July 11, 2020
Print This PagePrint This Page

  *
Session:
Bill #:
Session:
Chamber: View Search Tips
Search Term:
Year: View Search Tips
Search Term:
       Florida Senate - 2010                             CS for SB 2022
       
       
       
       By the Policy and Steering Committee on Ways and Means; and
       Senator Alexander
       
       
       
       576-03752-10                                          20102022c1
    1                        A bill to be entitled                      
    2         An act relating to the Florida Retirement System;
    3         amending s. 121.011, F.S.; deleting a provision
    4         ensuring certain rights of members of the system;
    5         providing for employee and employer contributions;
    6         providing that the rights of members are of a
    7         contractual nature; amending s. 121.021, F.S.;
    8         redefining the terms “prior service,” “termination,”
    9         “benefit,” and “payee”; amending s. 121.051, F.S.;
   10         requiring that a local governmental entity or the
   11         governing body of a charter school or charter
   12         technical career center make certain elections
   13         regarding benefits at the time the entity or governing
   14         body joins the Florida Retirement System; providing
   15         that employer-paid employee contributions are subject
   16         to certain taxes; amending s. 121.0515, F.S.;
   17         providing for employee contributions to be used, if
   18         applicable, when purchasing credit for past service;
   19         amending s. 121.052, F.S., relating to the membership
   20         class of elected officers; conforming provisions to
   21         changes made by the act; providing for a refund of
   22         contributions under certain circumstances for an
   23         officer who leaves office; providing that a member who
   24         obtains a refund of contributions waives certain
   25         rights under the Florida Retirement System; amending
   26         s. 121.053, F.S.; clarifying the contributions
   27         required for a member in the Elected Officers’ Class
   28         who participates in the Deferred Retirement Option
   29         Program; amending s. 121.055, F.S., relating to the
   30         Senior Management Service Class; conforming provisions
   31         to changes made by the act; providing for a refund of
   32         contributions under certain circumstances for a member
   33         who terminates employment; providing that a member who
   34         obtains a refund of contributions waives certain
   35         rights under the Florida Retirement System; requiring
   36         employee and employer contributions for participants
   37         in the Senior Management Service Optional Annuity
   38         Program, effective January 1, 2011, and thereafter;
   39         limiting the payment of benefits prior to a
   40         participant’s termination of employment; amending s.
   41         121.071, F.S.; requiring employee and employer
   42         contributions to the retirement system effective
   43         January 1, 2011; providing for a refund of
   44         contributions under certain circumstances following
   45         termination of employment; prohibiting such refund if
   46         an approved qualified domestic relations order is
   47         filed against the participant’s retirement account;
   48         requiring repayment plus interest of an invalid
   49         refund; amending s. 121.081, F.S.; providing
   50         requirements for contributions for prior service
   51         performed on or after January 1, 2011; amending s.
   52         121.091, F.S.; providing for the refund of accumulated
   53         contributions if a member’s employment is terminated
   54         for any reason other than death or retirement;
   55         amending s. 121.121, F.S., relating to the purchase of
   56         creditable service following an authorized leave of
   57         absence; requiring that service credit be purchased at
   58         the employee and employer contribution rates in effect
   59         during the leave of absence; amending s. 121.125,
   60         F.S.; requiring that the employer make the required
   61         employee and employer retirement contributions
   62         following an employee’s workers’ compensation injury
   63         or illness; requiring that a penalty be assessed
   64         against an employer that fails to pay the required
   65         contributions; amending s. 121.35, F.S., relating to
   66         the optional retirement program for the State
   67         University System; requiring employee and employer
   68         contributions for participants in the optional
   69         retirement program, effective January 1, 2011, and
   70         thereafter; deleting certain requirements governing
   71         employer contributions to conform to changes made by
   72         the act; limiting the payment of benefits prior to a
   73         participant’s termination of employment; amending s.
   74         121.4501, F.S.; requiring that participants in the
   75         Public Employee Optional Retirement Program make
   76         certain contributions to the program trust fund based
   77         on the employee’s membership class; redefining the
   78         term “retiree” and defining the term “participant
   79         contributions”; providing for contribution adjustments
   80         as a result of errors or corrections; requiring an
   81         employer to receive a credit for excess contributions
   82         and to reimburse an employee for excess contributions,
   83         subject to certain limitations; providing for a
   84         participant to retain his or her prior plan choice
   85         following a return to employment; excluding certain
   86         retirees from renewed membership in the Florida
   87         Retirement System; limiting certain refunds of
   88         contributions which exceed the amount that would have
   89         accrued had the member remained in the defined benefit
   90         program; providing certain requirements and
   91         limitations with respect to contributions; clarifying
   92         that participant and employer contributions are
   93         earmarked for specified purposes; providing duties of
   94         the third-party administrator; providing that a
   95         participant is vested immediately with respect to
   96         employee contributions paid by the participant;
   97         providing for the forfeiture of nonvested employer
   98         contributions and service credit under certain
   99         circumstances; amending s. 121.4503, F.S.; providing
  100         for the deposit of participant contributions into the
  101         Florida Retirement System Contributions Clearing Trust
  102         Fund; amending s. 121.571, F.S.; providing
  103         requirements for submitting participant contributions;
  104         amending s. 121.591, F.S.; limiting the payment of
  105         benefits prior to a participant’s termination of
  106         employment; providing for the forfeiture of nonvested
  107         accumulations upon payment of certain vested benefits;
  108         providing that the distribution payment method
  109         selected by the participant or beneficiary is
  110         irrevocable at the time of distribution; prohibiting a
  111         distribution of employee contributions if an qualified
  112         domestic relations order is filed against the
  113         participant’s account; amending s. 121.70, F.S.;
  114         revising legislative intent; amending s. 121.71, F.S.;
  115         requiring that employee contributions be deducted from
  116         the employee’s monthly salary, beginning on a
  117         specified date, and treated as employer contributions
  118         under certain provisions of federal law; clarifying
  119         that an employee may not receive such contributions
  120         directly; specifying the required employee
  121         contribution rates for the membership of each
  122         membership class and subclass of the Florida
  123         Retirement System; specifying the required employer
  124         retirement contribution rates for each membership
  125         class and subclass of the system in order to address
  126         unfunded actuarial liabilities of the system;
  127         requiring an assessment to be imposed if the employee
  128         contributions remitted are less than the amount
  129         required; providing for the employer to receive a
  130         credit for excess contributions remitted; amending s.
  131         121.72, F.S.; revising certain requirements governing
  132         allocations to optional retirement program participant
  133         accounts; amending s. 121.73, F.S., relating to
  134         disability coverage for participants in the optional
  135         retirement program; conforming provisions to changes
  136         made by the act; amending s. 121.74, F.S.; revising
  137         the amount that employers are required to contribute
  138         for administrative and educational expenses; amending
  139         s. 121.76, F.S.; providing that employer-paid employee
  140         contributions are subject to certain taxes; amending
  141         s. 121.78, F.S.; revising certain requirements for
  142         administering the payment and distribution of
  143         contributions; requiring that certain fees be imposed
  144         for delinquent payment; providing that an employer is
  145         responsible for recovering any refund provided to an
  146         employee in error; revising the terms of an authorized
  147         waiver of delinquency; requiring an employer to
  148         receive a credit for excess contributions and to
  149         reimburse an employee for excess contributions,
  150         subject to certain limitations; amending s. 1012.875,
  151         F.S.; requiring employee and employer contributions
  152         for participants in the State Community College System
  153         Optional Retirement Program, effective January 1,
  154         2011, and thereafter; providing that the act fulfills
  155         an important state interest; providing appropriations
  156         to and authorizing additional positions for the
  157         Division of Retirement within the Department of
  158         Management Services; providing an effective date.
  159  
  160  Be It Enacted by the Legislature of the State of Florida:
  161  
  162         Section 1. Paragraph (d) of subsection (3) of section
  163  121.011, Florida Statutes, is amended, and paragraph (h) is
  164  added to that subsection, to read:
  165         121.011 Florida Retirement System.—
  166         (3) PRESERVATION OF RIGHTS.—
  167         (d) The rights of members of the retirement system
  168  established by this chapter shall not be impaired by virtue of
  169  the conversion of the Florida Retirement System to an employee
  170  noncontributory system. As of July 1, 1974, the rights of
  171  members of the retirement system established by this chapter are
  172  declared to be of a contractual nature, entered into between the
  173  member and the state, and such rights shall be legally
  174  enforceable as valid contract rights and shall not be abridged
  175  in any way.
  176         (h) Effective January 1, 2011, this system shall require
  177  employee and employer contributions as provided in s. 121.071
  178  and part III of this chapter. As of January 1, 2011, the rights
  179  of members of the retirement system established by this chapter
  180  are declared to be of a contractual nature, entered into between
  181  the member and the state, and such rights shall be legally
  182  enforceable as valid contract rights and shall not be abridged
  183  in any way.
  184         Section 2. Paragraph (a) of subsection (19) and subsections
  185  (39), (55), and (59) of section 121.021, Florida Statutes, are
  186  amended to read:
  187         121.021 Definitions.—The following words and phrases as
  188  used in this chapter have the respective meanings set forth
  189  unless a different meaning is plainly required by the context:
  190         (19) “Prior service” under this chapter means:
  191         (a) Service for which the member had credit under one of
  192  the existing systems and received a refund of his or her
  193  contributions upon termination of employment. Prior service
  194  shall also include that service between December 1, 1970, and
  195  the date the system becomes noncontributory for which the member
  196  had credit under the Florida Retirement System and received a
  197  refund of his or her contributions upon termination of
  198  employment.
  199         (39)(a) “Termination” occurs, except as provided in
  200  paragraph (b), when a member ceases all employment relationships
  201  with an employer, however:
  202         1. For retirements effective before July 1, 2010, if a
  203  member is employed by any such employer within the next calendar
  204  month, termination shall be deemed not to have occurred. A leave
  205  of absence constitutes a continuation of the employment
  206  relationship, except that a leave of absence without pay due to
  207  disability may constitute termination if such member makes
  208  application for and is approved for disability retirement in
  209  accordance with s. 121.091(4). The department or state board may
  210  require other evidence of termination as it deems necessary.
  211         2. For retirements effective on or after July 1, 2010, if a
  212  member is employed by any such employer within the next 6
  213  calendar months, termination shall be deemed not to have
  214  occurred. A leave of absence constitutes a continuation of the
  215  employment relationship, except that a leave of absence without
  216  pay due to disability may constitute termination if such member
  217  makes application for and is approved for disability retirement
  218  in accordance with s. 121.091(4). The department or state board
  219  may require other evidence of termination as it deems necessary.
  220         (b) “Termination” for a member electing to participate in
  221  the Deferred Retirement Option Program occurs when the program
  222  participant ceases all employment relationships with an employer
  223  in accordance with s. 121.091(13), however:
  224         1. For termination dates occurring before July 1, 2010, if
  225  the participant is employed by any such employer within the next
  226  calendar month, termination will be deemed not to have occurred,
  227  except as provided in s. 121.091(13)(b)4.c. A leave of absence
  228  shall constitute a continuation of the employment relationship.
  229         2. For termination dates occurring on or after July 1,
  230  2010, if the participant becomes employed by any such employer
  231  within the next 6 calendar months, termination will be deemed
  232  not to have occurred, except as provided in s.
  233  121.091(13)(b)4.c. A leave of absence constitutes a continuation
  234  of the employment relationship.
  235         (c) Effective January 1, 2011, “termination” for a member
  236  receiving a refund of employee contributions occurs when a
  237  member ceases all employment relationships with an employer for
  238  3 calendar months.
  239         (55) “Benefit” means any pension payment, lump-sum or
  240  periodic, to a member, retiree, or beneficiary, based partially
  241  or entirely on employer contributions and employee
  242  contributions, if applicable.
  243         (59) “Payee” means a retiree or beneficiary of a retiree
  244  who has received or is receiving a retirement benefit payment.
  245         Section 3. Paragraphs (b) and (d) of subsection (2) and
  246  subsection (3) of section 121.051, Florida Statutes, are amended
  247  to read:
  248         121.051 Participation in the system.—
  249         (2) OPTIONAL PARTICIPATION.—
  250         (b)1. The governing body of any municipality, metropolitan
  251  planning organization, or special district in the state may
  252  elect to participate in the system upon proper application to
  253  the administrator and may cover all or any of its units as
  254  approved by the Secretary of Health and Human Services and the
  255  administrator. The department shall adopt rules establishing
  256  provisions for the submission of documents necessary for such
  257  application. Prior to being approved for participation in the
  258  Florida Retirement System, the governing body of any such
  259  municipality, metropolitan planning organization, or special
  260  district that has a local retirement system shall submit to the
  261  administrator a certified financial statement showing the
  262  condition of the local retirement system as of a date within 3
  263  months prior to the proposed effective date of membership in the
  264  Florida Retirement System. The statement must be certified by a
  265  recognized accounting firm that is independent of the local
  266  retirement system. All required documents necessary for
  267  extending Florida Retirement System coverage must be received by
  268  the department for consideration at least 15 days prior to the
  269  proposed effective date of coverage. If the municipality,
  270  metropolitan planning organization, or special district does not
  271  comply with this requirement, the department may require that
  272  the effective date of coverage be changed.
  273         2. Any city, metropolitan planning organization, or special
  274  district that has an existing retirement system covering the
  275  employees in the units that are to be brought under the Florida
  276  Retirement System may participate only after holding a
  277  referendum in which all employees in the affected units have the
  278  right to participate. Only those employees electing coverage
  279  under the Florida Retirement System by affirmative vote in said
  280  referendum shall be eligible for coverage under this chapter,
  281  and those not participating or electing not to be covered by the
  282  Florida Retirement System shall remain in their present systems
  283  and shall not be eligible for coverage under this chapter. After
  284  the referendum is held, all future employees shall be compulsory
  285  members of the Florida Retirement System.
  286         3. At the time of joining the Florida Retirement System,
  287  the governing body of any city, metropolitan planning
  288  organization, or special district complying with subparagraph 1.
  289  may elect to provide, or not provide, benefits based on past
  290  service of officers and employees as described in s. 121.081(1).
  291  However, if such employer elects to provide past service
  292  benefits, such benefits must be provided for all officers and
  293  employees of its covered group.
  294         4. Once this election is made and approved it may not be
  295  revoked, except pursuant to subparagraphs 5. and 6., and all
  296  present officers and employees electing coverage under this
  297  chapter and all future officers and employees shall be
  298  compulsory members of the Florida Retirement System.
  299         5. Subject to the conditions set forth in subparagraph 6.,
  300  the governing body of any hospital licensed under chapter 395
  301  which is governed by the board of a special district as defined
  302  in s. 189.403(1) or by the board of trustees of a public health
  303  trust created under s. 154.07, hereinafter referred to as
  304  “hospital district,” and which participates in the system, may
  305  elect to cease participation in the system with regard to future
  306  employees in accordance with the following procedure:
  307         a. No more than 30 days and at least 7 days before adopting
  308  a resolution to partially withdraw from the Florida Retirement
  309  System and establish an alternative retirement plan for future
  310  employees, a public hearing must be held on the proposed
  311  withdrawal and proposed alternative plan.
  312         b. From 7 to 15 days before such hearing, notice of intent
  313  to withdraw, specifying the time and place of the hearing, must
  314  be provided in writing to employees of the hospital district
  315  proposing partial withdrawal and must be published in a
  316  newspaper of general circulation in the area affected, as
  317  provided by ss. 50.011-50.031. Proof of publication of such
  318  notice shall be submitted to the Department of Management
  319  Services.
  320         c. The governing body of any hospital district seeking to
  321  partially withdraw from the system must, before such hearing,
  322  have an actuarial report prepared and certified by an enrolled
  323  actuary, as defined in s. 112.625(3), illustrating the cost to
  324  the hospital district of providing, through the retirement plan
  325  that the hospital district is to adopt, benefits for new
  326  employees comparable to those provided under the Florida
  327  Retirement System.
  328         d. Upon meeting all applicable requirements of this
  329  subparagraph, and subject to the conditions set forth in
  330  subparagraph 6., partial withdrawal from the system and adoption
  331  of the alternative retirement plan may be accomplished by
  332  resolution duly adopted by the hospital district board. The
  333  hospital district board must provide written notice of such
  334  withdrawal to the division by mailing a copy of the resolution
  335  to the division, postmarked no later than December 15, 1995. The
  336  withdrawal shall take effect January 1, 1996.
  337         6. Following the adoption of a resolution under sub
  338  subparagraph 5.d., all employees of the withdrawing hospital
  339  district who were participants in the Florida Retirement System
  340  prior to January 1, 1996, shall remain as participants in the
  341  system for as long as they are employees of the hospital
  342  district, and all rights, duties, and obligations between the
  343  hospital district, the system, and the employees shall remain in
  344  full force and effect. Any employee who is hired or appointed on
  345  or after January 1, 1996, may not participate in the Florida
  346  Retirement System, and the withdrawing hospital district shall
  347  have no obligation to the system with respect to such employees.
  348         (d) The governing body of a charter school or a charter
  349  technical career center may elect to participate in the system
  350  upon proper application to the administrator and shall cover its
  351  units as approved by the Secretary of Health and Human Services
  352  and the administrator. At the time of joining the Florida
  353  Retirement System, the governing body of the charter school may
  354  elect to provide, or not provide, benefits based on past service
  355  of officers and employees as described in s. 121.081(1). Once
  356  this election is made and approved, it may not be revoked, and
  357  all present officers and employees selecting coverage under this
  358  chapter and all future officers and employees shall be
  359  compulsory members of the Florida Retirement System.
  360         (3) SOCIAL SECURITY COVERAGE.—Social security coverage
  361  shall be provided for all officers and employees who become
  362  members under the provisions of subsection (1) or subsection
  363  (2). Any modification of the present agreement with the Social
  364  Security Administration, or referendum required under the Social
  365  Security Act, for the purpose of providing social security
  366  coverage for any member shall be requested by the state agency
  367  in compliance with the applicable provisions of the Social
  368  Security Act governing such coverage. However, retroactive
  369  social security coverage for service prior to December 1, 1970,
  370  with the employer shall not be provided for any member who was
  371  not covered under the agreement as of November 30, 1970. The
  372  employer-paid employee contributions specified in s. 121.71(2)
  373  are subject to taxes imposed under the Federal Insurance
  374  Contributions Act, 26 U.S.C. ss. 3101-3128.
  375         Section 4. Paragraph (b) of subsection (5) of section
  376  121.0515, Florida Statutes, is amended to read:
  377         121.0515 Special risk membership.—
  378         (5) CREDIT FOR PAST SERVICE.—A special risk member may
  379  purchase retirement credit in the Special Risk Class based upon
  380  past service, and may upgrade retirement credit for such past
  381  service, to the extent of 2 percent of the member’s average
  382  monthly compensation as specified in s. 121.091(1)(a) for such
  383  service as follows:
  384         (b) Contributions for upgrading the additional special risk
  385  credit pursuant to this subsection shall be equal to the
  386  difference in the employer and, if applicable, employee
  387  contributions paid and the special risk percentage rate of gross
  388  salary in effect at the time of purchase for the period being
  389  claimed, plus interest thereon at the rate of 4 percent a year
  390  compounded annually from the date of such service until July 1,
  391  1975, and 6.5 percent a year thereafter until the date of
  392  payment. This past service may be purchased by the member or by
  393  the employer on behalf of the member.
  394         Section 5. Paragraphs (a) and (d) of subsection (4) and
  395  paragraph (b) of subsection (7) of section 121.052, Florida
  396  Statutes, are amended, present paragraph (c) of subsection (7)
  397  of that section is redesignated as paragraph (d), and a new
  398  paragraph (c) is added to that subsection, to read:
  399         121.052 Membership class of elected officers.—
  400         (4) PARTICIPATION BY ELECTED OFFICERS SERVING A SHORTENED
  401  TERM DUE TO APPORTIONMENT, FEDERAL INTERVENTION, ETC.—
  402         (a) Any duly elected officer whose term of office was
  403  shortened by legislative or judicial apportionment pursuant to
  404  the provisions of s. 16, Art. III of the State Constitution may,
  405  after the term of office to which he or she was elected is
  406  completed, pay into the System Trust Fund the amount of
  407  contributions that would have been made by the officer or the
  408  officer’s employer on his or her behalf, plus 4 percent interest
  409  compounded annually from the date he or she left office until
  410  July 1, 1975, and 6.5 percent interest compounded annually
  411  thereafter, and may receive service credit for the length of
  412  time the officer would have served if such term had not been
  413  shortened by apportionment.
  414         (d)1. Any justice or judge, or any retired justice or judge
  415  who retired before July 1, 1993, who has attained the age of 70
  416  years and who is prevented under s. 8, Art. V of the State
  417  Constitution from completing his or her term of office because
  418  of age may elect to purchase credit for all or a portion of the
  419  months he or she would have served during the remainder of the
  420  term of office, but he or she may claim those months only after
  421  the date the service would have occurred. The justice or judge
  422  must pay into the System Trust Fund the amount of contributions
  423  that would have been made by the employer on his or her behalf
  424  for the period of time being claimed, plus 6.5 percent interest
  425  thereon compounded each June 30 from the date he or she left
  426  office, in order to receive service credit in this class for the
  427  period of time being claimed. After the date the service would
  428  have occurred, and upon payment of the required contributions,
  429  the retirement benefit of a retired justice or judge will be
  430  adjusted prospectively to include this additional creditable
  431  service; however, such adjustment may be made only once.
  432         2. Any justice or judge who does not seek election to a
  433  subsequent term of office because he or she would be prevented
  434  under s. 8, Art. V of the State Constitution from completing
  435  such term of office upon attaining the age of 70 years may elect
  436  to purchase service credit for service as a temporary judge as
  437  assigned by the court if the temporary assignment follows
  438  immediately the last full term of office served and the purchase
  439  is limited to the number of months of service needed to vest
  440  retirement benefits. To receive retirement credit for such
  441  temporary service beyond termination, the justice or judge must
  442  pay into the System Trust Fund the amount of contributions that
  443  would have been made by the justice or judge and the employer on
  444  his or her behalf had he or she continued in office for the
  445  period of time being claimed, plus 6.5 percent interest thereon
  446  compounded each June 30 from the date he or she left office.
  447         (7) CONTRIBUTIONS.—
  448         (b) The employer paying the salary of a member of the
  449  Elected Officers’ Class shall contribute an amount as specified
  450  in this subsection or s. 121.71, as appropriate, which shall
  451  constitute the entire employer retirement contribution with
  452  respect to such member. The employer shall also withhold one
  453  half of the entire contribution of the member required for
  454  social security coverage. Effective January 1, 2011, each member
  455  of the Elected Officers’ Class shall pay retirement
  456  contributions as specified in s. 121.71.
  457         (c) If a member of the Elected Officer’ Class ceases to
  458  fill an office covered by this class for 3 calendar months for
  459  any reason other than retirement, the member shall be entitled
  460  to a full refund of the contributions he or she has made prior
  461  or subsequent to participation in the noncontributory plan,
  462  subject to the restrictions otherwise provided in this chapter.
  463  The refund shall not include any interest earnings on the
  464  contributions for a participant of the defined benefit program.
  465  Employer contributions made on behalf of the member are not
  466  refundable. By obtaining a refund of contributions, a member
  467  waives all rights under the Florida Retirement System, including
  468  the health insurance subsidy, to the service credit represented
  469  by the refunded contributions, except the right to purchase his
  470  or her prior service credit in accordance with s. 121.081(2).
  471         Section 6. Paragraph (a) of subsection (7) of section
  472  121.053, Florida Statutes, is amended to read:
  473         121.053 Participation in the Elected Officers’ Class for
  474  retired members.—
  475         (7) A member who is elected or appointed to an elective
  476  office and who is participating in the Deferred Retirement
  477  Option Program is not subject to termination as defined in s.
  478  121.021, or reemployment limitations as provided in s.
  479  121.091(9), until the end of his or her current term of office
  480  or, if the officer is consecutively elected or reelected to an
  481  elective office eligible for coverage under the Florida
  482  Retirement System, until he or she no longer holds an elective
  483  office, as follows:
  484         (a) At the end of the 60-month DROP period:
  485         1. The officer’s DROP account may not accrue additional
  486  monthly benefits, but does continue to earn interest as provided
  487  in s. 121.091(13). However, an officer whose DROP participation
  488  begins on or after July 1, 2010, may not continue to earn such
  489  interest.
  490         2. Retirement contributions are not required of the officer
  491  or the employer of the elected officer and additional retirement
  492  credit may not be earned under the Florida Retirement System.
  493         Section 7. Paragraph (j) of subsection (1), paragraph (b)
  494  of subsection (3), and paragraphs (d) and (e) of subsection (6)
  495  of section 121.055, Florida Statutes, are amended, present
  496  paragraph (c) of subsection (3) of that section is redesignated
  497  as paragraph (d), and a new paragraph (c) is added to that
  498  subsection, to read:
  499         121.055 Senior Management Service Class.—There is hereby
  500  established a separate class of membership within the Florida
  501  Retirement System to be known as the “Senior Management Service
  502  Class,” which shall become effective February 1, 1987.
  503         (1)
  504         (j) Except as may otherwise be provided, any member of the
  505  Senior Management Service Class may purchase additional
  506  retirement credit in such class for creditable service within
  507  the purview of the Senior Management Service Class retroactive
  508  to February 1, 1987, and may upgrade retirement credit for such
  509  service, to the extent of 2 percent of the member’s average
  510  monthly compensation as specified in paragraph (4)(d) for such
  511  service. Contributions for upgrading the additional Senior
  512  Management Service credit pursuant to this paragraph shall be
  513  equal to the difference in the employer and, if applicable,
  514  employee contributions paid and the Senior Management Service
  515  Class contribution rate as a percentage of gross salary in
  516  effect for the period being claimed, plus interest thereon at
  517  the rate of 6.5 percent a year, compounded annually until the
  518  date of payment. This service credit may be purchased by the
  519  employer on behalf of the member.
  520         (3)
  521         (b) The employer paying the salary of a member of the
  522  Senior Management Service Class shall contribute an amount as
  523  specified in this section or s. 121.71, as appropriate, which
  524  shall constitute the entire employer retirement contribution
  525  with respect to such member. The employer shall also withhold
  526  one-half of the entire contribution of the member required for
  527  social security coverage. Effective January 1, 2011, each
  528  employee shall pay retirement contributions as specified in s.
  529  121.71.
  530         (c) Upon termination of employment for 3 calendar months
  531  for any reason other than retirement, a member shall be entitled
  532  to a full refund of the contributions he or she has made prior
  533  or subsequent to participation in the noncontributory plan,
  534  subject to the restrictions otherwise provided in this chapter.
  535  The refund shall not include any interest earnings on the
  536  contributions for a participant of the defined benefit program.
  537  Employer contributions made on behalf of the member are not
  538  refundable. By obtaining a refund of contributions, a member
  539  waives all rights under the Florida Retirement System, including
  540  the health insurance subsidy, to the service credit represented
  541  by the refunded contributions, except the right to purchase his
  542  or her prior service credit in accordance with s. 121.081(2).
  543         (6)
  544         (d) Contributions.—
  545         1.a. Through June 30, 2001, each employer shall contribute
  546  on behalf of each participant in the Senior Management Service
  547  Optional Annuity Program an amount equal to the normal cost
  548  portion of the employer retirement contribution which would be
  549  required if the participant were a Senior Management Service
  550  Class member of the Florida Retirement System defined benefit
  551  program, plus the portion of the contribution rate required in
  552  s. 112.363(8) that would otherwise be assigned to the Retiree
  553  Health Insurance Subsidy Trust Fund. For the period Effective
  554  July 1, 2001, through December 31, 2010, each employer shall
  555  contribute on behalf of each participant in the optional program
  556  an amount equal to 12.49 percent of the participant’s gross
  557  monthly compensation.
  558         b. Effective January 1, 2011, each member participating in
  559  the Senior Management Service Optional Annuity Program shall
  560  contribute an amount equal to the employee contribution required
  561  in s. 121.71(3). Effective January 1, 2011, each employer shall
  562  contribute on behalf of each participant in the optional program
  563  an amount equal to the difference between 12.49 percent of the
  564  participant’s gross monthly compensation and the amount equal to
  565  the employee’s required contribution based on the employee’s
  566  gross monthly compensation.
  567  
  568  The department shall deduct an amount approved by the
  569  Legislature to provide for the administration of this program.
  570  The payment of the contributions to the optional program which
  571  is required by this subparagraph for each participant shall be
  572  made by the employer to the department, which shall forward the
  573  contributions to the designated company or companies contracting
  574  for payment of benefits for the participant under the program.
  575         2. Each employer shall contribute on behalf of each
  576  participant in the Senior Management Service Optional Annuity
  577  Program an amount equal to the unfunded actuarial accrued
  578  liability portion of the employer contribution which would be
  579  required for members of the Senior Management Service Class in
  580  the Florida Retirement System. This contribution shall be paid
  581  to the department for transfer to the Florida Retirement System
  582  Trust Fund.
  583         3. An Optional Annuity Program Trust Fund shall be
  584  established in the State Treasury and administered by the
  585  department to make payments to provider companies on behalf of
  586  the optional annuity program participants, and to transfer the
  587  unfunded liability portion of the state optional annuity program
  588  contributions to the Florida Retirement System Trust Fund.
  589         4. Contributions required for social security by each
  590  employer and each participant, in the amount required for social
  591  security coverage as now or hereafter may be provided by the
  592  federal Social Security Act shall be maintained for each
  593  participant in the Senior Management Service retirement program
  594  and shall be in addition to the retirement contributions
  595  specified in this paragraph.
  596         5. Each participant in the Senior Management Service
  597  Optional Annuity Program may contribute by way of salary
  598  reduction or deduction a percentage amount of the participant’s
  599  gross compensation not to exceed the percentage amount
  600  contributed by the employer to the optional annuity program.
  601  Payment of the participant’s contributions shall be made by the
  602  employer to the department, which shall forward the
  603  contributions to the designated company or companies contracting
  604  for payment of benefits for the participant under the program.
  605         (e) Benefits.—
  606         1. Benefits under the Senior Management Service Optional
  607  Annuity Program are payable only to participants in the program,
  608  or their beneficiaries as designated by the participant in the
  609  contract with the provider company, and must be paid by the
  610  designated company in accordance with the terms of the annuity
  611  contract applicable to the participant. A participant must be
  612  terminated from all employment relationships with Florida
  613  Retirement System employers as provided in s. 121.021(39) to
  614  begin receiving the employer-funded benefit. Benefits funded by
  615  employer contributions are payable under the terms of the
  616  contract to the participant, his or her beneficiary, or his or
  617  her estate, in addition to:
  618         a. A lump-sum payment to the beneficiary upon the death of
  619  the participant;
  620         b. A cash-out of a de minimis account upon the request of a
  621  former participant who has been terminated for a minimum of 6
  622  calendar months from the employment that entitled him or her to
  623  optional annuity program participation. Such cash-out must be a
  624  complete liquidation of the account balance with that company
  625  and is subject to the Internal Revenue Code;
  626         c. A mandatory distribution of a de minimis account of a
  627  former participant who has been terminated for a minimum of 6
  628  calendar months from the employment that entitled him or her to
  629  optional annuity program participation as authorized by the
  630  department; or
  631         d. A lump-sum direct rollover distribution whereby all
  632  accrued benefits, plus interest and investment earnings, are
  633  paid from the participant’s account directly to the custodian of
  634  an eligible retirement plan, as defined in s. 402(c)(8)(B) of
  635  the Internal Revenue Code, on behalf of the participant.
  636         2.Benefits are not payable under the Senior Management
  637  Service Optional Annuity Program prior to termination of
  638  employment for employee hardships, unforeseeable emergencies,
  639  loans, medical expenses, educational expenses, purchase of a
  640  principal residence, payments necessary to prevent eviction or
  641  foreclosure on an employee’s principal residence, or for any
  642  other reason.
  643         3.2. The benefits payable to any person under the Senior
  644  Management Service Optional Annuity Program, and any
  645  contribution accumulated under such program, are not subject to
  646  assignment, execution, or attachment or to any legal process
  647  whatsoever.
  648         4.3. Except as provided in subparagraph 5. 4., a
  649  participant who terminates employment and receives a
  650  distribution, including a rollover or trustee-to-trustee
  651  transfer, funded by employer contributions shall be deemed to be
  652  retired from a state-administered retirement system if the
  653  participant is subsequently employed with an employer that
  654  participates in the Florida Retirement System.
  655         5.4. A participant who receives optional annuity program
  656  benefits funded by employer contributions as a mandatory
  657  distribution of a de minimis account authorized by the
  658  department is not considered a retiree.
  659  
  660  As used in this paragraph, a “de minimis account” means an
  661  account with a provider company containing employer
  662  contributions and accumulated earnings of not more than $5,000
  663  made under this chapter.
  664         Section 8. Subsections (2) and (5) and paragraph (c) of
  665  subsection (6) of section 121.071, Florida Statutes, are
  666  amended, present paragraph (d) of subsection (6) of that section
  667  is redesignated as paragraph (e), and a new paragraph (d) is
  668  added to that subsection, to read:
  669         121.071 Contributions.—Contributions to the system shall be
  670  made as follows:
  671         (2)(a) Effective January 1, 1975, or October 1, 1975, as
  672  applicable, and through December 31, 2010, each employer shall
  673  accomplish the contribution required by subsection (1) by a
  674  procedure in which no employee’s gross salary shall be reduced.
  675  Effective January 1, 2011, each employee and employer shall pay
  676  retirement contributions as specified in s. 121.71.
  677         (b) Upon termination of employment for 3 calendar months
  678  for any reason other than retirement, a member shall be entitled
  679  to a full refund of the contributions he or she has made prior
  680  or subsequent to participation in the noncontributory plan,
  681  subject to the restrictions otherwise provided in this chapter.
  682  The refund shall not include any interest earnings on the
  683  contributions for a participant of the defined benefit program.
  684  Employer contributions made on behalf of the member are not
  685  refundable. A member may not receive a refund of employee
  686  contributions if an approved qualified domestic relations order
  687  is filed against his or her retirement account.
  688         (5) Contributions made in accordance with subsections (1),
  689  (2), (3), and (4), and s. 121.71 shall be paid by the employer
  690  into the system trust funds in accordance with rules adopted by
  691  the administrator pursuant to chapter 120, except as may be
  692  otherwise specified herein. Effective July 1, 2002,
  693  contributions paid under subsections (1) and (4) and
  694  accompanying payroll data are due and payable no later than the
  695  5th working day of the month immediately following the month
  696  during which the payroll period ended.
  697         (6)
  698         (c) By obtaining a refund of contributions, a member waives
  699  all rights under the Florida Retirement System, including the
  700  health insurance subsidy, to the service credit represented by
  701  the refunded contributions, except the right to purchase his or
  702  her prior service credit in accordance with s. 121.081(2).
  703         (d) If a member or former member of the defined benefit
  704  program receives an invalid refund from the Florida Retirement
  705  System Trust Fund, such person must repay the full amount of the
  706  invalid refund, plus interest at 6.5 percent compounded annually
  707  on each June 30 from the date of refund until full payment is
  708  made to the trust fund.
  709         Section 9. Paragraphs (b) and (c) of subsection (1) and
  710  subsection (2) of section 121.081, Florida Statutes, are amended
  711  to read:
  712         121.081 Past service; prior service; contributions.
  713  Conditions under which past service or prior service may be
  714  claimed and credited are:
  715         (1)
  716         (b) Past service earned after January 1, 1975, may be
  717  claimed by officers or employees of a municipality, metropolitan
  718  planning organization, charter school, charter technical career
  719  center, or special district who become a covered group under
  720  this system. The governing body of a covered group may elect to
  721  provide benefits for past service earned after January 1, 1975,
  722  in accordance with this chapter, and the cost for such past
  723  service is established by applying the following formula: The
  724  employer shall contribute an amount equal to the employer
  725  contribution rate in effect at the time the service was earned,
  726  and, if applicable, the employee contribution rate, multiplied
  727  by the employee’s gross salary for each year of past service
  728  claimed, plus 6.5-percent interest thereon, compounded annually,
  729  figured on each year of past service, with interest compounded
  730  from date of annual salary earned until date of payment.
  731         (c) Should the employer not elect to provide past service
  732  on the date of joining the Florida Retirement System for the
  733  member, then the member may claim and pay for the service as
  734  provided in same, based on paragraphs (a) and (b).
  735         (2) Prior service, as defined in s. 121.021(19), may be
  736  claimed as creditable service under the Florida Retirement
  737  System after a member has been reemployed for 1 complete year of
  738  creditable service within a period of 12 consecutive months,
  739  except as provided in paragraph (c). Service performed as a
  740  participant of the optional retirement program for the State
  741  University System under s. 121.35 or the Senior Management
  742  Service Optional Annuity Program under s. 121.055 may be used to
  743  satisfy the reemployment requirement of 1 complete year of
  744  creditable service. The member shall not be permitted to make
  745  any contributions for prior service until after completion of
  746  the 1 year of creditable service. If a member does not wish to
  747  claim credit for all of his or her prior service, the service
  748  the member claims must be the most recent period of service. The
  749  required contributions for claiming the various types of prior
  750  service are:
  751         (a) For prior service performed prior to the date the
  752  system becomes noncontributory for the member and for which the
  753  member had credit under one of the existing retirement systems
  754  and received a refund of contributions upon termination of
  755  employment, the member shall contribute 4 percent of all salary
  756  received during the period being claimed, plus 4-percent
  757  interest compounded annually from date of refund until July 1,
  758  1975, and 6.5-percent interest compounded annually thereafter,
  759  until full payment is made to the Retirement Trust Fund, and
  760  shall receive credit in the Regular Class. A member who elected
  761  to transfer to the Florida Retirement System from an existing
  762  system may receive credit for prior service under the existing
  763  system if he or she was eligible under the existing system to
  764  claim the prior service at the time of the transfer.
  765  Contributions for such prior service shall be determined by the
  766  applicable provisions of the system under which the prior
  767  service is claimed and shall be paid by the member, with
  768  matching contributions paid by the employer at the time the
  769  service was performed. Effective July 1, 1978, the account of a
  770  person who terminated under s. 238.05(3) may not be charged
  771  interest for contributions that remained on deposit in the
  772  Annuity Savings Trust Fund established under chapter 238, upon
  773  retirement under this chapter or chapter 238.
  774         (b) For prior service performed prior to the date the
  775  system becomes noncontributory for the member and for which the
  776  member had credit under the Florida Retirement System and
  777  received a refund of contributions upon termination of
  778  employment, the member shall contribute at the rate that was
  779  required of him or her during the period of service being
  780  claimed, on all salary received during such period, plus 4
  781  percent interest compounded annually from date of refund until
  782  July 1, 1975, and 6.5-percent interest compounded annually
  783  thereafter, until the full payment is made to the Retirement
  784  Trust Fund, and shall receive credit in the membership class in
  785  which the member participated during the period claimed.
  786         (c) For prior service as defined in s. 121.021(19)(b) and
  787  (c) during which no contributions were made because the member
  788  did not participate in a retirement system, the member shall
  789  contribute 14.38 percent of all salary received during such
  790  period or 14.38 percent of $100 per month during such period,
  791  whichever is greater, plus 4-percent interest compounded
  792  annually from the first year of service claimed until July 1,
  793  1975, and 6.5-percent interest compounded annually thereafter,
  794  until full payment is made to the Retirement Trust Fund, and
  795  shall receive credit in the Regular Class.
  796         (d) In order to claim credit for prior service as defined
  797  in s. 121.021(19)(d) for which no retirement contributions were
  798  paid during the period of such service, the member shall
  799  contribute the total employee and employer contributions which
  800  were required to be made to the Highway Patrol Pension Trust
  801  Fund, as provided in chapter 321, during the period claimed,
  802  plus 4-percent interest compounded annually from the first year
  803  of service until July 1, 1975, and 6.5-percent interest
  804  compounded annually thereafter, until full payment is made to
  805  the Retirement Trust Fund. However, any governmental entity
  806  which employed such member may elect to pay up to 50 percent of
  807  the contributions and interest required to purchase this prior
  808  service credit. The service shall be credited in accordance with
  809  the provisions of the Highway Patrol Pension Plan in effect
  810  during the period claimed unless the member terminated and
  811  withdrew his or her retirement contributions and was thereafter
  812  enrolled in the State and County Officers and Employees’
  813  Retirement System or the Florida Retirement System, in which
  814  case the service shall be credited as Regular Class service.
  815         (e) For service performed under the Florida Retirement
  816  System after December 1, 1970, that was never reported to the
  817  division or the department due to error, retirement credit may
  818  be claimed by a member of the Florida Retirement System. The
  819  department shall adopt rules establishing criteria for claiming
  820  such credit and detailing the documentation required to
  821  substantiate the error.
  822         (f) For prior service performed on or after January 1,
  823  2011, for which the member had credit under the Florida
  824  Retirement System and received a refund of contributions upon
  825  termination of employment for 3 calendar months, the member
  826  shall contribute at the rate that was required of him or her
  827  during the period of service being claimed, plus 6.5 percent
  828  interest, compounded annually on each June 30 from date of
  829  refund until the full payment is made to the Florida Retirement
  830  System Trust Fund, and shall receive credit in the membership
  831  class in which the member participated during the period
  832  claimed.
  833         (g)(f) The employer may not be required to make
  834  contributions for prior service credit for any member, except
  835  that the employer shall pay the employer portion of
  836  contributions for any legislator who elects to withdraw from the
  837  Florida Retirement System and later rejoins the system and pays
  838  any employee contributions required in accordance with s.
  839  121.052(3)(d).
  840         Section 10. Paragraphs (a) and (c) of subsection (5) of
  841  section 121.091, Florida Statutes, are amended to read:
  842         121.091 Benefits payable under the system.—Benefits may not
  843  be paid under this section unless the member has terminated
  844  employment as provided in s. 121.021(39)(a) or begun
  845  participation in the Deferred Retirement Option Program as
  846  provided in subsection (13), and a proper application has been
  847  filed in the manner prescribed by the department. The department
  848  may cancel an application for retirement benefits when the
  849  member or beneficiary fails to timely provide the information
  850  and documents required by this chapter and the department’s
  851  rules. The department shall adopt rules establishing procedures
  852  for application for retirement benefits and for the cancellation
  853  of such application when the required information or documents
  854  are not received.
  855         (5) TERMINATION BENEFITS.—A member whose employment is
  856  terminated prior to retirement retains membership rights to
  857  previously earned member-noncontributory service credit, and to
  858  member-contributory service credit, if the member leaves the
  859  member contributions on deposit in his or her retirement
  860  account. If a terminated member receives a refund of member
  861  contributions, such member may reinstate membership rights to
  862  the previously earned service credit represented by the refund
  863  by completing 1 year of creditable service and repaying the
  864  refunded member contributions, plus interest.
  865         (a) A member whose employment is terminated for any reason
  866  other than death or retirement prior to becoming vested is
  867  entitled to the return of his or her accumulated contributions
  868  as of the date of termination. Effective January 1, 2011, a
  869  member is eligible for the return of his or her employee
  870  contributions after being terminated for 3 calendar months.
  871         (c) In lieu of the deferred monthly benefit provided in
  872  paragraph (b), the terminated member may elect to receive a
  873  lump-sum amount equal to his or her accumulated contributions as
  874  of the date of termination. Effective January 1, 2011, a member
  875  is eligible for the return of his or her employee contributions
  876  after being terminated for 3 calendar months.
  877         Section 11. Subsection (1) of section 121.121, Florida
  878  Statutes, is amended to read:
  879         121.121 Authorized leaves of absence.—
  880         (1) A member may purchase creditable service for up to 2
  881  work years of authorized leaves of absence, including any leaves
  882  of absence covered under the Family Medical Leave Act, if:
  883         (a) The member has completed a minimum of 6 years of
  884  creditable service, excluding periods for which a leave of
  885  absence was authorized;
  886         (b) The leave of absence is authorized in writing by the
  887  employer of the member and approved by the administrator;
  888         (c) The member returns to active employment performing
  889  service with a Florida Retirement System employer in a regularly
  890  established position immediately upon termination of the leave
  891  of absence and remains on the employer’s payroll for 1 calendar
  892  month, except that a member who retires on disability while on a
  893  medical leave of absence shall not be required to return to
  894  employment. A member whose work year is less than 12 months and
  895  whose leave of absence terminates between school years is
  896  eligible to receive credit for the leave of absence as long as
  897  he or she returns to the employment of his or her employer at
  898  the beginning of the next school year and remains on the
  899  employer’s payroll for 1 calendar month; and
  900         (d) The member makes the required contributions for service
  901  credit during the leave of absence, which shall be 8 percent
  902  until January 1, 1975, and 9 percent thereafter of his or her
  903  rate of monthly compensation in effect immediately prior to the
  904  commencement of such leave for each month of such period, plus 4
  905  percent interest until July 1, 1975, and 6.5 percent interest
  906  thereafter on such contributions, compounded annually each June
  907  30 from the due date of the contribution to date of payment.
  908  Effective July 1, 1980, any leave of absence purchased pursuant
  909  to this section shall be at the contribution rates specified in
  910  s. 121.071 or s. 121.71 in effect at the time the leave is
  911  granted for the class of membership from which the leave of
  912  absence was granted; however, any member who purchased leave-of
  913  absence credit prior to July 1, 1980, for a leave of absence
  914  from a position in a class other than the regular membership
  915  class, may pay the appropriate additional contributions plus
  916  compound interest thereon and receive creditable service for
  917  such leave of absence in the membership class from which the
  918  member was granted the leave of absence. Effective January 1,
  919  2011, any leave of absence purchased pursuant to this section
  920  shall be at the employee and employer contribution rates
  921  specified in s. 121.71 in effect during the leave for the class
  922  of membership from which the leave of absence was granted.
  923         Section 12. Section 121.125, Florida Statutes, is amended
  924  to read:
  925         121.125 Credit for workers’ compensation payment periods.—A
  926  member of the retirement system created by this chapter who has
  927  been eligible or becomes eligible to receive workers’
  928  compensation payments for an injury or illness occurring during
  929  his or her employment while a member of any state retirement
  930  system shall, upon return to active employment with a covered
  931  employer for 1 calendar month or upon approval for disability
  932  retirement in accordance with s. 121.091(4), receive full
  933  retirement credit for the period prior to such return to active
  934  employment or disability retirement for which the workers’
  935  compensation payments were received. However, no member may
  936  receive retirement credit for any such period occurring after
  937  the earlier of the date of maximum medical improvement as
  938  defined in s. 440.02 or the date termination has occurred as
  939  defined in s. 121.021(39). The employer of record at the time of
  940  the worker’s compensation injury or illness shall make the
  941  required employee and employer retirement contributions based on
  942  the member’s rate of monthly compensation immediately prior to
  943  his or her receiving workers’ compensation payments for
  944  retirement credit received by the member. The employer of record
  945  at the time of the worker’s compensation injury or illness shall
  946  be assessed by the division a penalty of 1 percent of the
  947  contributions on all contributions not paid on the first payroll
  948  report after the member becomes eligible to receive credit. This
  949  delinquent assessment may not be waived.
  950         Section 13. Subsections (4) and (5) of section 121.35,
  951  Florida Statutes, are amended to read:
  952         121.35 Optional retirement program for the State University
  953  System.—
  954         (4) CONTRIBUTIONS.—
  955         (a)1. Through June 30, 2001, each employer shall contribute
  956  on behalf of each participant in the optional retirement program
  957  an amount equal to the normal cost portion of the employer
  958  retirement contribution which would be required if the
  959  participant were a regular member of the Florida Retirement
  960  System defined benefit program, plus the portion of the
  961  contribution rate required in s. 112.363(8) that would otherwise
  962  be assigned to the Retiree Health Insurance Subsidy Trust Fund.
  963  For the period Effective July 1, 2001, through December 31,
  964  2010, each employer shall contribute on behalf of each
  965  participant in the optional program an amount equal to 10.43
  966  percent of the participant’s gross monthly compensation.
  967         2. Effective January 1, 2011, each member participating in
  968  the State University System Optional Retirement Program shall
  969  contribute an amount equal to the employee contribution required
  970  in s. 121.71(3). Effective January 1, 2011, each employer shall
  971  contribute on behalf of each participant in the optional program
  972  an amount equal to the difference between 10.43 percent of the
  973  participant’s gross monthly compensation and the amount equal to
  974  the employee’s required contribution based on the employee’s
  975  gross monthly compensation.
  976  
  977  The department shall deduct an amount approved by the
  978  Legislature to provide for the administration of this program.
  979  The payment of the contributions to the optional program which
  980  is required by this paragraph for each participant shall be made
  981  by the employer to the department, which shall forward the
  982  contributions to the designated company or companies contracting
  983  for payment of benefits for the participant under the program.
  984  However, such contributions paid on behalf of an employee
  985  described in paragraph (3)(c) shall not be forwarded to a
  986  company and shall not begin to accrue interest until the
  987  employee has executed a contract and notified the department.
  988         (b) Each employer shall contribute on behalf of each
  989  participant in the optional retirement program an amount equal
  990  to the unfunded actuarial accrued liability portion of the
  991  employer contribution which would be required for members of the
  992  Florida Retirement System. This contribution shall be paid to
  993  the department for transfer to the Florida Retirement System
  994  Trust Fund.
  995         (c) An Optional Retirement Program Trust Fund shall be
  996  established in the State Treasury and administered by the
  997  department to make payments to the provider companies on behalf
  998  of the optional retirement program participants, and to transfer
  999  the unfunded liability portion of the state optional retirement
 1000  program contributions to the Florida Retirement System Trust
 1001  Fund.
 1002         (d) Contributions required for social security by each
 1003  employer and each participant, in the amount required for social
 1004  security coverage as now or hereafter may be provided by the
 1005  federal Social Security Act, shall be maintained for each
 1006  participant in the optional retirement program and shall be in
 1007  addition to the retirement contributions specified in this
 1008  subsection.
 1009         (e)Each participant in the optional retirement program who
 1010  has executed a contract may contribute by way of salary
 1011  reduction or deduction a percentage amount of the participant’s
 1012  gross compensation not to exceed the percentage amount
 1013  contributed by the employer to the optional program, but in no
 1014  case may such contribution exceed federal limitations. Payment
 1015  of the participant’s contributions shall be made by the
 1016  financial officer of the employer to the division which shall
 1017  forward the contributions to the designated company or companies
 1018  contracting for payment of benefits for the participant under
 1019  the program. A participant may not make, through salary
 1020  reduction, any voluntary employee contributions to any other
 1021  plan under s. 403(b) of the Internal Revenue Code, with the
 1022  exception of a custodial account under s. 403(b)(7) of the
 1023  Internal Revenue Code, until he or she has made an employee
 1024  contribution to his or her optional program equal to the
 1025  employer contribution. A participant is responsible for
 1026  monitoring his or her individual tax-deferred income to ensure
 1027  he or she does not exceed the maximum deferral amounts permitted
 1028  under the Internal Revenue Code.
 1029         (f)The Optional Retirement Trust Fund may accept for
 1030  deposit into participant contracts contributions in the form of
 1031  rollovers or direct trustee-to-trustee transfers by or on behalf
 1032  of participants who are reasonably determined by the department
 1033  to be eligible for rollover or transfer to the optional
 1034  retirement program pursuant to the Internal Revenue Code, if
 1035  such contributions are made in accordance with rules adopted by
 1036  the department. Such contributions shall be accounted for in
 1037  accordance with any applicable requirements of the Internal
 1038  Revenue Code and rules of the department.
 1039         (e)(g) Effective July 1, 2008, for purposes of paragraph
 1040  (a) and notwithstanding s. 121.021(22)(b)1., the term
 1041  “participant’s gross monthly compensation” includes salary
 1042  payments made to eligible clinical faculty from a state
 1043  university using funds provided by a faculty practice plan
 1044  authorized by the Board of Governors of the State University
 1045  System if:
 1046         1. There is not any employer contribution from the state
 1047  university to any other retirement program with respect to such
 1048  salary payments; and
 1049         2. The employer contribution on behalf of the participant
 1050  in the optional retirement program with respect to such salary
 1051  payments is made using funds provided by the faculty practice
 1052  plan.
 1053         (5) BENEFITS.—
 1054         (a) Benefits are payable under the optional retirement
 1055  program only to vested participants in the program, or their
 1056  beneficiaries as designated by the participant in the contract
 1057  with a provider company, and such benefits shall be paid only by
 1058  the designated company in accordance with s. 403(b) of the
 1059  Internal Revenue Code and the terms of the annuity contract or
 1060  contracts applicable to the participant. Benefits accrue in
 1061  individual accounts that are participant-directed, portable, and
 1062  funded by employer contributions and the earnings thereon. The
 1063  participant must be terminated from all employment relationships
 1064  with all Florida Retirement System employers, as provided in s.
 1065  121.021(39), to begin receiving the employer-funded benefit.
 1066  Benefits funded by employer contributions are payable in
 1067  accordance with the following terms and conditions:
 1068         1. Benefits shall be paid only to a participant, to his or
 1069  her beneficiaries, or to his or her estate, as designated by the
 1070  participant.
 1071         2. Benefits shall be paid by the provider company or
 1072  companies in accordance with the law, the provisions of the
 1073  contract, and any applicable department rule or policy.
 1074         3. In the event of a participant’s death, moneys
 1075  accumulated by, or on behalf of, the participant, less
 1076  withholding taxes remitted to the Internal Revenue Service, if
 1077  any, shall be distributed to the participant’s designated
 1078  beneficiary or beneficiaries, or to the participant’s estate, as
 1079  if the participant retired on the date of death, as provided in
 1080  paragraph (d) (c). No other death benefits are available to
 1081  survivors of participants under the optional retirement program
 1082  except for such benefits, or coverage for such benefits, as are
 1083  separately afforded by the employer, at the employer’s
 1084  discretion.
 1085         (b) Benefits are not payable under the optional retirement
 1086  program prior to termination of employment for employee
 1087  hardships, unforeseeable emergencies, loans, medical expenses,
 1088  educational expenses, purchase of a principal residence,
 1089  payments necessary to prevent eviction or foreclosure on an
 1090  employee’s principal residence, or for any other reason
 1091         (c)(b) Upon receipt by the provider company of a properly
 1092  executed application for distribution of benefits, the total
 1093  accumulated benefit shall be payable to the participant, as:
 1094         1. A lump-sum distribution to the participant;
 1095         2. A lump-sum direct rollover distribution whereby all
 1096  accrued benefits, plus interest and investment earnings, are
 1097  paid from the participant’s account directly to an eligible
 1098  retirement plan, as defined in s. 402(c)(8)(B) of the Internal
 1099  Revenue Code, on behalf of the participant;
 1100         3. Periodic distributions;
 1101         4. A partial lump-sum payment whereby a portion of the
 1102  accrued benefit is paid to the participant and the remaining
 1103  amount is transferred to an eligible retirement plan, as defined
 1104  in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of
 1105  the participant; or
 1106         5. Such other distribution options as are provided for in
 1107  the participant’s optional retirement program contract.
 1108         (d)(c) Survivor benefits shall be payable as:
 1109         1. A lump-sum distribution payable to the beneficiaries or
 1110  to the deceased participant’s estate;
 1111         2. An eligible rollover distribution on behalf of the
 1112  surviving spouse of a deceased participant, whereby all accrued
 1113  benefits, plus interest and investment earnings, are paid from
 1114  the deceased participant’s account directly to an eligible
 1115  retirement plan, as described in s. 402(c)(8)(B) of the Internal
 1116  Revenue Code, on behalf of the surviving spouse;
 1117         3. Such other distribution options as are provided for in
 1118  the participant’s optional retirement program contract; or
 1119         4. A partial lump-sum payment whereby a portion of the
 1120  accrued benefit is paid to the deceased participant’s surviving
 1121  spouse or other designated beneficiaries, less withholding taxes
 1122  remitted to the Internal Revenue Service, if any, and the
 1123  remaining amount is transferred directly to an eligible
 1124  retirement plan, as described in s. 402(c)(8)(B) of the Internal
 1125  Revenue Code, on behalf of the surviving spouse. The proportions
 1126  must be specified by the participant or the surviving
 1127  beneficiary.
 1128  
 1129  This paragraph does not abrogate other applicable provisions of
 1130  state or federal law providing payment of death benefits.
 1131         (e)(d) The benefits payable to any person under the
 1132  optional retirement program, and any contribution accumulated
 1133  under such program, shall not be subject to assignment,
 1134  execution, or attachment or to any legal process whatsoever.
 1135         (f)(e) A participant who chooses to receive his or her
 1136  benefits upon termination as defined in s. 121.021 must notify
 1137  the provider company of the date he or she wishes benefits
 1138  funded by employer contributions to begin. Benefits may be
 1139  deferred until the participant chooses to make such application.
 1140         (g)(f) Benefits funded by the participant’s personal
 1141  contributions may be paid out at any time and in any form within
 1142  the limits provided in the contract between the participant and
 1143  his or her provider company. The participant shall notify the
 1144  provider company regarding the date and provisions under which
 1145  he or she wants to receive the employee-funded portion of the
 1146  plan.
 1147         (h)(g) For purposes of this section, “retiree” means a
 1148  former participant of the optional retirement program who has
 1149  terminated employment and has taken a distribution as provided
 1150  in this subsection, except for a mandatory distribution of a de
 1151  minimis account authorized by the department.
 1152         Section 14. Subsection (1), paragraph (j) of subsection
 1153  (2), paragraph (c) of subsection (3), subsections (4), (5), (6),
 1154  (7), paragraph (b) of subsection (8), subsection (11), paragraph
 1155  (c) of subsection (13), and paragraph (b) of subsection (21) of
 1156  section 121.4501, Florida Statutes, are amended, and paragraph
 1157  (n) is added to subsection (2) of that section, to read:
 1158         121.4501 Public Employee Optional Retirement Program.—
 1159         (1) The Trustees of the State Board of Administration shall
 1160  establish an optional defined contribution retirement program
 1161  for members of the Florida Retirement System under which
 1162  retirement benefits will be provided for eligible employees who
 1163  elect to participate in the program. The benefits to be provided
 1164  for or on behalf of participants in such optional retirement
 1165  program shall be provided through employee-directed investments,
 1166  in accordance with s. 401(a) of the Internal Revenue Code and
 1167  its related regulations. Participants and The employers shall
 1168  contribute, as provided in this section, ss. 121.571, and 121.71
 1169  to the Public Employee Optional Retirement Program Trust Fund
 1170  toward the funding of such optional benefits.
 1171         (2) DEFINITIONS.—As used in this part, the term:
 1172         (j) “Retiree” means a former participant of the Florida
 1173  Retirement System Public Employee Optional Retirement Program
 1174  who has terminated employment and has taken any a distribution
 1175  of vested participant or employer contributions as provided in
 1176  s. 121.591, except for a mandatory distribution of a de minimis
 1177  account authorized by the state board.
 1178         (n) “Participant contributions” mean the sum of all amounts
 1179  deducted from the salary of a participant by his or her employer
 1180  in accordance with s. 121.71(2) and credited to his or her
 1181  individual account in the Public Employee Optional Retirement
 1182  Program, plus any earnings on such amounts and any contributions
 1183  specified in paragraph (5)(e).
 1184         (3) ELIGIBILITY; RETIREMENT SERVICE CREDIT.—
 1185         (c)1. Notwithstanding paragraph (b), each eligible employee
 1186  who elects to participate in the Public Employee Optional
 1187  Retirement Program and establishes one or more individual
 1188  participant accounts under the optional program may elect to
 1189  transfer to the optional program a sum representing the present
 1190  value of the employee’s accumulated benefit obligation under the
 1191  defined benefit retirement program of the Florida Retirement
 1192  System. Upon such transfer, all service credit previously earned
 1193  under the defined benefit program of the Florida Retirement
 1194  System shall be nullified for purposes of entitlement to a
 1195  future benefit under the defined benefit program of the Florida
 1196  Retirement System. A participant is precluded from transferring
 1197  the accumulated benefit obligation balance from the defined
 1198  benefit program upon the expiration of the period afforded to
 1199  enroll in the optional program.
 1200         2. For purposes of this subsection, the present value of
 1201  the member’s accumulated benefit obligation is based upon the
 1202  member’s estimated creditable service and estimated average
 1203  final compensation under the defined benefit program, subject to
 1204  recomputation under subparagraph 3. For state employees
 1205  enrolling under subparagraph (4)(a)1., initial estimates will be
 1206  based upon creditable service and average final compensation as
 1207  of midnight on June 30, 2002; for district school board
 1208  employees enrolling under subparagraph (4)(b)1., initial
 1209  estimates will be based upon creditable service and average
 1210  final compensation as of midnight on September 30, 2002; and for
 1211  local government employees enrolling under subparagraph
 1212  (4)(c)1., initial estimates will be based upon creditable
 1213  service and average final compensation as of midnight on
 1214  December 31, 2002. The dates respectively specified above shall
 1215  be construed as the “estimate date” for these employees. The
 1216  actuarial present value of the employee’s accumulated benefit
 1217  obligation shall be based on the following:
 1218         a. The discount rate and other relevant actuarial
 1219  assumptions used to value the Florida Retirement System Trust
 1220  Fund at the time the amount to be transferred is determined,
 1221  consistent with the factors provided in sub-subparagraphs b. and
 1222  c.
 1223         b. A benefit commencement age, based on the member’s
 1224  estimated creditable service as of the estimate date. The
 1225  benefit commencement age shall be the younger of the following,
 1226  but shall not be younger than the member’s age as of the
 1227  estimate date:
 1228         (I) Age 62; or
 1229         (II) The age the member would attain if the member
 1230  completed 30 years of service with an employer, assuming the
 1231  member worked continuously from the estimate date, and
 1232  disregarding any vesting requirement that would otherwise apply
 1233  under the defined benefit program of the Florida Retirement
 1234  System.
 1235         c. For members of the Special Risk Class and for members of
 1236  the Special Risk Administrative Support Class entitled to retain
 1237  special risk normal retirement date, the benefit commencement
 1238  age shall be the younger of the following, but shall not be
 1239  younger than the member’s age as of the estimate date:
 1240         (I) Age 55; or
 1241         (II) The age the member would attain if the member
 1242  completed 25 years of service with an employer, assuming the
 1243  member worked continuously from the estimate date, and
 1244  disregarding any vesting requirement that would otherwise apply
 1245  under the defined benefit program of the Florida Retirement
 1246  System.
 1247         d. The calculation shall disregard vesting requirements and
 1248  early retirement reduction factors that would otherwise apply
 1249  under the defined benefit retirement program.
 1250         3. For each participant who elects to transfer moneys from
 1251  the defined benefit program to his or her account in the
 1252  optional program, the division shall recompute the amount
 1253  transferred under subparagraph 2. not later than 60 days after
 1254  the actual transfer of funds based upon the participant’s actual
 1255  creditable service and actual final average compensation as of
 1256  the initial date of participation in the optional program. If
 1257  the recomputed amount differs from the amount transferred under
 1258  subparagraph 2. by $10 or more, the division shall:
 1259         a. Transfer, or cause to be transferred, from the Florida
 1260  Retirement System Trust Fund to the participant’s account in the
 1261  optional program the excess, if any, of the recomputed amount
 1262  over the previously transferred amount together with interest
 1263  from the initial date of transfer to the date of transfer under
 1264  this subparagraph, based upon effective annual interest equal to
 1265  the assumed return on the actuarial investment which was used in
 1266  the most recent actuarial valuation of the system, compounded
 1267  annually.
 1268         b. Transfer, or cause to be transferred, from the
 1269  participant’s account to the Florida Retirement System Trust
 1270  Fund the excess, if any, of the previously transferred amount
 1271  over the recomputed amount, together with interest from the
 1272  initial date of transfer to the date of transfer under this
 1273  subparagraph, based upon 6 percent effective annual interest,
 1274  compounded annually, pro rata based on the participant’s
 1275  allocation plan.
 1276         4. If contribution adjustments are made as a result of
 1277  employer errors or corrections, including plan corrections,
 1278  following recomputation of the amount transferred under
 1279  subparagraph 2., the participant is entitled to the additional
 1280  contributions or is responsible for returning any excess
 1281  contributions resulting from the correction, provided that any
 1282  return of such erroneous excess pretax contribution by the
 1283  program shall be made within 1 year after the making of such
 1284  erroneous contributions or such other period as may be allowed
 1285  by applicable Internal Revenue Service guidance. The present
 1286  value of the member’s accumulated benefit obligation shall not
 1287  be recalculated.
 1288         5.4. As directed by the participant, the board shall
 1289  transfer or cause to be transferred the appropriate amounts to
 1290  the designated accounts. The board shall establish transfer
 1291  procedures by rule, but the actual transfer shall not be later
 1292  than 30 days after the effective date of the member’s
 1293  participation in the optional program unless the major financial
 1294  markets for securities available for a transfer are seriously
 1295  disrupted by an unforeseen event which also causes the
 1296  suspension of trading on any national securities exchange in the
 1297  country where the securities were issued. In that event, such
 1298  30-day period of time may be extended by a resolution of the
 1299  trustees. Transfers are not commissionable or subject to other
 1300  fees and may be in the form of securities or cash as determined
 1301  by the state board. Such securities shall be valued as of the
 1302  date of receipt in the participant’s account.
 1303         6.5. If the board or the division receives notification
 1304  from the United States Internal Revenue Service that this
 1305  paragraph or any portion of this paragraph will cause the
 1306  retirement system, or a portion thereof, to be disqualified for
 1307  tax purposes under the Internal Revenue Code, then the portion
 1308  that will cause the disqualification does not apply. Upon such
 1309  notice, the state board and the division shall notify the
 1310  presiding officers of the Legislature.
 1311         (4) PARTICIPATION; ENROLLMENT.—
 1312         (a)1. With respect to an eligible employee who is employed
 1313  in a regularly established position on June 1, 2002, by a state
 1314  employer:
 1315         a. Any such employee may elect to participate in the Public
 1316  Employee Optional Retirement Program in lieu of retaining his or
 1317  her membership in the defined benefit program of the Florida
 1318  Retirement System. The election must be made in writing or by
 1319  electronic means and must be filed with the third-party
 1320  administrator by August 31, 2002, or, in the case of an active
 1321  employee who is on a leave of absence on April 1, 2002, by the
 1322  last business day of the 5th month following the month the leave
 1323  of absence concludes. This election is irrevocable, except as
 1324  provided in paragraph (g) (e). Upon making such election, the
 1325  employee shall be enrolled as a participant of the Public
 1326  Employee Optional Retirement Program, the employee’s membership
 1327  in the Florida Retirement System shall be governed by the
 1328  provisions of this part, and the employee’s membership in the
 1329  defined benefit program of the Florida Retirement System shall
 1330  terminate. The employee’s enrollment in the Public Employee
 1331  Optional Retirement Program shall be effective the first day of
 1332  the month for which a full month’s participant and employer
 1333  contribution is made to the optional program.
 1334         b. Any such employee who fails to elect to participate in
 1335  the Public Employee Optional Retirement Program within the
 1336  prescribed time period is deemed to have elected to retain
 1337  membership in the defined benefit program of the Florida
 1338  Retirement System, and the employee’s option to elect to
 1339  participate in the optional program is forfeited.
 1340         2. With respect to employees who become eligible to
 1341  participate in the Public Employee Optional Retirement Program
 1342  by reason of employment in a regularly established position with
 1343  a state employer commencing after April 1, 2002:
 1344         a. Any such employee shall, by default, be enrolled in the
 1345  defined benefit retirement program of the Florida Retirement
 1346  System at the commencement of employment, and may, by the last
 1347  business day of the 5th month following the employee’s month of
 1348  hire, elect to participate in the Public Employee Optional
 1349  Retirement Program. The employee’s election must be made in
 1350  writing or by electronic means and must be filed with the third
 1351  party administrator. The election to participate in the optional
 1352  program is irrevocable, except as provided in paragraph (g) (e).
 1353         b. If the employee files such election within the
 1354  prescribed time period, enrollment in the optional program shall
 1355  be effective on the first day of employment. The participant and
 1356  employer retirement contributions paid through the month of the
 1357  employee plan change shall be transferred to the optional
 1358  program, and, effective the first day of the next month, the
 1359  participant and employer shall pay the applicable contributions
 1360  based on the employee membership class in the optional program.
 1361         c. Any such employee who fails to elect to participate in
 1362  the Public Employee Optional Retirement Program within the
 1363  prescribed time period is deemed to have elected to retain
 1364  membership in the defined benefit program of the Florida
 1365  Retirement System, and the employee’s option to elect to
 1366  participate in the optional program is forfeited.
 1367         3. With respect to employees who become eligible to
 1368  participate in the Public Employee Optional Retirement Program
 1369  pursuant to s. 121.051(2)(c)3. or s. 121.35(3)(i), any such
 1370  employee may elect to participate in the Public Employee
 1371  Optional Retirement Program in lieu of retaining his or her
 1372  participation in the State Community College System Optional
 1373  Retirement Program or the State University System Optional
 1374  Retirement Program. The election must be made in writing or by
 1375  electronic means and must be filed with the third-party
 1376  administrator. This election is irrevocable, except as provided
 1377  in paragraph (g) (e). Upon making such election, the employee
 1378  shall be enrolled as a participant of the Public Employee
 1379  Optional Retirement Program, the employee’s membership in the
 1380  Florida Retirement System shall be governed by the provisions of
 1381  this part, and the employee’s participation in the State
 1382  Community College System Optional Retirement Program or the
 1383  State University System Optional Retirement Program shall
 1384  terminate. The employee’s enrollment in the Public Employee
 1385  Optional Retirement Program shall be effective the first day of
 1386  the month for which a full month’s participant and employer
 1387  contribution is made to the optional program.
 1388         4. For purposes of this paragraph, “state employer” means
 1389  any agency, board, branch, commission, community college,
 1390  department, institution, institution of higher education, or
 1391  water management district of the state, which participates in
 1392  the Florida Retirement System for the benefit of certain
 1393  employees.
 1394         (b)1. With respect to an eligible employee who is employed
 1395  in a regularly established position on September 1, 2002, by a
 1396  district school board employer:
 1397         a. Any such employee may elect to participate in the Public
 1398  Employee Optional Retirement Program in lieu of retaining his or
 1399  her membership in the defined benefit program of the Florida
 1400  Retirement System. The election must be made in writing or by
 1401  electronic means and must be filed with the third-party
 1402  administrator by November 30, or, in the case of an active
 1403  employee who is on a leave of absence on July 1, 2002, by the
 1404  last business day of the 5th month following the month the leave
 1405  of absence concludes. This election is irrevocable, except as
 1406  provided in paragraph (g) (e). Upon making such election, the
 1407  employee shall be enrolled as a participant of the Public
 1408  Employee Optional Retirement Program, the employee’s membership
 1409  in the Florida Retirement System shall be governed by the
 1410  provisions of this part, and the employee’s membership in the
 1411  defined benefit program of the Florida Retirement System shall
 1412  terminate. The employee’s enrollment in the Public Employee
 1413  Optional Retirement Program shall be effective the first day of
 1414  the month for which a full month’s participant and employer
 1415  contribution is made to the optional program.
 1416         b. Any such employee who fails to elect to participate in
 1417  the Public Employee Optional Retirement Program within the
 1418  prescribed time period is deemed to have elected to retain
 1419  membership in the defined benefit program of the Florida
 1420  Retirement System, and the employee’s option to elect to
 1421  participate in the optional program is forfeited.
 1422         2. With respect to employees who become eligible to
 1423  participate in the Public Employee Optional Retirement Program
 1424  by reason of employment in a regularly established position with
 1425  a district school board employer commencing after July 1, 2002:
 1426         a. Any such employee shall, by default, be enrolled in the
 1427  defined benefit retirement program of the Florida Retirement
 1428  System at the commencement of employment, and may, by the last
 1429  business day of the 5th month following the employee’s month of
 1430  hire, elect to participate in the Public Employee Optional
 1431  Retirement Program. The employee’s election must be made in
 1432  writing or by electronic means and must be filed with the third
 1433  party administrator. The election to participate in the optional
 1434  program is irrevocable, except as provided in paragraph (g) (e).
 1435         b. If the employee files such election within the
 1436  prescribed time period, enrollment in the optional program shall
 1437  be effective on the first day of employment. The participant and
 1438  employer retirement contributions paid through the month of the
 1439  employee plan change shall be transferred to the optional
 1440  program, and, effective the first day of the next month, the
 1441  participant and employer shall pay the applicable contributions
 1442  based on the employee membership class in the optional program.
 1443         c. Any such employee who fails to elect to participate in
 1444  the Public Employee Optional Retirement Program within the
 1445  prescribed time period is deemed to have elected to retain
 1446  membership in the defined benefit program of the Florida
 1447  Retirement System, and the employee’s option to elect to
 1448  participate in the optional program is forfeited.
 1449         3. For purposes of this paragraph, “district school board
 1450  employer” means any district school board that participates in
 1451  the Florida Retirement System for the benefit of certain
 1452  employees, or a charter school or charter technical career
 1453  center that participates in the Florida Retirement System as
 1454  provided in s. 121.051(2)(d).
 1455         (c)1. With respect to an eligible employee who is employed
 1456  in a regularly established position on December 1, 2002, by a
 1457  local employer:
 1458         a. Any such employee may elect to participate in the Public
 1459  Employee Optional Retirement Program in lieu of retaining his or
 1460  her membership in the defined benefit program of the Florida
 1461  Retirement System. The election must be made in writing or by
 1462  electronic means and must be filed with the third-party
 1463  administrator by February 28, 2003, or, in the case of an active
 1464  employee who is on a leave of absence on October 1, 2002, by the
 1465  last business day of the 5th month following the month the leave
 1466  of absence concludes. This election is irrevocable, except as
 1467  provided in paragraph (g) (e). Upon making such election, the
 1468  employee shall be enrolled as a participant of the Public
 1469  Employee Optional Retirement Program, the employee’s membership
 1470  in the Florida Retirement System shall be governed by the
 1471  provisions of this part, and the employee’s membership in the
 1472  defined benefit program of the Florida Retirement System shall
 1473  terminate. The employee’s enrollment in the Public Employee
 1474  Optional Retirement Program shall be effective the first day of
 1475  the month for which a full month’s participant and employer
 1476  contribution is made to the optional program.
 1477         b. Any such employee who fails to elect to participate in
 1478  the Public Employee Optional Retirement Program within the
 1479  prescribed time period is deemed to have elected to retain
 1480  membership in the defined benefit program of the Florida
 1481  Retirement System, and the employee’s option to elect to
 1482  participate in the optional program is forfeited.
 1483         2. With respect to employees who become eligible to
 1484  participate in the Public Employee Optional Retirement Program
 1485  by reason of employment in a regularly established position with
 1486  a local employer commencing after October 1, 2002:
 1487         a. Any such employee shall, by default, be enrolled in the
 1488  defined benefit retirement program of the Florida Retirement
 1489  System at the commencement of employment, and may, by the last
 1490  business day of the 5th month following the employee’s month of
 1491  hire, elect to participate in the Public Employee Optional
 1492  Retirement Program. The employee’s election must be made in
 1493  writing or by electronic means and must be filed with the third
 1494  party administrator. The election to participate in the optional
 1495  program is irrevocable, except as provided in paragraph (g) (e).
 1496         b. If the employee files such election within the
 1497  prescribed time period, enrollment in the optional program shall
 1498  be effective on the first day of employment. The participant and
 1499  employer retirement contributions paid through the month of the
 1500  employee plan change shall be transferred to the optional
 1501  program, and, effective the first day of the next month, the
 1502  participant and employer shall pay the applicable contributions
 1503  based on the employee membership class in the optional program.
 1504         c. Any such employee who fails to elect to participate in
 1505  the Public Employee Optional Retirement Program within the
 1506  prescribed time period is deemed to have elected to retain
 1507  membership in the defined benefit program of the Florida
 1508  Retirement System, and the employee’s option to elect to
 1509  participate in the optional program is forfeited.
 1510         3. For purposes of this paragraph, “local employer” means
 1511  any employer not included in paragraph (a) or paragraph (b).
 1512         (d) Contributions available for self-direction by a
 1513  participant who has not selected one or more specific investment
 1514  products shall be allocated as prescribed by the board. The
 1515  third-party administrator shall notify any such participant at
 1516  least quarterly that the participant should take an affirmative
 1517  action to make an asset allocation among the optional program
 1518  products.
 1519         (e) On or after January 1, 2011, a participant of the
 1520  defined benefit program who obtains a refund of employee
 1521  contributions retains his or her prior plan choice upon return
 1522  to employment in a regularly established position with an FRS
 1523  participating employer.
 1524         (f) A participant of the Public Employee Optional
 1525  Retirement Program who terminates FRS-covered employment and
 1526  takes a distribution of any contributions from his Public
 1527  Employee Optional Retirement Program account is considered a
 1528  retiree. Upon reemployment in a regularly established position
 1529  with an FRS-covered employer, the participant returns as a new
 1530  hire and, if applicable, has the opportunity to participate in
 1531  the Florida Retirement System. A retiree who is initially
 1532  reemployed on or after July 1, 2010, is not eligible for renewed
 1533  membership.
 1534         (g)(e) After the period during which an eligible employee
 1535  had the choice to elect the defined benefit program or the
 1536  Public Employee Optional Retirement Program, or the month
 1537  following the receipt of the eligible employee’s plan election,
 1538  if sooner, the employee shall have one opportunity, at the
 1539  employee’s discretion, to choose to move from the defined
 1540  benefit program to the Public Employee Optional Retirement
 1541  Program or from the Public Employee Optional Retirement Program
 1542  to the defined benefit program. Eligible employees may elect to
 1543  move between Florida Retirement System programs only if they are
 1544  earning service credit in an employer-employee relationship
 1545  consistent with the requirements under s. 121.021(17)(b),
 1546  excluding leaves of absence without pay. Effective July 1, 2005,
 1547  such elections shall be effective on the first day of the month
 1548  following the receipt of the election by the third-party
 1549  administrator and are not subject to the requirements regarding
 1550  an employer-employee relationship or receipt of contributions
 1551  for the eligible employee in the effective month, except that
 1552  the employee must meet the conditions of the previous sentence
 1553  when the election is received by the third-party administrator.
 1554  This paragraph shall be contingent upon approval from the
 1555  Internal Revenue Service for including the choice described
 1556  herein within the programs offered by the Florida Retirement
 1557  System.
 1558         1. If the employee chooses to move to the Public Employee
 1559  Optional Retirement Program, the applicable provisions of this
 1560  section shall govern the transfer.
 1561         2. If the employee chooses to move to the defined benefit
 1562  program, the employee must transfer from his or her Public
 1563  Employee Optional Retirement Program account and from other
 1564  employee moneys as necessary, a sum representing the present
 1565  value of that employee’s accumulated benefit obligation
 1566  immediately following the time of such movement, determined
 1567  assuming that attained service equals the sum of service in the
 1568  defined benefit program and service in the Public Employee
 1569  Optional Retirement Program. Benefit commencement occurs on the
 1570  first date the employee would become eligible for unreduced
 1571  benefits, using the discount rate and other relevant actuarial
 1572  assumptions that were used to value the Florida Retirement
 1573  System defined benefit plan liabilities in the most recent
 1574  actuarial valuation. For any employee who, at the time of the
 1575  second election, already maintains an accrued benefit amount in
 1576  the defined benefit plan, the then-present value of such accrued
 1577  benefit shall be deemed part of the required transfer amount
 1578  described in this subparagraph. The division shall ensure that
 1579  the transfer sum is prepared using a formula and methodology
 1580  certified by an enrolled actuary. A refund is not permitted of
 1581  any member contributions or additional member payments made
 1582  which exceed the employee contributions that would have accrued
 1583  had the member remained in the defined benefit program and not
 1584  transferred to the Public Employee Optional Retirement Program.
 1585         3. Notwithstanding subparagraph 2., an employee who chooses
 1586  to move to the defined benefit program and who became eligible
 1587  to participate in the Public Employee Optional Retirement
 1588  Program by reason of employment in a regularly established
 1589  position with a state employer after June 1, 2002; a district
 1590  school board employer after September 1, 2002; or a local
 1591  employer after December 1, 2002, must transfer from his or her
 1592  Public Employee Optional Retirement Program account and, from
 1593  other employee moneys as necessary, a sum representing that
 1594  employee’s actuarial accrued liability. A refund is not
 1595  permitted of any member contributions or additional member
 1596  payments made which exceed the employee contributions that would
 1597  have accrued had the member remained in the defined benefit
 1598  program and not transferred to the Public Employee Optional
 1599  Retirement Program.
 1600         4. Employees’ ability to transfer from the Florida
 1601  Retirement System defined benefit program to the Public Employee
 1602  Optional Retirement Program pursuant to paragraphs (a)-(d), and
 1603  the ability for current employees to have an option to later
 1604  transfer back into the defined benefit program under
 1605  subparagraph 2., shall be deemed a significant system amendment.
 1606  Pursuant to s. 121.031(4), any such resulting unfunded liability
 1607  arising from actual original transfers from the defined benefit
 1608  program to the optional program shall be amortized within 30
 1609  plan years as a separate unfunded actuarial base independent of
 1610  the reserve stabilization mechanism defined in s. 121.031(3)(f).
 1611  For the first 25 years, no direct amortization payment shall be
 1612  calculated for this base. During this 25-year period, such
 1613  separate base shall be used to offset the impact of employees
 1614  exercising their second program election under this paragraph.
 1615  It is the legislative intent that the actuarial funded status of
 1616  the Florida Retirement System defined benefit plan is neither
 1617  beneficially nor adversely impacted by such second program
 1618  elections in any significant manner, after due recognition of
 1619  the separate unfunded actuarial base. Following this initial 25
 1620  year period, any remaining balance of the original separate base
 1621  shall be amortized over the remaining 5 years of the required
 1622  30-year amortization period.
 1623         (5) CONTRIBUTIONS.—
 1624         (a) The participant and Each employer shall make the
 1625  required contributions to contribute on behalf of each
 1626  participant in the Public Employee Optional Retirement Program
 1627  based on a percentage of the employee’s gross monthly
 1628  compensation, as provided in part III of this chapter.
 1629         (b) Participant contributions shall be paid on a pretax
 1630  basis, as provided in s. 401 of the Internal Revenue Code. In no
 1631  case may such contribution exceed federal limitations. A
 1632  participant is responsible for monitoring his or her individual
 1633  contributions to ensure that he or she does not exceed the
 1634  maximum deferral amounts permitted under the Internal Revenue
 1635  Code.
 1636         (c) The state board, acting as plan fiduciary, shall ensure
 1637  that all plan assets are held in a trust, pursuant to s. 401 of
 1638  the Internal Revenue Code. The fiduciary shall ensure that said
 1639  contributions are allocated as follows:
 1640         1. The participant and employer contribution portion
 1641  earmarked for participant accounts shall be used to purchase
 1642  interests in the appropriate investment vehicles for the
 1643  accounts of each participant as specified by the participant, or
 1644  in accordance with paragraph (4)(d).
 1645         2. The employer contribution portion earmarked for
 1646  administrative and educational expenses shall be transferred to
 1647  the board.
 1648         3. The employer contribution portion earmarked for
 1649  disability benefits shall be transferred to the department.
 1650         (d)(b)The third-party administrator is Employers are
 1651  responsible for monitoring and notifying employers of the
 1652  participants regarding maximum contribution levels permitted for
 1653  participants under the Internal Revenue Code. If a participant
 1654  contributes to any other tax-deferred plan, he or she is
 1655  responsible for ensuring that total contributions made to the
 1656  optional program and to any other such plan do not exceed
 1657  federally permitted maximums.
 1658         (e)(c) The Public Employee Optional Retirement Program may
 1659  accept for deposit into participant accounts contributions in
 1660  the form of rollovers or direct trustee-to-trustee transfers by
 1661  or on behalf of participants, reasonably determined by the board
 1662  to be eligible for rollover or transfer to the optional
 1663  retirement program pursuant to the Internal Revenue Code, if
 1664  such contributions are made in accordance with rules as may be
 1665  adopted by the board. Such contributions shall be accounted for
 1666  in accordance with any applicable Internal Revenue Code
 1667  requirements and rules of the board.
 1668         (6) VESTING REQUIREMENTS.—
 1669         (a) With respect to employee contributions paid by the
 1670  participant to the Public Employee Optional Retirement Program,
 1671  plus interest and earnings thereon and less investment fees and
 1672  administrative charges, a participant shall be fully and
 1673  immediately vested.
 1674         (b)(a)1. With respect to employer contributions paid on
 1675  behalf of the participant to the Public Employee Optional
 1676  Retirement Program, plus interest and earnings thereon and less
 1677  investment fees and administrative charges, a participant shall
 1678  be vested after completing 1 work year, as defined in s.
 1679  121.021(54), with an employer, including any service while the
 1680  participant was a member of the defined benefit retirement
 1681  program or an optional retirement program authorized under s.
 1682  121.051(2)(c) or s. 121.055(6).
 1683         2. If the participant terminates employment prior to
 1684  satisfying the vesting requirements, the nonvested accumulation
 1685  shall be transferred from the participant’s accounts to the
 1686  state board for deposit and investment by the board in the
 1687  suspense account of the Public Employee Optional Retirement
 1688  Program Trust Fund of the board. If the terminated participant
 1689  is reemployed as an eligible employee within 5 years, the state
 1690  board shall transfer to the participant’s account any amount of
 1691  the moneys previously transferred from the participant’s
 1692  accounts to the suspense account of the Public Employee Optional
 1693  Retirement Program Trust Fund, plus the actual earnings on such
 1694  amount while in the suspense account.
 1695         (c)(b)1. A participant shall be vested in the employer
 1696  amount transferred from the defined benefit program, plus
 1697  interest and earnings thereon and less administrative charges
 1698  and investment fees, upon meeting the service requirements for
 1699  the participant’s membership class as set forth in s.
 1700  121.021(29). The third-party administrator shall account for
 1701  such amounts for each participant. The division shall notify the
 1702  participant and the third-party administrator when the
 1703  participant has satisfied the vesting period for Florida
 1704  Retirement System purposes.
 1705         2. If the participant terminates employment prior to
 1706  satisfying the vesting requirements, the nonvested employer
 1707  accumulation shall be transferred from the participant’s
 1708  accounts to the state board for deposit and investment by the
 1709  board in the suspense account of the Public Employee Optional
 1710  Retirement Program Trust Fund of the board. If the terminated
 1711  participant is reemployed as an eligible employee within 5
 1712  years, the state board shall transfer to the participant’s
 1713  account any amount of the moneys previously transferred from the
 1714  participant’s accounts to the suspense account of the Public
 1715  Employee Optional Retirement Program Trust Fund, plus the actual
 1716  earnings on such amount while in the suspense account.
 1717         (d)(c) Any nonvested accumulations transferred from a
 1718  participant’s account to the suspense account shall be forfeited
 1719  by the participant if the participant is not reemployed as an
 1720  eligible employee within 5 years after termination.
 1721         (e) If the participant elects to receive any of his or her
 1722  vested employee or employer contributions upon termination of
 1723  employment as defined in s. 121.021, the participant shall
 1724  forfeit all nonvested employer contributions, and accompanying
 1725  service credit, paid on behalf of the participant to the Public
 1726  Employee Optional Retirement Program.
 1727         (7) BENEFITS.—Under the Public Employee Optional Retirement
 1728  Program:
 1729         (a) Benefits shall be provided in accordance with s. 401(a)
 1730  of the Internal Revenue Code.
 1731         (b) Benefits shall accrue in individual accounts that are
 1732  participant-directed, portable, and funded by participant and
 1733  employer contributions and earnings thereon.
 1734         (c) Benefits shall be payable in accordance with the
 1735  provisions of s. 121.591.
 1736         (8) ADMINISTRATION OF PROGRAM.—
 1737         (b)1. The state board shall select and contract with one
 1738  third-party administrator to provide administrative services if
 1739  those services cannot be competitively and contractually
 1740  provided by the Division of Retirement within the Department of
 1741  Management Services. With the approval of the state board, the
 1742  third-party administrator may subcontract with other
 1743  organizations or individuals to provide components of the
 1744  administrative services. As a cost of administration, the board
 1745  may compensate any such contractor for its services, in
 1746  accordance with the terms of the contract, as is deemed
 1747  necessary or proper by the board. The third-party administrator
 1748  may not be an approved provider or be affiliated with an
 1749  approved provider.
 1750         2. These administrative services may include, but are not
 1751  limited to, enrollment of eligible employees, collection of
 1752  participant and employer contributions, disbursement of such
 1753  contributions to approved providers in accordance with the
 1754  allocation directions of participants; services relating to
 1755  consolidated billing; individual and collective recordkeeping
 1756  and accounting; asset purchase, control, and safekeeping; and
 1757  direct disbursement of funds to and from the third-party
 1758  administrator, the division, the board, employers, participants,
 1759  approved providers, and beneficiaries. This section does not
 1760  prevent or prohibit a bundled provider from providing any
 1761  administrative or customer service, including accounting and
 1762  administration of individual participant benefits and
 1763  contributions; individual participant recordkeeping; asset
 1764  purchase, control, and safekeeping; direct execution of the
 1765  participant’s instructions as to asset and contribution
 1766  allocation; calculation of daily net asset values; direct access
 1767  to participant account information; or periodic reporting to
 1768  participants, at least quarterly, on account balances and
 1769  transactions, if these services are authorized by the board as
 1770  part of the contract.
 1771         3. The state board shall select and contract with one or
 1772  more organizations to provide educational services. With
 1773  approval of the board, the organizations may subcontract with
 1774  other organizations or individuals to provide components of the
 1775  educational services. As a cost of administration, the board may
 1776  compensate any such contractor for its services in accordance
 1777  with the terms of the contract, as is deemed necessary or proper
 1778  by the board. The education organization may not be an approved
 1779  provider or be affiliated with an approved provider.
 1780         4. Educational services shall be designed by the board and
 1781  department to assist employers, eligible employees,
 1782  participants, and beneficiaries in order to maintain compliance
 1783  with United States Department of Labor regulations under s.
 1784  404(c) of the Employee Retirement Income Security Act of 1974
 1785  and to assist employees in their choice of defined benefit or
 1786  defined contribution retirement alternatives. Educational
 1787  services include, but are not limited to, disseminating
 1788  educational materials; providing retirement planning education;
 1789  explaining the differences between the defined benefit
 1790  retirement plan and the defined contribution retirement plan;
 1791  and offering financial planning guidance on matters such as
 1792  investment diversification, investment risks, investment costs,
 1793  and asset allocation. An approved provider may also provide
 1794  educational information, including retirement planning and
 1795  investment allocation information concerning its products and
 1796  services.
 1797         (11) PARTICIPANT INFORMATION REQUIREMENTS.—The board shall
 1798  ensure that each participant is provided a quarterly statement
 1799  that accounts for the participant and employer contributions
 1800  made on behalf of such participant; the interest and investment
 1801  earnings thereon; and any fees, penalties, or other deductions
 1802  that apply thereto. At a minimum, such statements must:
 1803         (a) Indicate the participant’s investment options.
 1804         (b) State the market value of the account at the close of
 1805  the current quarter and previous quarter.
 1806         (c) Show account gains and losses for the period and
 1807  changes in account accumulation unit values for the period.
 1808         (d) Itemize account contributions for the quarter.
 1809         (e) Indicate any account changes due to adjustment of
 1810  contribution levels, reallocation of contributions, balance
 1811  transfers, or withdrawals.
 1812         (f) Set forth any fees, charges, penalties, and deductions
 1813  that apply to the account.
 1814         (g) Indicate the amount of the account in which the
 1815  participant is fully vested and the amount of the account in
 1816  which the participant is not vested.
 1817         (h) Indicate each investment product’s performance relative
 1818  to an appropriate market benchmark.
 1819  
 1820  The third-party administrator shall provide quarterly and annual
 1821  summary reports to the board and any other reports requested by
 1822  the department or the board. In any solicitation or offer of
 1823  coverage under an optional retirement program, a provider
 1824  company shall be governed by the contract readability provisions
 1825  of s. 627.4145, notwithstanding s. 627.4145(6)(c). In addition,
 1826  all descriptive materials must be prepared under the assumption
 1827  that the participant is an unsophisticated investor. Provider
 1828  companies must maintain an internal system of quality assurance,
 1829  have proven functional systems that are date-calculation
 1830  compliant, and be subject to a due-diligence inquiry that proves
 1831  their capacity and fitness to undertake service
 1832  responsibilities.
 1833         (13) FEDERAL REQUIREMENTS.—
 1834         (c) Participant and employer contributions payable under
 1835  this section for any limitation year may not exceed the maximum
 1836  amount allowable for qualified defined contribution pension
 1837  plans under applicable provisions of the Internal Revenue Code.
 1838  If an employee who has elected to participate in the Public
 1839  Employee Optional Retirement Program participates in any other
 1840  plan that is maintained by the participating employer, benefits
 1841  that accrue under the Public Employee Optional Retirement
 1842  Program shall be considered primary for any aggregate limitation
 1843  applicable under s. 415 of the Internal Revenue Code.
 1844         (21) PARTICIPATION BY TERMINATED DEFERRED RETIREMENT OPTION
 1845  PROGRAM PARTICIPANTS.—Notwithstanding any provision of law to
 1846  the contrary, participants in the Deferred Retirement Option
 1847  Program offered under part I may, after conclusion of their
 1848  participation in the program, elect to roll over or authorize a
 1849  direct trustee-to-trustee transfer to an account under the
 1850  Public Employee Optional Retirement Program of their Deferred
 1851  Retirement Option Program proceeds distributed as provided under
 1852  s. 121.091(13)(c)5. The transaction must constitute an “eligible
 1853  rollover distribution” within the meaning of s. 402(c)(4) of the
 1854  Internal Revenue Code.
 1855         (b) The affected participant shall direct the investment of
 1856  his or her investment account; however, unless he or she becomes
 1857  a renewed member of the Florida Retirement System under s.
 1858  121.122 and elects to participate in the Public Employee
 1859  Optional Retirement Program, participant and employer
 1860  contributions may not be made to the participant’s account as
 1861  provided under paragraph (5)(a).
 1862         Section 15. Subsections (1) and (3) of section 121.4503,
 1863  Florida Statutes, are amended to read:
 1864         121.4503 Florida Retirement System Contributions Clearing
 1865  Trust Fund.—
 1866         (1) The Florida Retirement System Contributions Clearing
 1867  Trust Fund is created as a clearing fund for disbursing
 1868  participant and employer contributions to the component plans of
 1869  the Florida Retirement System and shall be administered by the
 1870  Department of Management Services. Funds shall be credited to
 1871  the trust fund as provided in this chapter and shall be held in
 1872  trust for the contributing participants and employers until such
 1873  time as the assets are transferred by the department to the
 1874  Florida Retirement System Trust Fund, the Public Employee
 1875  Optional Retirement Program Trust Fund, or other trust funds as
 1876  authorized by law, to be used for the purposes of this chapter.
 1877  The trust fund is exempt from the service charges imposed by s.
 1878  215.20.
 1879         (3) The Department of Management Services may adopt rules
 1880  governing the receipt and disbursement of amounts received by
 1881  the Florida Retirement System Contributions Clearing Trust Fund
 1882  from employees and employers contributing to the component plans
 1883  of the Florida Retirement System.
 1884         Section 16. Subsection (1) of section 121.571, Florida
 1885  Statutes, is amended to read:
 1886         121.571 Contributions.—Contributions to the Public Employee
 1887  Optional Retirement Program shall be made as follows:
 1888         (1) CONTRIBUTORY NONCONTRIBUTORY PLAN.—Each participant and
 1889  employer shall submit accomplish the contributions as required
 1890  by s. 121.71 by a procedure in which no employee’s gross salary
 1891  shall be reduced.
 1892         Section 17. Section 121.591, Florida Statutes, is amended
 1893  to read:
 1894         121.591 Benefits payable under the Public Employee Optional
 1895  Retirement Program of the Florida Retirement System.—Benefits
 1896  may not be paid under this section unless the member has
 1897  terminated employment as provided in s. 121.021(39)(a) or is
 1898  deceased and a proper application has been filed in the manner
 1899  prescribed by the state board or the department. Benefits are
 1900  not payable under the Public Employee Optional Retirement
 1901  Program prior to termination of employment as provided in s.
 1902  121.021(39)(a) for employee hardships, unforeseeable
 1903  emergencies, loans, medical expenses, educational expenses,
 1904  purchase of a principal residence, payments necessary to prevent
 1905  eviction or foreclosure on an employee’s principal residence, or
 1906  for any other reason. The state board or department, as
 1907  appropriate, may cancel an application for retirement benefits
 1908  when the member or beneficiary fails to timely provide the
 1909  information and documents required by this chapter and the rules
 1910  of the state board and department. In accordance with their
 1911  respective responsibilities as provided herein, the State Board
 1912  of Administration and the Department of Management Services
 1913  shall adopt rules establishing procedures for application for
 1914  retirement benefits and for the cancellation of such application
 1915  when the required information or documents are not received. The
 1916  State Board of Administration and the Department of Management
 1917  Services, as appropriate, are authorized to cash out a de
 1918  minimis account of a participant who has been terminated from
 1919  Florida Retirement System covered employment for a minimum of 6
 1920  calendar months. A de minimis account is an account containing
 1921  participant and employer contributions and accumulated earnings
 1922  of not more than $5,000 made under the provisions of this
 1923  chapter. Such cash-out must either be a complete lump-sum
 1924  liquidation of the account balance, subject to the provisions of
 1925  the Internal Revenue Code, or a lump-sum direct rollover
 1926  distribution paid directly to the custodian of an eligible
 1927  retirement plan, as defined by the Internal Revenue Code, on
 1928  behalf of the participant. Any nonvested accumulations,
 1929  including amounts transferred to the suspense account of the
 1930  Public Employee Optional Retirement Program Trust Fund
 1931  authorized under s. 121.4501(6), shall be forfeited upon payment
 1932  of any vested benefit to a participant or beneficiary, except
 1933  for de minimis distributions or minimum required distributions
 1934  as provided under this section. If any financial instrument
 1935  issued for the payment of retirement benefits under this section
 1936  is not presented for payment within 180 days after the last day
 1937  of the month in which it was originally issued, the third-party
 1938  administrator or other duly authorized agent of the State Board
 1939  of Administration shall cancel the instrument and credit the
 1940  amount of the instrument to the suspense account of the Public
 1941  Employee Optional Retirement Program Trust Fund authorized under
 1942  s. 121.4501(6). Any such amounts transferred to the suspense
 1943  account are payable upon a proper application, not to include
 1944  earnings thereon, as provided in this section, within 10 years
 1945  after the last day of the month in which the instrument was
 1946  originally issued, after which time such amounts and any
 1947  earnings attributable to employer contributions thereon shall be
 1948  forfeited. Any such forfeited amounts are assets of the Public
 1949  Employee Optional Retirement Program Trust Fund and are not
 1950  subject to the provisions of chapter 717.
 1951         (1) NORMAL BENEFITS.—Under the Public Employee Optional
 1952  Retirement Program:
 1953         (a) Benefits in the form of vested accumulations as
 1954  described in s. 121.4501(6) are payable under this subsection in
 1955  accordance with the following terms and conditions:
 1956         1. To the extent vested, benefits are payable only to a
 1957  participant.
 1958         2. Benefits shall be paid by the third-party administrator
 1959  or designated approved providers in accordance with the law, the
 1960  contracts, and any applicable board rule or policy.
 1961         3. To receive benefits, the participant must be terminated
 1962  from all employment with all Florida Retirement System
 1963  employers, as provided in s. 121.021(39).
 1964         4. Benefit payments may not be made until the participant
 1965  has been terminated for 3 calendar months, except that the board
 1966  may authorize by rule for the distribution of up to 10 percent
 1967  of the participant’s account after being terminated for 1
 1968  calendar month if the participant has reached the normal
 1969  retirement date as defined in s. 121.021 of the defined benefit
 1970  plan.
 1971         5. If a member or former member of the Florida Retirement
 1972  System receives an invalid distribution from the Public Employee
 1973  Optional Retirement Program Trust Fund, such person must repay
 1974  the full invalid distribution to the trust fund within 90 days
 1975  after receipt of final notification by the state board or the
 1976  third-party administrator that the distribution was invalid. If
 1977  such person fails to repay the full invalid distribution within
 1978  90 days after receipt of final notification, the person may be
 1979  deemed retired from the optional retirement program by the state
 1980  board, as provided pursuant to s. 121.4501(2)(j), and is subject
 1981  to s. 121.122. If such person is deemed retired by the state
 1982  board, any joint and several liability set out in s.
 1983  121.091(9)(d)2. becomes null and void, and the state board, the
 1984  department, or the employing agency is not liable for gains on
 1985  payroll contributions that have not been deposited to the
 1986  person’s account in the retirement program, pending resolution
 1987  of the invalid distribution. The member or former member who has
 1988  been deemed retired or who has been determined by the board to
 1989  have taken an invalid distribution may appeal the agency
 1990  decision through the complaint process as provided under s.
 1991  121.4501(9)(g)3. As used in this subparagraph, the term “invalid
 1992  distribution” means any distribution from an account in the
 1993  optional retirement program which is taken in violation of this
 1994  section, s. 121.091(9), or s. 121.4501.
 1995         (b) If a participant elects to receive his or her benefits
 1996  upon termination of employment as defined in s. 121.021, the
 1997  participant must submit a written application or an equivalent
 1998  form to the third-party administrator indicating his or her
 1999  preferred distribution date and selecting an authorized method
 2000  of distribution as provided in paragraph (c). The participant
 2001  may defer receipt of benefits until he or she chooses to make
 2002  such application, subject to federal requirements.
 2003         (c) Upon receipt by the third-party administrator of a
 2004  properly executed application for distribution of benefits, the
 2005  total accumulated benefit shall be payable to the participant
 2006  pro rata across all FRS benefit sources, as:
 2007         1. A lump-sum or partial distribution to the participant;
 2008         2. A lump-sum direct rollover distribution whereby all
 2009  accrued benefits, plus interest and investment earnings, are
 2010  paid from the participant’s account directly to the custodian of
 2011  an eligible retirement plan, as defined in s. 402(c)(8)(B) of
 2012  the Internal Revenue Code, on behalf of the participant; or
 2013         3. Periodic distributions, as authorized by the state
 2014  board.
 2015         (d) The distribution payment method selected by the
 2016  participant or beneficiary, and the retirement of the
 2017  participant or beneficiary, shall be final and irrevocable at
 2018  the time a benefit distribution payment is cashed, deposited, or
 2019  transferred to another financial institution. Any additional
 2020  service that remains unclaimed at retirement may not be claimed
 2021  or purchased, and the type of retirement may not be changed,
 2022  except that if a participant recovers from a disability, the
 2023  participant may subsequently request normal service benefits
 2024  under subsection (2).
 2025         (e) A participant may not receive a distribution of
 2026  employee contributions if a pending qualified domestic relations
 2027  order is filed against the participant’s Public Employee
 2028  Optional Retirement Program account.
 2029         (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under
 2030  this subsection are payable in lieu of the benefits which would
 2031  otherwise be payable under the provisions of subsection (1).
 2032  Such benefits shall be funded entirely from employer
 2033  contributions made under s. 121.571, transferred participant
 2034  contributions and funds accumulated pursuant to paragraph (a),
 2035  and interest and earnings thereon. Pursuant thereto:
 2036         (a) Transfer of funds.—To qualify to receive monthly
 2037  disability benefits under this subsection:
 2038         1. All moneys accumulated in the participant’s Public
 2039  Employee Optional Retirement Program accounts, including vested
 2040  and nonvested accumulations as described in s. 121.4501(6),
 2041  shall be transferred from such individual accounts to the
 2042  Division of Retirement for deposit in the disability account of
 2043  the Florida Retirement System Trust Fund. Such moneys shall be
 2044  separately accounted for. Earnings shall be credited on an
 2045  annual basis for amounts held in the disability accounts of the
 2046  Florida Retirement System Trust Fund based on actual earnings of
 2047  the Florida Retirement System Trust Fund.
 2048         2. If the participant has retained retirement credit he or
 2049  she had earned under the defined benefit program of the Florida
 2050  Retirement System as provided in s. 121.4501(3)(b), a sum
 2051  representing the actuarial present value of such credit within
 2052  the Florida Retirement System Trust Fund shall be reassigned by
 2053  the Division of Retirement from the defined benefit program to
 2054  the disability program as implemented under this subsection and
 2055  shall be deposited in the disability account of the Florida
 2056  Retirement System Trust Fund. Such moneys shall be separately
 2057  accounted for.
 2058         (b) Disability retirement; entitlement.—
 2059         1. A participant of the Public Employee Optional Retirement
 2060  Program who becomes totally and permanently disabled, as defined
 2061  in s. 121.091(4)(b), after completing 8 years of creditable
 2062  service, or a participant who becomes totally and permanently
 2063  disabled in the line of duty regardless of his or her length of
 2064  service, shall be entitled to a monthly disability benefit as
 2065  provided herein.
 2066         2. In order for service to apply toward the 8 years of
 2067  service required to vest for regular disability benefits, or
 2068  toward the creditable service used in calculating a service
 2069  based benefit as provided for under paragraph (g), the service
 2070  must be creditable service as described below:
 2071         a. The participant’s period of service under the Public
 2072  Employee Optional Retirement Program will be considered
 2073  creditable service, except as provided in subparagraph d.
 2074         b. If the participant has elected to retain credit for his
 2075  or her service under the defined benefit program of the Florida
 2076  Retirement System as provided under s. 121.4501(3)(b), all such
 2077  service will be considered creditable service.
 2078         c. If the participant has elected to transfer to his or her
 2079  participant accounts a sum representing the present value of his
 2080  or her retirement credit under the defined benefit program as
 2081  provided under s. 121.4501(3)(c), the period of service under
 2082  the defined benefit program represented in the present value
 2083  amounts transferred will be considered creditable service for
 2084  purposes of vesting for disability benefits, except as provided
 2085  in subparagraph d.
 2086         d. Whenever a participant has terminated employment and has
 2087  taken distribution of his or her funds as provided in subsection
 2088  (1), all creditable service represented by such distributed
 2089  funds is forfeited for purposes of this subsection.
 2090         (c) Disability retirement effective date.—The effective
 2091  retirement date for a participant who applies and is approved
 2092  for disability retirement shall be established as provided under
 2093  s. 121.091(4)(a)2. and 3.
 2094         (d) Total and permanent disability.—A participant shall be
 2095  considered totally and permanently disabled if, in the opinion
 2096  of the division, he or she is prevented, by reason of a
 2097  medically determinable physical or mental impairment, from
 2098  rendering useful and efficient service as an officer or
 2099  employee.
 2100         (e) Proof of disability.—The division, before approving
 2101  payment of any disability retirement benefit, shall require
 2102  proof that the participant is totally and permanently disabled
 2103  in the same manner as provided for members of the defined
 2104  benefit program of the Florida Retirement System under s.
 2105  121.091(4)(c).
 2106         (f) Disability retirement benefit.—Upon the disability
 2107  retirement of a participant under this subsection, the
 2108  participant shall receive a monthly benefit that shall begin to
 2109  accrue on the first day of the month of disability retirement,
 2110  as approved by the division, and shall be payable on the last
 2111  day of that month and each month thereafter during his or her
 2112  lifetime and continued disability. All disability benefits
 2113  payable to such member shall be paid out of the disability
 2114  account of the Florida Retirement System Trust Fund established
 2115  under this subsection.
 2116         (g) Computation of disability retirement benefit.—The
 2117  amount of each monthly payment shall be calculated in the same
 2118  manner as provided for members of the defined benefit program of
 2119  the Florida Retirement System under s. 121.091(4)(f). For such
 2120  purpose, creditable service under both the defined benefit
 2121  program and the Public Employee Optional Retirement Program of
 2122  the Florida Retirement System shall be applicable as provided
 2123  under paragraph (b).
 2124         (h) Reapplication.—A participant whose initial application
 2125  for disability retirement has been denied may reapply for
 2126  disability benefits in the same manner, and under the same
 2127  conditions, as provided for members of the defined benefit
 2128  program of the Florida Retirement System under s. 121.091(4)(g).
 2129         (i) Membership.—Upon approval of an application for
 2130  disability benefits under this subsection, the applicant shall
 2131  be transferred to the defined benefit program of the Florida
 2132  Retirement System, effective upon his or her disability
 2133  retirement effective date.
 2134         (j) Option to cancel.—Any participant whose application for
 2135  disability benefits is approved may cancel his or her
 2136  application for disability benefits, provided that the
 2137  cancellation request is received by the division before a
 2138  disability retirement warrant has been deposited, cashed, or
 2139  received by direct deposit. Upon such cancellation:
 2140         1. The participant’s transfer to the defined benefit
 2141  program under paragraph (i) shall be nullified;
 2142         2. The participant shall be retroactively reinstated in the
 2143  Public Employee Optional Retirement Program without hiatus;
 2144         3. All funds transferred to the Florida Retirement System
 2145  Trust Fund under paragraph (a) shall be returned to the
 2146  participant accounts from which such funds were drawn; and
 2147         4. The participant may elect to receive the benefit payable
 2148  under the provisions of subsection (1) in lieu of disability
 2149  benefits as provided under this subsection.
 2150         (k) Recovery from disability.—
 2151         1. The division may require periodic reexaminations at the
 2152  expense of the disability program account of the Florida
 2153  Retirement System Trust Fund. Except as otherwise provided in
 2154  subparagraph 2., the requirements, procedures, and restrictions
 2155  relating to the conduct and review of such reexaminations,
 2156  discontinuation or termination of benefits, reentry into
 2157  employment, disability retirement after reentry into covered
 2158  employment, and all other matters relating to recovery from
 2159  disability shall be the same as are set forth under s.
 2160  121.091(4)(h).
 2161         2. Upon recovery from disability, any recipient of
 2162  disability retirement benefits under this subsection shall be a
 2163  compulsory member of the Public Employee Optional Retirement
 2164  Program of the Florida Retirement System. The net difference
 2165  between the recipient’s original account balance transferred to
 2166  the Florida Retirement System Trust Fund, including earnings,
 2167  under paragraph (a) and total disability benefits paid to such
 2168  recipient, if any, shall be determined as provided in sub
 2169  subparagraph a.
 2170         a. An amount equal to the total benefits paid shall be
 2171  subtracted from that portion of the transferred account balance
 2172  consisting of vested accumulations as described under s.
 2173  121.4501(6), if any, and an amount equal to the remainder of
 2174  benefit amounts paid, if any, shall then be subtracted from any
 2175  remaining portion consisting of nonvested accumulations as
 2176  described under s. 121.4501(6).
 2177         b. Amounts subtracted under sub-subparagraph a. shall be
 2178  retained within the disability account of the Florida Retirement
 2179  System Trust Fund. Any remaining account balance shall be
 2180  transferred to the third-party administrator for disposition as
 2181  provided under sub-subparagraph c. or sub-subparagraph d., as
 2182  appropriate.
 2183         c. If the recipient returns to covered employment,
 2184  transferred amounts shall be deposited in individual accounts
 2185  under the Public Employee Optional Retirement Program, as
 2186  directed by the participant. Vested and nonvested amounts shall
 2187  be separately accounted for as provided in s. 121.4501(6).
 2188         d. If the recipient fails to return to covered employment
 2189  upon recovery from disability:
 2190         (I) Any remaining vested amount shall be deposited in
 2191  individual accounts under the Public Employee Optional
 2192  Retirement Program, as directed by the participant, and shall be
 2193  payable as provided in subsection (1).
 2194         (II) Any remaining nonvested amount shall be held in a
 2195  suspense account and shall be forfeitable after 5 years as
 2196  provided in s. 121.4501(6).
 2197         3. If present value was reassigned from the defined benefit
 2198  program to the disability program of the Florida Retirement
 2199  System as provided under subparagraph (a)2., the full present
 2200  value amount shall be returned to the defined benefit account
 2201  within the Florida Retirement System Trust Fund and the affected
 2202  individual’s associated retirement credit under the defined
 2203  benefit program shall be reinstated in full. Any benefit based
 2204  upon such credit shall be calculated as provided in s.
 2205  121.091(4)(h)1.
 2206         (l) Nonadmissible causes of disability.—A participant shall
 2207  not be entitled to receive a disability retirement benefit if
 2208  the disability results from any injury or disease sustained or
 2209  inflicted as described in s. 121.091(4)(i).
 2210         (m) Disability retirement of justice or judge by order of
 2211  Supreme Court.—
 2212         1. If a participant is a justice of the Supreme Court,
 2213  judge of a district court of appeal, circuit judge, or judge of
 2214  a county court who has served for 6 years or more as an elected
 2215  constitutional judicial officer, including service as a judicial
 2216  officer in any court abolished pursuant to Art. V of the State
 2217  Constitution, and who is retired for disability by order of the
 2218  Supreme Court upon recommendation of the Judicial Qualifications
 2219  Commission pursuant to the provisions of Art. V of the State
 2220  Constitution, the participant’s Option 1 monthly disability
 2221  benefit amount as provided in s. 121.091(6)(a)1. shall be two
 2222  thirds of his or her monthly compensation as of the
 2223  participant’s disability retirement date. Such a participant may
 2224  alternatively elect to receive an actuarially adjusted
 2225  disability retirement benefit under any other option as provided
 2226  in s. 121.091(6)(a), or to receive the normal benefit payable
 2227  under the Public Employee Optional Retirement Program as set
 2228  forth in subsection (1).
 2229         2. If any justice or judge who is a participant of the
 2230  Public Employee Optional Retirement Program of the Florida
 2231  Retirement System is retired for disability by order of the
 2232  Supreme Court upon recommendation of the Judicial Qualifications
 2233  Commission pursuant to the provisions of Art. V of the State
 2234  Constitution and elects to receive a monthly disability benefit
 2235  under the provisions of this paragraph:
 2236         a. Any present value amount that was transferred to his or
 2237  her program account and all participant and employer
 2238  contributions made to such account on his or her behalf, plus
 2239  interest and earnings thereon, shall be transferred to and
 2240  deposited in the disability account of the Florida Retirement
 2241  System Trust Fund; and
 2242         b. The monthly benefits payable under this paragraph for
 2243  any affected justice or judge retired from the Florida
 2244  Retirement System pursuant to Art. V of the State Constitution
 2245  shall be paid from the disability account of the Florida
 2246  Retirement System Trust Fund.
 2247         (n) Death of retiree or beneficiary.—Upon the death of a
 2248  disabled retiree or beneficiary thereof who is receiving monthly
 2249  benefits under this subsection, the monthly benefits shall be
 2250  paid through the last day of the month of death and shall
 2251  terminate, or be adjusted, if applicable, as of that date in
 2252  accordance with the optional form of benefit selected at the
 2253  time of retirement. The Department of Management Services may
 2254  adopt rules necessary to administer this paragraph.
 2255         (3) DEATH BENEFITS.—Under the Public Employee Optional
 2256  Retirement Program:
 2257         (a) Survivor benefits shall be payable in accordance with
 2258  the following terms and conditions:
 2259         1. To the extent vested, benefits shall be payable only to
 2260  a participant’s beneficiary or beneficiaries as designated by
 2261  the participant as provided in s. 121.4501(20).
 2262         2. Benefits shall be paid by the third-party administrator
 2263  or designated approved providers in accordance with the law, the
 2264  contracts, and any applicable board rule or policy.
 2265         3. To receive benefits under this subsection, the
 2266  participant must be deceased.
 2267         (b) In the event of a participant’s death, all vested
 2268  accumulations as described in s. 121.4501(6), less withholding
 2269  taxes remitted to the Internal Revenue Service, shall be
 2270  distributed, as provided in paragraph (c) or as described in s.
 2271  121.4501(20), as if the participant retired on the date of
 2272  death. No other death benefits shall be available for survivors
 2273  of participants under the Public Employee Optional Retirement
 2274  Program, except for such benefits, or coverage for such
 2275  benefits, as are otherwise provided by law or are separately
 2276  afforded by the employer, at the employer’s discretion.
 2277         (c) Upon receipt by the third-party administrator of a
 2278  properly executed application for distribution of benefits, the
 2279  total accumulated benefit shall be payable by the third-party
 2280  administrator to the participant’s surviving beneficiary or
 2281  beneficiaries, as:
 2282         1. A lump-sum distribution payable to the beneficiary or
 2283  beneficiaries, or to the deceased participant’s estate;
 2284         2. An eligible rollover distribution, if permitted, on
 2285  behalf of the surviving spouse of a deceased participant,
 2286  whereby all accrued benefits, plus interest and investment
 2287  earnings, are paid from the deceased participant’s account
 2288  directly to the custodian of an eligible retirement plan, as
 2289  described in s. 402(c)(8)(B) of the Internal Revenue Code, on
 2290  behalf of the surviving spouse; or
 2291         3. A partial lump-sum payment whereby a portion of the
 2292  accrued benefit is paid to the deceased participant’s surviving
 2293  spouse or other designated beneficiaries, less withholding taxes
 2294  remitted to the Internal Revenue Service, and the remaining
 2295  amount is transferred directly to the custodian of an eligible
 2296  retirement plan, if permitted, as described in s. 402(c)(8)(B)
 2297  of the Internal Revenue Code, on behalf of the surviving spouse.
 2298  The proportions must be specified by the participant or the
 2299  surviving beneficiary.
 2300  
 2301  This paragraph does not abrogate other applicable provisions of
 2302  state or federal law providing for payment of death benefits.
 2303         (4) LIMITATION ON LEGAL PROCESS.—The benefits payable to
 2304  any person under the Public Employee Optional Retirement
 2305  Program, and any contributions accumulated under such program,
 2306  are not subject to assignment, execution, attachment, or any
 2307  legal process, except for qualified domestic relations orders by
 2308  a court of competent jurisdiction, income deduction orders as
 2309  provided in s. 61.1301, and federal income tax levies.
 2310         Section 18. Subsection (1) of section 121.70, Florida
 2311  Statutes, is amended to read:
 2312         121.70 Legislative purpose and intent.—
 2313         (1) This part provides for a uniform system for funding
 2314  benefits provided under the Florida Retirement System defined
 2315  benefit program established under part I of this chapter
 2316  (referred to in this part as the defined benefit program) and
 2317  under the Public Employee Optional Retirement Program
 2318  established under part II of this chapter (referred to in this
 2319  part as the optional retirement program). The Legislature
 2320  recognizes and declares that the Florida Retirement System is a
 2321  single retirement system, consisting of two retirement plans and
 2322  other nonintegrated programs. Employees and employers
 2323  participating in the Florida Retirement System collectively
 2324  shall be responsible for making contributions to support the
 2325  benefits afforded under both plans. As provided in this part,
 2326  employees and employers participating in the Florida Retirement
 2327  System shall make contributions based upon uniform contribution
 2328  rates determined as a percentage of the employee’s gross monthly
 2329  compensation total payroll for the employee’s each class or
 2330  subclass of Florida Retirement System membership, irrespective
 2331  of which retirement plan individual employees may elect. This
 2332  shall be known as a uniform or blended contribution rate system.
 2333         Section 19. Subsection (2) of section 121.71, Florida
 2334  Statutes, is amended, present subsections (3) and (4) of that
 2335  section are renumbered as subsections (4) and (7), respectively,
 2336  and new subsections (3), (5), and (6) are added to that section,
 2337  to read:
 2338         121.71 Uniform rates; process; calculations; levy.—
 2339         (2) Based on the uniform rates set forth in subsections
 2340  subsection (3), (4), and (5), employees and employers shall make
 2341  monthly contributions to the Division of Retirement as required
 2342  in s. 121.061(1), which shall initially deposit the funds into
 2343  the Florida Retirement System Contributions Clearing Trust Fund.
 2344  A change in a contribution rate is effective the first day of
 2345  the month for which a full month’s employee and employer
 2346  contribution may be made on or after the beginning date of the
 2347  change. Beginning January 1, 2011, each employee shall
 2348  contribute to the plan the contributions required in subsection
 2349  (3). The employer shall deduct the contribution from the
 2350  employee’s monthly salary, and the contribution shall be
 2351  submitted to the Division of Retirement. These contributions
 2352  shall be reported as employer-paid employee contributions, and
 2353  shall be credited to the account of the employee. The
 2354  contributions shall be deducted from the employee’s salary
 2355  before the computation of applicable federal taxes and shall be
 2356  treated as employer contributions under 26 U.S.C. 414(b)(2). The
 2357  contributions, although designated as employee contributions,
 2358  are being paid by the employers in lieu of contributions by the
 2359  employee. The employee shall not have the option of choosing to
 2360  receive the contributed amounts directly instead of having them
 2361  paid by the employer to the plan. Such contributions are
 2362  mandatory and each employee shall be considered to consent to
 2363  payroll deductions. Payment of an employee’s salary or wages,
 2364  less the contribution, is a full and complete discharge and
 2365  satisfaction of all claims and demands for the service rendered
 2366  by employees during the period covered by the payment, except
 2367  their claims to the benefits to which they may be entitled under
 2368  the provisions of this chapter.
 2369         (3)Required employee retirement contribution rates for
 2370  each membership class and subclass of the Florida Retirement
 2371  System for both retirement plans are as follows:
 2372  Membership Class           Percentage of Gross Compensation,Effective January 1, 2011
 2373  Regular Class                               0.25%                 
 2374  Special Risk Class                          0.25%                 
 2375  Special Risk Administrative  Support Class                 0.25%                 
 2376  Elected Officers’ Class -  Legislators, Governor,  Lt. Governor,  Cabinet Officers,  State Attorneys,  Public Defenders                  0.25%                  
 2377  Elected Officers’ Class -  Justices, Judges                 0.25%                 
 2378  Elected Officers’ Class -  County Elected Officers                 0.25%                 
 2379  Senior Management Class                     0.25%                 
 2380  DROP                                        0.25%                 
 2381         (4)(3) Required employer retirement contribution rates for
 2382  each membership class and subclass of the Florida Retirement
 2383  System for both retirement plans are as follows:
 2384  Membership Class           Percentage of Gross Compensation,Effective July 1, 2010 2009Percentage of Gross Compensation,Effective January 1, 2011 July 1, 2010
 2385  Regular Class                   9.76% 8.69%          9.54% 9.63%     
 2386  Special Risk Class             22.15% 19.76%        21.92% 22.11%    
 2387  Special Risk Administrative  Support Class    11.24% 11.39%        11.02% 12.10%    
 2388  Elected Officers’ Class -  Legislators, Governor,  Lt. Governor,  Cabinet Officers,  State Attorneys,  Public Defenders    14.38% 13.32%        14.16% 15.20%    
 2389  Elected Officers’ Class -  Justices, Judges    19.39% 18.40%        19.15% 20.65%    
 2390  Elected Officers’ Class -  County Elected Officers    16.62% 15.37%        16.39% 17.50%    
 2391  Senior Management Class        11.70% 11.96%        11.49% 13.43%    
 2392  DROP                           14.23% 9.80%         14.21% 11.14%    
 2393         (5)In order to address unfunded actuarial liabilities of
 2394  the system, the required employer retirement contribution rates
 2395  for each membership class and subclass of the Florida Retirement
 2396  System for both retirement plans are as follows:
 2397  Membership Class           Percentage of Gross Compensation,Effective July 1, 2010Percentage of Gross Compensation,Effective July 1, 2011
 2398  Regular Class                      0.00%                1.58%        
 2399  Special Risk Class                 0.00%                5.97%        
 2400  Special Risk Administrative  Support Class        0.00%               15.97%        
 2401  Elected Officers’ Class -  Legislators, Governor,  Lt. Governor,  Cabinet Officers,  State Attorneys,  Public Defenders        0.00%               17.05%        
 2402  Elected Officers’ Class -  Justices, Judges        0.00%               11.00%        
 2403  Elected Officers’ Class -  County Elected Officers        0.00%               19.75%        
 2404  Senior Management Class            0.00%                9.26%        
 2405  DROP                               0.00%                4.97%        
 2406         (6) If a member is reported under an incorrect membership
 2407  class and the amount of contributions reported and remitted are
 2408  less than the amount required, the employer shall owe the
 2409  difference, plus the delinquent fee, of 1 percent for each
 2410  calendar month or part thereof that the contributions should
 2411  have been paid. This delinquent assessment may not be waived. If
 2412  the contributions reported and remitted are more than the amount
 2413  required, the employer shall receive a credit to be applied
 2414  against future contributions owed.
 2415         (7)(4) The state actuary shall recognize and use an
 2416  appropriate level of available excess assets of the Florida
 2417  Retirement System Trust Fund to offset the difference between
 2418  the normal costs of the Florida Retirement System and the
 2419  statutorily prescribed contribution rates.
 2420         Section 20. Subsections (2), (3), and (4) of section
 2421  121.72, Florida Statutes, are amended to read:
 2422         121.72 Allocations to optional retirement program
 2423  participant accounts; percentage amounts.—
 2424         (2) The allocations are stated as a percentage of each
 2425  optional retirement program participant’s gross compensation for
 2426  the calendar month. A change in a contribution percentage is
 2427  effective the first day of the month for which retirement
 2428  contributions a full month’s employer contribution may be made
 2429  on or after the beginning date of the change. Contribution
 2430  percentages may be modified by general law.
 2431         (3) Employer and participant contributions to participant
 2432  accounts shall be accounted for separately. Participant
 2433  contributions may be made only if expressly authorized by law.
 2434  Interest and investment earnings on contributions shall accrue
 2435  on a tax-deferred basis until proceeds are distributed.
 2436         (4) Effective January 1, 2011 July 1, 2002, allocations
 2437  from the Florida Retirement System Contributions Clearing Trust
 2438  Fund to optional retirement program participant accounts,
 2439  including employee contributions as required in s. 121.71(3),
 2440  shall be as follows:
 2441  Membership Class                      Percentage of Gross Compensation
 2442  Regular Class                                     9.00%             
 2443  Special Risk Class                                20.00%            
 2444  Special Risk Administrative Support Class            11.35%            
 2445  Elected Officers’ Class -  Legislators, Governor,  Lt. Governor, Cabinet Officers,  State Attorneys, Public Defenders            13.40%            
 2446  Elected Officers’ Class -  Justices, Judges            18.90%            
 2447  Elected Officers’ Class -  County Elected Officers            16.20%            
 2448  Senior Management Service Class                   10.95%            
 2449         Section 21. Section 121.73, Florida Statutes, is amended to
 2450  read:
 2451         121.73 Allocations for optional retirement program
 2452  participant disability coverage; percentage amounts.—
 2453         (1) The allocations established in subsection (3) shall be
 2454  used to provide disability coverage for participants in the
 2455  optional retirement program and shall be transferred monthly by
 2456  the Division of Retirement from the Florida Retirement System
 2457  Contributions Clearing Trust Fund to the disability account of
 2458  the Florida Retirement System Trust Fund.
 2459         (2) The allocations are stated as a percentage of each
 2460  optional retirement program participant’s gross compensation for
 2461  the calendar month. A change in a contribution percentage is
 2462  effective the first day of the month for which retirement
 2463  contributions a full month’s employer contribution may be made
 2464  on or after the beginning date of the change. Contribution
 2465  percentages may be modified by general law.
 2466         (3) Effective July 1, 2002, allocations from the FRS
 2467  Contribution Clearing Fund to provide disability coverage for
 2468  participants in the optional retirement program, and to offset
 2469  the costs of administering said coverage, shall be as follows:
 2470  Membership Class                      Percentage of Gross Compensation
 2471  Regular Class                                     0.25%             
 2472  Special Risk Class                                1.33%             
 2473  Special Risk Administrative Support Class            0.45%             
 2474  Elected Officers’ Class -  Legislators, Governor,  Lt. Governor, Cabinet Officers,  State Attorneys, Public Defenders            0.41%             
 2475  Elected Officers’ Class -  Justices, Judges            0.73%             
 2476  Elected Officers’ Class -  County Elected Officers            0.41%             
 2477  Senior Management Service Class                   0.26%             
 2478         Section 22. Section 121.74, Florida Statutes, is amended to
 2479  read:
 2480         121.74 Administrative and educational expenses.—In addition
 2481  to contributions required under ss. s. 121.71 and 121.73,
 2482  effective July 1, 2010, through June 30, 2014, employers
 2483  participating in the Florida Retirement System shall contribute
 2484  an amount equal to 0.03 0.05 percent of the payroll reported for
 2485  each class or subclass of Florida Retirement System membership.
 2486  Effective July 1, 2014, the contribution rate shall be 0.04
 2487  percent of the payroll reported for each class or subclass of
 2488  membership. The, which amount contributed shall be transferred
 2489  by the Division of Retirement from the Florida Retirement System
 2490  Contributions Clearing Trust Fund to the State Board of
 2491  Administration’s Administrative Trust Fund to offset the costs
 2492  of administering the optional retirement program and the costs
 2493  of providing educational services to participants in the defined
 2494  benefit program and the optional retirement program. Approval of
 2495  the trustees of the State Board of Administration is required
 2496  before prior to the expenditure of these funds. Payments for
 2497  third-party administrative or educational expenses shall be made
 2498  only pursuant to the terms of the approved contracts for such
 2499  services.
 2500         Section 23. Section 121.76, Florida Statutes, is amended to
 2501  read:
 2502         121.76 Contributions for social security and for retiree
 2503  health insurance subsidy.—Contributions required under this part
 2504  shall be made or deducted, as may be appropriate, for each pay
 2505  period and are in addition to employer and member contributions
 2506  required for social security and the Retiree Health Insurance
 2507  Subsidy Trust Fund as provided under parts I and II of this
 2508  chapter. The employer-paid employee contributions specified in
 2509  s. 121.71(2) are subject to taxes imposed under the Federal
 2510  Insurance Contributions Act, 26 U.S.C. ss. 3101-3128.
 2511         Section 24. Subsections (1) and (3) of section 121.78,
 2512  Florida Statutes, are amended to read:
 2513         121.78 Payment and distribution of contributions.—
 2514         (1) Contributions made pursuant to this part shall be paid
 2515  by the employer, including the employee contribution, to the
 2516  Division of Retirement by electronic funds transfer no later
 2517  than the 5th working day of the month immediately following the
 2518  month during which the payroll period ended. Accompanying
 2519  payroll data must be transmitted to the division concurrent with
 2520  the contributions.
 2521         (3)(a) Employee and employer contributions and accompanying
 2522  payroll data received after the 5th working day of the month
 2523  shall be considered late. The employer shall be assessed by the
 2524  division a penalty of 1 percent of the contributions due for
 2525  each calendar month or part thereof that the contributions or
 2526  accompanying payroll data are late. Proceeds from the 1-percent
 2527  assessment against contributions made on behalf of participants
 2528  of the defined benefit program shall be deposited in the Florida
 2529  Retirement System Trust Fund, and proceeds from the 1-percent
 2530  assessment against contributions made on behalf of participants
 2531  of the optional retirement program shall be transferred to the
 2532  third-party administrator for deposit into participant accounts,
 2533  as provided in paragraph (c) (b).
 2534         (b)Retirement contributions paid for a prior period shall
 2535  be charged a delinquent fee of 1 percent for each calendar month
 2536  or part thereof that the contributions should have been paid.
 2537  This includes prior period contributions due to incorrect wages
 2538  and contributions from an earlier report or wages and
 2539  contributions that should have been reported, but were not. This
 2540  delinquent assessment may not be waived.
 2541         (c)(b) If employee contributions or contributions made by
 2542  an employer on behalf of participants of the optional retirement
 2543  program or accompanying payroll data are not received within the
 2544  calendar month they are due, including, but not limited to,
 2545  contribution adjustments as a result of employer errors or
 2546  corrections, and if that delinquency results in market losses to
 2547  participants, the employer shall reimburse each participant’s
 2548  account for market losses resulting from the late contributions.
 2549  If a participant has terminated employment and taken a
 2550  distribution, the participant is responsible for returning any
 2551  excess contributions erroneously provided by employers, adjusted
 2552  for any investment gain or loss incurred during the period such
 2553  excess contributions were in the participant’s Public Employee
 2554  Optional Retirement Program account. The State Board of
 2555  Administration or its designated agent shall communicate to
 2556  terminated participants any obligation to repay such excess
 2557  contribution amounts. However, the State Board of
 2558  Administration, its designated agents, the Public Employee
 2559  Optional Retirement Program Trust Fund, the Department of
 2560  Management Services, or the Florida Retirement System Trust Fund
 2561  shall not incur any loss or gain as a result of an employer’s
 2562  correction of such excess contributions. The third-party
 2563  administrator, hired by the board pursuant to s. 121.4501(8),
 2564  shall calculate the market losses for each affected participant.
 2565  When contributions made on behalf of participants of the
 2566  optional retirement program or accompanying payroll data are not
 2567  received within the calendar month due, the employer shall also
 2568  pay the cost of the third-party administrator’s calculation and
 2569  reconciliation adjustments resulting from the late
 2570  contributions. The third-party administrator shall notify the
 2571  employer of the results of the calculations and the total amount
 2572  due from the employer for such losses and the costs of
 2573  calculation and reconciliation. The employer shall remit to the
 2574  division the amount due within 10 working days after the date of
 2575  the penalty notice sent by the division. The division shall
 2576  transfer said amount to the third-party administrator, who shall
 2577  deposit proceeds from the 1-percent assessment and from
 2578  individual market losses into participant accounts, as
 2579  appropriate. The board is authorized to adopt rules to implement
 2580  the provisions regarding late contributions, late submission of
 2581  payroll data, the process for reimbursing participant accounts
 2582  for resultant market losses, and the penalties charged to the
 2583  employers.
 2584         (d) If employee contributions reported by an employer on
 2585  behalf of participants are reduced as a result of employer
 2586  errors or corrections, and the participant has terminated
 2587  employment and taken a refund or distribution, the employer
 2588  shall be billed and is responsible for recovering from the
 2589  participant any excess contributions erroneously provided by the
 2590  employer.
 2591         (e)(c) Delinquency fees specified in paragraph (a) may be
 2592  waived by the division, with regard to defined benefit program
 2593  contributions, and by the State Board of Administration, with
 2594  regard to optional retirement program contributions, only when,
 2595  in the opinion of the division or the board, as appropriate,
 2596  exceptional circumstances beyond the employer’s control
 2597  prevented remittance by the prescribed due date notwithstanding
 2598  the employer’s good faith efforts to effect delivery. Such a
 2599  waiver of delinquency may be granted an employer only one time
 2600  each plan state fiscal year.
 2601         (f) If the employer submits excess employer or employee
 2602  contributions, the employer shall receive a credit to be applied
 2603  against future contributions owed. The employer is responsible
 2604  for reimbursing the employee for any excess contributions
 2605  submitted, provided that any return of such an erroneous excess
 2606  pretax contribution by the program shall be made within 1 year
 2607  after making erroneous contributions or such other period as may
 2608  be allowed by applicable Internal Revenue guidance.
 2609         Section 25. Paragraph (a) of subsection (4) of section
 2610  1012.875, Florida Statutes, is amended to read:
 2611         1012.875 State Community College System Optional Retirement
 2612  Program.—Each community college may implement an optional
 2613  retirement program, if such program is established therefor
 2614  pursuant to s. 1001.64(20), under which annuity or other
 2615  contracts providing retirement and death benefits may be
 2616  purchased by, and on behalf of, eligible employees who
 2617  participate in the program, in accordance with s. 403(b) of the
 2618  Internal Revenue Code. Except as otherwise provided herein, this
 2619  retirement program, which shall be known as the State Community
 2620  College System Optional Retirement Program, may be implemented
 2621  and administered only by an individual community college or by a
 2622  consortium of community colleges.
 2623         (4)(a) Through December 31, 2010, each college must
 2624  contribute on behalf of each program participant an amount equal
 2625  to 10.43 percent of the participant’s gross monthly
 2626  compensation. Effective January 1, 2011, each program
 2627  participant shall contribute an amount equal to the employee
 2628  contribution required in s. 121.71(3). Effective January 1,
 2629  2011, each employer shall contribute on behalf of each program
 2630  participant an amount equal to the difference between 10.43
 2631  percent of the participant’s gross monthly compensation and the
 2632  amount equal to the employee’s required contribution based on
 2633  the employee’s gross monthly compensation. The college shall
 2634  deduct an amount approved by the district board of trustees of
 2635  the college to provide for the administration of the optional
 2636  retirement program. Payment of this contribution must be made
 2637  either directly by the college or through the program
 2638  administrator to the designated company contracting for payment
 2639  of benefits to the program participant.
 2640         Section 26. The Legislature finds that a proper and
 2641  legitimate state purpose is served when employees and retirees
 2642  of the state and its political subdivisions, and the dependents,
 2643  survivors, and beneficiaries of such employees and retirees, are
 2644  extended the basic protections afforded by governmental
 2645  retirement systems. These persons must be provided benefits that
 2646  are fair and adequate and that are managed, administered, and
 2647  funded in an actuarially sound manner, as required by s. 14,
 2648  Article X of the State Constitution and part VII of chapter 112,
 2649  Florida Statutes. Therefore, the Legislature determines and
 2650  declares that this act fulfills an important state interest.
 2651         Section 27. For the 2010-2011 fiscal year, the sums of
 2652  $414,109 of recurring funds and $31,016 of nonrecurring funds
 2653  from the Florida Retirement System Operating Trust Fund are
 2654  appropriated to, and eight full-time equivalent positions and
 2655  salary rate of 265,621 are authorized for, the Division of
 2656  Retirement within the Department of Management Services for the
 2657  purpose of implementing this act.
 2658         Section 28. This act shall take effect July 1, 2010.

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 © 2000-2020 State of Florida.     Privacy Statement     Contact Us     Get Acrobat Reader