December 13, 2019
Print This PagePrint This Page

  *
Session:
Bill #:
Session:
Chamber: View Search Tips
Search Term:
Year: View Search Tips
Search Term:
Senate Bill 1650

Senate Bill sb1650c1

CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2004                           CS for SB 1650

    By the Committee on Appropriations; and Senator Wise





    309-2160-04

  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         prescribing the obligation of system employers

14         to communicate the existence of both retirement

15         plans; amending s. 121.591, F.S.; providing for

16         cashing out de minimis accounts; amending s.

17         121.78, F.S.; providing the participant's

18         obligation to return excess contributions;

19         amending s. 215.47, F.S.; revising guidelines

20         for foreign obligations that are eligible for

21         state investment; providing that expenditures

22         for acquisition for private equity or other

23         private investment partnerships shall be

24         included in the cost of the investment;

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

26         redesignating investment plans as "investment

27         policy statements"; providing an effective

28         date.

29  

30  Be It Enacted by the Legislature of the State of Florida:

31  

                                  1

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  112.363, Florida Statutes, is amended to read:

 3         112.363  Retiree health insurance subsidy.--

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

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

 6  the defined benefit program of the Florida Retirement System,

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

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

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

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

11  health insurance subsidy payment equal to the number of years

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

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

14  eligible retiree or beneficiary may receive a subsidy payment

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

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

17  payment to which the retiree was entitled.  The health

18  insurance subsidy amount payable to any person receiving the

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

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

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

22  of the Public Employee Optional Retirement Program of the

23  Florida Retirement System who has met the requirements of this

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

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

26  a monthly retiree health insurance subsidy payment equal to

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

28  subparagraph, completed at the time of retirement, multiplied

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

30  a subsidy payment of more than $150 or less than $30.  For

31  purposes of determining a participant's creditable service

                                  2

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  used to calculate the health insurance subsidy, a

 2  participant's years of service credit or fraction thereof

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

 4  121.021(54).  Credit shall be awarded for a full work year

 5  whenever health insurance subsidy contributions have been made

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

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

 8  under the Florida Retirement System defined benefit program

 9  shall be included as creditable service for purposes of this

10  section. Notwithstanding any other provision in this section

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

12  participant's beneficiary unless such participant has

13  designated a different beneficiary subsequent to the

14  participant's most recent marriage.

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

16  section 121.4501, Florida Statutes, are amended to read:

17         121.4501  Public Employee Optional Retirement

18  Program.--

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

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

21  sector company that is selected and approved by the state

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

23  the Public Employee Optional Retirement Program. The term

24  includes a bundled provider that offers participants a range

25  of individually allocated or unallocated investment products

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

27  which may include accounting and administration of individual

28  participant benefits and contributions; individual participant

29  recordkeeping; asset purchase, control, and safekeeping;

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

31  and contribution allocation; calculation of daily net asset

                                  3

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  values; direct access to participant account information;

 2  periodic reporting to participants, at least quarterly, on

 3  account balances and transactions; guidance, advice, and

 4  allocation services directly relating to its own investment

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

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

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

 8  providing such guidance, advice, or allocation services does

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

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

11  that such prohibited transaction provisions do not apply to

12  the optional retirement program; a broad array of distribution

13  options; asset allocation; and retirement counseling and

14  education. Private sector companies include investment

15  management companies, insurance companies, depositories, and

16  mutual fund companies.

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

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

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

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

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

22  Services.

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

24  the Department of Management Services.

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

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

27         1.  Is a member of, or is eligible for membership in,

28  the Florida Retirement System, including any renewed member of

29  the Florida Retirement System;

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

31  the Senior Management Service Optional Annuity Program as

                                  4

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  Optional Retirement Program as established under s.

 3  121.051(2)(c); or

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

 5  participate in, the State University System Optional

 6  Retirement Program established under s. 121.35.

 7  

 8  The term does not include any member participating in the

 9  Deferred Retirement Option Program established under s.

10  121.091(13) or any employee participating in an optional

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

12  121.35.

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

14  121.021(10), of an eligible employee.

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

16  elects to participate in the Public Employee Optional

17  Retirement Program and enrolls in such optional program as

18  provided in subsection (4).

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

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

21  alternative defined contribution retirement program

22  established under this section.

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

24  Florida Retirement System Public Employee Optional Retirement

25  Program who has terminated employment and has taken a

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

27  distribution of a de minimis account authorized by the state

28  board.

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

30  of Administration.

31  

                                  5

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  Administration.

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

 4  a participant is eligible to receive a retirement benefit upon

 5  completion of the required years of service under the Public

 6  Employee Optional Retirement Program.

 7         (4)  PARTICIPATION; ENROLLMENT.--

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

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

10  by a state employer:

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

12  Public Employee Optional Retirement Program in lieu of

13  retaining his or her membership in the defined benefit program

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

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

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

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

18  2002, by the last business day of the 5th month following

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

20  of absence concludes conclusion of the leave of absence,

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

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

23  employee shall be enrolled as a participant of the Public

24  Employee Optional Retirement Program, the employee's

25  membership in the Florida Retirement System shall be governed

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

27  in the defined benefit program of the Florida Retirement

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

29  Public Employee Optional Retirement Program shall be effective

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

31  contribution is made to the optional program.

                                  6

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 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 state employer commencing after April 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

                                  7

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 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.  With respect to employees who become eligible to

 5  participate in the Public Employee Optional Retirement Program

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

 7  participate in the Public Employee Optional Retirement Program

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

 9  Community College Optional Retirement Program. The election

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

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

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

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

14  of the Public Employee Optional Retirement Program, the

15  employee's membership in the Florida Retirement System shall

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

17  participation in the State Community College Optional

18  Retirement Program shall terminate. The employee's enrollment

19  in the Public Employee Optional Retirement Program shall be

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

21  employer contribution is made to the optional program.

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

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

24  college, department, institution, institution of higher

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

26  participates in the Florida Retirement System for the benefit

27  of certain employees.

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

29  employed in a regularly established position on September 1,

30  2002, by a district school board employer:

31  

                                  8

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  Public Employee Optional Retirement Program in lieu of

 3  retaining his or her membership in the defined benefit program

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

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

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

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

 8  2002, by the last business day of the 5th month following

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

10  of absence concludes conclusion of the leave of absence,

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

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

13  employee shall be enrolled as a participant of the Public

14  Employee Optional Retirement Program, the employee's

15  membership in the Florida Retirement System shall be governed

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

17  in the defined benefit program of the Florida Retirement

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

19  Public Employee Optional Retirement Program shall be effective

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

21  contribution is made to the optional program.

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

23  in the Public Employee Optional Retirement Program within the

24  prescribed time period is deemed to have elected to retain

25  membership in the defined benefit program of the Florida

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

27  participate in the optional program is forfeited.

28         2.  With respect to employees who become eligible to

29  participate in the Public Employee Optional Retirement Program

30  by reason of employment in a regularly established position

31  

                                  9

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  2002:

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

 4  the defined benefit retirement program of the Florida

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

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

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

 8  Employee Optional Retirement Program. The employee's election

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

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

11  participate in the optional program is irrevocable, except as

12  provided in paragraph (e).

13         b.  If the employee files such election within the

14  prescribed time period, enrollment in the optional program

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

16  employer retirement contributions paid through the month of

17  the employee plan change shall be transferred to the optional

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

19  employer shall pay the applicable contributions based on the

20  employee membership class in the optional program.

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

22  in the Public Employee Optional Retirement Program within the

23  prescribed time period is deemed to have elected to retain

24  membership in the defined benefit program of the Florida

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

26  participate in the optional program is forfeited.

27         3.  For purposes of this paragraph, "district school

28  board employer" means any district school board that

29  participates in the Florida Retirement System for the benefit

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

31  

                                  10

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  career center that participates in the Florida Retirement

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

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

 4  employed in a regularly established position on December 1,

 5  2002, by a local 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 February 28, 2003, or, in the

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

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

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

15  the leave of absence concludes conclusion of the leave of

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

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

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

19  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  membership in the defined benefit program of the Florida

23  Retirement System 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         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  

                                  11

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 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 local employer commencing after October 1, 2002:

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

 8  the defined benefit retirement program of the Florida

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

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

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

12  Employee Optional Retirement Program. The employee's election

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

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

15  participate in the optional program is irrevocable, except as

16  provided in paragraph (e).

17         b.  If the employee files such election within the

18  prescribed time period, enrollment in the optional program

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

20  employer retirement contributions paid through the month of

21  the employee plan change shall be transferred to the optional

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

23  employer shall pay the applicable contributions based on the

24  employee membership class in the optional program.

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

26  in the Public Employee Optional Retirement Program within the

27  prescribed time period is deemed to have elected to retain

28  membership in the defined benefit program of the Florida

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

30  participate in the optional program is forfeited.

31  

                                  12

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

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

 3  (b).

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

 5  participant who has not selected one or more specific

 6  investment products shall be allocated as prescribed by the

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

 8  participant at least quarterly that the participant should

 9  take an affirmative action to make an asset allocation among

10  the optional program products.

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

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

13  Public Employee Optional Retirement Program, or the month

14  following the eligible employee's plan selection effective

15  date, if sooner, the employee shall have one opportunity, at

16  the employee's discretion, to choose to move from the defined

17  benefit program to the Public Employee Optional Retirement

18  Program or from the Public Employee Optional Retirement

19  Program to the defined benefit program. This paragraph shall

20  be contingent upon approval from the Internal Revenue Service

21  for including the choice described herein within the programs

22  offered by the Florida Retirement System.

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

24  Employee Optional Retirement Program, the applicable

25  provisions of this section shall govern the transfer.

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

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

28  Public Employee Optional Retirement Program account and from

29  other employee moneys as necessary, a sum representing the

30  present value of that employee's accumulated benefit

31  obligation immediately following the time of such movement,

                                  13

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  determined assuming that attained service equals the sum of

 2  service in the defined benefit program and service in the

 3  Public Employee Optional Retirement Program. Benefit

 4  commencement occurs on the first date the employee would

 5  become eligible for unreduced benefits, using the discount

 6  rate and other relevant actuarial assumptions that were used

 7  to value the Florida Retirement System defined benefit plan

 8  liabilities in the most recent actuarial valuation. For any

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

10  maintains an accrued benefit amount in the defined benefit

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

12  deemed part of the required transfer amount described in this

13  subparagraph. The division shall ensure that the transfer sum

14  is prepared using a formula and methodology certified by an

15  enrolled actuary.

16         3.  Notwithstanding subparagraph 2., an employee who

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

18  eligible to participate in the Public Employee Optional

19  Retirement Program by reason of employment in a regularly

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

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

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

23  or her Public Employee Optional Retirement Program account

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

25  representing that employee's actuarial accrued liability.

26         4.  Employees' ability to transfer from the Florida

27  Retirement System defined benefit program to the Public

28  Employee Optional Retirement Program pursuant to paragraphs

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

30  an option to later transfer back into the defined benefit

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

                                  14

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  resulting unfunded liability arising from actual original

 3  transfers from the defined benefit program to the optional

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

 5  unfunded actuarial base independent of the reserve

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

 7  first 25 years, no direct amortization payment shall be

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

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

10  exercising their second program election under this paragraph.

11  It is the legislative intent that the actuarial funded status

12  of the Florida Retirement System defined benefit plan is

13  neither beneficially nor adversely impacted by such second

14  program elections in any significant manner, after due

15  recognition of the separate unfunded actuarial base. Following

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

17  original separate base shall be amortized over the remaining 5

18  years of the required 30-year amortization period.

19         (10)  EDUCATION COMPONENT.--

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

21  shall provide for an education component for system members in

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

23  education component must be available to eligible employees at

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

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

26         (b)  The education component must provide system

27  members with impartial and balanced information about plan

28  choices. The education component must involve multimedia

29  formats. Program comparisons must, to the greatest extent

30  possible, be based upon the retirement income that different

31  retirement programs may provide to the participant. The board

                                  15

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  shall monitor the performance of the contract to ensure that

 2  the program is conducted in accordance with the contract,

 3  applicable law, and the rules of the board.

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

 5  shall provide for an initial and ongoing transfer education

 6  component to provide system members with information necessary

 7  to make informed plan choice decisions. The transfer education

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

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

10  transfer to the defined contribution program.

11         2.  The features of and differences between the defined

12  benefit program and the defined contribution program, both

13  generally and specifically, as those differences may affect

14  the member.

15         3.  The expected benefit available if the member were

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

17  appropriate alternative sets of assumptions.

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

19  contribution program and the period of time over which such

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

21  expected monthly benefit payable to the member under the

22  defined benefit program.

23         5.  The historical rates of return for the investment

24  alternatives available in the defined contribution programs.

25         6.  The benefits and historical rates of return on

26  investments available in a typical deferred compensation plan

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

28  for which the employee may be eligible.

29         7.  The program choices available to employees of the

30  State University System and the comparative benefits of each

31  available program, if applicable.

                                  16

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1         8.  Payout options available in each of the retirement

 2  programs.

 3         (d)  An ongoing education and communication component

 4  must provide system members with information necessary to make

 5  informed decisions about choices within their program of

 6  membership and in preparation for retirement. The component

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

 8         1.  Rights and conditions of membership.

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

10  effects of certain decisions.

11         3.  Coordination of contributions and benefits with a

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

13  403(b) of the Internal Revenue Code.

14         4.  Significant program changes.

15         5.  Contribution rates and program funding status.

16         6.  Planning for retirement.

17         (e)  Descriptive materials must be prepared under the

18  assumption that the employee is an unsophisticated investor,

19  and all materials used in the education component must be

20  approved by the state board prior to dissemination.

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

22  a communication component to provide program information to

23  participating employers and the employers' personnel and

24  payroll officers and to explain their respective

25  responsibilities in conjunction with the retirement programs.

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

27  administrative costs to the optional program and the defined

28  benefit program.

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

30  Retirement System employers have an obligation to regularly

31  communicate the existence of the two Florida Retirement System

                                  17

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  plans and the plan choice in the natural course of

 2  administering their personnel functions, using the educational

 3  materials supplied by the state board and the Department of

 4  Management Services.

 5         (15)  STATEMENT OF FIDUCIARY STANDARDS AND

 6  RESPONSIBILITIES.--

 7         (a)  Investment of optional defined contribution

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

 9  exclusive purpose of providing benefits to plan participants

10  and beneficiaries and defraying reasonable expenses of

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

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

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

14  like manner would undertake. The performance of the investment

15  duties set forth in this paragraph shall comply with the

16  fiduciary standards set forth in the Employee Retirement

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

18  In case of conflict with other provisions of law authorizing

19  investments, the investment and fiduciary standards set forth

20  in this subsection shall prevail.

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

22  Employee Optional Retirement Program exercises control over

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

24  to regulations of the United States Department of Labor under

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

26  1974 and all applicable laws governing the operation of the

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

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

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

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

31  incorporate the federal law concept of participant control,

                                  18

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  established by regulations of the United States Department of

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

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

 4  to assist employers and the State Board of Administration in

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

 6  unnecessary costs and eroding participant benefits under the

 7  Public Employee Optional Retirement Program. Pursuant to 29

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

 9  Administration or its designated agents shall deliver to

10  participants of the Public Employee Optional Retirement

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

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

13  2550.404c-1(b)(2)(i)(B)(2)(ii), or shall provide such

14  participants an opportunity to obtain this information, except

15  that:

16         1.  The requirement to deliver a prospectus shall be

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

18  contains the information that would be included in a summary

19  prospectus as described by Rule 498 under the Securities Act

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

21  expense information or other information provided by a mutual

22  fund in the prospectus does not reflect terms negotiated by

23  the State Board of Administration or its designated agents,

24  the aforementioned requirement is deemed to be satisfied by

25  delivery of a separate document described by Rule 498

26  substituting accurate information; and

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

28  delivery is through electronic means and the following

29  standards are satisfied:

30  

31  

                                  19

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1         a.  Electronically-delivered documents are prepared and

 2  provided consistent with style, format, and content

 3  requirements applicable to printed documents;

 4         b.  Each participant is provided timely and adequate

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

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

 7  a paper copy of such documents free of charge;

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

 9  electronic documents, at locations such as their worksites or

10  public facilities, and have the ability to convert the

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

12  Administration, and the board or its designated agents take

13  appropriate and reasonable measures to ensure that the system

14  for furnishing electronic documents results in actual receipt,

15  or

16         (II)  Participants have provided consent to receive

17  information in electronic format, which consent may be

18  revoked; and

19         d.  The State Board of Administration, or its

20  designated agent, actually provides paper copies of the

21  documents free of charge, upon request.

22         Section 3.  Section 121.591, Florida Statutes, is

23  amended to read:

24         121.591  Benefits payable under the Public Employee

25  Optional Retirement Program of the Florida Retirement

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

27  the member has terminated employment as provided in s.

28  121.021(39)(a) or is deceased and a proper application has

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

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

31  cancel an application for retirement benefits when the member

                                  20

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  or beneficiary fails to timely provide the information and

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

 3  board and department. In accordance with their respective

 4  responsibilities as provided herein, the State Board of

 5  Administration and the Department of Management Services shall

 6  adopt rules establishing procedures for application for

 7  retirement benefits and for the cancellation of such

 8  application when the required information or documents are not

 9  received. The State Board of Administration and the Department

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

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

12  terminated from Florida Retirement System covered employment

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

14  account containing employer contributions and accumulated

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

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

17  liquidation of the account balance, subject to the provisions

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

19  distribution paid directly to the custodian of an eligible

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

21  behalf of the participant.

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

23  Optional Retirement Program:

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

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

26  subsection in accordance with the following terms and

27  conditions:

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

29  only to a participant.

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

31  administrator or designated approved providers in accordance

                                  21

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  policy.

 3         3.  To receive benefits under this subsection, the

 4  participant must be terminated from all employment with all

 5  Florida Retirement System employers, as provided in s.

 6  121.021(39).

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

 8  benefits upon termination of employment, the participant must

 9  submit a written application to the third-party administrator

10  indicating his or her preferred distribution date and

11  selecting an authorized method of distribution as provided in

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

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

14  federal requirements.

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

16  properly executed application for distribution of benefits,

17  the total accumulated benefit shall be payable to the

18  participant, as:

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

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

21  accrued benefits, plus interest and investment earnings, are

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

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

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

25         3.  Periodic distributions, as authorized by the state

26  board.

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

28  under this subsection are payable in lieu of the benefits

29  which would otherwise be payable under the provisions of

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

31  employer contributions made under s. 121.571, transferred

                                  22

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  interest and earnings thereon. Pursuant thereto:

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

 4  disability benefits under this subsection:

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

 6  Employee Optional Retirement Program accounts, including

 7  vested and nonvested accumulations as described in s.

 8  121.4501(6), shall be transferred from such individual

 9  accounts to the Division of Retirement for deposit in the

10  disability account of the Florida Retirement System Trust

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

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

13  disability accounts of the Florida Retirement System Trust

14  Fund based on actual earnings of the Florida Retirement System

15  Trust Fund.

16         2.  If the participant has retained retirement credit

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

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

19  sum representing the actuarial present value of such credit

20  within the Florida Retirement System Trust Fund shall be

21  reassigned by the Division of Retirement from the defined

22  benefit program to the disability program as implemented under

23  this subsection and shall be deposited in the disability

24  account of the Florida Retirement System Trust Fund. Such

25  moneys shall be separately accounted for.

26         (b)  Disability retirement; entitlement.--

27         1.  A participant of the Public Employee Optional

28  Retirement Program who becomes totally and permanently

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

30  years of creditable service, or a participant who becomes

31  totally and permanently disabled in the line of duty

                                  23

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  to a monthly disability benefit as provided herein.

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

 4  service required to vest for regular disability benefits, or

 5  toward the creditable service used in calculating a

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

 7  service must be creditable service as described below:

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

 9  Public Employee Optional Retirement Program will be considered

10  creditable service, except as provided in subparagraph d.

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

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

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

14  all such service will be considered creditable service.

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

16  or her participant accounts a sum representing the present

17  value of his or her retirement credit under the defined

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

19  period of service under the defined benefit program

20  represented in the present value amounts transferred will be

21  considered creditable service for purposes of vesting for

22  disability benefits, except as provided in subparagraph d.

23         d.  Whenever a participant has terminated employment

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

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

26  distributed funds is forfeited for purposes of this

27  subsection.

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

29  effective retirement date for a participant who applies and is

30  approved for disability retirement shall be established as

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

                                  24

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  shall be considered totally and permanently disabled if, in

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

 4  of a medically determinable physical or mental impairment,

 5  from rendering useful and efficient service as an officer or

 6  employee.

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

 8  approving payment of any disability retirement benefit, shall

 9  require proof that the participant is totally and permanently

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

11  defined benefit program of the Florida Retirement System under

12  s. 121.091(4)(c).

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

14  disability retirement of a participant under this subsection,

15  the participant shall receive a monthly benefit that shall

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

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

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

19  his or her lifetime and continued disability. All disability

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

21  disability account of the Florida Retirement System Trust Fund

22  established under this subsection.

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

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

25  manner as provided for members of the defined benefit program

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

27  such purpose, creditable service under both the defined

28  benefit program and the Public Employee Optional Retirement

29  Program of the Florida Retirement System shall be applicable

30  as provided under paragraph (b).

31  

                                  25

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  application for disability retirement has been denied may

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

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

 5  benefit program of the Florida Retirement System under s.

 6  121.091(4)(g).

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

 8  disability benefits under this subsection, the applicant shall

 9  be transferred to the defined benefit program of the Florida

10  Retirement System, effective upon his or her disability

11  retirement effective date.

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

13  application for disability benefits is approved may cancel his

14  or her application for disability benefits, provided that the

15  cancellation request is received by the division before a

16  disability retirement warrant has been deposited, cashed, or

17  received by direct deposit. Upon such cancellation:

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

19  program under paragraph (i) shall be nullified;

20         2.  The participant shall be retroactively reinstated

21  in the Public Employee Optional Retirement Program without

22  hiatus;

23         3.  All funds transferred to the Florida Retirement

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

25  participant accounts from which such funds were drawn; and

26         4.  The participant may elect to receive the benefit

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

28  disability benefits as provided under this subsection.

29         (k)  Recovery from disability.--

30         1.  The division may require periodic reexaminations at

31  the expense of the disability program account of the Florida

                                  26

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  Retirement System Trust Fund. Except as otherwise provided in

 2  subparagraph 2., the requirements, procedures, and

 3  restrictions relating to the conduct and review of such

 4  reexaminations, discontinuation or termination of benefits,

 5  reentry into employment, disability retirement after reentry

 6  into covered employment, and all other matters relating to

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

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

 9         2.  Upon recovery from disability, any recipient of

10  disability retirement benefits under this subsection shall be

11  a compulsory member of the Public Employee Optional Retirement

12  Program of the Florida Retirement System. The net difference

13  between the recipient's original account balance transferred

14  to the Florida Retirement System Trust Fund, including

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

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

17  provided in sub-subparagraph a.

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

19  subtracted from that portion of the transferred account

20  balance consisting of vested accumulations as described under

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

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

23  any remaining portion consisting of nonvested accumulations as

24  described under s. 121.4501(6).

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

26  be retained within the disability account of the Florida

27  Retirement System Trust Fund. Any remaining account balance

28  shall be transferred to the third-party administrator for

29  disposition as provided under sub-subparagraph c. or

30  sub-subparagraph d., as appropriate.

31  

                                  27

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1         c.  If the recipient returns to covered employment,

 2  transferred amounts shall be deposited in individual accounts

 3  under the Public Employee Optional Retirement Program, as

 4  directed by the participant. Vested and nonvested amounts

 5  shall be separately accounted for as provided in s.

 6  121.4501(6).

 7         d.  If the recipient fails to return to covered

 8  employment upon recovery from disability:

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

10  individual accounts under the Public Employee Optional

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

12  be payable as provided in subsection (1).

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

14  suspense account and shall be forfeitable after 5 years as

15  provided in s. 121.4501(6).

16         3.  If present value was reassigned from the defined

17  benefit program to the disability program of the Florida

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

19  full present value amount shall be returned to the defined

20  benefit account within the Florida Retirement System Trust

21  Fund and the affected individual's associated retirement

22  credit under the defined benefit program shall be reinstated

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

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

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

26  shall not be entitled to receive a disability retirement

27  benefit if the disability results from any injury or disease

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

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

30  of Supreme Court.--

31  

                                  28

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

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

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

 4  elected constitutional judicial officer, including service as

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

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

 7  by order of the Supreme Court upon recommendation of the

 8  Judicial Qualifications Commission pursuant to the provisions

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

10  1 monthly disability benefit amount as provided in s.

11  121.091(6)(a)1. shall be two-thirds of his or her monthly

12  compensation as of the participant's disability retirement

13  date.  Such a participant may alternatively elect to receive

14  an actuarially adjusted disability retirement benefit under

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

16  receive the normal benefit payable under the Public Employee

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

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

19  Public Employee Optional Retirement Program of the Florida

20  Retirement System is retired for disability by order of the

21  Supreme Court upon recommendation of the Judicial

22  Qualifications Commission pursuant to the provisions of Art. V

23  of the State Constitution and elects to receive a monthly

24  disability benefit under the provisions of this paragraph:

25         a.  Any present value amount that was transferred to

26  his or her program account and all employer contributions made

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

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

29  disability account of the Florida Retirement System Trust

30  Fund; and

31  

                                  29

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1         b.  The monthly benefits payable under this paragraph

 2  for any affected justice or judge retired from the Florida

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

 4  shall be paid from the disability account of the Florida

 5  Retirement System Trust Fund.

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

 7  of a disabled retiree or beneficiary thereof who is receiving

 8  monthly benefits under this subsection, the monthly benefits

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

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

11  date in accordance with the optional form of benefit selected

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

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

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

15  System Trust Fund. The Department of Management Services may

16  adopt rules necessary to administer this paragraph.

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

18  Optional Retirement Program:

19         (a)  Survivor benefits shall be payable in accordance

20  with the following terms and conditions:

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

22  only to a participant's beneficiary or beneficiaries as

23  designated by the participant. If a participant designates a

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

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

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

27  more contingent beneficiaries to receive any benefits

28  remaining upon the death of the primary beneficiary or

29  beneficiaries.

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

31  administrator or designated approved providers in accordance

                                  30

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  policy.

 3         3.  To receive benefits under this subsection, the

 4  participant must be deceased.

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

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

 7  taxes remitted to the Internal Revenue Service, shall be

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

 9  participant's designated beneficiary or beneficiaries, or to

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

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

12  survivors of participants under the Public Employee Optional

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

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

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

16  discretion.

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

18  properly executed application for distribution of benefits,

19  the total accumulated benefit shall be payable by the

20  third-party administrator to the participant's surviving

21  beneficiary or beneficiaries, as:

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

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

24         2.  An eligible rollover distribution on behalf of the

25  surviving spouse of a deceased participant, whereby all

26  accrued benefits, plus interest and investment earnings, are

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

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

29  402(c)(8)(B) of the Internal Revenue Code, on behalf of the

30  surviving spouse; or

31  

                                  31

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




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

 2  accrued benefit is paid to the deceased participant's

 3  surviving spouse or other designated beneficiaries, less

 4  withholding taxes remitted to the Internal Revenue Service,

 5  and the remaining amount is transferred directly to the

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

 7  402(c)(8)(B) of the Internal Revenue Code, on behalf of the

 8  surviving spouse. The proportions must be specified by the

 9  participant or the surviving beneficiary.

10  

11  This paragraph does not abrogate other applicable provisions

12  of state or federal law providing for payment of death

13  benefits.

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

15  to any person under the Public Employee Optional Retirement

16  Program, and any contributions accumulated under such program,

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

18  legal process, except for qualified domestic relations orders

19  by a court of competent jurisdiction, income deduction orders

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

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

22  121.78, Florida Statutes, is amended to read:

23         121.78  Payment and distribution of contributions.--

24         (3)

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

26  participants of the optional retirement program or

27  accompanying payroll data are not received within the calendar

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

29  contribution adjustments as a result of employer errors or

30  corrections, and if that delinquency results in market losses

31  to participants, the employer shall reimburse each

                                  32

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  participant's account for market losses resulting from the

 2  late contributions. If a participant has terminated employment

 3  and taken a distribution, the participant is responsible for

 4  returning any excess contributions erroneously provided by

 5  employers, adjusted for any investment gain or loss incurred

 6  during the period such excess contributions were in the

 7  participant's Public Employee Optional Retirement Program

 8  account. The State Board of Administration or its designated

 9  agent shall communicate to terminated participants any

10  obligation to repay such excess contribution amounts. However,

11  the State Board of Administration, its designated agents, the

12  Public Employee Optional Retirement Program Trust Fund, the

13  Department of Management Services, or the Florida Retirement

14  System Trust Fund shall not incur any loss or gain as a result

15  of an employer's correction of such excess contributions. The

16  third-party administrator, hired by the board pursuant to s.

17  121.4501(8), shall calculate the market losses for each

18  affected participant. When contributions made on behalf of

19  participants of the optional retirement program or

20  accompanying payroll data are not received within the calendar

21  month due, the employer shall also pay the cost of the

22  third-party administrator's calculation and reconciliation

23  adjustments resulting from the late contributions. The

24  third-party administrator shall notify the employer of the

25  results of the calculations and the total amount due from the

26  employer for such losses and the costs of calculation and

27  reconciliation. The employer shall remit to the division the

28  amount due within 10 working days after the date of the

29  penalty notice sent by the division. The division shall

30  transfer said amount to the third-party administrator, who

31  shall deposit proceeds from the 1-percent assessment and from

                                  33

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  individual market losses into participant accounts, as

 2  appropriate. The board is authorized to adopt rules to

 3  implement the provisions regarding late contributions, late

 4  submission of payroll data, the process for reimbursing

 5  participant accounts for resultant market losses, and the

 6  penalties charged to the employers.

 7         Section 5.  Paragraphs (f), (g), and (i) of subsection

 8  (2) of section 215.47, Florida Statutes, are amended to read:

 9         215.47  Investments; authorized securities; loan of

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

11  State Constitution or of the trust agreement relating to a

12  trust fund, moneys available for investments under ss.

13  215.44-215.53 may be invested as follows:

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

15         (f)  Certain interests in real property and related

16  personal property, including mortgages and related instruments

17  on commercial or industrial real property, with provisions for

18  equity or income participation or with provisions for

19  convertibility to equity ownership; and interests in

20  collective investment funds. Associated expenditures for

21  acquisition and operation of assets purchased under this

22  provision or of investments in private equity or other private

23  investment partnerships or limited liability companies shall

24  be included as a part of the cost of the investment.

25         1.  The title to real property acquired under this

26  paragraph shall be vested in the name of the respective fund.

27         2.  For purposes of taxation of property owned by any

28  fund, the provisions of s. 196.199(2)(b) do not apply.

29         3.  Real property acquired under the provisions of this

30  paragraph shall not be considered state lands or public lands

31  

                                  34

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  and property as defined in chapter 253, and the provisions of

 2  that chapter do not apply to such real property.

 3         (g)  Fixed-income obligations not otherwise authorized

 4  by this section issued by foreign governments or political

 5  subdivisions or agencies thereof, supranational agencies,

 6  foreign corporations, or foreign commercial entities, if the

 7  obligations are rated investment grade by at least one

 8  nationally recognized rating service. General obligations

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

10  which has not defaulted on similar obligations for a minimum

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

12  met its payments of similar obligations when due.

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

14  United States, provided such obligations have been included in

15  and authorized by the Florida Retirement System Defined

16  Benefit Total Fund Investment Plan Investment Policy Statement

17  established in s. 215.475.

18         Section 6.  Section 215.475, Florida Statutes, is

19  amended to read:

20         215.475  Investment policy statement plan.--

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

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

23  investment which is not in conformance with the Florida

24  Retirement System Defined Benefit Total Fund Investment Plan

25  Investment Policy Statement, hereinafter referred to as "the

26  IPS plan," as developed by the executive director and approved

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

28  the investment objectives of the System Trust Fund; permitted

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

30  evaluation criteria necessary to measure the investment

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

                                  35

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2004                           CS for SB 1650
    309-2160-04




 1  executive director of the board may present recommended

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

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

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

 5  board shall present such changes to the Investment Advisory

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

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

 8  the IPS plan or changes in the IPS plan.

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

10  215.5601, Florida Statutes, is amended to read:

11         215.5601  Lawton Chiles Endowment Fund.--

12         (4)  ADMINISTRATION.--

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

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

15  investment policy statement plan developed by the executive

16  director and approved by the board.

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

18  

19          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
20                         Senate Bill 1650

21                                 

22  Restores current law to allow only active employees of
    employers participating in the Florida Retirement System to
23  elect to move between the defined benefit and defined
    contribution retirement programs.
24  
    Adds a provision that holds the Department of Management
25  Services and the defined benefit program of the Florida
    Retirement System harmless for gains and losses attributed to
26  errors made by employers regarding retirement contributions.

27  Adds a provision that requires expenditures for acquisition of
    private equity or other private investment partnerships to be
28  included in the cost of the investment for purposes of valuing
    investments made by the State Board of Administration.
29  

30  

31  

                                  36

CODING: Words stricken are deletions; words underlined are additions.

Site Map
Session:   Bills ·   Calendars ·   Bound Journals ·   Citator ·   Search ·   Appropriations ·   Redistricting ·   Bill Information Reports
Committee Publications
Historical Information
Statutes:   Introduction ·   View Statutes ·   Search Statutes
Flsenate.gov
Disclaimer: The information on this system is unverified. The journals or printed bills of the respective chambers should be consulted for official purposes.    Copyright © 2000-2019 State of Florida.     Privacy Statement     Contact Us     Get Acrobat Reader