Bill Text: FL S2100 | 2011 | Regular Session | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Retirement
Spectrum: Committee Bill
Status: (Enrolled - Dead) 2011-05-06 - Ordered engrossed, then enrolled -SJ 1832 [S2100 Detail]
Download: Florida-2011-S2100-Engrossed.html
Bill Title: Retirement
Spectrum: Committee Bill
Status: (Enrolled - Dead) 2011-05-06 - Ordered engrossed, then enrolled -SJ 1832 [S2100 Detail]
Download: Florida-2011-S2100-Engrossed.html
SB 2100 First Engrossed 20112100e1 1 A bill to be entitled 2 An act relating to retirement; amending ss. 110.123, 3 112.0801, 112.363, and 112.65, F.S.; conforming 4 provisions to changes made by the act; amending s. 5 121.011, F.S.; requiring employee and employer 6 contributions to the retirement system by a certain 7 date; amending s. 121.021, F.S.; redefining the terms 8 “system,” “prior service,” “compensation,” “average 9 final compensation,” “normal retirement date,” 10 “termination,” “benefit,” and “payee”; defining the 11 term “division”; amending s. 121.051, F.S.; conforming 12 provisions to changes made by the act; amending s. 13 121.0515, F.S.; providing that special risk employee 14 contributions be used, if applicable, when purchasing 15 credit for past service; conforming a cross-reference; 16 amending s. 121.052, F.S., relating to the membership 17 class of elected officers; conforming provisions to 18 changes made by the act; providing for a refund of 19 contributions under certain circumstances for an 20 officer who leaves office; prohibiting such refund if 21 an approved qualified domestic relations order is 22 filed against the member’s retirement account; 23 providing that a member who obtains a refund of 24 contributions waives certain rights under the Florida 25 Retirement System; conforming a cross-reference; 26 amending s. 121.053, F.S.; conforming provisions to 27 changes made by the act; amending s. 121.055, F.S., 28 relating to the Senior Management Service Class; 29 conforming provisions to changes made by the act; 30 providing for refunds of employee refunds; prohibiting 31 a refund of retirement contributions if an approved 32 qualified domestic relations order is filed against 33 the member’s retirement account; providing that a 34 member who obtains a refund of contributions waives 35 certain rights under the Florida Retirement System; 36 requiring employee and employer contributions for 37 members in the Senior Management Service Optional 38 Annuity Program after a certain date; limiting the 39 payment of benefits before a member’s termination of 40 employment; amending s. 121.071, F.S.; requiring 41 employee and employer contributions to the retirement 42 system beginning on a certain date; limiting the 43 payment of benefits before a member’s termination of 44 employment; requiring repayment plus interest of an 45 invalid refund; amending s. 121.081, F.S.; providing 46 requirements for contributions for prior service 47 performed on or after a certain date; amending s. 48 121.091, F.S.; conforming a cross-reference; providing 49 for refunds of employee refunds; limiting the payment 50 of benefits before a member’s termination of 51 employment; prohibiting a refund of retirement 52 contributions if an approved qualified domestic 53 relations order is filed against the member’s 54 retirement account; providing that a member who 55 obtains a refund of contributions waives certain 56 rights under the Florida Retirement System; revising 57 the interest rate accruing on DROP benefits after a 58 certain date; conforming provisions to changes made by 59 the act; amending s. 121.1001, F.S.; conforming 60 provisions to changes made by the act; amending s. 61 121.101, F.S.;. revising the cost-of-living adjustment 62 depending on the date of retirement; amending s. 63 121.121, F.S., relating to the purchase of creditable 64 service following an authorized leave of absence; 65 requiring that service credit be purchased at the 66 employee and employer contribution rates in effect 67 during the leave of absence; reducing the interest 68 rate on benefits payable under the Deferred Retirement 69 Option Program for employees hired after a certain 70 date; amending s. 121.122, F.S.; providing for renewed 71 membership in the retirement system for retirees who 72 are reemployed after a certain date; excluding 73 retirees of the Elected Officers’ Class or the Senior 74 Management Service Class; specifying requirements and 75 limitations; amending s. 121.125, F.S.; conforming 76 provisions to changes made by the act; assessing a 77 penalty against employers for contributions not paid 78 after a member becomes eligible for workers’ 79 compensation; amending s. 121.35, F.S., relating to 80 the optional retirement program for the State 81 University System; conforming provisions to changes 82 made by the act; requiring employee and employer 83 contributions for members participating in the 84 optional retirement program after a certain date; 85 deleting certain requirements governing employer 86 contributions to conform to changes made by the act; 87 prohibiting certain benefits before termination from 88 employment; conforming cross-references; amending s. 89 121.355, F.S.; conforming provisions to changes made 90 by the act; amending s. 121.4501, F.S.; changing the 91 name of the Public Employee Optional Retirement 92 Program to the Florida Retirement System Investment 93 Plan; limiting the option of enrolling in the State 94 Retirement System’s defined benefit program or defined 95 contribution program to public employees employed 96 before a certain date; requiring certain public 97 employees employed on or after a certain date to 98 enroll in the investment plan; providing exceptions; 99 requiring that plan members make contributions to the 100 plan based on the employee’s membership class; 101 revising definitions; revising the benefit 102 commencement age for members of the special risk 103 class; providing for contribution adjustments as a 104 result of errors or corrections; deleting obsolete 105 provisions relating to the 2002 optional transfer of 106 public employees from the pension plan to the 107 investment plan; providing for past employees who 108 reenter the system; requiring an employer to receive a 109 credit for excess contributions and to reimburse an 110 employee for excess contributions, subject to certain 111 limitations; providing for a retiree to retain his or 112 her prior plan choice following a return to 113 employment; limiting certain refunds of contributions 114 which exceed the amount that would have accrued had 115 the member remained in the pension plan; providing 116 certain requirements and limitations with respect to 117 contributions; clarifying that employee and employer 118 contributions are earmarked for specified purposes; 119 providing duties of the third-party administrator; 120 providing that a member is vested immediately with 121 respect to employee contributions paid by the 122 employee; providing for the forfeiture of nonvested 123 employer contributions and service credit based on 124 years of service; amending s. 121.4502, F.S.; 125 conforming provisions to changes made by the act; 126 amending s. 121.4503, F.S.; providing for the deposit 127 of employee contributions into the Florida Retirement 128 System Contributions Clearing Trust Fund; amending s. 129 121.571, F.S.; conforming provisions to changes made 130 by the act; providing requirements for submitting 131 employee contributions; amending s. 121.591, F.S.; 132 prohibiting the payment of certain benefits before 133 termination of employment; providing for the 134 forfeiture of nonvested accumulations upon payment of 135 certain vested benefits; providing that the 136 distribution payment method selected by the member or 137 beneficiary is irrevocable at the time of 138 distribution; prohibiting a distribution of employee 139 contributions if a qualified domestic relations order 140 is filed against the member’s account; providing for 141 the distribution of an employee’s contributions if the 142 employee dies before being vested; conforming 143 provisions to changes made by the act; amending ss. 144 121.5911 and 121.70, F.S.; conforming provisions to 145 changes made by the act; amending s. 121.71, F.S.; 146 providing for employee contributions to be deducted 147 from the employee’s monthly salary, beginning on a 148 specified date, and treated as employer contributions 149 under certain provisions of federal law; clarifying 150 that an employee may not receive such contributions 151 directly; specifying the required contribution rate 152 for all members of the Florida Retirement System; 153 specifying the required employer retirement 154 contribution rates for each membership class and 155 subclass of the system in order to address unfunded 156 actuarial liabilities of the system; requiring an 157 assessment to be imposed if the employee contributions 158 remitted are less than the amount required; providing 159 for the employer to receive a credit for excess 160 contributions remitted; conforming cross-references; 161 amending s. 121.72, F.S.; revising certain 162 requirements governing allocations to optional 163 retirement program member accounts; conforming cross 164 references; amending s. 121.73, F.S., relating to 165 disability coverage for members of the optional 166 retirement program; conforming provisions to changes 167 made by the act; amending ss. 121.74, 121.75, and 168 121.77, F.S.; conforming provisions to changes made by 169 the act; conforming cross-references; amending s. 170 121.78, F.S.; revising certain requirements for 171 administering the payment and distribution of 172 contributions; requiring that certain fees be imposed 173 for delinquent payment; providing that an employer is 174 responsible for recovering any refund provided to an 175 employee in error; revising the terms of an authorized 176 waiver of delinquency; requiring an employer to 177 receive a credit for excess contributions and to 178 reimburse an employee for excess contributions, 179 subject to certain limitations; amending s. 175.121, 180 F.S.; specifying other sources available to pay the 181 expenses of the Department of Revenue for 182 administering firefighters’ pension plans; amending s. 183 175.341, F.S.; conforming provisions to changes made 184 by the act; amending s. 185.10, F.S.; specifying other 185 sources available to pay the expenses of the 186 department for administering police officers’ pension 187 plans; amending s. 185.23, F.S.; conforming provisions 188 to changes made by the act; amending s. 250.22, F.S.; 189 providing that retirement pay for members of the 190 Florida National Guard is determined on the date of 191 retirement and may not be recomputed to reflect an 192 increase in basic pay; directing the Division of 193 Retirement to annually adjust retirement pay after a 194 certain date; amending s. 1012.875, F.S.; requiring 195 employee and employer contributions for members of the 196 State Community College System Optional Retirement 197 Program on a certain date; conforming cross 198 references; providing that the act fulfills an 199 important state interest; providing a directive to the 200 Division of Statutory Revision; requiring the State 201 Board of Administration and the Department of 202 Management Services to request a private letter ruling 203 from the United States Internal Revenue Service 204 regarding the act; providing an effective date. 205 206 Be It Enacted by the Legislature of the State of Florida: 207 208 Section 1. Paragraph (g) of subsection (2) of section 209 110.123, Florida Statutes, is amended to read: 210 110.123 State group insurance program.— 211 (2) DEFINITIONS.—As used in this section, the term: 212 (g) “Retired state officer or employee” or “retiree” means 213 aanystate, or state university, officer or employee who 214 retires under a state retirement system or a state optional 215 annuity or retirement program or is placed on disability 216 retirement,andwho was insured under the state group insurance 217 program at the time of retirement, and who begins receiving 218 retirement benefits immediately after retirement from state or 219 state university office or employment. The term also includesIn220addition to theserequirements,any state officer orstate221 employee who retires under the investment planPublic Employee222Optional Retirement Programestablished under part II of chapter 223 121shall be considereda “retired state officer oremployee” or224“retiree” as used in this sectionif he or she: 225 1. Meets the age and service requirements to qualify for 226 normal retirement as set forth in s. 121.021(29); or 227 2. Has attained the age specified by s. 72(t)(2)(A)(i) of 228 the Internal Revenue Code and has 6 years of creditable service. 229 Section 2. Section 112.0801, Florida Statutes, is amended 230 to read: 231 112.0801 Group insurance; participation by retired 232 employees.— 233(1)Any state agency, county, municipality, special 234 district, community college, or district school board thatwhich235 provides life, health, accident, hospitalization, or annuity 236 insurance, or all of any kinds of such insurance, for its 237 officers and employees and their dependents upon a group 238 insurance plan or self-insurance plan shall allow all former 239 personnel whohaveretired beforeprior toOctober 1, 1987, as 240 well as those who retire on or after such date, and their 241 eligible dependents, the option of continuing to participate in 242 thesuchgroup insurance plan or self-insurance plan. Retirees 243 and their eligible dependents shall be offered the same health 244 and hospitalization insurance coverage as is offered to active 245 employees at a premium cost of no more than the premium cost 246 applicable to active employees. Fortheretired employees and 247 their eligible dependents, the cost ofany suchcontinued 248 participationin any type of plan or any of the cost thereofmay 249 be paid by the employer or by the retired employees. To 250 determine health and hospitalization plan costs, the employer 251 shall commingle the claims experience of the retiree group with 252 the claims experience of the active employees; and, for other 253 types of coverage, the employer may commingle the claims 254 experience of the retiree group with the claims experience of 255 active employees. Retirees covered under Medicare may be 256 experience-rated separately from the retirees not covered by 257 Medicare and from active employees if, provided thatthe total 258 premium does not exceed that of the active group and coverage is 259 basically the same as for the active group. 260(2)For purposes of this section, the term “retiree” has 261 the same meaning as in s. 110.123(2)means any officer or262employee who retires under a state retirement system or a state263optional annuity or retirement program or is placed on264disability retirement and who begins receiving retirement265benefits immediately after retirement from employment.In266addition to these requirements, any officer or employee who267retires under the Public Employee Optional Retirement Program268established under part II of chapter 121 shall be considered a269“retired officer or employee” or “retiree” as used in this270section if he or she:271(a)Meets the age and service requirements to qualify for272normal retirement as set forth in s.121.021(29); or273(b)Has attained the age specified by s. 72(t)(2)(A)(i) of274the Internal Revenue Code and has 6 years of creditable service.275 Section 3. Paragraphs (b) and (c) of subsection (2) and 276 paragraph (e) of subsection (3) of section 112.363, Florida 277 Statutes, are amended to read: 278 112.363 Retiree health insurance subsidy.— 279 (2) ELIGIBILITY FOR RETIREE HEALTH INSURANCE SUBSIDY.— 280 (b) For purposes of this section, a person is deemed 281 retired from a state-administered retirement system when he or 282 she terminates employment with all employers participating in 283 the Florida Retirement System as described in s. 121.021(39) 284 and: 285 1. For a memberparticipantof the investment planPublic286Employee Optional Retirement programestablished under part II 287 of chapter 121, the memberparticipantmeets the age or service 288 requirements to qualify for normal retirement as set forth in s. 289 121.021(29) and meets the definition of retiree in s. 290 121.4501(2). 291 2. For a member of the pension planFlorida Retirement292System defined benefit program, or any employee who maintains 293 creditable service underboththe pension plan and the 294 investment plandefined benefit program and the Public Employee295Optional Retirement program, the member begins drawing 296 retirement benefits from the pension plandefined benefit297program of the Florida Retirement System. 298 (c)1.Effective July 1, 2001, any person retiring on or 299 after thatsuchdate as a member of the Florida Retirement 300 System, including a memberanyparticipantof the investment 301 plandefined contribution programadministered pursuant to part 302 II of chapter 121, must have satisfied the vesting requirements 303 for his or her membership class under the pension planFlorida304Retirement System defined benefit programas administered under 305 part I of chapter 121. However, 3062. Notwithstanding the provisions of subparagraph 1.,a 307 person retiring due to disability musteitherqualify for a 308 regular or in-line-of-duty disability benefit as provided in s. 309 121.091(4) or qualify for a disability benefit under a 310 disability plan established under part II of chapter 121, as 311 appropriate. 312 (3) RETIREE HEALTH INSURANCE SUBSIDY AMOUNT.— 313 (e)1. Beginning July 1, 2001, each eligible retiree of the 314 pension plandefined benefit programof the Florida Retirement 315 System, or, if the retiree is deceased, his or her beneficiary 316 who is receiving a monthly benefit from such retiree’s account 317 and who is a spouse, or a person who meets the definition of 318 joint annuitant in s. 121.021(28), shall receive a monthly 319 retiree health insurance subsidy payment equal to the number of 320 years of creditable service, as defined in s. 121.021(17), 321 completed at the time of retirement multiplied by $5; however, 322 annoeligible retiree or beneficiary may not receive a subsidy 323 payment of more than $150 or less than $30. If there are 324 multiple beneficiaries, the total payment maymustnot be 325 greater than the payment to which the retiree was entitled. The 326 health insurance subsidy amount payable to any person receiving 327 the retiree health insurance subsidy payment on July 1, 2001, 328 mayshallnot be reduced solely by operation of this 329 subparagraph. 330 2. Beginning July 1, 2002, each eligible memberparticipant331 of the investment plan under part II of chapter 121Public332Employee Optional Retirement program of the Florida Retirement333Systemwho has met the requirements of this section, or, if the 334 memberparticipantis deceased, his or her spouse who is the 335 member’sparticipant’sdesignated beneficiary, shall receive a 336 monthly retiree health insurance subsidy payment equal to the 337 number of years of creditable service, as provided in this 338 subparagraph, completed at the time of retirement, multiplied by 339 $5; however, annoeligible retiree or beneficiary may not 340 receive a subsidy payment of more than $150 or less than $30. 341 For purposes of determining a member’sparticipant’screditable 342 service used to calculate the health insurance subsidy, the 343 member’saparticipant’syears of service credit or fraction 344 thereof mustshallbe based on the member’sparticipant’swork 345 year as defined in s. 121.021(54). Credit mustshallbe awarded 346 for a full work year ifwheneverhealth insurance subsidy 347 contributions have been madeas required by lawfor each month 348 in the member’sparticipant’swork year. In addition, all years 349 of creditable service retained under the Florida Retirement 350 System pension plan mustdefined benefit program shallbe 351 included as creditable service for purposes of this section. 352 Notwithstanding any other provision in this sectionto the353contrary, the spouse at the time of death isshall bethe 354 member’sparticipant’sbeneficiary unless such member 355participanthas designated a different beneficiary subsequent to 356 the member’sparticipant’smost recent marriage. 357 Section 4. Subsection (1) of section 112.65, Florida 358 Statutes, is amended to read: 359 112.65 Limitation of benefits.— 360 (1) ESTABLISHMENT OF PROGRAM.—The normal retirement benefit 361 or pension payable to a retiree who becomes a member of aany362 retirement system or plan and who has not previously 363 participated in such plan, on or after January 1, 1980, may 364shallnot exceed 100 percent of his or her average final 365 compensation. However,nothing contained inthis section does 366 notshallapply to supplemental retirement benefits or to 367 pension increases attributable to cost-of-living increases or 368 adjustments. For the purposes of this section, benefits accruing 369 in individual memberparticipantaccounts established under the 370 investment planPublic Employee Optional Retirement program371 established in part II of chapter 121 are considered 372 supplemental benefits. As used in this section, the term 373 “average final compensation” means the average of the member’s 374 earnings over a period of time which the governmental entity 375 establisheshas establishedby statute, charter, or ordinance. 376 Section 5. Paragraph (h) is added to subsection (3) of 377 section 121.011, Florida Statutes, to read: 378 121.011 Florida Retirement System.— 379 (3) PRESERVATION OF RIGHTS.— 380 (h) Effective July 1, 2011, the retirement system shall 381 require employee and employer contributions as provided in s. 382 121.071 and part III of this chapter. 383 Section 6. Subsection (3), paragraph (a) of subsection 384 (19), paragraphs (a) and (b) of subsection (22), subsections 385 (24), (29), (39), (45), (55), and (59) of section 121.021, 386 Florida Statutes, are amended, and subsection (65) is added to 387 that section, to read: 388 121.021 Definitions.—The following words and phrases as 389 used in this chapter have the respective meanings set forth 390 unless a different meaning is plainly required by the context: 391 (3) “Florida Retirement System” or “system” means the 392 general retirement system established by this chapter,to be393known and cited as the “Florida Retirement System,”including, 394 but not limited to, the defined benefitretirementprogram 395 administered underthe provisions of part I ofthis part, 396 referred to as the “Florida Retirement System Pension Plan” or 397 “pension plan,”chapterand the defined contributionretirement398 programknown as the Public Employee Optional Retirement Program399andadministered underthe provisions ofpart II of this 400 chapter, referred to as the “Florida Retirement System 401 Investment Plan” or “investment plan.” 402 (19) “Prior service”under this chaptermeans: 403 (a) Service for which the member had credit under one of 404 the existing systems and received a refund of his or her 405 contributions upon termination of employment. Prior service 406shallalso includesinclude thatservicebetween December 1,4071970, and the date the system becomes noncontributoryfor which 408 the member had credit under the Florida Retirement System and 409 received a refund of his or her contributions upon termination 410 of employment. 411 (22) “Compensation” means the monthly salary paid a member 412 by his or her employer for work performed arising from that 413 employment. 414 (a) Before July 1, 2011, compensation includesshall415include: 416 1. Overtime payments paid from a salary fund. 417 2. Accumulated annual leave payments. 418 3. Payments in addition to the employee’s base rate of pay 419 ifallthe following apply: 420 a. The payments are paid according to a formal written 421 policy that applies to all eligible employees equally; 422 b. The policy provides that paymentsshallcommence byno423later thanthe 11th year of employment; 424 c. The payments are paid for as long as the employee 425 continues his or her employment; and 426 d. The payments are paid at least annually. 427 4. Amounts withheld for tax sheltered annuities or deferred 428 compensation programs, or any other type of salary reduction 429 plan authorized under the Internal Revenue Code. 430 5. Payments made in lieu of a permanent increase in the 431 base rate of pay, whether made annually or in 12 or 26 equal 432 payments within a 12-month period, ifwhenthe member’s base pay 433 is at the maximum of his or her pay range. IfWhena portion of 434 a member’s annual increase raises his or her pay range and the 435 excess is paid as a lump sum payment, thesuchlump sum payment 436 is consideredshall becompensation for retirement purposes. 437 (b) On or after July 1, 2011, compensation includes: 438 1. Payments in addition to the employee’s base rate of pay 439 if the following apply: 440 a. The payments are paid according to a formal written 441 policy that applies to all eligible employees equally; 442 b. The policy provides that payments shall commence by the 443 11th year of employment; and 444 c. The payments are paid at least annually. 445 2. Amounts withheld for tax-sheltered annuities, deferred 446 compensation programs, or any other type of salary reduction 447 plan authorized under the Internal Revenue Code. 448 3. Payments made in lieu of a permanent increase in the 449 base rate of pay, whether made annually or in 12 or 26 equal 450 payments within a 12-month period, if the member’s base pay is 451 at the maximum of his or her pay range. If a portion of a 452 member’s annual increase raises his or her pay range and the 453 excess is paid as a lump sum payment, such lump sum payment is 454 compensation for retirement purposes. 455 4. Up to 300 hours of overtime payments paid from a salary 456 fund. 457 (c)(b)Under no circumstances shallCompensation for a 458 member participating in the pension plandefined benefit459retirement programor the investment planPublic Employee460Optional Retirement Programof the Florida Retirement System may 461 not include: 462 1. Fees paid professional persons for special or particular 463 services orincludesalary payments made from a faculty practice 464 plan authorized by the Board of Governors of the State 465 University System for eligible clinical faculty at a college in 466 a state university that has a faculty practice plan; or 467 2. Any bonuses or other payments prohibited from inclusion 468 in the member’s average final compensationand defined in469subsection (47). 470 (24) “Average final compensation” means the average of the 471 5 highest fiscal years of compensation for creditable service 472 prior to retirement, termination, or death. For in-line-of-duty 473 disability benefits, if less than 5 years of creditable service 474 have been completed, the term“average final compensation”means 475 the average annual compensation of the total number of years of 476 creditable service. Each year used to calculate thein the477calculation ofaverage final compensation commencesshall478commenceon July 1. 479 (a) Before July 1, 2011: 480 1. The average final compensation includesshall include: 481 a.1.Accumulated annual leave payments, not to exceed 500 482 hours; and 483 b.2.All payments defined as compensation under this 484 sectionin subsection (22). 485 2.(b)The average final compensation doesshallnot 486 include: 487 a.1.Compensation paid to professional persons for special 488 or particular services; 489 b.2.Payments for accumulated sick leave made due to 490 retirement or termination; 491 c.3.Payments for accumulated annual leave in excess of 500 492 hours; 493 d.4.Bonusesas defined in subsection (47); 494 e.5.Third-partyThird partypayments made on and after 495 July 1, 1990; or 496 f.6.Fringe benefits, such as(for example,automobile 497 allowances or housing allowances). 498 (b) On or after July 1, 2011: 499 1. The average final compensation includes all payments 500 defined as compensation under this section. 501 2. The average final compensation does not include: 502 a. Compensation paid to professional persons for special or 503 particular services; 504 b. Payments for accumulated sick leave made due to 505 retirement or termination; 506 c. Payments for accumulated annual leave; 507 d. Payments for overtime exceeding 300 hours paid from a 508 salary fund; 509 e. Bonuses; 510 f. Third-party payments made on and after July 1, 1990; or 511 g. Fringe benefits, such as automobile allowances or 512 housing allowances. 513 (29) “Normal retirement date” means the date a member 514 attains normal retirement age and is vested, which is determined 515 as follows: 516 (a) If a Regular Class member, a Senior Management Service 517 Class member, or an Elected Officers’ Class member: 518 1. The first day of the month the member completes 6 or 519 more years of creditable service and attains age 62; or 520 2. The first day of the month following the date the member 521 completes 30 years of creditable service, regardless of age. 522 (b) If a Special Risk Class member: 523 1. The first day of the month the member completes 6 or 524 more years of creditable service in the Special Risk Class and 525 attains age 55; 526 2. The first day of the month following the date the member 527 completes 25 years of creditable service in the Special Risk 528 Class, regardless of age; or 529 3. The first day of the month following the date the member 530 completes 25 years of creditable service and attains age 52, 531 which service may include a maximum of 4 years of military 532 service credit as long as such credit is not claimed under any 533 other system and the remaining years are in the Special Risk 534 Class. 535 536 “Normal retirement age” is attained on the “normal retirement 537 date.” 538 (39)(a) “Termination” or “terminated” meansoccurs, except 539 as provided in paragraph (b), thatwhena member ceases all 540 employment relationships with a participatinganemployer;,541 however: 542 1. For retirements effective before July 1, 2010, if a 543 member is employed by any such employer within the next calendar 544 month, termination shall be deemed not to have occurred. A leave 545 of absence constitutes a continuation of the employment 546 relationship, except that a leave of absence without pay due to 547 disability may constitute termination if such member makes 548 application for and is approved for disability retirement in 549 accordance with s. 121.091(4). The department or state board may 550 require other evidence of termination as it deems necessary. 551 2. For retirements effective on or after July 1, 2010, if a 552 member is employed by any such employer within the next 6 553 calendar months, termination shall be deemed not to have 554 occurred. A leave of absence constitutes a continuation of the 555 employment relationship, except that a leave of absence without 556 pay due to disability may constitute termination if such member 557 makes application for and is approved for disability retirement 558 in accordance with s. 121.091(4). The department or state board 559 may require other evidence of termination as it deems necessary. 560 (b) “Termination” or “terminated” means for a member 561 electing to participate in the Deferred Retirement Option 562 Program thatoccurs whenthe memberprogram participantceases 563 all employment relationships with a participatinganemployer in 564 accordance with s. 121.091(13);,however: 565 1. For termination dates occurring before July 1, 2010, if 566 the memberparticipantis employed by any such employer within 567 the next calendar month, termination will be deemed not to have 568 occurred, except as provided in s. 121.091(13)(b)4.c. A leave of 569 absence shall constitute a continuation of the employment 570 relationship. 571 2. For termination dates occurring on or after July 1, 572 2010, if the memberparticipantbecomes employed by any such 573 employer within the next 6 calendar months, termination will be 574 deemed not to have occurred, except as provided in s. 575 121.091(13)(b)4.c. A leave of absence constitutes a continuation 576 of the employment relationship. 577 (c) Effective July 1, 2011, “termination” or “terminated” 578 means for a member receiving a refund of employee contributions 579 that the member ceases all employment relationships with a 580 participating employer for 3 calendar months. A leave of absence 581 for less than 3 calendar months constitutes a continuation of an 582 employment relationship. 583 (45)(a)“Vested” or “vesting” means the guarantee that a 584 member is eligible to receive a future retirement benefit upon 585 completion of the required years of creditable service for the 586 employee’s class of membership, even though the member may have 587 terminated covered employment before reaching normal or early 588 retirement date. Being vested does not entitle a member to a 589 disability benefit. Provisions governing entitlement to 590 disability benefits are set forth under s. 121.091(4). 591 (a)(b)Effective July 1, 2001, and for members initially 592 enrolled before July 1, 2011, a 6-year vesting requirement shall 593 be implemented for thedefined benefit program of theFlorida 594 Retirement System’s pension planSystem. Pursuant thereto: 595 1. Any member employed in a regularly established position 596 on July 1, 2001, who completes or has completed a total of 6 597 years of creditable service isshall be consideredvestedas598described in paragraph (a). 599 2. Any member not employed in a regularly established 600 position on July 1, 2001, shall be deemed vested upon completion 601 of 6 years of creditable service if, provided thatsuch member 602 is employed in a covered position for at least 1 work year after 603 July 1, 2001. However, anomember may notshallbe required to 604 complete more years of creditable service than would have been 605 required for that member to vest under retirement laws in effect 606 before July 1, 2001. 607 (b) Any member initially enrolled on or after July 1, 2011, 608 is vested upon completion of 10 years of creditable service. 609 (55) “Benefit” means any pension payment, lump-sum or 610 periodic, to a member, retiree, or beneficiary, basedpartially611or entirelyon employer and employee contributions as 612 applicable. 613 (59) “Payee” means a retiree or beneficiary of a retiree 614 who has received or is receiving a retirement benefit payment. 615 (65) “Division” means the Division of Retirement in the 616 department. 617 Section 7. Paragraphs (b), (c), and (d) of subsection (2) 618 of section 121.051, Florida Statutes, are amended, present 619 paragraphs (e) and (f) of that subsection are redesignated as 620 subsections (f) and (g), respectively, a new subsection (e) is 621 added to that subsection, and subsection (3) of that section is 622 amended, to read: 623 121.051 Participation in the system.— 624 (2) OPTIONAL PARTICIPATION.— 625 (b)1. The governing body of any municipality, metropolitan 626 planning organization, or special district in the state may 627 elect to participate in the Florida Retirement System upon 628 proper application to the administrator and may cover allor any629 of its units as approved by the Secretary of Health and Human 630 Services and the administrator. The department shall adopt rules 631 establishing proceduresprovisionsfor the submission of 632 documents necessary for such application. BeforePrior tobeing 633 approved for participationin the Florida Retirement System, the 634 governing body of aany suchmunicipality, metropolitan planning 635 organization, or special district that has a local retirement 636 system mustshallsubmit to the administrator a certified 637 financial statement showing the condition of the local 638 retirement systemas of a datewithin 3 months beforeprior to639 the proposed effective date of membership in the Florida 640 Retirement System. The statement must be certified by a 641 recognized accounting firm that is independent of the local 642 retirement system. All required documentsnecessary for643extending Florida Retirement System coveragemust be received by 644 the department for consideration at least 15 days beforeprior645tothe proposed effective date of coverage. If the governing 646 bodymunicipality, metropolitan planning organization, or647special districtdoes not comply with this requirement, the 648 department may require that the effective date of coverage be 649 changed. 650 2. A municipalityAny city, metropolitan planning 651 organization, or special district that has an existing 652 retirement system covering the employees in the units that are 653 to be brought under the Florida Retirement System may 654 participate only after holding a referendum in which all 655 employees in the affected units have the right to participate. 656 Only those employees electing coverage under the Florida 657 Retirement System by affirmative vote in thesaidreferendum are 658shall beeligible for coverage under this chapter, and those not 659 participating or electing not to be covered by the Florida 660 Retirement System shall remain in their present systems and are 661shallnotbeeligible for coverage under this chapter. After the 662 referendum is held, all future employees areshall becompulsory 663 members of the Florida Retirement System. 664 3. At the time of joining the Florida Retirement System, 665 the governing body of a municipalityany city, metropolitan 666 planning organization, or special district complying with 667 subparagraph 1. may elect to provide, or not provide, benefits 668 based on past service of officers and employees as described in 669 s. 121.081(1). However, if such employer elects to provide past 670 service benefits, such benefits must be provided for all 671 officers and employees of its covered group. 672 4. Once this election is made and approved it may not be 673 revoked, except pursuant to subparagraphs 5. and 6., and all 674 present officers and employees electing coverageunder this675chapterand all future officers and employees areshall be676 compulsory members of the Florida Retirement System. 677 5. Subject tothe conditions set forth insubparagraph 6., 678 the governing body of aanyhospital licensed under chapter 395 679 which is governed by the board of a special district as defined 680 in s. 189.403(1)or by the board of trustees of a public health 681 trust created under s. 154.07, hereinafter referred to as 682 “hospital district,” and which participates in the Florida 683 Retirement System, may elect to cease participation in the 684 system with regard to future employees in accordance with the 685 followingprocedure: 686 a. No more than 30 days and at least 7 days before 687 adopting a resolution to partially withdraw from theFlorida688Retirementsystem and establish an alternative retirement plan 689 for future employees, a public hearing must be held on the 690 proposed withdrawal and proposed alternative plan. 691 b. From 7 to 15 days before such hearing, notice of intent 692 to withdraw, specifying the time and place of the hearing, must 693 be provided in writing to employees of the hospital district 694 proposing partial withdrawal and must be published in a 695 newspaper of general circulation in the area affected, as 696 provided by ss. 50.011-50.031. Proof of publication mustof such697notice shallbe submitted to the departmentof Management698Services. 699 c. The governing body of aanyhospital district seeking to 700 partially withdraw from the system must, before such hearing, 701 have an actuarial report prepared and certified by an enrolled 702 actuary, as defined in s. 112.625(3), illustrating the cost to 703 the hospital district of providing, through the retirement plan 704 that the hospital district is to adopt, benefits for new 705 employees comparable to those provided under theFlorida706Retirementsystem. 707 d. Upon meeting all applicable requirements of this 708 subparagraph, and subject tothe conditions set forth in709 subparagraph 6., partial withdrawal from the system and adoption 710 of the alternative retirement plan may be accomplished by 711 resolutiondulyadopted by the hospital district board. The 712 hospital district board must provide written notice of such 713 withdrawal to the division by mailing a copy of the resolution 714 to the division, postmarked byno later thanDecember 15, 1995. 715 The withdrawal shall take effect January 1, 1996. 716 6. Following the adoption of a resolution under sub 717 subparagraph 5.d., all employees of the withdrawing hospital 718 district who were members ofparticipants intheFlorida719Retirementsystem beforeprior toJanuary 1, 1996, shall remain 720 as members ofparticipants inthe system for as long as they are 721 employees of the hospital district, and all rights, duties, and 722 obligations between the hospital district, the system, and the 723 employeesshallremain in full force and effect. Any employee 724 who is hired or appointed on or after January 1, 1996, may not 725 participate in theFlorida Retirementsystem, and the 726 withdrawing hospital district hasshall haveno obligation to 727 the system with respect to such employees. 728 (c) Employees of public community colleges or charter 729 technical career centers sponsored by public community colleges, 730 designated in s. 1000.21(3), who are members of the Regular 731 Class of the Florida Retirement System and who comply with the 732 criteria set forth in this paragraph and s. 1012.875 may, in 733 lieu of participating in the Florida Retirement System, elect to 734 withdraw from the system altogether and participate in the State 735 Community College System Optional Retirement Program provided by 736 the employing agency under s. 1012.875. 737 1. Through June 30, 2001, the cost to the employer for a 738 benefit under the optional retirement programsuch annuity739 equals the normal cost portion of the employer retirement 740 contribution which would be required if the employee were a 741 member of the Regular Class pension plandefined benefit742program, plus the portion of the contribution rate required by 743 s. 112.363(8) which would otherwise be assigned to the Retiree 744 Health Insurance Subsidy Trust Fund. Effective July 1, 2001, 745 each employer shall contribute on behalf of each member of 746participant inthe optional program an amount equal to 10.43 747 percent of the employee’sparticipant’sgross monthly 748 compensation. The employer shall deduct an amount for the 749 administration of the program. The employer shall contribute an 750 additional amount to the Florida Retirement System Trust Fund 751 equal to the unfunded actuarial accrued liability portion of the 752 Regular Class contribution rate. 753 2. The decision to participate in theanoptional 754 retirement program is irrevocable as long as the employee holds 755 a position eligible for participation, except as provided in 756 subparagraph 3. Any service creditable under the Florida 757 Retirement System is retained after the member withdraws from 758 the system; however, additional service credit in the system may 759 not be earned while a member of the optional retirement program. 760 3. An employee who has elected to participate in the 761 optional retirement program shall have one opportunity, at the 762 employee’s discretion, to transfer from the optional retirement 763 program to thedefined benefit program of theFlorida Retirement 764 System’s pension planSystemor to the investment plan 765 established under part II of this chapterPublic Employee766Optional Retirement Program, subject to the terms of the 767 applicable optional retirement program contracts. 768 a. If the employee chooses to move to the investment plan 769Public Employee Optional Retirementprogram, any contributions, 770 interest, and earnings creditable to the employee under the 771State Community College Systemoptional retirement program are 772 retained by the employee in theState Community College System773 optional retirement program, and the applicable provisions of s. 774 121.4501(4) govern the election. 775 b. If the employee chooses to move to the pension plan 776defined benefit program of the Florida Retirement System, the 777 employee shall receive service credit equal to his or her years 778 of service under theState Community College Systemoptional 779 retirement program. 780 (I) The cost for such credit is the amount representing the 781 present value of the employee’s accumulated benefit obligation 782 for the affected period of service. The cost shall be calculated 783 as if the benefit commencement occurs on the first date the 784 employee becomes eligible for unreduced benefits, using the 785 discount rate and other relevant actuarial assumptions that were 786 used to value the pensionFlorida Retirement System defined787benefitplan liabilities in the most recent actuarial valuation. 788 The calculation must include any service already maintained 789 under the pensiondefined benefitplan in addition to the years 790 under theState Community College Systemoptional retirement 791 program. The present value of any service already maintained 792 must be applied as a credit to total cost resulting from the 793 calculation. The division shall ensure that the transfer sum is 794 prepared using a formula and methodology certified by an 795 enrolled actuary. 796 (II) The employee must transfer from his or herState797Community College Systemoptional retirement program account and 798 from other employee moneys as necessary, a sum representing the 799 present value of the employee’s accumulated benefit obligation 800 immediately following the time of such movement, determined 801 assuming that attained service equals the sum of service in the 802 pension plandefined benefit programand service in theState803Community College Systemoptional retirement program. 804 4. Participation in the optional retirement program is 805 limited to employees who satisfy the following eligibility 806 criteria: 807 a. The employee ismust beotherwise eligible for 808 membership or renewed membership in the Regular Class of the 809 Florida Retirement System, as provided in s. 121.021(11) and 810 (12) or s. 121.122. 811 b. The employee ismust beemployed in a full-time position 812 classified in the Accounting Manual for Florida’s Public 813 Community Colleges as: 814 (I) Instructional; or 815 (II) Executive Management, Instructional Management, or 816 Institutional Management, and the, if acommunity college 817 determines that recruiting to fill a vacancy in the position is 818 to be conducted in the national or regional market, and the 819 duties and responsibilities of the position include the 820 formulation, interpretation, or implementation of policies, or 821 the performance of functions that are unique or specialized 822 within higher education and that frequently support the mission 823 of the community college. 824 c. The employee ismust beemployed in a position not 825 included in the Senior Management Service Class of the Florida 826 Retirement System, as described in s. 121.055. 827 5. Members ofParticipants inthe program are subject to 828 the same reemployment limitations, renewed membership 829 provisions, and forfeiture provisionsas areapplicable to 830 regular members of the Florida Retirement System under ss. 831 121.091(9), 121.122, and 121.091(5), respectively. A member 832participantwho receives a program distribution funded by 833 employer contributions isshall bedeemed to be retired from a 834 state-administered retirement system if the retireeparticipant835 is subsequently employed with an employer that participates in 836 the Florida Retirement System. 837 6. Eligible community college employees are compulsory 838 members of the Florida Retirement System until, pursuant to s. 839 1012.875, a written election to withdraw from the system and 840 participate in theState Community College Systemoptional 841 retirement program is filed with the program administrator and 842 received by the division. 843 a. A community college employee whose program eligibility 844 results from initial employment shallmustbe enrolled in the 845State Community College Systemoptional retirement program 846 retroactive to the first day of eligible employment. The 847 employer retirement contributions paid through the month of the 848 employee plan change shall be transferred to the community 849 college to the employee’s optional program account, and, 850 effective the first day of the next month, the employer shall 851 pay the applicable contributions based upon subparagraph 1. 852 b. A community college employee whose program eligibility 853 is due to the subsequent designation of the employee’s position 854 as one of those specified in subparagraph 4., or due to the 855 employee’s appointment, promotion, transfer, or reclassification 856 to a position specified in subparagraph 4., must be enrolled in 857 the program on the first day of the first full calendar month 858 that such change in status becomes effective. The employer 859 retirement contributions paid from the effective date through 860 the month of the employee plan change must be transferred to the 861 community college to the employee’s optional program account, 862 and, effective the first day of the next month, the employer 863 shall pay the applicable contributions based upon subparagraph 864 1. 865 7. Effective July 1, 2003, through December 31, 2008, any 866 memberparticipantof theState Community College System867 optional retirement program who has service credit in the 868 pensiondefined benefitplan of the Florida Retirement System 869 for the period between his or her first eligibility to transfer 870 from the pensiondefined benefitplan to the optional retirement 871 program and the actual date of transfer may, during employment, 872 transfer to the optional retirement program a sum representing 873 the present value of the accumulated benefit obligation under 874 the pension plandefined benefit retirement programfor the 875 period of service credit. Upon transfer, all service credit 876 previously earned under the pension plandefined benefit program877of the Florida Retirement Systemduring this period is nullified 878 for purposes of entitlement to a future benefit under the 879 pension plandefined benefit program ofthe Florida Retirement880System. 881 (d) The governing body of a charter school or a charter 882 technical career center may elect to participate in the system 883 upon proper application to the administrator and shall cover its 884 units as approved by the Secretary of Health and Human Services 885 and the administrator. Once this election is made and approved, 886 it may not be revoked, and all present officers and employees 887 selecting coverage under this chapter and all future officers 888 and employees shall be compulsory members of the Florida 889 Retirement System. 890 (e) All eligible employees initially enrolled on or after 891 July 1, 2011, who are members of the Elected Officers’ Class and 892 Senior Management Class are compulsory members of the investment 893 plan and membership in the revision plan is not permitted except 894 as provided in s. 121.591, F.S. 895 (3) SOCIAL SECURITY COVERAGE.—Social security coverage 896 shall be provided for all officers and employees who become 897 members underthe provisions ofsubsection (1) or subsection 898 (2). Any modification of the present agreement with the Social 899 Security Administration, or referendum required under the Social 900 Security Act, for the purpose of providing social security 901 coverage for any member shall be requested by the state agency 902 in compliance with the applicable provisions of the Social 903 Security Act governing such coverage. However, retroactive 904 social security coverage for serviceprior to December 1, 1970,905 with the employer before December 1, 1970, mayshallnot be 906 provided for aanymember who was not covered under the 907 agreement as of November 30, 1970. The employer-paid employee 908 contributions specified in s. 121.71(2) are subject to taxes 909 imposed under the Federal Insurance Contributions Act, 26 U.S.C. 910 ss. 3101-3128. 911 Section 8. Paragraph (b) of subsection (5), paragraph (a) 912 of subsection (7), and paragraph (c) of subsection (9) of 913 section 121.0515, Florida Statutes, are amended to read: 914 121.0515 Special risk membership.— 915 (5) CREDIT FOR PAST SERVICE.—A special risk member may 916 purchase retirement credit in the Special Risk Class based upon 917 past service, and may upgrade retirement credit for such past 918 service, to the extent of 2 percent of the member’s average 919 monthly compensation as specified in s. 121.091(1)(a) for such 920 service as follows: 921 (b) Contributions for upgrading the additional special risk 922 credit arepursuant to this subsection shall beequal to the 923 difference in the employer and, if applicable, employee 924 contributions paid and the special risk percentage rate of gross 925 salary in effect at the time of purchase for the period being 926 claimed, plus interest thereon at the rate of 4 percent a year 927 compounded annually from the date of such service until July 1, 928 1975, and 6.5 percent a year thereafter until the date of 929 payment.ThisPast service may be purchased by the member or by 930 the employer on behalf of the member. 931 (7) RETENTION OF SPECIAL RISK NORMAL RETIREMENT DATE.— 932 (a) A special risk member who is moved or reassigned to a 933 nonspecial risk law enforcement, firefighting, correctional, or 934 emergency medical care administrative support position within 935withthe same agency, or who is subsequently employed in such a 936 position with any law enforcement, firefighting, correctional, 937 or emergency medical care agency under the Florida Retirement 938 System, shall participate in the Special Risk Administrative 939 Support Class andshallearn credit for such service at the same 940 percentage rate as that earned by a regular member. 941 Notwithstandingthe provisions ofsubsection (4), service in 942suchan administrative support positionshall, for purposes of 943 s. 121.091, appliesapplytoward satisfaction of the special 944 risk normal retirement date, as defined in s. 121.021(29)(b)if, 945provided that,while in such position, the member remains 946 certified as a law enforcement officer, firefighter, 947 correctional officer, emergency medical technician, or 948 paramedic; remains subject to reassignment at any time to a 949 position qualifying for special risk membership; and completes 950 an aggregate of 6 or more years of service as a designated 951 special risk member beforeprior toretirement. 952 (9) CREDIT FOR UPGRADED SERVICE.— 953 (c) Any member of the Special Risk Class who has earned 954 creditable service in another membership class of the Florida 955 Retirement System in a position with the Department of Law 956 Enforcement or the Division of State Fire Marshal and became 957 covered by the Special Risk Class as described in paragraph 958 (2)(i), or with a local government law enforcement agency or 959 medical examiner’s office and became covered by the Special Risk 960 Class as described in paragraph (2)(j), which service is within 961 the purview of the Special Risk Class, and is employed in such 962 position on or after July 1, 2008, may purchase additional 963 retirement credit to upgrade such service to Special Risk Class 964 service, to the extent of the percentages of the member’s 965 average final compensation provided in s. 121.091(1)(a)2. The 966 cost for such credit mustshallbe an amount representing the 967 actuarial accrued liability for the difference in accrual value 968 during the affected period of service. The cost shall be 969 calculated using the discount rate and other relevant actuarial 970 assumptions that were used to value the Florida Retirement 971 System’s pensionSystem defined benefitplan liabilities in the 972 most recent actuarial valuation. The division shall ensure that 973 the transfer sum is prepared using a formula and methodology 974 certified by an enrolled actuary. The cost must be paid 975 immediately upon notification by the division. The local 976 government employer may purchase the upgraded service credit on 977 behalf of the member if the member has been employed by that 978 employer for at least 3 years. 979 Section 9. Paragraphs (a) and (d) of subsection (4) and 980 paragraph (b) of subsection (7) of section 121.052, Florida 981 Statutes, are amended, present paragraph (c) of subsection (7) 982 of that section is redesignated as paragraph (d), a new 983 paragraph (c) is added to that subsection, and subsection (8) of 984 that section is amended, to read: 985 121.052 Membership class of elected officers.— 986 (4) PARTICIPATION BY ELECTED OFFICERS SERVING A SHORTENED 987 TERM DUE TO APPORTIONMENT, FEDERAL INTERVENTION, ETC.— 988 (a) AnAny dulyelected officer whose term of office was 989 shortened by legislative or judicial apportionment pursuant to 990the provisions ofs. 16, Art. III of the State Constitution may, 991 after the term of office to which he or she was elected is 992 completed, pay into the Florida Retirement System Trust Fund the 993 amount of contributions that would have been made by the officer 994 or the officer’s employer on his or her behalf, plus 4 percent 995 interest compounded annually from the date he or she left office 996 until July 1, 1975, and 6.5 percent interest compounded annually 997 thereafter, and may receive service credit for the length of 998 time the officer would have served if such term had not been 999 shortened by apportionment. 1000 (d)1. Any justice or judge, or any retired justice or judge 1001 who retired before July 1, 1993, who has attained the age of 70 1002 years and who is prevented under s. 8, Art. V of the State 1003 Constitution from completing his or her term of office because 1004 of age may elect to purchase credit for all or a portion of the 1005 months he or she would have served during the remainder of the 1006 term of office; however,buthe or she may claim those months 1007 only after the date the service would have occurred. The justice 1008 or judge must pay into the Florida Retirement System Trust Fund 1009 the amount of contributions that would have been made by the 1010 employer on his or her behalf for the period of time being 1011 claimed, plus 6.5 percent interest thereon compounded each June 1012 30 from the date he or she left office, in order to receive 1013 service credit in this class for the period of time being 1014 claimed. After the date the service would have occurred, and 1015 upon payment of the required contributions, the retirement 1016 benefit of a retired justice or judge shallwillbe adjusted 1017 prospectively to include thethisadditional creditable service; 1018 however, such adjustment may be made only once. 1019 2. Any justice or judge who does not seek election to a 1020 subsequent term of office because he or she would be prevented 1021 under s. 8, Art. V of the State Constitution from completing 1022 such term of office upon attaining the age of 70 years may elect 1023 to purchase service credit for service as a temporary judge as 1024 assigned by the court if the temporary assignmentfollows1025 immediately follows the last full term of office served and the 1026 purchase is limited to the number of months of service needed to 1027 vest retirement benefits. To receive retirement credit forsuch1028 temporary service beyond termination, the justice or judge must 1029 pay into the Florida Retirement System Trust Fund the amount of 1030 contributions that would have been made by the justice or judge 1031 and the employer on his or her behalf had he or she continued in 1032 office for the period of time being claimed, plus 6.5 percent 1033 interest thereon compounded each June 30 from the date he or she 1034 left office. 1035 (7) CONTRIBUTIONS.— 1036 (b) The employer paying the salary of a member of the 1037 Elected Officers’ Class shall contribute an amount as specified 1038 in this subsection or s. 121.71, as appropriate, which shall 1039 constitute theentireemployer retirement contribution with 1040 respect to such member. The employer shall also withhold one 1041 half of the entire contribution of the member required for 1042 social security coverage. Effective July 1, 2011, members of the 1043 Elected Officers’ Class shall pay retirement contributions as 1044 specified in s. 121.71. 1045 (c) If a member of the Elected Officers’ Class ceases to 1046 fill an office covered by this class for 3 calendar months for 1047 any reason other than retirement and has not been employed in 1048 any capacity with any participating employer for 3 calendar 1049 months, the member is entitled to receive a refund of all 1050 contributions he or she made to the pension plan, subject to the 1051 restrictions otherwise provided in this chapter. Partial refunds 1052 are not permitted. The refund may not include any interest 1053 earnings on contributions to the pension plan. Employer 1054 contributions made on behalf of the member are not refundable. A 1055 member may not receive a refund of employee contributions if a 1056 pending or an approved qualified domestic relations order is 1057 filed against the member’s retirement account. By obtaining a 1058 refund of contributions, a member waives all rights under the 1059 Florida Retirement System, including the health insurance 1060 subsidy under this subsection, to the service credit represented 1061 by the refunded contributions, except the right to purchase 1062 prior service credit in accordance with s. 121.081(2). 1063 (8) NORMAL RETIREMENT DATE; VESTING REQUIREMENT.—A member 1064 of the Elected Officers’ Class hasshall havethe same normal 1065 retirement date as defined in s. 121.021(29)for a member of the 1066 regular class of the Florida Retirement System. AAnypublic 1067 service commissioner who was removed from the Elected State 1068 Officers’ Class on July 1, 1979, after attaining at least 8 1069 years of creditable service in that class isshall beconsidered 1070 to have reached the normal retirement date upon attaining the 1071 required age as provided62 as requiredin s. 121.021(29)(a). 1072 Section 10. Paragraph (a) of subsection (7) of section 1073 121.053, Florida Statutes, is amended to read: 1074 121.053 Participation in the Elected Officers’ Class for 1075 retired members.— 1076 (7) A member who is elected or appointed to an elective 1077 office and who is participating in the Deferred Retirement 1078 Option Program is not subject to termination as defined in s. 1079 121.021, or reemployment limitations as provided in s. 1080 121.091(9), until the end of his or her current term of office 1081 or, if the officer is consecutively elected or reelected to an 1082 elective office eligible for coverage under the Florida 1083 Retirement System, until he or she no longer holds an elective 1084 office, as follows: 1085 (a) At the end of the 60-month DROP period: 1086 1. The officer’s DROP account may not accrue additional 1087 monthly benefits, but does continue to earn interest as provided 1088 in s. 121.091(13). However, an officer whose DROP participation 1089 begins on or after July 1, 2010, may not continue to earn such 1090 interest. 1091 2. Except for unfunded actuarial liability and health 1092 insurance subsidy contributions required under ss. 121.71(5) and 1093 121.76, retirement contributions are not required of the 1094 employer of the elected officer and additional retirement credit 1095 may not be earned under the Florida Retirement System. 1096 Section 11. Paragraphs (b) and (j) of subsection (1), 1097 paragraph (b) of subsection (3), and paragraphs (c), (d), and 1098 (e) of subsection (6) of section 121.055, Florida Statutes, are 1099 amended, present paragraph (c) of subsection (3) of that section 1100 is redesignated as paragraph (d), and a new paragraph (c) is 1101 added to that subsection, to read: 1102 121.055 Senior Management Service Class.—There is hereby 1103 established a separate class of membership within the Florida 1104 Retirement System to be known as the “Senior Management Service 1105 Class,” which shall become effective February 1, 1987. 1106 (1) 1107 (b)1. Except as provided in subparagraph 2., effective 1108 January 1, 1990, participation in the Senior Management Service 1109 Class isshall becompulsory for the president of each community 1110 college, the manager of each participating city or county, and 1111 all appointed district school superintendents. Effective January 1112 1, 1994, additional positions may be designated for inclusion in 1113 the Senior Management Service Class ifof the Florida Retirement1114System, provided that: 1115 a. Positions to be included in the class areshall be1116 designated by the local agency employer. Notice of intent to 1117 designate positions for inclusion in the class mustshallbe 1118 published once a week for 2 consecutive weeks in a newspaper of 1119 general circulation published in the county or counties 1120 affected, as provided underinchapter 50. 1121 b. Up to 10 nonelective full-time positions may be 1122 designated for each local agency employer reporting to the 1123 departmentof Management Services; for local agencies with 100 1124 or more regularly established positions, additional nonelective 1125 full-time positions may be designated, up tonot to exceed1 1126 percent of the regularly established positions within the 1127 agency. 1128 c. Each position added to the class must be a managerial or 1129 policymaking position filled by an employee who is not subject 1130 to continuing contract and serves at the pleasure of the local 1131 agency employer without civil service protection, and who: 1132 (I) Heads an organizational unit; or 1133 (II) Has responsibility to effect or recommend personnel, 1134 budget, expenditure, or policy decisions in his or her areas of 1135 responsibility. 1136 2. In lieu of participation in the Senior Management 1137 Service Class, members of theSenior Management Serviceclass, 1138 pursuant tothe provisions ofsubparagraph 1., may withdraw from 1139 the Florida Retirement System altogether. The decision to 1140 withdraw from theFlorida Retirementsystem isshall be1141 irrevocableforas long as the employee holds thesuch a1142 position. Any service creditable under the Senior Management 1143 Service Class shall be retained after the member withdraws from 1144 theFlorida Retirementsystem; however, additional service 1145 credit in the Senior Management Service Class mayshallnot be 1146 earned after such withdrawal. Such members areshallnotbe1147 eligible to participate in the Senior Management Service 1148 Optional Annuity Program. 1149 3. Effective January 1, 2006, through June 30, 2006, an 1150 employee who has withdrawn from the Florida Retirement System 1151 under subparagraph 2. has one opportunity to elect to 1152 participate ineitherthe pension plan or investment plan 1153defined benefit program or the Public Employee Optional1154Retirement Programof the Florida Retirement System. 1155 a. If the employee elects to participate in the investment 1156 planPublic Employee Optional Retirement Program, membership is 1157shall beprospective, and the applicable provisions of s. 1158 121.4501(4) shall govern the election. 1159 b. If the employee elects to participate in the pension 1160 plandefined benefit program of theFlorida Retirement System, 1161 the employee shall, upon payment to the system trust fund of the 1162 amount calculated under sub-sub-subparagraph (I), receive 1163 service credit for prior service based upon the time during 1164 which the employee had withdrawn from the system. 1165 (I) The cost for such credit shall be an amount 1166 representing the actuarial accrued liability for the affected 1167 period of service. The cost shall be calculated using the 1168 discount rate and other relevant actuarial assumptions that were 1169 used to value pensionthe Florida Retirement System defined1170benefitplan liabilities in the most recent actuarial valuation. 1171 The calculation mustshallinclude any service already 1172 maintained under the pensiondefined benefitplan in addition to 1173 the period of withdrawal. The actuarial accrued liability 1174 attributable to any service already maintained under the pension 1175defined benefitplan shall be applied as a credit to the total 1176 cost resulting from the calculation. The division mustshall1177 ensure that the transfer sum is prepared using a formula and 1178 methodology certified by an actuary. 1179 (II) The employee must transfer a sum representing the net 1180 cost owed for the actuarial accrued liability in sub-sub 1181 subparagraph (I) immediately following the time of such 1182 movement, determined assuming that attained service equals the 1183 sum of service in the pension plandefined benefit programand 1184 the period of withdrawal. 1185 (j) Except as may otherwise be provided, aanymember of 1186 the Senior Management Service Class may purchase additional 1187 retirement credit in such class for creditable service within 1188 the purview of the Senior Management Service Class retroactive 1189 to February 1, 1987, and may upgrade retirement credit for such 1190 service,to the extent of 2 percent of the member’s average 1191 monthly compensation as specified in paragraph (4)(d) for such 1192 service. Contributions for upgradingtheadditional Senior 1193 Management Service credit arepursuant to this paragraph shall1194beequal to the difference in the employer and, if applicable, 1195 employee contributions paid and the Senior Management Service 1196 Class contribution rate as a percentage of gross salary in 1197 effect for the period being claimed, plus interest thereon at 1198 the rate of 6.5 percent a year, compounded annually until the 1199 date of payment. TheThisservice credit may be purchased by the 1200 employer on behalf of the member. 1201 (3) 1202 (b) The employer or member of the Senior Management Service 1203 Class, as applicable,paying the salary of a member of the1204Senior Management Service Classshall contribute an amount as 1205 specified in this section or s. 121.71, as appropriate, which 1206 shall constitute the entireemployerretirement contribution 1207 with respect to such member. The employer shall also withhold 1208 one-half of the entire contribution of the member required for 1209 social security coverage. Effective July 1, 2011, each member 1210 shall pay employee contributions as specified in s. 121.71. 1211 (c) Upon termination of employment from all participating 1212 employers for 3 calendar months as defined in s. 121.021(39)(c) 1213 for any reason other than retirement, a member may receive a 1214 refund of all contributions he or she has made to the pension 1215 plan, subject to the restrictions otherwise provided in this 1216 chapter. Partial refunds are not permitted. The refund may not 1217 include any interest earnings on the contributions for a member 1218 of the pension plan. Employer contributions made on behalf of 1219 the member are not refundable. A member may not receive a refund 1220 of employee contributions if a pending or an approved qualified 1221 domestic relations order is filed against the member’s 1222 retirement account. By obtaining a refund of contributions, a 1223 member waives all rights under the Florida Retirement System and 1224 the health insurance subsidy provided under s. 112.363 to the 1225 service credit represented by the refunded contributions, except 1226 the right to purchase prior service credit in accordance with s. 1227 121.081(2). 1228 (6) 1229 (c) Participation.— 1230 1. An eligible employee who is employed on or before 1231 February 1, 1987, may elect to participate in the optional 1232 annuity program in lieu of participatingparticipationin the 1233 Senior Management Service Class. Such election must be made in 1234 writing and filed with the department and the personnel officer 1235 of the employer on or before May 1, 1987. An eligible employee 1236 who is employed on or before February 1, 1987, and who fails to 1237 make an election to participate in the optional annuity program 1238 by May 1, 1987, shall be deemed to have elected membership in 1239 the Senior Management Service Class. 1240 2. Except as provided in subparagraph 6., an employee who 1241 becomes eligible to participate in the optional annuity program 1242 by reason of initial employment commencing after February 1, 1243 1987, may, within 90 days after the date of commencing 1244 employment, elect to participate in the optional annuity 1245 program. Such election must be made in writing and filed with 1246 the personnel officer of the employer. An eligible employee who 1247 does not within 90 days after commencing employment elect to 1248 participate in the optional annuity program shall be deemed to 1249 have elected membership in the Senior Management Service Class. 1250 3. A person who is appointed to a position in the Senior 1251 Management Service Class and who is a member of an existing 1252 retirement system or the Special Risk or Special Risk 1253 Administrative Support Classes of the Florida Retirement System 1254 may elect to remain in such system or class in lieu of 1255 participatingparticipationin the Senior Management Service 1256 Class or optional annuity program. Such election must be made in 1257 writing and filed with the department and the personnel officer 1258 of the employer within 90 days afterofsuch appointment. AnAny1259 eligible employee who fails to make an election to participate 1260 in the existing system, the Special Risk Class of the Florida 1261 Retirement System, the Special Risk Administrative Support Class 1262 of the Florida Retirement System, or the optional annuity 1263 program shall be deemed to have elected membership in the Senior 1264 Management Service Class. 1265 4. Except as provided in subparagraph 5., an employee’s 1266 election to participate in the optional annuity program is 1267 irrevocable if the employee continues to be employed in an 1268 eligible position and continues to meet the eligibility 1269 requirements set forth in this paragraph. 1270 5. Effective from July 1, 2002, through September 30, 2002, 1271 ananyactive employee in a regularly established position who 1272 has elected to participate in the Senior Management Service 1273 Optional Annuity Program has one opportunity to choose to move 1274 from the Senior Management Service Optional Annuity Program to 1275 the Florida Retirement System’s pension planSystem defined1276benefit program. 1277 a. The election must be made in writing and must be filed 1278 with the department and the personnel officer of the employer 1279 before October 1, 2002, or, in the case of an active employee 1280 who is on a leave of absence on July 1, 2002, within 90 days 1281 after the conclusion of the leave of absence. This election is 1282 irrevocable. 1283 b. The employee shall receive service credit under the 1284 pension plandefined benefit program of the Florida Retirement1285Systemequal to his or her years of service under the Senior 1286 Management Service Optional Annuity Program. The cost for such 1287 credit is the amount representing the present value of that 1288 employee’s accumulated benefit obligation for the affected 1289 period of service. 1290 c. The employee must transfer the total accumulated 1291 employer contributions and earnings on deposit in his or her 1292 Senior Management Service Optional Annuity Program account. If 1293 the transferred amount is not sufficient to pay the amount due, 1294 the employee must pay a sum representing the remainder of the 1295 amount due. The employee may not retain any employer 1296 contributions or earningsthereonfrom the Senior Management 1297 Service Optional Annuity Program account. 1298 6. A retiree of a state-administered retirement system who 1299 is initially reemployed on or after July 1, 2010, may not renew 1300 membership in the Senior Management Service Optional Annuity 1301 Program. 1302 (d) Contributions.— 1303 1.a. Through June 30, 2001, each employer shall contribute 1304 on behalf of each member ofparticipant inthe Senior Management 1305 Service Optional Annuity Program an amount equal to the normal 1306 cost portion of the employer retirement contribution which would 1307 be required if the employeeparticipantwere a Senior Management 1308 Service Class member of the Florida Retirement System’s pension 1309 planSystem defined benefit program, plus the portion of the 1310 contribution rate required in s. 112.363(8) whichthatwould 1311 otherwise be assigned to the Retiree Health Insurance Subsidy 1312 Trust Fund. 1313 b. Effective July 1, 2001, each employer shall contribute 1314 on behalf of each member ofparticipant inthe optional annuity 1315 program an amount equal to 12.49 percent of the employee’s 1316participant’sgross monthly compensation. 1317 c. Effective July 1, 2011, each member of the optional 1318 annuity program shall contribute an amount equal to the employee 1319 contribution required in s. 121.71(3). The employer shall 1320 contribute on behalf of each such employee an amount equal to 1321 the difference between 12.49 percent of the employee’s gross 1322 monthly compensation and the amount equal to the employee’s 1323 required contribution based on the employee’s gross monthly 1324 compensation. 1325 d.The department shall deduct an amount approved by the1326Legislature to provide for the administration of this program.1327ThePayment of the contributions, including contributions made 1328 by the employee,to the optional program which is required by1329this subparagraph for each participantshall be made by the 1330 employer to the department, which shall forward the 1331 contributions to the designated company or companies contracting 1332 for payment of benefits for members ofthe participant underthe 1333 optional annuity program. The department shall deduct an amount 1334 approved by the Legislature to provide for the administration of 1335 the program. 1336 2. Each employer shall contribute on behalf of each member 1337 ofparticipant inthe Senior Management Service Optional Annuity 1338 Program an amount equal to the unfunded actuarial accrued 1339 liability portion of the employer contribution which would be 1340 required for members of the Senior Management Service Class in 1341 the Florida Retirement System. This contribution shall be paid 1342 to the department for transfer to the Florida Retirement System 1343 Trust Fund. 1344 3. An Optional Annuity Program Trust Fund shall be 1345 established in the State Treasury and administered by the 1346 department to make payments to provider companies on behalf of 1347 the optional annuity program membersparticipants, and to 1348 transfer the unfunded liability portion of the state optional 1349 annuity program contributions to the Florida Retirement System 1350 Trust Fund. 1351 4. Contributions required for social security by each 1352 employer and each employeeparticipant, in the amount required 1353 for social security coverage as now or hereafter may be provided 1354 by the federal Social Security Act, shall be maintained for each 1355 member ofparticipant inthe Senior Management Service 1356 retirement program and areshall bein addition to the 1357 retirement contributions specified in this paragraph. 1358 5. Each member ofparticipant intheSenior Management1359Serviceoptional annuity program may contribute by way of salary 1360 reduction or deduction a percentage amount of the employee’s 1361participant’sgross compensation not to exceed the percentage 1362 amount contributed by the employer to the optional annuity 1363 program. Payment of the employee’sparticipant’scontributions 1364 shall be made by the employer to the department, which shall 1365 forward the contributions to the designated company or companies 1366 contracting for payment of benefits for membersthe participant1367 under the program. 1368 (e) Benefits.— 1369 1. Benefits under the Senior Management Service Optional 1370 Annuity Program are payable only to members ofparticipants in1371 the program, or their beneficiaries as designated by the member 1372participantin the contract with the provider company, and must 1373 be paid by the designated company in accordance with the terms 1374 of the annuity contract applicable to the memberparticipant. A 1375 memberparticipantmust be terminated from all employment 1376 relationships with Florida Retirement System employers as 1377 provided in s. 121.021(39) to begin receiving the employer 1378 funded and employee-funded benefit. Benefits funded by employer 1379 and employee contributions are payable under the terms of the 1380 contract to the memberparticipant, his or her beneficiary, or 1381 his or her estate, in addition to: 1382 a. A lump-sum payment to the beneficiary upon the death of 1383 the memberparticipant; 1384 b. A cash-out of a de minimis account upon the request of a 1385 former memberparticipantwho has been terminated for a minimum 1386 of 6 calendar months from the employment that entitled him or 1387 her to optional annuity program participation. Such cash-out 1388 must be a complete liquidation of the account balance with that 1389 company and is subject to the Internal Revenue Code; 1390 c. A mandatory distribution of a de minimis account of a 1391 former memberparticipantwho has been terminated for a minimum 1392 of 6 calendar months from the employment that entitled him or 1393 her to optional annuity program participation as authorized by 1394 the department; or 1395 d. A lump-sum direct rollover distribution whereby all 1396 accrued benefits, plus interest and investment earnings, are 1397 paid from the member’sparticipant’saccount directly to the 1398 custodian of an eligible retirement plan, as defined in s. 1399 402(c)(8)(B) of the Internal Revenue Code, on behalf of the 1400 memberparticipant. 1401 2. Benefits are not payable for employee hardships, 1402 unforeseeable emergencies, loans, medical expenses, educational 1403 expenses, purchase of a principal residence, payments necessary 1404 to prevent eviction or foreclosure on an employee’s principal 1405 residence, or any other reason before termination from all 1406 employment relationships with participating employers, as 1407 provided in s. 121.021(39). 1408 3.2.The benefits payable to any person under theSenior1409Management Serviceoptional annuity program, and any 1410 contribution accumulated under such program, are not subject to 1411 assignment, execution, or attachment or to any legal process 1412whatsoever. 1413 4.3.Except as provided in subparagraph 5.4., a member 1414participantwho terminates employment and receives a 1415 distribution, including a rollover or trustee-to-trustee 1416 transfer, funded by employer or employee contributions isshall1417bedeemed to be retired from a state-administered retirement 1418 system if the retireeparticipantis subsequently employed with 1419 an employer that participates in the Florida Retirement System. 1420 5.4.A memberparticipantwho receives optional annuity 1421 program benefits funded by employer or employee contributions as 1422 a mandatory distribution of a de minimis account authorized by 1423 the department is not considered a retiree. 1424 1425 As used in this paragraph, a “de minimis account” means an 1426 account with a provider company containing employer or employee 1427 contributions and accumulated earnings of not more than $5,000 1428 made under this chapter. 1429 Section 12. Subsections (2) and (5) and paragraph (c) of 1430 subsection (6) of section 121.071, Florida Statutes, are 1431 amended, present paragraph (d) of subsection (6) of that section 1432 is redesignated as paragraph (e), and a new paragraph (d) is 1433 added to that subsection, to read: 1434 121.071 Contributions.—Contributions to the system shall be 1435 made as follows: 1436 (2)(a) Effective January 1, 1975, or October 1, 1975, as 1437 applicable, and through June 30, 2011, each employer shall make 1438accomplishthe contribution required by subsection (1) by a 1439 procedure in which no employee’s gross salary isshall be1440 reduced. Effective July 1, 2011, each employee, and his or her 1441 employer, shall pay retirement contributions as specified in s. 1442 121.71. 1443 (b) Upon termination of employment from all participating 1444 employers for 3 calendar months as defined in s. 121.021(39)(c) 1445 for any reason other than retirement, a member may receive a 1446shall be entitled to a fullrefund of allthecontributions he 1447 or shehasmade to the pensionprior or subsequent to1448participation in the noncontributoryplan, subject tothe1449 restrictions otherwise provided in this chapter. Partial refunds 1450 are not permitted. The refund may not include any interest 1451 earnings on the contributions for a member of the pension plan. 1452 Employer contributions made on behalf of the member are not 1453 refundable. A member may not receive a refund of employee 1454 contributions if a pending or an approved qualified domestic 1455 relations order is filed against his or her retirement account. 1456 By obtaining a refund of contributions, a member waives all 1457 rights under the Florida Retirement System and the health 1458 insurance subsidy to the service credit represented by the 1459 refunded contributions, except the right to purchase prior 1460 service credit in accordance with s. 121.081(2). 1461 (5) Contributions made in accordance with subsections (1), 1462 (2), (3), and (4), and s. 121.71 shall be paidby the employer1463 into the system trust funds in accordance with rules adopted by 1464 the administrator pursuant to chapter 120, except asmay be1465 otherwise specified herein. Effective July 1, 2002, 1466 contributions paid under subsections (1) and (4) and 1467 accompanying payroll data are due and payable byno later than1468 the 5th working day of the month immediately following the month 1469 during which the payroll period ended. 1470 (6) 1471 (c) By obtaining a refund of contributions, a member waives 1472 all rights under the Florida Retirement System, including the 1473 health insurance subsidy under subsection (4), to the service 1474 credit represented by the refunded contributions, except the 1475 right to purchasehis or herprior service credit in accordance 1476 with s. 121.081(2). 1477 (d) If a member or former member of the pension plan 1478 receives an invalid refund from the Florida Retirement System 1479 Trust Fund, such person must repay the full amount of the 1480 refund, plus interest at 6.5 percent compounded annually on each 1481 June 30 from the date of refund until full repayment is made. 1482 The invalid refund must be repaid before the member retires or, 1483 if applicable, transfers to the investment plan. 1484 Section 13. Paragraphs (b) and (c) of subsection (1) and 1485 subsection (2) of section 121.081, Florida Statutes, are amended 1486 to read: 1487 121.081 Past service; prior service; contributions. 1488 Conditions under which past service or prior service may be 1489 claimed and credited are: 1490 (1) 1491 (b) Past service earned after January 1, 1975, may be 1492 claimed by officers or employees of a municipality, metropolitan 1493 planning organization, charter school, charter technical career 1494 center, or special district who become a covered group under 1495 this system. The governing body of a covered group may elect to 1496 provide benefits for past service earned after January 1, 1975, 1497 in accordance with this chapter., andThe cost for such past 1498 service is established by applying the following formula: The 1499 employer shall contribute an amount equal to the employer or 1500 employee contribution rate in effect at the time the service was 1501 earned, as applicable, multiplied by the employee’s gross salary 1502 for each year of past service claimed, plus 6.5 percent6.51503percentinterest thereon, compounded annually, forfiguredon1504 each year of past service, with interest compounded from date of 1505 annual salary earned until date of payment. 1506 (c) If anShould theemployer does not elect to provide 1507 past service for the member on the date of joining the system, 1508thenthe member may claim and pay for the service as provided in 1509same, based onparagraphs (a) and (b). 1510 (2) Prior service, as defined in s. 121.021(19), may be 1511 claimed as creditable service under the Florida Retirement 1512 System after a member has been reemployed for 1 complete year of 1513 creditable servicewithin a period of 12 consecutive months, 1514 except as provided in paragraph (c). Service performed as a 1515 memberparticipantof the optional retirement program for the 1516 State University System under s. 121.35 or the Senior Management 1517 Service Optional Annuity Program under s. 121.055 may be used to 1518 satisfy the reemployment requirement of 1 complete year of 1519 creditable service. The member mayshallnotbe permitted to1520 make any contributions for prior service until after completion 1521 of the 1 year of creditable service. If a member does not wish 1522 to claim credit for all of his or her prior service, the service 1523 the member claims must be the most recent period of service. The 1524 required contributions for claiming the various types of prior 1525 service are: 1526 (a) For prior service performed beforeprior tothe date 1527 the system becomes noncontributory for the member and for which 1528 the member had credit under one of the existing retirement 1529 systems and received a refund of contributions upon termination 1530 of employment, the member shall contribute 4 percent of all 1531 salary received during the period being claimed, plus 4 percent 15324-percentinterest compounded annually from date of refund until 1533 July 1, 1975, and 6.5 percent6.5-percentinterest compounded 1534 annually thereafter, until full payment is made to the Florida 1535 Retirement System Trust Fund, and shall receive credit in the 1536 Regular Class. A member who elected to transfer to the Florida 1537 Retirement System from an existing system may receive credit for 1538 prior service under the existing system if he or she was 1539 eligible under the existing system to claim the prior service at 1540 the time of the transfer. Contributions for such prior service 1541 shall be determined by the applicable provisions of the system 1542 under which the prior service is claimed and shall be paid by 1543 the member, with matching contributions paid by the employer at 1544 the time the service was performed. Effective July 1, 1978, the 1545 account of a person who terminated under s. 238.05(3) may not be 1546 charged interest for contributions that remained on deposit in 1547 the Annuity Savings Trust Fund established under chapter 238, 1548 upon retirement under this chapter or chapter 238. 1549 (b) For prior service performed beforeprior tothe date 1550 the system becomes noncontributory for the member and for which 1551 the member had credit under the Florida Retirement System and 1552 received a refund of contributions upon termination of 1553 employment, the member shall contribute at the rate that was 1554 required of him or her during the period of service being 1555 claimed, on all salary received during such period, plus 4 1556 percent4-percentinterest compounded annually from date of 1557 refund until July 1, 1975, and 6.5 percent6.5-percentinterest 1558 compounded annually thereafter, until the full payment is made 1559 to the Florida Retirement System Trust Fund, andshallreceive 1560 credit in the membership class in which the member participated 1561 during the period claimed. 1562 (c) For prior service as defined in s. 121.021(19)(b) and 1563 (c) during which no contributions were made because the member 1564 did not participate in a retirement system, the member shall 1565 contribute 14.38 percent of all salary received during such 1566 period or 14.38 percent of $100 per month during such period, 1567 whichever is greater, plus 4 percent4-percentinterest 1568 compounded annually from the first year of service claimed until 1569 July 1, 1975, and 6.5 percent6.5-percentinterest compounded 1570 annually thereafter, until full payment is made to the 1571 Retirement Trust Fund, and shall receive credit in the Regular 1572 Class. 1573 (d) In order to claim credit for prior service as defined 1574 in s. 121.021(19)(d) for which no retirement contributions were 1575 paid during the period of such service, the member shall 1576 contribute the total employee and employer contributions which 1577 were required to be made to the Highway Patrol Pension Trust 1578 Fund, as provided in chapter 321, during the period claimed, 1579 plus 4 percent4-percentinterest compounded annually from the 1580 first year of service until July 1, 1975, and 6.5 percent6.51581percentinterest compounded annually thereafter, until full 1582 payment is made to the Retirement Trust Fund. However, any 1583 governmental entity thatwhichemployed such member may elect to 1584 pay up to 50 percent of the contributions and interest required 1585 to purchase thethisprior service credit. The service shall be 1586 credited in accordance with theprovisions of theHighway Patrol 1587 Pension Plan in effect during the period claimed unless the 1588 member terminated and withdrew his or her retirement 1589 contributions and was thereafter enrolled in the State and 1590 County Officers and Employees’ Retirement System or the Florida 1591 Retirement System, in which case the service shall be credited 1592 as Regular Class service. 1593 (e) For service performed under the Florida Retirement 1594 System after December 1, 1970, whichthatwas never reported to 1595 the division or the department due to error, retirement credit 1596 may be claimed by a member of the Florida Retirement System. The 1597 department shall adopt rules establishing criteria for claiming 1598 such credit and detailing the documentation required to 1599 substantiate the error. 1600 (f) For prior service performed on or after July 1, 2011, 1601 for which the member had credit under the Florida Retirement 1602 System and received a refund of contributions 3 calendar months 1603 after termination of employment, the member shall contribute at 1604 the rate that was required during the period of service being 1605 claimed, plus 6.5 percent interest, compounded annually on each 1606 June 30 from date of refund until the full payment is made to 1607 the Florida Retirement System Trust Fund, and shall receive 1608 credit in the membership class in which the member participated 1609 during the period claimed. 1610 (g)(f)The employer may notbe required tomake 1611 contributions for prior service credit for any member, except 1612 that the employer shall pay the employer portion of 1613 contributions for any legislator who elects to withdraw from the 1614 Florida Retirement System and later rejoins the system and pays 1615 any employee contributions required in accordance with s. 1616 121.052(3)(d). 1617 Section 14. Paragraph (a) of subsection (3), paragraph (a) 1618 of subsection (4), paragraphs (a) and (c) of subsection (5), 1619 paragraph (d) of subsection (9), paragraphs (a) and (c) of 1620 subsection (13), and paragraph (d) of subsection (14) of section 1621 121.091, Florida Statutes, are amended to read: 1622 121.091 Benefits payable under the system.—Benefits may not 1623 be paid under this section unless the member has terminated 1624 employment as provided in s. 121.021(39)(a) or begun 1625 participation in the Deferred Retirement Option Program as 1626 provided in subsection (13), and a proper application has been 1627 filed in the manner prescribed by the department. The department 1628 may cancel an application for retirement benefits when the 1629 member or beneficiary fails to timely provide the information 1630 and documents required by this chapter and the department’s 1631 rules. The department shall adopt rules establishing procedures 1632 for application for retirement benefits and for the cancellation 1633 of such application when the required information or documents 1634 are not received. 1635 (3) EARLY RETIREMENT BENEFIT.—Upon retirement on his or her 1636 early retirement date, the member shall receive an immediate 1637 monthly benefit that shall begin to accrue on the first day of 1638 the month of the retirement date and be payable on the last day 1639 of that month and each month thereafter during his or her 1640 lifetime. Such benefit shall be calculated as follows: 1641 (a) The amount of each monthly payment shall be computed in 1642 the same manner asfora normal retirement benefit,in 1643 accordance with subsection (1), but shall be based on the 1644 member’s average monthly compensation and creditable service as 1645 of the member’s early retirement date. The benefit so computed 1646 shall be reduced by five-twelfths of 1 percent for each complete 1647 month by which the early retirement date precedes the normal 1648 retirement dateof age 62 for a member of the Regular Class,1649Senior Management Service Class, or the Elected Officers’ Class,1650and age 55 for a member of the Special Risk Class, or age 52 if1651a Special Risk member has completed 25 years of creditable1652servicein accordance with s. 121.021(29)(b)3. 1653 (4) DISABILITY RETIREMENT BENEFIT.— 1654 (a) Disability retirement; entitlement and effective date.— 1655 1.a. A member who becomes totally and permanently disabled, 1656 as defined in paragraph (b), after completing 5 years of 1657 creditable service, or a member who becomes totally and 1658 permanently disabled in the line of duty regardless of service, 1659 isshall beentitled to a monthly disability benefit; except 1660 that any member with less than 5 years of creditable service on 1661 July 1, 1980, or any person who becomes a member of the Florida 1662 Retirement System on or after such date must have completed 10 1663 years of creditable service beforeprior tobecoming totally and 1664 permanently disabled in order to receive disability retirement 1665 benefits for any disability which occurs other than in the line 1666 of duty. However, if a member employed on July 1, 1980, having 1667withless than 5 years of creditable service as of that date, 1668 becomes totally and permanently disabled after completing 5 1669 years of creditable service and is found not to have attained 1670 fully insured status for benefits under the federal Social 1671 Security Act, such member isshall beentitled to a monthly 1672 disability benefit. 1673 b. Effective July 1, 2001, a member of the pension plan 1674defined benefit retirement programwho becomes totally and 1675 permanently disabled, as defined in paragraph (b), after 1676 completing 8 years of creditable service, or a member who 1677 becomes totally and permanently disabled in the line of duty 1678 regardless of service, isshall beentitled to a monthly 1679 disability benefit. 1680 2. If the division has received from the employer the 1681 required documentation of the member’s termination of 1682 employment, the effective retirement date for a member who 1683 applies and is approved for disability retirement shall be 1684 established by rule of the division. 1685 3. For a member who is receiving Workers’ Compensation 1686 payments, the effective disability retirement date may not 1687 precede the date the member reaches Maximum Medical Improvement 1688 (MMI), unless the member terminates employment beforeprior to1689 reaching MMI. 1690 (5) TERMINATION BENEFITS.—A member whose employment is 1691 terminated beforeprior toretirement retains membership rights 1692 to previously earned member-noncontributory service credit, and 1693 to member-contributory service credit, if the member leaves the 1694 member contributions on deposit in his or her retirement 1695 account. If a terminated member receives a refund of member 1696 contributions, such member may reinstate membership rights to 1697 the previously earned service credit represented by the refund 1698 by completing 1 year of creditable service and repaying the 1699 refunded member contributions, plus interest. 1700 (a) A member whose employment is terminated for any reason 1701 other than death or retirement beforeprior tobecoming vested 1702 is entitled to the return of his or her accumulated employee 1703 contributions as of the date of termination. Effective July 1, 1704 2011, upon termination of employment from all participating 1705 employers for 3 calendar months as defined in s. 121.021(39)(c) 1706 for any reason other than retirement, a member may receive a 1707 refund of all contributions he or she has made to the pension 1708 plan, subject to the restrictions otherwise provided in this 1709 chapter. Partial refunds are not permitted. The refund may not 1710 include any interest earnings on the contributions for a member 1711 of the pension plan. Employer contributions made on behalf of 1712 the member are not refundable. A member may not receive a refund 1713 of employee contributions if a pending or an approved qualified 1714 domestic relations order is filed against his or her retirement 1715 account. By obtaining a refund of contributions, a member waives 1716 all rights under the Florida Retirement System and the health 1717 insurance subsidy to the service credit represented by the 1718 refunded contributions, except the right to purchase prior 1719 service credit in accordance with s. 121.081(2). 1720 (c) In lieu of the deferred monthly benefit provided in 1721 paragraph (b), the terminated member may elect to receive a 1722 lump-sum amount equal to his or her accumulated employee 1723 contributions as of the date of termination. Effective July 1, 1724 2011, upon termination of employment from all participating 1725 employers for 3 calendar months as defined in s. 121.021(39)(c) 1726 for any reason other than retirement, a member may receive a 1727 refund of all contributions he or she has made to the pension 1728 plan, subject to the restrictions otherwise provided in this 1729 chapter. Partial refunds are not permitted. The refund may not 1730 include any interest earnings on the contributions for a member 1731 of the pension plan. Employer contributions made on behalf of 1732 the member are not refundable. A member may not receive a refund 1733 of employee contributions if a pending or an approved qualified 1734 domestic relations order is filed against his or her retirement 1735 account. By obtaining a refund of contributions, a member waives 1736 all rights under the Florida Retirement System and the health 1737 insurance subsidy to the service credit represented by the 1738 refunded contributions, except the right to purchase prior 1739 service credit in accordance with s. 121.081(2). 1740 (9) EMPLOYMENT AFTER RETIREMENT; LIMITATION.— 1741 (d)The provisions ofThis subsection appliesapplyto 1742 retirees, as defined in s. 121.4501(2), of the FloridaPublic1743Employee OptionalRetirement System Investment PlanProgram, 1744 subject to the following conditions: 1745 1. The retireeretireesmay not be reemployed with an 1746 employer participating in the Florida Retirement System until 1747 such person has been retired for 6 calendar months. 1748 2. A retiree employed in violation of this subsection and 1749 an employer that employs or appoints such person are jointly and 1750 severally liable for reimbursement of any benefits paid to the 1751 retirement trust fund from which the benefits were paid,1752including the Retirement System Trust Fund and the Public1753Employee Optional Retirement Program Trust Fund, as appropriate. 1754 The employer must have a written statement from the retiree that 1755 he or she is not retired from a state-administered retirement 1756 system. 1757 (13) DEFERRED RETIREMENT OPTION PROGRAM.—In general, and 1758 subject to this section, the Deferred Retirement Option Program, 1759 hereinafter referred to as DROP, is a program under which an 1760 eligible member of the Florida Retirement System may elect to 1761 participate, deferring receipt of retirement benefits while 1762 continuing employment with his or her Florida Retirement System 1763 employer. The deferred monthly benefits shall accrue in the 1764 Florida Retirement System on behalf of the participant, plus 1765 interest compounded monthly, for the specified period of the 1766 DROP participation, as provided in paragraph (c). Upon 1767 termination of employment, the participant shall receive the 1768 total DROP benefits and begin to receive the previously 1769 determined normal retirement benefits. Participation in the DROP 1770 does not guarantee employment for the specified period of DROP. 1771 Participation in DROP by an eligible member beyond the initial 1772 60-month period as authorized in this subsection shall be on an 1773 annual contractual basis for all participants. 1774 (a) Eligibility of member to participate in DROP.—All 1775 active Florida Retirement System members in a regularly 1776 established position, and all active members of the Teachers’ 1777 Retirement System established in chapter 238 or the State and 1778 County Officers’ and Employees’ Retirement System established in 1779 chapter 122, which are consolidated within the Florida 1780 Retirement System under s. 121.011, are eligible to elect 1781 participation in DROP if: 1782 1. The member is not a renewed member under s. 121.122 or a 1783 member of the State Community College System Optional Retirement 1784 Program under s. 121.051, the Senior Management Service Optional 1785 Annuity Program under s. 121.055, or the optional retirement 1786 program for the State University System under s. 121.35. 1787 2. Except as provided in subparagraph 6., election to 1788 participate is made within 12 months immediately following the 1789 date on which the member first reaches normal retirement date, 1790 or, for a member who reaches normal retirement date based on 1791 service before he or she reaches age 62, or age 55 for Special 1792 Risk Class members, election to participate may be deferred to 1793 the 12 months immediately following the date the member attains 1794 age 57, or age 52 for Special Risk Class members. A member who 1795 delays DROP participation during the 12-month period immediately 1796 following his or her maximum DROP deferral date, except as 1797 provided in subparagraph 6., loses a month of DROP participation 1798 for each month delayed. A member who fails to make an election 1799 within the 12-month limitation period forfeits all rights to 1800 participate in DROP. The member shall advise his or her employer 1801 and the division in writing of the date DROP begins. The 1802 beginning date may be subsequent to the 12-month election period 1803 but must be within the original 60-month participation period 1804 provided in subparagraph (b)1. When establishing eligibilityof1805the memberto participate in DROP, the member may elect to 1806 include or exclude any optional service credit purchased by the 1807 member from the total service used to establish the normal 1808 retirement date. A member who has dual normal retirement dates 1809 is eligible to elect to participate in DROP after attaining 1810 normal retirement date in either class. 1811 3. The employer of a member electing to participate in 1812 DROP, or employers if dually employed, shall acknowledge in 1813 writing to the division the date the member’s participation in 1814 DROP begins and the date the member’s employment and DROP 1815 participation terminateswill terminate. 1816 4. Simultaneous employment of a memberparticipantby 1817 additional Florida Retirement System employers subsequent to the 1818 commencement of a member’s participation in DROP is permissible 1819 if such employers acknowledge in writing a DROP termination date 1820 no later than the member’sparticipant’sexisting termination 1821 date or the maximum participation period provided in 1822 subparagraph (b)1. 1823 5. A memberDROP participantmay change employers while 1824 participating in DROP, subject to the following: 1825 a. A change of employment must take place without a break 1826 in service so that the member receives salary for each month of 1827 continuous DROP participation. If a member receives no salary 1828 during a month, DROP participation ceasesshall ceaseunless the 1829 employer verifies a continuation of the employment relationship 1830 for such memberparticipantpursuant to s. 121.021(39)(b). 1831 b. The memberSuch participantand new employershall1832 notify the division of the identity of the new employer on forms 1833 required by the division. 1834 c. The new employer acknowledgesshall acknowledge, in 1835 writing, the member’sparticipant’sDROP termination date, which 1836 may be extended but not beyond the maximum participation period 1837 provided in subparagraph (b)1., acknowledgesshall acknowledge1838 liability for any additional retirement contributions and 1839 interest required if the memberparticipantfails to timely 1840 terminate employment, and is subject to the adjustment required 1841 in sub-subparagraph (c)5.d. 1842 6. Effective July 1, 2001, for instructional personnel as 1843 defined in s. 1012.01(2), election to participate in DROP may be 1844 made at any time following the date on which the member first 1845 reaches normal retirement date. The member shall advise his or 1846 her employer and the division in writing of the date on which 1847 DROP begins. When establishing eligibility of the member to 1848 participate in DROP for the 60-month participation period 1849 provided in subparagraph (b)1., the member may elect to include 1850 or exclude any optional service credit purchased by the member 1851 from the total service used to establish the normal retirement 1852 date. A member who has dual normal retirement dates is eligible 1853 to elect to participate in either class. 1854 (c) Benefits payable under DROP.— 1855 1. Effective on the date of DROP participation, the 1856 member’s initial normal monthly benefit, including creditable 1857 service, optional form of payment, and average final 1858 compensation, and the effective date of retirement are fixed. 1859 The beneficiary established under the Florida Retirement System 1860 is the beneficiary eligible to receive any DROP benefits payable 1861 if the DROP participant dies before completing the period of 1862 DROP participation. If a joint annuitant predeceases the member, 1863 the member may name a beneficiary to receive accumulated DROP 1864 benefits payable. The retirement benefit, the annual cost of 1865 living adjustments provided in s. 121.101, and interest accrue 1866 monthly in the Florida Retirement System Trust Fund. 1867 a. For members initially enrolled in the system before July 1868 1, 2011, the interest accrues at an effective annual rate of 6.5 1869 percent compounded monthly, on the prior month’s accumulated 1870 ending balance, up to the month of termination or death, except 1871 as provided in s. 121.053(7). 1872 b. For members initially enrolled in the system on or after 1873 July 1, 2011, the interest accrues at an effective annual rate 1874 of 2 percent compounded monthly, on the prior month’s 1875 accumulated ending balance, up to the month of termination or 1876 death, except as provided in s. 121.053(7). 1877 2. Each employee who elects to participate in DROP may 1878 elect to receive a lump-sum payment for accrued annual leave 1879 earned in accordance with agency policy upon beginning 1880 participation in DROP. The accumulated leave payment certified 1881 to the division upon commencement of DROP shall be included in 1882 the calculation of the member’s average final compensation. The 1883 employee electing the lump-sum payment is not eligible to 1884 receive a second lump-sum payment upon termination, except to 1885 the extent the employee has earned additional annual leave 1886 which, combined with the original payment, does not exceed the 1887 maximum lump-sum payment allowed by the employing agency’s 1888 policy or rules. An early lump-sum payment shall be based on the 1889 hourly wage of the employee at the time he or she begins 1890 participation in DROP. If the member elects to wait and receive 1891 a lump-sum payment upon termination of DROP and termination of 1892 employment with the employer, any accumulated leave payment made 1893 at that time may not be included in the member’s retirement 1894 benefit, which was determined and fixed by law when the employee 1895 elected to participate in DROP. 1896 3. The effective date of DROP participation and the 1897 effective date of retirement of a DROP participant shall be the 1898 first day of the month selected by the member to begin 1899 participation in DROP, provided such date is properly 1900 established, with the written confirmation of the employer, and 1901 the approval of the division, on forms required by the division. 1902 4. Normal retirement benefits and any interestshall1903 continue to accrue in DROP until the established termination 1904 date of DROP or until the memberparticipantterminates 1905 employment or dies beforeprior tosuch date, except as provided 1906 in s. 121.053(7). Although individual DROP accounts mayshall1907 not be established, a separate accounting of each member’s 1908participant’saccrued benefits under DROP shall be calculated 1909 and provided to the memberparticipants. 1910 5. At the conclusion of the member’s participation inthe1911participant’sDROP, the division shall distribute the member’s 1912participant’stotal accumulated DROP benefits, subject to the 1913 following: 1914 a. The division shall receive verification by the member’s 1915participant’semployer or employers that the memberparticipant1916 has terminated all employment relationships as provided in s. 1917 121.021(39). 1918 b. The terminated DROP participant or, if deceased, the 1919 member’sparticipant’snamed beneficiary, shall elect on forms 1920 provided by the division to receive payment of the DROP benefits 1921 in accordance with one of the options listed below. If a member 1922participantor beneficiary fails to elect a method of payment 1923 within 60 days after termination of DROP, the division shall pay 1924 a lump sum as provided in sub-sub-subparagraph (I). 1925 (I) Lump sum.—All accrued DROP benefits, plus interest, 1926 less withholding taxes remitted to the Internal Revenue Service, 1927 shall be paid to the DROP participant or surviving beneficiary. 1928 (II) Direct rollover.—All accrued DROP benefits, plus 1929 interest, shall be paid from DROP directly to the custodian of 1930 an eligible retirement plan as defined in s. 402(c)(8)(B) of the 1931 Internal Revenue Code. However, in the case of an eligible 1932 rollover distribution to the surviving spouse of a deceased 1933 memberparticipant, an eligible retirement plan is an individual 1934 retirement account or an individual retirement annuity as 1935 described in s. 402(c)(9) of the Internal Revenue Code. 1936 (III) Partial lump sum.—A portion of the accrued DROP 1937 benefits shall be paid to DROP participant or surviving spouse, 1938 less withholding taxes remitted to the Internal Revenue Service, 1939 and the remaining DROP benefits must be transferred directly to 1940 the custodian of an eligible retirement plan as defined in s. 1941 402(c)(8)(B) of the Internal Revenue Code. However, in the case 1942 of an eligible rollover distribution to the surviving spouse of 1943 a deceased memberparticipant, an eligible retirement plan is an 1944 individual retirement account or an individual retirement 1945 annuity as described in s. 402(c)(9) of the Internal Revenue 1946 Code. The proportions must be specified by the DROP participant 1947 or surviving beneficiary. 1948 c. The form of payment selected by the DROP participant or 1949 surviving beneficiary must comply with the minimum distribution 1950 requirements of the Internal Revenue Code. 1951 d. A DROP participant who fails to terminate all employment 1952 relationships as provided in s. 121.021(39) shall be deemed as 1953 not retired, and the DROP election is null and void. Florida 1954 Retirement System membership shall be reestablished 1955 retroactively to the date of the commencement of DROP, and each 1956 employer with whom the memberparticipantcontinues employment 1957 must pay to the Florida Retirement System Trust Fund the 1958 difference between the DROP contributions paid in paragraph (i) 1959 and the contributions required for the applicable Florida 1960 Retirement System class of membership during the period the 1961 member participated in DROP, plus 6.5 percent interest 1962 compounded annually. 1963 6. The retirement benefits of any DROP participant who 1964 terminates all employment relationships as provided in s. 1965 121.021(39) but is reemployed in violation of the reemployment 1966 provisions of subsection (9) areshall besuspended during those 1967 months in which the retiree is in violation. Any retiree in 1968 violation of this subparagraph and any employer that employs or 1969 appoints such person without notifying the divisionof1970Retirementto suspend retirement benefits are jointly and 1971 severally liable for any benefits paid during the reemployment 1972 limitation period. The employer must have a written statement 1973 from the retiree that he or she is not retired from a state 1974 administered retirement system. Any retirement benefits received 1975 by a retiree while employed in violation of the reemployment 1976 limitations must be repaid to the Florida Retirement System 1977 Trust Fund, and his or her retirement benefits shall remain 1978 suspended until payment is made. Benefits suspended beyond the 1979 end of the reemployment limitation period apply toward repayment 1980 of benefits received in violation of the reemployment 1981 limitation. 1982 7. The accrued benefits of any DROP participant, and any 1983 contributions accumulated under the program, are not subject to 1984 assignment, execution, attachment, or any legal process 1985whatsoever,except for qualified domestic relations court orders 1986by a court of competent jurisdiction, income deduction orders as 1987 provided in s. 61.1301, and federal income tax levies. 1988 8. DROP participants are not eligible for disability 1989 retirement benefits as provided in subsection (4). 1990 (14) PAYMENT OF BENEFITS.—This subsection applies to the 1991 payment of benefits to a payee (retiree or beneficiary) under 1992 the Florida Retirement System: 1993 (d) A payee whose retirement benefits are reduced by the 1994 application of maximum benefit limits under s. 415(b) of the 1995 Internal Revenue Code, as specified in s. 121.30(5), shall have 1996 the portion of his or her calculated benefit in the Florida 1997 Retirement System’s pensionSystem defined benefitplan which 1998 exceeds such federal limitation paid through the Florida 1999 Retirement System Preservation of Benefits Plan, as provided in 2000 s. 121.1001. 2001 Section 15. Subsection (1) and paragraph (a) of subsection 2002 (2) of section 121.1001, Florida Statutes, are amended to read: 2003 121.1001 Florida Retirement System Preservation of Benefits 2004 Plan.—Effective July 1, 1999, the Florida Retirement System 2005 Preservation of Benefits Plan is established as a qualified 2006 governmental excess benefit arrangement pursuant to s. 415(m) of 2007 the Internal Revenue Code. The Preservation of Benefits Plan is 2008 created as a separate portion of the Florida Retirement System, 2009 for the purpose of providing benefits to a payee (retiree or 2010 beneficiary) of the Florida Retirement System whose benefits 2011 would otherwise be limited by s. 415(b) of the Internal Revenue 2012 Code. 2013 (1) ELIGIBILITY TO PARTICIPATE IN THE PRESERVATION OF 2014 BENEFITS PLAN.—A payee of the Florida Retirement System shall 2015 participate in the Preservation of Benefits Plan ifwheneverhis 2016 or her earned benefit under the Florida Retirement System’s 2017 pensionSystem defined benefitplan exceeds the benefit maximum 2018 established under s. 415(b) of the Internal Revenue Code. 2019 Participation in the Preservation of Benefits Plan shall 2020 continue for as long as the payee’s earned benefit under the 2021 pensionFlorida Retirement System defined benefitplan is 2022 reduced by the application of the maximum benefit limit under s. 2023 415(b) of the Internal Revenue Code. 2024 (2) BENEFITS PAYABLE UNDER THE PRESERVATION OF BENEFITS 2025 PLAN.— 2026 (a) On and after July 1, 1999, the divisionof Retirement2027 shall pay to each eligible payee of the Florida Retirement 2028 System who retires before, on, or after thatsuchdate, a 2029 supplemental retirement benefit equal to the difference between 2030 the amount of the payee’s monthly retirement benefit which would 2031 have been payable under the Florida Retirement System’s pension 2032System defined benefitplan if not for a reduction due to the 2033 application of s. 415(b) of the Internal Revenue Code and the 2034 reduced monthly retirement benefit as paid to the payee. The 2035 Preservation of Benefits Plan benefit shall be computed and 2036 payable under the same terms and conditions and to the same 2037 person as would have applied under the pensionFlorida2038Retirement System defined benefitplan were it not for the 2039 federal limitation. 2040 Section 16. Subsections (1) and (3) of section 121.101, 2041 Florida Statutes, are amended, present subsections (4) through 2042 (7) of that section are redesignated as subsections (5) through 2043 (8), respectively, and a new subsection (4) is added to that 2044 section, to read: 2045 121.101 Cost-of-living adjustment of benefits.— 2046 (1) The purpose of this section is to provide cost-of 2047 living adjustments to the monthly benefits payable toall2048 retired members of state-supported retirement systems. 2049 (3) Commencing July 1, 1987, the benefit of each retiree 2050 and annuitant retiring before July 1, 2011, shall be adjusted 2051 annually oneachJuly 1thereafter,as follows: 2052 (a) For those retirees and annuitants who have never 2053 received a cost-of-living adjustment under this section, the 2054 amount of the monthly benefit payable for the 12-month period 2055 commencing on the adjustment date shall be the amount of the 2056 member’s initial benefit plus an amount equal to a percentage of 2057 the member’s initial benefit; this percentage is derived by 2058 dividing the number of months the member has received an initial 2059 benefit by 12, and multiplying the result by 3. 2060 (b) For those retirees and annuitants who have received a 2061 cost-of-living adjustment under this subsectionsection, the 2062 adjusted monthly benefit shall be the amount of the monthly 2063 benefit being received on June 30 immediately preceding the 2064 adjustment date plus an amount equal to 3 percent of this 2065 benefit. 2066 (4) For members retiring on or after July 1, 2011, the 2067 benefit of each retiree and annuitant shall be adjusted annually 2068 on July 1 as follows: 2069 (a) For those retirees and annuitants who have never 2070 received a cost-of-living adjustment under this subsection, the 2071 amount of the monthly benefit payable for the 12-month period 2072 commencing on the adjustment date shall be the amount of the 2073 member’s initial benefit plus an amount equal to a percentage of 2074 the member’s initial benefit. This percentage is derived by 2075 dividing the number of months the member has received an initial 2076 benefit by 12, and multiplying the result by the factor 2077 calculated pursuant to paragraph (c). 2078 (b) For those retirees and annuitants who have received a 2079 cost-of-living adjustment under this subsection, the adjusted 2080 monthly benefit shall be the amount of the monthly benefit being 2081 received on June 30 immediately preceding the adjustment date 2082 plus an amount determined by multiplying the benefit by the 2083 factor calculated pursuant to paragraph (c). 2084 (c) The department shall calculate a cost-of-living factor 2085 for each retiree and beneficiary retiring on or after July 1, 2086 2011. This factor shall equal the product of 3 percent 2087 multiplied by the quotient of the sum of the member’s service 2088 credit earned for service before July 1, 2011, divided by the 2089 sum of the member’s total service credit earned. 2090 Section 17. Subsection (1) of section 121.121, Florida 2091 Statutes, is amended to read: 2092 121.121 Authorized leaves of absence.— 2093 (1) A member may purchase creditable service for up to 2 2094 work years of authorized leaves of absence, including any leaves 2095 of absence covered under the Family Medical Leave Act, if: 2096 (a) The member has completed a minimum of 6 years of 2097 creditable service, excluding periods for which a leave of 2098 absence was authorized; 2099 (b) The leave of absence is authorized in writing by the 2100 employer of the member and approved by the administrator; 2101 (c) The member returns to active employment performing 2102 service with a Florida Retirement System employer in a regularly 2103 established position immediately upon termination of the leave 2104 of absence and remains on the employer’s payroll for 1 calendar 2105 month, except that a member who retires on disability while on a 2106 medical leave of absence mayshallnot be required to return to 2107 employment. A member whose work year is less than 12 months and 2108 whose leave of absence terminates between school years is 2109 eligible to receive credit for the leave of absence ifas long2110ashe or she returns to the employmentof his or her employerat 2111 the beginning of the next school year and remains on the 2112 employer’s payroll for 1 calendar month; and 2113 (d) The member makes the required contributions for service 2114 credit during the leave of absence, which shall be 8 percent 2115 until January 1, 1975, and 9 percent thereafter of his or her 2116 rate of monthly compensation in effect immediately beforeprior2117tothe commencement of such leave for each month of such period, 2118 plus 4 percent interest until July 1, 1975, and 6.5 percent 2119 interest thereafter on such contributions, compounded annually 2120 each June 30 from the due date of the contribution to date of 2121 payment. Effective July 1, 1980, any leave of absence purchased 2122 pursuant to this section isshall beat the contribution rates 2123 specified in s. 121.071 or s. 121.71 in effect at the time the 2124 leave is granted for the class of membership from which the 2125 leave of absence was granted; however, any member who purchased 2126 leave-of-absence credit beforeprior toJuly 1, 1980, for a 2127 leave of absence from a position in a class other than the 2128 regular membership class, may pay the appropriate additional 2129 contributions plus compound interest thereon and receive 2130 creditable service for such leave of absence in the membership 2131 class from which the member was granted the leave of absence. 2132 Effective July 1, 2011, any leave of absence purchased pursuant 2133 to this section shall be at the employee and employer 2134 contribution rates specified in s. 121.71 in effect during the 2135 leave for the class of membership from which the leave of 2136 absence was granted. 2137 Section 18. Subsection (2) of section 121.122, Florida 2138 Statutes, is amended, and subsection (3) is added to that 2139 section, to read: 2140 121.122 Renewed membership in system.— 2141 (2) A retiree of a state-administered retirement system who 2142 is initially reemployed on or after July 1, 2010, through June 2143 30, 2011, shall become a member of the Regular Class and be 2144 enrolled in the Florida Retirement System Investment Plan on 2145 July 1, 2011, and must resatisfy the vesting requirements and 2146 other provisions provided in this chapteris not eligible for2147renewed membership. This subsection does not apply to retirees 2148 from the Elected Officers’ Class or the Senior Management 2149 Service Class. 2150 (a) Creditable service, including credit towards the 2151 retiree health insurance subsidy provided in s. 112.363, does 2152 not accrue for a retiree’s employment in a regularly established 2153 position with a covered employer during the period from July 1, 2154 2010, through June 30, 2011. 2155 (b) Employer contributions, interest, earnings, or any 2156 other funds may not be paid into a renewed member’s investment 2157 plan account for any employment in a regularly established 2158 position with a covered employer during the period from July 1, 2159 2010, through June 30, 2011. 2160 (c) To be eligible to receive a retirement benefit under 2161 the investment plan, the renewed member must meet the vesting 2162 requirements of the plan as provided in s. 121.4501(6). 2163 (d) The member is not entitled to disability benefits as 2164 provided in s. 121.091(4) or s. 121.591(2). 2165 (e) The member must meet the limitations on reemployment 2166 after retirement as provided in s. 121.091(9), as applicable. 2167 (f) Upon the renewed membership or reemployment of a 2168 retiree, the employer of such member and the retiree shall pay 2169 the applicable employer and employee contributions as required 2170 by ss. 112.363, 121.71, 121.74, and 121.76. Such contributions 2171 are payable only for employment in a regularly established 2172 position with a covered employer on or after July 1, 2011. 2173 (g) The member may not purchase any prior or past service 2174 in the investment plan, including employment in a regularly 2175 established position with a covered employer during the period 2176 from July 1, 2010, through June 30, 2011. 2177 (h) A renewed member who is not receiving the maximum 2178 health insurance subsidy provided in s. 112.363 is entitled to 2179 earn additional credit toward the subsidy. Such credit may be 2180 earned only for employment in a regularly established position 2181 with a covered employer on or after July 1, 2011. Any additional 2182 subsidy due because of additional credit may be received only at 2183 the time of paying the second career retirement benefit. The 2184 total health insurance subsidy received by a retiree receiving 2185 benefits from initial and renewed membership may not exceed the 2186 maximum allowed under s. 112.363. 2187 (3) Any retiree of a state-administered retirement system 2188 who is initially reemployed on or after July 1, 2011, except for 2189 retirees from the Elected Officers’ Class or the Senior 2190 Management Service Class, shall become a member of the Regular 2191 Class and be enrolled in the Florida Retirement System 2192 Investment Plan, and must resatisfy the vesting requirements and 2193 other provisions of this chapter. Retirees from the Elected 2194 Officers’ Class or the Senior Management Service Class may not 2195 be enrolled in a state-administered retirement system. 2196 (a) To be eligible to receive a retirement benefit under 2197 the investment plan, the renewed member must meet the vesting 2198 requirements of the investment plan as provided in s. 2199 121.4501(6). 2200 (b) The member is not entitled to disability benefits as 2201 provided in s. 121.091(4) or s. 121.591(2). 2202 (c) The member must meet the limitations on reemployment 2203 after retirement provided in s. 121.091(9), as applicable. 2204 (d) Upon renewed membership or reemployment of a retiree, 2205 the employer of such member and the retiree must pay the 2206 applicable employer and employee contributions as required by 2207 ss. 112.363, 121.71, 121.74, and 121.76. 2208 (e) The member may not purchase any prior or past service 2209 in the investment plan. 2210 (f) A renewed member who is not receiving the maximum 2211 health insurance subsidy provided in s. 112.363 is entitled to 2212 earn additional credit toward the subsidy. Any additional 2213 subsidy due because of additional credit may be received only at 2214 the time of paying the second career retirement benefit. The 2215 total health insurance subsidy received by a retiree receiving 2216 benefits from initial and renewed membership may not exceed the 2217 maximum allowed under s. 112.363. 2218 Section 19. Section 121.125, Florida Statutes, is amended 2219 to read: 2220 121.125 Credit for workers’ compensation payment periods.—A 2221 member of the retirement system created by this chapter who has 2222 been eligible or becomes eligible forto receiveworkers’ 2223 compensation payments for an injury or illness that occurred 2224occurringduringhis or heremployment while a member of aany2225 state retirement system shall, upon return to active employment 2226 with a covered employer for 1 calendar month or upon approval 2227 for disability retirement in accordance with s. 121.091(4), 2228 receive full retirement credit for the period beforeprior to2229 such return to active employment or disability retirement for 2230 which the workers’ compensation payments were received. However, 2231 anomember may not receive retirement credit foranysuch 2232 period occurring after the earlier of the date of maximum 2233 medical improvement as defined in s. 440.02 or the date 2234 termination has occurred as defined in s. 121.021(39). The 2235 employer of record at the time of the worker’s compensation 2236 injury or illness shall make the required employee and employer 2237 retirement contributions based on the member’s rate of monthly 2238 compensation immediately beforeprior to his or herreceiving 2239 workers’ compensation payments for retirement credit received by 2240 the member. The employer of record at the time of the workers’ 2241 compensation injury or illness shall be assessed by the division 2242 a penalty of 1 percent of the contributions on all contributions 2243 not paid on the first payroll report after the member becomes 2244 eligible to receive credit. This delinquent assessment may not 2245 be waived. 2246 Section 20. Paragraphs (g) and (i) of subsection (3) and 2247 subsections (4) and (5) of section 121.35, Florida Statutes, are 2248 amended to read: 2249 121.35 Optional retirement program for the State University 2250 System.— 2251 (3) ELECTION OF OPTIONAL PROGRAM.— 2252 (g) An eligible employee who is a member of the Florida 2253 Retirement System at the time of electingelectionto 2254 participate in the optional retirement program shall retain all 2255 retirement service credit earned under the Florida Retirement 2256 System,at the rate earned.NoAdditional service credit in the 2257Florida Retirementsystem may notshallbe earned while the 2258 employee participates in the optional program, andnor shallthe 2259 employee is notbeeligible for disability retirement under the 2260Florida Retirementsystem. An eligible employee may transfer 2261 from the Florida Retirement System to his or her accounts under 2262 the State University System Optional Retirement Program a sum 2263 representing the present value of the employee’s accumulated 2264 benefit obligation under thedefined benefit program of the2265 Florida Retirement System’s pension planSystemfor any service 2266 credit accrued from the employee’s first eligible transfer date 2267 to the optional retirement program through the actual date of 2268 such transfer, if such service credit was earnedin the period2269 from July 1, 1984, through December 31, 1992. The present value 2270 of the employee’s accumulated benefit obligation shall be 2271 calculated as described in s. 121.4501(3)s.121.4501(3)(c)2. 2272 Uponsuchtransfer, allsuchservice creditpreviouslyearned 2273 under the pension plandefined benefit program of the Florida2274Retirement Systemduring this period isshall benullified for 2275 purposes of entitlement to a future benefit under the pension 2276 plandefined benefit program ofthe Florida Retirement System. 2277 (i) Effective January 1, 2008, through December 31, 2008, 2278 except for an employee who is a mandatory memberparticipantof 2279 the State University System Optional Retirement Program, an 2280 employee who has elected to participate in the State University 2281 System Optional Retirement Program shall have one opportunity, 2282 at the employee’s discretion,to chooseto transfer from this 2283 program to the pension plan or the investment plandefined2284benefit program of the Florida Retirement System or to the2285Public Employee Optional Retirement Program, subject to the 2286 terms of the applicable contracts of the State University System 2287 Optional Retirement Program. 2288 1. If the employee chooses to move to the investment plan 2289Public Employee Optional Retirement Program, any contributions, 2290 interest, and earnings creditable to the employee under the 2291 State University System Optional Retirement Program mustshall2292 be retained by the employee in the State University System 2293 Optional Retirement Program, and the applicable provisions of s. 2294 121.4501(4) shall govern the election. 2295 2. If the employee chooses to move to the pension plan 2296defined benefit program of theFlorida Retirement System, the 2297 employee shall receive service credit equal to his or her years 2298 of service under the State University System Optional Retirement 2299 Program. 2300 a. The cost for such credit must be inshall bean amount 2301 representing the actuarial accrued liability for the affected 2302 period of service. The cost mustshallbe calculated using the 2303 discount rate and other relevant actuarial assumptions that were 2304 used to value the pensionFlorida Retirement System defined2305benefitplan liabilities in the most recent actuarial valuation. 2306 The calculation mustshallinclude any service already 2307 maintained under the pensiondefined benefitplan in addition to 2308 the years under the State University System Optional Retirement 2309 Program. The actuarial accrued liability of any service already 2310 maintained under the pensiondefined benefitplan mustshallbe 2311 applied as a credit to total cost resulting from the 2312 calculation. The division mustshallensure that the transfer 2313 sum is prepared using a formula and methodology certified by an 2314 enrolled actuary. 2315 b. The employee must transfer from his or her State 2316 University System Optional Retirement Program account, and from 2317 other employee moneys as necessary, a sum representing the 2318 actuarial accrued liability immediately following the time of 2319 such movement, determined assuming that attained service equals 2320 the sum of service in the pension plandefined benefit program2321 and service in the State University System Optional Retirement 2322 Program. 2323 (4) CONTRIBUTIONS.— 2324 (a)1. Through June 30, 2001, each employer shall contribute 2325 on behalf of each member ofparticipant inthe optional 2326 retirement program an amount equal to the normal cost portion of 2327 the employer retirement contribution which would be required if 2328 the employeeparticipantwere a regular member of the Florida 2329 Retirement System’s pension planSystem defined benefit program, 2330 plus the portion of the contribution rate required in s. 2331 112.363(8) that would otherwise be assigned to the Retiree 2332 Health Insurance Subsidy Trust Fund. 2333 2. Effective July 1, 2001, through June 30, 2011, each 2334 employer shall contribute on behalf of each member of 2335participant inthe optional retirement program an amount equal 2336 to 10.43 percent of the employee’sparticipant’sgross monthly 2337 compensation. 2338 3. Effective July 1, 2011, each member of the optional 2339 retirement program shall contribute an amount equal to the 2340 employee contribution required in s. 121.71(3). The employer 2341 shall contribute on behalf of each such member an amount equal 2342 to the difference between 10.43 percent of the employee’s gross 2343 monthly compensation and the amount equal to the employee’s 2344 required contribution based on the employee’s gross monthly 2345 compensation. 2346 4.The department shall deduct an amount approved by the2347Legislature to provide for the administration of this program.2348 The payment of the contributions, including contributions by the 2349 employee,to the optional program which is required by this2350paragraph for each participantshall be made by the employer to 2351 the department, which shall forward the contributions to the 2352 designated company or companies contracting for payment of 2353 benefits for member’s ofthe participant underthe program. 2354 However, such contributions paid on behalf of an employee 2355 described in paragraph (3)(c) mayshallnot be forwarded to a 2356 company and doshallnot begin to accrue interest until the 2357 employee has executed a contract and notified the department. 2358 The department shall deduct an amount from the contributions to 2359 provide for the administration of this program. 2360 (b) Each employer shall contribute on behalf of each member 2361 ofparticipant inthe optional retirement program an amount 2362 equal to the unfunded actuarial accrued liability portion of the 2363 employer contribution which would be required for members of the 2364 Florida Retirement System. This contribution shall be paid to 2365 the department for transfer to the Florida Retirement System 2366 Trust Fund. 2367 (c) An Optional Retirement Program Trust Fund shall be 2368 established in the State Treasury and administered by the 2369 department to make payments to the provider companies on behalf 2370 oftheoptional retirement program membersparticipants, and to 2371 transfer the unfunded liability portion of the state optional 2372 retirement program contributions to the Florida Retirement 2373 System Trust Fund. 2374 (d) Contributions required for social security by each 2375 employer and each employeeparticipant, in the amount required 2376 for social security coverage as now or hereafter may be provided 2377 by the federal Social Security Act, shall be maintained for each 2378 member ofparticipant inthe optional retirement program and are 2379shall bein addition to the retirement contributions specified 2380 in this subsection. 2381 (e) Each member ofparticipant inthe optional retirement 2382 program who has executed a contract may contribute by way of 2383 salary reduction or deduction a percentage amount of the 2384 employee’sparticipant’sgross compensation not to exceed the 2385 percentage amount contributed by the employer to the optional 2386 program, butin no case maysuch contribution may not exceed 2387 federal limitations. Payment of the employee’sparticipant’s2388 contributions shall be made by the financial officer of the 2389 employer to the division which shall forward the contributions 2390 to the designated company or companies contracting for payment 2391 of benefits for membersthe participantunder the program. A 2392 memberparticipantmay not make, through salary reduction, any 2393 voluntary employee contributions to any other plan under s. 2394 403(b) of the Internal Revenue Code, with the exception of a 2395 custodial account under s. 403(b)(7) of the Internal Revenue 2396 Code, until he or she has made an employee contribution to his 2397 or her optional program equal to the employer contribution. An 2398 employeeA participantis responsible for monitoring his or her 2399 individual tax-deferred income to ensure he or she does not 2400 exceed the maximum deferral amounts permitted under the Internal 2401 Revenue Code. 2402 (f) The Optional Retirement Trust Fund may accept for 2403 deposit into memberparticipantcontracts contributions in the 2404 form of rollovers or direct trustee-to-trustee transfers by or 2405 on behalf of membersparticipantswho are reasonably determined 2406 by the department to be eligible for rollover or transfer to the 2407 optional retirement program pursuant to the Internal Revenue 2408 Code,if such contributions are made in accordance with rules 2409 adopted by the department. Such contributions shall be accounted 2410 for in accordance with any applicable requirements of the 2411 Internal Revenue Code and department rulesof the department. 2412 (g) Effective July 1, 2008, for purposes of paragraph (a) 2413 and notwithstanding s. 121.021(22)(b)1., the term “employee’s 2414participant’sgross monthly compensation” includes salary 2415 payments made to eligible clinical faculty from a state 2416 university using funds provided by a faculty practice plan 2417 authorized by the Board of Governors of the State University 2418 System if: 2419 1. There is nonot anyemployer contribution from the state 2420 university to any other retirement program with respect to such 2421 salary payments; and 2422 2. The employer contribution on behalf of a member ofthe2423participant inthe optional retirement program with respect to 2424 such salary payments is made using funds provided by the faculty 2425 practice plan. 2426 (5) BENEFITS.— 2427 (a) Benefits are payable under the optional retirement 2428 program only to vested members participatingparticipantsin the 2429 program, or their beneficiaries as designated by the member 2430participantin the contract with a provider company, and such 2431 benefits shall be paid only by the designated company in 2432 accordance with s. 403(b) of the Internal Revenue Code and the 2433 terms of the annuity contract or contracts applicable to the 2434 memberparticipant. Benefits accrue in individual accounts that 2435 are member-directedparticipant-directed, portable, and funded 2436 by employer contributions and the earnings thereon. The member 2437participantmust be terminated for 3 calendar months from all 2438 employment relationships with all Florida Retirement System 2439 employers, as provided in s. 121.021(39), to begin receiving the 2440employer-fundedbenefit. Benefits funded by employer 2441 contributions are payable in accordance with the following terms 2442 and conditions: 2443 1. Benefits shall be paid only to a participating member 2444participant, to his or her beneficiaries, or to his or her 2445 estate, as designated by the memberparticipant. 2446 2. Benefits shall be paid by the provider company or 2447 companies in accordance with the law, the provisions of the 2448 contract, and any applicable department rule or policy. 2449 3. In the event of a member’sparticipant’sdeath, moneys 2450 accumulated by, or on behalf of, the memberparticipant, less 2451 withholding taxes remitted to the Internal Revenue Service, if 2452 any, shall be distributed to the member’sparticipant’s2453 designated beneficiary or beneficiaries, or to the member’s 2454participant’sestate, as if the memberparticipantretired on 2455 the date of death, as provided in paragraph (d)(c). No other 2456 death benefits are available to survivors of members 2457participantsunder the optional retirement program except for 2458 such benefits, or coverage for such benefits, as are separately 2459 afforded by the employer, at the employer’s discretion. 2460 (b) Benefits are not payable for employee hardships, 2461 unforeseeable emergencies, loans, medical expenses, educational 2462 expenses, purchase of a principal residence, payments necessary 2463 to prevent eviction or foreclosure on an employee’s principal 2464 residence, or any other reason before termination from all 2465 employment relationships with participating employers, as 2466 provided in s. 121.021(39). 2467 (c)(b)Upon receipt by the provider company of a properly 2468 executed application for distribution of benefits, the total 2469 accumulated benefit areshall bepayable to the participating 2470 memberparticipant, as: 2471 1. A lump-sum distribution to the memberparticipant; 2472 2. A lump-sum direct rollover distribution whereby all 2473 accrued benefits, plus interest and investment earnings, are 2474 paid from the participant’s account directly to an eligible 2475 retirement plan, as defined in s. 402(c)(8)(B) of the Internal 2476 Revenue Code, on behalf of the memberparticipant; 2477 3. Periodic distributions; 2478 4. A partial lump-sum payment whereby a portion of the 2479 accrued benefit is paid to the memberparticipantand the 2480 remaining amount is transferred to an eligible retirement plan, 2481 as defined in s. 402(c)(8)(B) of the Internal Revenue Code, on 2482 behalf of the memberparticipant; or 2483 5. Such other distribution options as are providedforin 2484 the participant’s optional retirement program contract. 2485 (d)(c)Survivor benefits areshall bepayable as: 2486 1. A lump-sum distribution payable to the beneficiaries or 2487 to the deceased member’sparticipant’sestate; 2488 2. An eligible rollover distribution on behalf of the 2489 surviving spouse of a deceased memberparticipant, whereby all 2490 accrued benefits, plus interest and investment earnings, are 2491 paid from the deceased member’sparticipant’saccount directly 2492 to an eligible retirement plan, as described in s. 402(c)(8)(B) 2493 of the Internal Revenue Code, on behalf of the surviving spouse; 2494 3. Such other distribution options as are providedforin 2495 the member’sparticipant’soptional retirement program contract; 2496 or 2497 4. A partial lump-sum payment whereby a portion of the 2498 accrued benefit is paid to the deceased member’sparticipant’s2499 surviving spouse or other designated beneficiaries, less 2500 withholding taxes remitted to the Internal Revenue Service, if 2501 any, and the remaining amount is transferred directly to an 2502 eligible retirement plan, as described in s. 402(c)(8)(B) of the 2503 Internal Revenue Code, on behalf of the surviving spouse. The 2504 proportions must be specified by the memberparticipantor the 2505 surviving beneficiary. 2506 2507 This paragraph does not abrogate other applicable provisions of 2508 state or federal law providing payment of death benefits. 2509 (e)(d)The benefits payable to any person under the 2510 optional retirement program, and any contribution accumulated 2511 under such program, areshallnotbesubject to assignment, 2512 execution, or attachment or to any legal processwhatsoever. 2513 (f)(e)A participating memberparticipantwho chooses to 2514 receive his or her benefits must be terminated for 3 calendar 2515 months to be eligible to receive benefits funded by employer 2516 contributions. The memberupon termination as defined in s.2517121.021must notify the provider company of the date he or she 2518 wishes benefits funded by required employer and employee 2519 contributions to begin and must be terminated as defined in s. 2520 121.021 after the initial benefit payment or distribution. 2521 Benefits may be deferred until the memberparticipantchooses to 2522 make such application. 2523 (g)(f)Benefits funded by the participating member’s 2524 voluntaryparticipant’spersonal contributions may be paid out 2525 at any time and in any form within the limits provided in the 2526 contract between the memberparticipantand thehis or her2527 provider company. The memberparticipantshall notify the 2528 provider company regarding the date and provisions under which 2529 he or she wants to receive the employee-funded portion of the 2530 plan. 2531 (h)(g)For purposes of this section, “retiree” means a 2532 former participating memberparticipantof the optional 2533 retirement program who has terminated employment and has taken a 2534 distribution as provided in this subsection, except for a 2535 mandatory distribution of a de minimis account authorized by the 2536 department. 2537 Section 21. Section 121.355, Florida Statutes, is amended 2538 to read: 2539 121.355 Community College Optional Retirement Program and 2540 State University System Optional Retirement Program member 2541 transfer.—Effective January 1, 2009, through December 31, 2009, 2542 an employee who is a former member ofparticipant inthe 2543 Community College Optional Retirement Program or the State 2544 University System Optional Retirement Program and present 2545 mandatory member ofparticipant inthe Florida Retirement 2546 System’s pensionSystem defined benefitplan may receive service 2547 credit equal to his or her years of service under the Community 2548 College Optional Retirement Program or the State University 2549 System Optional Retirement Program under the following 2550 conditions: 2551 (1) The cost for such credit must representshall be an2552amount representingthe actuarial accrued liability for the 2553 affected period of service. The cost shall be calculated using 2554 the discount rate and other relevant actuarial assumptions that 2555 were used to value the Florida Retirement System’s pension 2556System defined benefitplan liabilities in the most recent 2557 actuarial valuation. The calculation mustshallinclude any 2558 service already maintained under the pensiondefined benefit2559 plan in addition to the years under the Community College 2560 Optional Retirement Program or the State University System 2561 Optional Retirement Program. The actuarial accrued liability of 2562 any service already maintained under the pensiondefined benefit2563 plan shall be applied as a credit to total cost resulting from 2564 the calculation. The division shall ensure that the transfer sum 2565 is prepared using a formula and methodology certified by an 2566 enrolled actuary. 2567 (2) The employee must transfer from his or her Community 2568 College Optional Retirement Program account or State University 2569 System Optional Retirement Program account, subject to the terms 2570 of the applicable optional retirement program contract, and from 2571 other employee moneys as necessary, a sum representing the 2572 actuarial accrued liability immediately following the time of 2573 such movement, determined assuming that attained service equals 2574 the sum of service in the pension plandefined benefit program2575 and service in the Community College Optional Retirement Program 2576 or State University System Optional Retirement Program. 2577 (3) The employee may not receive service credit for a 2578 period of mandatory participation in the State University 2579 Optional Retirement Program or for a period for which a 2580 distribution was received from the Community College Optional 2581 Retirement Program or State University System Optional 2582 Retirement Program. 2583 Section 22. Section 121.4501, Florida Statutes, is amended 2584 to read: 2585 121.4501 FloridaPublic Employee OptionalRetirement System 2586 Investment PlanProgram.— 2587 (1) The Trustees of the State Board of Administration shall 2588 establish aan optionaldefined contributionretirementprogram 2589 called the Florida Retirement System Investment Plan for members 2590 of the Florida Retirement System under which retirement benefits 2591 arewill beprovided for eligible employees initially employed 2592 before July 1, 2011, who elect to enrollparticipatein the 2593 plan. Enrollment is compulsory for members of the Elected 2594 Officers’ Class and the Senior Management Class, who are 2595 employed on or after July 1, 2011, except for those who are 2596 eligible to and elect to enroll in an optional retirement 2597 program established under s. 121.055(6), s. 121.35, or s. 2598 1012.875, or those who qualify for special risk membership 2599 pursuant to s. 121.0515program. The retirement benefitsto be2600provided for or on behalf of participants in such optional2601retirement programshall be provided through employee-directed 2602 investments, in accordance with s. 401(a) of the Internal 2603 Revenue Code anditsrelated regulations.TheEmployers and 2604 employees shall make contributionscontribute, as provided in 2605 this section and,ss. 121.571,and 121.71, to the FloridaPublic2606Employee OptionalRetirement System Investment PlanProgram2607 Trust Fund toward the funding ofsuchoptionalbenefits. 2608 (2) DEFINITIONS.—As used in this part, the term: 2609 (a) “Approved provider” or “provider” means a private 2610 sector company that is selected and approved by the state board 2611 to offer one or more investment products or services to the 2612 investment planoptional retirement program. The term includes a 2613 bundled provider that offers plan membersparticipantsa range 2614 of individually allocated or unallocated investment products and 2615 may offer a range of administrative and customer services, which 2616 may include accounting and administration of individual member 2617participantbenefits and contributions; individual member 2618participantrecordkeeping; asset purchase, control, and 2619 safekeeping; direct execution of the member’sparticipant’s2620 instructions as to asset and contribution allocation; 2621 calculation of daily net asset values; direct access to member 2622participantaccount information; periodic reporting to members 2623participants, at least quarterly, on account balances and 2624 transactions; guidance, advice, and allocation services directly 2625 relating to the provider’s own investment options or products, 2626 but only if the bundled provider complies with the standard of 2627 care of s. 404(a)(1)(A-B) of the Employee Retirement Income 2628 Security Act of 1974 (ERISA) and if providing such guidance, 2629 advice, or allocation services does not constitute a prohibited 2630 transaction under s. 4975(c)(1) of the Internal Revenue Code or 2631 s. 406 of ERISA, notwithstanding that such prohibited 2632 transaction provisions do not apply to theoptionalretirement 2633 program; a broad array of distribution options; asset 2634 allocation; and retirement counseling and education. Private 2635 sector companies include investment management companies, 2636 insurance companies, depositories, and mutual fund companies. 2637 (b) “Average monthly compensation” means one-twelfth of 2638 average final compensation as defined in s. 121.021. 2639 (c) “Covered employment” means employment in a regularly 2640 established position as defined in s. 121.021. 2641(d) “Defined benefit program” means the defined benefit2642program of the Florida Retirement System administered under part2643I of this chapter.2644(e) “Division” means the Division of Retirement within the2645department.2646 (d)(f)“Electronic means” means by telephone, ifthe2647requiredinformation is received on a recorded line, or through 2648 Internet access, ifthe requiredinformation is captured online. 2649(g) “Eligible employee” means an officer or employee, as2650defined in s.121.021, who:26511. Is a member of, or is eligible for membership in, the2652Florida Retirement System, including any renewed member of the2653Florida Retirement System initially enrolled before July 1,26542010; or26552. Participates in, or is eligible to participate in, the2656Senior Management Service Optional Annuity Program as2657established under s.121.055(6), the State Community College2658System Optional Retirement Program as established under s.2659121.051(2)(c), or the State University System Optional2660Retirement Program established under s.121.35.2661 2662The term does not include any member participating in the2663Deferred Retirement Option Program established under s.2664121.091(13), a retiree of a state-administered retirement system2665initially reemployed on or after July 1, 2010, or a mandatory2666participant of the State University System Optional Retirement2667Program established under s.121.35.2668 (e)(h)“Employer” means an employer, as defined in s. 2669 121.021, of an eligible employee. 2670 (f) “Florida Retirement System Investment Plan” or 2671 “investment plan” means the defined contribution program of the 2672 Florida Retirement System established under this part. 2673 (g) “Florida Retirement System Pension Plan” or pension 2674 plan” means the defined benefit program of the Florida 2675 Retirement System administered under part I of this chapter. 2676(i) “Optional retirement program” or “optional program”2677means the Public Employee Optional Retirement Program2678established under this part.2679 (h)(j)“Member” or “employee”“participant”means an 2680 eligible employee who is enrolledenrollsin the investment plan 2681optional programas provided in subsection (4),ora terminated 2682 Deferred Retirement Option Program memberparticipantas 2683 described in subsection (21), or a beneficiary or alternate 2684 payee of a member or employee. 2685 (i) “Member contributions” or “employee contributions” mean 2686 the sum of all amounts deducted from the salary of a member by 2687 his or her employer in accordance with s. 121.71(2) and credited 2688 to his or her individual account in the investment plan, plus 2689 any earnings on such amounts and any contributions specified in 2690 paragraph (5)(e). 2691 (j)(k)“Retiree” means a former memberparticipantof the 2692 investment planoptional retirement programwho has terminated 2693 employment andhastaken a distribution of vested employer or 2694 employee contributions as provided in s. 121.591, except for a 2695 mandatory distribution of a de minimis account authorized by the 2696 state board. 2697 (k)(l)“Vested” or “vesting” means the guarantee that a 2698 memberparticipantis eligible to receive a retirement benefit 2699 upon completion of the required years of service under the 2700 investment planoptional retirement program. 2701 (3)ELIGIBILITY;RETIREMENT SERVICE CREDIT; TRANSFER OF 2702 BENEFITS.— 2703(a)Participation in the Public Employee Optional2704Retirement Program is limited to eligible employees.2705Participation in the optional retirement program is in lieu of2706participation in the defined benefit program of the Florida2707Retirement System.2708 (a)(b)An eligible employee who is employed in a regularly 2709 established position by a state employer on June 1, 2002; by a 2710 district school board employer on September 1, 2002; or by a 2711 local employer on December 1, 2002, and who is a member of the 2712 pension plandefined benefit retirement program of the Florida2713Retirement Systemat the time of his or her election to enroll 2714participatein the investment planPublic Employee Optional2715Retirement Programshall retain all retirement service credit 2716 earned under the pension plandefined benefit retirement program2717of the Florida Retirement Systemas credited under the Florida 2718 Retirement System and isshall beentitled to a deferred benefit 2719 upon termination, if eligibleunder the system. However, 2720 election to enrollparticipatein the investment planPublic2721Employee Optional Retirement Programterminates the active 2722 membership of the employee in the pension plandefined benefit2723program ofthe Florida Retirement System, and the service of a 2724 member ofparticipant inthe investment plan isPublic Employee2725Optional Retirement Program shallnotbecreditable under the 2726 pension plandefined benefit retirement program of the Florida2727Retirement Systemfor purposes of benefit accrual but is 2728 creditableshall be creditedfor purposes of vesting. 2729 (b)(c)1.Notwithstanding paragraph (a), an(b), each2730 eligible employee who elects to enrollparticipatein the 2731 investment planPublic Employee Optional Retirement Programand 2732 establishes one or more individual memberparticipantaccounts 2733under the optional programmay elect to transfer to the 2734 investment planoptional programa sum representing the present 2735 value of the employee’s accumulated benefit obligation under the 2736 pension plandefined benefit retirement program of the Florida2737Retirement System. Uponsuchtransfer, all service credit 2738previouslyearned under the pension plan isdefined benefit2739program of the Florida Retirement System shall benullified for 2740 purposes of entitlement to a future benefit under the pension 2741 plandefined benefit program of the Florida Retirement System. A 2742 member may not transferparticipant is precluded from2743transferringthe accumulated benefit obligation balance from the 2744 pension plan after the timedefined benefit program uponthe2745expiration of theperiod for enrollingafforded to enrollin the 2746 investment plan has expiredoptional program. 2747 1.2.For purposes of this subsection, the present value of 2748 the member’s accumulated benefit obligation is based upon the 2749 member’s estimated creditable service and estimated average 2750 final compensation under the pension plandefined benefit2751 program, subject to recomputation under subparagraph 2.3.For 2752 state employeesenrolling under subparagraph (4)(a)1., initial 2753 estimates shallwillbe based upon creditable service and 2754 average final compensation as of midnight on June 30, 2002; for 2755 district school board employeesenrolling under subparagraph2756(4)(b)1., initial estimates shallwillbe based upon creditable 2757 service and average final compensation as of midnight on 2758 September 30, 2002; and for local government employeesenrolling2759under subparagraph (4)(c)1., initial estimates shallwillbe 2760 based upon creditable service and average final compensation as 2761 of midnight on December 31, 2002. The datesrespectively2762 specified areabove shall be construed asthe “estimate date” 2763 for these employees. The actuarial present value of the 2764 employee’s accumulated benefit obligation shall be based on the 2765 following: 2766 a. The discount rate and other relevant actuarial 2767 assumptions used to value the Florida Retirement System Trust 2768 Fund at the time the amount to be transferred is determined, 2769 consistent with the factors provided in sub-subparagraphs b. and 2770 c. 2771 b. A benefit commencement age, based on the member’s 2772 estimated creditable service as of the estimate date. The 2773 benefit commencement age isshall bethe younger of the 2774 following, but mayshallnot be younger than the member’s age as 2775 of the estimate date: 2776 (I) Age 62; or 2777 (II) The age the member would attain if the member 2778 completed 30 years of service with an employer, assuming the 2779 member worked continuously from the estimate date, and 2780 disregarding any vesting requirement that would otherwise apply 2781 under the pension plandefined benefit program of the Florida2782Retirement System. 2783 c. For members of the Special Risk Class, and for members 2784 of the Special Risk Administrative Support Class entitled to 2785 retain the special risk normal retirement date, the benefit 2786 commencement age isshall bethe younger of the following, but 2787 mayshallnot be younger than the member’s age as of the 2788 estimate date: 2789 (I) Age 55 or, for members enrolled on or after July 1, 2790 2011, age 62; or 2791 (II) The age the member would attain if the member 2792 completed 25 years of service with an employer, or, for members 2793 enrolled on or after July 1, 2011, 30 years of service with an 2794 employer, assuming the member worked continuously from the 2795 estimate date, and disregarding any vesting requirement that 2796 would otherwise apply under the pension plandefined benefit2797program ofthe Florida Retirement System. 2798 d. The calculation mustshalldisregard vesting 2799 requirements and early retirement reduction factors that would 2800 otherwise apply under the pension plandefined benefit2801retirement program. 2802 2.3.For each memberparticipantwho elects to transfer 2803 moneys from the pension plandefined benefit programto his or 2804 her account in the investment planoptional program, the 2805 division shall recompute the amount transferred under 2806 subparagraph 1. within2. not later than60 days after the 2807 actual transfer of funds based upon the member’sparticipant’s2808 actual creditable service and actual final average compensation 2809 as of the initial date of participation in the investment plan 2810optional program. If the recomputed amount differs from the 2811 amount transferredunder subparagraph 2.by $10 or more, the 2812 division shall: 2813 a. Transfer, or cause to be transferred, from the Florida 2814 Retirement System Trust Fund to the member’sparticipant’s2815 accountin the optional programthe excess, if any, of the 2816 recomputed amount over the previously transferred amount 2817 together with interest from the initial date of transfer to the 2818 date of transfer under this subparagraph, based upon the 2819 effective annual interest equal to the assumed return on the 2820 actuarial investment which was used in the most recent actuarial 2821 valuation of the system, compounded annually. 2822 b. Transfer, or cause to be transferred, from the member’s 2823participant’saccount to the Florida Retirement System Trust 2824 Fund the excess, if any, of the previously transferred amount 2825 over the recomputed amount, together with interest from the 2826 initial date of transfer to the date of transfer under this 2827 subparagraph, based upon 6 percent effective annual interest, 2828 compounded annually, pro rata based on the member’s 2829participant’sallocation plan. 2830 3. If contribution adjustments are made as a result of 2831 employer errors or corrections, including plan corrections, 2832 following recomputation of the amount transferred under 2833 subparagraph 1., the member is entitled to the additional 2834 contributions or is responsible for returning any excess 2835 contributions resulting from the correction. However, the return 2836 of such erroneous excess pretax contribution by the plan must be 2837 made within the period allowed by the Internal Revenue Service. 2838 The present value of the member’s accumulated benefit obligation 2839 may not be recalculated. 2840 4. As directed by the memberparticipant, the state board 2841 shall transfer or cause to be transferred the appropriate 2842 amounts to the designated accounts within. The board shall2843establish transfer procedures by rule, but the actual transfer2844shall notbe later than30 days after the effective date of the 2845 member’s participation in the investment planoptional program2846 unless the major financial markets for securities available for 2847 a transfer are seriously disrupted by an unforeseen event that 2848which alsocauses the suspension of trading on any national 2849 securities exchange in the country where the securities arewere2850 issued. In that event, thesuch30-day periodof timemay be 2851 extended by a resolution of the state boardtrustees. Transfers 2852 are not commissionable or subject to other fees and may be in 2853 the form of securities or cash, as determined by the state 2854 board. Such securities areshall bevalued as of the date of 2855 receipt in the member’sparticipant’saccount. 2856 5. If the state board or the division receives notification 2857 from the United States Internal Revenue Service that this 2858 paragraph or any portion of this paragraph will cause the 2859 retirement system, or a portion thereof, to be disqualified for 2860 tax purposes under the Internal Revenue Code,thenthe portion 2861 that will cause the disqualification does not apply. Upon such 2862 notice, the state board and the division shall notify the 2863 presiding officers of the Legislature. 2864 (4) PARTICIPATION; ENROLLMENT.— 2865 (a)1.Between June 1, 2001, and February 28, 2003, eligible 2866 employees were provided a 90-day period to elect membership in 2867 the investment plan. An employee who failed to elect the 2868 investment plan during the election period remained in the 2869 pension plan. An eligible employee who was employed in a 2870 regularly established position during the election period was 2871 also provided one opportunity to change plans, as provided under 2872 paragraph (e). With respect to an eligible employee who did not 2873 participate in the initial election period and an eligible 2874 employee who is initially employed in a regularly established 2875 position after the close of the initial election period but 2876 before June 30, 2011, theon June 1, 2002, by a state employer:2877a.Any such employee may elect to participate in the Public2878Employee Optional Retirement Program in lieu of retaining his or2879her membership in the defined benefit program of the Florida2880Retirement System. The election must be made in writing or by2881electronic means and must be filed with the third-party2882administrator by August 31, 2002, or, in the case of an active2883employee who is on a leave of absence on April 1, 2002, by the2884last business day of the 5th month following the month the leave2885of absence concludes. This election is irrevocable, except as2886provided in paragraph (e). Upon making such election, the2887employee shall be enrolled as a participant of the Public2888Employee Optional Retirement Program, the employee’s membership2889in the Florida Retirement System shall be governed by the2890provisions of this part, and the employee’s membership in the2891defined benefit program of the Florida Retirement System shall2892terminate. The employee’s enrollment in the Public Employee2893Optional Retirement Program shall be effective the first day of2894the month for which a full month’s employer contribution is made2895to the optional program.2896b.Any such employee who fails to elect to participate in2897the Public Employee Optional Retirement Program within the2898prescribed time period is deemed to have elected to retain2899membership in the defined benefit program of the Florida2900Retirement System, and the employee’s option to elect to2901participate in the optional program is forfeited.29022.With respect to employees who become eligible to2903participate in the Public Employee Optional Retirement Program2904by reason of employment in a regularly established position with2905a state employer commencing after April 1, 2002:2906a.Any suchemployee shall, by default, be enrolled in the 2907 pension plandefined benefit retirement program of the Florida2908Retirement Systemat the commencement of employment, and may, by 2909 the last business day of the 5th month following the employee’s 2910 month of hire, elect to enrollparticipatein the investment 2911 planPublic Employee Optional Retirement Program. The employee’s 2912 election must be made in writing or by electronic means and must 2913 be filed with the third-party administrator. The election to 2914 enrollparticipatein the investment planoptional programis 2915 irrevocable, except as provided in paragraph (e). 2916 1.b.If the employee files such election within the 2917 prescribed time period, enrollment in the investment plan is 2918optional program shall beeffective on the first day of 2919 employment. The employer and employeeretirementcontributions 2920 paid through the month of the employee plan change shall be 2921 transferred to the investment planoptional program, and, 2922 effective the first day of the next month, the employer and 2923 employee mustshallpay the applicable contributions based on 2924 the employee membership class in the planoptional program. 2925 2.c.AnAny suchemployee who fails to elect to enroll 2926participatein the investment planPublic Employee Optional2927Retirement Programwithin the prescribed time period is deemed 2928 to have elected to retain membership in the pension plandefined2929benefit program of the Florida RetirementSystem, and the 2930 employee’s option to elect to enrollparticipatein the 2931 investment planoptional programis forfeited. 2932 3. With respect to employees who become eligible to enroll 2933participatein the investment planPublic Employee Optional2934Retirement Programpursuant to s. 121.051(2)(c)3. or s. 2935 121.35(3)(i), theany suchemployee may elect to enroll 2936participatein the investment planPublic Employee Optional2937Retirement Programin lieu of retaining his or her participation 2938 in the State Community College System Optional Retirement 2939 Program or the State University System Optional Retirement 2940 Program. The election must be made in writing or by electronic 2941 means and must be filed with the third-party administrator. This 2942 election is irrevocable, except as provided in paragraph (e). 2943 Upon making such election, the employee shall be enrolled inas2944a participant ofthe investment planPublic Employee Optional2945RetirementProgram, the employee’s membership in the Florida 2946 Retirement System shall be governed by the provisions of this 2947 part, and the employee’s participation in the State Community 2948 College System Optional Retirement Program or the State 2949 University System Optional Retirement Program shall terminate. 2950 The employee’s enrollment in the investment plan isPublic2951Employee Optional Retirement Program shall beeffective on the 2952 first day of the month for which a full month’s of employee 2953 contributions areemployercontribution ismade to the 2954 investment planoptional program. 29554.For purposes of this paragraph,“state employer”means2956any agency, board, branch, commission, community college,2957department, institution, institution of higher education, or2958water management district of the state, which participates in2959the Florida Retirement System for the benefit of certain2960employees.2961(b)1.With respect to an eligible employee who is employed2962in a regularly established position on September 1, 2002, by a2963district school board employer:2964a.Any such employee may elect to participate in the Public2965Employee Optional Retirement Program in lieu of retaining his or2966her membership in the defined benefit program of the Florida2967Retirement System. The election must be made in writing or by2968electronic means and must be filed with the third-party2969administrator by November 30, or, in the case of an active2970employee who is on a leave of absence on July 1, 2002, by the2971last business day of the 5th month following the month the leave2972of absence concludes. This election is irrevocable, except as2973provided in paragraph (e). Upon making such election, the2974employee shall be enrolled as a participant of the Public2975Employee Optional Retirement Program, the employee’s membership2976in the Florida Retirement System shall be governed by the2977provisions of this part, and the employee’s membership in the2978defined benefit program of the Florida Retirement System shall2979terminate. The employee’s enrollment in the Public Employee2980Optional Retirement Program shall be effective the first day of2981the month for which a full month’s employer contribution is made2982to the optional program.2983b.Any such employee who fails to elect to participate in2984the Public Employee Optional Retirement Program within the2985prescribed time period is deemed to have elected to retain2986membership in the defined benefit program of the Florida2987Retirement System, and the employee’s option to elect to2988participate in the optional program is forfeited.29892.With respect to employees who become eligible to2990participate in the Public Employee Optional Retirement Program2991by reason of employment in a regularly established position with2992a district school board employer commencing after July 1, 2002:2993a.Any such employee shall, by default, be enrolled in the2994defined benefit retirement program of the Florida Retirement2995System at the commencement of employment, and may, by the last2996business day of the 5th month following the employee’s month of2997hire, elect to participate in the Public Employee Optional2998Retirement Program. The employee’s election must be made in2999writing or by electronic means and must be filed with the third3000party administrator. The election to participate in the optional3001program is irrevocable, except as provided in paragraph (e).3002b.If the employee files such election within the3003prescribed time period, enrollment in the optional program shall3004be effective on the first day of employment. The employer3005retirement contributions paid through the month of the employee3006plan change shall be transferred to the optional program, and,3007effective the first day of the next month, the employer shall3008pay the applicable contributions based on the employee3009membership class in the optional program.3010c.Any such employee who fails to elect to participate in3011the Public Employee Optional Retirement Program within the3012prescribed time period is deemed to have elected to retain3013membership in the defined benefit program of the Florida3014Retirement System, and the employee’s option to elect to3015participate in the optional program is forfeited.30163.For purposes of this paragraph,“district school board3017employer”means any district school board that participates in3018the Florida Retirement System for the benefit of certain3019employees, or a charter school or charter technical career3020center that participates in the Florida Retirement System as3021provided in s.121.051(2)(d).3022(c)1.With respect to an eligible employee who is employed3023in a regularly established position on December 1, 2002, by a3024local employer:3025a.Any such employee may elect to participate in the Public3026Employee Optional Retirement Program in lieu of retaining his or3027her membership in the defined benefit program of the Florida3028Retirement System. The election must be made in writing or by3029electronic means and must be filed with the third-party3030administrator by February 28, 2003, or, in the case of an active3031employee who is on a leave of absence on October 1, 2002, by the3032last business day of the 5th month following the month the leave3033of absence concludes. This election is irrevocable, except as3034provided in paragraph (e). Upon making such election, the3035employee shall be enrolled as a participant of the Public3036Employee Optional Retirement Program, the employee’s membership3037in the Florida Retirement System shall be governed by the3038provisions of this part, and the employee’s membership in the3039defined benefit program of the Florida Retirement System shall3040terminate. The employee’s enrollment in the Public Employee3041Optional Retirement Program shall be effective the first day of3042the month for which a full month’s employer contribution is made3043to the optional program.3044b.Any such employee who fails to elect to participate in3045the Public Employee Optional Retirement Program within the3046prescribed time period is deemed to have elected to retain3047membership in the defined benefit program of the Florida3048Retirement System, and the employee’s option to elect to3049participate in the optional program is forfeited.30502.With respect to employees who become eligible to3051participate in the Public Employee Optional Retirement Program3052by reason of employment in a regularly established position with3053a local employer commencing after October 1, 2002:3054a.Any such employee shall, by default, be enrolled in the3055defined benefit retirement program of the Florida Retirement3056System at the commencement of employment, and may, by the last3057business day of the 5th month following the employee’s month of3058hire, elect to participate in the Public Employee Optional3059Retirement Program. The employee’s election must be made in3060writing or by electronic means and must be filed with the third3061party administrator. The election to participate in the optional3062program is irrevocable, except as provided in paragraph (e).3063b.If the employee files such election within the3064prescribed time period, enrollment in the optional program shall3065be effective on the first day of employment. The employer3066retirement contributions paid through the month of the employee3067plan change shall be transferred to the optional program, and,3068effective the first day of the next month, the employer shall3069pay the applicable contributions based on the employee3070membership class in the optional program.3071c.Any such employee who fails to elect to participate in3072the Public Employee Optional Retirement Program within the3073prescribed time period is deemed to have elected to retain3074membership in the defined benefit program of the Florida3075Retirement System, and the employee’s option to elect to3076participate in the optional program is forfeited.30773.For purposes of this paragraph,“local employer”means3078any employer not included in paragraph (a) or paragraph (b).3079 (b)(d)Contributions available for self-direction by a 3080 memberparticipantwho has not selected one or more specific 3081 investment products shall be allocated as prescribed by the 3082 state board. The third-party administrator shall notify the 3083 memberany such participantat least quarterly that the member 3084participantshould take an affirmative action to make an asset 3085 allocation among the investment planoptional programproducts. 3086 (c) On or after July 1, 2011, a member of the pension plan 3087 who obtains a refund of employee contributions retains his or 3088 her prior plan choice upon return to employment in a regularly 3089 established position with a participating employer. 3090 (d) A member of the investment plan who takes a 3091 distribution of any contributions from his investment plan 3092 account is considered a retiree. Upon reemployment in a 3093 regularly established position with a participating employer, 3094 the member returns as a new hire and, if applicable, may 3095 participate in the Florida Retirement System. 3096 (e) After the period during which an eligible employee had 3097 the choice to elect the pension plandefined benefit programor 3098 the investment planoptional retirement program, or the month 3099 following the receipt of the eligible employee’s plan election, 3100 if sooner, the employee shall have one opportunity, at the 3101 employee’s discretion, to choose to move from the pension plan 3102defined benefit programto the investment planoptional3103retirement programor from the investment planoptional3104retirement programto the pension plandefined benefit program. 3105 Eligible employees may elect to move between Florida Retirement 3106 System programs only if they are earning service credit in an 3107 employer-employee relationship consistent with s. 3108 121.021(17)(b), excluding leaves of absence without pay. 3109 Effective July 1, 2005, such elections are effective on the 3110 first day of the month following the receipt of the election by 3111 the third-party administrator and are not subject to the 3112 requirements regarding an employer-employee relationship or 3113 receipt of contributions for the eligible employee in the 3114 effective month, except when the election is received by the 3115 third-party administrator. This paragraph is contingent upon 3116 receiving approval from the Internal Revenue Service to include 3117for includingthe choice described herein within the programs 3118 offered by the Florida Retirement System. 3119 1. If the employee chooses to move to the investment plan 3120optional retirement program, the applicable provisions of 3121 subsection (3)this section shallgovern the transfer. 3122 2. If the employee chooses to move to the pension plan 3123defined benefit program, the employee must transfer from his or 3124 her investment planoptional retirement programaccount, and 3125 from other employee moneys as necessary, a sum representing the 3126 present value of that employee’s accumulated benefit obligation 3127 immediately following the time of such movement, determined 3128 assuming that attained service equals the sum of service in the 3129 pension plandefined benefit programand service in the 3130 investment planoptional retirement program. Benefit 3131 commencement occurs on the first date the employee is eligible 3132 for unreduced benefits, using the discount rate and other 3133 relevant actuarial assumptions that were used to value the 3134 pensiondefined benefitplan liabilities in the most recent 3135 actuarial valuation. For any employee who, at the time of the 3136 second election, already maintains an accrued benefit amount in 3137 the pension plandefined benefit program, the then-present value 3138 of the accrued benefit shall be deemed part of the required 3139 transfer amount. The division shall ensure that the transfer sum 3140 is prepared using a formula and methodology certified by an 3141 enrolled actuary. A refund of any employee contributions or 3142 additional member payments made which exceed the employee 3143 contributions that would have accrued had the member remained in 3144 the pension plan and not transferred to the investment plan is 3145 not permitted. 3146 3. Notwithstanding subparagraph 2., an employee who chooses 3147 to move to the pension plandefined benefit program and who3148became eligible to participatein the optional retirement3149program by reason of employment in a regularly established3150position with a state employer after June 1, 2002; a district3151school board employer after September 1, 2002; or a local3152employer after December 1, 2002,must transfer from his or her 3153 investment planoptional retirement programaccount, and from 3154 other employee moneys as necessary, a sum representing the 3155 employee’s actuarial accrued liability. A refund of any employee 3156 contributions or additional participant payments made which 3157 exceed the employee contributions that would have accrued had 3158 the member remained in the pension plan and not transferred to 3159 the investment plan is not permitted. 3160 4. An employee’s ability to transfer from the pension plan 3161defined benefit programto the investment planoptional3162retirement programpursuant to paragraphs (a) and (b)(a)-(d), 3163 and the ability of a current employee to have an option to later 3164 transfer back into the pension plandefined benefit program3165 under subparagraph 2., shall be deemed a significant system 3166 amendment. Pursuant to s. 121.031(4), any resulting unfunded 3167 liability arising from actual original transfers from the 3168 pension plandefined benefit programto the investment plan 3169optional programmust be amortized within 30 plan years as a 3170 separate unfunded actuarial base independent of the reserve 3171 stabilization mechanism defined in s. 121.031(3)(f). For the 3172 first 25 years, a direct amortization payment may not be 3173 calculated for this base. During this 25-year period, the 3174 separate base shall be used to offset the impact of employees 3175 exercising their second program election under this paragraph. 3176 It is the intent of the Legislature that the actuarial funded 3177 status of the pension plandefined benefit programnot be 3178 affected by such second program elections in any significant 3179 manner, after due recognition of the separate unfunded actuarial 3180 base. Following the initial 25-year period, any remaining 3181 balance of the original separate base shall be amortized over 3182 the remaining 5 years of the required 30-year amortization 3183 period. 3184 5. If the employee chooses to transfer from the investment 3185 planoptional retirement programto the pension plandefined3186benefit programand retains an excess account balance in the 3187 investment planoptional programafter satisfying the buy-in 3188 requirements under this paragraph, the excess may not be 3189 distributed until the member retires from the pension plan 3190defined benefit program. The excess account balance may be 3191 rolled over to the pension plandefined benefit programand used 3192 to purchase service credit or upgrade creditable service in that 3193 program. 3194 (f) On or after July 1, 2011, a member of the pension plan 3195 who obtains a refund of employee contributions retains his or 3196 her prior plan choice upon return to employment in a regularly 3197 established position with a participating employer. 3198 (g) A member of the investment plan who takes a 3199 distribution of any contributions from his or her investment 3200 plan account is considered a retiree. Upon reemployment in a 3201 regularly established position with a participating employer, 3202 the member returns as a new hire and, if applicable, may 3203 participate in the Florida Retirement System. 3204 (5) CONTRIBUTIONS.— 3205 (a) TheEachemployer and employee shall make the required 3206 contributions to the investment plan based on a percentage of 3207 the employee’s gross monthly compensationcontribute on behalf3208of each participantin the Public Employee optional retirement3209Program, as provided in part III of this chapter. 3210 (b) Employee contributions shall be paid on a pretax basis, 3211 as provided in s. 121.71(2). 3212 (c) The state board, acting as plan fiduciary, shall ensure 3213 that all plan assets are held in a trust, pursuant to s. 401 of 3214 the Internal Revenue Code. The fiduciary shall ensure that said 3215 contributions are allocated as follows: 3216 1. The employer and employee portion earmarked for member 3217participantaccounts shall be used to purchase interests in the 3218 appropriate investment vehiclesfor the accounts of each3219participantas specified by the memberparticipant, or in 3220 accordance with paragraph (4)(b)(4)(d). 3221 2. The employer portion earmarked for administrative and 3222 educational expenses shall be transferred to the state board. 3223 3. The employer portion earmarked for disability benefits 3224 shall be transferred to the department. 3225 (d)(b)The third-party administrator isEmployers are3226 responsible for monitoring and notifying employers of the 3227participants regardingmaximum contribution levels allowed for 3228 memberspermittedunder the Internal Revenue Code. If a member 3229participantcontributes to any other tax-deferred plan, the 3230 memberhe or sheis responsible for ensuring that total 3231 contributions made to the investment planoptional programand 3232 to any other such plan do not exceed federally permitted 3233 maximums. 3234 (e)(c)The investment planPublic Employee Optional3235Retirement Programmay accept for deposit into member 3236participantaccounts contributions in the form of rollovers or 3237 direct trustee-to-trustee transfers by or on behalf of members 3238participants, reasonably determined by the state board to be 3239 eligible for rollover or transfer to the investment plan 3240optional retirement programpursuant to the Internal Revenue 3241 Code, if such contributions are made in accordance with rulesas3242may beadopted by the board. Such contributions mustshallbe 3243 accounted for in accordance withanyapplicable Internal Revenue 3244 Code requirements and rules of the state board. 3245 (6) VESTING REQUIREMENTS.— 3246 (a) A member is fully and immediately vested in all 3247 employee contributions paid to the investment plan as provided 3248 in s. 121.72(2), plus interest and earnings thereon and less 3249 investment fees and administrative charges. 3250 (b)(a)1. With respect to employer contributions paid on 3251 behalf of a member ofthe participant tothe investment plan 3252optional retirement program, plus interest and earnings thereon 3253 and less investment fees and administrative charges, a member 3254 who voluntarily elected to enroll in the investment plan before 3255 July 1, 2011, or an eligible employee initially enrolled in the 3256 Florida Retirement System before July 1, 2011, who has the 3257 option to voluntarily elect to enroll in the investment plan, 3258participantis vested after completing 1 work year with an 3259 employer, including any service while the employeeparticipant3260 was a member of the pension plandefined benefit programor an 3261 optional retirement program authorized under s. 121.051(2)(c), 3262ors. 121.055(6), or s. 121.35. 3263 2. With respect to employer contributions paid on behalf of 3264 the member of the investment plan, plus interest and earnings 3265 thereon and less investment fees and administrative charges, an 3266 employee initially enrolled in the Florida Retirement System on 3267 or after July 1, 2011, is vested according to the following 3268 schedule: 3269 a. Upon completion of 1 year of service.................20% 3270 b. Upon completion of 2 years of service................40% 3271 c. Upon completion of 3 years of service................60% 3272 d. Upon completion of 4 years of service................80% 3273 e. Upon completion of 5 or more years of service.......100% 3274 3275 Years of service includes any service completed while the 3276 employee was a member of the pension plan or an optional 3277 retirement program authorized under s. 121.051(2)(c), s. 3278 121.055(6), or s. 121.35. 3279 3.2.If the memberparticipantterminates employment before 3280 satisfying the vesting requirements, the nonvested accumulation 3281 must be transferred from the member’sparticipant’saccounts to 3282 the state board for deposit and investment by the state board in 3283 the suspense account created within the FloridaPublic Employee3284OptionalRetirement System Investment PlanProgramTrust Fund. 3285 If the terminated memberparticipantis reemployed as an 3286 eligible employee within 5 years, the state board shall transfer 3287 to the member’sparticipant’saccount any amount previously 3288 transferred from the member’sparticipant’saccounts to the 3289 suspense account, plus actual earnings on such amount while in 3290 the suspense account. 3291 (c)(b)1. With respect to amounts contributed by an employer 3292 and transferred from the pension plandefined benefit programto 3293 the investment planprogram, plus interest and earnings, and 3294 less investment fees and administrative charges, a member 3295participantshall be vested in the amount transferred upon 3296 meeting the service requirements for the member’sparticipant’s3297 membership class as set forth in s. 121.021(29). The third-party 3298 administrator shall account for such amounts for each member 3299participant. The division shall notify the memberparticipant3300 and the third-party administrator when the memberparticipant3301 has satisfied the vesting period for Florida Retirement System 3302 purposes. 3303 2. If the memberparticipantterminates employment before 3304 satisfying the vesting requirements, the nonvested employer 3305 accumulation must be transferred from the member’sparticipant’s3306 accounts to the state board for deposit and investment by the 3307 state board in the suspense account created within the Florida 3308Public Employee OptionalRetirement System Investment Plan 3309ProgramTrust Fund. If the terminated memberparticipantis 3310 reemployed as an eligible employee within 5 years, the state 3311 board shall transfer to the member’sparticipant’saccount any 3312 amount previously transferred from the member’sparticipant’s3313 accounts to the suspense account, plus the actual earnings on 3314 such amount while in the suspense account. 3315 (d)(c)Any nonvested accumulations transferred from a 3316 member’sparticipant’saccount to the state board’s suspense 3317 account, including any accompanying service credit, shall be 3318 forfeited by the memberparticipantif the memberparticipantis 3319 not reemployed as an eligible employee within 5 years after 3320 termination. 3321 (e) If the member elects to receive any of his or her 3322 vested employer or employee contributions upon termination of 3323 employment as defined in s. 121.021, except for a mandatory 3324 distribution of a de minimis account authorized by the state 3325 board or a minimum required distribution provided by s. 3326 401(a)(9) of the Internal Revenue Code, the employee shall 3327 forfeit all nonvested employer contributions and accompanying 3328 service credit paid on behalf of the employee to the investment 3329 plan. 3330 (7) BENEFITS.—Under the investment plan the normal 3331 retirement date is the date on which a member attains age 62 or 3332 completes 5 years of service, whichever occurs later. Plan 3333 benefits mustPublic Employee Optional Retirement program: 3334 (a)Benefits shallBe provided in accordance with s. 401(a) 3335 of the Internal Revenue Code. 3336 (b)Benefits shallAccrue in individual accounts that are 3337 member-directedparticipant-directed, portable, and funded by 3338 employer and employee contributions and earnings thereon. 3339 (c)Benefits shallBe payable in accordance withthe3340provisions ofs. 121.591. 3341 (8) ADMINISTRATION OF PLANPROGRAM.— 3342(a)The investment planoptional retirement programshall 3343 be administered by the state board and affected employers. The 3344 state board may require oaths, by affidavit or otherwise, and 3345 acknowledgments from persons in connection with the 3346 administration of its statutory duties and responsibilities for 3347 the planthis program. An oath, by affidavit or otherwise, may 3348 not be required of an employeeparticipantat the time of 3349 enrollment. For members enrolled before July 1, 2011, 3350 acknowledgment of an employee’s election to enrollparticipate3351 in the plan mayprogram shallbe no greater than necessary to 3352 confirm the employee’s election. The state board shall adopt 3353 rules to carry out its statutory duties with respect to 3354 administering the investment planoptional retirement program, 3355 includingestablishingthe roles and responsibilities of 3356 affected state, local government, and education-related 3357 employers, the state board, the department, and third-party 3358 contractors. The department shall adopt rules necessary to 3359 administer the investment planoptional programin coordination 3360 with the pension plandefined benefit programand the disability 3361 benefits available under the investment planoptional program. 3362 (a)(b)1. The state board shall select and contract with a 3363onethird-party administrator to provide administrative services 3364 if those services cannot be competitively and contractually 3365 provided by the divisionof Retirement within the Department of3366Management Services. With the approval of the state board, the 3367 third-party administrator may subcontractwith other3368organizations or individualsto provide components of the 3369 administrative services. As a cost of administration, the state 3370 board may compensateanysuch contractor for its services, in 3371 accordance with the terms of the contract, as is deemed 3372 necessary or proper by the board. The third-party administrator 3373 may not be an approved provider or be affiliated with an 3374 approved provider. 3375 2. These administrative services may include, but are not 3376 limited to, enrollment of eligible employees, collection of 3377 employer and employee contributions, disbursement ofsuch3378 contributions to approved providers in accordance with the 3379 allocation directions of membersparticipants; services relating 3380 to consolidated billing; individual and collective recordkeeping 3381 and accounting; asset purchase, control, and safekeeping; and 3382 direct disbursement of funds to and from the third-party 3383 administrator, the division, the state board, employers, plan 3384 membersparticipants, approved providers, and beneficiaries. 3385 This section does not prevent or prohibit a bundled provider 3386 from providing any administrative or customer service, including 3387 accounting and administration of individual memberparticipant3388 benefits and contributions; individual memberparticipant3389 recordkeeping; asset purchase, control, and safekeeping; direct 3390 execution of the member’sparticipant’sinstructions as to asset 3391 and contribution allocation; calculation of daily net asset 3392 values; direct access to memberparticipantaccount information; 3393 or periodic reporting to membersparticipants, at least 3394 quarterly, on account balances and transactions, if these 3395 services are authorized by the state board as part of the 3396 contract. 3397 (b)1.3.The state board shall select and contract with one 3398 or more organizations to provide educational services. With 3399 approval of the state board, the organizations may subcontract 3400with other organizations or individualsto provide components of 3401 the educational services. As a cost of administration, the state 3402 board may compensate any such contractor for its services in 3403 accordance with the terms of the contract, as is deemed 3404 necessary or proper by the board. The education organization may 3405 not be an approved provider or be affiliated with an approved 3406 provider. 3407 2.4.Educational services shall be designed by the state 3408 board and department to assist employers, eligible employees, 3409 membersparticipants, and beneficiaries in order to maintain 3410 compliance with United States Department of Labor regulations 3411 under s. 404(c) of the Employee Retirement Income Security Act 3412 of 1974,andto assist employees in understanding theirchoice3413of defined benefit or defined contributionretirement program, 3414 and, if applicable, the choice between the pension plan and the 3415 investment planalternatives. Educational services include, but 3416 are not limited to, disseminating educational materials; 3417 providing retirement planning education; explaining the pension 3418differences between the defined benefit retirementplan and the 3419 investmentdefined contribution retirementplan; and offering 3420 financial planning guidance on matters such as investment 3421 diversification, investment risks, investment costs, and asset 3422 allocation. An approved provider may also provide educational 3423 information, including retirement planning and investment 3424 allocation information concerning its products and services. 3425 (c)1. In evaluating and selecting a third-party 3426 administrator, the state board shall establish criteria for 3427 evaluatingunder which it shall considerthe relative 3428 capabilities and qualifications of each proposed administrator. 3429 In developing such criteria, the state board shall consider: 3430 a. The administrator’s demonstrated experience in providing 3431 administrative services to public or private sector retirement 3432 systems. 3433 b. The administrator’s demonstrated experience in providing 3434 daily valued recordkeeping for investmentto defined3435contributionplans. 3436 c. The administrator’s ability and willingness to 3437 coordinate its activities withthe Florida Retirement System3438 employers, the state board, and the division, and to supply to 3439 such employers, the board, and the division the information and 3440 data they require, including, but not limited to, monthly 3441 management reports, quarterly memberparticipantreports, and ad 3442 hoc reports requested by the department or state board. 3443 d. The cost-effectiveness and levels of the administrative 3444 services provided. 3445 e. The administrator’s ability to interact with the members 3446participants, the employers, the state board, the division, and 3447 the providers; the means by which membersparticipantsmay 3448 access account information, direct investment of contributions, 3449 make changes to their accounts, transfer moneys between 3450 available investment vehicles, and transfer moneys between 3451 investment products; and any fees that apply to such activities. 3452 f. Any other factor deemed necessary by theTrustees of the3453 state boardof Administration. 3454 2. In evaluating and selecting an educational provider, the 3455 state board shall establish criteria under which it shall 3456 consider the relative capabilities and qualifications of each 3457 proposed educational provider. In developing such criteria, the 3458 board shall consider: 3459 a. Demonstrated experience in providing educational 3460 services to public or private sector retirement systems. 3461 b. Ability and willingness to coordinate its activities 3462 with theFlorida Retirement Systememployers, the state board, 3463 and the division, and to supply to such employers, the board, 3464 and the division the information and data they require, 3465 including, but not limited to, reports on educational contacts. 3466 c. The cost-effectiveness and levels of the educational 3467 services provided. 3468 d. Ability to provide educational services via different 3469 media, including, but not limited to, the Internet, personal 3470 contact, seminars, brochures, and newsletters. 3471 e. Any other factor deemed necessary by theTrustees of the3472 state boardof Administration. 3473 3. The establishment of the criteria shall be solely within 3474 the discretion of the state board. 3475 (d) The state board shall develop the form and content of 3476 any contracts to be offered under the investment planPublic3477Employee Optional Retirement Program. In developing theits3478 contracts, the state board shallmustconsider: 3479 1. The nature and extent of the rights and benefits to be 3480 afforded in relation to therequiredcontributions required 3481 under the planprogram. 3482 2. The suitability of the rights and benefits providedto3483be affordedand the interests of employers in the recruitment 3484 and retention of eligible employees. 3485 (e)1. The state board may contractwith any consultantfor 3486 professional services, including legal, consulting, accounting, 3487 and actuarial services, deemed necessary to implement and 3488 administer the investment planoptional program bythe Trustees3489of the state board of Administration. The state board may enter 3490 into a contract with one or more vendors to provide low-cost 3491 investment advice to membersparticipants, supplemental to 3492 education provided by the third-party administrator. All fees 3493 underanysuch contract shall be paid by those members 3494participantswho choose to use the services of the vendor. 3495 2. The department may contractwith consultantsfor 3496 professional services, including legal, consulting, accounting, 3497 and actuarial services, deemed necessary to implement and 3498 administer the investment planoptional programin coordination 3499 with the pension plandefined benefit program of the Florida3500Retirement System. The department, in coordination with the 3501 state board, may enter into a contract with the third-party 3502 administrator in order to coordinate services common to the 3503 various programs within the Florida Retirement System. 3504 (f) The third-party administrator mayshallnot receive 3505 direct or indirect compensation from an approved provider, 3506 except as specifically provided for in the contract with the 3507 state board. 3508 (g) The state board shall receive and resolve member 3509participantcomplaints against the investment planprogram, the 3510 third-party administrator, or any planprogramvendor or 3511 provider; shall resolve any conflict between the third-party 3512 administrator and an approved provider if such conflict 3513 threatens the implementation or administration of the plan 3514programor the quality of services to employees; and may resolve 3515 any other conflicts. The third-party administrator shall retain 3516 all memberparticipantrecords for at least 5 years for use in 3517 resolving any memberparticipantconflicts. The state board, the 3518 third-party administrator, or a provider is not required to 3519 produce documentation or an audio recording to justify action 3520 taken with regard to a memberparticipantif the action occurred 3521 5 or more years before the complaint is submitted to the state 3522 board. It is presumed that all action taken 5 or more years 3523 before the complaint is submitted was taken at the request of 3524 the memberparticipantand with the member’sparticipant’sfull 3525 knowledge and consent. To overcome this presumption, the member 3526participantmust present documentary evidence or an audio 3527 recording demonstrating otherwise. 3528 (9) INVESTMENT OPTIONS OR PRODUCTS; PERFORMANCE REVIEW.— 3529 (a) The state board shall develop policy and procedures for 3530 selecting, evaluating, and monitoring the performance of 3531 approved providers and investment productsto which employees3532may direct retirement contributionsunder the investment plan 3533program. In accordance with such policy and procedures, the 3534 state board shall designate and contract for a number of 3535 investment products as determined by the state board. The state 3536 board shall also select one or more bundled providers, each of 3537 whichwhommay offer multiple investment options and related 3538 services, ifwhensuchanapproach is determined by the state 3539 board to provideaffordvalue to the membersparticipants3540 otherwise not available through individual investment products. 3541 Each approved bundled provider may offer investment options that 3542 provide membersparticipantswith the opportunity to invest in 3543 each of the following asset classes, to be composed of 3544 individual options that representeithera single asset class or 3545 a combination thereof: money markets, United States fixed 3546 income, United States equities, and foreign stock. The state 3547 board shall review and manage all educational materials, 3548 contract terms, fee schedules, and other aspects oftheapproved 3549 provider relationships to ensure that no provider is unduly 3550 favored or penalized by virtue of its status within the 3551 investment plan. 3552 (b) The state board shall consider investment options or 3553 products it considers appropriate to give membersparticipants3554 the opportunity to accumulate retirement benefits, subject to 3555 the following: 3556 1. The investment planPublic Employee Optional Retirement3557Programmust offer a diversified mix of low-cost investment 3558 products that span the risk-return spectrum and may include a 3559 guaranteed account as well as investment products, such as 3560 individually allocated guaranteed and variable annuities, which 3561 meet the requirements of this subsection and combine the ability 3562 to accumulate investment returns with the option of receiving 3563 lifetime income consistent with the long-term retirement 3564 security of a pension plan and similar to the lifetime-income 3565 benefit provided by the Florida Retirement System. 3566 2. Investment options or products offered bythe group of3567 approved providers may include mutual funds, group annuity 3568 contracts, individual retirement annuities, interests in trusts, 3569 collective trusts, separate accounts, and other such financial 3570 instruments, andmay includeproducts that give members 3571participantsthe option of committing their contributions for an 3572 extended time period in an effort to obtain returns higher than 3573 those that could be obtained from investment products offering 3574 full liquidity. 3575 3. The state board mayshallnot contract with aany3576 provider that imposes a front-end, back-end, contingent, or 3577 deferred sales charge, or any other fee that limits or restricts 3578 the ability of membersparticipantsto select any investment 3579 product available in the investment planoptional program. This 3580 prohibition does not apply to fees or charges that are imposed 3581 on withdrawals from products that give membersparticipantsthe 3582 option of committingtheircontributions for an extended time 3583 period in an effort to obtain returns higher than those that 3584 could be obtained from investment products offering full 3585 liquidity, provided that the productin question, net of all 3586 fees and charges, produces material benefits relative to other 3587 comparable products in the planprogramoffering full liquidity. 3588 4. Fees or charges for insurance features, such as 3589 mortality and expense-risk charges, must be reasonable relative 3590 to the benefits provided. 3591 (c) In evaluating and selecting approved providers and 3592 products, the state board shall establish criteria for 3593 evaluatingunder which it shall considerthe relative 3594 capabilities and qualifications of each proposed provider 3595 company and product. In developing such criteria, the state 3596 board shall consider the following to the extent such factors 3597 may be applied in connection with investment products, services, 3598 or providers: 3599 1. Experience in the United States providing retirement 3600 products and related financial services under investmentdefined3601contribution retirementplans. 3602 2. Financial strength and stability aswhich shall be3603 evidenced by the highest ratings assigned by nationally 3604 recognized rating services when comparing proposed providers 3605 that are so rated. 3606 3. Intrastate and interstate portability of the product 3607 offered, including early withdrawal options. 3608 4. Compliance with the Internal Revenue Code. 3609 5. The cost-effectiveness of the product provided and the 3610 levels of service supporting the product relative to its 3611 benefits and its characteristics, including, without limitation,3612 the level of risk borne by the provider. 3613 6. The provider company’s ability and willingness to 3614 coordinate its activities with Florida Retirement System 3615 employers, the department, and the state board, and to supplyto3616 thesuchemployers, the department, and the state board with the 3617 information and data they require. 3618 7. The methods available to membersparticipantsto 3619 interact with the provider company; the means by which members 3620participantsmay access account information, direct investment 3621 of contributions, make changes to their accounts, transfer 3622 moneys between available investment vehicles, and transfer 3623 moneys between provider companies; and any fees that apply to 3624 such activities. 3625 8. The provider company’s policies with respect to the 3626 transfer of individual account balances, contributions, and 3627 earnings thereon, both internally among investment products 3628 offered by the provider company and externally between approved 3629 providers, as well as any fees, charges, reductions, or 3630 penalties that may be applied. 3631 9. An evaluation of specific investment products, taking 3632 into account each product’s experience in meeting its investment 3633 return objectives net of all related fees, expenses, and 3634 charges, including, but not limited to, investment management 3635 fees, loads, distribution and marketing fees, custody fees, 3636 recordkeeping fees, education fees, annuity expenses, and 3637 consulting fees. 3638 10. Organizational factors, including, but not limited to, 3639 financial solvency, organizational depth, and experience in 3640 providing institutional and retail investment services. 3641 (d)By March 1, 2010,The state board shall identify and 3642 offer at least one terror-free investment product that allocates 3643 its funds among securities not subject to divestiture as 3644 provided in s. 215.473 if the investment product is deemed by 3645 the state board to be consistent with prudent investor 3646 standards. No person may bring a civil, criminal, or 3647 administrative action against an approved provider; the state 3648 board; or any employee, officer, director, or trustee of such 3649 provider based upon the divestiture of any security or the 3650 offering of a terror-free investment product as specified in 3651 this paragraph. 3652 (e) As a condition of offering ananyinvestment option or 3653 product in the investment planoptional retirement program, the 3654 approved provider must agree to make the investment product or 3655 service available under the most beneficial terms offered to any 3656 other customer, subject to approval by theTrustees of thestate 3657 boardof Administration. 3658 (f) The state board shall regularly review the performance 3659 of each approved provider and product and related organizational 3660 factors to ensure continued compliance with established 3661 selection criteria and with board policy and procedures. 3662 Providers and products may be terminated subject to contract 3663 provisions. The state board shall adopt procedures to transfer 3664 account balances from terminated products or providers to other 3665 products or providers in the investment planoptional program. 3666 (g)1. An approved provider shall comply with all applicable 3667 federal and state securities and insurance laws and regulations 3668applicable to the provider, as well as with the applicable rules 3669 and guidelines of the National Association of Securities Dealers 3670 which govern the ethical marketing of investment products. In 3671 furtherance of this mandate, an approved provider must agree in 3672 its contract with the state board to establish and maintain a 3673 compliance education and monitoring system to supervise the 3674 activities of all personnel who directly communicate with 3675 individual membersparticipantsand recommend investment 3676 products, which system is consistent with rules of the National 3677 Association of Securities Dealers. 3678 2. Approved provider personnel who directly communicate 3679 with individual membersparticipantsand who recommend 3680 investment products shall make an independent and unbiased 3681 determination as to whether an investment product is suitable 3682 for a particular memberparticipant. 3683 3. The state board shall develop procedures to receive and 3684 resolve memberparticipantcomplaints against a provider or 3685 approved provider personnel, and, ifwhenappropriate, refer 3686 such complaints to the appropriate agency. 3687 4. Approved providers may not sell or in any way distribute 3688 any customer list or memberparticipantidentification 3689 information generated through their offering of products or 3690 services through the investment planoptional retirement3691program. 3692 (10) EDUCATION COMPONENT.— 3693 (a) The state board, in coordination with the department, 3694 shall provideforan education component for eligible employees 3695system membersin a manner consistent withthe provisions of3696 this section. The education component must be available to 3697 eligible employees at least 90 days beforeprior tothe 3698 beginning date of the election period for the employees of the 3699 respective types of employers. 3700 (b) The education component must provide eligible employees 3701system memberswith impartial and balanced information about 3702 plan choices. The education component must involve multimedia 3703 formats. PlanProgramcomparisons must, to the greatest extent 3704 possible, be based upon the retirement income that different 3705 retirement programs may provide to the memberparticipant. The 3706 state board shall monitor the performance of the contract for 3707 the education component to ensure that the program is conducted 3708 in accordance with the contract, applicable law, and the rules 3709 of the board. 3710 (c) The state board, in coordination with the department, 3711 shall provide for an initial and ongoing transfer education 3712 component to provide system members with information necessary 3713 to make informed plan choice decisions. The transfer education 3714 component must include, but is not limited to, information on: 3715 1. The amount of money available to a member to transfer to 3716 the investment plandefined contribution program. 3717 2. The features of and differences between the pension plan 3718defined benefit programand the investment plandefined3719contribution program, both generally and specifically, as those 3720 differences may affect the member. 3721 3. The expected benefit available if the member were to 3722 retire under each of the retirement programs, based on 3723 appropriate alternative sets of assumptions. 3724 4. The rate of return from investments in the investment 3725 plandefined contribution programand the period of time over 3726 which such rate of return must be achieved to equal or exceed 3727 the expected monthly benefit payable to the member under the 3728 pension plandefined benefit program. 3729 5. The historical rates of return for the investment 3730 alternatives available in the investment plandefined3731contribution programs. 3732 6. The benefits and historical rates of return on 3733 investments available in a typical deferred compensation plan or 3734 a typical plan under s. 403(b) of the Internal Revenue Code for 3735 which the employee may be eligible. 3736 7. The program choices available to employees of the State 3737 University System and the comparative benefits of each available 3738 program, if applicable. 3739 8. Payout options available in each of the retirement 3740 programs. 3741 (d) An ongoing education and communication component must 3742 provide eligible employeessystem memberswith information 3743 necessary to make informed decisions about choices within their 3744 retirement programof membershipand in preparation for 3745 retirement. The component must include, but is not limited to, 3746 information concerning: 3747 1. Rights and conditions of membership. 3748 2. Benefit features within the program, options, and 3749 effects of certain decisions. 3750 3. Coordination of contributions and benefits with a 3751 deferred compensation plan under s. 457 or a plan under s. 3752 403(b) of the Internal Revenue Code. 3753 4. Significant program changes. 3754 5. Contribution rates and program funding status. 3755 6. Planning for retirement. 3756 (e) Descriptive materials must be prepared under the 3757 assumption that the employee is an unsophisticated investor, and 3758 all materials used in the education component must be approved 3759 by the state board beforeprior todissemination. 3760 (f) The state board and the department shall also establish 3761 a communication component to provide program information to 3762 participating employers and the employers’ personnel and payroll 3763 officers and to explain their respective responsibilities in 3764 conjunction with the retirement programs. 3765 (g) Funding for education of new employees may reflect 3766 administrative costs to the investment planoptional programand 3767 the pension plandefined benefit program. 3768 (h) Pursuant to paragraph (8)(a), all Florida Retirement 3769 System employers have an obligation to regularly communicate the 3770 existence of the two Florida Retirement System plans and the 3771 plan choice in the natural course of administering their 3772 personnel functions, using the educational materials supplied by 3773 the state board and the departmentof Management Services. 3774 (11) MEMBERPARTICIPANTINFORMATION REQUIREMENTS.—The state 3775 board shall ensure that each memberparticipantis provided a 3776 quarterly statement that accounts for employer and employeethe3777 contributions made on behalf of the membersuch participant; the 3778 interest and investment earnings thereon; and any fees, 3779 penalties, or other deductions that applythereto. At a minimum, 3780 such statements must: 3781 (a) Indicate the member’sparticipant’sinvestment options. 3782 (b) State the market value of the account at the close of 3783 the current quarter and previous quarter. 3784 (c) Show account gains and lossesfor the periodand 3785 changes in account accumulation unit values for the quarter 3786period. 3787 (d) Itemize account contributions for the quarter. 3788 (e) Indicate any account changes due to adjustment of 3789 contribution levels, reallocation of contributions, balance 3790 transfers, or withdrawals. 3791 (f) Set forth any fees, charges, penalties, and deductions 3792 that apply to the account. 3793 (g) Indicate the amount of the account in which the member 3794participantis fully vested and the amount of the account in 3795 which the memberparticipantis not vested. 3796 (h) Indicate each investment product’s performance relative 3797 to an appropriate market benchmark. 3798 3799 The third-party administrator shall provide quarterly and annual 3800 summary reports to the state board and any other reports 3801 requested by the department or the board. In any solicitation or 3802 offer of coverage under the investment planan optional3803retirement program, a provider company shall be governed by the 3804 contract readability provisions of s. 627.4145, notwithstanding 3805 s. 627.4145(6)(c). In addition, all descriptive materials must 3806 be prepared under the assumption that the memberparticipantis 3807 an unsophisticated investor. Provider companies must maintain an 3808 internal system of quality assurance, have proven functional 3809 systems that are date-calculation compliant, and be subject to a 3810 due-diligence inquiry that proves their capacity and fitness to 3811 undertake service responsibilities. 3812 (12) ADVISORY COUNCIL TO PROVIDE ADVICE AND ASSISTANCE.—The 3813 Investment Advisory Council, created pursuant to s. 215.444, 3814 shall assist the state board in implementing and administering 3815 the investment planPublic Employee Optional Retirement Program. 3816 TheInvestment Advisorycouncil, created pursuant to s.215.444,3817 shall review the state board’s initial recommendations regarding 3818 the criteria to be used in selecting and evaluating approved 3819 providers and investment products. The council may provide 3820 comments on the recommendations to the board within 45 days 3821 after receiving the initial recommendations. The state board 3822 shall make the final determination as to whether any investment 3823 provider or product, any contractor, or any and all contract 3824 provisions areshall beapproved for the investment plan 3825program. 3826 (13) FEDERAL REQUIREMENTS.— 3827 (a)Provisions ofThis section shall be construed, and the 3828 investment planPublic Employee Optional Retirement Program3829 shall be administered, so as to comply with the Internal Revenue 3830 Code, 26 U.S.C., and specifically with plan qualification 3831 requirements imposed on governmental plans under s. 401(a) of 3832 the Internal Revenue Code. The state board mayshall have the3833power and authority toadopt rules reasonably necessary to 3834 establish or maintain the qualified status of the investment 3835 planOptional Retirement Programunder the Internal Revenue Code 3836 and to implement and administer the planOptional Retirement3837Programin compliance with the Internal Revenue Code and this 3838 part;providedhowever,thatthe board mayshallnothave the3839authority toadopt any rule which makes a substantive change to 3840 the investment planOptional Retirement Programas designed by 3841 this part. 3842 (b) Any section or provision of this chapter which is 3843 susceptible to more than one construction shallmustbe 3844 interpreted in favor of the construction most likely to satisfy 3845 requirements imposed by s. 401(a) of the Internal Revenue Code. 3846 (c) Employer and employee contributions payable under this 3847 section for any limitation year may not exceed the maximum 3848 amount allowable for qualified defined contributionpension3849 plans under applicable provisions of the Internal Revenue Code. 3850 If an employee who is enrolledwho has elected to participatein 3851 the investment plan enrollsPublic Employee Optional Retirement3852Programparticipatesin any other plan that is maintained by the 3853 participating employer, benefits that accrue under the 3854 investment plan arePublic Employee Optional Retirement Program3855shallbeconsidered primary for any aggregate limitation 3856 applicable under s. 415 of the Internal Revenue Code. 3857 (14) INVESTMENT POLICY STATEMENT.— 3858 (a) Investment products and approved providers selected for 3859 the investment planPublic Employee Optional Retirement Program3860 mustshallconform with the FloridaPublic Employee Optional3861 Retirement SystemProgramInvestment Plan Policy Statement, 3862 herein referred to as the “statement,” as developed and approved 3863 by theTrustees of thestate boardof Administration. The 3864 statement must include, among other items, the investment 3865 objectives of the investment planPublic Employee Optional3866Retirement Program, manager selection and monitoring guidelines, 3867 and performance measurement criteria. As required from time to 3868 time, the executive director of the state board may present 3869 recommended changes in the statement to the board for approval. 3870 (b) BeforePrior topresenting the statement, or any 3871 recommended changesthereto, to the state board, the executive 3872 director of the board shall present such statement or changes to 3873 the Investment Advisory Council for review. The council shall 3874 present the results of its review to the board prior to the 3875 board’s final approval of the statement or changes in the 3876 statement. 3877 (15) STATEMENT OF FIDUCIARY STANDARDS AND 3878 RESPONSIBILITIES.— 3879 (a) Investment of investment planoptional defined3880contribution retirement planassets shall be made for the sole 3881 interest and exclusive purpose of providing benefits to plan 3882 membersparticipantsand beneficiaries and defraying reasonable 3883 expenses of administering the plan. The program’s assets shall 3884are tobe invested,on behalf of the membersprogram3885participants,with the care, skill, and diligence that a prudent 3886 person acting in a like manner would undertake. The performance 3887 of the investment duties set forth in this paragraph shall 3888 comply with the fiduciary standards set forth in the Employee 3889 Retirement Income Security Act of 1974 at 29 U.S.C. s. 3890 1104(a)(1)(A)-(C). In case of conflict with other provisions of 3891 law authorizing investments, the investment and fiduciary 3892 standards set forth in this subsection shall prevail. 3893 (b) If a memberparticipantor beneficiary of the 3894 investment planPublic Employee Optional Retirement program3895 exercises control over the assets in his or her account, as 3896 determined by reference to regulations of the United States 3897 Department of Labor under s. 404(c) of the Employee Retirement 3898 Income Security Act of 1974 and all applicable laws governing 3899 the operation of the program, anoprogram fiduciary is not 3900shall beliable for any loss to a member’sparticipant’sor 3901 beneficiary’s account which results from the member’ssuch3902participant’sor beneficiary’s exercise of control. 3903 (c) Subparagraph (8)(b)2.(8)(b)4.and paragraph(15)(b) 3904 incorporate the federal law concept of memberparticipant3905 control, established by regulations of the United States 3906 Department of Labor under s. 404(c) of the Employee Retirement 3907 Income Security Act of 1974 (ERISA). The purpose of this 3908 paragraph is to assist employers and the state boardof3909Administrationin maintaining compliance with s. 404(c), while 3910 avoiding unnecessary costs and eroding memberparticipant3911 benefits under the investment planPublic Employee Optional3912Retirement program. Pursuant to 29 C.F.R. s. 2550.404c 3913 1(b)(2)(i)(B)(1)(viii), the state boardof Administrationor its 3914 designated agents shall deliver to membersparticipantsof the 3915 investment planPublic Employee Optional Retirement programa 3916 copy of the prospectus most recently provided to the plan, and, 3917 pursuant to 29 C.F.R. s. 2550.404c-1(b)(2)(i)(B)(2)(ii), shall 3918 provide such membersparticipantsan opportunity to obtain this 3919 information, except that: 3920 1. The requirement to deliver a prospectus shall bedeemed3921to besatisfied by delivery of a fund profile or summary profile 3922 that contains the information that would be included in a 3923 summary prospectus as described by Rule 498 under the Securities 3924 Act of 1933, 17 C.F.R. s. 230.498. IfWhenthe transaction fees, 3925 expense information, or other information provided by a mutual 3926 fund in the prospectus does not reflect terms negotiated by the 3927 state boardof Administrationor its designated agents, the 3928aforementionedrequirement isdeemed to besatisfied by delivery 3929 of a separate document described by Rule 498 substituting 3930 accurate information; and 3931 2. Delivery shall bedeemed to have beeneffected if 3932 delivery is through electronic means and the following standards 3933 are satisfied: 3934 a. Electronically-delivered documents are prepared and 3935 provided consistent with style, format, and content requirements 3936 applicable to printed documents; 3937 b. Each memberparticipantis provided timely and adequate 3938 notice of the documents that are to be delivered and their 3939 significance thereof, and of the member’sparticipant’sright to 3940 obtain a paper copy of such documents free of charge; 3941 c.(I)MembersParticipantshave adequate access to the 3942 electronic documents, at locations such as their worksites or 3943 public facilities, and have the ability to convert the documents 3944 to paper free of charge by the state boardof Administration, 3945 and the board or its designated agents take appropriate and 3946 reasonable measures to ensure that the system for furnishing 3947 electronic documents results in actual receipt., or3948(II)MembersParticipantshave provided consent to receive 3949 information in electronic format, which consent may be revoked; 3950 and 3951 d. The state boardof Administration, or its designated 3952 agent, actually provides paper copies of the documents free of 3953 charge, upon request. 3954 (16) DISABILITY BENEFITS.—For any memberparticipantof the 3955 investment planoptional retirement programwho becomes totally 3956 and permanently disabled, benefits mustshallbe paid in 3957 accordance withthe provisions ofs. 121.591. 3958 (17) SOCIAL SECURITY COVERAGE.—Social security coverage 3959 shall be provided for all officers and employees who become 3960 membersparticipantsof the investment planoptional program. 3961 Any modification of the present agreement with the Social 3962 Security Administration, or referendum required under the Social 3963 Security Act, for the purpose of providing social security 3964 coverage for any member shall be requested by the state agency 3965 in compliance with the applicable provisions of the Social 3966 Security Act governing such coverage. However, retroactive 3967 social security coverage for service beforeprior toDecember 1, 3968 1970, with the employer mayshallnot be provided for any member 3969 who was not covered under the agreement as of November 30, 1970. 3970 (18) RETIREE HEALTH INSURANCE SUBSIDY.—All officers and 3971 employees who are membersparticipantsof the investment plan 3972 areoptional program shall beeligible to receive the retiree 3973 health insurance subsidy, subject tothe provisions ofs. 3974 112.363. 3975 (19) MEMBERPARTICIPANTRECORDS.—Personal identifying 3976 information of a member ofparticipant inthe investment plan 3977Public Employee Optional Retirement Programcontained in Florida 3978 Retirement System records held by the state boardof3979Administrationor the departmentof Management Servicesis 3980 exempt from s. 119.07(1) and s. 24(a), Art. I of the State 3981 Constitution. 3982 (20) DESIGNATION OF BENEFICIARIES.— 3983 (a) Each memberparticipantmay, by electronic means or on 3984 a form provided for that purpose, signed and filed with the 3985 third-party administrator, designate a choice of one or more 3986 persons, named sequentially or jointly, as his or her 3987 beneficiary for receivingwho shall receivethe benefits, if 3988 any, which may be payable pursuant to this chapter in the event 3989 of the member’sparticipant’sdeath. If no beneficiary is named 3990 in this manner, or if no beneficiary designated by the member 3991participantsurvives the memberparticipant, the beneficiary 3992 shall be the spouse of the deceased, if living. If the member’s 3993participant’sspouse is not alive at the time of the 3994 beneficiary’shis or herdeath, the beneficiary shall be the 3995 member’s living childrenof the participant. If no children 3996 survive, the beneficiary shall be the member’sparticipant’s3997 father or mother, if living; otherwise, the beneficiary shall be 3998 the member’sparticipant’sestate. The beneficiary most recently 3999 designated by a memberparticipant ona form or letter filed4000with the third-party administratorshall be the beneficiary 4001 entitled to any benefits payable at the time of the member’s 4002participant’sdeath. HoweverNotwithstanding any other provision4003in this subsection to the contrary, if a memberfor a4004participant whodies beforeprior tohis or her effective date 4005 of retirement, the spouse at the time of death shall be the 4006 member’sparticipant’sbeneficiary unless the membersuch4007participantdesignates a different beneficiaryas provided in4008this subsectionsubsequent to the member’sparticipant’smost 4009 recent marriage. 4010 (b) If a memberparticipantdesignates a primary 4011 beneficiary other than the member’sparticipant’sspouse, the 4012 member’sparticipant’sspouse must sign the beneficiary 4013 designation form to acknowledge the designation. This 4014 requirement does not apply to the designation of one or more 4015 contingent beneficiaries to receive benefits remaining upon the 4016 death of the primary beneficiary or beneficiaries. 4017 (c) Notwithstanding the member’sparticipant’sdesignation 4018 of benefits to be paid through a trust to a beneficiary that is 4019 a natural person,andnotwithstandingthe provisions of the 4020 trust, benefits mustshallbe paid directly to the beneficiary 4021 if the person is no longer a minor or an incapacitated person as 4022 defined in s. 744.102. 4023 (21) PARTICIPATION BY TERMINATED DEFERRED RETIREMENT OPTION 4024 PROGRAM PARTICIPANTS.—Notwithstanding any other provision of law 4025to the contrary, members participatingparticipantsin the 4026 Deferred Retirement Option Program offered under part I may, 4027 after conclusion of their participation in the program, elect to 4028 roll over or authorize a direct trustee-to-trustee transfer to 4029 an account under the investment planPublic Employee Optional4030Retirement Programof their Deferred Retirement Option Program 4031 proceeds distributed as provided under s. 121.091(13)(c)5. The 4032 transaction must constitute an “eligible rollover distribution” 4033 within the meaning of s. 402(c)(4) of the Internal Revenue Code. 4034 (a) The investment planPublic Employee Optional Retirement4035Programmay accept such amounts for deposit into member 4036participantaccounts as provided in paragraph (5)(e)(5)(c). 4037 (b) The affected memberparticipantshall direct the 4038 investment of his or her investment account; however, unless he 4039 or she becomes a renewed member of the Florida Retirement System 4040 under s. 121.122 and elects to enrollparticipatein the 4041 investment planPublic Employee Optional Retirement program, 4042 employer and employee contributions may not be made to the 4043 member’sparticipant’saccount as provided under paragraph 4044 (5)(a). 4045 (c) The state board or the department is not responsible 4046 for locating those persons who may be eligible to enroll 4047participatein the investment planPublic Employee Optional4048Retirement Programunder this subsection. 4049 (22) CREDIT FOR MILITARY SERVICE.—Creditable service of any 4050 member of the investment program includesPublic Employee4051Optional Retirement Program shall includemilitary service in 4052 the Armed Forces of the United States as provided inthe4053conditions outlined ins. 121.111(1). 4054 Section 23. Section 121.4502, Florida Statutes, is amended 4055 to read: 4056 121.4502 FloridaPublic Employee OptionalRetirement System 4057 Investment PlanProgramTrust Fund.— 4058 (1) The FloridaPublic Employee OptionalRetirement System 4059 Investment PlanProgramTrust Fund is created to hold the assets 4060 of the FloridaPublic Employee OptionalRetirement System 4061 Investment PlanProgramin trust for the exclusive benefit of 4062 plan memberssuch program’s participantsand beneficiaries, and 4063 for the payment of reasonable administrative expenses of the 4064 planprogram, in accordance with s. 401 of the Internal Revenue 4065 Code, and shall be administered by the State Board of 4066 Administration as trustee. Funds shall be credited to the trust 4067 fund as provided in this part and, to beused for the purposes 4068 of this part. The trust fund is exempt from the service charges 4069 imposed by s. 215.20. 4070 (2) The FloridaPublic Employee OptionalRetirement System 4071 Investment PlanProgramTrust Fund is aretirementtrust fund of 4072 the Florida Retirement System that accounts for retirement plan 4073 assets held by the state in a trustee capacity as a fiduciary 4074 for individual membersparticipantsin the FloridaPublic4075Employee OptionalRetirement System Investment PlanProgramand, 4076 pursuant to s. 19(f), Art. III of the State Constitution, is not 4077 subject to termination. 4078 (3) A forfeiture account shall be created within the 4079 Florida Retirement System Investment PlanPublic Employee4080Optional Retirement ProgramTrust Fund to hold the assets 4081 derived from the forfeiture of benefits by participating members 4082participants. Pursuant to a private letter ruling from the 4083 Internal Revenue Service, the forfeiture account may be used 4084 only for paying expenses of the Florida Retirement System 4085 Investment PlanPublic Employee Optional Retirement Programand 4086 reducing future employer contributions to the program. 4087 Consistent with Rulings 80-155 and 74-340 of the Internal 4088 Revenue Service, unallocated reserves within the forfeiture 4089 account must be used as quickly and as prudently as possible 4090 considering the state board’s fiduciary duty. Expected 4091 withdrawals from the account must endeavor to reduce the account 4092 to zero each fiscal year. 4093 Section 24. Subsections (1) and (3) of section 121.4503, 4094 Florida Statutes, are amended to read: 4095 121.4503 Florida Retirement System Contributions Clearing 4096 Trust Fund.— 4097 (1) The Florida Retirement System Contributions Clearing 4098 Trust Fund is created as a clearing fund for disbursing employer 4099 and employee contributions to the component plans of the Florida 4100 Retirement System and shall be administered by the departmentof4101Management Services. Funds shall be credited to the trust fund 4102 as provided in this chapter andshall beheld in trust for the 4103 contributing employers and employees untilsuch time asthe 4104 assets are transferred by the department to the Florida 4105 Retirement System Trust Fund, the FloridaPublic Employee4106OptionalRetirement System Investment PlanProgramTrust Fund, 4107 or other trust funds as authorized by law, to be used for the 4108 purposes of this chapter. The trust fund is exempt from the 4109 service charges imposed by s. 215.20. 4110 (3) The departmentof Management Servicesmay adopt rules 4111 governing the receipt and disbursement of amounts received by 4112 the Florida Retirement System Contributions Clearing Trust Fund 4113 from employers and employees contributing to the component plans 4114 of the Florida Retirement System. 4115 Section 25. Section 121.571, Florida Statutes, is amended 4116 to read: 4117 121.571 Contributions.—Contributions to the FloridaPublic4118Employee OptionalRetirement System Investment PlanProgram4119 shall be made as follows: 4120 (1) CONTRIBUTORYNONCONTRIBUTORYPLAN.—Each employer and 4121 employee shall submitaccomplish thecontributions as required 4122 underbys. 121.71by a procedure in which no employee’s gross4123salary shall be reduced. 4124 (2) CONTRIBUTION RATES GENERALLY.—Contributions to fund the 4125 retirement and disability benefits provided under this part must 4126shallbe based on the uniform contribution rates established by 4127 s. 121.71 and on the membership class or subclass of the 4128 employeeparticipant. Such contributions mustshallbe allocated 4129 as provided in ss. 121.72 and 121.73. 4130 (3) CONTRIBUTIONS FOR SOCIAL SECURITY COVERAGE AND FOR 4131 RETIREE HEALTH INSURANCE SUBSIDY.—Contributions required under 4132 s. 121.71 arethis section shall bein addition to employer and 4133 member contributionsrequiredfor social security and the 4134 Retiree Health Insurance Subsidy Trust Fund as required under 4135provided inss. 112.363, 121.052, 121.055, and 121.071, as 4136 appropriate. 4137 Section 26. Section 121.591, Florida Statutes, is amended 4138 to read: 4139 121.591 Payment of benefitspayable under the Public4140Employee Optional Retirement Program of the Florida Retirement4141System.—Benefits may not be paid under the Florida Retirement 4142 System Investment Planthis sectionunless the member has 4143 terminated employment as provided in s. 121.021(39)(a) or is 4144 deceased and a proper application has been filed asin the4145mannerprescribed by the state board or the department. Before 4146 termination of employment, benefits are not payable under the 4147 investment plan for employee hardships, unforeseeable 4148 emergencies, loans, medical expenses, educational expenses, 4149 purchase of a principal residence, payments necessary to prevent 4150 eviction or foreclosure on an employee’s principal residence, or 4151 any other reason prior to termination from all employment 4152 relationships with participating employers. The state board or 4153 department, as appropriate, may cancel an application for 4154 retirement benefits ifwhenthe member or beneficiary fails to 4155 timely provide the information and documents required by this 4156 chapter and the rules of the state board and department. In 4157 accordance with their respective responsibilitiesas provided4158herein, the state boardof Administrationand the departmentof4159Management Servicesshall adopt rules establishing procedures 4160 for application for retirement benefits and for the cancellation 4161 of such application ifwhenthe required information or 4162 documents are not received. The state boardof Administration4163 and the departmentof Management Services, as appropriate, are 4164 authorized to cash out a de minimis account of not more than 4165 $5,000 of a memberparticipantwho has been terminated from 4166 Florida Retirement System covered employment for a minimum of 6 4167 calendar months.A de minimis account is an account containing4168employer contributions and accumulated earnings of not more than4169$5,000 made under the provisions of this chapter.Such cash-out 4170 musteitherbe a complete lump-sum liquidation of the account 4171 balance, subject to the provisions of the Internal Revenue Code, 4172 or a lump-sum direct rollover distribution paid directly to the 4173 custodian of an eligible retirement plan, as defined by the 4174 Internal Revenue Code, on behalf of the memberparticipant. Any 4175 nonvested accumulations, including amounts transferred to the 4176 suspense account of the Florida Retirement System Investment 4177 Plan Trust Fund, are forfeited upon payment of any vested 4178 benefit to a member or beneficiary, except for de minimis 4179 distributions or minimum required distributions as provided 4180 under this section. If any financial instrument issued for the 4181 payment of retirement benefits under this section is not 4182 presented for payment within 180 days after the last day of the 4183 month in which it was originally issued, the third-party 4184 administrator or other duly authorized agent of the state board 4185of Administrationshall cancel the instrument and credit the 4186 amount of the instrument to the suspense account of the Florida 4187Public Employee OptionalRetirement System Investment Plan 4188ProgramTrust Fund authorized under s. 121.4501(6). Anysuch4189 amounts transferred to the suspense account are payable upon a 4190 proper application, not to include earnings thereon, as provided 4191 in this section, within 10 years after the last day of the month 4192 in which the instrument was originally issued, after which time 4193 such amounts and any earnings attributable to employer 4194 contributions arethereon shall beforfeited. Anysuchforfeited 4195 amounts are assets of thePublic Employee Optional Retirement4196Programtrust fund and are not subject to the provisions of 4197 chapter 717. 4198 (1) NORMAL BENEFITS.—Under the FloridaPublic Employee4199OptionalRetirement System Investment PlanProgram: 4200 (a) Benefits in the form of vested accumulations as 4201 described in s. 121.4501(6) are payable under this subsection in 4202 accordance with the following terms and conditions: 4203 1.To the extent vested,Benefits are payable only to a 4204 member, alternate payee of a qualified domestic relations order, 4205 or a beneficiaryparticipant. 4206 2. Benefits shall be paid by the third-party administrator 4207 or designated approved providers in accordance with the law, the 4208 contracts, and any applicable board rule or policy. 4209 3.To receive benefits,The memberparticipantmust be 4210 terminated from all employment with all Florida Retirement 4211 System employers, as provided in s. 121.021(39). 4212 4. Benefit payments may not be made until the member 4213participanthas been terminated for 3 calendar months, except 4214 that the state board may authorize by rule for the distribution 4215 of up to 10 percent of the member’sparticipant’saccount after 4216 being terminated for 1 calendar month if the memberparticipant4217 has reached the normal retirement date as defined in s. 121.021 4218of the defined benefit plan. 4219 5. If a member or former member of the Florida Retirement 4220 System receives an invalid distributionfrom the Public Employee4221Optional Retirement Program Trust Fund, such person must repay 4222 the full amountinvalid distribution to the trust fundwithin 90 4223 days after receipt of final notification by the state board or 4224 the third-party administrator that the distribution was invalid, 4225 or, in lieu of repayment, must terminate employment from all 4226 participating employers. If such person fails to repay the full 4227 invalid distribution within 90 days after receipt of final 4228 notification, the person may be deemed retired from the 4229 investment planoptional retirement programby the state board,4230as provided pursuant to s.121.4501(2)(k),and is subject to s. 4231 121.122. If such person is deemed retiredby the state board, 4232 any joint and several liability set out in s. 121.091(9)(d)2. is 4233becomesnull and void, and the state board, the department, or 4234 the employing agency is not liable for gains on payroll 4235 contributions that have not been deposited to the person’s 4236 account in the investment planretirement program, pending 4237 resolution of the invalid distribution. The member or former 4238 member who has been deemed retired or who has been determined by 4239 the state board to have taken an invalid distribution may appeal 4240 the agency decision through the complaint process as provided 4241 under s. 121.4501(9)(g)3. As used in this subparagraph, the term 4242 “invalid distribution” means any distribution from an account in 4243 the investment planoptional retirement programwhich is taken 4244 in violation of this section, s. 121.091(9), or s. 121.4501. 4245 (b) If a memberparticipantelects to receive his or her 4246 benefits upon termination of employment as defined in s. 4247 121.021, the memberparticipantmust submit a written 4248 application or an application by electronic means to the third 4249 party administrator indicating his or her preferred distribution 4250 date and selecting an authorized method of distribution as 4251 provided in paragraph (c). The memberparticipantmay defer 4252 receipt of benefits until he or she chooses to make such 4253 application, subject to federal requirements. 4254 (c) Upon receipt by the third-party administrator of a 4255 properly executed application for distribution of benefits, the 4256 total accumulated benefit isshall bepayable to the member pro 4257 rata across all Florida Retirement System benefit sources 4258participant, as: 4259 1. A lump-sum or partial distribution to the member 4260participant; 4261 2. A lump-sum direct rollover distribution whereby all 4262 accrued benefits, plus interest and investment earnings, are 4263 paid from the member’sparticipant’saccount directly to the 4264 custodian of an eligible retirement plan, as defined in s. 4265 402(c)(8)(B) of the Internal Revenue Code, on behalf of the 4266 memberparticipant; or 4267 3. Periodic distributions, as authorized by the state 4268 board. 4269 (d) The distribution payment method selected by the plan 4270 member or beneficiary, and the retirement of the member or 4271 beneficiary, is final and irrevocable at the time a benefit 4272 distribution payment is cashed, deposited, or transferred to 4273 another financial institution. Any additional service that 4274 remains unclaimed at retirement may not be claimed or purchased, 4275 and the type of retirement may not be changed, except that if a 4276 member recovers from a disability, the member may subsequently 4277 request normal service benefits under subsection (2). 4278 (e) A member may not receive a distribution of employee 4279 contributions if a pending or approved qualified domestic 4280 relations order is filed against the member’s investment plan 4281 account. 4282 (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under 4283 this subsection are payable in lieu of the benefits thatwhich4284 would otherwise be payable under the provisions of subsection 4285 (1). Such benefits mustshallbe fundedentirelyfrom employer 4286 contributionsmade under s.121.571, transferred employee 4287 contributions andparticipantfunds accumulated pursuant to 4288 paragraph (a), and interest and earnings thereon.Pursuant4289thereto:4290 (a) Transfer of funds.—To qualify forto receivemonthly 4291 disability benefits under this subsection: 4292 1. All moneys accumulated in a member’s accountthe4293participant’s Public Employee Optional Retirement Program4294accounts, including vested and nonvested accumulations as 4295 described in s. 121.4501(6), mustshallbe transferred from such 4296 individual accounts to the divisionof Retirementfor deposit in 4297 the disability account of the Florida Retirement System Trust 4298 Fund. Such moneys mustshallbeseparatelyaccounted for 4299 separately. Earnings mustshallbe credited on an annual basis 4300 for amounts held in the disability accountsof the Florida4301Retirement System Trust Fundbased on actual earnings of the 4302Florida Retirement Systemtrust fund. 4303 2. If the memberparticipanthas retained retirement credit 4304he or she hadearned under the pension plandefined benefit4305program of the Florida Retirement Systemas provided in s. 4306 121.4501(3)s.121.4501(3)(b), a sum representing the actuarial 4307 present value of such credit within the Florida Retirement 4308 System Trust Fund shall be reassigned by the divisionof4309Retirementfrom the pension plandefined benefit programto the 4310 disability program as implemented under this subsection and 4311 shall be deposited in the disability account of theFlorida4312Retirement Systemtrust fund. Such moneys mustshallbe 4313separatelyaccounted for separately. 4314 (b) Disability retirement; entitlement.— 4315 1. A memberparticipantof the investment planPublic4316Employee Optional Retirement programwho becomes totally and 4317 permanently disabled, as defined in paragraph (d)s.4318121.091(4)(b), after completing 8 years of creditable service, 4319 or a memberparticipantwho becomes totally and permanently 4320 disabled in the line of duty regardless ofhis or herlength of 4321 service, isshall beentitled to a monthly disability benefitas4322provided herein. 4323 2. In order for service to apply toward the 8 years of 4324 creditable service requiredto vestfor regular disability 4325 benefits, or toward the creditable service used in calculating a 4326 service-based benefit as providedforunder paragraph (g), the 4327 service must be creditable service as described below: 4328 a. The member’sparticipant’speriod of service under the 4329 investment plan shallPublic Employee Optional Retirement4330program willbe considered creditable service, except as 4331 provided in subparagraph d. 4332 b. If the memberparticipanthas elected to retain credit 4333 forhis or herservice under the pension plandefined benefit4334program of the Florida Retirement Systemas provided under s. 4335 121.4501(3)s.121.4501(3)(b), all such service shallwillbe 4336 considered creditable service. 4337 c. If the member electsparticipant has electedto transfer 4338 to his or her memberparticipantaccounts a sum representing the 4339 present value of his or her retirement credit under the pension 4340 plandefined benefit programas provided under s. 121.4501(3)s.4341121.4501(3)(c), the period of service under the pension plan 4342defined benefit programrepresented in the present value amounts 4343 transferred shallwillbe considered creditable servicefor4344purposes of vesting for disability benefits, except as provided 4345 in subparagraph d. 4346 d. If a memberWhenever a participanthas terminated 4347 employment and has taken distribution of his or her funds as 4348 provided in subsection (1), all creditable service represented 4349 by such distributed funds is forfeited for purposes of this 4350 subsection. 4351 (c) Disability retirement effective date.—The effective 4352 retirement date for a memberparticipantwho applies and is 4353 approved for disability retirement shall be established as 4354 provided under s. 121.091(4)(a)2. and 3. 4355 (d) Total and permanent disability.—A member isparticipant4356shall beconsidered totally and permanently disabled if, in the 4357 opinion of the division, he or she is prevented, by reason of a 4358 medically determinable physical or mental impairment, from 4359 rendering useful and efficient service as an officer or 4360 employee. 4361 (e) Proof of disability.—The division,Before approving 4362 payment of any disability retirement benefit, the division shall 4363 require proof that the memberparticipantis totally and 4364 permanently disabledin the same manneras providedfor members4365of the defined benefit program of the Florida Retirement System4366 under s. 121.091(4)(c). 4367 (f) Disability retirement benefit.—Upon the disability 4368 retirement of a memberparticipantunder this subsection, the 4369 memberparticipantshall receive a monthly benefit that begins 4370 accruingshall begin to accrueon the first day of the month of 4371 disability retirement, as approved by the division, and isshall4372bepayable on the last day of that month and each month 4373 thereafter during his or her lifetime and continued disability. 4374 All disability benefits mustpayable to such member shallbe 4375 paid out of the disability account of the Florida Retirement 4376 System Trust Fund established under this subsection. 4377 (g) Computation of disability retirement benefit.—The 4378 amount of each monthly payment mustshallbe calculatedin the4379same manneras providedfor members of the defined benefit4380program of the Florida Retirement Systemunder s. 121.091(4)(f). 4381For such purpose,Creditable service under both the pension plan 4382defined benefit programand the investment planPublic Employee4383Optional Retirement Program of the Florida Retirement System4384 shall be applicable as provided under paragraph (b). 4385 (h) Reapplication.—A memberparticipantwhose initial 4386 application for disability retirement ishas beendenied may 4387 reapply for disability benefits in the same manner, and under 4388 the same conditions, as provided for members of the pension plan 4389defined benefit program of the Florida Retirement Systemunder 4390 s. 121.091(4)(g). 4391 (i) Membership.—Upon approval of a member’sanapplication 4392 for disability benefitsunder this subsection, the applicant 4393 shall be transferred to the pension plandefined benefit program4394of the Florida Retirement System, effective upon his or her 4395 disability retirement effective date. 4396 (j) Option to cancel.—A memberAny participantwhose 4397 application for disability benefits is approved may cancel the 4398his or herapplication iffor disability benefits, provided that4399 the cancellation request is received by the division before a 4400 disability retirement warrant has been deposited, cashed, or 4401 received by direct deposit. Uponsuchcancellation: 4402 1. The member’sparticipant’stransfer to the pension plan 4403defined benefit programunder paragraph (i) shall be nullified; 4404 2. The memberparticipantshall be retroactively reinstated 4405 in the investment planPublic Employee Optional Retirement4406programwithout hiatus; 4407 3. All funds transferred to the Florida Retirement System 4408 Trust Fund under paragraph (a) mustshallbe returned to the 4409 memberparticipantaccounts from which thesuchfunds were 4410 drawn; and 4411 4. The memberparticipantmay elect to receive the benefit 4412 payable underthe provisions ofsubsection (1) in lieu of 4413 disability benefitsas provided under this subsection. 4414 (k) Recovery from disability.— 4415 1. The division may require periodic reexaminations at the 4416 expense of the disability program account of the Florida 4417 Retirement System Trust Fund. Except asotherwiseprovided in 4418 subparagraph 2.,the requirements, procedures, and restrictions4419relating to the conduct and review of such reexaminations,4420discontinuation or termination of benefits, reentry into4421employment, disability retirement after reentry into covered4422employment, andall other matters relating to recovery from 4423 disability shall bethe sameas providedare set forthunder s. 4424 121.091(4)(h). 4425 2. Upon recovery from disability, theanyrecipient of 4426 disability retirement benefits under this subsection shall be 4427 transferred back to the investment plana compulsory member of4428the Public Employee Optional Retirement Program of the Florida4429Retirement System. The net difference between the recipient’s 4430 original account balance transferred to the Florida Retirement 4431 System Trust Fund, including earnings,under paragraph (a)and 4432 total disability benefits paid to such recipient, if any, shall 4433 be determined as provided in sub-subparagraph a. 4434 a. An amount equal to the total benefits paid shall be 4435 subtracted from that portion of the transferred account balance 4436 consisting of vested accumulations as described under s. 4437 121.4501(6), if any, and an amount equal to the remainder of 4438 benefit amounts paid, if any, shallthenbe subtracted from any 4439 remainingportion consisting ofnonvested accumulationsas4440described under s.121.4501(6). 4441 b. Amounts subtracted under sub-subparagraph a. mustshall4442 be retained within the disability account of the Florida 4443 Retirement System Trust Fund. Any remaining account balance 4444 shall be transferred to the third-party administrator for 4445 disposition as provided under sub-subparagraph c. or sub 4446 subparagraph d., as appropriate. 4447 c. If the recipient returns to covered employment, 4448 transferred amounts mustshallbe deposited in individual 4449 accounts under the investment planPublic Employee Optional4450Retirement program, as directed by the memberparticipant. 4451 Vested and nonvested amounts shall be separately accounted for 4452 as provided in s. 121.4501(6). 4453 d. If the recipient fails to return to covered employment 4454 upon recovery from disability: 4455 (I) Any remaining vested amount mustshallbe deposited in 4456 individual accounts under the investment planPublic Employee4457Optional Retirement program, as directed by the member 4458participant, and isshall bepayable as provided in subsection 4459 (1). 4460 (II) Any remaining nonvested amount mustshallbe held in a 4461 suspense account and isshall beforfeitable after 5 years as 4462 provided in s. 121.4501(6). 4463 3. If present value was reassigned from the pension plan 4464defined benefit programto the disability programof the Florida4465Retirement Systemas provided under subparagraph (a)2., the full 4466 present value amount mustshallbe returned to the pension plan 4467defined benefit accountwithin the Florida Retirement System 4468 Trust Fund and the recipient’saffected individual’sassociated 4469 retirement credit under the pension plan mustdefined benefit4470program shallbe reinstated in full. Any benefit based upon such 4471 credit mustshallbe calculated as provided in s. 4472 121.091(4)(h)1. 4473 (l) Nonadmissible causes of disability.—A member is 4474participant shallnotbeentitled toreceivea disability 4475 retirement benefit if the disability results from any injury or 4476 diseasesustained or inflictedas described in s. 121.091(4)(i). 4477 (m) Disability retirement of justice or judge by order of 4478 Supreme Court.— 4479 1. If a memberparticipantis a justice of the Supreme 4480 Court, judge of a district court of appeal, circuit judge, or 4481 judge of a county court who has served for 6 years or more as an 4482 elected constitutional judicial officer, including service as a 4483 judicial officer in any court abolished pursuant to Art. V of 4484 the State Constitution, and who is retired for disabilityby4485order of the Supreme Court upon recommendation of the Judicial4486Qualifications Commissionpursuant to s. 12,the provisions of4487 Art. V of the State Constitution, the member’sparticipant’s4488 Option 1 monthly disability benefit amount as provided in s. 4489 121.091(6)(a)1. shall be two-thirds of his or her monthly 4490 compensation as of the member’sparticipant’sdisability 4491 retirement date. The memberSuch a participantmay alternatively 4492 elect to receive an actuarially adjusted disability retirement 4493 benefit under any other option as provided in s. 121.091(6)(a), 4494 ortoreceive the normal benefit payable underthe Public4495Employee Optional Retirement Program as set forth insubsection 4496 (1). 4497 2. If any justice or judge who is a memberparticipantof 4498 the investment planPublic Employee Optional Retirement program4499ofthe Florida Retirement Systemis retired for disabilityby4500order of the Supreme Court upon recommendation of the Judicial4501Qualifications Commissionpursuant to s. 12,the provisions of4502 Art. V of the State Constitution, and elects to receive a 4503 monthly disability benefit underthe provisions ofthis 4504 paragraph: 4505 a. Any present value amount that was transferred to his or 4506 her planprogramaccount and all employer and employee 4507 contributions made to such account on his or her behalf, plus 4508 interest and earnings thereon, mustshallbe transferred to and 4509 deposited in the disability account of the Florida Retirement 4510 System Trust Fund; and 4511 b. The monthly disability benefits payable under this 4512 paragraph for any affected justice or judge retired from the 4513 Florida Retirement System pursuant to Art. V of the State 4514 Constitution shall be paid from the disability account of the 4515 Florida Retirement System Trust Fund. 4516 (n) Death of retiree or beneficiary.—Upon the death of a 4517 disabled retiree or beneficiary of the retireethereofwho is 4518 receiving monthly disability benefits under this subsection, the 4519 monthly benefits shall be paid through the last day of the month 4520 of death and shall terminate, or be adjusted, if applicable, as 4521 of that date in accordance with the optional form of benefit 4522 selected at the time of retirement. The departmentof Management4523Servicesmay adopt rules necessary to administer this paragraph. 4524 (3) DEATH BENEFITS.—Under the FloridaPublic Employee4525OptionalRetirement System Investment PlanProgram: 4526 (a) Survivor benefits areshall bepayable in accordance 4527 with the following terms and conditions: 4528 1.To the extent vested,Benefits areshall bepayable only 4529 to a member’sparticipant’s beneficiary orbeneficiaries as 4530 designated by the memberparticipantas provided in s. 4531 121.4501(20). 4532 2. Benefits shall be paid by the third-party administrator 4533 or designated approved providers in accordance with the law, the 4534 contracts, and any applicable state board rule or policy. 4535 3. To receive benefitsunder this subsection, the member 4536participantmust be deceased. 4537 (b) Except as provided in paragraph (d), if the employment 4538 of a member is terminated by reason of his or herIn the event4539of a participant’sdeath:,4540 1. Before being vested, only the member’s accumulated 4541 contributions are payable to his or her designated beneficiary. 4542 2. After being vested, all vested accumulations as 4543 described in s. 121.4501(6), less withholding taxes remitted to 4544 the Internal Revenue Service, shall be distributed, as provided 4545 in paragraph (c) or as described in s. 121.4501(20), as if the 4546 memberparticipantretired on the date of death. No other death 4547 benefits areshall beavailable for survivors of members 4548participantsunder the investment planPublic Employee Optional4549Retirement Program, except forsuchbenefits, or coverage for 4550suchbenefits, as are otherwise provided by law orare4551 separately providedaffordedby the employer, at the employer’s 4552 discretion. 4553 (c) Upon receipt by the third-party administrator of a 4554 properly executed application for distribution of benefits under 4555 paragraph (b), the total accumulated benefit isshall bepayable 4556 by the third-party administrator to the member’sparticipant’s4557 surviving beneficiary or beneficiaries, as: 4558 1. A lump-sum distribution payable to the beneficiary or 4559 beneficiaries, or to the deceased member’sparticipant’sestate; 4560 2. An eligible rollover distribution on behalf of the 4561 surviving spouse of a deceased memberparticipant, whereby all 4562 accrued benefits, plus interest and investment earnings, are 4563 paid from the deceased member’sparticipant’saccount directly 4564 to the custodian of an eligible retirement plan, as described in 4565 s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the 4566 surviving spouse; or 4567 3. A partial lump-sum payment whereby a portion of the 4568 accrued benefit is paid to the deceased member’sparticipant’s4569 surviving spouse or other designated beneficiaries, less 4570 withholding taxes remitted to the Internal Revenue Service, and 4571 the remaining amount is transferred directly to the custodian of 4572 an eligible retirement plan, as described in s. 402(c)(8)(B) of 4573 the Internal Revenue Code, on behalf of the surviving spouse. 4574 The proportions must be specified by the memberparticipantor 4575 the surviving beneficiary. 4576 4577 This paragraph does not abrogate other applicable provisions of 4578 state or federal law providing for payment of death benefits. 4579 (4) LIMITATION ON LEGAL PROCESS.—The benefits payable to 4580 any person under the FloridaPublic Employee OptionalRetirement 4581 System Investment PlanProgram, and any contributions 4582 accumulated under such planprogram, are not subject to 4583 assignment, execution, attachment, or any legal process, except 4584 for qualified domestic relations orders by a court of competent 4585 jurisdiction, income deduction orders as provided in s. 61.1301, 4586 and federal income tax levies. 4587 Section 27. Section 121.5911, Florida Statutes, is amended 4588 to read: 4589 121.5911 Disability retirement program; qualified status; 4590 rulemaking authority.—It is the intent of the Legislature that 4591 the disability retirement program for membersparticipantsof 4592 the FloridaPublic Employee OptionalRetirement System 4593 Investment PlanProgram ascreated in this act mustmeet all 4594 applicable requirements of federal law for a qualified plan. The 4595 departmentof Management Servicesshall seek a private letter 4596 ruling from the Internal Revenue Service on the disability 4597 retirement programfor participants of the Public Employee4598Optional Retirement Program. Consistent with the private letter 4599 ruling, the departmentof Management Servicesshall adoptany4600necessaryrules necessaryrequiredto maintain the qualified 4601 status of the disability retirement program and the Florida 4602 Retirement System’s pensionSystem defined benefitplan. 4603 Section 28. Subsection (1) of section 121.70, Florida 4604 Statutes, is amended to read: 4605 121.70 Legislative purpose and intent.— 4606 (1) This part provides for a uniform system for funding 4607 benefits provided under the Florida Retirement System defined 4608 benefit program established under part I of this chapter, 4609(referred to in this part as the pension plan,defined benefit4610program)and under the FloridaPublic Employee Optional4611 Retirement System Investment PlanProgramestablished under part 4612 II of this chapter,(referred to in this part as the investment 4613 planoptional retirement program). The Legislature recognizes 4614 and declares that the Florida Retirement System is a single 4615 retirement system, consisting of two retirement plans and other 4616 nonintegrated programs. Employers and employees participating in 4617 the Florida Retirement System collectively shall be responsible 4618 for making contributions to support the benefits provided 4619affordedunder both programsplans. TheAs provided in this4620part,employers and employeesparticipating in the Florida4621Retirement Systemshall make contributions based upon uniform 4622 contribution rates determined as a percentage of the total 4623 payroll for each class or subclass of Florida Retirement System 4624 membership, irrespective of which retirement program theplan4625 individual employee is enrolled inemployees may elect. This 4626 shall be known as a uniform or blended contribution rate system. 4627 Section 29. Subsections (1) and (2) of section 121.71, 4628 Florida Statutes, are amended, present subsections (3) and (4) 4629 of that section are renumbered as subsections (4) and (7), 4630 respectively, and new subsections (3), (5), and (6) are added to 4631 that section, to read: 4632 121.71 Uniform rates; process; calculations; levy.— 4633 (1) In conducting the system actuarial study required under 4634 s. 121.031, the actuary shall follow all requirements specified 4635thereunderto determine, by Florida Retirement System employee 4636 membership class, the dollar contribution amounts necessary for 4637 the nextforthcomingfiscal year for the pension plandefined4638benefit program. In addition, the actuary shall determine, by 4639 Florida Retirement System membership class, based on an estimate 4640 for the forthcoming fiscal year of the gross compensation of 4641 employees participating in the investment planoptional4642retirement program, the dollar contribution amounts necessary to 4643 make the allocations required under ss. 121.72 and 121.73. For 4644 each employee membership class and subclass, the actuarial study 4645 mustshallestablish a uniform rate necessary to fund the 4646 benefit obligations under both Florida Retirement System 4647 retirement plans by dividing the sum of total dollars required 4648 by the estimated gross compensation of members in both plans. 4649 (2) Based on the uniform rates set forth in subsections 4650subsection(3), (4), and (5), employers and employees shall make 4651 monthly contributions to the division as required under s. 4652 121.061(1)of Retirement, which shall initially deposit the 4653 funds into the Florida Retirement System Contributions Clearing 4654 Trust Fund. A change in a contribution rate is effective on the 4655 first day of the month for which a full month’semployer4656 contribution may be made on or after the beginning date of the 4657 change. Beginning July 1, 2011, each employee shall contribute 4658 the contributions required in subsection (3) to the plan. The 4659 employer shall deduct the contribution from the employee’s 4660 monthly salary and submit it to the division. The contributions 4661 shall be reported as employer-paid employee contributions, and 4662 shall be credited to the account of the employee. The 4663 contributions shall be deducted from the employee’s salary 4664 before the computation of applicable federal taxes and treated 4665 as employer contributions under 26 U.S.C. 414(h)(2). Although 4666 designated as employee contributions, the employer specifies 4667 that the contributions are being paid by the employer in lieu of 4668 contributions by the employee. The employee does not have the 4669 option of choosing to receive the contributed amounts directly 4670 instead of having them paid to the plan. Such contributions are 4671 mandatory and each employee is deemed to have consented to the 4672 payroll deductions. Payment of an employee’s salary or wages, 4673 less the contribution, is a full and complete discharge and 4674 satisfaction of all claims and demands for the service rendered 4675 by employees during the period covered by the payment, except 4676 for claims to benefits to which they may be entitled under this 4677 chapter. 4678 (3) Effective July 1, 2011, the required employee 4679 retirement contribution rates for all members of the Florida 4680 Retirement System shall be 2 percent for gross compensation up 4681 to and including $25,000, 4 percent for gross compensation 4682 greater than $25,000 and up to and including $50,000, and 6 4683 percent for gross compensation greater than $50,000. 4684 (4)(3)Required employer retirement contribution rates for 4685 each membership class and subclass of the Florida Retirement 4686 System for both retirement plans are as follows: 4687 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 20112009Percentage ofGrossCompensation,EffectiveJuly 1,20104688 4689 Regular Class 5.09%8.69%9.63%4690 Special Risk Class 13.80%19.76%22.11%4691 Special Risk Administrative Support Class 6.67%11.39%12.10%4692 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 9.46%13.32%15.20%4693 Elected Officers’ Class— Justices, Judges 12.02%18.40%20.65%4694 Elected Officers’ Class— County Elected Officers 11.44%15.37%17.50%4695 Senior Management Class 6.88%11.96%13.43%4696 DROP 3.12%9.80%11.14%4697 (5) In order to address unfunded actuarial liabilities of 4698 the system, the required employer retirement contribution rates 4699 for each membership class and subclass of the Florida Retirement 4700 System for both retirement plans are as follows: 4701 4702 4703 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2011 4704 Regular Class 0.00% 4705 Special Risk Class 0.00% 4706 Special Risk Administrative Support Class 0.00% 4707 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 0.00% 4708 Elected Officers’ Class— Justices, Judges 0.00% 4709 Elected Officers’ Class— County Elected Officers 0.00% 4710 Senior Management Class 0.00% 4711 DROP 0.00% 4712 (6) If a member is reported under an incorrect membership 4713 class and the amount of contributions reported and remitted are 4714 less than the amount required, the employer shall owe the 4715 difference plus the delinquent fee of 1 percent for each 4716 calendar month or part thereof that the contributions should 4717 have been paid. This delinquent assessment may not be waived. If 4718 the contributions reported and remitted are more than the amount 4719 required, the employer shall receive a credit to be applied 4720 against future contributions owed. 4721 (7)(4)The state actuary shall recognize and use an 4722 appropriate level of available excess assets of the Florida 4723 Retirement System Trust Fund to offset the difference between 4724 the normal costs of the Florida Retirement System and the 4725 statutorily prescribed contribution rates. 4726 Section 30. Section 121.72, Florida Statutes, is amended to 4727 read: 4728 121.72 Allocations to investment plan memberoptional4729retirement program participantaccounts; percentage amounts.— 4730 (1) The allocations established in subsection (4) shall 4731 fund retirement benefits under the investment plan under part II 4732 of this chapteroptional retirement programand shall be 4733 transferred monthly by the divisionof Retirementfrom the 4734 Florida Retirement System Contributions Clearing Trust Fund to 4735 the third-party administrator for deposit in each participating 4736 employee’s individual account based on the membership class of 4737 the employeeparticipant. 4738 (2) The allocations are stated as a percentage of each 4739 investment plan member’soptional retirement program4740participant’sgross compensation for the calendar month. A 4741 change in a contribution percentage is effective the first day 4742 of the month for which retirement contributionsa full month’s4743employer contributionmay be made on or after the beginning date 4744 of the change. Contribution percentages may be modified by 4745 general law. 4746 (3) Employer and employeeparticipantcontributions to 4747 member’sparticipantaccounts shall be accounted for separately. 4748Participant contributions may be made only if expressly4749authorized by law.Interest and investment earnings on 4750 contributions shall accrue on a tax-deferred basis until 4751 proceeds are distributed. 4752 (4) Effective July 1, 2011July 1, 2002, allocations from 4753 the Florida Retirement System Contributions Clearing Trust Fund 4754 to investment plan memberoptional retirement program4755participantaccounts, including employee contributions required 4756 under s. 121.71(3), areshall beas follows: 4757 Membership Class Percentage of Gross Compensation 4758 Regular Class 9.00% 4759 Special Risk Class 20.00% 4760 Special Risk Administrative Support Class 11.35% 4761 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 13.40% 4762 Elected Officers’ Class— Justices, Judges 18.90% 4763 Elected Officers’ Class— County Elected Officers 16.20% 4764 Senior Management Service Class 10.95% 4765 Section 31. Section 121.73, Florida Statutes, is amended to 4766 read: 4767 121.73 Allocations for memberoptional retirement program4768participantdisability coverage; percentage amounts.— 4769 (1) The allocations established in subsection (3) shall be 4770 used to provide disability coverage for members of the 4771 investment planparticipants in the optional retirement program4772 and shall be transferred monthly by the divisionof Retirement4773 from the Florida Retirement System Contributions Clearing Trust 4774 Fund to the disability account of the Florida Retirement System 4775 Trust Fund. 4776 (2) The allocations are stated as a percentage of each 4777 investment plan member’soptional retirement program4778participant’sgross compensation for the calendar month. A 4779 change in a contribution percentage is effective the first day 4780 of the month for which retirement contributionsa full month’s4781employer contributionmay be made on or after the beginning date 4782 of the change. Contribution percentages may be modified by 4783 general law. 4784 (3) Effective July 1, 2002, allocations from the Florida 4785 Retirement SystemFRSContribution Clearing Fund to provide 4786 disability coverage for members of the investment plan 4787participants in the optional retirement program, and to offset 4788 the costs of administering said coverage, shall be as follows: 4789 Membership Class Percentage of Gross Compensation 4790 Regular Class 0.25% 4791 Special Risk Class 1.33% 4792 Special Risk Administrative Support Class 0.45% 4793 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 0.41% 4794 Elected Officers’ Class— Justices, Judges 0.73% 4795 Elected Officers’ Class— County Elected Officers 0.41% 4796 Senior Management Service Class 0.26% 4797 (4) Effective July 1, 2011, allocations from the Florida 4798 Retirement System Contribution Clearing Fund to provide 4799 disability coverage for members of the investment plan and to 4800 offset the costs of administering such coverage shall be the 4801 actuarially indicated amount necessary to fund the statutorily 4802 authorized benefit for the plan year as determined by the 4803 department’s actuary. 4804 Section 32. Section 121.74, Florida Statutes, is amended to 4805 read: 4806 121.74 Administrative and educational expenses.—In addition 4807 to contributions required under ss.s.121.71 and 121.73, 4808 effective July 1, 2010, through June 30, 2014, employers 4809 participating in the Florida Retirement System shall contribute 4810 an amount equal to 0.03 percent of the payroll reported for each 4811 class or subclass of Florida Retirement System membership; 4812 effective July 1, 2014, the contribution rate shall be 0.04 4813 percent of the payroll reported for each class or subclass of 4814 membership. The amount contributed shall be transferred by the 4815 divisionof Retirementfrom the Florida Retirement System 4816 Contributions Clearing Trust Fund to the state board’sBoard of4817Administration’sadministrative trust fund to offset the costs 4818 of administering the investment planoptional retirement program4819 and the costs of providing educational services to members 4820 participatingparticipantsin the pension plandefined benefit4821programand the investment planoptional retirement program. 4822 Approval of the trustees is required before the expenditure of 4823 these funds. Payments for third-party administrative or 4824 educational expenses shall be made only pursuant to the terms of 4825 the approved contracts for such services. 4826 Section 33. Section 121.75, Florida Statutes, is amended to 4827 read: 4828 121.75 Allocation for pension plandefined benefit4829program.—After making the transfers required pursuant to ss. 4830 121.71, 121.72, 121.73, and 121.74, the monthly balance of funds 4831 in the Florida Retirement System Contributions Clearing Trust 4832 Fund shall be transferred to the Florida Retirement System Trust 4833 Fund to pay the costs of providing pension plandefined benefit4834programbenefits and plan administrative costs under the pension 4835 plandefined benefit program. 4836 Section 34. Section 121.77, Florida Statutes, is amended to 4837 read: 4838 121.77 Deductions from memberparticipantaccounts.—The 4839 State Board of Administration may authorize the third-party 4840 administrator to deduct reasonable fees and apply appropriate 4841 charges to investment plan memberoptional retirement program4842participantaccounts. In no event mayshalladministrative and 4843 educational expenses exceed the portion of employer 4844 contributions earmarked for such expenses under this part, 4845 except for reasonable administrative charges assessed against 4846 memberparticipantaccounts of persons for whom no employer 4847 contributions are made during the calendar quarter. Investment 4848 management fees shall be deducted from memberparticipant4849 accounts, pursuant to the terms of the contract between the 4850 provider and the board. 4851 Section 35. Subsections (1) and (3) of section 121.78, 4852 Florida Statutes, are amended to read: 4853 121.78 Payment and distribution of contributions.— 4854 (1) Contributions made pursuant to this part, including the 4855 employee contributions, shall be paid by the employer to the 4856 divisionof Retirementby electronic funds transfer no later 4857 than the 5th working day of the month immediately following the 4858 month during which the payroll period ended. Accompanying 4859 payroll data must be transmitted to the division concurrent with 4860 the contributions. 4861 (3)(a) Employer and employee contributions and accompanying 4862 payroll data received after the 5th working day of the month are 4863 considered late. The employer shall be assessed by the division 4864of Retirementa penalty of 1 percent of the contributions due 4865 for each calendar month or part thereof that the contributions 4866 or accompanying payroll data are late. Proceeds from the 1 4867 percent1-percentassessment against contributions made on 4868 behalf of members of the pension planparticipants of the4869defined benefit programshall be deposited in the Florida 4870 Retirement System Trust Fund, and proceeds from the 1 percent14871percentassessment against contributions made on behalf of 4872 members of the investment planparticipants of the optional4873retirement programshall be transferred to the third-party 4874 administrator for deposit into memberparticipantaccounts, as 4875 provided in paragraph (c)(b). 4876 (b) Retirement contributions paid for a prior period shall 4877 be charged a delinquent fee of 1 percent for each calendar month 4878 or part thereof that the contributions should have been paid. 4879 This includes prior period contributions due to incorrect wages, 4880 contributions from an earlier report or wages, and contributions 4881 that should have been reported but were not. The delinquent 4882 assessments may not be waived. 4883 (c)(b)If employee contributions or contributions made by 4884 an employer on behalf of members of the investment plan 4885participants of the optional retirement programor accompanying 4886 payroll data are not received within the calendar month they are 4887 due, including, but not limited to, contribution adjustments as 4888 a result of employer errors or corrections, and if that 4889 delinquency results in market losses to membersparticipants, 4890 the employer shall reimburse each member’sparticipant’saccount 4891 for market losses resulting from the late contributions. If a 4892 memberparticipanthas terminated employment and taken a 4893 distribution, the memberparticipantis responsible for 4894 returning any excess contributions erroneously provided by 4895 employers, adjusted for any investment gain or loss incurred 4896 during the period such excess contributions were in the member’s 4897participant’saccount. The state board or its designated agent 4898 shall communicate to terminated membersparticipantsany 4899 obligation to repay such excess contribution amounts. However, 4900 the state board, its designated agents, the FloridaPublic4901Employee OptionalRetirement System Investment PlanProgram4902 Trust Fund, the department, or the Florida Retirement System 4903 Trust Fund may not incur any loss or gain as a result of an 4904 employer’s correction of such excess contributions. The third 4905 party administrator, hired by the state board pursuant to s. 4906 121.4501(8), shall calculate the market losses for each affected 4907 memberparticipant. If contributions made on behalf of members 4908 of the investment planparticipants of the optional retirement4909programor accompanying payroll data are not received within the 4910 calendar month due, the employer shall also pay the cost of the 4911 third-party administrator’s calculation and reconciliation 4912 adjustments resulting from the late contributions. The third 4913 party administrator shall notify the employer of the results of 4914 the calculations and the total amount due from the employer for 4915 such losses and the costs of calculation and reconciliation. The 4916 employer shall remit to the divisionof Retirementthe amount 4917 due within 30 working days after the date of the penalty notice 4918 sent by the division. The division shall transfer that amount to 4919 the third-party administrator, which shall deposit proceeds from 4920 the 1 percent1-percentassessment and from individual market 4921 losses into memberparticipantaccounts, as appropriate. The 4922 state board may adopt rules to administer the provisions 4923 regarding late contributions, late submission of payroll data, 4924 the process for reimbursing memberparticipantaccounts for 4925 resultant market losses, and the penalties charged to the 4926 employers. 4927 (d) If employee contributions reported by an employer on 4928 behalf of the employee are reduced as a result of employer 4929 errors or corrections and the employee has terminated employment 4930 and taken a refund or distribution, the employer shall be billed 4931 and is responsible for recovering from the employee any excess 4932 contributions erroneously provided by the employer. 4933 (e)(c)Delinquency fees specified in paragraph (a) may be 4934 waived by the divisionof Retirement, with regard to pension 4935 plandefined benefit programcontributions, and by the state 4936 board, with regard to investment planoptional retirement4937programcontributions, only if, in the opinion of the division 4938 or the board, as appropriate, exceptional circumstances beyond 4939 the employer’s control prevented remittance by the prescribed 4940 due date notwithstanding the employer’s good faith efforts to 4941 effect delivery. Such a waiver of delinquency may be granted an 4942 employer only once each planstate fiscalyear. 4943 (f) If the employer submits excess employer or employee 4944 contributions, the employer shall receive a credit to be applied 4945 against future contributions owed. The employer is responsible 4946 for reimbursing the employee for any excess contributions 4947 submitted if any return of such an erroneous excess pretax 4948 contribution by the program is made within 1 year after making 4949 erroneous contributions or such other period as allowed under 4950 applicable Internal Revenue Service guidance. 4951 (g)(d)If contributions made by an employer on behalf of 4952 members of the investment programparticipants in the optional4953retirement programare delayed in posting to memberparticipant4954 accounts due to acts of God beyond the control of the division 4955of Retirement, the state board, or the third-party 4956 administrator, as applicable, market losses resulting from the 4957 late contributions are not payable to the membersparticipants. 4958 Section 36. Subsection (1) of section 175.121, Florida 4959 Statutes, is amended to read: 4960 175.121 Department of Revenue and Division of Retirement to 4961 keep accounts of deposits; disbursements.—For any municipality 4962 or special fire control district having a chapter or local law 4963 plan established pursuant to this chapter: 4964 (1) The Department of Revenue shall keep a separate account 4965 of all moneys collected for each municipality and each special 4966 fire control district pursuant tounder the provisions ofthis 4967 chapter. All moneys so collected must be transferred to the 4968 Police and Firefighters’ Premium Tax Trust Fund andshall be4969 separately accounted for by the division. The moneys budgeted as 4970 necessary to pay the expenses of the division for the daily 4971 oversight and monitoring of the firefighters’ pension plans 4972 under this chapter and for the oversight and actuarial reviews 4973 conducted under part VII of chapter 112 are annually 4974 appropriated from the following sources in the order listed: 4975 (a) Interest and investment income earned on the moneys 4976 collected for each municipality or special fire control district 4977 and deposited in the Police and Firefighters’ Premium Tax Trust 4978 Fund. Interest and investment income remainingthereafterin the 4979 trust fund which is unexpended and otherwise unallocated by law 4980 shall revert to the General Revenue Fund on June 30 of each 4981 year. 4982 (b) Moneys collected for each municipality or special fire 4983 control district and deposited in the Police and Firefighters’ 4984 Premium Tax Trust Fund. Moneys used pursuant to this paragraph 4985 shall be reimbursed during years in which there is an excess of 4986 interest and investment income under paragraph (a). 4987 Section 37. Subsection (1) of section 175.341, Florida 4988 Statutes, is amended to read: 4989 175.341 Duties of Division of Retirement; rulemaking 4990 authority; investments by State Board of Administration.— 4991 (1) The division isshall beresponsible for the daily 4992 oversight and monitoring of theforactuarial soundness of the 4993 firefighters’ pension plans, whether chapter or local law plans, 4994 established under this chapter, for receiving and holding the 4995 premium tax moneys collected under this chapter, and, upon 4996 determining compliance with the provisions of this chapter, for 4997 disbursing those moneys to the firefighters’ pension plans. The 4998 funds necessary to pay expenses for such administration shall be 4999 annually appropriated as provided in s. 175.121(1)from the5000interest and investment income earned on moneys deposited in the5001trust fund. 5002 Section 38. Subsection (1) of section 185.10, Florida 5003 Statutes, is amended to read: 5004 185.10 Department of Revenue and Division of Retirement to 5005 keep accounts of deposits; disbursements.—For any municipality 5006 having a chapter plan or local law plan under this chapter: 5007 (1) The Department of Revenue shall keep a separate account 5008 of all moneys collected for each municipality pursuant tounder5009the provisions ofthis chapter. All moneys so collected must be 5010 transferred to the Police and Firefighters’ Premium Tax Trust 5011 Fund andshall beseparately accounted for by the division. The 5012 moneys budgeted as necessary to pay the expenses of the division 5013 for the daily oversight and monitoring of the police officers’ 5014 retirement plans under this chapter and for the oversight and 5015 actuarial reviews conducted under part VII of chapter 112 are 5016 annually appropriated from the following sources in the order 5017 listed: 5018 (a) Interest and investment income earned on the moneys 5019 collected for each municipality or special fire control district 5020 and deposited in the Police and Firefighters’ Premium Tax Trust 5021 Fund. Interest and investment income remainingthereafterin the 5022 trust fund which is unexpended and otherwise unallocated by law 5023 shall revert to the General Revenue Fund on June 30 of each 5024 year. 5025 (b) Moneys collected for each municipality or special fire 5026 control district and deposited in the Police and Firefighters’ 5027 Premium Tax Trust Fund. Moneys used pursuant to this paragraph 5028 shall be reimbursed during years in which there is an excess of 5029 interest and investment income under paragraph (a). 5030 Section 39. Subsection (1) of section 185.23, Florida 5031 Statutes, is amended to read: 5032 185.23 Duties of Division of Retirement; rulemaking 5033 authority; investments by State Board of Administration.— 5034 (1) The division isshall beresponsible for the daily 5035 oversight and monitoring of theforactuarial soundness of the 5036 municipal police officers’ retirement plans, whether chapter or 5037 local law plans, established under this chapter, for receiving 5038 and holding the premium tax moneys collected under this chapter, 5039 and, upon determining compliance with the provisions of this 5040 chapter, for disbursing those moneys to the municipal police 5041 officers’ retirement plans. The funds to pay the expenses for 5042 such administration shall be annually appropriated as provided 5043 in s. 185.10(1)from the interest and investment income earned5044on moneys deposited in the trust fund. 5045 Section 40. Subsection (1) of section 250.22, Florida 5046 Statutes, is amended to read: 5047 250.22 Retirement.— 5048 (1) Any person who is at least 62 years of age andwhohas 5049 completed at leastnot less than30 years of service as an 5050 officer or enlisted person in the Florida National Guard, 5051(exclusive of time served on the inactive or retired lists,) on,5052before, or subsequent to the passage of this sectionis eligible 5053 upon application, whether on the active or retired list of the 5054 Florida National Guard, to be retired under the provisions of 5055 this section at the highest rank attained while serving in the 5056 Florida National Guard or the federal military forces. 5057 (a) Such person, andshall initially receive pay in an 5058 amount equal to one-half of the base pay asis now or hereafter5059may beprescribed on the date of retirement in the applicable 5060 pay tables for similar grades and periods of service of 5061 personnel in the United States Army or Air Force if; provided5062that, in computing service in the Florida National Guard, 5063 service in federal military forces during a period of war or 5064 upon order of the President of the United States, in any 5065 military duty, where the applicant has been inducted from the 5066 Florida National Guard isshall beincluded; andprovided5067further that, in computing such service performed after July 1, 5068 1955, only federally recognized service isshall beincluded. 5069 Eligibility for retirement under this section is in addition to 5070 any other retirement that such person is eligible to receive; 5071provided,however, suchthatretirement payunder this section5072 shall be reduced by any amount of retirement pay, pension, or 5073 compensation which such person is eligible to receive from the 5074 Federal Government for military service. Unless otherwise 5075 provided by law, effective July 1, 2011, the retirement pay of a 5076 member or former member of the Florida National Guard may not be 5077 recomputed to reflect an increase in the rates of base pay for 5078 active members of the armed forces. 5079 (b) Effective July 1, 2012, and annually thereafter on July 5080 1, the Division of Retirement shall adjust the retirement pay of 5081 persons eligible under this section based on s. 121.101(3). 5082 Section 41. Paragraph (a) of subsection (4) of section 5083 1012.875, Florida Statutes, is amended to read: 5084 1012.875 State Community College System Optional Retirement 5085 Program.—Each community college may implement an optional 5086 retirement program, if such program is established therefor 5087 pursuant to s. 1001.64(20), under which annuity or other 5088 contracts providing retirement and death benefits may be 5089 purchased by, and on behalf of, eligible employees who 5090 participate in the program, in accordance with s. 403(b) of the 5091 Internal Revenue Code. Except as otherwise provided herein, this 5092 retirement program, which shall be known as the State Community 5093 College System Optional Retirement Program, may be implemented 5094 and administered only by an individual community college or by a 5095 consortium of community colleges. 5096 (4)(a) Through June 30, 2011, each college must contribute 5097 on behalf of each program memberparticipantan amount equal to 5098 10.43 percent of the employee’sparticipant’sgross monthly 5099 compensation. Effective July 1, 2011, each member shall 5100 contribute an amount equal to the employee contribution required 5101 under s. 121.71(3). Effective July 1, 2011, each employer shall 5102 contribute on behalf of each program member an amount equal to 5103 the difference between 10.43 percent of the employee’s gross 5104 monthly compensation and the employee’s required contribution 5105 based on the employee’s gross monthly compensation. The college 5106 shall deduct an amount approved by the district board of 5107 trustees of the college to provide for the administration of the 5108 optional retirement program. Payment of this contribution must 5109 be madeeitherdirectly by the college or through the program 5110 administrator to the designated company contracting for payment 5111 of benefits to the program memberparticipant. 5112 Section 42. The Legislature finds that a proper and 5113 legitimate state purpose is served when employees and retirees 5114 of the state and its political subdivisions, and the dependents, 5115 survivors, and beneficiaries of such employees and retirees, are 5116 extended the basic protections afforded by governmental 5117 retirement systems. These persons must be provided benefits that 5118 are fair and adequate and that are managed, administered, and 5119 funded in an actuarially sound manner, as required by s. 14, 5120 Article X of the State Constitution and part VII of chapter 112, 5121 Florida Statutes. Therefore, the Legislature determines and 5122 declares that this act fulfills an important state interest. 5123 Section 43. The Division of Statutory Revision is requested 5124 to rename the title of part II of chapter 121, Florida Statutes, 5125 as “Florida Retirement System Investment Plan.” 5126 Section 44. (1) Effective upon this act becoming a law, the 5127 State Board of Administration and the Department of Management 5128 Services shall, as soon as practicable, request a determination 5129 letter and private letter ruling from the United States Internal 5130 Revenue Service. If the Internal Revenue Service refuses to act 5131 upon a request for a private letter ruling, the legal opinion 5132 from a qualified tax attorney or firm may be substituted for the 5133 private letter ruling. 5134 (2) If the board or the department receives notification 5135 from the United States Internal Revenue Service that this act or 5136 any portion of this act will cause the Florida Retirement 5137 System, or a portion thereof, to be disqualified for tax 5138 purposes under the Internal Revenue Code, then that portion does 5139 not apply. Upon such notice, the state board and the department 5140 shall notify the presiding officers of the Legislature. 5141 Section 45. This act shall take effect June 30, 2011.