Bill Text: FL S1392 | 2013 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Retirement
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2013-04-30 - Laid on Table [S1392 Detail]
Download: Florida-2013-S1392-Introduced.html
Bill Title: Retirement
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2013-04-30 - Laid on Table [S1392 Detail]
Download: Florida-2013-S1392-Introduced.html
Florida Senate - 2013 SB 1392 By Senator Simpson 18-00985C-13 20131392__ 1 A bill to be entitled 2 An act relating to retirement; amending s. 121.021, 3 F.S.; revising the definition of “vested” or 4 “vesting”; providing that a member initially enrolled 5 in the Florida Retirement System after a certain date 6 is vested in the pension plan after 10 years of 7 creditable service; amending s. 121.051, F.S.; 8 providing for compulsory membership in the Florida 9 Retirement System Investment Plan for employees in the 10 Elected Officers’ Class or the Senior Management 11 Service Class initially enrolled after a specified 12 date; conforming cross-references to changes made by 13 the act; amending s. 121.052, F.S.; prohibiting 14 members of the Elected Officers’ Class from joining 15 the Senior Management Service Class after a specified 16 date; amending s. 121.055, F.S.; prohibiting an 17 elected official eligible for membership in the 18 Elected Officers’ Class from enrolling in the Senior 19 Management Service Class or in the Senior Management 20 Service Optional Annuity Program; closing the Senior 21 Management Optional Annuity Program to new members 22 after a specified date; amending s. 121.091, F.S.; 23 providing that certain members are entitled to a 24 monthly disability benefit; revising provisions to 25 conform to changes made by the act; amending s. 26 121.4501, F.S.; requiring certain employees initially 27 enrolled in the Florida Retirement System on or after 28 a specified date to be compulsory members of the 29 investment plan; revising the definition of “member” 30 or “employee”; revising a provision relating to 31 acknowledgement of an employee’s election to 32 participate in the investment plan; placing certain 33 employees in the pension plan from their date of hire 34 until they are automatically enrolled in the 35 investment plan or timely elect enrollment in the 36 pension plan; authorizing certain employees to elect 37 to participate in the pension plan, rather than the 38 default investment plan, within a specified time; 39 providing for the transfer of certain contributions; 40 revising the education component; deleting the 41 obligation of system employers to communicate the 42 existence of both retirement plans; conforming 43 provisions and cross-references to changes made by the 44 act; amending s. 121.591, F.S.; revising provisions 45 relating to disability retirement benefits; amending 46 s. 121.71, F.S.; decreasing the employee retirement 47 contribution rates for investment plan members; 48 amending ss. 121.35, 238.072, 413.051, and 1012.875, 49 F.S.; conforming cross-references; providing for 50 contribution rate increases to fund the changes made 51 by this act; directing the Division of Law Revision 52 and Information to adjust contribution rates set forth 53 in s. 121.071, F.S.; providing that the act fulfills 54 an important state interest; providing an effective 55 date. 56 57 Be It Enacted by the Legislature of the State of Florida: 58 59 Section 1. Subsection (45) of section 121.021, Florida 60 Statutes, is amended to read: 61 121.021 Definitions.—The following words and phrases as 62 used in this chapter have the respective meanings set forth 63 unless a different meaning is plainly required by the context: 64 (45) “Vested” or “vesting” means the guarantee that a 65 member is eligible to receive a future retirement benefit upon 66 completion of the required years of creditable service for the 67 employee’s class of membership, even though the member may have 68 terminated covered employment before reaching normal or early 69 retirement date. Being vested does not entitle a member to a 70 disability benefit. Provisions governing entitlement to 71 disability benefits are set forth under s. 121.091(4). 72 (a) Effective July 1, 2001, through June 30, 2011, a 6-year 73 vesting requirement shall be implemented for the Florida 74 Retirement System Pension Plan: 75 1. Any member employed in a regularly established position 76 on July 1, 2001, who completes or has completed a total of 6 77 years of creditable service is considered vested. 78 2. Any member initially enrolled in the Florida Retirement 79 System before July 1, 2001, but not employed in a regularly 80 established position on July 1, 2001, shall be deemed vested 81 upon completion of 6 years of creditable service if such member 82 is employed in a covered position for at least 1 work year after 83 July 1, 2001. However, a member is not required to complete more 84 years of creditable service than would have been required for 85 that member to vest under retirement laws in effect before July 86 1, 2001. 87 3. Any member initially enrolled in the Florida Retirement 88 System on July 1, 2001, through June 30, 2011, shall be deemed 89 vested upon completion of 6 years of creditable service. 90 (b) Any member initially enrolled in the Florida Retirement 91 System onor afterJuly 1, 2011, through December 31, 2013, 92 shall be vested in the pension plan upon completion of 8 years 93 of creditable service. 94 (c) Any member initially enrolled in the Florida Retirement 95 System on or after January 1, 2014, shall be vested in the 96 pension plan upon completion of 10 years of creditable service. 97 Section 2. Paragraph (c) of subsection (2) of section 98 121.051, Florida Statutes, is amended, present subsections (3) 99 through (9) of that section are renumbered as subsections (4) 100 through (10), respectively, and a new subsection (3) is added to 101 that section, to read: 102 121.051 Participation in the system.— 103 (2) OPTIONAL PARTICIPATION.— 104 (c) Employees of public community colleges or charter 105 technical career centers sponsored by public community colleges, 106 designated in s. 1000.21(3), who are members of the Regular 107 Class of the Florida Retirement System and who comply with the 108 criteria set forth in this paragraph and s. 1012.875 may, in 109 lieu of participating in the Florida Retirement System, elect to 110 withdraw from the system altogether and participate in the State 111 Community College System Optional Retirement Program provided by 112 the employing agency under s. 1012.875. 113 1.a. Through June 30, 2001, the cost to the employer for 114 benefits under the optional retirement program equals the normal 115 cost portion of the employer retirement contribution which would 116 be required if the employee were a member of the pension plan’s 117 Regular Class, plus the portion of the contribution rate 118 required by s. 112.363(8) which would otherwise be assigned to 119 the Retiree Health Insurance Subsidy Trust Fund. 120 b. Effective July 1, 2001, through June 30, 2011, each 121 employer shall contribute on behalf of each member of the 122 optional program an amount equal to 10.43 percent of the 123 employee’s gross monthly compensation. The employer shall deduct 124 an amount for the administration of the program. 125 c. Effective July 1, 2011, through June 30, 2012, each 126 member shall contribute an amount equal to the employee 127 contribution required under s. 121.71(3)(a). The employer shall 128 contribute on behalf of each program member an amount equal to 129 the difference between 10.43 percent of the employee’s gross 130 monthly compensation and the employee’s required contribution 131 based on the employee’s gross monthly compensation. 132 d. Effective July 1, 2012, each member shall contribute an 133 amount equal to the employee contribution required under s. 134 121.71(3)(a). The employer shall contribute on behalf of each 135 program member an amount equal to the difference between 8.15 136 percent of the employee’s gross monthly compensation and the 137 employee’s required contribution based on the employee’s gross 138 monthly compensation. 139 e. The employer shall contribute an additional amount to 140 the Florida Retirement System Trust Fund equal to the unfunded 141 actuarial accrued liability portion of the Regular Class 142 contribution rate. 143 2. The decision to participate in the optional retirement 144 program is irrevocable as long as the employee holds a position 145 eligible for participation, except as provided in subparagraph 146 3. Any service creditable under the Florida Retirement System is 147 retained after the member withdraws from the system; however, 148 additional service credit in the system may not be earned while 149 a member of the optional retirement program. 150 3. An employee who has elected to participate in the 151 optional retirement program shall have one opportunity, at the 152 employee’s discretion, to transfer from the optional retirement 153 program to the pension plan of the Florida Retirement System or 154 to the investment plan established under part II of this 155 chapter, subject to the terms of the applicable optional 156 retirement program contracts. 157 a. If the employee chooses to move to the investment plan, 158 any contributions, interest, and earnings creditable to the 159 employee under the optional retirement program are retained by 160 the employee in the optional retirement program, and the 161 applicable provisions of s. 121.4501(4) govern the election. 162 b. If the employee chooses to move to the pension plan of 163 the Florida Retirement System, the employee shall receive 164 service credit equal to his or her years of service under the 165 optional retirement program. 166 (I) The cost for such credit is the amount representing the 167 present value of the employee’s accumulated benefit obligation 168 for the affected period of service. The cost shall be calculated 169 as if the benefit commencement occurs on the first date the 170 employee becomes eligible for unreduced benefits, using the 171 discount rate and other relevant actuarial assumptions that were 172 used to value the Florida Retirement System Pension Plan 173 liabilities in the most recent actuarial valuation. The 174 calculation must include any service already maintained under 175 the pension plan in addition to the years under the optional 176 retirement program. The present value of any service already 177 maintained must be applied as a credit to total cost resulting 178 from the calculation. The division must ensure that the transfer 179 sum is prepared using a formula and methodology certified by an 180 enrolled actuary. 181 (II) The employee must transfer from his or her optional 182 retirement program account and from other employee moneys as 183 necessary, a sum representing the present value of the 184 employee’s accumulated benefit obligation immediately following 185 the time of such movement, determined assuming that attained 186 service equals the sum of service in the pension plan and 187 service in the optional retirement program. 188 4. Participation in the optional retirement program is 189 limited to employees who satisfy the following eligibility 190 criteria: 191 a. The employee is otherwise eligible for membership or 192 renewed membership in the Regular Class of the Florida 193 Retirement System, as provided in s. 121.021(11) and (12) or s. 194 121.122. 195 b. The employee is employed in a full-time position 196 classified in the Accounting Manual for Florida’s Public 197 Community Colleges as: 198 (I) Instructional; or 199 (II) Executive Management, Instructional Management, or 200 Institutional Management and the community college determines 201 that recruiting to fill a vacancy in the position is to be 202 conducted in the national or regional market, and the duties and 203 responsibilities of the position include the formulation, 204 interpretation, or implementation of policies, or the 205 performance of functions that are unique or specialized within 206 higher education and that frequently support the mission of the 207 community college. 208 c. The employee is employed in a position not included in 209 the Senior Management Service Class of the Florida Retirement 210 System as described in s. 121.055. 211 5. Members of the program are subject to the same 212 reemployment limitations, renewed membership provisions, and 213 forfeiture provisions applicable to regular members of the 214 Florida Retirement System under ss. 121.091(9), 121.122, and 215 121.091(5), respectively. A member who receives a program 216 distribution funded by employer and required employee 217 contributions is deemed to be retired from a state-administered 218 retirement system if the member is subsequently employed with an 219 employer that participates in the Florida Retirement System. 220 6. Eligible community college employees are compulsory 221 members of the Florida Retirement System until, pursuant to s. 222 1012.875, a written election to withdraw from the system and 223 participate in the optional retirement program is filed with the 224 program administrator and received by the division. 225 a. A community college employee whose program eligibility 226 results from initial employment shall be enrolled in the 227 optional retirement program retroactive to the first day of 228 eligible employment. The employer and employee retirement 229 contributions paid through the month of the employee plan change 230 shall be transferred to the community college to the employee’s 231 optional program account, and, effective the first day of the 232 next month, the employer shall pay the applicable contributions 233 based upon subparagraph 1. 234 b. A community college employee whose program eligibility 235 is due to the subsequent designation of the employee’s position 236 as one of those specified in subparagraph 4., or due to the 237 employee’s appointment, promotion, transfer, or reclassification 238 to a position specified in subparagraph 4., must be enrolled in 239 the program on the first day of the first full calendar month 240 that such change in status becomes effective. The employer and 241 employee retirement contributions paid from the effective date 242 through the month of the employee plan change must be 243 transferred to the community college to the employee’s optional 244 program account, and, effective the first day of the next month, 245 the employer shall pay the applicable contributions based upon 246 subparagraph 1. 247 7. Effective July 1, 2003, through December 31, 2008, any 248 member of the optional retirement program who has service credit 249 in the pension plan of the Florida Retirement System for the 250 period between his or her first eligibility to transfer from the 251 pension plan to the optional retirement program and the actual 252 date of transfer may, during employment, transfer to the 253 optional retirement program a sum representing the present value 254 of the accumulated benefit obligation under the defined benefit 255 retirement program for the period of service credit. Upon 256 transfer, all service credit previously earned under the pension 257 plan during this period is nullified for purposes of entitlement 258 to a future benefit under the pension plan. 259 (3) INVESTMENT PLAN MEMBERSHIP COMPULSORY.— 260 (a) Employees initially enrolled on or after January 1, 261 2014, in positions covered by the Elected Officers’ Class or the 262 Senior Management Service Class are compulsory members of the 263 investment plan, except those eligible to withdraw from the 264 system under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those 265 eligible for optional retirement programs under paragraph 266 (1)(a), paragraph (2)(c), or s. 121.35. Investment plan 267 membership continues if there is subsequent employment in a 268 position covered by another membership class. Membership in the 269 pension plan is not permitted. Employees initially enrolled on 270 or after January 1, 2014, are not eligible to use the election 271 opportunity specified in s. 121.4501(4)(f). 272 (b) Employees eligible to withdraw from the system under s. 273 121.052(3)(d) or s. 121.055(1)(b)2. may choose to withdraw from 274 the system or to participate in the investment plan as provided 275 in these sections. Employees eligible for optional retirement 276 programs under paragraph (2)(c) or s. 121.35 may choose to 277 participate in the optional retirement program or the investment 278 plan as provided in this paragraph or this section. Eligible 279 employees required to participate pursuant to (1)(a) in the 280 optional retirement program as provided under s. 121.35 must 281 participate in the investment plan when employed in a position 282 not eligible for the optional retirement program. 283 (c) Notwithstanding the provisions of subsection (a), any 284 former member of the pension plan who terminated covered 285 employment in the Florida Retirement System before the 286 availability to join the investment plan during the initial 287 rollout, or the provisions of 121.4501(4)(a)1., and who 288 subsequently returns to covered employment under the system on 289 or after January 1, 2014, shall be reenrolled in the pension 290 plan effective on their date of employment and may use the 291 second election opportunity specified in s. 121.4501(4)(f)to 292 transfer to the investment plan. 293 Section 3. Paragraph (c) of subsection (3) of section 294 121.052, Florida Statutes, is amended to read: 295 121.052 Membership class of elected officers.— 296 (3) PARTICIPATION AND WITHDRAWAL, GENERALLY.—Effective July 297 1, 1990, participation in the Elected Officers’ Class shall be 298 compulsory for elected officers listed in paragraphs (2)(a)-(d) 299 and (f) assuming office on or after said date, unless the 300 elected officer elects membership in another class or withdraws 301 from the Florida Retirement System as provided in paragraphs 302 (3)(a)-(d): 303 (c) Before January 1, 2014, any elected officer may, within 304 6 months after assuming office, or within 6 months after this 305 act becomes a law for serving elected officers, elect membership 306 in the Senior Management Service Class as provided in s. 121.055 307 in lieu of membership in the Elected Officers’ Class. Any such 308 election made by a county elected officer shall have no effect 309 upon the statutory limit on the number of nonelective full-time 310 positions that may be designated by a local agency employer for 311 inclusion in the Senior Management Service Class under s. 312 121.055(1)(b)1. 313 Section 4. Paragraph (f) of subsection (1) and paragraph 314 (c) of subsection (6) of section 121.055, Florida Statutes, are 315 amended to read: 316 121.055 Senior Management Service Class.—There is hereby 317 established a separate class of membership within the Florida 318 Retirement System to be known as the “Senior Management Service 319 Class,” which shall become effective February 1, 1987. 320 (1) 321 (f) Effective July 1, 1997, through December 31, 2013: 322 1. Except as provided in subparagraphssubparagraph3. and 323 4., an elected state officer eligible for membership in the 324 Elected Officers’ Class under s. 121.052(2)(a), (b), or (c) who 325 elects membership in the Senior Management Service Class under 326 s. 121.052(3)(c) may, within 6 months after assuming office or 327 within 6 months after this act becomes a law for serving elected 328 state officers, elect to participate in the Senior Management 329 Service Optional Annuity Program, as provided in subsection (6), 330 in lieu of membership in the Senior Management Service Class. 331 2. Except as provided in subparagraphssubparagraph3. and 332 4., an elected officer of a local agency employer eligible for 333 membership in the Elected Officers’ Class under s. 121.052(2)(d) 334 who elects membership in the Senior Management Service Class 335 under s. 121.052(3)(c) may, within 6 months after assuming 336 office, or within 6 months after this act becomes a law for 337 serving elected officers of a local agency employer, elect to 338 withdraw from the Florida Retirement System, as provided in 339 subparagraph (b)2., in lieu of membership in the Senior 340 Management Service Class. 341 3. A retiree of a state-administered retirement system who 342 is initially reemployed in a regularly established position on 343 or after July 1, 2010, as an elected official eligible for the 344 Elected Officers’ Class may not be enrolled in renewed 345 membership in the Senior Management Service Class or in the 346 Senior Management Service Optional Annuity Program as provided 347 in subsection (6), and may not withdraw from the Florida 348 Retirement System as a renewed member as provided in 349 subparagraph (b)2., as applicable, in lieu of membership in the 350 Senior Management Service Class. 351 4. On or after January 1, 2014, an elected officer eligible 352 for membership in the Elected Officers’ Class may not be 353 enrolled in the Senior Management Service Class or in the Senior 354 Management Service Optional Annuity Program as provided in 355 subsection (6). 356 (6) 357 (c) Participation.— 358 1. An eligible employee who is employed on or before 359 February 1, 1987, may elect to participate in the optional 360 annuity program in lieu of participating in the Senior 361 Management Service Class. Such election must be made in writing 362 and filed with the department and the personnel officer of the 363 employer on or before May 1, 1987. An eligible employee who is 364 employed on or before February 1, 1987, and who fails to make an 365 election to participate in the optional annuity program by May 366 1, 1987, shall be deemed to have elected membership in the 367 Senior Management Service Class. 368 2. Except as provided in subparagraph 6., an employee who 369 becomes eligible to participate in the optional annuity program 370 by reason of initial employment commencing after February 1, 371 1987, may, within 90 days after the date of commencing 372 employment, elect to participate in the optional annuity 373 program. Such election must be made in writing and filed with 374 the personnel officer of the employer. An eligible employee who 375 does not within 90 days after commencing employment elect to 376 participate in the optional annuity program shall be deemed to 377 have elected membership in the Senior Management Service Class. 378 3. A person who is appointed to a position in the Senior 379 Management Service Class and who is a member of an existing 380 retirement system or the Special Risk or Special Risk 381 Administrative Support Classes of the Florida Retirement System 382 may elect to remain in such system or class in lieu of 383 participating in the Senior Management Service Class or optional 384 annuity program. Such election must be made in writing and filed 385 with the department and the personnel officer of the employer 386 within 90 days after such appointment. An eligible employee who 387 fails to make an election to participate in the existing system, 388 the Special Risk Class of the Florida Retirement System, the 389 Special Risk Administrative Support Class of the Florida 390 Retirement System, or the optional annuity program shall be 391 deemed to have elected membership in the Senior Management 392 Service Class. 393 4. Except as provided in subparagraph 5., an employee’s 394 election to participate in the optional annuity program is 395 irrevocable if the employee continues to be employed in an 396 eligible position and continues to meet the eligibility 397 requirements set forth in this paragraph. 398 5. Effective from July 1, 2002, through September 30, 2002, 399 an active employee in a regularly established position who has 400 elected to participate in the Senior Management Service Optional 401 Annuity Program has one opportunity to choose to move from the 402 Senior Management Service Optional Annuity Program to the 403 Florida Retirement System Pension Plan. 404 a. The election must be made in writing and must be filed 405 with the department and the personnel officer of the employer 406 before October 1, 2002, or, in the case of an active employee 407 who is on a leave of absence on July 1, 2002, within 90 days 408 after the conclusion of the leave of absence. This election is 409 irrevocable. 410 b. The employee shall receive service credit under the 411 pension plan equal to his or her years of service under the 412 Senior Management Service Optional Annuity Program. The cost for 413 such credit is the amount representing the present value of that 414 employee’s accumulated benefit obligation for the affected 415 period of service. 416 c. The employee must transfer the total accumulated 417 employer contributions and earnings on deposit in his or her 418 Senior Management Service Optional Annuity Program account. If 419 the transferred amount is not sufficient to pay the amount due, 420 the employee must pay a sum representing the remainder of the 421 amount due. The employee may not retain any employer 422 contributions or earnings from the Senior Management Service 423 Optional Annuity Program account. 424 6. A retiree of a state-administered retirement system who 425 is initially reemployed on or after July 1, 2010, may not renew 426 membership in the Senior Management Service Optional Annuity 427 Program. 428 7. Effective January 1, 2014, the Senior Management Service 429 Optional Annuity Program is closed to new members. Members 430 enrolled in the Senior Management Service Optional Annuity 431 Program before January 1, 2014, may retain their membership in 432 the annuity program. 433 Section 5. Paragraph (a) of subsection (4) of section 434 121.091, Florida Statutes, is amended to read: 435 121.091 Benefits payable under the system.—Benefits may not 436 be paid under this section unless the member has terminated 437 employment as provided in s. 121.021(39)(a) or begun 438 participation in the Deferred Retirement Option Program as 439 provided in subsection (13), and a proper application has been 440 filed in the manner prescribed by the department. The department 441 may cancel an application for retirement benefits when the 442 member or beneficiary fails to timely provide the information 443 and documents required by this chapter and the department’s 444 rules. The department shall adopt rules establishing procedures 445 for application for retirement benefits and for the cancellation 446 of such application when the required information or documents 447 are not received. 448 (4) DISABILITY RETIREMENT BENEFIT.— 449 (a) Disability retirement; entitlement and effective date.— 450 1.a. A member who becomes totally and permanently disabled, 451 as defined in paragraph (b), after completing 5 years of 452 creditable service, or a member who becomes totally and 453 permanently disabled in the line of duty regardless of service, 454 is entitled to a monthly disability benefit; except that any 455 member with less than 5 years of creditable service on July 1, 456 1980, or any person who becomes a member of the Florida 457 Retirement System on or after such date must have completed 10 458 years of creditable service before becoming totally and 459 permanently disabled in order to receive disability retirement 460 benefits for any disability which occurs other than in the line 461 of duty. However, if a member employed on July 1, 1980, who has 462 less than 5 years of creditable service as of that date becomes 463 totally and permanently disabled after completing 5 years of 464 creditable service and is found not to have attained fully 465 insured status for benefits under the federal Social Security 466 Act, such member is entitled to a monthly disability benefit. 467 b. Effective July 1, 2001, a member of the pension plan 468 initially enrolled before January 1, 2014, who becomes totally 469 and permanently disabled, as defined in paragraph (b), after 470 completing 8 years of creditable service, or a member who 471 becomes totally and permanently disabled in the line of duty 472 regardless of service, is entitled to a monthly disability 473 benefit. 474 c. Effective January 1, 2014, a member of the pension plan 475 initially enrolled on or after January 1, 2014, who becomes 476 totally and permanently disabled, as defined in paragraph (b), 477 after completing 10 years of creditable service, or a member who 478 becomes totally and permanently disabled in the line of duty 479 regardless of service, is entitled to a monthly disability 480 benefit. 481 2. If the division has received from the employer the 482 required documentation of the member’s termination of 483 employment, the effective retirement date for a member who 484 applies and is approved for disability retirement shall be 485 established by rule of the division. 486 3. For a member who is receiving Workers’ Compensation 487 payments, the effective disability retirement date may not 488 precede the date the member reaches Maximum Medical Improvement 489 (MMI), unless the member terminates employment before reaching 490 MMI. 491 Section 6. Subsection (1), paragraph (i) of subsection (2), 492 paragraph (b) of subsection (3), subsection (4), paragraph (c) 493 of subsection (5), subsection (8), and paragraphs (a), (b), (c), 494 and (h) of subsection (10) of section 121.4501, Florida 495 Statutes, are amended to read: 496 121.4501 Florida Retirement System Investment Plan.— 497 (1) The Trustees of the State Board of Administration shall 498 establish a defined contribution program called the “Florida 499 Retirement System Investment Plan” or “investment plan” for 500 members of the Florida Retirement System under which retirement 501 benefits will be provided for eligible employees who elect to 502 participate in the program and for employees initially enrolled 503 on or after January 1, 2014, in positions covered by the Elected 504 Officers’ Class or the Senior Management Service Class and are 505 compulsory members of the investment plan unless otherwise 506 eligible to withdraw from the system under s. 121.052(3)(d) or 507 s. 121.055(1)(b)2., or to participate in an optional retirement 508 program under s. 121.051(1)(a), s. 121.051(2)(c), or s. 121.35. 509 Investment plan membership continues if there is subsequent 510 employment in a position covered by another membership class. 511 The retirement benefits shall be provided through member 512 directed investments, in accordance with s. 401(a) of the 513 Internal Revenue Code and related regulations. The employer and 514 employee shall make contributions, as provided in this section 515 and ss. 121.571 and 121.71, to the Florida Retirement System 516 Investment Plan Trust Fund toward the funding of benefits. 517 (2) DEFINITIONS.—As used in this part, the term: 518 (i) “Member” or “employee” means an eligible employee who 519 enrolls in or is defaulted into the investment plan as provided 520 in subsection (4), a terminated Deferred Retirement Option 521 Program member as described in subsection (21), or a beneficiary 522 or alternate payee of a member or employee. 523 (3) RETIREMENT SERVICE CREDIT; TRANSFER OF BENEFITS.— 524 (b) Notwithstanding paragraph (a), an eligible employee who 525 elects to participate in or is defaulted into the investment 526 plan and establishes one or more individual member accounts may 527 elect to transfer to the investment plan a sum representing the 528 present value of the employee’s accumulated benefit obligation 529 under the pension plan, except as provided in paragraph (4)(b). 530 Upon transfer, all service credit earned under the pension plan 531 is nullified for purposes of entitlement to a future benefit 532 under the pension plan. A member may not transfer the 533 accumulated benefit obligation balance from the pension plan 534 after the time period for enrolling in the investment plan has 535 expired. 536 1. For purposes of this subsection, the present value of 537 the member’s accumulated benefit obligation is based upon the 538 member’s estimated creditable service and estimated average 539 final compensation under the pension plan, subject to 540 recomputation under subparagraph 2. For state employees, initial 541 estimates shall be based upon creditable service and average 542 final compensation as of midnight on June 30, 2002; for district 543 school board employees, initial estimates shall be based upon 544 creditable service and average final compensation as of midnight 545 on September 30, 2002; and for local government employees, 546 initial estimates shall be based upon creditable service and 547 average final compensation as of midnight on December 31, 2002. 548 The dates specified are the “estimate date” for these employees. 549 The actuarial present value of the employee’s accumulated 550 benefit obligation shall be based on the following: 551 a. The discount rate and other relevant actuarial 552 assumptions used to value the Florida Retirement System Trust 553 Fund at the time the amount to be transferred is determined, 554 consistent with the factors provided in sub-subparagraphs b. and 555 c. 556 b. A benefit commencement age, based on the member’s 557 estimated creditable service as of the estimate date. 558 c. Except as provided under sub-subparagraph d., for a 559 member initially enrolled: 560 (I) Before July 1, 2011, the benefit commencement age is 561 the younger of the following, but may not be younger than the 562 member’s age as of the estimate date: 563 (A) Age 62; or 564 (B) The age the member would attain if the member completed 565 30 years of service with an employer, assuming the member worked 566 continuously from the estimate date, and disregarding any 567 vesting requirement that would otherwise apply under the pension 568 plan. 569 (II) On or after July 1, 2011, the benefit commencement age 570 is the younger of the following, but may not be younger than the 571 member’s age as of the estimate date: 572 (A) Age 65; or 573 (B) The age the member would attain if the member completed 574 33 years of service with an employer, assuming the member worked 575 continuously from the estimate date, and disregarding any 576 vesting requirement that would otherwise apply under the pension 577 plan. 578 d. For members of the Special Risk Class and for members of 579 the Special Risk Administrative Support Class entitled to retain 580 the special risk normal retirement date: 581 (I) Initially enrolled before July 1, 2011, the benefit 582 commencement age is the younger of the following, but may not be 583 younger than the member’s age as of the estimate date: 584 (A) Age 55; or 585 (B) The age the member would attain if the member completed 586 25 years of service with an employer, assuming the member worked 587 continuously from the estimate date, and disregarding any 588 vesting requirement that would otherwise apply under the pension 589 plan. 590 (II) Initially enrolled on or after July 1, 2011, the 591 benefit commencement age is the younger of the following, but 592 may not be younger than the member’s age as of the estimate 593 date: 594 (A) Age 60; or 595 (B) The age the member would attain if the member completed 596 30 years of service with an employer, assuming the member worked 597 continuously from the estimate date, and disregarding any 598 vesting requirement that would otherwise apply under the pension 599 plan. 600 e. The calculation must disregard vesting requirements and 601 early retirement reduction factors that would otherwise apply 602 under the pension plan. 603 2. For each member who elects to transfer moneys from the 604 pension plan to his or her account in the investment plan, the 605 division shall recompute the amount transferred under 606 subparagraph 1. within 60 days after the actual transfer of 607 funds based upon the member’s actual creditable service and 608 actual final average compensation as of the initial date of 609 participation in the investment plan. If the recomputed amount 610 differs from the amount transferred by $10 or more, the division 611 shall: 612 a. Transfer, or cause to be transferred, from the Florida 613 Retirement System Trust Fund to the member’s account the excess, 614 if any, of the recomputed amount over the previously transferred 615 amount together with interest from the initial date of transfer 616 to the date of transfer under this subparagraph, based upon the 617 effective annual interest equal to the assumed return on the 618 actuarial investment which was used in the most recent actuarial 619 valuation of the system, compounded annually. 620 b. Transfer, or cause to be transferred, from the member’s 621 account to the Florida Retirement System Trust Fund the excess, 622 if any, of the previously transferred amount over the recomputed 623 amount, together with interest from the initial date of transfer 624 to the date of transfer under this subparagraph, based upon 6 625 percent effective annual interest, compounded annually, pro rata 626 based on the member’s allocation plan. 627 3. If contribution adjustments are made as a result of 628 employer errors or corrections, including plan corrections, 629 following recomputation of the amount transferred under 630 subparagraph 1., the member is entitled to the additional 631 contributions or is responsible for returning any excess 632 contributions resulting from the correction. However, any return 633 of such erroneous excess pretax contribution by the plan must be 634 made within the period allowed by the Internal Revenue Service. 635 The present value of the member’s accumulated benefit obligation 636 shall not be recalculated. 637 4. As directed by the member, the state board shall 638 transfer or cause to be transferred the appropriate amounts to 639 the designated accounts within 30 days after the effective date 640 of the member’s participation in the investment plan unless the 641 major financial markets for securities available for a transfer 642 are seriously disrupted by an unforeseen event that causes the 643 suspension of trading on any national securities exchange in the 644 country where the securities were issued. In that event, the 30 645 day period may be extended by a resolution of the state board. 646 Transfers are not commissionable or subject to other fees and 647 may be in the form of securities or cash, as determined by the 648 state board. Such securities are valued as of the date of 649 receipt in the member’s account. 650 5. If the state board or the division receives notification 651 from the United States Internal Revenue Service that this 652 paragraph or any portion of this paragraph will cause the 653 retirement system, or a portion thereof, to be disqualified for 654 tax purposes under the Internal Revenue Code, the portion that 655 will cause the disqualification does not apply. Upon such 656 notice, the state board and the division shall notify the 657 presiding officers of the Legislature. 658 (4) PARTICIPATION; ENROLLMENT.— 659 (a)1. Effective June 1, 2002, through February 28, 2003, a 660 90-day election period was provided to each eligible employee 661 participating in the Florida Retirement System, preceded by a 662 90-day education period, permitting each eligible employee to 663 elect membership in the investment plan, and an employee who 664 failed to elect the investment plan during the election period 665 remained in the pension plan. An eligible employee who was 666 employed in a regularly established position during the election 667 period was granted the option to make one subsequent election, 668 as provided in paragraph (f). With respect toaneligible 669 employees who did not participate in the initial election period 670 or who are initiallyemployee who isemployed in a regularly 671 established position after the close of the initial election 672 period but before January 1, 2014,on June 1, 2002, by a state673employer:674a. Any such employee may elect to participate in the675investment plan in lieu of retaining his or her membership in676the pension plan. The election must be made in writing or by677electronic means and must be filed with the third-party678administrator by August 31, 2002, or, in the case of an active679employee who is on a leave of absence on April 1, 2002, by the680last business day of the 5th month following the month the leave681of absence concludes. This election is irrevocable, except as682provided in paragraph (g). Upon making such election, the683employee shall be enrolled as a member of the investment plan,684the employee’s membership in the Florida Retirement System is685governed by the provisions of this part, and the employee’s686membership in the pension plan terminates. The employee’s687enrollment in the investment plan is effective the first day of688the month for which a full month’s employer contribution is made689to the investment plan.690b. Any such employee who fails to elect to participate in691the investment plan within the prescribed time period is deemed692to have elected to retain membership in the pension plan, and693the employee’s option to elect to participate in the investment694plan is forfeited.6952. With respect to employees who become eligible to696participate in the investment plan by reason of employment in a697regularly established position with a state employer commencing698after April 1, 2002:699a. Anysuch employee shall, by default, be enrolled in the 700 pension plan at the commencement of employment, and may, by the 701 last business day of the 5th month following the employee’s 702 month of hire, elect to participate in the investment plan. The 703 employee’s election must be made in writing or by electronic 704 means and must be filed with the third-party administrator. The 705 election to participate in the investment plan is irrevocable, 706 except as provided in paragraph (f)(g). 707 a.b.If the employee files such election within the 708 prescribed time period, enrollment in the investment plan is 709 effective on the first day of employment. The retirement 710 contributions paid through the month of the employee plan change 711 shall be transferred to the investment program, and, effective 712 the first day of the next month, the employer and employee must 713 pay the applicable contributions based on the employee 714 membership class in the program. 715 b.c.An employee who fails to elect to participate in the 716 investment plan within the prescribed time period is deemed to 717 have elected to retain membership in the pension plan, and the 718 employee’s option to elect to participate in the investment plan 719 is forfeited. 720 2.3.With respect to employees who become eligible to 721 participate in the investment plan pursuant to s. 722 121.051(2)(c)3. or s. 121.35(3)(i), the employee may elect to 723 participate in the investment plan in lieu of retaining his or 724 her membership in the State Community College System Optional 725 Retirement Program or the State University System Optional 726 Retirement Program. The election must be made in writing or by 727 electronic means and must be filed with the third-party 728 administrator. This election is irrevocable, except as provided 729 in paragraph (f)(g). Upon making such election, the employee 730 shall be enrolled as a member in the investment plan, the 731 employee’s membership in the Florida Retirement System is 732 governed by the provisions of this part, and the employee’s 733 participation in the State Community College System Optional 734 Retirement Program or the State University System Optional 735 Retirement Program terminates. The employee’s enrollment in the 736 investment plan is effective on the first day of the month for 737 which a full month’s employer and employee contribution is made 738 to the investment plan. 739 (b)1. With respect to employees who become eligible to 740 participate in the investment plan by reason of employment in a 741 regularly established position commencing on or after January 1, 742 2014, any such employee shall be enrolled in the pension plan at 743 the commencement of employment and may, by the last business day 744 of the 5th month following the employee’s month of hire, elect 745 to participate in the pension plan or the investment plan. 746 Eligible employees may make a plan election only if they are 747 earning service credit in an employer-employee relationship 748 consistent with s. 121.021(17)(b), excluding leaves of absence 749 without pay. 750 2. The employee’s election must be made in writing or by 751 electronic means and must be filed with the third-party 752 administrator. The election to participate in the pension plan 753 or investment plan is irrevocable, except as provided in 754 paragraph (f). 755 3. If the employee fails to make an election of the pension 756 plan or investment plan within 5 months following the month of 757 hire, the employee is deemed to have elected the investment plan 758 and will be defaulted into the investment plan retroactively to 759 the employee’s date of employment. The employee’s option to 760 participate in the pension plan is forfeited, except as provided 761 in paragraph (f). 762 4. The amount of the employee and employer contributions 763 paid before the default to the investment plan shall be 764 transferred to the investment plan and shall be placed in a 765 default fund as designated by the State Board of Administration. 766 The employee may move the contributions once an account is 767 activated in the investment plan. 768 5. Effective the first day of the month after an eligible 769 employee makes a plan election of the pension plan or investment 770 plan, or after the month of default to the investment plan, the 771 employee and employer shall pay the applicable contributions 772 based on the employee membership class in the pension plan or 773 investment plan. 7744. For purposes of this paragraph, “state employer” means775any agency, board, branch, commission, community college,776department, institution, institution of higher education, or777water management district of the state, which participates in778the Florida Retirement System for the benefit of certain779employees.780(b)1. With respect to an eligible employee who is employed781in a regularly established position on September 1, 2002, by a782district school board employer:783a. Any such employee may elect to participate in the784investment plan in lieu of retaining his or her membership in785the pension plan. The election must be made in writing or by786electronic means and must be filed with the third-party787administrator by November 30, or, in the case of an active788employee who is on a leave of absence on July 1, 2002, by the789last business day of the 5th month following the month the leave790of absence concludes. This election is irrevocable, except as791provided in paragraph (g). Upon making such election, the792employee shall be enrolled as a member of the investment plan,793the employee’s membership in the Florida Retirement System is794governed by the provisions of this part, and the employee’s795membership in the pension plan terminates. The employee’s796enrollment in the investment plan is effective the first day of797the month for which a full month’s employer contribution is made798to the investment program.799b. Any such employee who fails to elect to participate in800the investment plan within the prescribed time period is deemed801to have elected to retain membership in the pension plan, and802the employee’s option to elect to participate in the investment803plan is forfeited.8042. With respect to employees who become eligible to805participate in the investment plan by reason of employment in a806regularly established position with a district school board807employer commencing after July 1, 2002:808a. Any such employee shall, by default, be enrolled in the809pension plan at the commencement of employment, and may, by the810last business day of the 5th month following the employee’s811month of hire, elect to participate in the investment plan. The812employee’s election must be made in writing or by electronic813means and must be filed with the third-party administrator. The814election to participate in the investment plan is irrevocable,815except as provided in paragraph (g).816b. If the employee files such election within the817prescribed time period, enrollment in the investment plan is818effective on the first day of employment. The employer819retirement contributions paid through the month of the employee820plan change shall be transferred to the investment plan, and,821effective the first day of the next month, the employer shall822pay the applicable contributions based on the employee823membership class in the investment plan.824c. Any such employee who fails to elect to participate in825the investment plan within the prescribed time period is deemed826to have elected to retain membership in the pension plan, and827the employee’s option to elect to participate in the investment828plan is forfeited.8293. For purposes of this paragraph, “district school board830employer” means any district school board that participates in831the Florida Retirement System for the benefit of certain832employees, or a charter school or charter technical career833center that participates in the Florida Retirement System as834provided in s.121.051(2)(d).835(c)1. With respect to an eligible employee who is employed836in a regularly established position on December 1, 2002, by a837local employer:838a. Any such employee may elect to participate in the839investment plan in lieu of retaining his or her membership in840the pension plan. The election must be made in writing or by841electronic means and must be filed with the third-party842administrator by February 28, 2003, or, in the case of an active843employee who is on a leave of absence on October 1, 2002, by the844last business day of the 5th month following the month the leave845of absence concludes. This election is irrevocable, except as846provided in paragraph (g). Upon making such election, the847employee shall be enrolled as a participant of the investment848plan, the employee’s membership in the Florida Retirement System849is governed by the provisions of this part, and the employee’s850membership in the pension plan terminates. The employee’s851enrollment in the investment plan is effective the first day of852the month for which a full month’s employer contribution is made853to the investment plan.854b. Any such employee who fails to elect to participate in855the investment plan within the prescribed time period is deemed856to have elected to retain membership in the pension plan, and857the employee’s option to elect to participate in the investment858plan is forfeited.8592. With respect to employees who become eligible to860participate in the investment plan by reason of employment in a861regularly established position with a local employer commencing862after October 1, 2002:863a. Any such employee shall, by default, be enrolled in the864pension plan at the commencement of employment, and may, by the865last business day of the 5th month following the employee’s866month of hire, elect to participate in the investment plan. The867employee’s election must be made in writing or by electronic868means and must be filed with the third-party administrator. The869election to participate in the investment plan is irrevocable,870except as provided in paragraph (g).871b. If the employee files such election within the872prescribed time period, enrollment in the investment plan is873effective on the first day of employment. The employer874retirement contributions paid through the month of the employee875plan change shall be transferred to the investment plan, and,876effective the first day of the next month, the employer shall877pay the applicable contributions based on the employee878membership class in the investment plan.879c. Any such employee who fails to elect to participate in880the investment plan within the prescribed time period is deemed881to have elected to retain membership in the pension plan, and882the employee’s option to elect to participate in the investment883plan is forfeited.8843. For purposes of this paragraph, “local employer” means885any employer not included in paragraph (a) or paragraph (b).886 (c)(d)Contributions available for self-direction by a 887 member who has not selected one or more specific investment 888 products shall be allocated as prescribed by the state board. 889 The third-party administrator shall notify the member at least 890 quarterly that the member should take an affirmative action to 891 make an asset allocation among the investment products. 892 (d)(e)On or after July 1, 2011, a member of the pension 893 plan who obtains a refund of employee contributions retains his 894 or her prior plan choice upon return to employment in a 895 regularly established position with a participating employer. 896 (e)(f)A member of the investment plan who takes a 897 distribution of any contributions from his or her investment 898 plan account is considered a retiree. A retiree who is initially 899 reemployed in a regularly established position on or after July 900 1, 2010, is not eligible to be enrolled in renewed membership. 901 (f)(g)After the period during which an eligible employee 902 had the choice to elect the pension plan or the investment plan, 903 or the month following the receipt of the eligible employee’s 904 plan election, if sooner, the employee shall have one 905 opportunity, at the employee’s discretion, to choose to move 906 from the pension plan to the investment plan or from the 907 investment plan to the pension plan. Eligible employees may 908 elect to move between plans only if they are earning service 909 credit in an employer-employee relationship consistent with s. 910 121.021(17)(b), excluding leaves of absence without pay. 911 Effective July 1, 2005, such elections are effective on the 912 first day of the month following the receipt of the election by 913 the third-party administrator and are not subject to the 914 requirements regarding an employer-employee relationship or 915 receipt of contributions for the eligible employee in the 916 effective month, except when the election is received by the 917 third-party administrator. This paragraph is contingent upon 918 approval by the Internal Revenue Service. This paragraph is not 919 applicable to compulsory investment plan members under paragraph 920 (g). 921 1. If the employee chooses to move to the investment plan, 922 the provisions of subsection (3) govern the transfer. 923 2. If the employee chooses to move to the pension plan, the 924 employee must transfer from his or her investment plan account, 925 and from other employee moneys as necessary, a sum representing 926 the present value of that employee’s accumulated benefit 927 obligation immediately following the time of such movement, 928 determined assuming that attained service equals the sum of 929 service in the pension plan and service in the investment plan. 930 Benefit commencement occurs on the first date the employee is 931 eligible for unreduced benefits, using the discount rate and 932 other relevant actuarial assumptions that were used to value the 933 pension plan liabilities in the most recent actuarial valuation. 934 For any employee who, at the time of the second election, 935 already maintains an accrued benefit amount in the pension plan, 936 the then-present value of the accrued benefit is deemed part of 937 the required transfer amount. The division must ensure that the 938 transfer sum is prepared using a formula and methodology 939 certified by an enrolled actuary. A refund of any employee 940 contributions or additional member payments made which exceed 941 the employee contributions that would have accrued had the 942 member remained in the pension plan and not transferred to the 943 investment plan is not permitted. 944 3. Notwithstanding subparagraph 2., an employee who chooses 945 to move to the pension plan and who became eligible to 946 participate in the investment plan by reason of employment in a 947 regularly established position with a state employer after June 948 1, 2002; a district school board employer after September 1, 949 2002; or a local employer after December 1, 2002, must transfer 950 from his or her investment plan account, and from other employee 951 moneys as necessary, a sum representing the employee’s actuarial 952 accrued liability. A refund of any employee contributions or 953 additional memberparticipantpayments made which exceed the 954 employee contributions that would have accrued had the member 955 remained in the pension plan and not transferred to the 956 investment plan is not permitted. 957 4. An employee’s ability to transfer from the pension plan 958 to the investment plan pursuant to paragraphs (a) and (b) 959paragraphs (a)-(d), and the ability of a current employee to 960 have an option to later transfer back into the pension plan 961 under subparagraph 2., shall be deemed a significant system 962 amendment. Pursuant to s. 121.031(4), any resulting unfunded 963 liability arising from actual original transfers from the 964 pension plan to the investment plan must be amortized within 30 965 plan years as a separate unfunded actuarial base independent of 966 the reserve stabilization mechanism defined in s. 121.031(3)(f). 967 For the first 25 years, a direct amortization payment may not be 968 calculated for this base. During this 25-year period, the 969 separate base shall be used to offset the impact of employees 970 exercising their second program election under this paragraph. 971 The actuarial funded status of the pension plan will not be 972 affected by such second program elections in any significant 973 manner, after due recognition of the separate unfunded actuarial 974 base. Following the initial 25-year period, any remaining 975 balance of the original separate base shall be amortized over 976 the remaining 5 years of the required 30-year amortization 977 period. 978 5. If the employee chooses to transfer from the investment 979 plan to the pension plan and retains an excess account balance 980 in the investment plan after satisfying the buy-in requirements 981 under this paragraph, the excess may not be distributed until 982 the member retires from the pension plan. The excess account 983 balance may be rolled over to the pension plan and used to 984 purchase service credit or upgrade creditable service in the 985 pension plan. 986 (g)1. All employees initially enrolled on or after January 987 1, 2014, in positions covered by the Elected Officers’ Class or 988 the Senior Management Service Class are compulsory members of 989 the investment plan, except those eligible to withdraw from the 990 system under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those 991 eligible for optional retirement programs under s. 992 121.051(1)(a), s. 121.051(2)(c), or s. 121.35. Employees 993 eligible to withdraw from the system under s. 121.052(3)(d) or 994 s. 121.055(1)(b)2. may choose to withdraw from the system or to 995 participate in the investment plan as provided in those 996 sections. Employees eligible for optional retirement programs 997 under s. 121.051(2)(c) or s. 121.35, except as provided in s. 998 121.051(1)(a), may choose to participate in the optional 999 retirement program or the investment plan as provided in those 1000 sections. Investment plan membership continues if there is 1001 subsequent employment in a position covered by another 1002 membership class. Membership in the pension plan is not 1003 permitted except as provided in s. 121.591(2). 1004 2. Employees initially enrolled on or after January 1, 1005 2014, are not permitted to use the election opportunity 1006 specified in paragraph (f). 1007 3. The amount of retirement contributions paid by the 1008 employee and employer, as required under s. 121.72, shall be 1009 placed in a default fund as designated by the state board, until 1010 an account is activated in the investment plan, at which time 1011 the member may move the contributions from the default fund to 1012 other funds provided in the investment plan. 1013 (5) CONTRIBUTIONS.— 1014 (c) The state board, acting as plan fiduciary, must ensure 1015 that all plan assets are held in a trust, pursuant to s. 401 of 1016 the Internal Revenue Code. The fiduciary must ensure that such 1017 contributions are allocated as follows: 1018 1. The employer and employee contribution portion earmarked 1019 for member accounts shall be used to purchase interests in the 1020 appropriate investment vehicles as specified by the member, or 1021 in accordance with paragraph (4)(c)(4)(d). 1022 2. The employer contribution portion earmarked for 1023 administrative and educational expenses shall be transferred to 1024 the Florida Retirement System Investment Plan Trust Fund. 1025 3. The employer contribution portion earmarked for 1026 disability benefits shall be transferred to the Florida 1027 Retirement System Trust Fund. 1028 (8) INVESTMENT PLAN ADMINISTRATION.—The investment plan 1029 shall be administered by the state board and affected employers. 1030 The state board may require oaths, by affidavit or otherwise, 1031 and acknowledgments from persons in connection with the 1032 administration of its statutory duties and responsibilities for 1033 the investment plan. An oath, by affidavit or otherwise, may not 1034 be required of a member at the time of enrollment. 1035 Acknowledgment of an employee’s election to participate in the 1036 program shall be no greater than necessary to confirm the 1037 employee’s election except for members initially enrolled on or 1038 after January 1, 2014, as provided in paragraph (4)(g). The 1039 state board shall adopt rules to carry out its statutory duties 1040 with respect to administering the investment plan, including 1041 establishing the roles and responsibilities of affected state, 1042 local government, and education-related employers, the state 1043 board, the department, and third-party contractors. The 1044 department shall adopt rules necessary to administer the 1045 investment plan in coordination with the pension plan and the 1046 disability benefits available under the investment plan. 1047 (a)1. The state board shall select and contract with a 1048 third-party administrator to provide administrative services if 1049 those services cannot be competitively and contractually 1050 provided by the division. With the approval of the state board, 1051 the third-party administrator may subcontract to provide 1052 components of the administrative services. As a cost of 1053 administration, the state board may compensate any such 1054 contractor for its services, in accordance with the terms of the 1055 contract, as is deemed necessary or proper by the board. The 1056 third-party administrator may not be an approved provider or be 1057 affiliated with an approved provider. 1058 2. These administrative services may include, but are not 1059 limited to, enrollment of eligible employees, collection of 1060 employer and employee contributions, disbursement of 1061 contributions to approved providers in accordance with the 1062 allocation directions of members; services relating to 1063 consolidated billing; individual and collective recordkeeping 1064 and accounting; asset purchase, control, and safekeeping; and 1065 direct disbursement of funds to and from the third-party 1066 administrator, the division, the state board, employers, 1067 members, approved providers, and beneficiaries. This section 1068 does not prevent or prohibit a bundled provider from providing 1069 any administrative or customer service, including accounting and 1070 administration of individual member benefits and contributions; 1071 individual member recordkeeping; asset purchase, control, and 1072 safekeeping; direct execution of the member’s instructions as to 1073 asset and contribution allocation; calculation of daily net 1074 asset values; direct access to member account information; or 1075 periodic reporting to members, at least quarterly, on account 1076 balances and transactions, if these services are authorized by 1077 the state board as part of the contract. 1078 (b)1. The state board shall select and contract with one or 1079 more organizations to provide educational services. With 1080 approval of the state board, the organizations may subcontract 1081 to provide components of the educational services. As a cost of 1082 administration, the state board may compensate any such 1083 contractor for its services in accordance with the terms of the 1084 contract, as is deemed necessary or proper by the board. The 1085 education organization may not be an approved provider or be 1086 affiliated with an approved provider. 1087 2. Educational services shall be designed by the state 1088 board and department to assist employers, eligible employees, 1089 members, and beneficiaries in order to maintain compliance with 1090 United States Department of Labor regulations under s. 404(c) of 1091 the Employee Retirement Income Security Act of 1974 and to 1092 assist employees in their choice of pension plan or investment 1093 plan retirement alternatives. Educational services include, but 1094 are not limited to, disseminating educational materials; 1095 providing retirement planning education; explaining the pension 1096 plan and the investment plan; and offering financial planning 1097 guidance on matters such as investment diversification, 1098 investment risks, investment costs, and asset allocation. An 1099 approved provider may also provide educational information, 1100 including retirement planning and investment allocation 1101 information concerning its products and services. 1102 (c)1. In evaluating and selecting a third-party 1103 administrator, the state board shall establish criteria for 1104 evaluating the relative capabilities and qualifications of each 1105 proposed administrator. In developing such criteria, the state 1106 board shall consider: 1107 a. The administrator’s demonstrated experience in providing 1108 administrative services to public or private sector retirement 1109 systems. 1110 b. The administrator’s demonstrated experience in providing 1111 daily valued recordkeeping to defined contribution programs. 1112 c. The administrator’s ability and willingness to 1113 coordinate its activities with employers, the state board, and 1114 the division, and to supply to such employers, the board, and 1115 the division the information and data they require, including, 1116 but not limited to, monthly management reports, quarterly member 1117 reports, and ad hoc reports requested by the department or state 1118 board. 1119 d. The cost-effectiveness and levels of the administrative 1120 services provided. 1121 e. The administrator’s ability to interact with the 1122 members, the employers, the state board, the division, and the 1123 providers; the means by which members may access account 1124 information, direct investment of contributions, make changes to 1125 their accounts, transfer moneys between available investment 1126 vehicles, and transfer moneys between investment products; and 1127 any fees that apply to such activities. 1128 f. Any other factor deemed necessary by the state board. 1129 2. In evaluating and selecting an educational provider, the 1130 state board shall establish criteria under which it shall 1131 consider the relative capabilities and qualifications of each 1132 proposed educational provider. In developing such criteria, the 1133 state board shall consider: 1134 a. Demonstrated experience in providing educational 1135 services to public or private sector retirement systems. 1136 b. Ability and willingness to coordinate its activities 1137 with the employers, the state board, and the division, and to 1138 supply to such employers, the board, and the division the 1139 information and data they require, including, but not limited 1140 to, reports on educational contacts. 1141 c. The cost-effectiveness and levels of the educational 1142 services provided. 1143 d. Ability to provide educational services via different 1144 media, including, but not limited to, the Internet, personal 1145 contact, seminars, brochures, and newsletters. 1146 e. Any other factor deemed necessary by the state board. 1147 3. The establishment of the criteria shall be solely within 1148 the discretion of the state board. 1149 (d) The state board shall develop the form and content of 1150 any contracts to be offered under the investment plan. In 1151 developing the contracts, the board shall consider: 1152 1. The nature and extent of the rights and benefits to be 1153 afforded in relation to the contributions required under the 1154 plan. 1155 2. The suitability of the rights and benefits provided and 1156 the interests of employers in the recruitment and retention of 1157 eligible employees. 1158 (e)1. The state board may contract for professional 1159 services, including legal, consulting, accounting, and actuarial 1160 services, deemed necessary to implement and administer the 1161 investment plan. The state board may enter into a contract with 1162 one or more vendors to provide low-cost investment advice to 1163 members, supplemental to education provided by the third-party 1164 administrator. All fees under any such contract shall be paid by 1165 those members who choose to use the services of the vendor. 1166 2. The department may contract for professional services, 1167 including legal, consulting, accounting, and actuarial services, 1168 deemed necessary to implement and administer the investment plan 1169 in coordination with the pension plan. The department, in 1170 coordination with the state board, may enter into a contract 1171 with the third-party administrator in order to coordinate 1172 services common to the various programs within the Florida 1173 Retirement System. 1174 (f) The third-party administrator may not receive direct or 1175 indirect compensation from an approved provider, except as 1176 specifically provided for in the contract with the state board. 1177 (g) The state board shall receive and resolve member 1178 complaints against the program, the third-party administrator, 1179 or any program vendor or provider; shall resolve any conflict 1180 between the third-party administrator and an approved provider 1181 if such conflict threatens the implementation or administration 1182 of the program or the quality of services to employees; and may 1183 resolve any other conflicts. The third-party administrator shall 1184 retain all member records for at least 5 years for use in 1185 resolving any member conflicts. The state board, the third-party 1186 administrator, or a provider is not required to produce 1187 documentation or an audio recording to justify action taken with 1188 regard to a member if the action occurred 5 or more years before 1189 the complaint is submitted to the state board. It is presumed 1190 that all action taken 5 or more years before the complaint is 1191 submitted was taken at the request of the member and with the 1192 member’s full knowledge and consent. To overcome this 1193 presumption, the member must present documentary evidence or an 1194 audio recording demonstrating otherwise. 1195 (10) EDUCATION COMPONENT.— 1196 (a) The state board, in coordination with the department, 1197 shall provide for an education component for eligible employees 1198system membersin a manner consistent with the provisions of 1199 this subsectionsection.The education component must be1200available to eligible employees at least 90 days prior to the1201beginning date of the election period for the employees of the1202respective types of employers.1203 (b) The education component must provide system members 1204 with impartial and balanced information about plan choices 1205 except for members initially enrolled on or after January 1, 1206 2014, as provided in paragraph (4)(g). The education component 1207 must involve multimedia formats. Program comparisons must, to 1208 the greatest extent possible, be based upon the retirement 1209 income that different retirement programs may provide to the 1210 member. The state board shall monitor the performance of the 1211 contract to ensure that the program is conducted in accordance 1212 with the contract, applicable law, and the rules of the state 1213 board. 1214 (c) The state board, in coordination with the department, 1215 shall provide for an initial and ongoing transfer education 1216 component to provide system members except for those members 1217 initially enrolled on or after January 1, 2014, as provided in 1218 paragraph (4)(g), with information necessary to make informed 1219 plan choice decisions. The transfer education component must 1220 include, but is not limited to, information on: 1221 1. The amount of money available to a member to transfer to 1222 the defined contribution program. 1223 2. The features of and differences between the pension plan 1224 and the defined contribution program, both generally and 1225 specifically, as those differences may affect the member. 1226 3. The expected benefit available if the member were to 1227 retire under each of the retirement programs, based on 1228 appropriate alternative sets of assumptions. 1229 4. The rate of return from investments in the defined 1230 contribution program and the period of time over which such rate 1231 of return must be achieved to equal or exceed the expected 1232 monthly benefit payable to the member under the pension plan. 1233 5. The historical rates of return for the investment 1234 alternatives available in the defined contribution programs. 1235 6. The benefits and historical rates of return on 1236 investments available in a typical deferred compensation plan or 1237 a typical plan under s. 403(b) of the Internal Revenue Code for 1238 which the employee may be eligible. 1239 7. The program choices available to employees of the State 1240 University System and the comparative benefits of each available 1241 program, if applicable. 1242 8. Payout options available in each of the retirement 1243 programs. 1244(h) Pursuant to subsection (8), all Florida Retirement1245System employers have an obligation to regularly communicate the1246existence of the two Florida Retirement System plans and the1247plan choice in the natural course of administering their1248personnel functions, using the educational materials supplied by1249the state board and the Department of Management Services.1250 Section 7. Paragraph (b) of subsection (2) of section 1251 121.591, Florida Statutes, is amended to read: 1252 121.591 Payment of benefits.—Benefits may not be paid under 1253 the Florida Retirement System Investment Plan unless the member 1254 has terminated employment as provided in s. 121.021(39)(a) or is 1255 deceased and a proper application has been filed as prescribed 1256 by the state board or the department. Benefits, including 1257 employee contributions, are not payable under the investment 1258 plan for employee hardships, unforeseeable emergencies, loans, 1259 medical expenses, educational expenses, purchase of a principal 1260 residence, payments necessary to prevent eviction or foreclosure 1261 on an employee’s principal residence, or any other reason except 1262 a requested distribution for retirement, a mandatory de minimis 1263 distribution authorized by the administrator, or a required 1264 minimum distribution provided pursuant to the Internal Revenue 1265 Code. The state board or department, as appropriate, may cancel 1266 an application for retirement benefits if the member or 1267 beneficiary fails to timely provide the information and 1268 documents required by this chapter and the rules of the state 1269 board and department. In accordance with their respective 1270 responsibilities, the state board and the department shall adopt 1271 rules establishing procedures for application for retirement 1272 benefits and for the cancellation of such application if the 1273 required information or documents are not received. The state 1274 board and the department, as appropriate, are authorized to cash 1275 out a de minimis account of a member who has been terminated 1276 from Florida Retirement System covered employment for a minimum 1277 of 6 calendar months. A de minimis account is an account 1278 containing employer and employee contributions and accumulated 1279 earnings of not more than $5,000 made under the provisions of 1280 this chapter. Such cash-out must be a complete lump-sum 1281 liquidation of the account balance, subject to the provisions of 1282 the Internal Revenue Code, or a lump-sum direct rollover 1283 distribution paid directly to the custodian of an eligible 1284 retirement plan, as defined by the Internal Revenue Code, on 1285 behalf of the member. Any nonvested accumulations and associated 1286 service credit, including amounts transferred to the suspense 1287 account of the Florida Retirement System Investment Plan Trust 1288 Fund authorized under s. 121.4501(6), shall be forfeited upon 1289 payment of any vested benefit to a member or beneficiary, except 1290 for de minimis distributions or minimum required distributions 1291 as provided under this section. If any financial instrument 1292 issued for the payment of retirement benefits under this section 1293 is not presented for payment within 180 days after the last day 1294 of the month in which it was originally issued, the third-party 1295 administrator or other duly authorized agent of the state board 1296 shall cancel the instrument and credit the amount of the 1297 instrument to the suspense account of the Florida Retirement 1298 System Investment Plan Trust Fund authorized under s. 1299 121.4501(6). Any amounts transferred to the suspense account are 1300 payable upon a proper application, not to include earnings 1301 thereon, as provided in this section, within 10 years after the 1302 last day of the month in which the instrument was originally 1303 issued, after which time such amounts and any earnings 1304 attributable to employer contributions shall be forfeited. Any 1305 forfeited amounts are assets of the trust fund and are not 1306 subject to chapter 717. 1307 (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under 1308 this subsection are payable in lieu of the benefits that would 1309 otherwise be payable under the provisions of subsection (1). 1310 Such benefits must be funded from employer contributions made 1311 under s. 121.571, transferred employee contributions and funds 1312 accumulated pursuant to paragraph (a), and interest and earnings 1313 thereon. 1314 (b) Disability retirement; entitlement.— 1315 1.a. A member of the investment plan initially enrolled 1316 before January 1, 2014, who becomes totally and permanently 1317 disabled, as defined in paragraph (d), after completing 8 years 1318 of creditable service, or a member who becomes totally and 1319 permanently disabled in the line of duty regardless of length of 1320 service, is entitled to a monthly disability benefit. 1321 b. A member of the investment plan initially enrolled on or 1322 after January 1, 2014, who becomes totally and permanently 1323 disabled, as defined in paragraph (d), after completing 10 years 1324 of creditable service, or a member who becomes totally and 1325 permanently disabled in the line of duty regardless of service, 1326 is entitled to a monthly disability benefit. 1327 2. In order for service to apply toward the8years of 1328 creditable service required for regular disability benefits, or 1329 toward the creditable service used in calculating a service 1330 based benefit as provided under paragraph (g), the service must 1331 be creditable service as described below: 1332 a. The member’s period of service under the investment plan 1333 shall be considered creditable service, except as provided in 1334 subparagraph d. 1335 b. If the member has elected to retain credit for service 1336 under the pension plan as provided under s. 121.4501(3), all 1337 such service shall be considered creditable service. 1338 c. If the member elects to transfer to his or her member 1339 accounts a sum representing the present value of his or her 1340 retirement credit under the pension plan as provided under s. 1341 121.4501(3), the period of service under the pension plan 1342 represented in the present value amounts transferred shall be 1343 considered creditable service, except as provided in 1344 subparagraph d. 1345 d. If a member has terminated employment and has taken 1346 distribution of his or her funds as provided in subsection (1), 1347 all creditable service represented by such distributed funds is 1348 forfeited for purposes of this subsection. 1349 Section 8. Subsection (3) of section 121.71, Florida 1350 Statutes, is amended to read: 1351 121.71 Uniform rates; process; calculations; levy.— 1352 (3)(a) Required employee retirement contribution rates for 1353 each membership class and subclass of the Florida Retirement 1354 System for the pension planboth retirement plansare as 1355 follows: 1356 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2011 1357 1358 Regular Class 3.00% 1359 Special Risk Class 3.00% 1360 Special Risk Administrative Support Class 3.00% 1361 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 3.00% 1362 Elected Officers’ Class— Justices, Judges 3.00% 1363 Elected Officers’ Class— County Elected Officers 3.00% 1364 Senior Management Service Class 3.00% 1365 DROP 0.00% 1366 (b) Required employee retirement contribution rates for 1367 each membership class and subclass of the Florida Retirement 1368 System for the investment plan are as follows: 1369 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2011Percentage ofGrossCompensation,EffectiveJanuary 1, 2014 1370 1371 Regular Class 3.00% 2.00% 1372 Special Risk Class 3.00% 2.00% 1373 Special Risk Administrative Support Class 3.00% 2.00% 1374 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 3.00% 2.00% 1375 Elected Officers’ Class— Justices, Judges 3.00% 2.00% 1376 Elected Officers’ Class— County Elected Officers 3.00% 2.00% 1377 Senior Management Service Class 3.00% 2.00% 1378 Section 9. Paragraph (a) of subsection (4) of section 1379 121.35, Florida Statutes, is amended to read: 1380 121.35 Optional retirement program for the State University 1381 System.— 1382 (4) CONTRIBUTIONS.— 1383 (a)1. Through June 30, 2001, each employer shall contribute 1384 on behalf of each member of the optional retirement program an 1385 amount equal to the normal cost portion of the employer 1386 retirement contribution which would be required if the employee 1387 were a regular member of the Florida Retirement System Pension 1388 Plan, plus the portion of the contribution rate required in s. 1389 112.363(8) that would otherwise be assigned to the Retiree 1390 Health Insurance Subsidy Trust Fund. 1391 2. Effective July 1, 2001, through June 30, 2011, each 1392 employer shall contribute on behalf of each member of the 1393 optional retirement program an amount equal to 10.43 percent of 1394 the employee’s gross monthly compensation. 1395 3. Effective July 1, 2011, through June 30, 2012, each 1396 member of the optional retirement program shall contribute an 1397 amount equal to the employee contribution required in s. 1398 121.71(3)(a). The employer shall contribute on behalf of each 1399 such member an amount equal to the difference between 10.43 1400 percent of the employee’s gross monthly compensation and the 1401 amount equal to the employee’s required contribution based on 1402 the employee’s gross monthly compensation. 1403 4. Effective July 1, 2012, each member of the optional 1404 retirement program shall contribute an amount equal to the 1405 employee contribution required in s. 121.71(3)(a). The employer 1406 shall contribute on behalf of each such member an amount equal 1407 to the difference between 8.15 percent of the employee’s gross 1408 monthly compensation and the amount equal to the employee’s 1409 required contribution based on the employee’s gross monthly 1410 compensation. 1411 5. The payment of the contributions, including 1412 contributions by the employee, shall be made by the employer to 1413 the department, which shall forward the contributions to the 1414 designated company or companies contracting for payment of 1415 benefits for members of the program. However, such contributions 1416 paid on behalf of an employee described in paragraph (3)(c) may 1417 not be forwarded to a company and do not begin to accrue 1418 interest until the employee has executed a contract and notified 1419 the department. The department shall deduct an amount from the 1420 contributions to provide for the administration of this program. 1421 Section 10. Section 238.072, Florida Statutes, is amended 1422 to read: 1423 238.072 Special service provisions for extension 1424 personnel.—All state and county cooperative extension personnel 1425 holding appointments by the United States Department of 1426 Agriculture for extension work in agriculture and home economics 1427 in this state who are joint representatives of the University of 1428 Florida and the United States Department of Agriculture, as 1429 provided in s. 121.051(8)121.051(7), who are members of the 1430 Teachers’ Retirement System, chapter 238, and who are prohibited 1431 from transferring to and participating in the Florida Retirement 1432 System, chapter 121, may retire with full benefits upon 1433 completion of 30 years of creditable service and shall be 1434 considered to have attained normal retirement age under this 1435 chapter, any law to the contrary notwithstanding. In order to 1436 comply with the provisions of s. 14, Art. X of the State 1437 Constitution, any liability accruing to the Florida Retirement 1438 System Trust Fund as a result of the provisions of this section 1439 shall be paid on an annual basis from the General Revenue Fund. 1440 Section 11. Subsection (11) of section 413.051, Florida 1441 Statutes, is amended to read: 1442 413.051 Eligible blind persons; operation of vending 1443 stands.— 1444 (11) Effective July 1, 1996, blind licensees who remain 1445 members of the Florida Retirement System pursuant to s. 1446 121.051(7)(b)1.121.051(6)(b)1.shall pay any unappropriated 1447 retirement costs from their net profits or from program income. 1448 Within 30 days after the effective date of this act, each blind 1449 licensee who is eligible to maintain membership in the Florida 1450 Retirement System under s. 121.051(7)(b)1.121.051(6)(b)1., but 1451 who elects to withdraw from the system as provided in s. 1452 121.051(7)(b)3.121.051(6)(b)3., must, on or before July 31, 1453 1996, notify the Division of Blind Services and the Department 1454 of Management Services in writing of his or her election to 1455 withdraw. Failure to timely notify the divisions shall be deemed 1456 a decision to remain a compulsory member of the Florida 1457 Retirement System. However, if, at any time after July 1, 1996, 1458 sufficient funds are not paid by a blind licensee to cover the 1459 required contribution to the Florida Retirement System, that 1460 blind licensee shall become ineligible to participate in the 1461 Florida Retirement System on the last day of the first month for 1462 which no contribution is made or the amount contributed is 1463 insufficient to cover the required contribution. For any blind 1464 licensee who becomes ineligible to participate in the Florida 1465 Retirement System as described in this subsection, no creditable 1466 service shall be earned under the Florida Retirement System for 1467 any period following the month that retirement contributions 1468 ceased to be reported. However, any such person may participate 1469 in the Florida Retirement System in the future if employed by a 1470 participating employer in a covered position. 1471 Section 12. Paragraph (a) of subsection (4) of section 1472 1012.875, Florida Statutes, is amended to read: 1473 1012.875 State Community College System Optional Retirement 1474 Program.—Each Florida College System institution may implement 1475 an optional retirement program, if such program is established 1476 therefor pursuant to s. 1001.64(20), under which annuity or 1477 other contracts providing retirement and death benefits may be 1478 purchased by, and on behalf of, eligible employees who 1479 participate in the program, in accordance with s. 403(b) of the 1480 Internal Revenue Code. Except as otherwise provided herein, this 1481 retirement program, which shall be known as the State Community 1482 College System Optional Retirement Program, may be implemented 1483 and administered only by an individual Florida College System 1484 institution or by a consortium of Florida College System 1485 institutions. 1486 (4)(a)1. Through June 30, 2011, each college must 1487 contribute on behalf of each program member an amount equal to 1488 10.43 percent of the employee’s gross monthly compensation. 1489 2. Effective July 1, 2011, through June 30, 2012, each 1490 member shall contribute an amount equal to the employee 1491 contribution required under s. 121.71(3)(a). The employer shall 1492 contribute on behalf of each program member an amount equal to 1493 the difference between 10.43 percent of the employee’s gross 1494 monthly compensation and the employee’s required contribution 1495 based on the employee’s gross monthly compensation. 1496 3. Effective July 1, 2012, each member shall contribute an 1497 amount equal to the employee contribution required under s. 1498 121.71(3)(a). The employer shall contribute on behalf of each 1499 program member an amount equal to the difference between 8.15 1500 percent of the employee’s gross monthly compensation and the 1501 employee’s required contribution based on the employee’s gross 1502 monthly compensation. 1503 4. The college shall deduct an amount approved by the 1504 district board of trustees of the college to provide for the 1505 administration of the optional retirement program. Payment of 1506 this contribution must be made directly by the college or 1507 through the program administrator to the designated company 1508 contracting for payment of benefits to the program member. 1509 Section 13. (1) In order to fund the benefit changes 1510 provided for in this act, the required employer contribution 1511 rates of the Florida Retirement System established in 121.71(4), 1512 Florida Statutes, shall be adjusted as follows: 1513 (a) The Regular Class is increased by X.XX percentage 1514 points. 1515 (b) The Special Risk Class is increased by X.XX percentage 1516 points. 1517 (c) The Special Risk Administrative Support Class is 1518 increased by X.XX percentage points. 1519 (d) The Elected Officers’ Class—Legislators, Governor, Lt. 1520 Governor, Cabinet Officers, State Attorneys, Public Defenders is 1521 increased by X.XX percentage points. 1522 (e) The Elected Officers’ Class—Justices, Judges is 1523 increased by X.XX percentage points. 1524 (f) The Elected Officer’s Class—County Elected Officers is 1525 increased by X.XX percentage points. 1526 (g) The Senior Management Service Class is increased by 1527 X.XX percentage points. 1528 (h) The DROP class is increased by X.XX percentage points. 1529 (2) In order to fund for the benefit changes provided for 1530 in this act, the required employer contribution rates for the 1531 unfunded actuarial liability of the Florida Retirement System 1532 established in s. 121.71(5), Florida Statutes, shall be adjusted 1533 as follows: 1534 (a) The Regular Class is increased by X.XX percentage 1535 points. 1536 (b) The Special Risk Class is increased by X.XX percentage 1537 points. 1538 (c) The Special Risk Administrative Support Class is 1539 increased by X.XX percentage points. 1540 (d) The Elected Officers’ Class—Legislators, Governor, Lt. 1541 Governor, Cabinet Officers, State Attorneys, Public Defenders is 1542 increased by X.XX percentage points. 1543 (e) The Elected Officers’ Class—Justices, Judges is 1544 increased by X.XX percentage points. 1545 (f) The Elected Officer’s Class—County Elected Officers is 1546 increased by X.XX percentage points. 1547 (g) The Senior Management Service Class is increased by 1548 X.XX percentage points. 1549 (h) The DROP class is increased by X.XX percentage points. 1550 (3) The adjustments provided in subsections (1) and (2) 1551 shall be made in addition to other changes to such contribution 1552 rates which may be enacted into law to take effect on July 1, 1553 2013, and July 1, 2014. The Division of Law Revision and 1554 Information is requested to adjust accordingly the contribution 1555 rates provided in s. 121.71, Florida Statutes. 1556 Section 14. The Legislature finds that a proper and 1557 legitimate state purpose is served when employees and retirees 1558 of the state and its political subdivisions, and the dependents, 1559 survivors, and beneficiaries of such employees and retirees, are 1560 extended the basic protections afforded by governmental 1561 retirement systems. These persons must be provided benefits that 1562 are fair and adequate and that are managed, administered, and 1563 funded in an actuarially sound manner, as required by s. 14, 1564 Article X of the State Constitution and part VII of chapter 112, 1565 Florida Statutes. Therefore, the Legislature determines and 1566 declares that this act fulfills an important state interest. 1567 Section 15. This act shall take effect January 1, 2014.