Bill Text: FL S0660 | 2010 | Regular Session | Introduced

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Bill Title: Defined Contribution Retirement Program [WPSC]

Sponsorship: Partisan Bill (Republican 1)

Status: (Failed) 2010-04-30 - Died in Committee on Community Affairs, companion bill(s) passed, see CS/CS/HB 1307 (Ch. 2010-180) [S0660 Detail]

Download: Florida-2010-S0660-Introduced.html

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Florida Senate - 2010                                     SB 660 
 
By Senator Fasano 
11-00585A-10                                           2010660__ 
1                        A bill to be entitled 
2         An act relating to the defined contribution retirement 
3         program; amending s. 121.4501, F.S.; changing the name 
4         of the Public Employee Optional Retirement Program to 
5         the Public Employee Retirement Investment Program; 
6         limiting the option of enrolling in the State 
7         Retirement System’s defined benefit program or defined 
8         contribution program to public employees employed 
9         before January 1, 2011; requiring public employees 
10         employed on or after January 1, 2011, to enroll in the 
11         defined contribution program; deleting obsolete 
12         provisions relating to the 2002 optional transfer of 
13         public employees from the defined benefit program to 
14         the defined contribution program; deleting 
15         requirements for an educational program that compares 
16         retirement programs; amending s. 121.4502, F.S.; 
17         changing the name of the Public Employee Optional 
18         Retirement Program Trust Fund to the Public Employee 
19         Retirement Investment Program Trust Fund; amending ss. 
20         110.123, 112.0801, 112.363, 112.65, 121.021, 121.051, 
21         121.35, 121.71, 121.72, 121.73, 121.74, 121.77, and 
22         121.78, F.S.; conforming cross-references; 
23         substituting references to the defined contribution 
24         program for references to the Public Employee Optional 
25         Retirement Program; amending ss. 121.091, 121.4503, 
26         121.571, 121.591, and 121.5911, F.S.; conforming 
27         cross-references; substituting the name of the Public 
28         Employee Retirement Investment Program and the Public 
29         Employee Retirement Investment Program Trust Fund; 
30         amending s. 121.055, F.S.; conforming changes relating 
31         to the name of the Florida Employee Retirement 
32         Investment Program and deleting obsolete provisions; 
33         amending s. 121.70, F.S.; changing the name of the 
34         Public Employee Optional Retirement Program to the 
35         defined contribution program; deleting provisions 
36         relating to having a choice in retirement plans; 
37         providing a directive to the Division of Statutory 
38         Revision; providing an effective date. 
39 
40  Be It Enacted by the Legislature of the State of Florida: 
41 
42         Section 1. Section 121.4501, Florida Statutes, is amended 
43  to read: 
44         121.4501 Public Employee Optional Retirement Investment 
45  Program.— 
46         (1) The Trustees of the State Board of Administration shall 
47  establish a an optional defined contribution retirement program 
48  called the Public Employee Retirement Investment Program for 
49  members of the Florida Retirement System under which retirement 
50  benefits will be provided for eligible employees employed before 
51  January 1, 2011, who elect to participate in the program, and 
52  for all eligible employees employed on or after January 1, 2011. 
53  The retirement benefits to be provided for or on behalf of 
54  participants in such optional retirement program shall be 
55  provided through employee-directed investments, in accordance 
56  with s. 401(a) of the Internal Revenue Code and its related 
57  regulations. The employer employers shall make contributions 
58  contribute, as provided in this section and, ss. 121.571, and 
59  121.71, to the Public Employee Optional Retirement Investment 
60  Program Trust Fund toward the funding of such optional benefits. 
61         (2) DEFINITIONS.—As used in this part, the term: 
62         (a) “Approved provider” or “provider” means a private 
63  sector company that is selected and approved by the state board 
64  to offer one or more investment products or services to the 
65  investment Public Employee Optional Retirement program. The term 
66  includes a bundled provider that offers participants a range of 
67  individually allocated or unallocated investment products and 
68  may offer a range of administrative and customer services, which 
69  may include accounting and administration of individual 
70  participant benefits and contributions; individual participant 
71  recordkeeping; asset purchase, control, and safekeeping; direct 
72  execution of the participant’s instructions as to asset and 
73  contribution allocation; calculation of daily net asset values; 
74  direct access to participant account information; periodic 
75  reporting to participants, at least quarterly, on account 
76  balances and transactions; guidance, advice, and allocation 
77  services directly relating to the provider’s its own investment 
78  options or products, but only if the bundled provider complies 
79  with the standard of care of s. 404(a)(1)(A-B) of the Employee 
80  Retirement Income Security Act of 1974 (ERISA), and if providing 
81  such guidance, advice, or allocation services does not 
82  constitute a prohibited transaction under s. 4975(c)(1) of the 
83  Internal Revenue Code or s. 406 of ERISA, notwithstanding that 
84  such prohibited transaction provisions do not apply to the 
85  optional retirement program; a broad array of distribution 
86  options; asset allocation; and retirement counseling and 
87  education. Private sector companies include investment 
88  management companies, insurance companies, depositories, and 
89  mutual fund companies. 
90         (b) “Average monthly compensation” means one-twelfth of 
91  average final compensation as defined in s. 121.021(24). 
92         (c) “Covered employment” means employment in a regularly 
93  established position as defined in s. 121.021(52). 
94         (d) “Defined benefit program” means the defined benefit 
95  program of the Florida Retirement System administered under part 
96  I of this chapter “Department” means the Department of 
97  Management Services. 
98         (e) “District school board employer” means a district 
99  school board that participates in the Florida Retirement System 
100  for the benefit of certain employees, or a charter school or 
101  charter technical career center that participates in the Florida 
102  Retirement System as provided under s. 121.051(2)(d). 
103         (f)(e) “Division” means the Division of Retirement within 
104  the department of Management Services. 
105         (g)(f) “Eligible employee” means an officer or employee, as 
106  defined in s. 121.021, who: 
107         1. Is a member of, or is eligible for membership in, the 
108  Florida Retirement System, including any renewed member of the 
109  Florida Retirement System initially enrolled before July 1, 
110  2010; or 
111         2. Participates in, or is eligible to participate in, the 
112  Senior Management Service Optional Annuity Program as 
113  established under s. 121.055(6), the State Community College 
114  System Optional Retirement Program as established under s. 
115  121.051(2)(c), or the State University System Optional 
116  Retirement Program established under s. 121.35. 
117 
118  The term does not include any member participating in the 
119  Deferred Retirement Option Program established under s. 
120  121.091(13), a retiree of a state-administered retirement system 
121  initially reemployed on or after July 1, 2010, or a mandatory 
122  participant of the State University System Optional Retirement 
123  Program established under s. 121.35. 
124         (h)(g) “Employer” means an employer, as defined in s. 
125  121.021(10), of an eligible employee. 
126         (i) “Investment program” means the Public Employee 
127  Retirement Investment Program established under this part. 
128         (j) “Local employer” means an employer that is not a state 
129  employer or a district school board employer. 
130         (k)(h) “Participant” means an eligible employee who is 
131  enrolled elects to participate in the investment program, Public 
132  Employee Optional Retirement program and enrolls in such 
133  optional program as provided in subsection (4) or a terminated 
134  Deferred Retirement Option Program participant as described in 
135  subsection (22) (21). 
136         (i)“ Public Employee Optional Retirement Program,” 
137  “optional program,” or “optional retirement program” means the 
138  alternative defined contribution retirement program established 
139  under this section. 
140         (l)(j) “Retiree” means a former participant of the 
141  investment Florida Retirement System Public Employee Optional 
142  Retirement program who has terminated employment and has taken a 
143  distribution as provided in s. 121.591, except for a mandatory 
144  distribution of a de minimis account authorized by the state 
145  board. 
146         (k) “State board” or “board” means the State Board of 
147  Administration. 
148         (l) “Trustees” means Trustees of the State Board of 
149  Administration. 
150         (m) “State employer” means an agency, board, branch, 
151  commission, community college, department, institution, 
152  institution of higher education, or water management district 
153  that participates in the Florida Retirement System for the 
154  benefit of certain employees. 
155         (n)(m) “Vested” or “vesting” means the guarantee that a 
156  participant is eligible to receive a retirement benefit upon 
157  completion of the required years of service under the Public 
158  Employee Optional Retirement Program. 
159         (3) ELIGIBILITY; RETIREMENT SERVICE CREDIT; TRANSFER OF 
160  BENEFITS.— 
161         (a) Participation in the Public Employee Optional 
162  Retirement Program is limited to eligible employees. 
163  Participation in the optional retirement program is in lieu of 
164  participation in the defined benefit program of the Florida 
165  Retirement System. 
166         (a)(b) An eligible employee who is employed in a regularly 
167  established position by a state employer on June 1, 2002; by a 
168  district school board employer on September 1, 2002; or by a 
169  local employer on December 1, 2002, and who is a member of the 
170  defined benefit retirement program of the Florida Retirement 
171  System at the time of his or her election to participate in the 
172  investment Public Employee Optional Retirement program shall 
173  retain all retirement service credit earned under the defined 
174  benefit retirement program of the Florida Retirement System as 
175  credited under the system and is shall be entitled to a deferred 
176  benefit upon termination, if eligible under the system. However, 
177  election to participate in the investment Public Employee 
178  Optional Retirement program terminates the active membership of 
179  the employee in the defined benefit program of the Florida 
180  Retirement System, and the service of a participant in the 
181  investment Public Employee Optional Retirement program is shall 
182  not be creditable under the defined benefit retirement program 
183  of the Florida Retirement System for purposes of benefit accrual 
184  but is creditable shall be credited for purposes of vesting. 
185         (b)(c)1. Notwithstanding paragraph (a), an (b), each 
186  eligible employee who elects to participate in the investment 
187  Public Employee Optional Retirement program and establishes one 
188  or more individual participant accounts under the optional 
189  program may elect to transfer to the investment optional program 
190  a sum representing the present value of the employee’s 
191  accumulated benefit obligation under the defined benefit 
192  retirement program of the Florida Retirement System. Upon such 
193  transfer, all service credit previously earned under the defined 
194  benefit program is of the Florida Retirement System shall be 
195  nullified for purposes of entitlement to a future benefit under 
196  the defined benefit program of the Florida Retirement System. A 
197  participant may not transfer is precluded from transferring the 
198  accumulated benefit obligation balance from the defined benefit 
199  program after the time upon the expiration of the period for 
200  enrolling afforded to enroll in the investment optional program. 
201         1.2. For purposes of this subsection, the present value of 
202  the member’s accumulated benefit obligation is based upon the 
203  member’s estimated creditable service and estimated average 
204  final compensation under the defined benefit program, subject to 
205  recomputation under subparagraph 2. 3. For state employees 
206  enrolling under subparagraph (4)(a)1., initial estimates shall 
207  will be based upon creditable service and average final 
208  compensation as of midnight on June 30, 2002; for district 
209  school board employees enrolling under subparagraph (4)(b)1., 
210  initial estimates shall will be based upon creditable service 
211  and average final compensation as of midnight on September 30, 
212  2002; and for local government employees enrolling under 
213  subparagraph (4)(c)1., initial estimates shall will be based 
214  upon creditable service and average final compensation as of 
215  midnight on December 31, 2002. The dates respectively specified 
216  are above shall be construed as the “estimate date” for these 
217  employees. The actuarial present value of the employee’s 
218  accumulated benefit obligation shall be based on the following: 
219         a. The discount rate and other relevant actuarial 
220  assumptions used to value the Florida Retirement System Trust 
221  Fund at the time the amount to be transferred is determined, 
222  consistent with the factors provided in sub-subparagraphs b. and 
223  c. 
224         b. A benefit commencement age, based on the member’s 
225  estimated creditable service as of the estimate date. The 
226  benefit commencement age is shall be the younger of the 
227  following, but may shall not be younger than the member’s age as 
228  of the estimate date: 
229         (I) Age 62; or 
230         (II) The age the member would attain if the member 
231  completed 30 years of service with an employer, assuming the 
232  member worked continuously from the estimate date, and 
233  disregarding any vesting requirement that would otherwise apply 
234  under the defined benefit program of the Florida Retirement 
235  System. 
236         c. For members of the Special Risk Class, and for members 
237  of the Special Risk Administrative Support Class entitled to 
238  retain the special risk normal retirement date, the benefit 
239  commencement age is shall be the younger of the following, but 
240  may shall not be younger than the member’s age as of the 
241  estimate date: 
242         (I) Age 55; or 
243         (II) The age the member would attain if the member 
244  completed 25 years of service with an employer, assuming the 
245  member worked continuously from the estimate date, and 
246  disregarding any vesting requirement that would otherwise apply 
247  under the defined benefit program of the Florida Retirement 
248  System. 
249         d. The calculation must shall disregard vesting 
250  requirements and early retirement reduction factors that would 
251  otherwise apply under the defined benefit retirement program. 
252         2.3. For each participant who elects to transfer moneys 
253  from the defined benefit program to his or her account in the 
254  investment optional program, the division shall recompute the 
255  amount transferred under subparagraph 1. within 2. not later 
256  than 60 days after the actual transfer of funds based upon the 
257  participant’s actual creditable service and actual final average 
258  compensation as of the initial date of participation in the 
259  investment optional program. If the recomputed amount differs 
260  from the amount transferred under subparagraph 2. by $10 or 
261  more, the division shall: 
262         a. Transfer, or cause to be transferred, from the Florida 
263  Retirement System Trust Fund to the participant’s account in the 
264  optional program the excess, if any, of the recomputed amount 
265  over the previously transferred amount together with interest 
266  from the initial date of transfer to the date of transfer under 
267  this subparagraph, based upon the effective annual interest 
268  equal to the assumed return on the actuarial investment which 
269  was used in the most recent actuarial valuation of the system, 
270  compounded annually. 
271         b. Transfer, or cause to be transferred, from the 
272  participant’s account to the Florida Retirement System Trust 
273  Fund the excess, if any, of the previously transferred amount 
274  over the recomputed amount, together with interest from the 
275  initial date of transfer to the date of transfer under this 
276  subparagraph, based upon 6 percent effective annual interest, 
277  compounded annually, pro rata based on the participant’s 
278  allocation plan. 
279         3.4. As directed by the participant, the state board shall 
280  transfer or cause to be transferred the appropriate amounts to 
281  the designated accounts within. The board shall establish 
282  transfer procedures by rule, but the actual transfer shall not 
283  be later than 30 days after the effective date of the member’s 
284  participation in the investment optional program unless the 
285  major financial markets for securities available for a transfer 
286  are seriously disrupted by an unforeseen event that which also 
287  causes the suspension of trading on any national securities 
288  exchange in the country where the securities are were issued. In 
289  that event, the such 30-day period of time may be extended by a 
290  resolution of the state board trustees. The state board shall 
291  establish transfer procedures by rule. Transfers are not 
292  commissionable or subject to other fees and may be in the form 
293  of securities or cash, as determined by the state board. Such 
294  securities are shall be valued as of the date of receipt in the 
295  participant’s account. 
296         4.5. If the state board or the division receives 
297  notification from the United States Internal Revenue Service 
298  that this paragraph or any portion of this paragraph will cause 
299  the retirement system, or a portion thereof, to be disqualified 
300  for tax purposes under the Internal Revenue Code, then the 
301  portion that will cause the disqualification does not apply. 
302  Upon such notice, the state board and the division shall notify 
303  the presiding officers of the Legislature. 
304         (4) OPTIONAL PARTICIPATION; ENROLLMENT.— 
305         (a)1. With respect to an eligible employee who is employed 
306  in a regularly established position by a state employer after on 
307  June 1, 2002; by a district school board employer after 
308  September 1, 2002; or by a local employer after December 1, 
309  2002, but before January 1, 2011, the, by a state employer: 
310         a. Any such employee may elect to participate in the Public 
311  Employee Optional Retirement Program in lieu of retaining his or 
312  her membership in the defined benefit program of the Florida 
313  Retirement System. The election must be made in writing or by 
314  electronic means and must be filed with the third-party 
315  administrator by August 31, 2002, or, in the case of an active 
316  employee who is on a leave of absence on April 1, 2002, by the 
317  last business day of the 5th month following the month the leave 
318  of absence concludes. This election is irrevocable, except as 
319  provided in paragraph (e). Upon making such election, the 
320  employee shall be enrolled as a participant of the Public 
321  Employee Optional Retirement Program, the employee’s membership 
322  in the Florida Retirement System shall be governed by the 
323  provisions of this part, and the employee’s membership in the 
324  defined benefit program of the Florida Retirement System shall 
325  terminate. The employee’s enrollment in the Public Employee 
326  Optional Retirement Program shall be effective the first day of 
327  the month for which a full month’s employer contribution is made 
328  to the optional program. 
329         b. Any such employee who fails to elect to participate in 
330  the Public Employee Optional Retirement Program within the 
331  prescribed time period is deemed to have elected to retain 
332  membership in the defined benefit program of the Florida 
333  Retirement System, and the employee’s option to elect to 
334  participate in the optional program is forfeited. 
335         2. With respect to employees who become eligible to 
336  participate in the Public Employee Optional Retirement Program 
337  by reason of employment in a regularly established position with 
338  a state employer commencing after April 1, 2002: 
339         a. Any such employee shall, by default, be enrolled in the 
340  defined benefit retirement program of the Florida Retirement 
341  System at the commencement of employment, and may, by the last 
342  business day of the 5th month following the employee’s month of 
343  hire, elect to participate in the investment Public Employee 
344  Optional Retirement program. The employee’s election must be 
345  made in writing or by electronic means and must be filed with 
346  the third-party administrator. The election to participate in 
347  the investment optional program is irrevocable, except as 
348  provided in paragraph (c) (e). 
349         1.b. If the employee files such election within the 
350  prescribed time period, enrollment in the investment optional 
351  program is shall be effective on the first day of employment. 
352  The employer retirement contributions paid through the month of 
353  the employee plan change shall be transferred to the investment 
354  optional program, and, effective the first day of the next 
355  month, the employer must shall pay the applicable contributions 
356  based on the employee membership class in the optional program. 
357         2.c. An Any such employee who fails to elect to participate 
358  in the investment Public Employee Optional Retirement program 
359  within the prescribed time period is deemed to have elected to 
360  retain membership in the defined benefit program of the Florida 
361  Retirement System, and the employee’s option to elect to 
362  participate in the investment optional program is forfeited. 
363         3. With respect to employees who become eligible to 
364  participate in the Public Employee Optional Retirement 
365  Investment Program pursuant to s. 121.051(2)(c)3. or s. 
366  121.35(3)(i), the any such employee may elect to participate in 
367  the investment Public Employee Optional Retirement program in 
368  lieu of retaining his or her participation in the State 
369  Community College System Optional Retirement Program or the 
370  State University System Optional Retirement Program. The 
371  election must be made in writing or by electronic means and must 
372  be filed with the third-party administrator. This election is 
373  irrevocable, except as provided in paragraph (c) (e). Upon 
374  making such election, the employee shall be enrolled as a 
375  participant in of the investment Public Employee Optional 
376  Retirement program, the employee’s membership in the Florida 
377  Retirement System shall be governed by the provisions of this 
378  part, and the employee’s participation in the State Community 
379  College System Optional Retirement Program or the State 
380  University System Optional Retirement Program shall terminate. 
381  The employee’s enrollment in the investment Public Employee 
382  Optional Retirement program is shall be effective on the first 
383  day of the month for which a full month’s employer contribution 
384  is made to the investment optional program. 
385         4. For purposes of this paragraph, “state employer” means 
386  any agency, board, branch, commission, community college, 
387  department, institution, institution of higher education, or 
388  water management district of the state, which participates in 
389  the Florida Retirement System for the benefit of certain 
390  employees. 
391         (b)1. With respect to an eligible employee who is employed 
392  in a regularly established position on September 1, 2002, by a 
393  district school board employer: 
394         a. Any such employee may elect to participate in the Public 
395  Employee Optional Retirement Program in lieu of retaining his or 
396  her membership in the defined benefit program of the Florida 
397  Retirement System. The election must be made in writing or by 
398  electronic means and must be filed with the third-party 
399  administrator by November 30, or, in the case of an active 
400  employee who is on a leave of absence on July 1, 2002, by the 
401  last business day of the 5th month following the month the leave 
402  of absence concludes. This election is irrevocable, except as 
403  provided in paragraph (e). Upon making such election, the 
404  employee shall be enrolled as a participant of the Public 
405  Employee Optional Retirement Program, the employee’s membership 
406  in the Florida Retirement System shall be governed by the 
407  provisions of this part, and the employee’s membership in the 
408  defined benefit program of the Florida Retirement System shall 
409  terminate. The employee’s enrollment in the Public Employee 
410  Optional Retirement Program shall be effective the first day of 
411  the month for which a full month’s employer contribution is made 
412  to the optional program. 
413         b. Any such employee who fails to elect to participate in 
414  the Public Employee Optional Retirement Program within the 
415  prescribed time period is deemed to have elected to retain 
416  membership in the defined benefit program of the Florida 
417  Retirement System, and the employee’s option to elect to 
418  participate in the optional program is forfeited. 
419         2. With respect to employees who become eligible to 
420  participate in the Public Employee Optional Retirement Program 
421  by reason of employment in a regularly established position with 
422  a district school board employer commencing after July 1, 2002: 
423         a. Any such employee shall, by default, be enrolled in the 
424  defined benefit retirement program of the Florida Retirement 
425  System at the commencement of employment, and may, by the last 
426  business day of the 5th month following the employee’s month of 
427  hire, elect to participate in the Public Employee Optional 
428  Retirement Program. The employee’s election must be made in 
429  writing or by electronic means and must be filed with the third 
430  party administrator. The election to participate in the optional 
431  program is irrevocable, except as provided in paragraph (e). 
432         b. If the employee files such election within the 
433  prescribed time period, enrollment in the optional program shall 
434  be effective on the first day of employment. The employer 
435  retirement contributions paid through the month of the employee 
436  plan change shall be transferred to the optional program, and, 
437  effective the first day of the next month, the employer shall 
438  pay the applicable contributions based on the employee 
439  membership class in the optional program. 
440         c. Any such employee who fails to elect to participate in 
441  the Public Employee Optional Retirement Program within the 
442  prescribed time period is deemed to have elected to retain 
443  membership in the defined benefit program of the Florida 
444  Retirement System, and the employee’s option to elect to 
445  participate in the optional program is forfeited. 
446         3. For purposes of this paragraph, “district school board 
447  employer” means any district school board that participates in 
448  the Florida Retirement System for the benefit of certain 
449  employees, or a charter school or charter technical career 
450  center that participates in the Florida Retirement System as 
451  provided in s. 121.051(2)(d). 
452         (c)1. With respect to an eligible employee who is employed 
453  in a regularly established position on December 1, 2002, by a 
454  local employer: 
455         a. Any such employee may elect to participate in the Public 
456  Employee Optional Retirement Program in lieu of retaining his or 
457  her membership in the defined benefit program of the Florida 
458  Retirement System. The election must be made in writing or by 
459  electronic means and must be filed with the third-party 
460  administrator by February 28, 2003, or, in the case of an active 
461  employee who is on a leave of absence on October 1, 2002, by the 
462  last business day of the 5th month following the month the leave 
463  of absence concludes. This election is irrevocable, except as 
464  provided in paragraph (e). Upon making such election, the 
465  employee shall be enrolled as a participant of the Public 
466  Employee Optional Retirement Program, the employee’s membership 
467  in the Florida Retirement System shall be governed by the 
468  provisions of this part, and the employee’s membership in the 
469  defined benefit program of the Florida Retirement System shall 
470  terminate. The employee’s enrollment in the Public Employee 
471  Optional Retirement Program shall be effective the first day of 
472  the month for which a full month’s employer contribution is made 
473  to the optional program. 
474         b. Any such employee who fails to elect to participate in 
475  the Public Employee Optional Retirement Program within the 
476  prescribed time period is deemed to have elected to retain 
477  membership in the defined benefit program of the Florida 
478  Retirement System, and the employee’s option to elect to 
479  participate in the optional program is forfeited. 
480         2. With respect to employees who become eligible to 
481  participate in the Public Employee Optional Retirement Program 
482  by reason of employment in a regularly established position with 
483  a local employer commencing after October 1, 2002: 
484         a. Any such employee shall, by default, be enrolled in the 
485  defined benefit retirement program of the Florida Retirement 
486  System at the commencement of employment, and may, by the last 
487  business day of the 5th month following the employee’s month of 
488  hire, elect to participate in the Public Employee Optional 
489  Retirement Program. The employee’s election must be made in 
490  writing or by electronic means and must be filed with the third 
491  party administrator. The election to participate in the optional 
492  program is irrevocable, except as provided in paragraph (e). 
493         b. If the employee files such election within the 
494  prescribed time period, enrollment in the optional program shall 
495  be effective on the first day of employment. The employer 
496  retirement contributions paid through the month of the employee 
497  plan change shall be transferred to the optional program, and, 
498  effective the first day of the next month, the employer shall 
499  pay the applicable contributions based on the employee 
500  membership class in the optional program. 
501         c. Any such employee who fails to elect to participate in 
502  the Public Employee Optional Retirement Program within the 
503  prescribed time period is deemed to have elected to retain 
504  membership in the defined benefit program of the Florida 
505  Retirement System, and the employee’s option to elect to 
506  participate in the optional program is forfeited. 
507         3. For purposes of this paragraph, “local employer” means 
508  any employer not included in paragraph (a) or paragraph (b). 
509         (b)(d) Contributions available for self-direction by a 
510  participant who has not selected one or more specific investment 
511  products shall be allocated as prescribed by the state board. 
512  The third-party administrator shall notify the any such 
513  participant at least quarterly that the participant should take 
514  an affirmative action to make an asset allocation among the 
515  optional program products. 
516         (c)(e) After the period during which an eligible employee 
517  had the choice to elect the defined benefit program or the 
518  investment Public Employee Optional Retirement program, or the 
519  month following the receipt of the eligible employee’s plan 
520  election, if sooner, the employee shall have one opportunity, at 
521  the employee’s discretion, to choose to move from the defined 
522  benefit program to the investment Public Employee Optional 
523  Retirement program or from the investment Public Employee 
524  Optional Retirement program to the defined benefit program. 
525  Eligible employees may elect to move between Florida Retirement 
526  System programs only if they are earning service credit in an 
527  employer-employee relationship consistent with the requirements 
528  under s. 121.021(17)(b), excluding leaves of absence without 
529  pay. Effective July 1, 2005, such elections are shall be 
530  effective on the first day of the month following the receipt of 
531  the election by the third-party administrator and are not 
532  subject to the requirements regarding an employer-employee 
533  relationship or receipt of contributions for the eligible 
534  employee in the effective month, except that the employee must 
535  meet the conditions of the previous sentence when the election 
536  is received by the third-party administrator. This paragraph is 
537  shall be contingent upon approval by from the Internal Revenue 
538  Service for including the choice described herein within the 
539  programs offered by the Florida Retirement System. 
540         1. If the employee chooses to move to the investment Public 
541  Employee Optional Retirement program, the applicable provisions 
542  of subsection (3) this section shall govern the transfer. 
543         2. If the employee chooses to move to the defined benefit 
544  program, the employee must transfer from his or her investment 
545  Public Employee Optional Retirement program account, and from 
546  other employee moneys as necessary, a sum representing the 
547  present value of that employee’s accumulated benefit obligation 
548  immediately following the time of such movement, determined 
549  assuming that attained service equals the sum of service in the 
550  defined benefit program and service in the investment Public 
551  Employee Optional Retirement program. Benefit commencement 
552  occurs on the first date the employee is would become eligible 
553  for unreduced benefits, using the discount rate and other 
554  relevant actuarial assumptions that were used to value the 
555  Florida Retirement System defined benefit program plan 
556  liabilities in the most recent actuarial valuation. For any 
557  employee who, at the time of the second election, already 
558  maintains an accrued benefit amount in the defined benefit 
559  program plan, the then-present value of the such accrued benefit 
560  shall be deemed part of the required transfer amount described 
561  in this subparagraph. The division shall ensure that the 
562  transfer sum is prepared using a formula and methodology 
563  certified by an enrolled actuary. 
564         3. Notwithstanding subparagraph 2., an employee who chooses 
565  to move to the defined benefit program and who became eligible 
566  to participate in the Public Employee Optional Retirement 
567  Program by reason of employment in a regularly established 
568  position with a state employer after June 1, 2002; a district 
569  school board employer after September 1, 2002; or a local 
570  employer after December 1, 2002, must transfer from his or her 
571  investment Public Employee Optional Retirement program account, 
572  and, from other employee moneys as necessary, a sum representing 
573  that employee’s actuarial accrued liability. 
574         4. An employee’s Employees’ ability to transfer from the 
575  Florida Retirement System defined benefit program to the 
576  investment Public Employee Optional Retirement program pursuant 
577  to paragraphs (a) and (b) (a)-(d), and the ability of a for 
578  current employee employees to have an option to later transfer 
579  back into the defined benefit program under subparagraph 2., 
580  shall be deemed a significant system amendment. Pursuant to s. 
581  121.031(4), any such resulting unfunded liability arising from 
582  actual original transfers from the defined benefit program to 
583  the investment optional program must shall be amortized within 
584  30 plan years as a separate unfunded actuarial base independent 
585  of the reserve stabilization mechanism defined in s. 
586  121.031(3)(f). For the first 25 years, a no direct amortization 
587  payment may not shall be calculated for this base. During this 
588  25-year period, the such separate base shall be used to offset 
589  the impact of employees exercising their second program election 
590  under this paragraph. It is the legislative intent of the 
591  Legislature that the actuarial funded status of the Florida 
592  Retirement System defined benefit program not be affected plan 
593  is neither beneficially nor adversely impacted by such second 
594  program elections in any significant manner, after due 
595  recognition of the separate unfunded actuarial base. Following 
596  this initial 25-year period, any remaining balance of the 
597  original separate base shall be amortized over the remaining 5 
598  years of the required 30-year amortization period. 
599         (5) CONTRIBUTIONS.— 
600         (a) Each employer shall contribute on behalf of each 
601  participant in the investment Public Employee Optional 
602  Retirement program, as provided in part III of this chapter. The 
603  state board, acting as plan fiduciary, shall ensure that all 
604  plan assets are held in a trust, pursuant to s. 401 of the 
605  Internal Revenue Code. The fiduciary shall ensure that said 
606  contributions are allocated as follows: 
607         1. The portion earmarked for participant accounts shall be 
608  used to purchase interests in the appropriate investment 
609  vehicles for the accounts of each participant as specified by 
610  the participant, or in accordance with paragraph (4)(b) (4)(d). 
611         2. The portion earmarked for administrative and educational 
612  expenses shall be transferred to the state board. 
613         3. The portion earmarked for disability benefits shall be 
614  transferred to the department. 
615         (b) Employers are responsible for notifying participants 
616  regarding maximum contribution levels allowed permitted under 
617  the Internal Revenue Code. If a participant contributes to any 
618  other tax-deferred plan, the participant he or she is 
619  responsible for ensuring that total contributions made to the 
620  investment optional program and to any other such plan do not 
621  exceed federally permitted maximums. 
622         (c) The investment Public Employee Optional Retirement 
623  program may accept for deposit into participant accounts 
624  contributions in the form of rollovers or direct trustee-to 
625  trustee transfers by or on behalf of participants, reasonably 
626  determined by the state board to be eligible for rollover or 
627  transfer to the investment optional retirement program pursuant 
628  to the Internal Revenue Code, if such contributions are made in 
629  accordance with rules as may be adopted by the board. Such 
630  contributions must shall be accounted for in accordance with any 
631  applicable Internal Revenue Code requirements and rules of the 
632  state board. 
633         (6) VESTING REQUIREMENTS.— 
634         (a)1. With respect to employer contributions paid on behalf 
635  of the participant to the investment Public Employee Optional 
636  Retirement program, plus interest and earnings thereon and less 
637  investment fees and administrative charges, a participant is 
638  shall be vested after completing 1 work year, as defined in s. 
639  121.021(54), with an employer, including any service while the 
640  participant was a member of the defined benefit retirement 
641  program or an optional retirement program authorized under s. 
642  121.051(2)(c) or s. 121.055(6). 
643         2. If the participant terminates employment before prior to 
644  satisfying the vesting requirements, the nonvested accumulation 
645  must shall be transferred from the participant’s accounts to the 
646  state board for deposit and investment by the state board in its 
647  the suspense account in of the Public Employee Optional 
648  Retirement Investment Program Trust Fund of the board. If the 
649  terminated participant is reemployed as an eligible employee 
650  within 5 years, the state board shall transfer to the 
651  participant’s account any amount of the moneys previously 
652  transferred from the participant’s accounts to the suspense 
653  account of the Public Employee Optional Retirement Program Trust 
654  Fund, plus the actual earnings on such amount while in the 
655  suspense account. 
656         (b)1. With respect to amounts transferred from the defined 
657  benefit program to the investment program, plus interest and 
658  earnings, and less investment fees and administrative charges, a 
659  participant shall be vested in the amount transferred from the 
660  defined benefit program, plus interest and earnings thereon and 
661  less administrative charges and investment fees, upon meeting 
662  the service requirements for the participant’s membership class 
663  as set forth in s. 121.021(29). The third-party administrator 
664  shall account for such amounts for each participant. The 
665  division shall notify the participant and the third-party 
666  administrator when the participant has satisfied the vesting 
667  period for Florida Retirement System purposes. 
668         2. If the participant terminates employment before prior to 
669  satisfying the vesting requirements, the nonvested accumulation 
670  must shall be transferred from the participant’s accounts to the 
671  state board for deposit and investment by the board in the 
672  suspense account in of the Public Employee Optional Retirement 
673  Investment Program Trust Fund of the board. If the terminated 
674  participant is reemployed as an eligible employee within 5 
675  years, the state board shall transfer to the participant’s 
676  account any amount of the moneys previously transferred from the 
677  participant’s accounts to the suspense account of the Public 
678  Employee Optional Retirement Program Trust Fund, plus the actual 
679  earnings on such amount while in the suspense account. 
680         (c) Any nonvested accumulations transferred from a 
681  participant’s account to the state board’s suspense account 
682  shall be forfeited by the participant if the participant is not 
683  reemployed as an eligible employee within 5 years after 
684  termination. 
685         (7) BENEFITS.—Under the Public Employee Optional Retirement 
686  Investment Program, benefits shall: 
687         (a) Benefits shall Be provided in accordance with s. 401(a) 
688  of the Internal Revenue Code. 
689         (b) Benefits shall Accrue in individual accounts that are 
690  participant-directed, portable, and funded by employer 
691  contributions and earnings thereon. 
692         (c) Benefits shall Be payable in accordance with the 
693  provisions of s. 121.591. 
694         (8) PROGRAM ADMINISTRATION OF PROGRAM.— 
695         (a) The Public Employee Optional Retirement Investment 
696  Program shall be administered by the state board and affected 
697  employers. The state board is authorized to require oaths, by 
698  affidavit or otherwise, and acknowledgments from persons in 
699  connection with the administration of its duties and 
700  responsibilities under the program this chapter. An No oath, by 
701  affidavit or otherwise, may not shall be required of an employee 
702  participant at the time of enrollment election. Acknowledgment 
703  of an employee’s election to participate in the program shall be 
704  no greater than necessary to confirm the employee’s election. 
705  The state board shall adopt rules establishing the roles role 
706  and responsibilities of affected state, local government, and 
707  education-related employers, the state board, the department, 
708  and third-party contractors in administering the investment 
709  Public Employee Optional Retirement program. The department 
710  shall adopt rules necessary to administer implement the 
711  investment optional program in coordination with the defined 
712  benefit retirement program and the disability benefits available 
713  under the investment optional program. 
714         (a)(b)1. The state board shall select and contract with a 
715  one third-party administrator to provide administrative services 
716  if those services cannot be competitively and contractually 
717  provided by the division of Retirement within the Department of 
718  Management Services. With the approval of the state board, the 
719  third-party administrator may subcontract with other 
720  organizations or individuals to provide components of the 
721  administrative services. As a cost of administration, the state 
722  board may compensate any such contractor for its services, in 
723  accordance with the terms of the contract, as is deemed 
724  necessary or proper by the board. The third-party administrator 
725  may not be an approved provider or be affiliated with an 
726  approved provider. 
727         2. These administrative services may include, but are not 
728  limited to, enrollment of eligible employees, collection of 
729  employer contributions, disbursement of such contributions to 
730  approved providers in accordance with the allocation directions 
731  of participants; services relating to consolidated billing; 
732  individual and collective recordkeeping and accounting; asset 
733  purchase, control, and safekeeping; and direct disbursement of 
734  funds to and from the third-party administrator, the division, 
735  the state board, employers, participants, approved providers, 
736  and beneficiaries. This section does not prevent or prohibit a 
737  bundled provider from providing any administrative or customer 
738  service, including accounting and administration of individual 
739  participant benefits and contributions; individual participant 
740  recordkeeping; asset purchase, control, and safekeeping; direct 
741  execution of the participant’s instructions as to asset and 
742  contribution allocation; calculation of daily net asset values; 
743  direct access to participant account information; or periodic 
744  reporting to participants, at least quarterly, on account 
745  balances and transactions, if these services are authorized by 
746  the state board as part of the contract. 
747         (b)1.3. The state board shall select and contract with one 
748  or more organizations to provide educational services. With 
749  approval of the state board, the organizations may subcontract 
750  with other organizations or individuals to provide components of 
751  the educational services. As a cost of administration, the state 
752  board may compensate any such contractor for its services in 
753  accordance with the terms of the contract, as is deemed 
754  necessary or proper by the board. The education organization may 
755  not be an approved provider or be affiliated with an approved 
756  provider. 
757         2.4. Educational services shall be designed by the state 
758  board and department to assist employers, eligible employees, 
759  participants, and beneficiaries in order to maintain compliance 
760  with United States Department of Labor regulations under s. 
761  404(c) of the Employee Retirement Income Security Act of 1974 
762  and to assist employees in understanding their choice of defined 
763  benefit or defined contribution retirement program alternatives. 
764  Educational services include, but are not limited to, 
765  disseminating educational materials; providing retirement 
766  planning education; explaining the differences between the 
767  defined benefit retirement plan and the defined contribution 
768  retirement programs plan; and offering financial planning 
769  guidance on matters such as investment diversification, 
770  investment risks, investment costs, and asset allocation. An 
771  approved provider may also provide educational information, 
772  including retirement planning and investment allocation 
773  information concerning its products and services. 
774         (c)1. In evaluating and selecting a third-party 
775  administrator, the state board shall establish criteria for 
776  evaluating under which it shall consider the relative 
777  capabilities and qualifications of each proposed administrator. 
778  In developing such criteria, the state board shall consider: 
779         a. The administrator’s demonstrated experience in providing 
780  administrative services to public or private sector retirement 
781  systems. 
782         b. The administrator’s demonstrated experience in providing 
783  daily valued recordkeeping to defined contribution programs 
784  plans. 
785         c. The administrator’s ability and willingness to 
786  coordinate its activities with the Florida Retirement System 
787  employers, the state board, and the division, and to supply to 
788  such employers, the board, and the division the information and 
789  data they require, including, but not limited to, monthly 
790  management reports, quarterly participant reports, and ad hoc 
791  reports requested by the department or state board. 
792         d. The cost-effectiveness and levels of the administrative 
793  services provided. 
794         e. The administrator’s ability to interact with the 
795  participants, the employers, the state board, the division, and 
796  the providers; the means by which participants may access 
797  account information, direct investment of contributions, make 
798  changes to their accounts, transfer moneys between available 
799  investment vehicles, and transfer moneys between investment 
800  products; and any fees that apply to such activities. 
801         f. Any other factor deemed necessary by the Trustees of the 
802  state board of Administration. 
803         2. In evaluating and selecting an educational provider, the 
804  state board shall establish criteria under which it shall 
805  consider the relative capabilities and qualifications of each 
806  proposed educational provider. In developing such criteria, the 
807  board shall consider: 
808         a. Demonstrated experience in providing educational 
809  services to public or private sector retirement systems. 
810         b. Ability and willingness to coordinate its activities 
811  with the Florida Retirement System employers, the state board, 
812  and the division, and to supply to such employers, the board, 
813  and the division the information and data they require, 
814  including, but not limited to, reports on educational contacts. 
815         c. The cost-effectiveness and levels of the educational 
816  services provided. 
817         d. Ability to provide educational services via different 
818  media, including, but not limited to, the Internet, personal 
819  contact, seminars, brochures, and newsletters. 
820         e. Any other factor deemed necessary by the Trustees of the 
821  state board of Administration. 
822         3. The establishment of the criteria shall be solely within 
823  the discretion of the state board. 
824         (d) The state board shall develop the form and content of 
825  any contracts to be offered under the investment Public Employee 
826  Optional Retirement program. In developing the its contracts, 
827  the board shall must consider: 
828         1. The nature and extent of the rights and benefits to be 
829  afforded in relation to the required contributions required 
830  under the program. 
831         2. The suitability of the rights and benefits provided to 
832  be afforded and the interests of employers in the recruitment 
833  and retention of eligible employees. 
834         (e)1. The state board may contract with any consultant for 
835  professional services, including legal, consulting, accounting, 
836  and actuarial services, deemed necessary to implement and 
837  administer the investment optional program by the Trustees of 
838  the state board of Administration. The board may enter into a 
839  contract with one or more vendors to provide low-cost investment 
840  advice to participants, supplemental to education provided by 
841  the third-party administrator. All fees under any such contract 
842  shall be paid by those participants who choose to use the 
843  services of the vendor. 
844         2. The department may contract with consultants for 
845  professional services, including legal, consulting, accounting, 
846  and actuarial services, deemed necessary to implement and 
847  administer the investment optional program in coordination with 
848  the defined benefit program of the Florida Retirement System. 
849  The department, in coordination with the state board, may enter 
850  into a contract with the third-party administrator in order to 
851  coordinate services common to the various programs within the 
852  Florida Retirement System. 
853         (f) The third-party administrator may shall not receive 
854  direct or indirect compensation from an approved provider, 
855  except as specifically provided for in the contract with the 
856  state board. 
857         (g) The state board shall resolve any conflict between the 
858  third-party administrator and an approved provider if when such 
859  conflict threatens the implementation or administration of the 
860  program or the quality of services to employees and may resolve 
861  any other conflicts. 
862         (9) INVESTMENT OPTIONS OR PRODUCTS; PERFORMANCE REVIEW.— 
863         (a) The state board shall develop policy and procedures for 
864  selecting, evaluating, and monitoring the performance of 
865  approved providers and investment products to which employees 
866  may direct retirement contributions under the investment 
867  program. In accordance with such policy and procedures, the 
868  state board shall designate and contract for a number of 
869  investment products as determined by the board. The board shall 
870  also select one or more bundled providers, each of which whom 
871  may offer multiple investment options and related services, if 
872  when such an approach is determined by the board to provide 
873  afford value to the participants otherwise not available through 
874  individual investment products. Each approved bundled provider 
875  may offer investment options that provide participants with the 
876  opportunity to invest in each of the following asset classes, to 
877  be composed of individual options that represent either a single 
878  asset class or a combination thereof: money markets, United 
879  States fixed income, United States equities, and foreign stock. 
880  The state board shall review and manage all educational 
881  materials, contract terms, fee schedules, and other aspects of 
882  the approved provider relationships to ensure that no provider 
883  is unduly favored or penalized by virtue of its status within 
884  the investment program plan. 
885         (b) The state board shall consider investment options or 
886  products it considers appropriate to give participants the 
887  opportunity to accumulate retirement benefits, subject to the 
888  following: 
889         1. The investment Public Employee Optional Retirement 
890  program must offer a diversified mix of low-cost investment 
891  products that span the risk-return spectrum and may include a 
892  guaranteed account as well as investment products, such as 
893  individually allocated guaranteed and variable annuities, which 
894  meet the requirements of this subsection and combine the ability 
895  to accumulate investment returns with the option of receiving 
896  lifetime income consistent with the long-term retirement 
897  security of a pension plan and similar to the lifetime-income 
898  benefit provided by the Florida Retirement System. 
899         2. Investment options or products offered by the group of 
900  approved providers may include mutual funds, group annuity 
901  contracts, individual retirement annuities, interests in trusts, 
902  collective trusts, separate accounts, and other such financial 
903  instruments, and may include products that give participants the 
904  option of committing their contributions for an extended time 
905  period in an effort to obtain returns higher than those that 
906  could be obtained from investment products offering full 
907  liquidity. 
908         3. The state board may shall not contract with a any 
909  provider that imposes a front-end, back-end, contingent, or 
910  deferred sales charge, or any other fee that limits or restricts 
911  the ability of participants to select any investment product 
912  available in the investment optional program. This prohibition 
913  does not apply to fees or charges that are imposed on 
914  withdrawals from products that give participants the option of 
915  committing their contributions for an extended time period in an 
916  effort to obtain returns higher than those that could be 
917  obtained from investment products offering full liquidity, 
918  provided that the product in question, net of all fees and 
919  charges, produces material benefits relative to other comparable 
920  products in the program offering full liquidity. 
921         4. Fees or charges for insurance features, such as 
922  mortality and expense-risk charges, must be reasonable relative 
923  to the benefits provided. 
924         (c) In evaluating and selecting approved providers and 
925  products, the state board shall establish criteria for 
926  evaluating under which it shall consider the relative 
927  capabilities and qualifications of each proposed provider 
928  company and product. In developing such criteria, the board 
929  shall consider the following to the extent such factors may be 
930  applied in connection with investment products, services, or 
931  providers: 
932         1. Experience in the United States providing retirement 
933  products and related financial services under a defined 
934  contribution retirement program plans. 
935         2. Financial strength and stability as which shall be 
936  evidenced by the highest ratings assigned by nationally 
937  recognized rating services when comparing proposed providers 
938  that are so rated. 
939         3. Intrastate and interstate portability of the product 
940  offered, including early withdrawal options. 
941         4. Compliance with the Internal Revenue Code. 
942         5. The cost-effectiveness of the product provided and the 
943  levels of service supporting the product relative to its 
944  benefits and its characteristics, including, without limitation, 
945  the level of risk borne by the provider. 
946         6. The provider company’s ability and willingness to 
947  coordinate its activities with Florida Retirement System 
948  employers, the department, and the state board, and to supply to 
949  the such employers, the department, and the board with the 
950  information and data they require. 
951         7. The methods available to participants to interact with 
952  the provider company; the means by which participants may access 
953  account information, direct investment of contributions, make 
954  changes to their accounts, transfer moneys between available 
955  investment vehicles, and transfer moneys between provider 
956  companies; and any fees that apply to such activities. 
957         8. The provider company’s policies with respect to the 
958  transfer of individual account balances, contributions, and 
959  earnings thereon, both internally among investment products 
960  offered by the provider company and externally between approved 
961  providers, as well as any fees, charges, reductions, or 
962  penalties that may be applied. 
963         9. An evaluation of specific investment products, taking 
964  into account each product’s experience in meeting its investment 
965  return objectives net of all related fees, expenses, and 
966  charges, including, but not limited to, investment management 
967  fees, loads, distribution and marketing fees, custody fees, 
968  recordkeeping fees, education fees, annuity expenses, and 
969  consulting fees. 
970         10. Organizational factors, including, but not limited to, 
971  financial solvency, organizational depth, and experience in 
972  providing institutional and retail investment services. 
973         (d) By March 1, 2010, the state board shall identify and 
974  offer at least one terror-free investment product that allocates 
975  its funds among securities not subject to divestiture as 
976  provided in s. 215.473 if the investment product is deemed by 
977  the board to be consistent with prudent investor standards. No 
978  person may bring a civil, criminal, or administrative action 
979  against an approved provider; the state board; or any employee, 
980  officer, director, or trustee of such provider based upon the 
981  divestiture of any security or the offering of a terror-free 
982  investment product as specified in this paragraph. 
983         (e) As a condition of offering an any investment option or 
984  product in the investment optional retirement program, the 
985  approved provider must agree to make the investment product or 
986  service available under the most beneficial terms offered to any 
987  other customer, subject to approval by the Trustees of the state 
988  board of Administration. 
989         (f) The state board shall regularly review the performance 
990  of each approved provider and product and related organizational 
991  factors to ensure continued compliance with established 
992  selection criteria and with board policy and procedures. 
993  Providers and products may be terminated subject to contract 
994  provisions. The state board shall adopt procedures to transfer 
995  account balances from terminated products or providers to other 
996  products or providers in the investment optional program. 
997         (g)1. An approved provider shall comply with all applicable 
998  federal and state securities and insurance laws and regulations 
999  applicable to the provider, as well as with the applicable rules 
1000  and guidelines of the National Association of Securities Dealers 
1001  which govern the ethical marketing of investment products. In 
1002  furtherance of this mandate, an approved provider must agree in 
1003  its contract with the state board to establish and maintain a 
1004  compliance education and monitoring system to supervise the 
1005  activities of all personnel who directly communicate with 
1006  individual participants and recommend investment products, which 
1007  system is consistent with rules of the National Association of 
1008  Securities Dealers. 
1009         2. Approved provider personnel who directly communicate 
1010  with individual participants and who recommend investment 
1011  products shall make an independent and unbiased determination as 
1012  to whether an investment product is suitable for a particular 
1013  participant. 
1014         3. The state board shall develop procedures to receive and 
1015  resolve participant complaints against a provider or approved 
1016  provider personnel, and, if when appropriate, refer such 
1017  complaints to the appropriate agency. 
1018         4. Approved providers may not sell or in any way distribute 
1019  any customer list or participant identification information 
1020  generated through their offering of products or services through 
1021  the investment optional retirement program. 
1022         (10) EDUCATION COMPONENT.— 
1023         (a) The state board, in coordination with the department, 
1024  shall provide for an education component for eligible employees 
1025  system members in a manner consistent with the provisions of 
1026  this section. The education component must be available to 
1027  eligible employees at least 90 days prior to the beginning date 
1028  of the election period for the employees of the respective types 
1029  of employers. 
1030         (b) The education component must provide system members 
1031  with impartial and balanced information about plan choices. The 
1032  education component must involve multimedia formats. Program 
1033  comparisons must, to the greatest extent possible, be based upon 
1034  the retirement income that different retirement programs may 
1035  provide to the participant. The board shall monitor the 
1036  performance of the contract to ensure that the program is 
1037  conducted in accordance with the contract, applicable law, and 
1038  the rules of the board. 
1039         (c) The board, in coordination with the department, shall 
1040  provide for an initial and ongoing transfer education component 
1041  to provide system members with information necessary to make 
1042  informed plan choice decisions. The transfer education component 
1043  must include, but is not limited to, information on: 
1044         1. The amount of money available to a member to transfer to 
1045  the defined contribution program. 
1046         2. The features of and differences between the defined 
1047  benefit program and the defined contribution program, both 
1048  generally and specifically, as those differences may affect the 
1049  member. 
1050         3. The expected benefit available if the member were to 
1051  retire under each of the retirement programs, based on 
1052  appropriate alternative sets of assumptions. 
1053         4. The rate of return from investments in the defined 
1054  contribution program and the period of time over which such rate 
1055  of return must be achieved to equal or exceed the expected 
1056  monthly benefit payable to the member under the defined benefit 
1057  program. 
1058         5. The historical rates of return for the investment 
1059  alternatives available in the defined contribution programs. 
1060         6. The benefits and historical rates of return on 
1061  investments available in a typical deferred compensation plan or 
1062  a typical plan under s. 403(b) of the Internal Revenue Code for 
1063  which the employee may be eligible. 
1064         7. The program choices available to employees of the State 
1065  University System and the comparative benefits of each available 
1066  program, if applicable. 
1067         8. Payout options available in each of the retirement 
1068  programs. 
1069         (a)(d) An ongoing education and communication component 
1070  must provide eligible employees system members with information 
1071  necessary to make informed decisions about choices within their 
1072  retirement program of membership and in preparation for 
1073  retirement. The component must include, but is not limited to, 
1074  information concerning: 
1075         1. Rights and conditions of membership. 
1076         2. Benefit features within the program, options, and 
1077  effects of certain decisions. 
1078         3. Coordination of contributions and benefits with a 
1079  deferred compensation plan under s. 457 or a plan under s. 
1080  403(b) of the Internal Revenue Code. 
1081         4. Significant program changes. 
1082         5. Contribution rates and program funding status. 
1083         6. Planning for retirement. 
1084         (b)(e) Descriptive materials must be prepared under the 
1085  assumption that the employee is an unsophisticated investor, and 
1086  all materials used in the education component must be approved 
1087  by the state board before prior to dissemination. 
1088         (c)(f) The state board and the department shall also 
1089  establish a communication component to provide program 
1090  information to participating employers and the employers’ 
1091  personnel and payroll officers and to explain their respective 
1092  responsibilities in conjunction with the retirement programs. 
1093         (d)(g) Funding for education of new employees may reflect 
1094  administrative costs to the investment optional program and the 
1095  defined benefit program. 
1096         (h) Pursuant to paragraph (8)(a), all Florida Retirement 
1097  System employers have an obligation to regularly communicate the 
1098  existence of the two Florida Retirement System plans and the 
1099  plan choice in the natural course of administering their 
1100  personnel functions, using the educational materials supplied by 
1101  the state board and the Department of Management Services. 
1102         (11) PARTICIPANT INFORMATION REQUIREMENTS.—The state board 
1103  shall ensure that each participant is provided a quarterly 
1104  statement that accounts for the contributions made on behalf of 
1105  the such participant; the interest and investment earnings 
1106  thereon; and any fees, penalties, or other deductions that apply 
1107  thereto. At a minimum, such statements must: 
1108         (a) Indicate the participant’s investment options. 
1109         (b) State the market value of the account at the close of 
1110  the current quarter and previous quarter. 
1111         (c) Show account gains and losses for the period and 
1112  changes in account accumulation unit values for the quarter 
1113  period. 
1114         (e) Indicate any account changes due to adjustment of 
1115  contribution levels, reallocation of contributions, balance 
1116  transfers, or withdrawals. 
1117         (f) Set forth any fees, charges, penalties, and deductions 
1118  that apply to the account. 
1119         (g) Indicate the amount of the account in which the 
1120  participant is fully vested and the amount of the account in 
1121  which the participant is not vested. 
1122         (h) Indicate each investment product’s performance relative 
1123  to an appropriate market benchmark. 
1124 
1125  The third-party administrator shall provide quarterly and annual 
1126  summary reports to the state board and any other reports 
1127  requested by the department or the board. In any solicitation or 
1128  offer of coverage under the defined contribution an optional 
1129  retirement program, a provider company shall be governed by the 
1130  contract readability provisions of s. 627.4145, notwithstanding 
1131  s. 627.4145(6)(c). In addition, all descriptive materials must 
1132  be prepared under the assumption that the participant is an 
1133  unsophisticated investor. Provider companies must maintain an 
1134  internal system of quality assurance, have proven functional 
1135  systems that are date-calculation compliant, and be subject to a 
1136  due-diligence inquiry that proves their capacity and fitness to 
1137  undertake service responsibilities. 
1138         (12) ADVISORY COUNCIL TO PROVIDE ADVICE AND ASSISTANCE.—The 
1139  Investment Advisory Council, created pursuant to s. 215.444, 
1140  shall assist the state board in implementing and administering 
1141  the Public Employee Optional Retirement Investment Program. The 
1142  Investment Advisory council, created pursuant to s. 215.444, 
1143  shall review the state board’s initial recommendations regarding 
1144  the criteria to be used in selecting and evaluating approved 
1145  providers and investment products. The council may provide 
1146  comments on the recommendations to the board within 45 days 
1147  after receiving the initial recommendations. The state board 
1148  shall make the final determination as to whether any investment 
1149  provider or product, any contractor, or any and all contract 
1150  provisions are shall be approved for the investment program. 
1151         (13) FEDERAL REQUIREMENTS.— 
1152         (a) Provisions of This section shall be construed, and the 
1153  investment Public Employee Optional Retirement program shall be 
1154  administered, so as to comply with the Internal Revenue Code, 26 
1155  U.S.C., and specifically with plan qualification requirements 
1156  imposed on governmental plans under s. 401(a) of the Internal 
1157  Revenue Code. The state board may shall have the power and 
1158  authority to adopt rules reasonably necessary to establish or 
1159  maintain the qualified status of the investment Optional 
1160  Retirement program under the Internal Revenue Code and to 
1161  implement and administer the Optional Retirement program in 
1162  compliance with the Internal Revenue Code and as designated 
1163  under this part; provided however, that the board shall not have 
1164  the authority to adopt any rule which makes a substantive change 
1165  to the Optional Retirement Program as designed by this part. 
1166         (b) Any section or provision of this chapter which is 
1167  susceptible to more than one construction shall must be 
1168  interpreted in favor of the construction most likely to satisfy 
1169  requirements imposed by s. 401(a) of the Internal Revenue Code. 
1170         (c) Contributions payable under this section for any 
1171  limitation year may not exceed the maximum amount allowable for 
1172  qualified defined contribution pension plans under applicable 
1173  provisions of the Internal Revenue Code. If an employee who is 
1174  enrolled who has elected to participate in the Public Employee 
1175  Optional Retirement Investment Program participates in any other 
1176  plan that is maintained by the participating employer, benefits 
1177  that accrue under the investment Public Employee Optional 
1178  Retirement program shall be considered primary for any aggregate 
1179  limitation applicable under s. 415 of the Internal Revenue Code. 
1180         (14) INVESTMENT POLICY STATEMENT.— 
1181         (a) Investment products and approved providers selected for 
1182  the investment Public Employee Optional Retirement program must 
1183  shall conform with the Public Employee Optional Retirement 
1184  Investment Program Investment Policy Statement, herein referred 
1185  to as the “statement,” as developed and approved by the Trustees 
1186  of the state board of Administration. The statement must 
1187  include, among other items, the investment objectives of the 
1188  investment Public Employee Optional Retirement program, manager 
1189  selection and monitoring guidelines, and performance measurement 
1190  criteria. As required from time to time, the executive director 
1191  of the state board may present recommended changes in the 
1192  statement to the board for approval. 
1193         (b) Before Prior to presenting the statement, or any 
1194  recommended changes thereto, to the state board, the executive 
1195  director of the board shall present such statement or changes to 
1196  the Investment Advisory Council for review. The council shall 
1197  present the results of its review to the board prior to the 
1198  board’s final approval of the statement or changes in the 
1199  statement. 
1200         (15) STATEMENT OF FIDUCIARY STANDARDS AND 
1201  RESPONSIBILITIES.— 
1202         (a) Investment of optional defined contribution program 
1203  retirement plan assets shall be made for the sole interest and 
1204  exclusive purpose of providing benefits to plan participants and 
1205  beneficiaries and defraying reasonable expenses of administering 
1206  the program plan. The program’s assets shall are to be invested, 
1207  on behalf of the program participants, with the care, skill, and 
1208  diligence that a prudent person acting in a like manner would 
1209  undertake. The performance of the investment duties set forth in 
1210  this paragraph shall comply with the fiduciary standards set 
1211  forth in the Employee Retirement Income Security Act of 1974 at 
1212  29 U.S.C. s. 1104(a)(1)(A)-(C). In case of conflict with other 
1213  provisions of law authorizing investments, the investment and 
1214  fiduciary standards set forth in this subsection shall prevail. 
1215         (b) If a participant or beneficiary of the defined 
1216  contribution Public Employee Optional Retirement program 
1217  exercises control over the assets in his or her account, as 
1218  determined by reference to regulations of the United States 
1219  Department of Labor under s. 404(c) of the Employee Retirement 
1220  Income Security Act of 1974 and all applicable laws governing 
1221  the operation of the program, a no program fiduciary is not 
1222  shall be liable for any loss to a participant’s or beneficiary’s 
1223  account which results from the such participant’s or 
1224  beneficiary’s exercise of control. 
1225         (c) Subparagraph (8)(b)2. (8)(b)4. and paragraph (15)(b) 
1226  incorporate the federal law concept of participant control, 
1227  established by regulations of the United States Department of 
1228  Labor under s. 404(c) of the Employee Retirement Income Security 
1229  Act of 1974 (ERISA). The purpose of this paragraph is to assist 
1230  employers and the state board of Administration in maintaining 
1231  compliance with s. 404(c), while avoiding unnecessary costs and 
1232  eroding participant benefits under the defined contribution 
1233  Public Employee Optional Retirement program. Pursuant to 29 
1234  C.F.R. s. 2550.404c-1(b)(2)(i)(B)(1)(viii), the state board of 
1235  Administration or its designated agents shall deliver to 
1236  participants of the defined contribution Public Employee 
1237  Optional Retirement program a copy of the prospectus most 
1238  recently provided to the plan, and, pursuant to 29 C.F.R. s. 
1239  2550.404c-1(b)(2)(i)(B)(2)(ii), shall provide such participants 
1240  an opportunity to obtain this information, except that: 
1241         1. The requirement to deliver a prospectus shall be deemed 
1242  to be satisfied by delivery of a fund profile that contains the 
1243  information that would be included in a summary prospectus as 
1244  described by Rule 498 under the Securities Act of 1933, 17 
1245  C.F.R. s. 230.498. If When the transaction fees, expense 
1246  information, or other information provided by a mutual fund in 
1247  the prospectus does not reflect terms negotiated by the state 
1248  board of Administration or its designated agents, the 
1249  aforementioned requirement is deemed to be satisfied by delivery 
1250  of a separate document described by Rule 498 substituting 
1251  accurate information; and 
1252         2. Delivery shall be deemed to have been effected if 
1253  delivery is through electronic means and the following standards 
1254  are satisfied: 
1255         a. Electronically-delivered documents are prepared and 
1256  provided consistent with style, format, and content requirements 
1257  applicable to printed documents; 
1258         b. Each participant is provided timely and adequate notice 
1259  of the documents that are to be delivered and their significance 
1260  thereof, and of the participant’s right to obtain a paper copy 
1261  of such documents free of charge; 
1262         c.(I) Participants have adequate access to the electronic 
1263  documents, at locations such as their worksites or public 
1264  facilities, and have the ability to convert the documents to 
1265  paper free of charge by the state board of Administration, and 
1266  the board or its designated agents take appropriate and 
1267  reasonable measures to ensure that the system for furnishing 
1268  electronic documents results in actual receipt., or 
1269         (II) Participants have provided consent to receive 
1270  information in electronic format, which consent may be revoked; 
1271  and 
1272         d. The state board of Administration, or its designated 
1273  agent, actually provides paper copies of the documents free of 
1274  charge, upon request. 
1275         (16) DISABILITY BENEFITS.—For any participant of the 
1276  investment optional retirement program who becomes totally and 
1277  permanently disabled, benefits must shall be paid in accordance 
1278  with the provisions of s. 121.591. 
1279         (17) SOCIAL SECURITY COVERAGE.—Social security coverage 
1280  shall be provided for all officers and employees who become 
1281  participants of the investment optional program. Any 
1282  modification of the present agreement with the Social Security 
1283  Administration, or referendum required under the Social Security 
1284  Act, for the purpose of providing social security coverage for 
1285  any member shall be requested by the state agency in compliance 
1286  with the applicable provisions of the Social Security Act 
1287  governing such coverage. However, retroactive social security 
1288  coverage for service before prior to December 1, 1970, with the 
1289  employer may shall not be provided for any member who was not 
1290  covered under the agreement as of November 30, 1970. 
1291         (18) RETIREE HEALTH INSURANCE SUBSIDY.—All officers and 
1292  employees who are participants of the investment optional 
1293  program are shall be eligible to receive the retiree health 
1294  insurance subsidy, subject to the provisions of s. 112.363. 
1295         (19) PARTICIPANT RECORDS.—Personal identifying information 
1296  of a participant in the investment Public Employee Optional 
1297  Retirement program contained in Florida Retirement System 
1298  records held by the state board of Administration or the 
1299  department of Management Services is exempt from s. 119.07(1) 
1300  and s. 24(a), Art. I of the State Constitution. 
1301         (20) DESIGNATION OF BENEFICIARIES.— 
1302         (a) Each participant may, on a form provided for that 
1303  purpose, signed and filed with the third-party administrator, 
1304  designate a choice of one or more persons, named sequentially or 
1305  jointly, as his or her beneficiary for receiving who shall 
1306  receive the benefits, if any, which may be payable pursuant to 
1307  this chapter in the event of the participant’s death. If no 
1308  beneficiary is named in this manner, or if no beneficiary 
1309  designated by the participant survives the participant, the 
1310  beneficiary shall be the spouse of the deceased, if living. If 
1311  the participant’s spouse is not alive at the time of the 
1312  beneficiary’s his or her death, the beneficiary shall be the 
1313  living children of the participant. If no children survive, the 
1314  beneficiary shall be the participant’s father or mother, if 
1315  living; otherwise, the beneficiary shall be the participant’s 
1316  estate. The beneficiary most recently designated by a 
1317  participant on a form or letter filed with the third-party 
1318  administrator shall be the beneficiary entitled to any benefits 
1319  payable at the time of the participant’s death. However 
1320  Notwithstanding any other provision in this subsection to the 
1321  contrary, for a participant who dies before prior to his or her 
1322  effective date of retirement, the spouse at the time of death 
1323  shall be the participant’s beneficiary unless the such 
1324  participant designates a different beneficiary as provided in 
1325  this subsection subsequent to the participant’s most recent 
1326  marriage. 
1327         (b) If a participant designates a primary beneficiary other 
1328  than the participant’s spouse, the participant’s spouse must 
1329  sign the beneficiary designation form to acknowledge the 
1330  designation. This requirement does not apply to the designation 
1331  of one or more contingent beneficiaries to receive benefits 
1332  remaining upon the death of the primary beneficiary or 
1333  beneficiaries. 
1334         (c) Notwithstanding the participant’s designation of 
1335  benefits to be paid through a trust to a beneficiary that is a 
1336  natural person, and notwithstanding the provisions of the trust, 
1337  benefits must shall be paid directly to the beneficiary if the 
1338  person is no longer a minor or an incapacitated person as 
1339  defined in s. 744.102. 
1340         (21) PARTICIPATION BY TERMINATED DEFERRED RETIREMENT OPTION 
1341  PROGRAM PARTICIPANTS.—Notwithstanding any other provision of law 
1342  to the contrary, participants in the Deferred Retirement Option 
1343  Program offered under part I may, after conclusion of their 
1344  participation in the program, elect to roll over or authorize a 
1345  direct trustee-to-trustee transfer to an account under the 
1346  Public Employee Optional Retirement Investment Program of their 
1347  Deferred Retirement Option Program proceeds distributed as 
1348  provided under s. 121.091(13)(c)5. The transaction must 
1349  constitute an “eligible rollover distribution” within the 
1350  meaning of s. 402(c)(4) of the Internal Revenue Code. 
1351         (a) The investment Public Employee Optional Retirement 
1352  program may accept such amounts for deposit into participant 
1353  accounts as provided in paragraph (5)(c). 
1354         (b) The affected participant shall direct the investment of 
1355  his or her investment account; however, unless he or she becomes 
1356  a renewed member of the Florida Retirement System under s. 
1357  121.122 and elects to participate in the investment Public 
1358  Employee Optional Retirement program, employer contributions may 
1359  not be made to the participant’s account as provided under 
1360  paragraph (5)(a). 
1361         (c) The state board or the department is not responsible 
1362  for locating those persons who may be eligible to participate in 
1363  the investment Public Employee Optional Retirement program under 
1364  this subsection. 
1365         (22) CREDIT FOR MILITARY SERVICE.—Creditable service of any 
1366  member of the Public Employee Optional Retirement Investment 
1367  Program includes shall include military service in the Armed 
1368  Forces of the United States as provided in the conditions 
1369  outlined in s. 121.111(1). 
1370         Section 2. Section 121.4502, Florida Statutes, is amended 
1371  to read: 
1372         121.4502 Public Employee Optional Retirement Investment 
1373  Program Trust Fund.— 
1374         (1) The Public Employee Optional Retirement Investment 
1375  Program Trust Fund is created to hold the assets of the Public 
1376  Employee Optional Retirement Investment Program in trust for the 
1377  exclusive benefit of program such program’s participants and 
1378  beneficiaries, and for the payment of reasonable administrative 
1379  expenses of the program, in accordance with s. 401 of the 
1380  Internal Revenue Code, and shall be administered by the State 
1381  Board of Administration as trustee. Funds shall be credited to 
1382  the trust fund as provided in this part and, to be used for the 
1383  purposes of this part. The trust fund is exempt from the service 
1384  charges imposed by s. 215.20. 
1385         (2) The Public Employee Optional Retirement Investment 
1386  Program Trust Fund is a retirement trust fund of the Florida 
1387  Retirement System that accounts for retirement plan assets held 
1388  by the state in a trustee capacity as a fiduciary for individual 
1389  participants in the Public Employee Optional Retirement 
1390  Investment Program and, pursuant to s. 19(f), Art. III of the 
1391  State Constitution, is not subject to termination. 
1392         Section 3. Paragraph (g) of subsection (2) of section 
1393  110.123, Florida Statutes, is amended to read: 
1394         110.123 State group insurance program.— 
1395         (2) DEFINITIONS.—As used in this section, the term: 
1396         (g) “Retired state officer or employee” or “retiree” means 
1397  any state or state university officer or employee who retires 
1398  under a state retirement system or a state optional annuity or 
1399  retirement program or is placed on disability retirement, and 
1400  who was insured under the state group insurance program at the 
1401  time of retirement, and who begins receiving retirement benefits 
1402  immediately after retirement from state or state university 
1403  office or employment. In addition to these requirements, the 
1404  term includes any state officer or state employee who retires 
1405  under the defined contribution Public Employee Optional 
1406  Retirement program established under part II of chapter 121 
1407  shall be considered a “retired state officer or employee” or 
1408  “retiree” as used in this section if he or she: 
1409         1. Meets the age and service requirements to qualify for 
1410  normal retirement as set forth in s. 121.021(29); or 
1411         2. Has attained the age specified by s. 72(t)(2)(A)(i) of 
1412  the Internal Revenue Code and has 6 years of creditable service. 
1413         Section 4. Section 112.0801, Florida Statutes, is amended 
1414  to read: 
1415         112.0801 Group insurance; participation by retired 
1416  employees.— 
1417         (1) Any state agency, county, municipality, special 
1418  district, community college, or district school board that which 
1419  provides life, health, accident, hospitalization, or annuity 
1420  insurance, or all of any kinds of such insurance, for its 
1421  officers and employees and their dependents upon a group 
1422  insurance plan or self-insurance plan shall allow all former 
1423  personnel who have retired before prior to October 1, 1987, as 
1424  well as those who retire on or after such date, and their 
1425  eligible dependents, the option of continuing to participate in 
1426  the such group insurance plan or self-insurance plan. Retirees 
1427  and their eligible dependents shall be offered the same health 
1428  and hospitalization insurance coverage as is offered to active 
1429  employees at a premium cost of no more than the premium cost 
1430  applicable to active employees. For the retired employees and 
1431  their eligible dependents, the cost of any such continued 
1432  participation in any type of plan or any of the cost thereof may 
1433  be paid by the employer or by the retired employees. To 
1434  determine health and hospitalization plan costs, the employer 
1435  shall commingle the claims experience of the retiree group with 
1436  the claims experience of the active employees; and, for other 
1437  types of coverage, the employer may commingle the claims 
1438  experience of the retiree group with the claims experience of 
1439  active employees. Retirees covered under Medicare may be 
1440  experience-rated separately from the retirees not covered by 
1441  Medicare and from active employees if, provided that the total 
1442  premium does not exceed that of the active group and coverage is 
1443  basically the same as for the active group. 
1444         (2) For purposes of this section, “retiree” has the same 
1445  meaning as in s. 110.123(2). means any officer or employee who 
1446  retires under a state retirement system or a state optional 
1447  annuity or retirement program or is placed on disability 
1448  retirement and who begins receiving retirement benefits 
1449  immediately after retirement from employment. In addition to 
1450  these requirements, any officer or employee who retires under 
1451  the Public Employee Optional Retirement Program established 
1452  under part II of chapter 121 shall be considered a “retired 
1453  officer or employee” or “retiree” as used in this section if he 
1454  or she: 
1455         (a) Meets the age and service requirements to qualify for 
1456  normal retirement as set forth in s. 121.021(29); or 
1457         (b) Has attained the age specified by s. 72(t)(2)(A)(i) of 
1458  the Internal Revenue Code and has 6 years of creditable service. 
1459         Section 5. Paragraph (b) of subsection (2) and paragraph 
1460  (e) of subsection (3) of section 112.363, Florida Statutes, are 
1461  amended to read: 
1462         112.363 Retiree health insurance subsidy.— 
1463         (2) ELIGIBILITY FOR RETIREE HEALTH INSURANCE SUBSIDY.— 
1464         (b) For purposes of this section, a person is deemed 
1465  retired from a state-administered retirement system when he or 
1466  she terminates employment with all employers participating in 
1467  the Florida Retirement System as described in s. 121.021(39) 
1468  and: 
1469         1. For a participant of the defined contribution Public 
1470  Employee Optional Retirement program established under part II 
1471  of chapter 121, the participant meets the age or service 
1472  requirements to qualify for normal retirement as set forth in s. 
1473  121.021(29). 
1474         2. For a member of the Florida Retirement System defined 
1475  benefit program, or any employee who maintains creditable 
1476  service under both the defined benefit program and the defined 
1477  contribution Public Employee Optional Retirement program, the 
1478  member begins drawing retirement benefits from the defined 
1479  benefit program of the Florida Retirement System. 
1480         (3) RETIREE HEALTH INSURANCE SUBSIDY AMOUNT.— 
1481         (e)1. Beginning July 1, 2001, each eligible retiree of the 
1482  defined benefit program of the Florida Retirement System, or, if 
1483  the retiree is deceased, his or her beneficiary who is receiving 
1484  a monthly benefit from such retiree’s account and who is a 
1485  spouse, or a person who meets the definition of joint annuitant 
1486  in s. 121.021(28), shall receive a monthly retiree health 
1487  insurance subsidy payment equal to the number of years of 
1488  creditable service, as defined in s. 121.021(17), completed at 
1489  the time of retirement multiplied by $5; however, no eligible 
1490  retiree or beneficiary may receive a subsidy payment of more 
1491  than $150 or less than $30. If there are multiple beneficiaries, 
1492  the total payment may must not be greater than the payment to 
1493  which the retiree was entitled. The health insurance subsidy 
1494  amount payable to any person receiving the retiree health 
1495  insurance subsidy payment on July 1, 2001, may shall not be 
1496  reduced solely by operation of this subparagraph. 
1497         2. Beginning July 1, 2002, each eligible participant of the 
1498  defined contribution Public Employee Optional Retirement program 
1499  of the Florida Retirement System who has met the requirements of 
1500  this section, or, if the participant is deceased, his or her 
1501  spouse who is the participant’s designated beneficiary, shall 
1502  receive a monthly retiree health insurance subsidy payment equal 
1503  to the number of years of creditable service, as provided in 
1504  this subparagraph, completed at the time of retirement, 
1505  multiplied by $5; however, no eligible retiree or beneficiary 
1506  may receive a subsidy payment of more than $150 or less than 
1507  $30. For purposes of determining a participant’s creditable 
1508  service used to calculate the health insurance subsidy, a 
1509  participant’s years of service credit or fraction thereof shall 
1510  be based on the participant’s work year as defined in s. 
1511  121.021(54). Credit must shall be awarded for a full work year 
1512  whenever health insurance subsidy contributions have been made 
1513  as required by law for each month in the participant’s work 
1514  year. In addition, all years of creditable service retained 
1515  under the Florida Retirement System defined benefit program must 
1516  shall be included as creditable service for purposes of this 
1517  section. Notwithstanding any other provision in this section to 
1518  the contrary, the spouse at the time of death is shall be the 
1519  participant’s beneficiary unless such participant has designated 
1520  a different beneficiary subsequent to the participant’s most 
1521  recent marriage. 
1522         Section 6. Subsection (1) of section 112.65, Florida 
1523  Statutes, is amended to read: 
1524         112.65 Limitation of benefits.— 
1525         (1) ESTABLISHMENT OF PROGRAM.—The normal retirement benefit 
1526  or pension payable to a retiree who becomes a member of any 
1527  retirement system or plan and who has not previously 
1528  participated in such plan, on or after January 1, 1980, may 
1529  shall not exceed 100 percent of his or her average final 
1530  compensation. However, nothing contained in this section does 
1531  not shall apply to supplemental retirement benefits or to 
1532  pension increases attributable to cost-of-living increases or 
1533  adjustments. For the purposes of this section, benefits accruing 
1534  in individual participant accounts established under the defined 
1535  contribution Public Employee Optional Retirement program 
1536  established in part II of chapter 121 are considered 
1537  supplemental benefits. As used in this section, the term 
1538  “average final compensation” means the average of the member’s 
1539  earnings over a period of time which the governmental entity has 
1540  established by statute, charter, or ordinance. 
1541         Section 7. Subsection (3) and paragraph (b) of subsection 
1542  (22) of section 121.021, Florida Statutes, are amended to read: 
1543         121.021 Definitions.—The following words and phrases as 
1544  used in this chapter have the respective meanings set forth 
1545  unless a different meaning is plainly required by the context: 
1546         (3) “System” means the general retirement system 
1547  established by this chapter to be known and cited as the 
1548  “Florida Retirement System,” including, but not limited to, the 
1549  defined benefit retirement program administered under the 
1550  provisions of part I of this part chapter and the defined 
1551  contribution retirement program known as the Public Employee 
1552  Optional Retirement Program and administered under the 
1553  provisions of part II of this chapter. 
1554         (22) “Compensation” means the monthly salary paid a member 
1555  by his or her employer for work performed arising from that 
1556  employment. 
1557         (b) Under no circumstances shall Compensation for a member 
1558  participating in the defined benefit retirement program or the 
1559  Public Employee Optional Retirement Investment Program of the 
1560  Florida Retirement System may not include: 
1561         1. Fees paid professional persons for special or particular 
1562  services or include salary payments made from a faculty practice 
1563  plan authorized by the Board of Governors of the State 
1564  University System for eligible clinical faculty at a college in 
1565  a state university that has a faculty practice plan; or 
1566         2. Any bonuses or other payments prohibited from inclusion 
1567  in the member’s average final compensation and defined in 
1568  subsection (47). 
1569         Section 8. Paragraph (c) of subsection (2) of section 
1570  121.051, Florida Statutes, is amended to read: 
1571         121.051 Participation in the system.— 
1572         (2) OPTIONAL PARTICIPATION.— 
1573         (c) Employees of public community colleges or charter 
1574  technical career centers sponsored by public community colleges, 
1575  designated in s. 1000.21(3), who are members of the Regular 
1576  Class of the Florida Retirement System and who comply with the 
1577  criteria set forth in this paragraph and s. 1012.875 may, in 
1578  lieu of participating in the Florida Retirement System, elect to 
1579  withdraw from the system altogether and participate in the State 
1580  Community College System Optional Retirement Program provided by 
1581  the employing agency under s. 1012.875. 
1582         1. Through June 30, 2001, the cost to the employer for an 
1583  such annuity under the optional retirement program equals the 
1584  normal cost portion of the employer retirement contribution 
1585  which would be required if the employee were a member of the 
1586  Regular Class defined benefit program, plus the portion of the 
1587  contribution rate required by s. 112.363(8) which would 
1588  otherwise be assigned to the Retiree Health Insurance Subsidy 
1589  Trust Fund. Effective July 1, 2001, each employer shall 
1590  contribute on behalf of each participant in the optional program 
1591  an amount equal to 10.43 percent of the participant’s gross 
1592  monthly compensation. The employer shall deduct an amount for 
1593  the administration of the program. The employer shall contribute 
1594  an additional amount to the Florida Retirement System Trust Fund 
1595  equal to the unfunded actuarial accrued liability portion of the 
1596  Regular Class contribution rate. 
1597         2. The decision to participate in the an optional 
1598  retirement program is irrevocable as long as the employee holds 
1599  a position eligible for participation, except as provided in 
1600  subparagraph 3. Any service creditable under the Florida 
1601  Retirement System is retained after the member withdraws from 
1602  the system; however, additional service credit in the system may 
1603  not be earned while a member of the optional retirement program. 
1604         3. An employee who has elected to participate in the 
1605  optional retirement program shall have one opportunity, at the 
1606  employee’s discretion, to transfer from the optional retirement 
1607  program to the defined benefit program of the Florida Retirement 
1608  System or to the defined contribution program established under 
1609  part II of this chapter Public Employee Optional Retirement 
1610  Program, subject to the terms of the applicable optional 
1611  retirement program contracts. 
1612         a. If the employee chooses to move to the defined 
1613  contribution Public Employee Optional Retirement program, any 
1614  contributions, interest, and earnings creditable to the employee 
1615  under the State Community College System optional retirement 
1616  program are retained by the employee in the State Community 
1617  College System optional retirement program, and the applicable 
1618  provisions of s. 121.4501(4) govern the election. 
1619         b. If the employee chooses to move to the defined benefit 
1620  program of the Florida Retirement System, the employee shall 
1621  receive service credit equal to his or her years of service 
1622  under the State Community College System optional retirement 
1623  program. 
1624         (I) The cost for such credit is the amount representing the 
1625  present value of the employee’s accumulated benefit obligation 
1626  for the affected period of service. The cost shall be calculated 
1627  as if the benefit commencement occurs on the first date the 
1628  employee becomes eligible for unreduced benefits, using the 
1629  discount rate and other relevant actuarial assumptions that were 
1630  used to value the Florida Retirement System defined benefit 
1631  program plan liabilities in the most recent actuarial valuation. 
1632  The calculation must include any service already maintained 
1633  under the defined benefit program plan in addition to the years 
1634  under the State Community College System optional retirement 
1635  program. The present value of any service already maintained 
1636  must be applied as a credit to total cost resulting from the 
1637  calculation. The division shall ensure that the transfer sum is 
1638  prepared using a formula and methodology certified by an 
1639  enrolled actuary. 
1640         (II) The employee must transfer from his or her State 
1641  Community College System optional retirement program account and 
1642  from other employee moneys as necessary, a sum representing the 
1643  present value of the employee’s accumulated benefit obligation 
1644  immediately following the time of such movement, determined 
1645  assuming that attained service equals the sum of service in the 
1646  defined benefit program and service in the State Community 
1647  College System optional retirement program. 
1648         4. Participation in the optional retirement program is 
1649  limited to employees who satisfy the following eligibility 
1650  criteria: 
1651         a. The employee is must be otherwise eligible for 
1652  membership or renewed membership in the Regular Class of the 
1653  Florida Retirement System, as provided in s. 121.021(11) and 
1654  (12) or s. 121.122. 
1655         b. The employee is must be employed in a full-time position 
1656  classified in the Accounting Manual for Florida’s Public 
1657  Community Colleges as: 
1658         (I) Instructional; or 
1659         (II) Executive Management, Instructional Management, or 
1660  Institutional Management and the, if a community college 
1661  determines that recruiting to fill a vacancy in the position is 
1662  to be conducted in the national or regional market, and the 
1663  duties and responsibilities of the position include the 
1664  formulation, interpretation, or implementation of policies, or 
1665  the performance of functions that are unique or specialized 
1666  within higher education and that frequently support the mission 
1667  of the community college. 
1668         c. The employee is must be employed in a position not 
1669  included in the Senior Management Service Class of the Florida 
1670  Retirement System, as described in s. 121.055. 
1671         5. Participants in the program are subject to the same 
1672  reemployment limitations, renewed membership provisions, and 
1673  forfeiture provisions as are applicable to regular members of 
1674  the Florida Retirement System under ss. 121.091(9), 121.122, and 
1675  121.091(5), respectively. A participant who receives a program 
1676  distribution funded by employer contributions shall be deemed to 
1677  be retired from a state-administered retirement system if the 
1678  participant is subsequently employed with an employer that 
1679  participates in the Florida Retirement System. 
1680         6. Eligible community college employees are compulsory 
1681  members of the Florida Retirement System until, pursuant to s. 
1682  1012.875, a written election to withdraw from the system and 
1683  participate in the State Community College System optional 
1684  retirement program is filed with the program administrator and 
1685  received by the division. 
1686         a. A community college employee whose program eligibility 
1687  results from initial employment shall must be enrolled in the 
1688  State Community College System optional retirement program 
1689  retroactive to the first day of eligible employment. The 
1690  employer retirement contributions paid through the month of the 
1691  employee plan change shall be transferred to the community 
1692  college to the employee’s optional program account, and, 
1693  effective the first day of the next month, the employer shall 
1694  pay the applicable contributions based upon subparagraph 1. 
1695         b. A community college employee whose program eligibility 
1696  is due to the subsequent designation of the employee’s position 
1697  as one of those specified in subparagraph 4., or due to the 
1698  employee’s appointment, promotion, transfer, or reclassification 
1699  to a position specified in subparagraph 4., must be enrolled in 
1700  the program on the first day of the first full calendar month 
1701  that such change in status becomes effective. The employer 
1702  retirement contributions paid from the effective date through 
1703  the month of the employee plan change must be transferred to the 
1704  community college to the employee’s optional program account, 
1705  and, effective the first day of the next month, the employer 
1706  shall pay the applicable contributions based upon subparagraph 
1707  1. 
1708         7. Effective July 1, 2003, through December 31, 2008, any 
1709  participant in of the State Community College System optional 
1710  retirement program who has service credit in the defined benefit 
1711  program plan of the Florida Retirement System for the period 
1712  between his or her first eligibility to transfer from the 
1713  defined benefit program plan to the optional retirement program 
1714  and the actual date of transfer may, during employment, transfer 
1715  to the optional retirement program a sum representing the 
1716  present value of the accumulated benefit obligation under the 
1717  defined benefit retirement program for the period of service 
1718  credit. Upon transfer, all service credit previously earned 
1719  under the defined benefit program of the Florida Retirement 
1720  System during this period is nullified for purposes of 
1721  entitlement to a future benefit under the defined benefit 
1722  program of the Florida Retirement System. 
1723         Section 9. Paragraph (b) of subsection (1) of section 
1724  121.055, Florida Statutes, is amended to read: 
1725         121.055 Senior Management Service Class.—There is hereby 
1726  established a separate class of membership within the Florida 
1727  Retirement System to be known as the “Senior Management Service 
1728  Class,” which shall become effective February 1, 1987. 
1729         (1) 
1730         (b)1. Except as provided in subparagraph 2., effective 
1731  January 1, 1990, participation in the Senior Management Service 
1732  Class is shall be compulsory for the president of each community 
1733  college, the manager of each participating city or county, and 
1734  all appointed district school superintendents. Effective January 
1735  1, 1994, additional positions may be designated for inclusion in 
1736  the Senior Management Service Class of the Florida Retirement 
1737  System, provided that: 
1738         a. Positions to be included in the class shall be 
1739  designated by the local agency employer. Notice of intent to 
1740  designate positions for inclusion in the class shall be 
1741  published once a week for 2 consecutive weeks in a newspaper of 
1742  general circulation published in the county or counties 
1743  affected, as provided in chapter 50. 
1744         b. Up to 10 nonelective full-time positions may be 
1745  designated for each local agency employer reporting to the 
1746  department of Management Services; for local agencies with 100 
1747  or more regularly established positions, additional nonelective 
1748  full-time positions may be designated, not to exceed 1 percent 
1749  of the regularly established positions within the agency. 
1750         c. Each position added to the class must be a managerial or 
1751  policymaking position filled by an employee who is not subject 
1752  to continuing contract and serves at the pleasure of the local 
1753  agency employer without civil service protection, and who: 
1754         (I) Heads an organizational unit; or 
1755         (II) Has responsibility to effect or recommend personnel, 
1756  budget, expenditure, or policy decisions in his or her areas of 
1757  responsibility. 
1758         2. In lieu of participation in the Senior Management 
1759  Service Class, members of the Senior Management Service class, 
1760  pursuant to the provisions of subparagraph 1., may withdraw from 
1761  the Florida Retirement System altogether. The decision to 
1762  withdraw from the Florida Retirement System is shall be 
1763  irrevocable for as long as the employee holds the such a 
1764  position. Any service creditable under the Senior Management 
1765  Service Class shall be retained after the member withdraws from 
1766  the Florida Retirement System; however, additional service 
1767  credit in the Senior Management Service Class may shall not be 
1768  earned after such withdrawal. Such members are shall not be 
1769  eligible to participate in the Senior Management Service 
1770  Optional Annuity Program. 
1771         3. Effective January 1, 2006, through June 30, 2006, an 
1772  employee who has withdrawn from the Florida Retirement System 
1773  under subparagraph 2. has one opportunity to elect to 
1774  participate in either the defined benefit program or the Public 
1775  Employee Optional Retirement Program of the Florida Retirement 
1776  System. 
1777         a. If the employee elects to participate in the Public 
1778  Employee Optional Retirement Program, membership shall be 
1779  prospective, and the applicable provisions of s. 121.4501(4) 
1780  shall govern the election. 
1781         b. If the employee elects to participate in the defined 
1782  benefit program of the Florida Retirement System, the employee 
1783  shall, upon payment to the system trust fund of the amount 
1784  calculated under sub-sub-subparagraph (I), receive service 
1785  credit for prior service based upon the time during which the 
1786  employee had withdrawn from the system. 
1787         (I) The cost for such credit shall be an amount 
1788  representing the actuarial accrued liability for the affected 
1789  period of service. The cost shall be calculated using the 
1790  discount rate and other relevant actuarial assumptions that were 
1791  used to value the Florida Retirement System defined benefit plan 
1792  liabilities in the most recent actuarial valuation. The 
1793  calculation shall include any service already maintained under 
1794  the defined benefit plan in addition to the period of 
1795  withdrawal. The actuarial accrued liability attributable to any 
1796  service already maintained under the defined benefit plan shall 
1797  be applied as a credit to the total cost resulting from the 
1798  calculation. The division shall ensure that the transfer sum is 
1799  prepared using a formula and methodology certified by an 
1800  actuary. 
1801         (II) The employee must transfer a sum representing the net 
1802  cost owed for the actuarial accrued liability in sub-sub 
1803  subparagraph (I) immediately following the time of such 
1804  movement, determined assuming that attained service equals the 
1805  sum of service in the defined benefit program and the period of 
1806  withdrawal. 
1807         Section 10. Paragraph (d) of subsection (9) of section 
1808  121.091, Florida Statutes, is amended to read: 
1809         121.091 Benefits payable under the system.—Benefits may not 
1810  be paid under this section unless the member has terminated 
1811  employment as provided in s. 121.021(39)(a) or begun 
1812  participation in the Deferred Retirement Option Program as 
1813  provided in subsection (13), and a proper application has been 
1814  filed in the manner prescribed by the department. The department 
1815  may cancel an application for retirement benefits when the 
1816  member or beneficiary fails to timely provide the information 
1817  and documents required by this chapter and the department’s 
1818  rules. The department shall adopt rules establishing procedures 
1819  for application for retirement benefits and for the cancellation 
1820  of such application when the required information or documents 
1821  are not received. 
1822         (9) EMPLOYMENT AFTER RETIREMENT; LIMITATION.— 
1823         (d) The provisions of this subsection apply to retirees, as 
1824  defined in s. 121.4501(2), of the Public Employee Optional 
1825  Retirement Program, subject to the following conditions: 
1826         1. The retiree retirees may not be reemployed with an 
1827  employer participating in the Florida Retirement System until 
1828  such person has been retired for 6 calendar months. 
1829         2. A retiree employed in violation of this subsection and 
1830  an employer that employs or appoints such person are jointly and 
1831  severally liable for reimbursement of any benefits paid to the 
1832  retirement trust fund from which the benefits were paid, 
1833  including the Retirement System Trust Fund and the Public 
1834  Employee Optional Retirement Investment Program Trust Fund, as 
1835  appropriate. The employer must have a written statement from the 
1836  retiree that he or she is not retired from a state-administered 
1837  retirement system. 
1838         Section 11. Paragraphs (g) and (i) of subsection (3) of 
1839  section 121.35, Florida Statutes, are amended to read: 
1840         121.35 Optional retirement program for the State University 
1841  System.— 
1842         (3) ELECTION OF OPTIONAL PROGRAM.— 
1843         (g) An eligible employee who is a member of the Florida 
1844  Retirement System at the time of election to participate in the 
1845  optional retirement program shall retain all retirement service 
1846  credit earned under the Florida Retirement System, at the rate 
1847  earned. No Additional service credit in the Florida Retirement 
1848  System may not shall be earned while the employee participates 
1849  in the optional program, and nor shall the employee is not be 
1850  eligible for disability retirement under the Florida Retirement 
1851  System. An eligible employee may transfer from the Florida 
1852  Retirement System to his or her accounts under the State 
1853  University System Optional Retirement Program a sum representing 
1854  the present value of the employee’s accumulated benefit 
1855  obligation under the defined benefit program of the Florida 
1856  Retirement System for any service credit accrued from the 
1857  employee’s first eligible transfer date to the optional 
1858  retirement program through the actual date of such transfer, if 
1859  such service credit was earned in the period from July 1, 1984, 
1860  through December 31, 1992. The present value of the employee’s 
1861  accumulated benefit obligation shall be calculated as described 
1862  in s. 121.4501(3) s. 121.4501(3)(c)2. Upon such transfer, all 
1863  such service credit previously earned under the defined benefit 
1864  program of the Florida Retirement System during this period is 
1865  shall be nullified for purposes of entitlement to a future 
1866  benefit under the defined benefit program of the Florida 
1867  Retirement System. 
1868         (i) Effective January 1, 2008, through December 31, 2008, 
1869  except for an employee who is a mandatory participant of the 
1870  State University System Optional Retirement Program, an employee 
1871  who has elected to participate in the State University System 
1872  Optional Retirement Program shall have one opportunity, at the 
1873  employee’s discretion, to choose to transfer from this program 
1874  to the defined benefit program of the Florida Retirement System 
1875  or to the Public Employee Optional Retirement Program, subject 
1876  to the terms of the applicable contracts of the State University 
1877  System Optional Retirement Program. 
1878         1. If the employee chooses to move to the defined 
1879  contribution Public Employee Optional Retirement program, any 
1880  contributions, interest, and earnings creditable to the employee 
1881  under the State University System Optional Retirement Program 
1882  must shall be retained by the employee in the State University 
1883  System Optional Retirement Program, and the applicable 
1884  provisions of s. 121.4501(4) shall govern the election. 
1885         2. If the employee chooses to move to the defined benefit 
1886  program of the Florida Retirement System, the employee shall 
1887  receive service credit equal to his or her years of service 
1888  under the State University System Optional Retirement Program. 
1889         a. The cost for such credit must be in shall be an amount 
1890  representing the actuarial accrued liability for the affected 
1891  period of service. The cost must shall be calculated using the 
1892  discount rate and other relevant actuarial assumptions that were 
1893  used to value the Florida Retirement System defined benefit plan 
1894  liabilities in the most recent actuarial valuation. The 
1895  calculation must shall include any service already maintained 
1896  under the defined benefit program plan in addition to the years 
1897  under the State University System Optional Retirement Program. 
1898  The actuarial accrued liability of any service already 
1899  maintained under the defined benefit program must plan shall be 
1900  applied as a credit to total cost resulting from the 
1901  calculation. The division shall ensure that the transfer sum is 
1902  prepared using a formula and methodology certified by an 
1903  enrolled actuary. 
1904         b. The employee must transfer from his or her State 
1905  University System Optional Retirement Program account, and from 
1906  other employee moneys as necessary, a sum representing the 
1907  actuarial accrued liability immediately following the time of 
1908  such movement, determined assuming that attained service equals 
1909  the sum of service in the defined benefit program and service in 
1910  the State University System Optional Retirement Program. 
1911         Section 12. Subsection (1) of section 121.4503, Florida 
1912  Statutes, is amended to read: 
1913         121.4503 Florida Retirement System Contributions Clearing 
1914  Trust Fund.— 
1915         (1) The Florida Retirement System Contributions Clearing 
1916  Trust Fund is created as a clearing fund for disbursing employer 
1917  contributions to the component plans of the Florida Retirement 
1918  System and shall be administered by the Department of Management 
1919  Services. Funds shall be credited to the trust fund as provided 
1920  in this chapter and shall be held in trust for the contributing 
1921  employers until such time as the assets are transferred by the 
1922  department to the Florida Retirement System Trust Fund, the 
1923  Public Employee Optional Retirement Investment Program Trust 
1924  Fund, or other trust funds as authorized by law, to be used for 
1925  the purposes of this chapter. The trust fund is exempt from the 
1926  service charges imposed by s. 215.20. 
1927         Section 13. Section 121.571, Florida Statutes, is amended 
1928  to read: 
1929         121.571 Contributions.—Contributions to the Public Employee 
1930  Optional Retirement Investment Program shall be made as follows: 
1931         (1) NONCONTRIBUTORY PLAN.—Each employer shall make 
1932  accomplish the monthly contributions required under by s. 121.71 
1933  without reducing an by a procedure in which no employee’s gross 
1934  salary shall be reduced. 
1935         (2) CONTRIBUTION RATES GENERALLY.—Contributions to fund the 
1936  retirement and disability benefits provided under this part must 
1937  shall be based on the uniform contribution rates established by 
1938  s. 121.71 and on the membership class or subclass of the 
1939  participant. Such contributions must shall be allocated as 
1940  provided in ss. 121.72 and 121.73. 
1941         (3) CONTRIBUTIONS FOR SOCIAL SECURITY COVERAGE AND FOR 
1942  RETIREE HEALTH INSURANCE SUBSIDY.—Contributions required under 
1943  s. 121.71 are this section shall be in addition to employer and 
1944  member contributions required for social security and the 
1945  Retiree Health Insurance Subsidy Trust Fund as required under 
1946  provided in ss. 112.363, 121.052, 121.055, and 121.071, as 
1947  appropriate. 
1948         Section 14. Section 121.591, Florida Statutes, is amended 
1949  to read: 
1950         121.591 Payment of benefits payable under the Public 
1951  Employee Optional Retirement Program of the Florida Retirement 
1952  System.—Benefits may not be paid under the Public Employee 
1953  Retirement Investment Program this section unless the member has 
1954  terminated employment as provided in s. 121.021(39)(a) or is 
1955  deceased and a proper application has been filed as in the 
1956  manner prescribed by the state board or the department. The 
1957  state board or department, as appropriate, may cancel an 
1958  application for retirement benefits if when the member or 
1959  beneficiary fails to timely provide the information and 
1960  documents required by this chapter and the rules of the state 
1961  board and department. In accordance with their respective 
1962  responsibilities as provided herein, the state board of 
1963  Administration and the department of Management Services shall 
1964  adopt rules establishing procedures for application for 
1965  retirement benefits and for the cancellation of such application 
1966  if when the required information or documents are not received. 
1967  The state board of Administration and the department of 
1968  Management Services, as appropriate, are authorized to cash out 
1969  a de minimis account of not more than $5,000 of a participant 
1970  who has been terminated from Florida Retirement System covered 
1971  employment for a minimum of 6 calendar months. A de minimis 
1972  account is an account containing employer contributions and 
1973  accumulated earnings of not more than $5,000 made under the 
1974  provisions of this chapter. Such cash-out must either be a 
1975  complete lump-sum liquidation of the account balance, subject to 
1976  the provisions of the Internal Revenue Code, or a lump-sum 
1977  direct rollover distribution paid directly to the custodian of 
1978  an eligible retirement plan, as defined by the Internal Revenue 
1979  Code, on behalf of the participant. If any financial instrument 
1980  issued for the payment of retirement benefits under this section 
1981  is not presented for payment within 180 days after the last day 
1982  of the month in which it was originally issued, the third-party 
1983  administrator or other duly authorized agent of the state board 
1984  of Administration shall cancel the instrument and credit the 
1985  amount of the instrument to the suspense account of the Public 
1986  Employee Optional Retirement Investment Program Trust Fund 
1987  authorized under s. 121.4501(6). Any such amounts transferred to 
1988  the suspense account are payable upon a proper application, not 
1989  to include earnings thereon, as provided in this section, within 
1990  10 years after the last day of the month in which the instrument 
1991  was originally issued, after which time such amounts and any 
1992  earnings are thereon shall be forfeited. Any such forfeited 
1993  amounts are assets of the Public Employee Optional Retirement 
1994  Program trust fund and are not subject to the provisions of 
1995  chapter 717. 
1996         (1) NORMAL BENEFITS.—Under the Public Employee Optional 
1997  Retirement Investment Program: 
1998         (a) Benefits in the form of vested accumulations as 
1999  described in s. 121.4501(6) are payable under this subsection in 
2000  accordance with the following terms and conditions: 
2001         1. To the extent vested, Benefits are payable only to a 
2002  participant. 
2003         2. Benefits shall be paid by the third-party administrator 
2004  or designated approved providers in accordance with the law, the 
2005  contracts, and any applicable board rule or policy. 
2006         3. To receive benefits, The participant must be terminated 
2007  from all employment with all Florida Retirement System 
2008  employers, as provided in s. 121.021(39). 
2009         4. Benefit payments may not be made until the participant 
2010  has been terminated for 3 calendar months, except that the state 
2011  board may authorize by rule for the distribution of up to 10 
2012  percent of the participant’s account after being terminated for 
2013  1 calendar month if the participant has reached the normal 
2014  retirement date as defined in s. 121.021 of the defined benefit 
2015  plan. 
2016         5. If a member or former member of the Florida Retirement 
2017  System receives an invalid distribution from the Public Employee 
2018  Optional Retirement Program Trust Fund, such person must repay 
2019  the full amount invalid distribution to the trust fund within 90 
2020  days after receipt of final notification by the state board or 
2021  the third-party administrator that the distribution was invalid. 
2022  If such person fails to repay the full invalid distribution 
2023  within 90 days after receipt of final notification, the person 
2024  may be deemed retired from the investment optional retirement 
2025  program by the state board, as provided pursuant to s. 
2026  121.4501(2)(j), and is subject to s. 121.122. If such person is 
2027  deemed retired by the state board, any joint and several 
2028  liability set out in s. 121.091(9)(d)2. is becomes null and 
2029  void, and the state board, the department, or the employing 
2030  agency is not liable for gains on payroll contributions that 
2031  have not been deposited to the person’s account in the 
2032  investment retirement program, pending resolution of the invalid 
2033  distribution. The member or former member who has been deemed 
2034  retired or who has been determined by the state board to have 
2035  taken an invalid distribution may appeal the agency decision 
2036  through the complaint process as provided under s. 
2037  121.4501(9)(g)3. As used in this subparagraph, the term “invalid 
2038  distribution” means any distribution from an account in the 
2039  investment optional retirement program which is taken in 
2040  violation of this section, s. 121.091(9), or s. 121.4501. 
2041         (b) If a participant elects to receive his or her benefits 
2042  upon termination of employment as defined in s. 121.021, the 
2043  participant must submit a written application or an equivalent 
2044  form to the third-party administrator indicating his or her 
2045  preferred distribution date and selecting an authorized method 
2046  of distribution as provided in paragraph (c). The participant 
2047  may defer receipt of benefits until he or she chooses to make 
2048  such application, subject to federal requirements. 
2049         (c) Upon receipt by the third-party administrator of a 
2050  properly executed application for distribution of benefits, the 
2051  total accumulated benefit is shall be payable to the 
2052  participant, as: 
2053         1. A lump-sum distribution to the participant; 
2054         2. A lump-sum direct rollover distribution whereby all 
2055  accrued benefits, plus interest and investment earnings, are 
2056  paid from the participant’s account directly to the custodian of 
2057  an eligible retirement plan, as defined in s. 402(c)(8)(B) of 
2058  the Internal Revenue Code, on behalf of the participant; or 
2059         3. Periodic distributions, as authorized by the state 
2060  board. 
2061         (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under 
2062  this subsection are payable in lieu of the benefits that which 
2063  would otherwise be payable under the provisions of subsection 
2064  (1). Such benefits must shall be funded entirely from employer 
2065  contributions made under s. 121.571, transferred participant 
2066  funds accumulated pursuant to paragraph (a), and interest and 
2067  earnings thereon. Pursuant thereto: 
2068         (a) Transfer of funds.— To qualify for to receive monthly 
2069  disability benefits under this subsection: 
2070         1. All moneys accumulated in the participant’s Public 
2071  Employee Optional Retirement Program accounts, including vested 
2072  and nonvested accumulations as described in s. 121.4501(6), must 
2073  shall be transferred from such individual accounts to the 
2074  division of Retirement for deposit in the disability account of 
2075  the Florida Retirement System Trust Fund. Such moneys must shall 
2076  be separately accounted for separately. Earnings must shall be 
2077  credited on an annual basis for amounts held in the disability 
2078  accounts of the Florida Retirement System Trust Fund based on 
2079  actual earnings of the Florida Retirement System trust fund. 
2080         2. If the participant has retained retirement credit he or 
2081  she had earned under the defined benefit program of the Florida 
2082  Retirement System as provided in s. 121.4501(3) s. 
2083  121.4501(3)(b), a sum representing the actuarial present value 
2084  of such credit within the Florida Retirement System Trust Fund 
2085  shall be reassigned by the division of Retirement from the 
2086  defined benefit program to the disability program as implemented 
2087  under this subsection and shall be deposited in the disability 
2088  account of the Florida Retirement System trust fund. Such moneys 
2089  must shall be separately accounted for separately. 
2090         (b) Disability retirement; entitlement.— 
2091         1. A participant of the investment Public Employee Optional 
2092  Retirement program who becomes totally and permanently disabled, 
2093  as defined in paragraph (d) s. 121.091(4)(b), after completing 8 
2094  years of creditable service, or a participant who becomes 
2095  totally and permanently disabled in the line of duty regardless 
2096  of his or her length of service, is shall be entitled to a 
2097  monthly disability benefit as provided herein. 
2098         2. In order for service to apply toward the 8 years of 
2099  creditable service required to vest for regular disability 
2100  benefits, or toward the creditable service used in calculating a 
2101  service-based benefit as provided for under paragraph (g), the 
2102  service must be creditable service as described below: 
2103         a. The participant’s period of service under the investment 
2104  Public Employee Optional Retirement program shall will be 
2105  considered creditable service, except as provided in 
2106  subparagraph d. 
2107         b. If the participant has elected to retain credit for his 
2108  or her service under the defined benefit program of the Florida 
2109  Retirement System as provided under s. 121.4501(3) s. 
2110  121.4501(3)(b), all such service shall will be considered 
2111  creditable service. 
2112         c. If the participant elects has elected to transfer to his 
2113  or her participant accounts a sum representing the present value 
2114  of his or her retirement credit under the defined benefit 
2115  program as provided under s. 121.4501(3) s. 121.4501(3)(c), the 
2116  period of service under the defined benefit program represented 
2117  in the present value amounts transferred shall will be 
2118  considered creditable service for purposes of vesting for 
2119  disability benefits, except as provided in subparagraph d. 
2120         d. Whenever a participant has terminated employment and has 
2121  taken distribution of his or her funds as provided in subsection 
2122  (1), all creditable service represented by such distributed 
2123  funds is forfeited for purposes of this subsection. 
2124         (c) Disability retirement effective date.—The effective 
2125  retirement date for a participant who applies and is approved 
2126  for disability retirement shall be established as provided under 
2127  s. 121.091(4)(a)2. and 3. 
2128         (d) Total and permanent disability.—A participant shall be 
2129  considered totally and permanently disabled if, in the opinion 
2130  of the division, he or she is prevented, by reason of a 
2131  medically determinable physical or mental impairment, from 
2132  rendering useful and efficient service as an officer or 
2133  employee. 
2134         (e) Proof of disability.—The division, Before approving 
2135  payment of any disability retirement benefit, the division shall 
2136  require proof that the participant is totally and permanently 
2137  disabled in the same manner as provided for members of the 
2138  defined benefit program of the Florida Retirement System under 
2139  s. 121.091(4)(c). 
2140         (f) Disability retirement benefit.—Upon the disability 
2141  retirement of a participant under this subsection, the 
2142  participant shall receive a monthly benefit that begins accruing 
2143  shall begin to accrue on the first day of the month of 
2144  disability retirement, as approved by the division, and is shall 
2145  be payable on the last day of that month and each month 
2146  thereafter during his or her lifetime and continued disability. 
2147  All disability benefits must payable to such member shall be 
2148  paid out of the disability account of the Florida Retirement 
2149  System Trust Fund established under this subsection. 
2150         (g) Computation of disability retirement benefit.—The 
2151  amount of each monthly payment must shall be calculated in the 
2152  same manner as provided for members of the defined benefit 
2153  program of the Florida Retirement System under s. 121.091(4)(f). 
2154  For such purpose, Creditable service under both the defined 
2155  benefit program and the investment Public Employee Optional 
2156  Retirement program of the Florida Retirement System shall be 
2157  applicable as provided under paragraph (b). 
2158         (h) Reapplication.—A participant whose initial application 
2159  for disability retirement is has been denied may reapply for 
2160  disability benefits in the same manner, and under the same 
2161  conditions, as provided for members of the defined benefit 
2162  program of the Florida Retirement System under s. 121.091(4)(g). 
2163         (i) Membership.—Upon approval of a participant’s an 
2164  application for disability benefits under this subsection, the 
2165  applicant shall be transferred to the defined benefit program of 
2166  the Florida Retirement System, effective upon his or her 
2167  disability retirement effective date. 
2168         (j) Option to cancel.—A Any participant whose application 
2169  for disability benefits is approved may cancel the his or her 
2170  application if for disability benefits, provided that the 
2171  cancellation request is received by the division before a 
2172  disability retirement warrant has been deposited, cashed, or 
2173  received by direct deposit. Upon such cancellation: 
2174         1. The participant’s transfer to the defined benefit 
2175  program under paragraph (i) shall be nullified; 
2176         2. The participant shall be retroactively reinstated in the 
2177  investment Public Employee Optional Retirement program without 
2178  hiatus; 
2179         3. All funds transferred to the Florida Retirement System 
2180  Trust Fund under paragraph (a) must shall be returned to the 
2181  participant accounts from which the such funds were drawn; and 
2182         4. The participant may elect to receive the benefit payable 
2183  under the provisions of subsection (1) in lieu of disability 
2184  benefits as provided under this subsection. 
2185         (k) Recovery from disability.— 
2186         1. The division may require periodic reexaminations at the 
2187  expense of the disability program account of the Florida 
2188  Retirement System Trust Fund. Except as otherwise provided in 
2189  subparagraph 2., the requirements, procedures, and restrictions 
2190  relating to the conduct and review of such reexaminations, 
2191  discontinuation or termination of benefits, reentry into 
2192  employment, disability retirement after reentry into covered 
2193  employment, and all other matters relating to recovery from 
2194  disability shall be the same as provided are set forth under s. 
2195  121.091(4)(h). 
2196         2. Upon recovery from disability, the any recipient of 
2197  disability retirement benefits under this subsection shall be 
2198  transferred back to the investment program a compulsory member 
2199  of the Public Employee Optional Retirement Program of the 
2200  Florida Retirement System. The net difference between the 
2201  recipient’s original account balance transferred to the Florida 
2202  Retirement System Trust Fund, including earnings, under 
2203  paragraph (a) and total disability benefits paid to such 
2204  recipient, if any, shall be determined as provided in sub 
2205  subparagraph a. 
2206         a. An amount equal to the total benefits paid shall be 
2207  subtracted from that portion of the transferred account balance 
2208  consisting of vested accumulations as described under s. 
2209  121.4501(6), if any, and an amount equal to the remainder of 
2210  benefit amounts paid, if any, shall then be subtracted from any 
2211  remaining portion consisting of nonvested accumulations as 
2212  described under s. 121.4501(6). 
2213         b. Amounts subtracted under sub-subparagraph a. must shall 
2214  be retained within the disability account of the Florida 
2215  Retirement System Trust Fund. Any remaining account balance 
2216  shall be transferred to the third-party administrator for 
2217  disposition as provided under sub-subparagraph c. or sub 
2218  subparagraph d., as appropriate. 
2219         c. If the recipient returns to covered employment, 
2220  transferred amounts must shall be deposited in individual 
2221  accounts under the investment Public Employee Optional 
2222  Retirement program, as directed by the participant. Vested and 
2223  nonvested amounts shall be separately accounted for as provided 
2224  in s. 121.4501(6). 
2225         d. If the recipient fails to return to covered employment 
2226  upon recovery from disability: 
2227         (I) Any remaining vested amount must shall be deposited in 
2228  individual accounts under the investment Public Employee 
2229  Optional Retirement program, as directed by the participant, and 
2230  is shall be payable as provided in subsection (1). 
2231         (II) Any remaining nonvested amount must shall be held in a 
2232  suspense account and is shall be forfeitable after 5 years as 
2233  provided in s. 121.4501(6). 
2234         3. If present value was reassigned from the defined benefit 
2235  program to the disability program of the Florida Retirement 
2236  System as provided under subparagraph (a)2., the full present 
2237  value amount must shall be returned to the defined benefit 
2238  account within the Florida Retirement System Trust Fund and the 
2239  recipient’s affected individual’s associated retirement credit 
2240  under the defined benefit program must shall be reinstated in 
2241  full. Any benefit based upon such credit must shall be 
2242  calculated as provided in s. 121.091(4)(h)1. 
2243         (l) Nonadmissible causes of disability.—A participant is 
2244  shall not be entitled to receive a disability retirement benefit 
2245  if the disability results from any injury or disease sustained 
2246  or inflicted as described in s. 121.091(4)(i). 
2247         (m) Disability retirement of justice or judge by order of 
2248  Supreme Court.— 
2249         1. If a participant is a justice of the Supreme Court, 
2250  judge of a district court of appeal, circuit judge, or judge of 
2251  a county court who has served for 6 years or more as an elected 
2252  constitutional judicial officer, including service as a judicial 
2253  officer in any court abolished pursuant to Art. V of the State 
2254  Constitution, and who is retired for disability by order of the 
2255  Supreme Court upon recommendation of the Judicial Qualifications 
2256  Commission pursuant to s. 12, the provisions of Art. V of the 
2257  State Constitution, the participant’s Option 1 monthly 
2258  disability benefit amount as provided in s. 121.091(6)(a)1. 
2259  shall be two-thirds of his or her monthly compensation as of the 
2260  participant’s disability retirement date. The Such a participant 
2261  may alternatively elect to receive an actuarially adjusted 
2262  disability retirement benefit under any other option as provided 
2263  in s. 121.091(6)(a), or to receive the normal benefit payable 
2264  under the Public Employee Optional Retirement Program as set 
2265  forth in subsection (1). 
2266         2. If any justice or judge who is a participant of the 
2267  investment Public Employee Optional Retirement program of the 
2268  Florida Retirement System is retired for disability by order of 
2269  the Supreme Court upon recommendation of the Judicial 
2270  Qualifications Commission pursuant to s. 12, the provisions of 
2271  Art. V of the State Constitution and elects to receive a monthly 
2272  disability benefit under the provisions of this paragraph: 
2273         a. Any present value amount that was transferred to his or 
2274  her program account and all employer contributions made to such 
2275  account on his or her behalf, plus interest and earnings 
2276  thereon, must shall be transferred to and deposited in the 
2277  disability account of the Florida Retirement System Trust Fund; 
2278  and 
2279         b. The monthly disability benefits payable under this 
2280  paragraph for any affected justice or judge retired from the 
2281  Florida Retirement System pursuant to Art. V of the State 
2282  Constitution shall be paid from the disability account of the 
2283  Florida Retirement System Trust Fund. 
2284         (n) Death of retiree or beneficiary.—Upon the death of a 
2285  disabled retiree or beneficiary of the retiree thereof who is 
2286  receiving monthly disability benefits under this subsection, the 
2287  monthly benefits shall be paid through the last day of the month 
2288  of death and shall terminate, or be adjusted, if applicable, as 
2289  of that date in accordance with the optional form of benefit 
2290  selected at the time of retirement. The department of Management 
2291  Services may adopt rules necessary to administer this paragraph. 
2292         (3) DEATH BENEFITS.—Under the Public Employee Optional 
2293  Retirement Investment Program: 
2294         (a) Survivor benefits are shall be payable in accordance 
2295  with the following terms and conditions: 
2296         1. To the extent vested, benefits are shall be payable only 
2297  to a participant’s beneficiary or beneficiaries as designated by 
2298  the participant as provided in s. 121.4501(20). 
2299         2. Benefits must shall be paid by the third-party 
2300  administrator or designated approved providers in accordance 
2301  with the law, the contracts, and any applicable state board rule 
2302  or policy. 
2303         3. To receive benefits under this subsection, the 
2304  participant must be deceased. 
2305         (b) In the event of a participant’s death, all vested 
2306  accumulations as described in s. 121.4501(6), less withholding 
2307  taxes remitted to the Internal Revenue Service, shall be 
2308  distributed, as provided in paragraph (c) or as described in s. 
2309  121.4501(20), as if the participant retired on the date of 
2310  death. No other death benefits are shall be available for 
2311  survivors of participants under the Public Employee Optional 
2312  Retirement Program, except for such benefits, or coverage for 
2313  such benefits, as are otherwise provided by law or are 
2314  separately provided afforded by the employer, at the employer’s 
2315  discretion. 
2316         (c) Upon receipt by the third-party administrator of a 
2317  properly executed application for distribution of benefits, the 
2318  total accumulated benefit is shall be payable by the third-party 
2319  administrator to the participant’s surviving beneficiary or 
2320  beneficiaries, as: 
2321         1. A lump-sum distribution payable to the beneficiary or 
2322  beneficiaries, or to the deceased participant’s estate; 
2323         2. An eligible rollover distribution on behalf of the 
2324  surviving spouse of a deceased participant, whereby all accrued 
2325  benefits, plus interest and investment earnings, are paid from 
2326  the deceased participant’s account directly to the custodian of 
2327  an eligible retirement plan, as described in s. 402(c)(8)(B) of 
2328  the Internal Revenue Code, on behalf of the surviving spouse; or 
2329         3. A partial lump-sum payment whereby a portion of the 
2330  accrued benefit is paid to the deceased participant’s surviving 
2331  spouse or other designated beneficiaries, less withholding taxes 
2332  remitted to the Internal Revenue Service, and the remaining 
2333  amount is transferred directly to the custodian of an eligible 
2334  retirement plan, as described in s. 402(c)(8)(B) of the Internal 
2335  Revenue Code, on behalf of the surviving spouse. The proportions 
2336  must be specified by the participant or the surviving 
2337  beneficiary. 
2338 
2339  This paragraph does not abrogate other applicable provisions of 
2340  state or federal law providing for payment of death benefits. 
2341         (4) LIMITATION ON LEGAL PROCESS.—The benefits payable to 
2342  any person under the Public Employee Optional Retirement 
2343  Investment Program, and any contributions accumulated under such 
2344  program, are not subject to assignment, execution, attachment, 
2345  or any legal process, except for qualified domestic relations 
2346  orders by a court of competent jurisdiction, income deduction 
2347  orders as provided in s. 61.1301, and federal income tax levies. 
2348         Section 15. Section 121.5911, Florida Statutes, is amended 
2349  to read: 
2350         121.5911 Disability retirement program; qualified status; 
2351  rulemaking authority.—It is the intent of the Legislature that 
2352  the disability retirement program for participants of the Public 
2353  Employee Optional Retirement Investment Program as created in 
2354  this act must meet all applicable requirements of federal law 
2355  for a qualified plan. The department of Management Services 
2356  shall seek a private letter ruling from the Internal Revenue 
2357  Service on the disability retirement program for participants of 
2358  the Public Employee Optional Retirement Program. Consistent with 
2359  the private letter ruling, the department of Management Services 
2360  shall adopt any necessary rules necessary required to maintain 
2361  the qualified status of the disability retirement program and 
2362  the Florida Retirement System defined benefit program plan. 
2363         Section 16. Section 121.70, Florida Statutes, is amended to 
2364  read: 
2365         121.70 Legislative purpose and intent.— 
2366         (1) This part provides for a uniform system for funding 
2367  benefits provided under the Florida Retirement System defined 
2368  benefit program established under part I of this chapter 
2369  (referred to in this part as the defined benefit program) and 
2370  under the Public Employee Optional Retirement Investment Program 
2371  established under part II of this chapter (referred to in this 
2372  part as the defined contribution optional retirement program). 
2373  The Legislature recognizes and declares that the Florida 
2374  Retirement System is a single retirement system, consisting of 
2375  two retirement plans and other nonintegrated programs. Employers 
2376  participating in the Florida Retirement System collectively 
2377  shall be responsible for making contributions to support the 
2378  benefits provided afforded under both programs plans. The As 
2379  provided in this part, employers participating in the Florida 
2380  Retirement System shall make contributions based upon uniform 
2381  contribution rates determined as a percentage of the total 
2382  payroll for each class or subclass of Florida Retirement System 
2383  membership, irrespective of which retirement program the plan 
2384  individual employee is enrolled in employees may elect. This 
2385  shall be known as a uniform or blended contribution rate system. 
2386         (2) In establishing a uniform contribution rate system, it 
2387  is the intent of the Legislature to: 
2388         (a) Provide greater stability and certainty in financial 
2389  planning and budgeting for Florida Retirement System employers 
2390  by eliminating the fiscal instability that would be caused by 
2391  dual rates coupled with employee-selected plan participation; 
2392  and 
2393         (b) Provide greater fiscal equity and uniformity for system 
2394  employers by effectively distributing the financial burden and 
2395  benefit of short-term system deficits and surpluses, 
2396  respectively, in proportion to total system payroll.; and 
2397         (c) Allow employees to make their retirement plan selection 
2398  decisions free of circumstances that may cause employers to 
2399  favor one plan choice over another. 
2400         Section 17. Subsection (1) of section 121.71, Florida 
2401  Statutes, is amended to read: 
2402         121.71 Uniform rates; process; calculations; levy.— 
2403         (1) In conducting the system actuarial study required under 
2404  s. 121.031, the actuary shall follow all requirements specified 
2405  thereunder to determine, by Florida Retirement System employee 
2406  membership class, the dollar contribution amounts necessary for 
2407  the next forthcoming fiscal year for the defined benefit 
2408  program. In addition, the actuary shall determine, by Florida 
2409  Retirement System membership class, based on an estimate for the 
2410  forthcoming fiscal year of the gross compensation of employees 
2411  participating in the defined contribution optional retirement 
2412  program, the dollar contribution amounts necessary to make the 
2413  allocations required under ss. 121.72 and 121.73. For each 
2414  employee membership class and subclass, the actuarial study must 
2415  shall establish a uniform rate necessary to fund the benefit 
2416  obligations under both Florida Retirement System retirement 
2417  plans by dividing the sum of total dollars required by the 
2418  estimated gross compensation of members in both plans. 
2419         Section 18. Section 121.72, Florida Statutes, is amended to 
2420  read: 
2421         121.72 Allocations to defined contribution optional 
2422  retirement program participant accounts; percentage amounts.— 
2423         (1) The allocations established in subsection (4) shall 
2424  fund retirement benefits under the defined contribution optional 
2425  retirement program and shall be transferred monthly by the 
2426  Division of Retirement from the Florida Retirement System 
2427  Contributions Clearing Trust Fund to the third-party 
2428  administrator for deposit in each participating employee’s 
2429  individual account based on the membership class of the 
2430  participant. 
2431         (2) The allocations are stated as a percentage of each 
2432  defined contribution optional retirement program participant’s 
2433  gross compensation for the calendar month. A change in a 
2434  contribution percentage is effective the first day of the month 
2435  for which a full month’s employer contribution may be made on or 
2436  after the beginning date of the change. Contribution percentages 
2437  may be modified by general law. 
2438         (3) Employer and participant contributions to participant 
2439  accounts shall be accounted for separately. Participant 
2440  contributions may be made only if expressly authorized by law. 
2441  Interest and investment earnings on contributions shall accrue 
2442  on a tax-deferred basis until proceeds are distributed. 
2443         (4) Effective July 1, 2002, allocations from the Florida 
2444  Retirement System Contributions Clearing Trust Fund to defined 
2445  contribution optional retirement program participant accounts 
2446  shall be as follows: 
2447  Membership Class                      Percentage of Gross Compensation 
2448  Regular Class                                     9.00% 
2449  Special Risk Class                                20.00% 
2450  Special Risk Administrative Support Class            11.35% 
2451  Elected Officers’ Class -� � Legislators, Governor,� � Lt. Governor, Cabinet Officers,� � State Attorneys, Public Defenders            13.40% 
2452  Elected Officers’ Class -� � Justices, Judges            18.90% 
2453  Elected Officers’ Class -� � County Elected Officers            16.20% 
2454  Senior Management Service Class                   10.95% 
2455         Section 19. Section 121.73, Florida Statutes, is amended to 
2456  read: 
2457         121.73 Allocations for optional retirement program 
2458  participant disability coverage; percentage amounts.— 
2459         (1) The allocations established in subsection (3) shall be 
2460  used to provide disability coverage for participants in the 
2461  defined contribution optional retirement program and shall be 
2462  transferred monthly by the Division of Retirement from the 
2463  Florida Retirement System Contributions Clearing Trust Fund to 
2464  the disability account of the Florida Retirement System Trust 
2465  Fund. 
2466         (2) The allocations are stated as a percentage of each 
2467  defined contribution optional retirement program participant’s 
2468  gross compensation for the calendar month. A change in a 
2469  contribution percentage is effective the first day of the month 
2470  for which a full month’s employer contribution may be made on or 
2471  after the beginning date of the change. Contribution percentages 
2472  may be modified by general law. 
2473         (3) Effective July 1, 2002, allocations from the Florida 
2474  Retirement System FRS Contribution Clearing Fund to provide 
2475  disability coverage for participants in the defined contribution 
2476  optional retirement program, and to offset the costs of 
2477  administering said coverage, shall be as follows: 
2478  Membership Class                      Percentage of Gross Compensation 
2479  Regular Class                                     0.25% 
2480  Special Risk Class                                1.33% 
2481  Special Risk Administrative Support Class            0.45% 
2482  Elected Officers’ Class -� � Legislators, Governor,� � Lt. Governor, Cabinet Officers,� � State Attorneys, Public Defenders            0.41% 
2483  Elected Officers’ Class -� � Justices, Judges            0.73% 
2484  Elected Officers’ Class -� � County Elected Officers            0.41% 
2485  Senior Management Service Class                   0.26% 
2486         Section 20. Section 121.74, Florida Statutes, is amended to 
2487  read: 
2488         121.74 Administrative and educational expenses.—In addition 
2489  to contributions required under s. 121.71, employers 
2490  participating in the Florida Retirement System shall contribute 
2491  an amount equal to 0.05 percent of the payroll reported for each 
2492  class or subclass of Florida Retirement System membership, which 
2493  amount shall be transferred by the Division of Retirement from 
2494  the Florida Retirement System Contributions Clearing Trust Fund 
2495  to the State Board of Administration’s Administrative Trust Fund 
2496  to offset the costs of administering the defined contribution 
2497  optional retirement program and the costs of providing 
2498  educational services to participants in the defined benefit 
2499  program and the defined contribution optional retirement 
2500  program. Approval of the Trustees of the State Board of 
2501  Administration is required prior to the expenditure of these 
2502  funds. Payments for third-party administrative or educational 
2503  expenses shall be made only pursuant to the terms of the 
2504  approved contracts for such services. 
2505         Section 21. Section 121.77, Florida Statutes, is amended to 
2506  read: 
2507         121.77 Deductions from participant accounts.— The State 
2508  Board of Administration may authorize the third-party 
2509  administrator to deduct reasonable fees and apply appropriate 
2510  charges to defined contribution optional retirement program 
2511  participant accounts. In no event may shall administrative and 
2512  educational expenses exceed the portion of employer 
2513  contributions earmarked for such expenses under this part, 
2514  except for reasonable administrative charges assessed against 
2515  participant accounts of persons for whom no employer 
2516  contributions are made during the calendar quarter. Investment 
2517  management fees shall be deducted from participant accounts, 
2518  pursuant to the terms of the contract between the provider and 
2519  the board. 
2520         Section 22. Subsection (3) of section 121.78, Florida 
2521  Statutes, is amended to read: 
2522         121.78 Payment and distribution of contributions.— 
2523         (3)(a) Employer contributions and accompanying payroll data 
2524  received after the 5th working day of the month shall be 
2525  considered late. The employer shall be assessed by the Division 
2526  of Retirement a penalty of 1 percent of the contributions due 
2527  for each calendar month or part thereof that the contributions 
2528  or accompanying payroll data are late. Proceeds from the 1 
2529  percent assessment against contributions made on behalf of 
2530  participants of the defined benefit program must shall be 
2531  deposited in the Florida Retirement System Trust Fund, and 
2532  proceeds from the 1-percent assessment against contributions 
2533  made on behalf of participants of the defined contribution 
2534  optional retirement program shall be transferred to the third 
2535  party administrator for deposit into participant accounts, as 
2536  provided in paragraph (b). 
2537         (b) If contributions made by an employer on behalf of 
2538  participants of the defined contribution optional retirement 
2539  program or accompanying payroll data are not received within the 
2540  calendar month they are due, including, but not limited to, 
2541  contribution adjustments as a result of employer errors or 
2542  corrections, and if that delinquency results in market losses to 
2543  participants, the employer shall reimburse each participant’s 
2544  account for market losses resulting from the late contributions. 
2545  If a participant has terminated employment and taken a 
2546  distribution, the participant is responsible for returning any 
2547  excess contributions erroneously provided by employers, adjusted 
2548  for any investment gain or loss incurred during the period such 
2549  excess contributions were in the participant’s Public Employee 
2550  Optional Retirement Program account. The State Board of 
2551  Administration or its designated agent shall communicate to 
2552  terminated participants any obligation to repay such excess 
2553  contribution amounts. However, the State Board of 
2554  Administration, its designated agents, the Public Employee 
2555  Optional Retirement Investment Program Trust Fund, the 
2556  Department of Management Services, or the Florida Retirement 
2557  System Trust Fund may shall not incur any loss or gain as a 
2558  result of an employer’s correction of such excess contributions. 
2559  The third-party administrator, hired by the state board pursuant 
2560  to s. 121.4501(8), shall calculate the market losses for each 
2561  affected participant. If When contributions made on behalf of 
2562  participants of the defined contribution optional retirement 
2563  program or accompanying payroll data are not received within the 
2564  calendar month due, the employer shall also pay the cost of the 
2565  third-party administrator’s calculation and reconciliation 
2566  adjustments resulting from the late contributions. The third 
2567  party administrator shall notify the employer of the results of 
2568  the calculations and the total amount due from the employer for 
2569  such losses and the costs of calculation and reconciliation. The 
2570  employer shall remit to the division the amount due within 10 
2571  working days after the date of the penalty notice sent by the 
2572  division. The Division of Retirement shall transfer said amount 
2573  to the third-party administrator, which who shall deposit 
2574  proceeds from the 1-percent assessment and from individual 
2575  market losses into participant accounts, as appropriate. The 
2576  state board may is authorized to adopt rules to administer 
2577  implement the provisions regarding late contributions, late 
2578  submission of payroll data, the process for reimbursing 
2579  participant accounts for resultant market losses, and the 
2580  penalties charged to the employers. 
2581         (c) Delinquency fees may be waived by the Division of 
2582  Retirement, with regard to defined benefit program 
2583  contributions, and by the State Board of Administration, with 
2584  regard to defined contribution optional retirement program 
2585  contributions, only if when, in the opinion of the division or 
2586  the board, as appropriate, exceptional circumstances beyond the 
2587  employer’s control prevented remittance by the prescribed due 
2588  date, notwithstanding the employer’s good faith efforts to 
2589  effect delivery. Such a waiver of delinquency may be granted an 
2590  employer only one time each state fiscal year. 
2591         Section 23. The Division of Statutory Revision is requested 
2592  to rename the title of part II of chapter 121, Florida Statutes, 
2593  as “Public Employee Retirement Investment Program.” 
2594         Section 24. This act shall take effect July 1, 2010.