Bill Text: FL S7040 | 2012 | Regular Session | Introduced
Bill Title: State Retirement
Spectrum: Committee Bill
Status: (N/A - Dead) 2012-01-13 - Submit as committee bill by Governmental Oversight and Accountability (SB 2024) [S7040 Detail]
Download: Florida-2012-S7040-Introduced.html
Florida Senate - 2012 (PROPOSED COMMITTEE BILL) SPB 7040 FOR CONSIDERATION By the Committee on Governmental Oversight and Accountability 585-01594A-12 20127040__ 1 A bill to be entitled 2 An act relating to state retirement; amending s. 3 121.0515, F.S.; correcting a cross-reference; amending 4 s. 121.053, F.S.; specifying that a retiree who is 5 elected or appointed for the first time to an elective 6 office may not be enrolled as a renewed member; 7 amending s. 121.055, F.S.; specifying that a retiree 8 who is reemployed in a regularly established position 9 as an elected official may not renew membership in the 10 Senior Management Service Class or annuity program; 11 providing exceptions from the prohibition against 12 paying benefits for certain purposes under the Senior 13 Management Service Optional Annuity Program; 14 specifying that a retiree who is reemployed in a 15 regularly established position after a certain date 16 may not be enrolled as a renewed member; amending s. 17 121.071, F.S.; providing exceptions from the 18 prohibition against paying benefits for certain 19 purposes under the pension plan; amending s. 121.091, 20 F.S.; specifying the age of eligibility to participate 21 in DROP for members enrolled after a certain date; 22 amending s. 121.122, F.S.; specifying that a retiree 23 who is reemployed in a regularly established position 24 after a certain date may not be enrolled as a renewed 25 member; amending s. 121.35, F.S.; providing exceptions 26 from the prohibition against paying benefits for 27 certain purposes under the optional retirement program 28 for the State University System; clarifying when 29 voluntary contributions may be paid out; defining the 30 term “benefit” for the purposes of the optional 31 program; amending s. 121.4501, F.S.; specifying that 32 the definition of “eligible employee” does not include 33 certain members reemployed in a regularly established 34 position; amending s. 121.591, F.S.; providing 35 exceptions from the prohibition against paying 36 benefits for certain purposes under the Florida 37 Retirement System Investment Plan; amending s. 38 1012.875, F.S.; providing exceptions to the 39 prohibition against paying benefits for certain 40 purposes under the State Community College System 41 Optional Retirement Program; providing an effective 42 date. 43 44 Be It Enacted by the Legislature of the State of Florida: 45 46 Section 1. Paragraph (k) of subsection (3) of section 47 121.0515, Florida Statutes, is amended to read: 48 121.0515 Special Risk Class.— 49 (3) CRITERIA.—A member, to be designated as a special risk 50 member, must meet the following criteria: 51 (k) The member must have already qualified for and be 52 actively participating in special risk membership under 53 paragraph (a), paragraph (b), or paragraph (c), must have 54 suffered a qualifying injuryas defined in this paragraph, must 55 not be receiving disability retirement benefits underas56provided ins. 121.091(4), and must satisfy the requirements of 57 this paragraph. 58 1.The abilityTo qualify for the class of membership 59 defined in paragraph (2)(i),(2)(f) occurs whentwo licensed 60 medical physicians, one of whom is the member’saprimary 61 treating physicianof the member, must certify the existence of 62the physical injury and medical condition that constitutea 63 qualifying injuryas defined in this paragraphand that the 64 member has reached maximum medical improvement after August 1, 65 2008. The certificationsfrom the licensed medical physicians66 must include, at a minimum, that the injuryto the special risk67memberhas resulted in a physical loss, or loss of use, of at 68 least two of the following: left arm, right arm, left leg, or 69 right leg; and that: 70 a. TheThat thisphysical loss or loss of use is total and 71 permanent, unlessexcept in the event thatthe loss of use is 72 due to a physical injury to the member’s brain, in which event 73 the loss of use is permanent with at least 75 percent loss of 74 motor function with respect to each arm or leg affected. 75 b. TheThat thisphysical loss or loss of use renders the 76 member physically unable to perform the essential job functions 77 of his or her special risk position. 78 c.That,Notwithstanding thethisphysical loss or loss of 79 use, the individual is able to perform the essential job 80 functions required by the member’s new position, as provided in 81 subparagraph 3. 82 d. TheThatuse of artificial limbs iseithernot possible 83 or does not alter the member’s ability to perform the essential 84 job functions of the member’s position. 85 e.ThatThe physical loss or loss of use is a direct result 86 of a physical injury and not a result of any mental, 87 psychological, or emotional injury. 88 2. For the purposes of this paragraph, “qualifying injury” 89 means a physicalaninjury and medical condition sustained in 90 the line of duty, as certified by the member’s employing agency, 91 by a special risk member whichthatdoes not result in total and 92 permanent disability as defined in s. 121.091(4)(b). An injury 93 is a qualifying injury if the injury is a physical injury to the 94 member’s physical body resulting in a physical loss, or loss of 95 use, of at least two of the following: left arm, right arm, left 96 leg, or right leg. Notwithstanding any other provision of this 97 section, an injury that would otherwise qualify as a qualifying 98 injury is notconsidereda qualifying injury if and when the 99 member ceases employment with the employer for whom he or she 100 was providing special risk services on the date the injury 101 occurred. 102 3. The new position, as described in sub-subparagraph 1.c., 103that is required for qualification as a special risk member104under this paragraphis not required to be a position with 105 essential job functions that entitle an individual to special 106 risk membership. Whether theanew positionas described in sub107subparagraph 1.c.exists and is available to the special risk 108 member is a decision to be made solely by the employer in 109 accordance with its hiring practices and applicable law. 110 4. This paragraph does not grant or create additional 111 rights for ananyindividual to continued employment or to be 112 hired or rehired by his or her employer whichthatare not 113 already provided under state lawwithin the Florida Statutes,114the State Constitution, the Americans with Disabilities Act, if 115 applicable, or any other applicablestate orfederal law. 116 Section 2. Paragraph (a) of subsection (3) of section 117 121.053, Florida Statutes, is amended to read: 118 121.053 Participation in the Elected Officers’ Class for 119 retired members.— 120 (3) On or after July 1, 2010: 121 (a) A retiree of a state-administered retirement system who 122 is elected or appointed for the first time to an elective office 123 in a regularly established position with a covered employer may 124 not be enrolled as a renewed member of a state-administered 125reenroll in the Floridaretirement system. 126 Section 3. Paragraph (f) of subsection (1) and paragraph 127 (e) of subsection (6) of section 121.055, Florida Statutes, are 128 amended to read: 129 121.055 Senior Management Service Class.—There is hereby 130 established a separate class of membership within the Florida 131 Retirement System to be known as the “Senior Management Service 132 Class,” which shall become effective February 1, 1987. 133 (1) 134 (f) Effective July 1, 1997: 135 1. Except as provided in subparagraph 3., an elected state 136 officer eligible for membership in the Elected Officers’ Class 137 under s. 121.052(2)(a), (b), or (c) who elects membership in the 138 Senior Management Service Class under s. 121.052(3)(c) may, 139 within 6 months after assuming office, orwithin 6 months after140this act becomes a lawfor serving elected state officers, 141 within 6 months after May 30, 1997, elect to participate in the 142 Senior Management Service Optional Annuity Program, as provided 143 in subsection (6), in lieu of membership in the Senior 144 Management Service Class. 145 2. Except as provided in subparagraph 3., an elected 146 officer of a local agency employer eligible for membership in 147 the Elected Officers’ Class under s. 121.052(2)(d) who elects 148 membership in the Senior Management Service Class under s. 149 121.052(3)(c) may, within 6 months after assuming office, or 150within 6 months after this act becomes a lawfor serving elected 151 officers of a local agency employer, within 6 months after May 152 30, 1997, elect to withdraw from the Florida Retirement System, 153 as provided in subparagraph (b)2., in lieu of membership in the 154 Senior Management Service Class. 155 3. A retiree of a state-administered retirement system who 156 is initially reemployed in a regularly established position on 157 or after July 1, 2010, as an elected official eligible for the 158 Elected Officers’ Class may not be enrolled in renewedrenew159 membership in the Senior Management Service Class or in the 160 Senior Management Service Optional Annuity Program as provided 161 in subsection (6), and may not withdraw from the Florida 162 Retirement System as a renewed member as provided in 163 subparagraph (b)2., as applicable, in lieu of membership in the 164 Senior Management Service Class. 165 (6) 166 (e) Benefits.— 167 1. Benefits under the Senior Management Service Optional 168 Annuity Program are payable only to members of the program, or 169 their beneficiaries as designated by the member in the contract 170 with the provider company, and must be paid by the designated 171 company in accordance with the terms of the annuity contract 172 applicable to the member. A member must be terminated from all 173 employment relationships with Florida Retirement System 174 employers for 3 calendar months to begin receiving the employer 175 funded and employee-funded benefit. The member must meet the 176 definition of termination in s. 121.021(39) beginning the month 177 after receiving a benefit, including a distribution. Benefits 178 funded by employer and employee contributions are payable under 179 the terms of the contract to the member, his or her beneficiary, 180 or his or her estate, in addition to: 181 a. A lump-sum payment to the beneficiary upon the death of 182 the member; 183 b. A cash-out of a de minimis account upon the request of a 184 former member who has been terminated for a minimum of 6 185 calendar months from the employment that entitled him or her to 186 optional annuity program participation. Such cash-out must be a 187 complete liquidation of the account balance with that company 188 and is subject to the Internal Revenue Code; 189 c. A mandatory distribution of a de minimis account of a 190 former member who has been terminated for a minimum of 6 191 calendar months from the employment that entitled him or her to 192 optional annuity program participation as authorized by the 193 department; or 194 d. A lump-sum direct rollover distribution whereby all 195 accrued benefits, plus interest and investment earnings, are 196 paid from the member’s account directly to the custodian of an 197 eligible retirement plan, as defined in s. 402(c)(8)(B) of the 198 Internal Revenue Code, on behalf of the member. 199 2. Under the Senior Management Service Optional Annuity 200 Program, benefits, including employee contributions, are not 201 payable for employee hardships, unforeseeable emergencies, 202 loans, medical expenses, educational expenses, purchase of a 203 principal residence, payments necessary to prevent eviction or 204 foreclosure on an employee’s principal residence, or any other 205 reason except for a requested distribution for retirement, a 206 mandatory de minimis distribution authorized by the 207 administrator, or a minimum distribution required pursuant to 208 the Internal Revenue Codebefore termination from all employment209relationships with participating employers for 3 calendar210months. 211 3. The benefits payable to aanyperson under the Senior 212 Management Service Optional Annuity Program, and any 213 contribution accumulated under such program, are not subject to 214 assignment, execution, or attachment or to any legal process 215whatsoever. 216 4. Except as provided in subparagraph 5., a member who 217 terminates employment and receives a distribution, including a 218 rollover or trustee-to-trustee transfer, funded by employer and 219 required employee contributions is a retiree ofdeemed to be220retired froma state-administered retirement system. Such 221 retiree, who is initially reemployed in a regularly established 222 position on or after July 1, 2010, may not be enrolled as a 223 renewed memberif the member is subsequently employed with an224employer that participates in the Florida Retirement System. 225 5. A member who receives optional annuity program benefits 226 funded by employer and employee contributions as a mandatory 227 distribution of a de minimis account authorized by the 228 department is not considered a retiree. 229 230 As used in this paragraph, a “de minimis account” means an 231 account with a provider company containing employer and employee 232 contributions and accumulated earnings of up tonot more than233 $5,000 made under this chapter. 234 Section 4. Subsection (7) of section 121.071, Florida 235 Statutes, is amended to read: 236 121.071 Contributions.—Contributions to the system shall be 237 made as follows: 238 (7)Before termination of employment,Benefits, including 239 employee contributions, are not payable under the pension plan 240 for employee hardships, unforeseeable emergencies, loans, 241 medical expenses, educational expenses, purchase of a principal 242 residence, payments necessary to prevent eviction or foreclosure 243 on an employee’s principal residence, or any other reason except 244 for payment of retirement benefits, a refund of employee 245 contributions, or a minimum distribution required pursuant to 246 the Internal Revenue Codebefore termination from all employment247relationships with participating employers. 248 Section 5. Paragraph (a) of subsection (13) of section 249 121.091, Florida Statutes, is amended to read: 250 121.091 Benefits payable under the system.—Benefits may not 251 be paid under this section unless the member has terminated 252 employment as provided in s. 121.021(39)(a) or begun 253 participation in the Deferred Retirement Option Program as 254 provided in subsection (13), and a proper application has been 255 filed in the manner prescribed by the department. The department 256 may cancel an application for retirement benefits when the 257 member or beneficiary fails to timely provide the information 258 and documents required by this chapter and the department’s 259 rules. The department shall adopt rules establishing procedures 260 for application for retirement benefits and for the cancellation 261 of such application when the required information or documents 262 are not received. 263 (13) DEFERRED RETIREMENT OPTION PROGRAM.—In general, and 264 subject to this section, the Deferred Retirement Option Program, 265 hereinafter referred to as DROP, is a program under which an 266 eligible member of the Florida Retirement System may elect to 267 participate, deferring receipt of retirement benefits while 268 continuing employment with his or her Florida Retirement System 269 employer. The deferred monthly benefits shall accrue in the 270 Florida Retirement System on behalf of the member, plus interest 271 compounded monthly, for the specified period of the DROP 272 participation, as provided in paragraph (c). Upon termination of 273 employment, the member shall receive the total DROP benefits and 274 begin to receive the previously determined normal retirement 275 benefits. Participation in the DROP does not guarantee 276 employment for the specified period of DROP. Participation in 277 DROP by an eligible member beyond the initial 60-month period as 278 authorized in this subsection shall be on an annual contractual 279 basis for all participants. 280 (a) Eligibility of member to participate in DROP.—All 281 active Florida Retirement System members in a regularly 282 established position, and all active members of the Teachers’ 283 Retirement System established in chapter 238 or the State and 284 County Officers’ and Employees’ Retirement System established in 285 chapter 122, which are consolidated within the Florida 286 Retirement System under s. 121.011, may participateare eligible287to elect participationin DROP if: 288 1. The member is not a renewed member under s. 121.122 or a 289 member of the State Community College System Optional Retirement 290 Program under s. 121.051, the Senior Management Service Optional 291 Annuity Program under s. 121.055, or the optional retirement 292 program for the State University System under s. 121.35. 293 2. Except as provided in subparagraph 6., for members 294 initially enrolled before July 1, 2011, election to participate 295 must beismade within 12 months immediately following the date 296on whichthe member first reaches normal retirement date;,or, 297 for a member who reaches normal retirement date based on service 298 before he or she reaches age 62, or age 55 for Special Risk 299 Class members, election to participate may be deferred to the 12 300 months immediately following the date the member attains age 57, 301 or age 52 for Special Risk Class members. Except as provided in 302 subparagraph 6., for members initially enrolled on or after July 303 1, 2011, election to participate must be made within the 12 304 months immediately following the date on which the member first 305 reaches normal retirement date; or, for a member who reaches 306 normal retirement date based on service before he or she reaches 307 age 65, or age 60 for Special Risk Class members, election to 308 participate may be deferred to the 12 months immediately 309 following the date the member attains age 60, or age 55 for 310 Special Risk Class members. A member who delays DROP 311 participation during the 12-month period immediately following 312 his or her maximum DROP deferral date, except as provided in313subparagraph 6.,loses a month of DROP participation for each 314 month delayed. A member who fails to make an election within the 315 12-month limitation period forfeits all rights to participate in 316 DROP. The member shall advise his or her employer and the 317 division in writing of the date DROP begins. The beginning date 318 may be subsequent to the 12-month election period but must be 319 within the original 60-month participation period provided in 320 subparagraph (b)1. When establishing eligibility to participate 321 in DROP, the member may elect to include or exclude any optional 322 service credit purchased by the member from the total service 323 used to establish the normal retirement date. A member who has 324 dual normal retirement dates mayis eligible to elect to325 participate in DROP after attaining normal retirement date in 326 either class. 327 3. The employer of a member electing to participate in 328 DROP, or employers if dually employed, shall acknowledge in 329 writing to the division the date the member’s participation in 330 DROP begins and the date the member’s employment and DROP 331 participation terminates. 332 4. Simultaneous employment of a member by additional 333 Florida Retirement System employers subsequent to the 334 commencement of a member’s participation in DROP is permissible 335 if such employers acknowledge in writing a DROP termination date 336 no later than the member’s existing termination date or the 337 maximum participation period provided in subparagraph (b)1. 338 5. A member may change employers while participating in 339 DROP, subject to the following: 340 a. TheAchange of employment takes place without a break 341 in service so that the member receives salary for each month of 342 continuous DROP participation. If a member receives no salary 343 during a month, DROP participation ceases unless the employer 344 verifies a continuation of the employment relationship for such 345 member pursuant to s. 121.021(39)(b). 346 b. The member and new employer notify the division of the 347 identity of the new employer on forms required by the division. 348 c. The new employer acknowledges, in writing, the member’s 349 DROP termination date, which may be extended but not beyond the 350 maximum participation period provided in subparagraph (b)1., 351 acknowledges liability for any additional retirement 352 contributions and interest required if the member fails to 353 timely terminate employment, and is subject to the adjustment 354 required in sub-subparagraph (c)5.d. 355 6. Effective July 1, 2001, for instructional personnel as 356 defined in s. 1012.01(2), election to participate in DROP may be 357 made at any time following the date on which the member first 358 reaches normal retirement date. The member shall advise his or 359 her employer and the division in writing of the date on which 360 DROP begins. When establishing eligibility of the member to 361 participate in DROP for the 60-month participation period 362 provided in subparagraph (b)1., the member may elect to include 363 or exclude any optional service credit purchased by the member 364 from the total service used to establish the normal retirement 365 date. A member who has dual normal retirement dates is eligible 366 to elect to participate in either class. 367 Section 6. Subsection (2) of section 121.122, Florida 368 Statutes, is amended to read: 369 121.122 Renewed membership in system.— 370 (2) A retiree of a state-administered retirement system who 371 is initially reemployed in a regularly established position on 372 or after July 1, 2010, may not be enrolled as a renewed member 373is noteligible for renewed membership. 374 Section 7. Paragraphs (a), (b), (g), and (h) of subsection 375 (5) of section 121.35, Florida Statutes, are amended to read: 376 121.35 Optional retirement program for the State University 377 System.— 378 (5) BENEFITS.— 379 (a) Benefits are payable under the optional retirement 380 program only to vested members participating in the program, or 381 their beneficiaries as designated by the member in the contract 382 with a provider company, and such benefits shall be paid only by 383 the designated company in accordance with s. 403(b) of the 384 Internal Revenue Code and the terms of the annuity or investment 385 contractor contractsapplicable to the member. Benefits accrue 386 in individual accounts that are member-directed, portable, and 387 funded by employer and employee contributions and the earnings 388 thereon. The member must be terminated for 3 calendar months 389 from all employment relationships with all Florida Retirement 390 System employers to begin receiving the benefit. Benefits funded 391 by employer and employee contributions are payable in accordance 392 with the following terms and conditions: 393 1. Benefits shall be paid only to a participating member, 394 to his or her beneficiaries, or to his or her estate, as 395 designated by the member. 396 2. Benefits shall be paid by the provider company or 397 companies in accordance with the law, the provisions of the 398 contract, and any applicable department rule or policy. 399 3. In the event of a member’s death, moneys accumulated by, 400 or on behalf of, the member, less withholding taxes remitted to 401 the Internal Revenue Service, if any, shall be distributed to 402 the member’s designated beneficiary or beneficiaries, or to the 403 member’s estate, as if the member retired on the date of death, 404 as provided in paragraph (d). No other death benefits are 405 available to survivors of members under the optional retirement 406 program except for such benefits, or coverage for such benefits, 407 as are separately afforded by the employer,at the employer’s 408 discretion. 409 (b) Benefits, including employee contributions, are not 410 payable for employee hardships, unforeseeable emergencies, 411 loans, medical expenses, educational expenses, purchase of a 412 principal residence, payments necessary to prevent eviction or 413 foreclosure on an employee’s principal residence, or any other 414 reason except for a requested distribution for retirement, a 415 mandatory de minimis distribution authorized by the 416 administrator, or a minimum distribution required pursuant to 417 the Internal Revenue Codebefore termination from all employment418relationships with participating employers for 3 calendar419months. 420 (g) Benefits funded by the participating member’s voluntary 421 personal contributions may be paid out after termination of 422 employment from all participating employers for 3 calendar 423 monthsat any timeand in any form within the limits provided in 424 the contract between the member and the provider company. The 425 member shall notify the provider company regarding the date and 426 provisions under which he or she wants to receive the employee 427 funded portion of the plan. 428 (h) For purposes of this section, the term: 429 1. “Benefit” means a distribution requested by the member 430 or surviving beneficiary funded in part or in whole by the 431 employer or required employee contributions, plus earnings, and 432 includes rolling a distribution over to another qualified plan. 433 2. “Retiree” means a former participating member of the 434 optional retirement program who has terminated employment and 435 has taken a distribution as provided in this subsection, except 436 for a mandatory distribution of a de minimis account authorized 437 by the department. 438 Section 8. Paragraph (e) of subsection (2) of section 439 121.4501, Florida Statutes, is amended to read: 440 121.4501 Florida Retirement System Investment Plan.— 441 (2) DEFINITIONS.—As used in this part, the term: 442 (e) “Eligible employee” means an officer or employee, as 443 defined in s. 121.021, who: 444 1. Is a member of, or is eligible for membership in, the 445 Florida Retirement System, including any renewed member of the 446 Florida Retirement System initially enrolled before July 1, 447 2010; or 448 2. Participates in, or is eligible to participate in, the 449 Senior Management Service Optional Annuity Programas450 established under s. 121.055(6), the State Community College 451 System Optional Retirement Programasestablished under s. 452 121.051(2)(c), or the State University System Optional 453 Retirement Program established under s. 121.35. 454 455 The term does not include aanymember participating in the 456 Deferred Retirement Option Program established under s. 457 121.091(13), a retiree of a state-administered retirement system 458 initially reemployed in a regularly established position on or 459 after July 1, 2010, or a mandatory participant of the State 460 University System Optional Retirement Program established under 461 s. 121.35. 462 Section 9. Section 121.591, Florida Statutes, is amended to 463 read: 464 121.591 Payment of benefits.—Benefits may not be paid under 465 the Florida Retirement System Investment Plan unless the member 466 has terminated employment as provided in s. 121.021(39)(a) or is 467 deceased and a proper application has been filed as prescribed 468 by the state board or the department.Before termination of469employment,Benefits, including employee contributions, are not 470 payable under the investment plan for employee hardships, 471 unforeseeable emergencies, loans, medical expenses, educational 472 expenses, purchase of a principal residence, payments necessary 473 to prevent eviction or foreclosure on an employee’s principal 474 residence, or any other reason except for a requested 475 distribution for retirement, a mandatory de minimis distribution 476 authorized by the board, or a minimum distribution required 477 pursuant to the Internal Revenue Codeprior to termination from478all employment relationships with participating employers. The 479 state board or department, as appropriate, may cancel an 480 application for retirement benefits if the member or beneficiary 481 fails to timely provide the information and documents required 482 by this chapter and the rules of the state board and department. 483 In accordance with their respective responsibilities, the state 484 board and the department shall adopt rules establishing 485 procedures for applyingapplicationfor retirement benefits and 486 for cancellingthe cancellation ofsuch application if the 487 required information or documents are not received. The state 488 board and the department, as appropriate, mayare authorized to489 cash out a de minimis account of a member who has been 490 terminated from Florida Retirement System covered employment for 491 a minimum of 6 calendar months. A de minimis account is an 492 account containing employer and employee contributions and 493 accumulated earnings of up tonot more than$5,000 made under 494the provisions ofthis chapter. Such cash-out must be a complete 495 lump-sum liquidation of the account balance, subject tothe496provisions ofthe Internal Revenue Code, or a lump-sum direct 497 rollover distribution paid directly to the custodian of an 498 eligible retirement plan, as defined by the Internal Revenue 499 Code, on behalf of the member. Any nonvested accumulations and 500 associated service credit, including amounts transferred to the 501 suspense account of the Florida Retirement System Investment 502 Plan Trust Fund authorized under s. 121.4501(6), areshall be503 forfeited upon payment of any vested benefit to a member or 504 beneficiary, except for de minimis distributions or minimum 505 required distributions as provided under this section. If any 506 financial instrument issued for the payment of retirement 507 benefits under this section is not presented for payment within 508 180 days after the last day of the month in which it was 509 originally issued, the third-party administrator or otherduly510 authorized agent of the state board shall cancel the instrument 511 and credit the amount of the instrument to the suspense account 512 of the Florida Retirement System Investment Plan Trust Fund 513authorized under s.121.4501(6). Any amounts transferred to the 514 suspense account are payable uponaproper application, not 515 includingto includeearnings thereon, as provided in this 516 section, within 10 years after the last day of the month in 517 which the instrument was originally issued, after which time 518 such amounts and any earnings attributable to employer 519 contributions areshall beforfeited. Any forfeited amounts are 520 assets of the trust fund and are not subject to chapter 717. 521 (1) NORMAL BENEFITS.—Under the investment plan: 522 (a) Benefits in the form of vested accumulations as 523 described in s. 121.4501(6) are payableunder this subsectionin 524 accordance with the following terms and conditions: 525 1. Benefits are payable only to a member, an alternate 526 payee of a qualified domestic relations order, or a beneficiary. 527 2. Benefits shall be paid by the third-party administrator 528 or designated approved providers in accordance withthelaw, the 529 contracts, and any applicable board rule or policy. 530 3. The member must be terminated from all employment with 531 all Florida Retirement System employers, as provided in s. 532 121.021(39). 533 4. Benefit payments may not be made until the member has 534 been terminated for 3 calendar months, except that the state 535 board may authorize by rule for the distribution of up to 10 536 percent of the member’s account after being terminated for 1 537 calendar month if the member has reached the normal retirement 538 date as defined in s. 121.021. 539 5. If a member or former member of the Florida Retirement 540 System receives an invalid distribution, such person musteither541 repay the full amount within 90 days after receipt of final 542 notification by the state board or the third-party administrator 543 that the distribution was invalid, or, in lieu of repayment,the544membermust terminate employment from all participating 545 employers. If such person fails to repay the full invalid 546 distribution within 90 days after receipt of final notification, 547 the person may be deemed retired from the investment plan by the 548 state board and is subject to s. 121.122. If such person is 549 deemed retired, any joint and several liability set out in s. 550 121.091(9)(d)2. is void, and the state board, the department, or 551 the employing agency is not liable for gains on payroll 552 contributions that have not been deposited to the person’s 553 account in the investment plan, pending resolution of the 554 invalid distribution. The member or former member who has been 555 deemed retired or who has been determined by the state board to 556 have taken an invalid distribution may appeal the agency 557 decision through the complaint processasprovided under s. 558 121.4501(9)(g)3. As used in this subparagraph, the term “invalid 559 distribution” means any distribution from an account in the 560 investment plan which is taken in violation of this section, s. 561 121.091(9), or s. 121.4501. 562 (b) If a member elects to receive his or her benefits upon 563 termination of employment as defined in s. 121.021, the member 564 must submit a written application or an application by 565 electronic means to the third-party administrator indicating his 566 or her preferred distribution date and selecting an authorized 567 method of distribution as provided in paragraph (c). The member 568 may defer application for and receipt of benefitsuntil he or569she chooses to make such application, subject to federal 570 requirements. 571 (c) Upon receipt by the third-party administrator of a 572 properly executed application for distribution of benefits, the 573 total accumulated benefit is payable to the member pro rata 574 across all Florida Retirement System benefit sources as: 575 1. A lump-sum or partial distribution to the member; 576 2. A lump-sum direct rollover distribution whereby all 577 accrued benefits, plus interest and investment earnings, are 578 paid from the member’s account directly to the custodian of an 579 eligible retirement plan, as defined in s. 402(c)(8)(B) of the 580 Internal Revenue Code, on behalf of the member; or 581 3. Periodic distributions, as authorized by the state 582 board. 583 (d) The distribution payment method selected by the member 584 or beneficiary, and the retirement of the member or beneficiary, 585 is final and irrevocable at the time a benefit distribution 586 payment is cashed, deposited, or transferred to another 587 financial institution. Any additional service that remains 588 unclaimed at retirement may not be claimed or purchased, and the 589 type of retirement may not be changed, except that if a member 590 recovers from a disability, the member may subsequently request 591 benefits under subsection (2). 592 (e) A member may not receive a distribution of employee 593 contributions if a pending qualified domestic relations order is 594 filed against the member’s investment plan account. 595 (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under 596 this subsection are payable in lieu ofthebenefits that would 597otherwisebe payable underthe provisions ofsubsection (1). 598 Such benefits must be funded from employer contributions made 599 under s. 121.571, transferred employee contributions and funds 600 accumulated pursuant to paragraph (a), and interest and earnings 601 thereon. 602 (a) Transfer of funds.—To qualify to receive monthly 603 disability benefits under this subsection: 604 1. All moneys accumulated in the member’s accountsaccount, 605 including vested and nonvested accumulations as described in s. 606 121.4501(6), must be transferred from thesuch individual607 accounts to the division for deposit in the disability account 608 of the Florida Retirement System Trust Fund. Such moneys must be 609 accounted for separately. Earnings must be credited on an annual 610 basis for amounts held in the disability accounts of the Florida 611 Retirement System Trust Fund based on actual earnings of the 612 trust fund. 613 2. If the member has retained retirement credit earned 614 under the pension plan as provided in s. 121.4501(3), a sum 615 representing the actuarial present value of such credit within 616 the Florida Retirement System Trust Fund shall be reassigned by 617 the division from the pension plan to the disability program as 618 implemented under this subsection andshall bedeposited intoin619 the disability account of the trust fund. Such moneys must be 620 accounted for separately. 621 (b) Disability retirement; entitlement.— 622 1. A member of the investment plan who becomes totally and 623 permanently disabled, as defined in paragraph (d), after 624 completing 8 years of creditable service, or a member who 625 becomes totally and permanently disabled in the line of duty 626 regardless of length of service, is entitled to a monthly 627 disability benefit. 628 2. In order for service to apply toward the 8 years of 629 creditable service required for regular disability benefits, or 630 toward the creditable service used in calculating a service 631 based benefitas providedunder paragraph (g), the service must 632 be creditable service as described below: 633 a. The member’s period of service under the investment plan 634 shall be considered creditable service, except as provided in 635 subparagraph d. 636 b. If the member has elected to retain credit for service 637 under the pension plan as provided under s. 121.4501(3), all 638 such service isshall beconsidered creditable service. 639 c. If the member elects to transfer to his or her member 640 accounts a sum representing the present value of his or her 641 retirement credit under the pension plan as provided under s. 642 121.4501(3), the period of service under the pension plan 643 represented in the present value amounts transferred isshall be644 considered creditable service, except as provided in 645 subparagraph d. 646 d. If a member has terminated employment and has taken 647 distribution of his or her funds as provided in subsection (1), 648 all creditable service represented by such distributed funds is 649 forfeited for purposes of this subsection. 650 (c) Disability retirement effective date.—The effective 651 retirement date for a member who applies and is approved for 652 disability retirement shall be established as provided under s. 653 121.091(4)(a)2. and 3. 654 (d) Total and permanent disability.—A member isshall be655 considered totally and permanently disabled if, in the opinion 656 of the division, he or she is prevented, by reason of a 657 medically determinable physical or mental impairment, from 658 rendering useful and efficient service as an officer or 659 employee. 660 (e) Proof of disability.— Before approving payment of aany661 disability retirement benefit, the division shall require proof 662 that the member is totally and permanently disabled as provided 663 under s. 121.091(4)(c). 664 (f) Disability retirement benefit.—Upon the disability 665 retirement of a member under this subsection, the member shall 666 receive a monthly benefit that begins accruing on the first day 667 of the month of disability retirement, as approved by the 668 division, and is payable on the last day of that month and each 669 month thereafter during his or her lifetime and continued 670 disability. All disability benefits must be paid out of the 671 disability account of the Florida Retirement System Trust Fund 672 established under this subsection. 673 (g) Computation of disability retirement benefit.—The 674 amount of each monthly payment must be calculated as provided 675 under s. 121.091(4)(f). Creditable service under both the 676 pension plan and the investment plan isshall beapplicable as 677 provided under paragraph (b). 678 (h) Reapplication.—A member whose initial application for 679 disability retirement is denied may reapply for disability 680 benefits as provided in s. 121.091(4)(g). 681 (i) Membership.—Upon approval of a member’s application for 682 disability benefits, the member shall be transferred to the 683 pension plan, effective upon his or her disability retirement 684 effective date. 685 (j) Option to cancel.—A member whose application for 686 disability benefits is approved may cancel the application if 687 the cancellation request is received by the division before a 688 disability retirement warrant has been deposited, cashed, or 689 received by direct deposit. Upon cancellation: 690 1. The member’s transfer to the pension plan under 691 paragraph (i) isshall benullified; 692 2. The member shall be retroactively reinstated in the 693 investment plan without hiatus; 694 3. All funds transferred to the Florida Retirement System 695 Trust Fund under paragraph (a) must be returned to the member 696 accounts from which the funds were drawn; and 697 4. The member may elect to receive the benefit payable 698 under subsection (1) in lieu of disability benefits. 699 (k) Recovery from disability.— 700 1. The division may require periodic reexaminations at the 701 expense of the disability program account of the Florida 702 Retirement System Trust Fund. Except as provided in subparagraph 703 2., all other matters relating to recovery from disability are 704shall beas provided under s. 121.091(4)(h). 705 2. Upon recovery from disability, the recipient of 706 disability retirement benefits under this subsection becomes 707shall bea compulsory member of the investment plan. The net 708 difference between the recipient’s original account balance 709 transferred to the Florida Retirement System Trust Fund, 710 including earnings and total disability benefits paid to the 711suchrecipient, if any, shall be determined as provided in sub 712 subparagraph a. 713 a. An amount equal to the total benefits paid shall be 714 subtracted from that portion of the transferred account balance 715 consisting of vested accumulations as described under s. 716 121.4501(6), if any, and an amount equal to the remainder of 717 benefit amounts paid, if any, shall be subtracted from any 718 remaining nonvested accumulations. 719 b. Amounts subtracted under sub-subparagraph a. must be 720 retained within the disability account of the Florida Retirement 721 System Trust Fund. Any remaining account balance shall be 722 transferred to the third-party administrator for disposition as 723 provided under sub-subparagraph c. or sub-subparagraph d., as 724 appropriate. 725 c. If the recipient returns to covered employment, 726 transferred amounts must be deposited in individual accounts 727 under the investment plan, as directed by the member. Vested and 728 nonvested amounts shall be accounted for separately as provided 729 in s. 121.4501(6). 730 d. If the recipient fails to return to covered employment 731 upon recovery from disability: 732 (I) Any remaining vested amount must be deposited in 733 individual accounts under the investment plan, as directed by 734 the member, and is payable as provided in subsection (1). 735 (II) Any remaining nonvested amount must be held in a 736 suspense account and is forfeitable after 5 years as provided in 737 s. 121.4501(6). 738 3. If present value was reassigned from the pension plan to 739 the disability program as provided under subparagraph (a)2., the 740 full present value amount must be returned to the defined 741 benefit account within the Florida Retirement System Trust Fund 742 and the member’s associated retirement credit under the pension 743 plan must be reinstated in full. Any benefit based upon such 744 credit must be calculated as provided in s. 121.091(4)(h)1. 745 (l) Nonadmissible causes of disability.—A member is not 746 entitled to a disability retirement benefit if the disability 747 results from ananyinjury or diseaseasdescribed in s. 748 121.091(4)(i). 749 (m) Disability retirement of justice or judge by order of 750 Supreme Court.— 751 1. If a member is a justice of the Supreme Court, judge of 752 a district court of appeal, circuit judge, or judge of a county 753 court who has served for the years equal to, or greater than, 754 the vesting requirement in s. 121.021(45) as an elected 755 constitutional judicial officer, including service as a judicial 756 officer in any court abolished pursuant to Art. V of the State 757 Constitution, and who is retired for disability pursuant to s. 758 12, Art. V of the State Constitution, the member’s Option 1 759 monthly disability benefit amount as provided in s. 760 121.091(6)(a)1. shall be two-thirds of his or her monthly 761 compensation as of the member’s disability retirement date. The 762 member may alternatively elect to receive an actuarially 763 adjusted disability retirement benefit under any other option as 764 provided in s. 121.091(6)(a) orto receivethe normal benefit 765 payable under subsection (1). 766 2. If any justice or judge who is a member of the 767 investment plan is retired for disability pursuant to s. 12, 768 Art. V of the State Constitution and elects to receive a monthly 769 disability benefit under the provisions of this paragraph: 770 a. Any present value amount that was transferred to his or 771 her investment plan account and all employer and employee 772 contributions made to such account on his or her behalf, plus 773 interest and earnings thereon, must be transferred to and 774 deposited in the disability account of the Florida Retirement 775 System Trust Fund; and 776 b. The monthly disability benefits payable under this 777 paragraph shall be paid from the disability account of the 778 Florida Retirement System Trust Fund. 779 (n) Death of retiree or beneficiary.—Upon the death of a 780 disabled retiree or beneficiary of the retiree who is receiving 781 monthly disability benefits under this subsection, the monthly 782 benefits shall be paid through the last day of the month of 783 death andshallterminate, or be adjusted, if applicable, as of 784 that date in accordance with the optional form of benefit 785 selected at the time of retirement. The department may adopt 786 rules necessary to administer this paragraph. 787 (3) DEATH BENEFITS.—Under the Florida Retirement System 788 Investment Plan: 789 (a) Survivor benefits are payable in accordance with the 790 following terms and conditions: 791 1. To the extent vested, benefits are payable only to a 792 member’s beneficiary or beneficiaries as designated by the 793 member underas provided ins. 121.4501(20). 794 2. Benefits shall be paid by the third-party administrator 795 or designated approved providers in accordance withthelaw, the 796 contracts, and any applicable state board rule or policy. 797 3.To receive benefits,The member must be deceased. 798 (b) In the event of a member’s death, all vested 799 accumulations as described in s. 121.4501(6), less withholding 800 taxes remitted to the Internal Revenue Service, shall be 801 distributed, as provided in paragraph (c) or as described in s. 802 121.4501(20), as if the member retired on the date of death. No 803 other death benefits are available for survivors of members, 804 except for benefits, or coverage for benefits, as are otherwise 805 provided by law or separately provided by the employer, at the 806 employer’s discretion. 807 (c) Upon receipt by the third-party administrator of a 808 properly executed application for distribution of benefits, the 809 total accumulated benefit is payable by the third-party 810 administrator to the member’s surviving beneficiary or 811 beneficiaries, as: 812 1. A lump-sum distribution payable to the beneficiary or 813 beneficiaries, or to the deceased member’s estate; 814 2. An eligible rollover distribution, if permitted, on 815 behalf of the surviving spouse of a deceased member, whereby all 816 accrued benefits, plus interest and investment earnings, are 817 paid from the deceased member’s account directly to the 818 custodian of an eligible retirement plan, as described in s. 819 402(c)(8)(B) of the Internal Revenue Code, on behalf of the 820 surviving spouse; or 821 3. A partial lump-sum payment whereby a portion of the 822 accrued benefit is paid to the deceased member’s surviving 823 spouse or other designated beneficiaries, less withholding taxes 824 remitted to the Internal Revenue Service, and the remaining 825 amount is transferred directly to the custodian of an eligible 826 retirement plan, if permitted, as described in s. 402(c)(8)(B) 827 of the Internal Revenue Code, on behalf of the surviving spouse. 828 The proportions must be specified by the member or the surviving 829 beneficiary. 830 831 This paragraph does not abrogate other applicable provisions of 832 state or federal law providing for payment of death benefits. 833 (4) LIMITATION ON LEGAL PROCESS.—The benefits payable to 834 any person under the Florida Retirement System Investment Plan, 835 and any contributions accumulated under the plan, are not 836 subject to assignment, execution, attachment, or any legal 837 process, except for qualified domestic relations orders by a 838 court of competent jurisdiction, income deduction orders as 839 provided in s. 61.1301, and federal income tax levies. 840 Section 10. Subsection (7) of section 1012.875, Florida 841 Statutes, is amended to read: 842 1012.875 State Community College System Optional Retirement 843 Program.—Each Florida College System institution may implement 844 an optional retirement program, if such program is established 845 therefor pursuant to s. 1001.64(20), under which annuity or 846 other contracts providing retirement and death benefits may be 847 purchased by, and on behalf of, eligible employees who 848 participate in the program, in accordance with s. 403(b) of the 849 Internal Revenue Code. Except as otherwise provided herein, this 850 retirement program, which shall be known as the State Community 851 College System Optional Retirement Program, may be implemented 852 and administered only by an individual Florida College System 853 institution or by a consortium of Florida College System 854 institutions. 855 (7) Benefits, including employee contributions, are not 856 payable for employee hardships, unforeseeable emergencies, 857 loans, medical expenses, educational expenses, purchase of a 858 principal residence, payments necessary to prevent eviction or 859 foreclosure on an employee’s principal residence, or any other 860 reason except for a requested distribution for retirement, a 861 mandatory de minimis distribution authorized by the college, or 862 a minimum distribution required pursuant to the Internal Revenue 863 Codebefore termination from all employment relationships with864participating employers for 3 calendar months. 865 Section 11. This act shall take effect July 1, 2012.