Florida Senate - 2021 CS for SB 84
By the Committee on Appropriations; and Senator Rodrigues
1 A bill to be entitled
2 An act relating to retirement; amending s. 121.051,
3 F.S.; providing for compulsory membership in the
4 Florida Retirement System Investment Plan for
5 specified employees initially enrolled on or after a
6 specified date; providing exceptions; conforming
7 provisions to changes made by the act; amending s.
8 121.052, F.S.; removing authorization for an elected
9 officer to elect membership in the Senior Management
10 Service Class on or after a specified date; amending
11 s. 121.35, F.S.; modifying provisions governing
12 participation in the investment plan for individuals
13 who are eligible to participate in the State
14 University System Optional Retirement Program to
15 conform to changes made by the act; providing for the
16 transfer of contributions for employees who default
17 into the investment plan; amending s. 121.4501, F.S.;
18 modifying provisions governing the administration of
19 the investment plan to reflect compulsory membership
20 for specified employees; amending s. 121.74, F.S.;
21 revising the employer assessment rate to fund certain
22 administrative and educational expenses related to
23 investment plan administration as of a specified date;
24 amending ss. 238.072 and 413.051, F.S.; conforming
25 cross-references to changes made by the act; providing
26 a declaration of important state interest; providing
27 an effective date.
29 Be It Enacted by the Legislature of the State of Florida:
31 Section 1. Present subsections (3) through (9) of section
32 121.051, Florida Statutes, are redesignated as subsections (4)
33 through (10), respectively, a new subsection (3) is added to
34 that section, and paragraph (c) of subsection (2) of that
35 section is amended, to read:
36 121.051 Participation in the system.—
37 (2) OPTIONAL PARTICIPATION.—
38 (c) Employees of public community colleges or charter
39 technical career centers sponsored by public community colleges,
40 designated in s. 1000.21(3), who are members of the Regular
41 Class of the Florida Retirement System and who comply with the
42 criteria set forth in this paragraph and s. 1012.875 may, in
43 lieu of participating in the Florida Retirement System, elect to
44 withdraw from the system altogether and participate in the State
45 Community College System Optional Retirement Program provided by
46 the employing agency under s. 1012.875.
47 1.a. Through June 30, 2001, the cost to the employer for
48 benefits under the optional retirement program equals the normal
49 cost portion of the employer retirement contribution which would
50 be required if the employee were a member of the pension plan’s
51 Regular Class, plus the portion of the contribution rate
52 required by s. 112.363(8) which would otherwise be assigned to
53 the Retiree Health Insurance Subsidy Trust Fund.
54 b. Effective July 1, 2001, through June 30, 2011, each
55 employer shall contribute on behalf of each member of the
56 optional program an amount equal to 10.43 percent of the
57 employee’s gross monthly compensation. The employer shall deduct
58 an amount for the administration of the program.
59 c. Effective July 1, 2011, through June 30, 2012, each
60 member shall contribute an amount equal to the employee
61 contribution required under s. 121.71(3). The employer shall
62 contribute on behalf of each program member an amount equal to
63 the difference between 10.43 percent of the employee’s gross
64 monthly compensation and the employee’s required contribution
65 based on the employee’s gross monthly compensation.
66 d. Effective July 1, 2012, each member shall contribute an
67 amount equal to the employee contribution required under s.
68 121.71(3). The employer shall contribute on behalf of each
69 program member an amount equal to the difference between 8.15
70 percent of the employee’s gross monthly compensation and the
71 employee’s required contribution based on the employee’s gross
72 monthly compensation.
73 e. The employer shall contribute an additional amount to
74 the Florida Retirement System Trust Fund equal to the unfunded
75 actuarial accrued liability portion of the Regular Class
76 contribution rate.
77 2. The decision to participate in the optional retirement
78 program is irrevocable as long as the employee holds a position
79 eligible for participation, except as provided in subparagraph
80 3. Any service creditable under the Florida Retirement System is
81 retained after the member withdraws from the system; however,
82 additional service credit in the system may not be earned while
83 a member of the optional retirement program.
84 3. Effective July 1, 2003, through June 30, 2022, an
85 employee who has elected to participate in the optional
86 retirement program shall have one opportunity, at the employee’s
87 discretion, to transfer from the optional retirement program to
88 the pension plan of the Florida Retirement System or to the
89 investment plan established under part II of this chapter,
90 subject to the terms of the applicable optional retirement
91 program contracts. Except as provided in subsection (3), an
92 employee participating in the optional retirement program on or
93 after July 1, 2022, is not eligible to transfer to the Florida
94 Retirement System.
95 a. If the employee chooses to move to the investment plan,
96 any contributions, interest, and earnings creditable to the
97 employee under the optional retirement program are retained by
98 the employee in the optional retirement program, and the
99 applicable provisions of s. 121.4501(4) govern the election.
100 b. If the employee chooses to move to the pension plan of
101 the Florida Retirement System, the employee shall receive
102 service credit equal to his or her years of service under the
103 optional retirement program.
104 (I) The cost for such credit is the amount representing the
105 present value of the employee’s accumulated benefit obligation
106 for the affected period of service. The cost shall be calculated
107 as if the benefit commencement occurs on the first date the
108 employee becomes eligible for unreduced benefits, using the
109 discount rate and other relevant actuarial assumptions that were
110 used to value the Florida Retirement System Pension Plan
111 liabilities in the most recent actuarial valuation. The
112 calculation must include any service already maintained under
113 the pension plan in addition to the years under the optional
114 retirement program. The present value of any service already
115 maintained must be applied as a credit to total cost resulting
116 from the calculation. The division must ensure that the transfer
117 sum is prepared using a formula and methodology certified by an
118 enrolled actuary.
119 (II) The employee must transfer from his or her optional
120 retirement program account and from other employee moneys as
121 necessary, a sum representing the present value of the
122 employee’s accumulated benefit obligation immediately following
123 the time of such movement, determined assuming that attained
124 service equals the sum of service in the pension plan and
125 service in the optional retirement program.
126 4. Participation in the optional retirement program is
127 limited to employees who satisfy the following eligibility
129 a. The employee is otherwise eligible for membership or
130 renewed membership in the Regular Class of the Florida
131 Retirement System, as provided in s. 121.021(11) and (12) or s.
133 b. The employee is employed in a full-time position
134 classified in the Accounting Manual for Florida’s College System
136 (I) Instructional; or
137 (II) Executive Management, Instructional Management, or
138 Institutional Management and the community college determines
139 that recruiting to fill a vacancy in the position is to be
140 conducted in the national or regional market, and the duties and
141 responsibilities of the position include the formulation,
142 interpretation, or implementation of policies, or the
143 performance of functions that are unique or specialized within
144 higher education and that frequently support the mission of the
145 community college.
146 c. The employee is employed in a position not included in
147 the Senior Management Service Class of the Florida Retirement
148 System as described in s. 121.055.
149 5. Members of the program are subject to the same
150 reemployment limitations, renewed membership provisions, and
151 forfeiture provisions applicable to regular members of the
152 Florida Retirement System under ss. 121.091(9), 121.122, and
153 121.091(5), respectively. A member who receives a program
154 distribution funded by employer and required employee
155 contributions is deemed to be retired from a state-administered
156 retirement system if the member is subsequently employed with an
157 employer that participates in the Florida Retirement System.
158 6. Eligible community college employees are compulsory
159 members of the Florida Retirement System until, pursuant to s.
160 1012.875, a written election to withdraw from the system and
161 participate in the optional retirement program is filed with the
162 program administrator and received by the division.
163 a. A community college employee whose program eligibility
164 results from initial employment shall be enrolled in the
165 optional retirement program retroactive to the first day of
166 eligible employment. The employer and employee retirement
167 contributions paid through the month of the employee plan change
168 shall be transferred to the community college to the employee’s
169 optional program account, and, effective the first day of the
170 next month, the employer shall pay the applicable contributions
171 based upon subparagraph 1.
172 b. A community college employee whose program eligibility
173 is due to the subsequent designation of the employee’s position
174 as one of those specified in subparagraph 4., or due to the
175 employee’s appointment, promotion, transfer, or reclassification
176 to a position specified in subparagraph 4., must be enrolled in
177 the program on the first day of the first full calendar month
178 that such change in status becomes effective. The employer and
179 employee retirement contributions paid from the effective date
180 through the month of the employee plan change must be
181 transferred to the community college to the employee’s optional
182 program account, and, effective the first day of the next month,
183 the employer shall pay the applicable contributions based upon
184 subparagraph 1.
185 7. Effective July 1, 2003, through December 31, 2008, any
186 member of the optional retirement program who has service credit
187 in the pension plan of the Florida Retirement System for the
188 period between his or her first eligibility to transfer from the
189 pension plan to the optional retirement program and the actual
190 date of transfer may, during employment, transfer to the
191 optional retirement program a sum representing the present value
192 of the accumulated benefit obligation under the defined benefit
193 retirement program for the period of service credit. Upon
194 transfer, all service credit previously earned under the pension
195 plan during this period is nullified for purposes of entitlement
196 to a future benefit under the pension plan.
197 (3) INVESTMENT PLAN MEMBERSHIP COMPULSORY.—
198 (a) All eligible employees and officers, except Special
199 Risk Class members, those employees and officers eligible to
200 withdraw from the system under s. 121.052(3)(d) or s.
201 121.055(1)(b)2., or those employees eligible for optional
202 retirement programs under s. 121.051(1)(a), s. 121.051(2)(c), or
203 s. 121.35, initially enrolled on or after July 1, 2022, are
204 compulsory members of the investment plan, and membership in the
205 pension plan is not permitted except as provided in s.
206 121.591(2) and (4). Employees initially enrolled on or after
207 July 1, 2022, are not eligible to use the election opportunity
208 specified in s. 121.4501(4)(e).
209 (b) Employees eligible to withdraw from the system under s.
210 121.052(3)(d) or s. 121.055(1)(b)2. may choose to withdraw from
211 the system or to participate in the investment plan as provided
212 in those sections. Employees eligible for optional retirement
213 programs under s. 121.051(2)(c) or s. 121.35 may choose to
214 participate in the optional retirement program or the investment
215 plan as provided in those sections. Eligible employees required
216 to participate in the optional retirement program under s.
217 121.35, pursuant to s. 121.051(1)(a), must participate in the
218 investment plan when employed in a position not eligible for the
219 optional retirement program.
220 Section 2. Paragraph (c) of subsection (3) of section
221 121.052, Florida Statutes, is amended to read:
222 121.052 Membership class of elected officers.—
223 (3) PARTICIPATION AND WITHDRAWAL, GENERALLY.—Effective July
224 1, 1990, participation in the Elected Officers’ Class shall be
225 compulsory for elected officers listed in paragraphs (2)(a)-(d)
226 and (f) assuming office on or after said date, unless the
227 elected officer elects membership in another class or withdraws
228 from the Florida Retirement System as provided in paragraphs
230 (c) Before July 1, 2022, an
any elected officer may, within
231 6 months after assuming office, or within 6 months after this
232 act becomes a law for serving elected officers, elect membership
233 in the Senior Management Service Class as provided in s. 121.055
234 in lieu of membership in the Elected Officers’ Class. Any Such
235 election does not affect made by a county elected officer shall
236 have no effect upon the statutory limit on the number of
237 nonelective full-time positions that may be designated by a
238 local agency employer for inclusion in the Senior Management
239 Service Class under s. 121.055(1)(b)1.
240 Section 3. Paragraph (c) of subsection (3) of section
241 121.35, Florida Statutes, is amended to read:
242 121.35 Optional retirement program for the State University
244 (3) ELECTION OF OPTIONAL PROGRAM.—
245 (c) An any employee who becomes eligible to participate in
246 the optional retirement program on or after January 1, 1993,
247 shall be a compulsory participant of the program unless such
248 employee elects membership in the Florida Retirement System.
249 Such election must shall be made in writing and filed with the
250 personnel officer of the employer. An any eligible employee who
251 fails to make such election within the prescribed time period
252 shall be deemed to have elected to participate in the optional
253 retirement program.
254 1. An any employee whose optional retirement program
255 eligibility results from initial employment shall be enrolled in
256 the program at the commencement of employment. If, within 90
257 days after commencement of employment, the employee elects
258 membership in the Florida Retirement System, such membership
259 shall be effective retroactive to the date of commencement of
260 employment as provided in s. 121.4501(4).
261 2. An Any employee whose optional retirement program
262 eligibility results from a change in status due to the
263 subsequent designation of the employee’s position as one of
264 those specified in paragraph (2)(a) or due to the employee’s
265 appointment, promotion, transfer, or reclassification to a
266 position specified in paragraph (2)(a) shall be enrolled in the
267 optional retirement program upon such change in status and shall
268 be notified by the employer of such action. If, within 90 days
269 after the date of such notification, the employee elects to
270 retain membership in the Florida Retirement System, such
271 continuation of membership shall be retroactive to the date of
272 the change in status.
273 3. Notwithstanding subparagraphs 1. and 2. the provisions
274 of this paragraph, effective July 1, 1997, an any employee who
275 is eligible to participate in the optional retirement program
276 and who fails to execute a contract with one of the approved
277 companies and to notify the department in writing as provided in
278 subsection (4) within 90 days after the date of eligibility is
279 shall be deemed to have elected membership in the Florida
280 Retirement System, except as provided in s. 121.051(1)(a). This
281 subparagraph provision shall also applies apply to any employee
282 who terminates employment in an eligible position before
283 executing the required investment annuity contract and notifying
284 the department. Such membership shall be retroactive to the date
285 of eligibility, and all appropriate contributions shall be
286 transferred to the Florida Retirement System Trust Fund and the
287 Retiree Health Insurance Subsidy Trust Fund. If a member is
288 initially enrolled on or after July 1, 2022, and fails to
289 execute a contract with one of the approved companies and notify
290 the department in writing within 90 days after the date of
291 eligibility as provided in subsection (4), the member is deemed
292 to have elected membership in the Florida Retirement System
293 Investment Plan and such membership shall be retroactive to the
294 date of eligibility. All contributions required under s. 121.72
295 shall be transferred to a default fund in the investment plan as
296 provided in s. 121.4501(4)(g) and the Retiree Health Insurance
297 Subsidy Trust Fund.
298 Section 4. Subsections (1), (4), (8), (10), and (15) of
299 section 121.4501, Florida Statutes, are amended to read:
300 121.4501 Florida Retirement System Investment Plan.—
301 (1) ESTABLISHMENT.—The Trustees of the State Board of
302 Administration shall establish a defined contribution program
303 called the “Florida Retirement System Investment Plan” or
304 “investment plan” for members of the Florida Retirement System
305 under which retirement benefits will be provided for eligible
306 employees initially enrolled before July 1, 2022, who elect to
307 participate in the program, for Special Risk members, regardless
308 of the date of initial enrollment, who elect to participate in
309 the program, and for all other eligible employees initially
310 enrolled on or after July 1, 2022, who are compulsory members of
311 the investment plan pursuant to paragraph (4)(g). The retirement
312 benefits shall be provided through member-directed investments,
313 in accordance with s. 401(a) of the Internal Revenue Code and
314 related regulations. The employer and employee shall make
315 contributions, as provided in this section and ss. 121.571 and
316 121.71, to the Florida Retirement System Investment Plan Trust
317 Fund toward the funding of benefits.
318 (4) PARTICIPATION; ENROLLMENT.—
319 (a)1. Effective June 1, 2002, through February 28, 2003, a
320 90-day election period was provided to each eligible employee
321 participating in the Florida Retirement System, preceded by a
322 90-day education period, permitting each eligible employee to
323 elect membership in the investment plan. An employee who failed
324 to elect the investment plan during the election period remained
325 in the pension plan. An eligible employee who was employed in a
326 regularly established position during the election period was
327 granted the option to make one subsequent election, as provided
328 in paragraph (f). With respect to an eligible employee who did
329 not participate in the initial election period or who is
330 initially employed in a regularly established position after the
331 close of the initial election period but before January 1, 2018,
332 such employee shall, by default, be enrolled in the pension plan
333 at the commencement of employment and may, by the last business
334 day of the 5th month following the employee’s month of hire,
335 elect to participate in the investment plan. The employee’s
336 election must be made in writing or by electronic means and must
337 be filed with the third-party administrator. The election to
338 participate in the investment plan is irrevocable, except as
339 provided in paragraph (f).
340 a. If the employee files such election within the
341 prescribed time period, enrollment in the investment plan is
342 effective on the first day of employment. The retirement
343 contributions paid through the month of the employee plan change
344 shall be transferred to the investment program, and, effective
345 the first day of the next month, the employer and employee must
346 pay the applicable contributions based on the employee
347 membership class in the program.
348 b. An employee who fails to elect to participate in the
349 investment plan within the prescribed time period is deemed to
350 have elected to retain membership in the pension plan, and the
351 employee’s option to elect to participate in the investment plan
352 is forfeited.
353 2. With respect to employees who become eligible to
354 participate in the investment plan pursuant to s.
355 121.051(2)(c)3. or s. 121.35(3)(i), the employee may elect to
356 participate in the investment plan in lieu of retaining his or
357 her membership in the State Community College System Optional
358 Retirement Program or the State University System Optional
359 Retirement Program. The election must be made in writing or by
360 electronic means and must be filed with the third-party
361 administrator. This election is irrevocable, except as provided
362 in paragraph (f). Upon making such election, the employee shall
363 be enrolled as a member in the investment plan, the employee’s
364 membership in the Florida Retirement System is governed by the
365 provisions of this part, and the employee’s participation in the
366 State Community College System Optional Retirement Program or
367 the State University System Optional Retirement Program
368 terminates. The employee’s enrollment in the investment plan is
369 effective on the first day of the month for which a full month’s
370 employer and employee contribution is made to the investment
372 (b)1. With respect to employees who become eligible to
373 participate in the investment plan by reason of employment in a
374 regularly established position commencing on or after January 1,
375 2018, through June 30, 2022, or who did not complete an election
376 window before June 30, 2022, or any employee in the Special Risk
377 Class initially enrolled on or after July 1, 2022 January 1,
378 2018, any such employee shall be enrolled in the pension plan at
379 the commencement of employment and may, by the last business day
380 of the eighth month following the employee’s month of hire,
381 elect to participate in the pension plan or the investment plan.
382 Eligible employees may make a plan election only if they are
383 earning service credit in an employer-employee relationship
384 consistent with s. 121.021(17)(b), excluding leaves of absence
385 without pay.
386 2. The employee’s election must be made in writing or by
387 electronic means and must be filed with the third-party
388 administrator. The election to participate in the pension plan
389 or investment plan is irrevocable, except as provided in
390 paragraph (f).
391 3.a. Except as provided in subparagraph 4., if the employee
392 fails to make an election to either the pension plan or the
393 investment plan during the 8-month period following the month of
394 hire, the employee is deemed to have elected the investment plan
395 and shall default into the investment plan retroactively to the
396 employee’s date of employment. The employee’s option to
397 participate in the pension plan is forfeited, except as provided
398 in paragraph (f).
399 b. The amount of the employee and employer contributions
400 paid through the date of default to the investment plan shall be
401 transferred to the investment plan and shall be placed in a
402 default fund as designated by the State Board of Administration.
403 The employee may move the contributions once an account is
404 activated in the investment plan.
405 4. If the employee is employed in a position included in
406 the Special Risk Class and fails to make an election to either
407 the pension plan or the investment plan during the 8-month
408 period following the month of hire, the employee is deemed to
409 have elected the pension plan and shall default into the pension
410 plan retroactively to the employee’s date of employment. The
411 employee’s option to participate in the investment plan is
412 forfeited, except as provided in paragraph (f).
413 5. Effective the first day of the month after an eligible
414 employee makes a plan election of the pension plan or investment
415 plan, or the first day of the month after default, the employee
416 and employer shall pay the applicable contributions based on the
417 employee membership class in the program.
418 (c) Contributions available for self-direction by a member
419 who has not selected one or more specific investment products
420 shall be allocated as prescribed by the state board. The third
421 party administrator shall notify the member at least quarterly
422 that the member should take an affirmative action to make an
423 asset allocation among the investment products.
424 (d) On or after July 1, 2011, a member of the pension plan
425 who obtains a refund of employee contributions retains his or
426 her prior plan choice upon return to employment in a regularly
427 established position with a participating employer.
428 (e)1. A member of the investment plan who takes a
429 distribution of any contributions from his or her investment
430 plan account is considered a retiree. A retiree who is initially
431 reemployed in a regularly established position on or after July
432 1, 2010, through June 30, 2017, is not eligible for renewed
433 membership, except as provided in s. 121.122.
434 2. A retiree who is reemployed on or after July 1, 2017,
435 shall be enrolled as a renewed member as provided in s. 121.122.
436 (f) After the period during which an eligible employee
437 initially enrolled before July 1, 2022, had the choice to elect
438 the pension plan or the investment plan, or the month following
439 the receipt of the eligible employee’s plan election, if sooner,
440 the employee shall have one opportunity, at the employee’s
441 discretion, to choose to move from the pension plan to the
442 investment plan or from the investment plan to the pension plan.
443 Eligible employees may elect to move between plans only if they
444 are earning service credit in an employer-employee relationship
445 consistent with s. 121.021(17)(b), excluding leaves of absence
446 without pay. Effective July 1, 2005, such elections are
447 effective on the first day of the month following the receipt of
448 the election by the third-party administrator and are not
449 subject to the requirements regarding an employer-employee
450 relationship or receipt of contributions for the eligible
451 employee in the effective month, except when the election is
452 received by the third-party administrator. This paragraph is
453 contingent upon approval by the Internal Revenue Service.
454 1. If the employee chooses to move to the investment plan,
455 the provisions of subsection (3) govern the transfer.
456 2. If the employee chooses to move to the pension plan, the
457 employee must transfer from his or her investment plan account,
458 and from other employee moneys as necessary, a sum representing
459 the present value of that employee’s accumulated benefit
460 obligation immediately following the time of such movement,
461 determined assuming that attained service equals the sum of
462 service in the pension plan and service in the investment plan.
463 Benefit commencement occurs on the first date the employee is
464 eligible for unreduced benefits, using the discount rate and
465 other relevant actuarial assumptions that were used to value the
466 pension plan liabilities in the most recent actuarial valuation.
467 For any employee who, at the time of the second election,
468 already maintains an accrued benefit amount in the pension plan,
469 the then-present value of the accrued benefit is deemed part of
470 the required transfer amount. The division must ensure that the
471 transfer sum is prepared using a formula and methodology
472 certified by an enrolled actuary. A refund of any employee
473 contributions or additional member payments made which exceed
474 the employee contributions that would have accrued had the
475 member remained in the pension plan and not transferred to the
476 investment plan is not permitted.
477 3. Notwithstanding subparagraph 2., an employee who chooses
478 to move to the pension plan and who became eligible to
479 participate in the investment plan by reason of employment in a
480 regularly established position with a state employer after June
481 1, 2002; a district school board employer after September 1,
482 2002; or a local employer after December 1, 2002, must transfer
483 from his or her investment plan account, and from other employee
484 moneys as necessary, a sum representing the employee’s actuarial
485 accrued liability. A refund of any employee contributions or
486 additional member payments made which exceed the employee
487 contributions that would have accrued had the member remained in
488 the pension plan and not transferred to the investment plan is
489 not permitted.
490 4. An employee’s ability to transfer from the pension plan
491 to the investment plan pursuant to paragraphs (a) and (b), and
492 the ability of a current employee to have an option to later
493 transfer back into the pension plan under subparagraph 2., shall
494 be deemed a significant system amendment. Pursuant to s.
495 121.031(4), any resulting unfunded liability arising from actual
496 original transfers from the pension plan to the investment plan
497 must be amortized within 30 plan years as a separate unfunded
498 actuarial base independent of the reserve stabilization
499 mechanism defined in s. 121.031(3)(f). For the first 25 years, a
500 direct amortization payment may not be calculated for this base.
501 During this 25-year period, the separate base shall be used to
502 offset the impact of employees exercising their second program
503 election under this paragraph. The actuarial funded status of
504 the pension plan will not be affected by such second program
505 elections in any significant manner, after due recognition of
506 the separate unfunded actuarial base. Following the initial 25
507 year period, any remaining balance of the original separate base
508 shall be amortized over the remaining 5 years of the required
509 30-year amortization period.
510 5. If the employee chooses to transfer from the investment
511 plan to the pension plan and retains an excess account balance
512 in the investment plan after satisfying the buy-in requirements
513 under this paragraph, the excess may not be distributed until
514 the member retires from the pension plan. The excess account
515 balance may be rolled over to the pension plan and used to
516 purchase service credit or upgrade creditable service in the
517 pension plan.
518 (g)1. All eligible employees, except Special Risk Class
519 members, those employees eligible to withdraw from the system
520 under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those employees
521 eligible for optional retirement programs under s.
522 121.051(1)(a), s. 121.051(2)(c), or s. 121.35, initially
523 enrolled on or after July 1, 2022, are compulsory members of the
524 investment plan. Employees eligible to withdraw from the system
525 under s. 121.052(3)(d) or s. 121.055(1)(b)2. may choose to
526 withdraw from the system or to participate in the investment
527 plan as provided in those sections. Employees eligible for
528 optional retirement programs under s. 121.051(2)(c) or s.
529 121.35, except as provided in s. 121.051(1)(a), may choose to
530 participate in the optional retirement program or the investment
531 plan as provided in those sections. Membership in the pension
532 plan is not authorized except as provided in s. 121.591(2) and
534 2. Employees who are compulsory members of the investment
535 plan may not use the election opportunity specified in paragraph
536 (f) unless the employee is initially enrolled in a class other
537 than the Special Risk Class and is employed subsequently in a
538 position in the Special Risk Class.
539 3. As required under s. 121.72, the amount of retirement
540 contributions paid by the employee and employer shall be
541 transferred to the investment plan and placed in a default fund
542 designated by the state board.
543 (8) INVESTMENT PLAN ADMINISTRATION.—The investment plan
544 shall be administered by the state board and affected employers.
545 The state board may require oaths, by affidavit or otherwise,
546 and acknowledgments from persons in connection with the
547 administration of its statutory duties and responsibilities for
548 the investment plan. An oath, by affidavit or otherwise, may not
549 be required of a member at the time of enrollment. For members
550 initially enrolled before July 1, 2022, acknowledgment of an
551 employee’s election to participate in the program shall be no
552 greater than necessary to confirm the employee’s election. The
553 state board shall adopt rules to carry out its statutory duties
554 with respect to administering the investment plan, including
555 establishing the roles and responsibilities of affected state,
556 local government, and education-related employers, the state
557 board, the department, and third-party contractors. The
558 department shall adopt rules necessary to administer the
559 investment plan in coordination with the pension plan, and the
560 disability benefits and line-of-duty death benefits available
561 under the investment plan provided in s. 121.591(2) and (4),
563 (a)1. The state board shall select and contract with a
564 third-party administrator to provide administrative services if
565 those services cannot be competitively and contractually
566 provided by the division. With the approval of the state board,
567 the third-party administrator may subcontract to provide
568 components of the administrative services. As a cost of
569 administration, the state board may compensate any such
570 contractor for its services, in accordance with the terms of the
571 contract, as is deemed necessary or proper by the board. The
572 third-party administrator may not be an approved provider or be
573 affiliated with an approved provider.
574 2. These administrative services may include, but are not
575 limited to, enrollment of eligible employees, collection of
576 employer and employee contributions, disbursement of
577 contributions to approved providers in accordance with the
578 allocation directions of members; services relating to
579 consolidated billing; individual and collective recordkeeping
580 and accounting; asset purchase, control, and safekeeping; and
581 direct disbursement of funds to and from the third-party
582 administrator, the division, the state board, employers,
583 members, approved providers, and beneficiaries. This section
584 does not prevent or prohibit a bundled provider from providing
585 any administrative or customer service, including accounting and
586 administration of individual member benefits and contributions;
587 individual member recordkeeping; asset purchase, control, and
588 safekeeping; direct execution of the member’s instructions as to
589 asset and contribution allocation; calculation of daily net
590 asset values; direct access to member account information; or
591 periodic reporting to members, at least quarterly, on account
592 balances and transactions, if these services are authorized by
593 the state board as part of the contract.
594 (b)1. The state board shall select and contract with one or
595 more organizations to provide educational services. With
596 approval of the state board, the organizations may subcontract
597 to provide components of the educational services. As a cost of
598 administration, the state board may compensate any such
599 contractor for its services in accordance with the terms of the
600 contract, as is deemed necessary or proper by the board. The
601 education organization may not be an approved provider or be
602 affiliated with an approved provider.
603 2. Educational services shall be designed by the state
604 board and department to assist employers, eligible employees,
605 members, and beneficiaries in order to maintain compliance with
606 United States Department of Labor regulations under s. 404(c) of
607 the Employee Retirement Income Security Act of 1974 and to
608 assist employees in their choice of pension plan or investment
609 plan retirement alternatives. Educational services include, but
610 are not limited to, disseminating educational materials;
611 providing retirement planning education; explaining the pension
612 plan and the investment plan; and offering financial planning
613 guidance on matters such as investment diversification,
614 investment risks, investment costs, and asset allocation. An
615 approved provider may also provide educational information,
616 including retirement planning and investment allocation
617 information concerning its products and services.
618 (c)1. In evaluating and selecting a third-party
619 administrator, the state board shall establish criteria for
620 evaluating the relative capabilities and qualifications of each
621 proposed administrator. In developing such criteria, the state
622 board shall consider:
623 a. The administrator’s demonstrated experience in providing
624 administrative services to public or private sector retirement
626 b. The administrator’s demonstrated experience in providing
627 daily valued recordkeeping to defined contribution programs.
628 c. The administrator’s ability and willingness to
629 coordinate its activities with employers, the state board, and
630 the division, and to supply to such employers, the board, and
631 the division the information and data they require, including,
632 but not limited to, monthly management reports, quarterly member
633 reports, and ad hoc reports requested by the department or state
635 d. The cost-effectiveness and levels of the administrative
636 services provided.
637 e. The administrator’s ability to interact with the
638 members, the employers, the state board, the division, and the
639 providers; the means by which members may access account
640 information, direct investment of contributions, make changes to
641 their accounts, transfer moneys between available investment
642 vehicles, and transfer moneys between investment products; and
643 any fees that apply to such activities.
644 f. Any other factor deemed necessary by the state board.
645 2. In evaluating and selecting an educational provider, the
646 state board shall establish criteria under which it shall
647 consider the relative capabilities and qualifications of each
648 proposed educational provider. In developing such criteria, the
649 state board shall consider:
650 a. Demonstrated experience in providing educational
651 services to public or private sector retirement systems.
652 b. Ability and willingness to coordinate its activities
653 with the employers, the state board, and the division, and to
654 supply to such employers, the board, and the division the
655 information and data they require, including, but not limited
656 to, reports on educational contacts.
657 c. The cost-effectiveness and levels of the educational
658 services provided.
659 d. Ability to provide educational services via different
660 media, including, but not limited to, the Internet, personal
661 contact, seminars, brochures, and newsletters.
662 e. Any other factor deemed necessary by the state board.
663 3. The establishment of the criteria shall be solely within
664 the discretion of the state board.
665 (d) The state board shall develop the form and content of
666 any contracts to be offered under the investment plan. In
667 developing the contracts, the board shall consider:
668 1. The nature and extent of the rights and benefits to be
669 afforded in relation to the contributions required under the
671 2. The suitability of the rights and benefits provided and
672 the interests of employers in the recruitment and retention of
673 eligible employees.
674 (e)1. The state board may contract for professional
675 services, including legal, consulting, accounting, and actuarial
676 services, deemed necessary to implement and administer the
677 investment plan. The state board may enter into a contract with
678 one or more vendors to provide low-cost investment advice to
679 members, supplemental to education provided by the third-party
680 administrator. All fees under any such contract shall be paid by
681 those members who choose to use the services of the vendor.
682 2. The department may contract for professional services,
683 including legal, consulting, accounting, and actuarial services,
684 deemed necessary to implement and administer the investment plan
685 in coordination with the pension plan. The department, in
686 coordination with the state board, may enter into a contract
687 with the third-party administrator in order to coordinate
688 services common to the various programs within the Florida
689 Retirement System.
690 (f) The third-party administrator may not receive direct or
691 indirect compensation from an approved provider, except as
692 specifically provided for in the contract with the state board.
693 (g) The state board shall receive and resolve member
694 complaints against the program, the third-party administrator,
695 or any program vendor or provider; shall resolve any conflict
696 between the third-party administrator and an approved provider
697 if such conflict threatens the implementation or administration
698 of the program or the quality of services to employees; and may
699 resolve any other conflicts. The third-party administrator shall
700 retain all member records for at least 5 years for use in
701 resolving any member conflicts. The state board, the third-party
702 administrator, or a provider is not required to produce
703 documentation or an audio recording to justify action taken with
704 regard to a member if the action occurred 5 or more years before
705 the complaint is submitted to the state board. It is presumed
706 that all action taken 5 or more years before the complaint is
707 submitted was taken at the request of the member and with the
708 member’s full knowledge and consent. To overcome this
709 presumption, the member must present documentary evidence or an
710 audio recording demonstrating otherwise.
711 (10) EDUCATION COMPONENT.—
712 (a) The state board, in coordination with the department,
713 shall provide for an education component for eligible employees
714 in a manner consistent with this subsection.
715 (b) The education component must provide system members
716 with impartial and balanced information about plan choices for
717 members initially enrolled before July 1, 2022. The education
718 component must involve multimedia formats. Program comparisons
719 must, to the greatest extent possible, be based upon the
720 retirement income that different retirement programs may provide
721 to the member. The state board shall monitor the performance of
722 the contract to ensure that the program is conducted in
723 accordance with the contract, applicable law, and the rules of
724 the state board.
725 (c) The state board, in coordination with the department,
726 shall provide for an initial and ongoing transfer education
727 component to provide system members initially enrolled before
728 July 1, 2022, with information necessary to make informed plan
729 choice decisions. The transfer education component must include,
730 but is not limited to, information on:
731 1. The amount of money available to a member to transfer to
732 the defined contribution program.
733 2. The features of and differences between the pension plan
734 and the defined contribution program, both generally and
735 specifically, as those differences may affect the member.
736 3. The expected benefit available if the member were to
737 retire under each of the retirement programs, based on
738 appropriate alternative sets of assumptions.
739 4. The rate of return from investments in the defined
740 contribution program and the period of time over which such rate
741 of return must be achieved to equal or exceed the expected
742 monthly benefit payable to the member under the pension plan.
743 5. The historical rates of return for the investment
744 alternatives available in the defined contribution programs.
745 6. The benefits and historical rates of return on
746 investments available in a typical deferred compensation plan or
747 a typical plan under s. 403(b) of the Internal Revenue Code for
748 which the employee may be eligible.
749 7. The program choices available to employees of the State
750 University System and the comparative benefits of each available
751 program, if applicable.
752 8. Payout options available in each of the retirement
754 (d) An ongoing education and communication component must
755 provide eligible employees with information necessary to make
756 informed decisions about choices within their retirement system
757 and in preparation for retirement. The component must include,
758 but is not limited to, information concerning:
759 1. Rights and conditions of membership.
760 2. Benefit features within the program, options, and
761 effects of certain decisions.
762 3. Coordination of contributions and benefits with a
763 deferred compensation plan under s. 457 or a plan under s.
764 403(b) of the Internal Revenue Code.
765 4. Significant program changes.
766 5. Contribution rates and program funding status.
767 6. Planning for retirement.
768 (e) Descriptive materials must be prepared under the
769 assumption that the employee is an unsophisticated investor, and
770 all materials used in the education component must be approved
771 by the state board prior to dissemination.
772 (f) The state board and the department shall also establish
773 a communication component to provide program information to
774 participating employers and the employers’ personnel and payroll
775 officers and to explain their respective responsibilities in
776 conjunction with the retirement programs.
777 (g) Funding for education of new employees may reflect
778 administrative costs to the investment plan and the pension
780 (15) STATEMENT OF FIDUCIARY STANDARDS AND
782 (a) Investment of investment defined contribution plan
783 assets shall be made for the sole interest and exclusive purpose
784 of providing benefits to members and beneficiaries and defraying
785 reasonable expenses of administering the plan. The program’s
786 assets shall be invested on behalf of the program members with
787 the care, skill, and diligence that a prudent person acting in a
788 like manner would undertake. The performance of the investment
789 duties set forth in this paragraph shall comply with the
790 fiduciary standards set forth in the Employee Retirement Income
791 Security Act of 1974 at 29 U.S.C. s. 1104(a)(1)(A)-(C). In case
792 of conflict with other provisions of law authorizing
793 investments, the investment and fiduciary standards set forth in
794 this subsection shall prevail.
795 (b) If a member or beneficiary of the investment plan
796 exercises control over the assets in his or her account, as
797 determined by reference to regulations of the United States
798 Department of Labor under s. 404(c) of the Employee Retirement
799 Income Security Act of 1974 and all applicable laws governing
800 the operation of the program, a program fiduciary is not liable
801 for any loss to a member’s or beneficiary’s account which
802 results from the member’s or beneficiary’s exercise of control.
803 (c) Subparagraph (8)(b)2. and paragraph (b) incorporate the
804 federal law concept of participant control, established by
805 regulations of the United States Department of Labor under s.
806 404(c) of the Employee Retirement Income Security Act of 1974
807 (ERISA). The purpose of this paragraph is to assist employers
808 and the state board in maintaining compliance with s. 404(c),
809 while avoiding unnecessary costs and eroding member benefits
810 under the investment plan. Pursuant to 29 C.F.R. s. 2550.404a
811 5(d)(4) 29 C.F.R. s. 2550.404c-1(b)(2)(i)(B)(1)(viii), the state
812 board or its designated agents shall deliver to members of the
813 investment plan a copy of the prospectus most recently provided
814 to the plan , and, pursuant to 29 C.F.R. s. 2550.404c
815 1(b)(2)(i)(B)(2)(ii), shall provide such members an opportunity
816 to obtain this information, except that:
817 1. The requirement to deliver a prospectus shall be
818 satisfied by delivery of a fund profile or summary profile that
819 contains the information that would be included in a summary
820 prospectus as described by Rule 498 under the Securities Act of
821 1933, 17 C.F.R. s. 230.498. If the transaction fees, expense
822 information or other information provided by a mutual fund in
823 the prospectus does not reflect terms negotiated by the state
824 board or its designated agents, the requirement is satisfied by
825 delivery of a separate document described by Rule 498
826 substituting accurate information; and
827 2. Delivery shall be effected if delivery is through
828 electronic means and the following standards are satisfied:
829 a. Electronically-delivered documents are prepared and
830 provided consistent with style, format, and content requirements
831 applicable to printed documents;
832 b. Each member is provided timely and adequate notice of
833 the documents that are to be delivered, and their significance,
834 and of the member’s right to obtain a paper copy of such
835 documents free of charge;
836 c. Members have adequate access to the electronic
837 documents, at locations such as their worksites or public
838 facilities, and have the ability to convert the documents to
839 paper free of charge by the state board, and the board or its
840 designated agents take appropriate and reasonable measures to
841 ensure that the system for furnishing electronic documents
842 results in actual receipt. Members have provided consent to
843 receive information in electronic format, which consent may be
844 revoked; and
845 d. The state board, or its designated agent, actually
846 provides paper copies of the documents free of charge, upon
848 Section 5. Section 121.74, Florida Statutes, is amended to
850 121.74 Administrative and educational expenses.—In addition
851 to contributions required to fund member accounts under s.
852 121.71, effective July 1, 2010, through June 30, 2014, employers
853 participating in the Florida Retirement System shall contribute
854 an employer assessment amount equal to 0.03 percent of the
855 payroll reported for each class or subclass of Florida
856 Retirement System membership. Effective July 1, 2014, the
857 employer assessment is 0.04 percent of the payroll reported for
858 each class or subclass of membership. Effective July 1, 2016,
859 the employer assessment is 0.06 percent of the payroll reported
860 for each class or subclass of membership. Effective July 1,
861 2022, the employer assessment is 0.07 percent of the payroll
862 reported for each class or subclass of membership. The amount
863 assessed shall be transferred by the division from the Florida
864 Retirement System Contributions Clearing Trust Fund to the State
865 Board of Administration’s Administrative Trust Fund to offset
866 the costs of administering the investment plan and the costs of
867 providing educational services to members of the Florida
868 Retirement System. Approval of the trustees is required before
869 the expenditure of these funds. Payments for third-party
870 administrative or educational expenses shall be made only
871 pursuant to the terms of the approved contracts for such
873 Section 6. Section 238.072, Florida Statutes, is amended to
875 238.072 Special service provisions for extension
876 personnel.—All state and county cooperative extension personnel
877 holding appointments by the United States Department of
878 Agriculture for extension work in agriculture and home economics
879 in this state who are joint representatives of the University of
880 Florida and the United States Department of Agriculture, as
881 provided in s. 121.051(8) s. 121.051(7), who are members of the
882 Teachers’ Retirement System, chapter 238, and who are prohibited
883 from transferring to and participating in the Florida Retirement
884 System, chapter 121, may retire with full benefits upon
885 completion of 30 years of creditable service and shall be
886 considered to have attained normal retirement age under this
887 chapter, any law to the contrary notwithstanding. In order to
888 comply with the provisions of s. 14, Art. X of the State
889 Constitution, any liability accruing to the Florida Retirement
890 System Trust Fund as a result of the provisions of this section
891 shall be paid on an annual basis from the General Revenue Fund.
892 Section 7. Subsection (11) of section 413.051, Florida
893 Statutes, is amended to read:
894 413.051 Eligible blind persons; operation of vending
896 (11) Effective July 1, 1996, blind licensees who remain
897 members of the Florida Retirement System pursuant to s.
898 121.051(7)(b)1. s. 121.051(6)(b)1. shall pay any unappropriated
899 retirement costs from their net profits or from program income.
900 Within 30 days after the effective date of this act, Each blind
901 licensee who is eligible to maintain membership in the Florida
902 Retirement System under s. 121.051(7)(b)1. s. 121.051(6)(b)1.,
903 but who elects to withdraw from the system as provided in that
904 subparagraph s. 121.051(6)(b)3., must, on or before July 31,
905 1996, notify the Division of Blind Services and the Department
906 of Management Services in writing of his or her election to
907 withdraw. Failure to timely notify the divisions shall be deemed
908 a decision to remain a compulsory member of the Florida
909 Retirement System. However, if, at any time after July 1, 1996,
910 sufficient funds are not paid by a blind licensee to cover the
911 required contribution to the Florida Retirement System, that
912 blind licensee shall become ineligible to participate in the
913 Florida Retirement System on the last day of the first month for
914 which no contribution is made or the amount contributed is
915 insufficient to cover the required contribution. For any blind
916 licensee who becomes ineligible to participate in the Florida
917 Retirement System as described in this subsection, no creditable
918 service shall be earned under the Florida Retirement System for
919 any period following the month that retirement contributions
920 ceased to be reported. However, any such person may participate
921 in the Florida Retirement System in the future if employed by a
922 participating employer in a covered position.
923 Section 8. The Legislature finds that a proper and
924 legitimate state purpose is served when employees and retirees
925 of the state and its political subdivisions, and the dependents,
926 survivors, and beneficiaries of such employees and retirees, are
927 extended the basic protections afforded by governmental
928 retirement systems. These persons must be provided benefits that
929 are fair and adequate and that are managed, administered, and
930 funded in an actuarially sound manner, as required by s. 14,
931 Article X of the State Constitution and part VII of chapter 112,
932 Florida Statutes. Therefore, the Legislature determines and
933 declares that this act fulfills an important state interest.
934 Section 9. This act shall take effect July 1, 2021.