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Senate Bill 1650

Senate Bill sb1650

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    Florida Senate - 2004                                  SB 1650

    By Senator Wise





    5-1024A-04

  1                      A bill to be entitled

  2         An act relating to state financial matters;

  3         amending s. 112.363, F.S.; providing that the

  4         spouse at the time of a Florida Retirement

  5         System participant's death is considered the

  6         beneficiary for purposes of the retiree health

  7         insurance subsidy unless a different

  8         beneficiary has been designated; amending s.

  9         121.4501, F.S.; defining the term "retiree" for

10         purposes of the Public Employee Optional

11         Retirement Program; changing the dates for

12         election to participate in the program;

13         providing that a terminated, vested member of

14         the program need not become reemployed to

15         change retirement plans; prescribing the

16         obligation of system employers to communicate

17         the existence of both retirement plans;

18         providing that certain terminated, vested

19         system members are eligible to participate in

20         the program; amending s. 121.591, F.S.;

21         providing for cashing out de minimis accounts;

22         amending s. 121.78, F.S.; providing the

23         participant's obligation to return excess

24         contributions; amending s. 215.47, F.S.;

25         revising guidelines for foreign obligations

26         that are eligible for state investment;

27         amending ss. 215.475, 215.5601, F.S.;

28         redesignating investment plans as "investment

29         policy statements"; providing an effective

30         date.

31  

                                  1

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    Florida Senate - 2004                                  SB 1650
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 1  Be It Enacted by the Legislature of the State of Florida:

 2  

 3         Section 1.  Paragraph (e) of subsection (3) of section

 4  112.363, Florida Statutes, is amended to read:

 5         112.363  Retiree health insurance subsidy.--

 6         (3)  RETIREE HEALTH INSURANCE SUBSIDY AMOUNT.--

 7         (e)1.  Beginning July 1, 2001, each eligible retiree of

 8  the defined benefit program of the Florida Retirement System,

 9  or, if the retiree is deceased, his or her beneficiary who is

10  receiving a monthly benefit from such retiree's account and

11  who is a spouse, or a person who meets the definition of joint

12  annuitant in s. 121.021(28), shall receive a monthly retiree

13  health insurance subsidy payment equal to the number of years

14  of creditable service, as defined in s. 121.021(17), completed

15  at the time of retirement multiplied by $5; however, no

16  eligible retiree or beneficiary may receive a subsidy payment

17  of more than $150 or less than $30.  If there are multiple

18  beneficiaries, the total payment must not be greater than the

19  payment to which the retiree was entitled.  The health

20  insurance subsidy amount payable to any person receiving the

21  retiree health insurance subsidy payment on July 1, 2001,

22  shall not be reduced solely by operation of this subparagraph.

23         2.  Beginning July 1, 2002, each eligible participant

24  of the Public Employee Optional Retirement Program of the

25  Florida Retirement System who has met the requirements of this

26  section, or, if the participant is deceased, his or her spouse

27  who is the participant's designated beneficiary, shall receive

28  a monthly retiree health insurance subsidy payment equal to

29  the number of years of creditable service, as provided in this

30  subparagraph, completed at the time of retirement, multiplied

31  by $5; however, no eligible retiree or beneficiary may receive

                                  2

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    Florida Senate - 2004                                  SB 1650
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 1  a subsidy payment of more than $150 or less than $30.  For

 2  purposes of determining a participant's creditable service

 3  used to calculate the health insurance subsidy, a

 4  participant's years of service credit or fraction thereof

 5  shall be based on the participant's work year as defined in s.

 6  121.021(54).  Credit shall be awarded for a full work year

 7  whenever health insurance subsidy contributions have been made

 8  as required by law for each month in the participant's work

 9  year.  In addition, all years of creditable service retained

10  under the Florida Retirement System defined benefit program

11  shall be included as creditable service for purposes of this

12  section. Notwithstanding any other provision in this section

13  to the contrary, the spouse at the time of death shall be the

14  participant's beneficiary unless such participant has

15  designated a different beneficiary subsequent to the

16  participant's most recent marriage.

17         Section 2.  Subsections (2), (4), (10), and (15) of

18  section 121.4501, Florida Statutes, are amended, and

19  subsection (20) is added to that section, to read:

20         121.4501  Public Employee Optional Retirement

21  Program.--

22         (2)  DEFINITIONS.--As used in this part, the term:

23         (a)  "Approved provider" or "provider" means a private

24  sector company that is selected and approved by the state

25  board to offer one or more investment products or services to

26  the Public Employee Optional Retirement Program. The term

27  includes a bundled provider that offers participants a range

28  of individually allocated or unallocated investment products

29  and may offer a range of administrative and customer services,

30  which may include accounting and administration of individual

31  participant benefits and contributions; individual participant

                                  3

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    Florida Senate - 2004                                  SB 1650
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 1  recordkeeping; asset purchase, control, and safekeeping;

 2  direct execution of the participant's instructions as to asset

 3  and contribution allocation; calculation of daily net asset

 4  values; direct access to participant account information;

 5  periodic reporting to participants, at least quarterly, on

 6  account balances and transactions; guidance, advice, and

 7  allocation services directly relating to its own investment

 8  options or products, but only if the bundled provider complies

 9  with the standard of care of s. 404(a)(1)(A-B) of the Employee

10  Retirement Income Security Act of 1974 (ERISA) and if

11  providing such guidance, advice, or allocation services does

12  not constitute a prohibited transaction under s. 4975(c)(1) of

13  the Internal Revenue Code or s. 406 of ERISA, notwithstanding

14  that such prohibited transaction provisions do not apply to

15  the optional retirement program; a broad array of distribution

16  options; asset allocation; and retirement counseling and

17  education. Private sector companies include investment

18  management companies, insurance companies, depositories, and

19  mutual fund companies.

20         (b)  "Average monthly compensation" means one-twelfth

21  of average final compensation as defined in s. 121.021(24).

22         (c)  "Covered employment" means employment in a

23  regularly established position as defined in s. 121.021(52).

24         (d)  "Department" means the Department of Management

25  Services.

26         (e)  "Division" means the Division of Retirement within

27  the Department of Management Services.

28         (f)  "Eligible employee" means an officer or employee,

29  as defined in s. 121.021(11), who:

30  

31  

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    Florida Senate - 2004                                  SB 1650
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 1         1.  Is a member of, or is eligible for membership in,

 2  the Florida Retirement System, including any renewed member of

 3  the Florida Retirement System;

 4         2.  Participates in, or is eligible to participate in,

 5  the Senior Management Service Optional Annuity Program as

 6  established under s. 121.055(6) or the State Community College

 7  Optional Retirement Program as established under s.

 8  121.051(2)(c); or

 9         3.  Is eligible to participate in, but does not

10  participate in, the State University System Optional

11  Retirement Program established under s. 121.35.

12  

13  The term does not include any member participating in the

14  Deferred Retirement Option Program established under s.

15  121.091(13) or any employee participating in an optional

16  retirement program established under s. 121.051(2)(c) or s.

17  121.35.

18         (g)  "Employer" means an employer, as defined in s.

19  121.021(10), of an eligible employee.

20         (h)  "Participant" means an eligible employee who

21  elects to participate in the Public Employee Optional

22  Retirement Program and enrolls in such optional program as

23  provided in subsection (4).

24         (i)  "Public Employee Optional Retirement Program,"

25  "optional program," or "optional retirement program" means the

26  alternative defined contribution retirement program

27  established under this section.

28         (j)  "Retiree" means a former participant of the

29  Florida Retirement System Public Employee Optional Retirement

30  Program who has terminated employment and has taken a

31  distribution as provided in s. 121.591, except for a mandatory

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    Florida Senate - 2004                                  SB 1650
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 1  distribution of a de minimis account authorized by the state

 2  board.

 3         (k)(j)  "State board" or "board" means the State Board

 4  of Administration.

 5         (l)(k)  "Trustees" means Trustees of the State Board of

 6  Administration.

 7         (m)(l)  "Vested" or "vesting" means the guarantee that

 8  a participant is eligible to receive a retirement benefit upon

 9  completion of the required years of service under the Public

10  Employee Optional Retirement Program.

11         (4)  PARTICIPATION; ENROLLMENT.--

12         (a)1.  With respect to an eligible employee who is

13  employed in a regularly established position on June 1, 2002,

14  by a state employer:

15         a.  Any such employee may elect to participate in the

16  Public Employee Optional Retirement Program in lieu of

17  retaining his or her membership in the defined benefit program

18  of the Florida Retirement System. The election must be made in

19  writing or by electronic means and must be filed with the

20  third-party administrator by August 31, 2002, or, in the case

21  of an active employee who is on a leave of absence on April 1,

22  2002, by the last business day of the 5th month following

23  August 31, 2002, or within 90 days after the month the leave

24  of absence concludes conclusion of the leave of absence,

25  whichever is later. This election is irrevocable, except as

26  provided in paragraph (e). Upon making such election, the

27  employee shall be enrolled as a participant of the Public

28  Employee Optional Retirement Program, the employee's

29  membership in the Florida Retirement System shall be governed

30  by the provisions of this part, and the employee's membership

31  in the defined benefit program of the Florida Retirement

                                  6

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    Florida Senate - 2004                                  SB 1650
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 1  System shall terminate. The employee's enrollment in the

 2  Public Employee Optional Retirement Program shall be effective

 3  the first day of the month for which a full month's employer

 4  contribution is made to the optional program.

 5         b.  Any such employee who fails to elect to participate

 6  in the Public Employee Optional Retirement Program within the

 7  prescribed time period is deemed to have elected to retain

 8  membership in the defined benefit program of the Florida

 9  Retirement System, and the employee's option to elect to

10  participate in the optional program is forfeited.

11         2.  With respect to employees who become eligible to

12  participate in the Public Employee Optional Retirement Program

13  by reason of employment in a regularly established position

14  with a state employer commencing after April 1, 2002:

15         a.  Any such employee shall, by default, be enrolled in

16  the defined benefit retirement program of the Florida

17  Retirement System at the commencement of employment, and may,

18  by the last business day end of the 5th month following the

19  employee's month of hire, elect to participate in the Public

20  Employee Optional Retirement Program. The employee's election

21  must be made in writing or by electronic means and must be

22  filed with the third-party administrator. The election to

23  participate in the optional program is irrevocable, except as

24  provided in paragraph (e).

25         b.  If the employee files such election within the

26  prescribed time period, enrollment in the optional program

27  shall be effective on the first day of employment. The

28  employer retirement contributions paid through the month of

29  the employee plan change shall be transferred to the optional

30  program, and, effective the first day of the next month, the

31  

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    Florida Senate - 2004                                  SB 1650
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 1  employer shall pay the applicable contributions based on the

 2  employee membership class in the optional program.

 3         c.  Any such employee who fails to elect to participate

 4  in the Public Employee Optional Retirement Program within the

 5  prescribed time period is deemed to have elected to retain

 6  membership in the defined benefit program of the Florida

 7  Retirement System, and the employee's option to elect to

 8  participate in the optional program is forfeited.

 9         3.  With respect to employees who become eligible to

10  participate in the Public Employee Optional Retirement Program

11  pursuant to s. 121.051(2)(c)3., any such employee may elect to

12  participate in the Public Employee Optional Retirement Program

13  in lieu of retaining his or her participation in the State

14  Community College Optional Retirement Program. The election

15  must be made in writing or by electronic means and must be

16  filed with the third-party administrator. This election is

17  irrevocable, except as provided in paragraph (e). Upon making

18  such election, the employee shall be enrolled as a participant

19  of the Public Employee Optional Retirement Program, the

20  employee's membership in the Florida Retirement System shall

21  be governed by the provisions of this part, and the employee's

22  participation in the State Community College Optional

23  Retirement Program shall terminate. The employee's enrollment

24  in the Public Employee Optional Retirement Program shall be

25  effective the first day of the month for which a full month's

26  employer contribution is made to the optional program.

27         4.  For purposes of this paragraph, "state employer"

28  means any agency, board, branch, commission, community

29  college, department, institution, institution of higher

30  education, or water management district of the state, which

31  

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    Florida Senate - 2004                                  SB 1650
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 1  participates in the Florida Retirement System for the benefit

 2  of certain employees.

 3         (b)1.  With respect to an eligible employee who is

 4  employed in a regularly established position on September 1,

 5  2002, by a district school board employer:

 6         a.  Any such employee may elect to participate in the

 7  Public Employee Optional Retirement Program in lieu of

 8  retaining his or her membership in the defined benefit program

 9  of the Florida Retirement System. The election must be made in

10  writing or by electronic means and must be filed with the

11  third-party administrator by November 30, or, in the case of

12  an active employee who is on a leave of absence on July 1,

13  2002, by the last business day of the 5th month following

14  November 30, 2002, or within 90 days after the month the leave

15  of absence concludes conclusion of the leave of absence,

16  whichever is later. This election is irrevocable, except as

17  provided in paragraph (e). Upon making such election, the

18  employee shall be enrolled as a participant of the Public

19  Employee Optional Retirement Program, the employee's

20  membership in the Florida Retirement System shall be governed

21  by the provisions of this part, and the employee's membership

22  in the defined benefit program of the Florida Retirement

23  System shall terminate. The employee's enrollment in the

24  Public Employee Optional Retirement Program shall be effective

25  the first day of the month for which a full month's employer

26  contribution is made to the optional program.

27         b.  Any such employee who fails to elect to participate

28  in the Public Employee Optional Retirement Program within the

29  prescribed time period is deemed to have elected to retain

30  membership in the defined benefit program of the Florida

31  

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    Florida Senate - 2004                                  SB 1650
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 1  Retirement System, and the employee's option to elect to

 2  participate in the optional program is forfeited.

 3         2.  With respect to employees who become eligible to

 4  participate in the Public Employee Optional Retirement Program

 5  by reason of employment in a regularly established position

 6  with a district school board employer commencing after July 1,

 7  2002:

 8         a.  Any such employee shall, by default, be enrolled in

 9  the defined benefit retirement program of the Florida

10  Retirement System at the commencement of employment, and may,

11  by the last business day end of the 5th month following the

12  employee's month of hire, elect to participate in the Public

13  Employee Optional Retirement Program. The employee's election

14  must be made in writing or by electronic means and must be

15  filed with the third-party administrator. The election to

16  participate in the optional program is irrevocable, except as

17  provided in paragraph (e).

18         b.  If the employee files such election within the

19  prescribed time period, enrollment in the optional program

20  shall be effective on the first day of employment. The

21  employer retirement contributions paid through the month of

22  the employee plan change shall be transferred to the optional

23  program, and, effective the first day of the next month, the

24  employer shall pay the applicable contributions based on the

25  employee membership class in the optional program.

26         c.  Any such employee who fails to elect to participate

27  in the Public Employee Optional Retirement Program within the

28  prescribed time period is deemed to have elected to retain

29  membership in the defined benefit program of the Florida

30  Retirement System, and the employee's option to elect to

31  participate in the optional program is forfeited.

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    Florida Senate - 2004                                  SB 1650
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 1         3.  For purposes of this paragraph, "district school

 2  board employer" means any district school board that

 3  participates in the Florida Retirement System for the benefit

 4  of certain employees, or a charter school or charter technical

 5  career center that participates in the Florida Retirement

 6  System as provided in s. 121.051(2)(d).

 7         (c)1.  With respect to an eligible employee who is

 8  employed in a regularly established position on December 1,

 9  2002, by a local employer:

10         a.  Any such employee may elect to participate in the

11  Public Employee Optional Retirement Program in lieu of

12  retaining his or her membership in the defined benefit program

13  of the Florida Retirement System. The election must be made in

14  writing or by electronic means and must be filed with the

15  third-party administrator by February 28, 2003, or, in the

16  case of an active employee who is on a leave of absence on

17  October 1, 2002, by the last business day of the 5th month

18  following February 28, 2003, or within 90 days after the month

19  the leave of absence concludes conclusion of the leave of

20  absence, whichever is later. This election is irrevocable,

21  except as provided in paragraph (e). Upon making such

22  election, the employee shall be enrolled as a participant of

23  the Public Employee Optional Retirement Program, the

24  employee's membership in the Florida Retirement System shall

25  be governed by the provisions of this part, and the employee's

26  membership in the defined benefit program of the Florida

27  Retirement System shall terminate. The employee's enrollment

28  in the Public Employee Optional Retirement Program shall be

29  effective the first day of the month for which a full month's

30  employer contribution is made to the optional program.

31  

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    Florida Senate - 2004                                  SB 1650
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 1         b.  Any such employee who fails to elect to participate

 2  in the Public Employee Optional Retirement Program within the

 3  prescribed time period is deemed to have elected to retain

 4  membership in the defined benefit program of the Florida

 5  Retirement System, and the employee's option to elect to

 6  participate in the optional program is forfeited.

 7         2.  With respect to employees who become eligible to

 8  participate in the Public Employee Optional Retirement Program

 9  by reason of employment in a regularly established position

10  with a local employer commencing after October 1, 2002:

11         a.  Any such employee shall, by default, be enrolled in

12  the defined benefit retirement program of the Florida

13  Retirement System at the commencement of employment, and may,

14  by the last business day end of the 5th month following the

15  employee's month of hire, elect to participate in the Public

16  Employee Optional Retirement Program. The employee's election

17  must be made in writing or by electronic means and must be

18  filed with the third-party administrator. The election to

19  participate in the optional program is irrevocable, except as

20  provided in paragraph (e).

21         b.  If the employee files such election within the

22  prescribed time period, enrollment in the optional program

23  shall be effective on the first day of employment. The

24  employer retirement contributions paid through the month of

25  the employee plan change shall be transferred to the optional

26  program, and, effective the first day of the next month, the

27  employer shall pay the applicable contributions based on the

28  employee membership class in the optional program.

29         c.  Any such employee who fails to elect to participate

30  in the Public Employee Optional Retirement Program within the

31  prescribed time period is deemed to have elected to retain

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 1  membership in the defined benefit program of the Florida

 2  Retirement System, and the employee's option to elect to

 3  participate in the optional program is forfeited.

 4         3.  For purposes of this paragraph, "local employer"

 5  means any employer not included in paragraph (a) or paragraph

 6  (b).

 7         (d)  Contributions available for self-direction by a

 8  participant who has not selected one or more specific

 9  investment products shall be allocated as prescribed by the

10  board. The third-party administrator shall notify any such

11  participant at least quarterly that the participant should

12  take an affirmative action to make an asset allocation among

13  the optional program products.

14         (e)  After the period during which an eligible employee

15  had the choice to elect the defined benefit program or the

16  Public Employee Optional Retirement Program, or the month

17  following the eligible employee's plan selection effective

18  date, if sooner, the employee or terminated vested employee

19  shall have one opportunity, at the employee's discretion

20  during his or her lifetime, to choose to move from the defined

21  benefit program to the Public Employee Optional Retirement

22  Program or from the Public Employee Optional Retirement

23  Program to the defined benefit program. This paragraph shall

24  be contingent upon approval from the Internal Revenue Service

25  for including the choice described herein within the programs

26  offered by the Florida Retirement System.

27         1.  If the employee chooses to move to the Public

28  Employee Optional Retirement Program, the applicable

29  provisions of this section shall govern the transfer.

30         2.  If the employee chooses to move to the defined

31  benefit program, the employee must transfer from his or her

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 1  Public Employee Optional Retirement Program account and from

 2  other employee moneys as necessary, a sum representing the

 3  present value of that employee's accumulated benefit

 4  obligation immediately following the time of such movement,

 5  determined assuming that attained service equals the sum of

 6  service in the defined benefit program and service in the

 7  Public Employee Optional Retirement Program. Benefit

 8  commencement occurs on the first date the employee would

 9  become eligible for unreduced benefits, using the discount

10  rate and other relevant actuarial assumptions that were used

11  to value the Florida Retirement System defined benefit plan

12  liabilities in the most recent actuarial valuation. For any

13  employee who, at the time of the second election, already

14  maintains an accrued benefit amount in the defined benefit

15  plan, the then-present value of such accrued benefit shall be

16  deemed part of the required transfer amount described in this

17  subparagraph. The division shall ensure that the transfer sum

18  is prepared using a formula and methodology certified by an

19  enrolled actuary.

20         3.  Notwithstanding subparagraph 2., an employee who

21  chooses to move to the defined benefit program and who became

22  eligible to participate in the Public Employee Optional

23  Retirement Program by reason of employment in a regularly

24  established position with a state employer after June 1, 2002;

25  a district school board employer after September 1, 2002; or a

26  local employer after December 1, 2002, must transfer from his

27  or her Public Employee Optional Retirement Program account

28  and, from other employee moneys as necessary, a sum

29  representing that employee's actuarial accrued liability.

30         4.  Employees' ability to transfer from the Florida

31  Retirement System defined benefit program to the Public

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 1  Employee Optional Retirement Program pursuant to paragraphs

 2  (a) through (d), and the ability for current employees to have

 3  an option to later transfer back into the defined benefit

 4  program under subparagraph 2., shall be deemed a significant

 5  system amendment. Pursuant to s. 121.031(4), any such

 6  resulting unfunded liability arising from actual original

 7  transfers from the defined benefit program to the optional

 8  program shall be amortized within 30 plan years as a separate

 9  unfunded actuarial base independent of the reserve

10  stabilization mechanism defined in s. 121.031(3)(f). For the

11  first 25 years, no direct amortization payment shall be

12  calculated for this base. During this 25-year period, such

13  separate base shall be used to offset the impact of employees

14  exercising their second program election under this paragraph.

15  It is the legislative intent that the actuarial funded status

16  of the Florida Retirement System defined benefit plan is

17  neither beneficially nor adversely impacted by such second

18  program elections in any significant manner, after due

19  recognition of the separate unfunded actuarial base. Following

20  this initial 25-year period, any remaining balance of the

21  original separate base shall be amortized over the remaining 5

22  years of the required 30-year amortization period.

23         5.  Notwithstanding the provisions of this section, any

24  terminated vested employee who is a participant in the Public

25  Employee Optional Retirement Program or the defined benefit

26  program may use his or her one-time opportunity to change

27  retirement plans as provided in this section without having to

28  return to employment with an employer participating in the

29  Florida Retirement System.

30         (10)  EDUCATION COMPONENT.--

31  

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 1         (a)  The board, in coordination with the department,

 2  shall provide for an education component for system members in

 3  a manner consistent with the provisions of this section. The

 4  education component must be available to eligible employees at

 5  least 90 days prior to the beginning date of the election

 6  period for the employees of the respective types of employers.

 7         (b)  The education component must provide system

 8  members with impartial and balanced information about plan

 9  choices. The education component must involve multimedia

10  formats. Program comparisons must, to the greatest extent

11  possible, be based upon the retirement income that different

12  retirement programs may provide to the participant. The board

13  shall monitor the performance of the contract to ensure that

14  the program is conducted in accordance with the contract,

15  applicable law, and the rules of the board.

16         (c)  The board, in coordination with the department,

17  shall provide for an initial and ongoing transfer education

18  component to provide system members with information necessary

19  to make informed plan choice decisions. The transfer education

20  component must include, but is not limited to, information on:

21         1.  The amount of money available to a member to

22  transfer to the defined contribution program.

23         2.  The features of and differences between the defined

24  benefit program and the defined contribution program, both

25  generally and specifically, as those differences may affect

26  the member.

27         3.  The expected benefit available if the member were

28  to retire under each of the retirement programs, based on

29  appropriate alternative sets of assumptions.

30         4.  The rate of return from investments in the defined

31  contribution program and the period of time over which such

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 1  rate of return must be achieved to equal or exceed the

 2  expected monthly benefit payable to the member under the

 3  defined benefit program.

 4         5.  The historical rates of return for the investment

 5  alternatives available in the defined contribution programs.

 6         6.  The benefits and historical rates of return on

 7  investments available in a typical deferred compensation plan

 8  or a typical plan under s. 403(b) of the Internal Revenue Code

 9  for which the employee may be eligible.

10         7.  The program choices available to employees of the

11  State University System and the comparative benefits of each

12  available program, if applicable.

13         8.  Payout options available in each of the retirement

14  programs.

15         (d)  An ongoing education and communication component

16  must provide system members with information necessary to make

17  informed decisions about choices within their program of

18  membership and in preparation for retirement. The component

19  must include, but is not limited to, information concerning:

20         1.  Rights and conditions of membership.

21         2.  Benefit features within the program, options, and

22  effects of certain decisions.

23         3.  Coordination of contributions and benefits with a

24  deferred compensation plan under s. 457 or a plan under s.

25  403(b) of the Internal Revenue Code.

26         4.  Significant program changes.

27         5.  Contribution rates and program funding status.

28         6.  Planning for retirement.

29         (e)  Descriptive materials must be prepared under the

30  assumption that the employee is an unsophisticated investor,

31  

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 1  and all materials used in the education component must be

 2  approved by the state board prior to dissemination.

 3         (f)  The board and the department shall also establish

 4  a communication component to provide program information to

 5  participating employers and the employers' personnel and

 6  payroll officers and to explain their respective

 7  responsibilities in conjunction with the retirement programs.

 8         (g)  Funding for education of new employees may reflect

 9  administrative costs to the optional program and the defined

10  benefit program.

11         (h)  Pursuant to paragraph (8)(a), all Florida

12  Retirement System employers have an obligation to regularly

13  communicate the existence of the two Florida Retirement System

14  plans and the plan choice in the natural course of

15  administering their personnel functions, using the educational

16  materials supplied by the state board and the Department of

17  Management Services.

18         (15)  STATEMENT OF FIDUCIARY STANDARDS AND

19  RESPONSIBILITIES.--

20         (a)  Investment of optional defined contribution

21  retirement plan assets shall be made for the sole interest and

22  exclusive purpose of providing benefits to plan participants

23  and beneficiaries and defraying reasonable expenses of

24  administering the plan. The program's assets are to be

25  invested, on behalf of the program participants, with the

26  care, skill, and diligence that a prudent person acting in a

27  like manner would undertake. The performance of the investment

28  duties set forth in this paragraph shall comply with the

29  fiduciary standards set forth in the Employee Retirement

30  Income Security Act of 1974 at 29 U.S.C. s. 1104(a)(1)(A)-(C).

31  In case of conflict with other provisions of law authorizing

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 1  investments, the investment and fiduciary standards set forth

 2  in this subsection shall prevail.

 3         (b)  If a participant or beneficiary of the Public

 4  Employee Optional Retirement Program exercises control over

 5  the assets in his or her account, as determined by reference

 6  to regulations of the United States Department of Labor under

 7  s. 404(c) of the Employee Retirement Income Security Act of

 8  1974 and all applicable laws governing the operation of the

 9  program, no program fiduciary shall be liable for any loss to

10  a participant's or beneficiary's account which results from

11  such participant's or beneficiary's exercise of control.

12         (c)  Subparagraph (8)(b)4. and paragraph (15)(b)

13  incorporate the federal law concept of participant control,

14  established by regulations of the United States Department of

15  Labor under s. 404(c) of the Employee Retirement Income

16  Security Act of 1974 (ERISA). The purpose of this paragraph is

17  to assist employers and the State Board of Administration in

18  maintaining compliance with s. 404(c), while avoiding

19  unnecessary costs and eroding participant benefits under the

20  Public Employee Optional Retirement Program. Pursuant to 29

21  C.F.R. s. 2550.404c-1(b)(2)(i)(B)(1)(viii), the State Board of

22  Administration or its designated agents shall deliver to

23  participants of the Public Employee Optional Retirement

24  Program a copy of the prospectus most recently provided to the

25  plan, and, pursuant to 29 C.F.R. s.

26  2550.404c-1(b)(2)(i)(B)(2)(ii), or shall provide such

27  participants an opportunity to obtain this information, except

28  that:

29         1.  The requirement to deliver a prospectus shall be

30  deemed to be satisfied by delivery of a fund profile that

31  contains the information that would be included in a summary

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 1  prospectus as described by Rule 498 under the Securities Act

 2  of 1933, 17 C.F.R. s. 230.498.  When the transaction fees,

 3  expense information or other information provided by a mutual

 4  fund in the prospectus does not reflect terms negotiated by

 5  the State Board of Administration or its designated agents,

 6  the aforementioned requirement is deemed to be satisfied by

 7  delivery of a separate document described by Rule 498

 8  substituting accurate information; and

 9         2.  Delivery shall be deemed to have been effected if

10  delivery is through electronic means and the following

11  standards are satisfied:

12         a.  Electronically-delivered documents are prepared and

13  provided consistent with style, format, and content

14  requirements applicable to printed documents;

15         b.  Each participant is provided timely and adequate

16  notice of the documents that are to be delivered and their

17  significance thereof, and of the participant's right to obtain

18  a paper copy of such documents free of charge;

19         c.(I)  Participants have adequate access to the

20  electronic documents, at locations such as their worksites or

21  public facilities, and have the ability to convert the

22  documents to paper free of charge by the State Board of

23  Administration, and the board or its designated agents take

24  appropriate and reasonable measures to ensure that the system

25  for furnishing electronic documents results in actual receipt,

26  or

27         (II)  Participants have provided consent to receive

28  information in electronic format, which consent may be

29  revoked; and

30  

31  

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 1         d.  The State Board of Administration, or its

 2  designated agent, actually provides paper copies of the

 3  documents free of charge, upon request.

 4         (20)  PARTICIPATION BY VESTED TERMINATED FLORIDA

 5  RETIREMENT SYSTEM MEMBERS.--Eligible employees include persons

 6  who are vested in the defined benefit retirement plan offered

 7  under the Florida Retirement System in compliance with the

 8  vesting provisions in effect at the time of their termination,

 9  who terminated covered employment before the establishment of

10  the Public Employee Optional Retirement Program, and who may

11  not otherwise be eligible to participate in the Public

12  Employee Optional Retirement Program under subsection (4). The

13  state board is not responsible for locating those persons who

14  may be eligible to participate in the Public Employee Optional

15  Retirement Program under this subsection.

16         Section 3.  Section 121.591, Florida Statutes, is

17  amended to read:

18         121.591  Benefits payable under the Public Employee

19  Optional Retirement Program of the Florida Retirement

20  System.--Benefits may not be paid under this section unless

21  the member has terminated employment as provided in s.

22  121.021(39)(a) or is deceased and a proper application has

23  been filed in the manner prescribed by the state board or the

24  department. The state board or department, as appropriate, may

25  cancel an application for retirement benefits when the member

26  or beneficiary fails to timely provide the information and

27  documents required by this chapter and the rules of the state

28  board and department. In accordance with their respective

29  responsibilities as provided herein, the State Board of

30  Administration and the Department of Management Services shall

31  adopt rules establishing procedures for application for

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 1  retirement benefits and for the cancellation of such

 2  application when the required information or documents are not

 3  received. The State Board of Administration and the Department

 4  of Management Services, as appropriate, are authorized to cash

 5  out a de minimis account of a participant who has been

 6  terminated from Florida Retirement System covered employment

 7  for a minimum of 6 calendar months. A de minimis account is an

 8  account containing employer contributions and accumulated

 9  earnings of not more than $5,000 made under the provisions of

10  this chapter. Such cash-out must either be a complete lump-sum

11  liquidation of the account balance, subject to the provisions

12  of the Internal Revenue Code, or a lump-sum direct rollover

13  distribution paid directly to the custodian of an eligible

14  retirement plan, as defined by the Internal Revenue Code, on

15  behalf of the participant.

16         (1)  NORMAL BENEFITS.--Under the Public Employee

17  Optional Retirement Program:

18         (a)  Benefits in the form of vested accumulations as

19  described in s. 121.4501(6) shall be payable under this

20  subsection in accordance with the following terms and

21  conditions:

22         1.  To the extent vested, benefits shall be payable

23  only to a participant.

24         2.  Benefits shall be paid by the third-party

25  administrator or designated approved providers in accordance

26  with the law, the contracts, and any applicable board rule or

27  policy.

28         3.  To receive benefits under this subsection, the

29  participant must be terminated from all employment with all

30  Florida Retirement System employers, as provided in s.

31  121.021(39).

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 1         (b)  If a participant elects to receive his or her

 2  benefits upon termination of employment, the participant must

 3  submit a written application to the third-party administrator

 4  indicating his or her preferred distribution date and

 5  selecting an authorized method of distribution as provided in

 6  paragraph (c). The participant may defer receipt of benefits

 7  until he or she chooses to make such application, subject to

 8  federal requirements.

 9         (c)  Upon receipt by the third-party administrator of a

10  properly executed application for distribution of benefits,

11  the total accumulated benefit shall be payable to the

12  participant, as:

13         1.  A lump-sum distribution to the participant;

14         2.  A lump-sum direct rollover distribution whereby all

15  accrued benefits, plus interest and investment earnings, are

16  paid from the participant's account directly to the custodian

17  of an eligible retirement plan, as defined in s. 402(c)(8)(B)

18  of the Internal Revenue Code, on behalf of the participant; or

19         3.  Periodic distributions, as authorized by the state

20  board.

21         (2)  DISABILITY RETIREMENT BENEFITS.--Benefits provided

22  under this subsection are payable in lieu of the benefits

23  which would otherwise be payable under the provisions of

24  subsection (1). Such benefits shall be funded entirely from

25  employer contributions made under s. 121.571, transferred

26  participant funds accumulated pursuant to paragraph (a), and

27  interest and earnings thereon. Pursuant thereto:

28         (a)  Transfer of funds.--To qualify to receive monthly

29  disability benefits under this subsection:

30         1.  All moneys accumulated in the participant's Public

31  Employee Optional Retirement Program accounts, including

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 1  vested and nonvested accumulations as described in s.

 2  121.4501(6), shall be transferred from such individual

 3  accounts to the Division of Retirement for deposit in the

 4  disability account of the Florida Retirement System Trust

 5  Fund. Such moneys shall be separately accounted for. Earnings

 6  shall be credited on an annual basis for amounts held in the

 7  disability accounts of the Florida Retirement System Trust

 8  Fund based on actual earnings of the Florida Retirement System

 9  Trust Fund.

10         2.  If the participant has retained retirement credit

11  he or she had earned under the defined benefit program of the

12  Florida Retirement System as provided in s. 121.4501(3)(b), a

13  sum representing the actuarial present value of such credit

14  within the Florida Retirement System Trust Fund shall be

15  reassigned by the Division of Retirement from the defined

16  benefit program to the disability program as implemented under

17  this subsection and shall be deposited in the disability

18  account of the Florida Retirement System Trust Fund. Such

19  moneys shall be separately accounted for.

20         (b)  Disability retirement; entitlement.--

21         1.  A participant of the Public Employee Optional

22  Retirement Program who becomes totally and permanently

23  disabled, as defined in s. 121.091(4)(b), after completing 8

24  years of creditable service, or a participant who becomes

25  totally and permanently disabled in the line of duty

26  regardless of his or her length of service, shall be entitled

27  to a monthly disability benefit as provided herein.

28         2.  In order for service to apply toward the 8 years of

29  service required to vest for regular disability benefits, or

30  toward the creditable service used in calculating a

31  

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 1  service-based benefit as provided for under paragraph (g), the

 2  service must be creditable service as described below:

 3         a.  The participant's period of service under the

 4  Public Employee Optional Retirement Program will be considered

 5  creditable service, except as provided in subparagraph d.

 6         b.  If the participant has elected to retain credit for

 7  his or her service under the defined benefit program of the

 8  Florida Retirement System as provided under s. 121.4501(3)(b),

 9  all such service will be considered creditable service.

10         c.  If the participant has elected to transfer to his

11  or her participant accounts a sum representing the present

12  value of his or her retirement credit under the defined

13  benefit program as provided under s. 121.4501(3)(c), the

14  period of service under the defined benefit program

15  represented in the present value amounts transferred will be

16  considered creditable service for purposes of vesting for

17  disability benefits, except as provided in subparagraph d.

18         d.  Whenever a participant has terminated employment

19  and has taken distribution of his or her funds as provided in

20  subsection (1), all creditable service represented by such

21  distributed funds is forfeited for purposes of this

22  subsection.

23         (c)  Disability retirement effective date.--The

24  effective retirement date for a participant who applies and is

25  approved for disability retirement shall be established as

26  provided under s. 121.091(4)(a)2. and 3.

27         (d)  Total and permanent disability.--A participant

28  shall be considered totally and permanently disabled if, in

29  the opinion of the division, he or she is prevented, by reason

30  of a medically determinable physical or mental impairment,

31  

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 1  from rendering useful and efficient service as an officer or

 2  employee.

 3         (e)  Proof of disability.--The division, before

 4  approving payment of any disability retirement benefit, shall

 5  require proof that the participant is totally and permanently

 6  disabled in the same manner as provided for members of the

 7  defined benefit program of the Florida Retirement System under

 8  s. 121.091(4)(c).

 9         (f)  Disability retirement benefit.--Upon the

10  disability retirement of a participant under this subsection,

11  the participant shall receive a monthly benefit that shall

12  begin to accrue on the first day of the month of disability

13  retirement, as approved by the division, and shall be payable

14  on the last day of that month and each month thereafter during

15  his or her lifetime and continued disability. All disability

16  benefits payable to such member shall be paid out of the

17  disability account of the Florida Retirement System Trust Fund

18  established under this subsection.

19         (g)  Computation of disability retirement benefit.--The

20  amount of each monthly payment shall be calculated in the same

21  manner as provided for members of the defined benefit program

22  of the Florida Retirement System under s. 121.091(4)(f). For

23  such purpose, creditable service under both the defined

24  benefit program and the Public Employee Optional Retirement

25  Program of the Florida Retirement System shall be applicable

26  as provided under paragraph (b).

27         (h)  Reapplication.--A participant whose initial

28  application for disability retirement has been denied may

29  reapply for disability benefits in the same manner, and under

30  the same conditions, as provided for members of the defined

31  

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 1  benefit program of the Florida Retirement System under s.

 2  121.091(4)(g).

 3         (i)  Membership.--Upon approval of an application for

 4  disability benefits under this subsection, the applicant shall

 5  be transferred to the defined benefit program of the Florida

 6  Retirement System, effective upon his or her disability

 7  retirement effective date.

 8         (j)  Option to cancel.--Any participant whose

 9  application for disability benefits is approved may cancel his

10  or her application for disability benefits, provided that the

11  cancellation request is received by the division before a

12  disability retirement warrant has been deposited, cashed, or

13  received by direct deposit. Upon such cancellation:

14         1.  The participant's transfer to the defined benefit

15  program under paragraph (i) shall be nullified;

16         2.  The participant shall be retroactively reinstated

17  in the Public Employee Optional Retirement Program without

18  hiatus;

19         3.  All funds transferred to the Florida Retirement

20  System Trust Fund under paragraph (a) shall be returned to the

21  participant accounts from which such funds were drawn; and

22         4.  The participant may elect to receive the benefit

23  payable under the provisions of subsection (1) in lieu of

24  disability benefits as provided under this subsection.

25         (k)  Recovery from disability.--

26         1.  The division may require periodic reexaminations at

27  the expense of the disability program account of the Florida

28  Retirement System Trust Fund. Except as otherwise provided in

29  subparagraph 2., the requirements, procedures, and

30  restrictions relating to the conduct and review of such

31  reexaminations, discontinuation or termination of benefits,

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 1  reentry into employment, disability retirement after reentry

 2  into covered employment, and all other matters relating to

 3  recovery from disability shall be the same as are set forth

 4  under s. 121.091(4)(h).

 5         2.  Upon recovery from disability, any recipient of

 6  disability retirement benefits under this subsection shall be

 7  a compulsory member of the Public Employee Optional Retirement

 8  Program of the Florida Retirement System. The net difference

 9  between the recipient's original account balance transferred

10  to the Florida Retirement System Trust Fund, including

11  earnings, under paragraph (a) and total disability benefits

12  paid to such recipient, if any, shall be determined as

13  provided in sub-subparagraph a.

14         a.  An amount equal to the total benefits paid shall be

15  subtracted from that portion of the transferred account

16  balance consisting of vested accumulations as described under

17  s. 121.4501(6), if any, and an amount equal to the remainder

18  of benefit amounts paid, if any, shall then be subtracted from

19  any remaining portion consisting of nonvested accumulations as

20  described under s. 121.4501(6).

21         b.  Amounts subtracted under sub-subparagraph a. shall

22  be retained within the disability account of the Florida

23  Retirement System Trust Fund. Any remaining account balance

24  shall be transferred to the third-party administrator for

25  disposition as provided under sub-subparagraph c. or

26  sub-subparagraph d., as appropriate.

27         c.  If the recipient returns to covered employment,

28  transferred amounts shall be deposited in individual accounts

29  under the Public Employee Optional Retirement Program, as

30  directed by the participant. Vested and nonvested amounts

31  

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 1  shall be separately accounted for as provided in s.

 2  121.4501(6).

 3         d.  If the recipient fails to return to covered

 4  employment upon recovery from disability:

 5         (I)  Any remaining vested amount shall be deposited in

 6  individual accounts under the Public Employee Optional

 7  Retirement Program, as directed by the participant, and shall

 8  be payable as provided in subsection (1).

 9         (II)  Any remaining nonvested amount shall be held in a

10  suspense account and shall be forfeitable after 5 years as

11  provided in s. 121.4501(6).

12         3.  If present value was reassigned from the defined

13  benefit program to the disability program of the Florida

14  Retirement System as provided under subparagraph (a)2., the

15  full present value amount shall be returned to the defined

16  benefit account within the Florida Retirement System Trust

17  Fund and the affected individual's associated retirement

18  credit under the defined benefit program shall be reinstated

19  in full. Any benefit based upon such credit shall be

20  calculated as provided in s. 121.091(4)(h)1.

21         (l)  Nonadmissible causes of disability.--A participant

22  shall not be entitled to receive a disability retirement

23  benefit if the disability results from any injury or disease

24  sustained or inflicted as described in s. 121.091(4)(i).

25         (m)  Disability retirement of justice or judge by order

26  of Supreme Court.--

27         1.  If a participant is a justice of the Supreme Court,

28  judge of a district court of appeal, circuit judge, or judge

29  of a county court who has served for 6 years or more as an

30  elected constitutional judicial officer, including service as

31  a judicial officer in any court abolished pursuant to Art. V

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 1  of the State Constitution, and who is retired for disability

 2  by order of the Supreme Court upon recommendation of the

 3  Judicial Qualifications Commission pursuant to the provisions

 4  of Art. V of the State Constitution, the participant's Option

 5  1 monthly disability benefit amount as provided in s.

 6  121.091(6)(a)1. shall be two-thirds of his or her monthly

 7  compensation as of the participant's disability retirement

 8  date.  Such a participant may alternatively elect to receive

 9  an actuarially adjusted disability retirement benefit under

10  any other option as provided in s. 121.091(6)(a), or to

11  receive the normal benefit payable under the Public Employee

12  Optional Retirement Program as set forth in subsection (1).

13         2.  If any justice or judge who is a participant of the

14  Public Employee Optional Retirement Program of the Florida

15  Retirement System is retired for disability by order of the

16  Supreme Court upon recommendation of the Judicial

17  Qualifications Commission pursuant to the provisions of Art. V

18  of the State Constitution and elects to receive a monthly

19  disability benefit under the provisions of this paragraph:

20         a.  Any present value amount that was transferred to

21  his or her program account and all employer contributions made

22  to such account on his or her behalf, plus interest and

23  earnings thereon, shall be transferred to and deposited in the

24  disability account of the Florida Retirement System Trust

25  Fund; and

26         b.  The monthly benefits payable under this paragraph

27  for any affected justice or judge retired from the Florida

28  Retirement System pursuant to Art. V of the State Constitution

29  shall be paid from the disability account of the Florida

30  Retirement System Trust Fund.

31  

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 1         (n)  Death of retiree or beneficiary.--Upon the death

 2  of a disabled retiree or beneficiary thereof who is receiving

 3  monthly benefits under this subsection, the monthly benefits

 4  shall be paid through the last day of the month of death and

 5  shall terminate, or be adjusted, if applicable, as of that

 6  date in accordance with the optional form of benefit selected

 7  at the time of retirement. The deceased disabled retiree's

 8  beneficiary shall also receive the amount of the participant's

 9  remaining account balance, if any, in the Florida Retirement

10  System Trust Fund. The Department of Management Services may

11  adopt rules necessary to administer this paragraph.

12         (3)  DEATH BENEFITS.--Under the Public Employee

13  Optional Retirement Program:

14         (a)  Survivor benefits shall be payable in accordance

15  with the following terms and conditions:

16         1.  To the extent vested, benefits shall be payable

17  only to a participant's beneficiary or beneficiaries as

18  designated by the participant. If a participant designates a

19  primary beneficiary other than the participant's spouse, the

20  participant's spouse shall be notified of the designation.

21  This requirement shall not apply to the designation of one or

22  more contingent beneficiaries to receive any benefits

23  remaining upon the death of the primary beneficiary or

24  beneficiaries.

25         2.  Benefits shall be paid by the third-party

26  administrator or designated approved providers in accordance

27  with the law, the contracts, and any applicable board rule or

28  policy.

29         3.  To receive benefits under this subsection, the

30  participant must be deceased.

31  

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 1         (b)  In the event of a participant's death, all vested

 2  accumulations as described in s. 121.4501(6), less withholding

 3  taxes remitted to the Internal Revenue Service, shall be

 4  distributed, as provided in paragraph (c), to the

 5  participant's designated beneficiary or beneficiaries, or to

 6  the participant's estate, as if the participant retired on the

 7  date of death. No other death benefits shall be available for

 8  survivors of participants under the Public Employee Optional

 9  Retirement Program, except for such benefits, or coverage for

10  such benefits, as are otherwise provided by law or are

11  separately afforded by the employer, at the employer's

12  discretion.

13         (c)  Upon receipt by the third-party administrator of a

14  properly executed application for distribution of benefits,

15  the total accumulated benefit shall be payable by the

16  third-party administrator to the participant's surviving

17  beneficiary or beneficiaries, as:

18         1.  A lump-sum distribution payable to the beneficiary

19  or beneficiaries, or to the deceased participant's estate;

20         2.  An eligible rollover distribution on behalf of the

21  surviving spouse of a deceased participant, whereby all

22  accrued benefits, plus interest and investment earnings, are

23  paid from the deceased participant's account directly to the

24  custodian of an eligible retirement plan, as described in s.

25  402(c)(8)(B) of the Internal Revenue Code, on behalf of the

26  surviving spouse; or

27         3.  A partial lump-sum payment whereby a portion of the

28  accrued benefit is paid to the deceased participant's

29  surviving spouse or other designated beneficiaries, less

30  withholding taxes remitted to the Internal Revenue Service,

31  and the remaining amount is transferred directly to the

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 1  custodian of an eligible retirement plan, as described in s.

 2  402(c)(8)(B) of the Internal Revenue Code, on behalf of the

 3  surviving spouse. The proportions must be specified by the

 4  participant or the surviving beneficiary.

 5  

 6  This paragraph does not abrogate other applicable provisions

 7  of state or federal law providing for payment of death

 8  benefits.

 9         (4)  LIMITATION ON LEGAL PROCESS.--The benefits payable

10  to any person under the Public Employee Optional Retirement

11  Program, and any contributions accumulated under such program,

12  are not subject to assignment, execution, attachment, or any

13  legal process, except for qualified domestic relations orders

14  by a court of competent jurisdiction, income deduction orders

15  as provided in s. 61.1301, and federal income tax levies.

16         Section 4.  Paragraph (b) of subsection (3) of section

17  121.78, Florida Statutes, is amended to read:

18         121.78  Payment and distribution of contributions.--

19         (3)

20         (b)  If contributions made by an employer on behalf of

21  participants of the optional retirement program or

22  accompanying payroll data are not received within the calendar

23  month they are due, including, but not limited to,

24  contribution adjustments as a result of employer errors or

25  corrections, and if that delinquency results in market losses

26  to participants, the employer shall reimburse each

27  participant's account for market losses resulting from the

28  late contributions. If a participant has terminated employment

29  and taken a distribution, the participant is responsible for

30  returning any excess contributions erroneously provided by

31  employers, adjusted for any investment gain or loss incurred

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    Florida Senate - 2004                                  SB 1650
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 1  during the period such excess contributions were in the

 2  participant's Public Employee Optional Retirement Program

 3  account. The State Board of Administration or its designated

 4  agent shall communicate to terminated participants any

 5  obligation to repay such excess contribution amounts, but the

 6  State Board of Administration, its designated agents, or the

 7  Public Employee Optional Retirement Program Trust Fund shall

 8  not incur any loss or gain as a result of employers'

 9  correcting such excess contributions. The third-party

10  administrator, hired by the board pursuant to s. 121.4501(8),

11  shall calculate the market losses for each affected

12  participant. When contributions made on behalf of participants

13  of the optional retirement program or accompanying payroll

14  data are not received within the calendar month due, the

15  employer shall also pay the cost of the third-party

16  administrator's calculation and reconciliation adjustments

17  resulting from the late contributions. The third-party

18  administrator shall notify the employer of the results of the

19  calculations and the total amount due from the employer for

20  such losses and the costs of calculation and reconciliation.

21  The employer shall remit to the division the amount due within

22  10 working days after the date of the penalty notice sent by

23  the division. The division shall transfer said amount to the

24  third-party administrator, who shall deposit proceeds from the

25  1-percent assessment and from individual market losses into

26  participant accounts, as appropriate. The board is authorized

27  to adopt rules to implement the provisions regarding late

28  contributions, late submission of payroll data, the process

29  for reimbursing participant accounts for resultant market

30  losses, and the penalties charged to the employers.

31  

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    Florida Senate - 2004                                  SB 1650
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 1         Section 5.  Paragraphs (g) and (i) of subsection (2) of

 2  section 215.47, Florida Statutes, are amended to read:

 3         215.47  Investments; authorized securities; loan of

 4  securities.--Subject to the limitations and conditions of the

 5  State Constitution or of the trust agreement relating to a

 6  trust fund, moneys available for investments under ss.

 7  215.44-215.53 may be invested as follows:

 8         (2)  With no more than 25 percent of any fund in:

 9         (g)  Fixed-income obligations not otherwise authorized

10  by this section issued by foreign governments or political

11  subdivisions or agencies thereof, supranational agencies,

12  foreign corporations, or foreign commercial entities, if the

13  obligations are rated investment grade by at least one

14  nationally recognized rating service. General obligations

15  backed by the full faith and credit of a foreign government

16  which has not defaulted on similar obligations for a minimum

17  period of 25 years prior to purchase of the obligation and has

18  met its payments of similar obligations when due.

19         (i)  Obligations of agencies of the government of the

20  United States, provided such obligations have been included in

21  and authorized by the Florida Retirement System Defined

22  Benefit Total Fund Investment Plan Investment Policy Statement

23  established in s. 215.475.

24         Section 6.  Section 215.475, Florida Statutes, is

25  amended to read:

26         215.475  Investment policy statement plan.--

27         (1)  In making investments for the System Trust Fund

28  pursuant to ss. 215.44-215.53, the board shall make no

29  investment which is not in conformance with the Florida

30  Retirement System Defined Benefit Total Fund Investment Plan

31  Investment Policy Statement, hereinafter referred to as "the

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    Florida Senate - 2004                                  SB 1650
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 1  IPS plan," as developed by the executive director and approved

 2  by the board. The IPS plan must include, among other items,

 3  the investment objectives of the System Trust Fund; permitted

 4  types of securities in which the board may invest; and

 5  evaluation criteria necessary to measure the investment

 6  performance of the fund.  As required from time to time, the

 7  executive director of the board may present recommended

 8  changes in the IPS plan to the board for approval.

 9         (2)  Prior to any recommended changes in the IPS plan

10  being presented to the board, the executive director of the

11  board shall present such changes to the Investment Advisory

12  Council for review. The council shall present the results of

13  its review to the board prior to the board's final approval of

14  the IPS plan or changes in the IPS plan.

15         Section 7.  Paragraph (a) of subsection (4) of section

16  215.5601, Florida Statutes, is amended to read:

17         215.5601  Lawton Chiles Endowment Fund.--

18         (4)  ADMINISTRATION.--

19         (a)  The board may invest and reinvest funds of the

20  endowment in accordance with s. 215.47 and consistent with an

21  investment policy statement plan developed by the executive

22  director and approved by the board.

23         Section 8.  This act shall take effect July 1, 2004.

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    Florida Senate - 2004                                  SB 1650
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 1            *****************************************

 2                          SENATE SUMMARY

 3    Revises various provisions relating to the Florida
      Retirement System and investment of state funds.
 4    Providing for determining the beneficiary of a deceased
      Florida Retirement System member. Defines "retiree" for
 5    purposes of the Public Employee Optional Retirement
      Program. Changes dates for election to participate in the
 6    program. Provides procedures for changing retirement
      plans. Provides for cashing out de minimis accounts.
 7    Revises guidelines for investing state funds in foreign
      obligations. Redesignates "investment plans" as
 8    "investment policy statements."

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