 to have breached their fiduciary duty in any action taken to
33 dispose of any such security, and the investment provider shall
34 have satisfactorily discharged the fiduciary duties of loyalty,
35 prudence, and sole and exclusive benefit to employees and their
36 beneficiaries if the actions it takes are consistent with the
37 duties imposed by s. 215.473, and the manner of the disposition,
38 if any, is reasonable as to the means chosen. For the purposes
39 of effecting compliance with that section, the Chief Financial
40 Officer shall designate terror-free plans that allocate their
41 funds among securities not subject to divestiture. No person may
42 bring any civil, criminal, or administrative action against an
43 investment provider or any employee, officer, director, or
44 trustee of such provider based upon the divestiture of any
45 security pursuant to this paragraph.
46 Section 2. Paragraph (f) of subsection (6) of section
47 121.055, Florida Statutes, is amended to read:
48 121.055 Senior Management Service Class.—There is hereby
49 established a separate class of membership within the Florida
50 Retirement System to be known as the “Senior Management Service
51 Class,” which shall become effective February 1, 1987.
52 (6)
53 (f) Administration.—
54 1. The Senior Management Service Optional Annuity Program
55 authorized by this section shall be administered by the
56 department. The department shall designate one or more provider
57 companies from which annuity contracts may be purchased under
58 the program and shall approve the form and content of the
59 contracts. The department shall sign a contract with each of the
60 provider companies and shall evaluate the performance of the
61 provider companies on a continuing basis. The department may
62 terminate the services of a provider company for reasons stated
63 in the contract. The department shall adopt rules establishing
64 its responsibilities and the responsibilities of employers in
65 administering the optional annuity program.
66 2. Effective July 1, 1997, the State Board of
67 Administration shall review and make recommendations to the
68 department on the acceptability of all investment products
69 proposed by provider companies of the optional annuity program
70 before such products are offered through annuity contracts to
71 the participants and may advise the department of any changes
72 deemed necessary to ensure that the optional annuity program
73 offers an acceptable mix of investment products. The department
74 shall make the final determination as to whether an investment
75 product will be approved for the program.
76 3. The provisions of each contract applicable to a
77 participant in the Senior Management Service Optional Annuity
78 Program shall be contained in a written program description
79 which includes shall include a report of pertinent financial and
80 actuarial information on the solvency and actuarial soundness of
81 the program and the benefits applicable to the participant. Such
82 description shall be furnished by the company or companies to
83 each participant in the program and to the department upon
84 commencement of participation in the program and annually
85 thereafter.
86 4. The department shall ensure that each participant in the
87 Senior Management Service Optional Annuity program is provided
88 an accounting of the total contribution and the annual
89 contribution made by and on behalf of such participants.
90 5. As provided in s. 215.473, the governing body of each
91 provider company shall identify and publicly report any direct
92 or indirect holdings it may have in any scrutinized company, as
93 defined in that section, and proceed to sell, redeem, divest, or
94 withdraw all publicly traded securities it may have in such
95 company beginning January 1, 2010. The divestiture of any such
96 security must be completed by March 1, 2010. The governing body
97 and its named officers or investment advisors may not be deemed
98 to have breached their fiduciary duty in any action taken to
99 dispose of any such security, and the approved provider shall
100 have satisfactorily discharged the fiduciary duties of loyalty,
101 prudence, and sole and exclusive benefit to participating
102 employees and their beneficiaries if the actions it takes are
103 consistent with the duties imposed by s. 215.473, and the manner
104 of the disposition, if any, is reasonable as to the means
105 chosen. For the purposes of effecting compliance with that
106 section, the department shall designate terror-free plans that
107 allocate their funds among securities not subject to
108 divestiture. No person may bring any civil, criminal, or
109 administrative action against a provider company or any
110 employee, officer, director, or trustee of such provider based
111 upon the divestiture of any security pursuant to this paragraph.
112 Section 3. Paragraph (f) is added to subsection (6) of
113 section 121.35, Florida Statutes, to read:
114 121.35 Optional retirement program for the State University
115 System.—
116 (6) ADMINISTRATION OF PROGRAM.—
117 (f) As provided in s. 215.473, the governing body of each
118 provider company shall identify and publicly report any direct
119 or indirect holdings it may have in any scrutinized company, as
120 defined in that section, and proceed to sell, redeem, divest, or
121 withdraw all publicly traded securities it may have in such
122 company beginning January 1, 2010. The divestiture of any such
123 security must be completed by March 1, 2010. The governing body
124 and its named officers or investment advisors may not be deemed
125 to have breached their fiduciary duty in any action taken to
126 dispose of any such security, and the approved provider shall
127 have satisfactorily discharged the fiduciary duties of loyalty,
128 prudence, and sole and exclusive benefit to program participants
129 and their beneficiaries if the actions it takes are consistent
130 with the duties imposed by s. 215.473, and the manner of the
131 disposition, if any, is reasonable as to the means chosen. For
132 the purposes of effecting compliance with that section, the
133 department shall designate terror-free plans that allocate their
134 funds among securities not subject to divestiture. No person may
135 bring any civil, criminal, or administrative action against a
136 provider company or any employee, officer, director, or trustee
137 of such provider based upon the divestiture of any security
138 pursuant to this paragraph.
139 Section 4. Present paragraphs (d), (e), and (f) of
140 subsection (9) of section 121.4501, Florida Statutes, are
141 redesignated as paragraphs (e), (f), and (g), respectively, and
142 a new paragraph (d) is added to that subsection, to read:
143 121.4501 Public Employee Optional Retirement Program.—
144 (9) INVESTMENT OPTIONS OR PRODUCTS; PERFORMANCE REVIEW.—
145 (d) As provided in s. 215.473, the governing body of each
146 approved provider shall identify and publicly report any direct
147 or indirect holdings it may have in any scrutinized company, as
148 defined in that section, and proceed to sell, redeem, divest, or
149 withdraw all publicly traded securities it may have in such
150 company beginning January 1, 2010. The divestiture of any such
151 security must be completed by March 1, 2010. The governing body
152 and its named officers or investment advisors may not be deemed
153 to have breached their fiduciary duty in any action taken to
154 dispose of any such security, and the approved provider shall
155 have satisfactorily discharged the fiduciary duties of loyalty,
156 prudence, and sole and exclusive benefit to program participants
157 and their beneficiaries if the actions it takes are consistent
158 with the duties imposed by s. 215.473, and the manner of the
159 disposition, if any, is reasonable as to the means chosen. For
160 the purposes of effecting compliance with that section, the
161 state board shall designate terror-free plans that allocate
162 their funds among securities not subject to divestiture. No
163 person may bring any civil, criminal, or administrative action
164 against an approved provider or any employee, officer, director,
165 or trustee of such provider based upon the divestiture of any
166 security pursuant to this paragraph.
167 Section 5. Paragraph (f) is added to subsection (1) of
168 section 175.071, Florida Statutes, to read:
169 175.071 General powers and duties of board of trustees.—For
170 any municipality, special fire control district, chapter plan,
171 local law municipality, local law special fire control district,
172 or local law plan under this chapter:
173 (1) The board of trustees may:
174 (f) Notwithstanding paragraph (b) and as provided in s.
175 215.473, identify and publicly report any direct or indirect
176 holdings it may have in any scrutinized company, as defined in
177 that section, and proceed to sell, redeem, divest, or withdraw
178 all publicly traded securities it may have in such company
179 beginning January 1, 2010. The divestiture of any such security
180 must be completed by March 1, 2010. The board and its named
181 officers or investment advisors may not be deemed to have
182 breached their fiduciary duty in any action taken to dispose of
183 any such security, and the board shall have satisfactorily
184 discharged the fiduciary duties of loyalty, prudence, and sole
185 and exclusive benefit to the participants of the pension fund
186 and their beneficiaries if the actions it takes are consistent
187 with the duties imposed by s. 215.473, and the manner of the
188 disposition, if any, is reasonable as to the means chosen. For
189 the purposes of effecting compliance with that section, the
190 pension fund shall designate terror-free plans that allocate
191 their funds among securities not subject to divestiture. No
192 person may bring any civil, criminal, or administrative action
193 against the board of trustees or any employee, officer,
194 director, or advisor of such pension fund based upon the
195 divestiture of any security pursuant to this paragraph.
196 Section 6. Paragraph (g) is added to subsection (1) of
197 section 185.06, Florida Statutes, to read:
198 185.06 General powers and duties of board of trustees.—For
199 any municipality, chapter plan, local law municipality, or local
200 law plan under this chapter:
201 (1) The board of trustees may:
202 (g) Notwithstanding paragraph (b) and as provided in s.
203 215.473, identify and publicly report any direct or indirect
204 holdings it may have in any scrutinized company, as defined in
205 that section, and proceed to sell, redeem, divest, or withdraw
206 all publicly traded securities it may have in such company
207 beginning January 1, 2010. The divestiture of any such security
208 must be completed by March 1, 2010. The board and its named
209 officers or investment advisors may not be deemed to have
210 breached their fiduciary duty in any action taken to dispose of
211 any such security, and the board shall have satisfactorily
212 discharged the fiduciary duties of loyalty, prudence, and sole
213 and exclusive benefit to the participants of the pension fund
214 and their beneficiaries if the actions it takes are consistent
215 with the duties imposed by s. 215.473, and the manner of the
216 disposition, if any, is reasonable as to the means chosen. For
217 the purposes of effecting compliance with that section, the
218 pension fund shall designate terror-free plans that allocate
219 their funds among securities not subject to divestiture. No
220 person may bring any civil, criminal, or administrative action
221 against the board of trustees or any employee, officer,
222 director, or advisor of such pension fund based upon the
223 divestiture of any security pursuant to this paragraph.
224 Section 7. Subsection (19) of section 218.415, Florida
225 Statutes, is amended to read:
226 218.415 Local government investment policies.—Investment
227 activity by a unit of local government must be consistent with a
228 written investment plan adopted by the governing body, or in the
229 absence of the existence of a governing body, the respective
230 principal officer of the unit of local government and maintained
231 by the unit of local government or, in the alternative, such
232 activity must be conducted in accordance with subsection (17).
233 Any such unit of local government shall have an investment
234 policy for any public funds in excess of the amounts needed to
235 meet current expenses as provided in subsections (1)-(16), or
236 shall meet the alternative investment guidelines contained in
237 subsection (17). Such policies shall be structured to place the
238 highest priority on the safety of principal and liquidity of
239 funds. The optimization of investment returns shall be secondary
240 to the requirements for safety and liquidity. Each unit of local
241 government shall adopt policies that are commensurate with the
242 nature and size of the public funds within its custody.
243 (19) SALE OF SECURITIES.—
244 (a) When the invested funds are needed in whole or in part
245 for the purposes originally intended or for more optimal
246 investments, the unit of local government's governing body may
247 sell such investments at the then-prevailing market price and
248 place the proceeds into the proper account or fund of the unit
249 of local government.
250 (b) Notwithstanding subsections (16) and (17) and as
251 provided in s. 215.473, the local government shall identify and
252 publicly report any direct or indirect holdings it may have in
253 any scrutinized company, as defined in that section, and proceed
254 to sell, redeem, divest, or withdraw all publicly traded
255 securities it may have in such company beginning January 1,
256 2010. The divestiture of any such security must be completed by
257 March 1, 2010. The governing body and its named officers or
258 investment advisors may not be deemed to have breached their
259 fiduciary duty in any action taken to dispose of any such
260 security, and the local government shall have satisfactorily
261 discharged the fiduciary duties of loyalty, prudence, and sole
262 and exclusive benefit to the local government and the public if
263 the actions it takes are consistent with the duties imposed by
264 s. 215.473, and the manner of the disposition, if any, is
265 reasonable as to the means chosen. For the purposes of effecting
266 compliance with that section, the local government shall
267 designate terror-free plans that allocate their funds among
268 securities not subject to divestiture. No person may bring any
269 civil, criminal, or administrative action against a local
270 government or any employee, officer, director, or advisor of
271 such government based upon the divestiture of any security
272 pursuant to this paragraph.
273 Section 8. Paragraph (f) is added to subsection (6) of
274 section 1012.875, Florida Statutes, to read:
275 1012.875 State Community College System Optional Retirement
276 Program.—Each community college may implement an optional
277 retirement program, if such program is established therefor
278 pursuant to s. 1001.64(20), under which annuity or other
279 contracts providing retirement and death benefits may be
280 purchased by, and on behalf of, eligible employees who
281 participate in the program, in accordance with s. 403(b) of the
282 Internal Revenue Code. Except as otherwise provided herein, this
283 retirement program, which shall be known as the State Community
284 College System Optional Retirement Program, may be implemented
285 and administered only by an individual community college or by a
286 consortium of community colleges.
287 (6)
288 (f) As provided in s. 215.473, the governing body of each
289 provider company shall identify and publicly report any direct
290 or indirect holdings it may have in any scrutinized company, as
291 defined in that section, and proceed to sell, redeem, divest, or
292 withdraw all publicly traded securities it may have in such
293 company beginning January 1, 2010. The divestiture of any such
294 security must be completed by March 1, 2010. The governing body
295 and its named officers or investment advisors may not be deemed
296 to have breached their fiduciary duty in any action taken to
297 dispose of any such security, and the approved provider shall
298 have satisfactorily discharged the fiduciary duties of loyalty,
299 prudence, and sole and exclusive benefit to program participants
300 and their beneficiaries if the actions it takes are consistent
301 with the duties imposed by s. 215.473, and the manner of the
302 disposition, if any, is reasonable as to the means chosen. For
303 the purposes of effecting compliance with that section, the
304 program administrator shall designate terror-free plans that
305 allocate their funds among securities not subject to
306 divestiture. No person may bring any civil, criminal, or
307 administrative action against a provider company or any
308 employee, officer, director, or trustee of such provider based
309 upon the divestiture of any security pursuant to this paragraph.
310 Section 9. This act shall take effect July 1, 2009.