Bill Text: FL S0084 | 2021 | Regular Session | Comm Sub


Bill Title: Retirement

Spectrum: Bipartisan Bill

Status: (Failed) 2021-04-30 - Died in State Affairs Committee [S0084 Detail]

Download: Florida-2021-S0084-Comm_Sub.html
       Florida Senate - 2021                               CS for SB 84
       
       
        
       By the Committee on Appropriations; and Senator Rodrigues
       
       
       
       
       
       576-03663-21                                            202184c1
    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.
   28          
   29  Be It Enacted by the Legislature of the State of Florida:
   30  
   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
  128  criteria:
  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.
  132  121.122.
  133         b. The employee is employed in a full-time position
  134  classified in the Accounting Manual for Florida’s College System
  135  as:
  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
  229  (3)(a)-(d):
  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
  243  System.—
  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
  371  plan.
  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
  533  (4).
  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),
  562  respectively.
  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
  625  systems.
  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
  634  board.
  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
  670  plan.
  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
  753  programs.
  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
  779  plan.
  780         (15) STATEMENT OF FIDUCIARY STANDARDS AND
  781  RESPONSIBILITIES.—
  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
  847  request.
  848         Section 5. Section 121.74, Florida Statutes, is amended to
  849  read:
  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
  872  services.
  873         Section 6. Section 238.072, Florida Statutes, is amended to
  874  read:
  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
  895  stands.—
  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.

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