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

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