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 Second Engrossed 20112100e2 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; 57 terminating participation in the Deferred Retirement 58 Option Program after a certain date; revising the 59 interest rate accruing on DROP benefits after a 60 certain date; conforming provisions to changes made by 61 the act; amending s. 121.1001, F.S.; conforming 62 provisions to changes made by the act; amending s. 63 121.101, F.S.;. revising the cost-of-living adjustment 64 depending on the date of retirement; amending s. 65 121.121, F.S., relating to the purchase of creditable 66 service following an authorized leave of absence; 67 requiring that service credit be purchased at the 68 employee and employer contribution rates in effect 69 during the leave of absence; reducing the interest 70 rate on benefits payable under the Deferred Retirement 71 Option Program for employees hired after a certain 72 date; amending s. 121.122, F.S.; providing for renewed 73 membership in the retirement system for retirees who 74 are reemployed after a certain date; excluding 75 retirees of the Elected Officers’ Class or the Senior 76 Management Service Class; specifying requirements and 77 limitations; amending s. 121.125, F.S.; conforming 78 provisions to changes made by the act; assessing a 79 penalty against employers for contributions not paid 80 after a member becomes eligible for workers’ 81 compensation; amending s. 121.35, F.S., relating to 82 the optional retirement program for the State 83 University System; conforming provisions to changes 84 made by the act; requiring employee and employer 85 contributions for members participating in the 86 optional retirement program after a certain date; 87 deleting certain requirements governing employer 88 contributions to conform to changes made by the act; 89 prohibiting certain benefits before termination from 90 employment; conforming cross-references; amending s. 91 121.355, F.S.; conforming provisions to changes made 92 by the act; amending s. 121.4501, F.S.; changing the 93 name of the Public Employee Optional Retirement 94 Program to the Florida Retirement System Investment 95 Plan; limiting the option of enrolling in the State 96 Retirement System’s defined benefit program or defined 97 contribution program to public employees employed 98 before a certain date; requiring certain public 99 employees employed on or after a certain date to 100 enroll in the investment plan; providing exceptions; 101 requiring that plan members make contributions to the 102 plan based on the employee’s membership class; 103 revising definitions; revising the benefit 104 commencement age for members of the special risk 105 class; providing for contribution adjustments as a 106 result of errors or corrections; deleting obsolete 107 provisions relating to the 2002 optional transfer of 108 public employees from the pension plan to the 109 investment plan; providing for past employees who 110 reenter the system; requiring an employer to receive a 111 credit for excess contributions and to reimburse an 112 employee for excess contributions, subject to certain 113 limitations; providing for a retiree to retain his or 114 her prior plan choice following a return to 115 employment; limiting certain refunds of contributions 116 which exceed the amount that would have accrued had 117 the member remained in the pension plan; providing 118 certain requirements and limitations with respect to 119 contributions; clarifying that employee and employer 120 contributions are earmarked for specified purposes; 121 providing duties of the third-party administrator; 122 providing that a member is vested immediately with 123 respect to employee contributions paid by the 124 employee; providing for the forfeiture of nonvested 125 employer contributions and service credit based on 126 years of service; amending s. 121.4502, F.S.; 127 conforming provisions to changes made by the act; 128 amending s. 121.4503, F.S.; providing for the deposit 129 of employee contributions into the Florida Retirement 130 System Contributions Clearing Trust Fund; amending s. 131 121.571, F.S.; conforming provisions to changes made 132 by the act; providing requirements for submitting 133 employee contributions; amending s. 121.591, F.S.; 134 prohibiting the payment of certain benefits before 135 termination of employment; providing for the 136 forfeiture of nonvested accumulations upon payment of 137 certain vested benefits; providing that the 138 distribution payment method selected by the member or 139 beneficiary is irrevocable at the time of 140 distribution; prohibiting a distribution of employee 141 contributions if a qualified domestic relations order 142 is filed against the member’s account; providing for 143 the distribution of an employee’s contributions if the 144 employee dies before being vested; conforming 145 provisions to changes made by the act; amending ss. 146 121.5911 and 121.70, F.S.; conforming provisions to 147 changes made by the act; amending s. 121.71, F.S.; 148 providing for employee contributions to be deducted 149 from the employee’s monthly salary, beginning on a 150 specified date, and treated as employer contributions 151 under certain provisions of federal law; clarifying 152 that an employee may not receive such contributions 153 directly; specifying the required contribution rate 154 for all members of the Florida Retirement System; 155 providing an exception for participants in the 156 Deferred Retirement Option Program; specifying the 157 required employer retirement contribution rates for 158 each membership class and subclass of the system in 159 order to address unfunded actuarial liabilities of the 160 system; requiring an assessment to be imposed if the 161 employee contributions remitted are less than the 162 amount required; providing for the employer to receive 163 a credit for excess contributions remitted; conforming 164 cross-references; amending s. 121.72, F.S.; revising 165 certain requirements governing allocations to optional 166 retirement program member accounts; conforming cross 167 references; amending s. 121.73, F.S., relating to 168 disability coverage for members of the optional 169 retirement program; conforming provisions to changes 170 made by the act; amending ss. 121.74, 121.75, and 171 121.77, F.S.; conforming provisions to changes made by 172 the act; conforming cross-references; amending s. 173 121.78, F.S.; revising certain requirements for 174 administering the payment and distribution of 175 contributions; requiring that certain fees be imposed 176 for delinquent payment; providing that an employer is 177 responsible for recovering any refund provided to an 178 employee in error; revising the terms of an authorized 179 waiver of delinquency; requiring an employer to 180 receive a credit for excess contributions and to 181 reimburse an employee for excess contributions, 182 subject to certain limitations; amending s. 175.121, 183 F.S.; specifying other sources available to pay the 184 expenses of the Department of Revenue for 185 administering firefighters’ pension plans; amending s. 186 175.341, F.S.; conforming provisions to changes made 187 by the act; amending s. 185.10, F.S.; specifying other 188 sources available to pay the expenses of the 189 department for administering police officers’ pension 190 plans; amending s. 185.23, F.S.; conforming provisions 191 to changes made by the act; amending s. 250.22, F.S.; 192 providing that retirement pay for members of the 193 Florida National Guard is determined on the date of 194 retirement and may not be recomputed to reflect an 195 increase in basic pay; directing the Division of 196 Retirement to annually adjust retirement pay after a 197 certain date; amending s. 1012.875, F.S.; requiring 198 employee and employer contributions for members of the 199 State Community College System Optional Retirement 200 Program on a certain date; conforming cross 201 references; providing that the act fulfills an 202 important state interest; providing a directive to the 203 Division of Statutory Revision; requiring the State 204 Board of Administration and the Department of 205 Management Services to request a private letter ruling 206 from the United States Internal Revenue Service 207 regarding the act; providing an effective date. 208 209 Be It Enacted by the Legislature of the State of Florida: 210 211 Section 1. Paragraph (g) of subsection (2) of section 212 110.123, Florida Statutes, is amended to read: 213 110.123 State group insurance program.— 214 (2) DEFINITIONS.—As used in this section, the term: 215 (g) “Retired state officer or employee” or “retiree” means 216 aanystate, or state university, officer or employee who 217 retires under a state retirement system or a state optional 218 annuity or retirement program or is placed on disability 219 retirement,andwho was insured under the state group insurance 220 program at the time of retirement, and who begins receiving 221 retirement benefits immediately after retirement from state or 222 state university office or employment. The term also includesIn223addition to theserequirements,any state officer orstate224 employee who retires under the investment planPublic Employee225Optional Retirement Programestablished under part II of chapter 226 121shall be considereda “retired state officer oremployee” or227“retiree” as used in this sectionif he or she: 228 1. Meets the age and service requirements to qualify for 229 normal retirement as set forth in s. 121.021(29); or 230 2. Has attained the age specified by s. 72(t)(2)(A)(i) of 231 the Internal Revenue Code and has 6 years of creditable service. 232 Section 2. Section 112.0801, Florida Statutes, is amended 233 to read: 234 112.0801 Group insurance; participation by retired 235 employees.— 236(1)Any state agency, county, municipality, special 237 district, community college, or district school board thatwhich238 provides life, health, accident, hospitalization, or annuity 239 insurance, or all of any kinds of such insurance, for its 240 officers and employees and their dependents upon a group 241 insurance plan or self-insurance plan shall allow all former 242 personnel whohaveretired beforeprior toOctober 1, 1987, as 243 well as those who retire on or after such date, and their 244 eligible dependents, the option of continuing to participate in 245 thesuchgroup insurance plan or self-insurance plan. Retirees 246 and their eligible dependents shall be offered the same health 247 and hospitalization insurance coverage as is offered to active 248 employees at a premium cost of no more than the premium cost 249 applicable to active employees. Fortheretired employees and 250 their eligible dependents, the cost ofany suchcontinued 251 participationin any type of plan or any of the cost thereofmay 252 be paid by the employer or by the retired employees. To 253 determine health and hospitalization plan costs, the employer 254 shall commingle the claims experience of the retiree group with 255 the claims experience of the active employees; and, for other 256 types of coverage, the employer may commingle the claims 257 experience of the retiree group with the claims experience of 258 active employees. Retirees covered under Medicare may be 259 experience-rated separately from the retirees not covered by 260 Medicare and from active employees if, provided thatthe total 261 premium does not exceed that of the active group and coverage is 262 basically the same as for the active group. 263(2)For purposes of this section, the term “retiree” has 264 the same meaning as in s. 110.123(2)means any officer or265employee who retires under a state retirement system or a state266optional annuity or retirement program or is placed on267disability retirement and who begins receiving retirement268benefits immediately after retirement from employment.In269addition to these requirements, any officer or employee who270retires under the Public Employee Optional Retirement Program271established under part II of chapter 121 shall be considered a272“retired officer or employee” or “retiree” as used in this273section if he or she:274(a)Meets the age and service requirements to qualify for275normal retirement as set forth in s.121.021(29); or276(b)Has attained the age specified by s. 72(t)(2)(A)(i) of277the Internal Revenue Code and has 6 years of creditable service.278 Section 3. Paragraphs (b) and (c) of subsection (2) and 279 paragraph (e) of subsection (3) of section 112.363, Florida 280 Statutes, are amended to read: 281 112.363 Retiree health insurance subsidy.— 282 (2) ELIGIBILITY FOR RETIREE HEALTH INSURANCE SUBSIDY.— 283 (b) For purposes of this section, a person is deemed 284 retired from a state-administered retirement system when he or 285 she terminates employment with all employers participating in 286 the Florida Retirement System as described in s. 121.021(39) 287 and: 288 1. For a memberparticipantof the investment planPublic289Employee Optional Retirement programestablished under part II 290 of chapter 121, the memberparticipantmeets the age or service 291 requirements to qualify for normal retirement as set forth in s. 292 121.021(29) and meets the definition of retiree in s. 293 121.4501(2). 294 2. For a member of the pension planFlorida Retirement295System defined benefit program, or any employee who maintains 296 creditable service underboththe pension plan and the 297 investment plandefined benefit program and the Public Employee298Optional Retirement program, the member begins drawing 299 retirement benefits from the pension plandefined benefit300program of the Florida Retirement System. 301 (c)1.Effective July 1, 2001, any person retiring on or 302 after thatsuchdate as a member of the Florida Retirement 303 System, including a memberanyparticipantof the investment 304 plandefined contribution programadministered pursuant to part 305 II of chapter 121, must have satisfied the vesting requirements 306 for his or her membership class under the pension planFlorida307Retirement System defined benefit programas administered under 308 part I of chapter 121. However, 3092. Notwithstanding the provisions of subparagraph 1.,a 310 person retiring due to disability musteitherqualify for a 311 regular or in-line-of-duty disability benefit as provided in s. 312 121.091(4) or qualify for a disability benefit under a 313 disability plan established under part II of chapter 121, as 314 appropriate. 315 (3) RETIREE HEALTH INSURANCE SUBSIDY AMOUNT.— 316 (e)1. Beginning July 1, 2001, each eligible retiree of the 317 pension plandefined benefit programof the Florida Retirement 318 System, or, if the retiree is deceased, his or her beneficiary 319 who is receiving a monthly benefit from such retiree’s account 320 and who is a spouse, or a person who meets the definition of 321 joint annuitant in s. 121.021(28), shall receive a monthly 322 retiree health insurance subsidy payment equal to the number of 323 years of creditable service, as defined in s. 121.021(17), 324 completed at the time of retirement multiplied by $5; however, 325 annoeligible retiree or beneficiary may not receive a subsidy 326 payment of more than $150 or less than $30. If there are 327 multiple beneficiaries, the total payment maymustnot be 328 greater than the payment to which the retiree was entitled. The 329 health insurance subsidy amount payable to any person receiving 330 the retiree health insurance subsidy payment on July 1, 2001, 331 mayshallnot be reduced solely by operation of this 332 subparagraph. 333 2. Beginning July 1, 2002, each eligible memberparticipant334 of the investment plan under part II of chapter 121Public335Employee Optional Retirement program of the Florida Retirement336Systemwho has met the requirements of this section, or, if the 337 memberparticipantis deceased, his or her spouse who is the 338 member’sparticipant’sdesignated beneficiary, shall receive a 339 monthly retiree health insurance subsidy payment equal to the 340 number of years of creditable service, as provided in this 341 subparagraph, completed at the time of retirement, multiplied by 342 $5; however, annoeligible retiree or beneficiary may not 343 receive a subsidy payment of more than $150 or less than $30. 344 For purposes of determining a member’sparticipant’screditable 345 service used to calculate the health insurance subsidy, the 346 member’saparticipant’syears of service credit or fraction 347 thereof mustshallbe based on the member’sparticipant’swork 348 year as defined in s. 121.021(54). Credit mustshallbe awarded 349 for a full work year ifwheneverhealth insurance subsidy 350 contributions have been madeas required by lawfor each month 351 in the member’sparticipant’swork year. In addition, all years 352 of creditable service retained under the Florida Retirement 353 System pension plan mustdefined benefit program shallbe 354 included as creditable service for purposes of this section. 355 Notwithstanding any other provision in this sectionto the356contrary, the spouse at the time of death isshall bethe 357 member’sparticipant’sbeneficiary unless such member 358participanthas designated a different beneficiary subsequent to 359 the member’sparticipant’smost recent marriage. 360 Section 4. Subsection (1) of section 112.65, Florida 361 Statutes, is amended to read: 362 112.65 Limitation of benefits.— 363 (1) ESTABLISHMENT OF PROGRAM.—The normal retirement benefit 364 or pension payable to a retiree who becomes a member of aany365 retirement system or plan and who has not previously 366 participated in such plan, on or after January 1, 1980, may 367shallnot exceed 100 percent of his or her average final 368 compensation. However,nothing contained inthis section does 369 notshallapply to supplemental retirement benefits or to 370 pension increases attributable to cost-of-living increases or 371 adjustments. For the purposes of this section, benefits accruing 372 in individual memberparticipantaccounts established under the 373 investment planPublic Employee Optional Retirement program374 established in part II of chapter 121 are considered 375 supplemental benefits. As used in this section, the term 376 “average final compensation” means the average of the member’s 377 earnings over a period of time which the governmental entity 378 establisheshas establishedby statute, charter, or ordinance. 379 Section 5. Paragraph (h) is added to subsection (3) of 380 section 121.011, Florida Statutes, to read: 381 121.011 Florida Retirement System.— 382 (3) PRESERVATION OF RIGHTS.— 383 (h) Effective July 1, 2011, the retirement system shall 384 require employee and employer contributions as provided in s. 385 121.071 and part III of this chapter. 386 Section 6. Subsection (3), paragraph (a) of subsection 387 (19), paragraphs (a) and (b) of subsection (22), subsections 388 (24), (29), (39), (45), (55), and (59) of section 121.021, 389 Florida Statutes, are amended, and subsection (65) is added to 390 that section, to read: 391 121.021 Definitions.—The following words and phrases as 392 used in this chapter have the respective meanings set forth 393 unless a different meaning is plainly required by the context: 394 (3) “Florida Retirement System” or “system” means the 395 general retirement system established by this chapter,to be396known and cited as the “Florida Retirement System,”including, 397 but not limited to, the defined benefitretirementprogram 398 administered underthe provisions of part I ofthis part, 399 referred to as the “Florida Retirement System Pension Plan” or 400 “pension plan,”chapterand the defined contributionretirement401 programknown as the Public Employee Optional Retirement Program402andadministered underthe provisions ofpart II of this 403 chapter, referred to as the “Florida Retirement System 404 Investment Plan” or “investment plan.” 405 (19) “Prior service”under this chaptermeans: 406 (a) Service for which the member had credit under one of 407 the existing systems and received a refund of his or her 408 contributions upon termination of employment. Prior service 409shallalso includesinclude thatservicebetween December 1,4101970, and the date the system becomes noncontributoryfor which 411 the member had credit under the Florida Retirement System and 412 received a refund of his or her contributions upon termination 413 of employment. 414 (22) “Compensation” means the monthly salary paid a member 415 by his or her employer for work performed arising from that 416 employment. 417 (a) Before July 1, 2011, compensation includesshall418include: 419 1. Overtime payments paid from a salary fund. 420 2. Accumulated annual leave payments. 421 3. Payments in addition to the employee’s base rate of pay 422 ifallthe following apply: 423 a. The payments are paid according to a formal written 424 policy that applies to all eligible employees equally; 425 b. The policy provides that paymentsshallcommence byno426later thanthe 11th year of employment; 427 c. The payments are paid for as long as the employee 428 continues his or her employment; and 429 d. The payments are paid at least annually. 430 4. Amounts withheld for tax sheltered annuities or deferred 431 compensation programs, or any other type of salary reduction 432 plan authorized under the Internal Revenue Code. 433 5. Payments made in lieu of a permanent increase in the 434 base rate of pay, whether made annually or in 12 or 26 equal 435 payments within a 12-month period, ifwhenthe member’s base pay 436 is at the maximum of his or her pay range. IfWhena portion of 437 a member’s annual increase raises his or her pay range and the 438 excess is paid as a lump sum payment, thesuchlump sum payment 439 is consideredshall becompensation for retirement purposes. 440 (b) On or after July 1, 2011, compensation includes: 441 1. Payments in addition to the employee’s base rate of pay 442 if the following apply: 443 a. The payments are paid according to a formal written 444 policy that applies to all eligible employees equally; 445 b. The policy provides that payments shall commence by the 446 11th year of employment; and 447 c. The payments are paid at least annually. 448 2. Amounts withheld for tax-sheltered annuities, deferred 449 compensation programs, or any other type of salary reduction 450 plan authorized under the Internal Revenue Code. 451 3. Payments made in lieu of a permanent increase in the 452 base rate of pay, whether made annually or in 12 or 26 equal 453 payments within a 12-month period, if the member’s base pay is 454 at the maximum of his or her pay range. If a portion of a 455 member’s annual increase raises his or her pay range and the 456 excess is paid as a lump sum payment, such lump sum payment is 457 compensation for retirement purposes. 458 4. Up to 300 hours of overtime payments paid from a salary 459 fund. 460 (c)(b)Under no circumstances shallCompensation for a 461 member participating in the pension plandefined benefit462retirement programor the investment planPublic Employee463Optional Retirement Programof the Florida Retirement System may 464 not include: 465 1. Fees paid professional persons for special or particular 466 services orincludesalary payments made from a faculty practice 467 plan authorized by the Board of Governors of the State 468 University System for eligible clinical faculty at a college in 469 a state university that has a faculty practice plan; or 470 2. Any bonuses or other payments prohibited from inclusion 471 in the member’s average final compensationand defined in472subsection (47). 473 (24) “Average final compensation” means the average of the 474 5 highest fiscal years of compensation for creditable service 475 prior to retirement, termination, or death. For in-line-of-duty 476 disability benefits, if less than 5 years of creditable service 477 have been completed, the term“average final compensation”means 478 the average annual compensation of the total number of years of 479 creditable service. Each year used to calculate thein the480calculation ofaverage final compensation commencesshall481commenceon July 1. 482 (a) Before July 1, 2011: 483 1. The average final compensation includesshall include: 484 a.1.Accumulated annual leave payments, not to exceed 500 485 hours; and 486 b.2.All payments defined as compensation under this 487 sectionin subsection (22). 488 2.(b)The average final compensation doesshallnot 489 include: 490 a.1.Compensation paid to professional persons for special 491 or particular services; 492 b.2.Payments for accumulated sick leave made due to 493 retirement or termination; 494 c.3.Payments for accumulated annual leave in excess of 500 495 hours; 496 d.4.Bonusesas defined in subsection (47); 497 e.5.Third-partyThird partypayments made on and after 498 July 1, 1990; or 499 f.6.Fringe benefits, such as(for example,automobile 500 allowances or housing allowances). 501 (b) On or after July 1, 2011: 502 1. The average final compensation includes all payments 503 defined as compensation under this section. 504 2. The average final compensation does not include: 505 a. Compensation paid to professional persons for special or 506 particular services; 507 b. Payments for accumulated sick leave made due to 508 retirement or termination; 509 c. Payments for accumulated annual leave; 510 d. Payments for overtime exceeding 300 hours paid from a 511 salary fund; 512 e. Bonuses; 513 f. Third-party payments made on and after July 1, 1990; or 514 g. Fringe benefits, such as automobile allowances or 515 housing allowances. 516 (29) “Normal retirement date” means the date a member 517 attains normal retirement age and is vested, which is determined 518 as follows: 519 (a) If a Regular Class member, a Senior Management Service 520 Class member, or an Elected Officers’ Class member: 521 1. The first day of the month the member completes 6 or 522 more years of creditable service and attains age 62; or 523 2. The first day of the month following the date the member 524 completes 30 years of creditable service, regardless of age. 525 (b) If a Special Risk Class member: 526 1. The first day of the month the member completes 6 or 527 more years of creditable service in the Special Risk Class and 528 attains age 55; 529 2. The first day of the month following the date the member 530 completes 25 years of creditable service in the Special Risk 531 Class, regardless of age; or 532 3. The first day of the month following the date the member 533 completes 25 years of creditable service and attains age 52, 534 which service may include a maximum of 4 years of military 535 service credit as long as such credit is not claimed under any 536 other system and the remaining years are in the Special Risk 537 Class. 538 539 “Normal retirement age” is attained on the “normal retirement 540 date.” 541 (39)(a) “Termination” or “terminated” meansoccurs, except 542 as provided in paragraph (b), thatwhena member ceases all 543 employment relationships with a participatinganemployer;,544 however: 545 1. For retirements effective before July 1, 2010, if a 546 member is employed by any such employer within the next calendar 547 month, termination shall be deemed not to have occurred. A leave 548 of absence constitutes a continuation of the employment 549 relationship, except that a leave of absence without pay due to 550 disability may constitute termination if such member makes 551 application for and is approved for disability retirement in 552 accordance with s. 121.091(4). The department or state board may 553 require other evidence of termination as it deems necessary. 554 2. For retirements effective on or after July 1, 2010, if a 555 member is employed by any such employer within the next 6 556 calendar months, termination shall be deemed not to have 557 occurred. A leave of absence constitutes a continuation of the 558 employment relationship, except that a leave of absence without 559 pay due to disability may constitute termination if such member 560 makes application for and is approved for disability retirement 561 in accordance with s. 121.091(4). The department or state board 562 may require other evidence of termination as it deems necessary. 563 (b) “Termination” or “terminated” means for a member 564 electing to participate in the Deferred Retirement Option 565 Program thatoccurs whenthe memberprogram participantceases 566 all employment relationships with a participatinganemployer in 567 accordance with s. 121.091(13);,however: 568 1. For termination dates occurring before July 1, 2010, if 569 the memberparticipantis employed by any such employer within 570 the next calendar month, termination will be deemed not to have 571 occurred, except as provided in s. 121.091(13)(b)4.c. A leave of 572 absence shall constitute a continuation of the employment 573 relationship. 574 2. For termination dates occurring on or after July 1, 575 2010, if the memberparticipantbecomes employed by any such 576 employer within the next 6 calendar months, termination will be 577 deemed not to have occurred, except as provided in s. 578 121.091(13)(b)4.c. A leave of absence constitutes a continuation 579 of the employment relationship. 580 (c) Effective July 1, 2011, “termination” or “terminated” 581 means for a member receiving a refund of employee contributions 582 that the member ceases all employment relationships with a 583 participating employer for 3 calendar months. A leave of absence 584 for less than 3 calendar months constitutes a continuation of an 585 employment relationship. 586 (45)(a)“Vested” or “vesting” means the guarantee that a 587 member is eligible to receive a future retirement benefit upon 588 completion of the required years of creditable service for the 589 employee’s class of membership, even though the member may have 590 terminated covered employment before reaching normal or early 591 retirement date. Being vested does not entitle a member to a 592 disability benefit. Provisions governing entitlement to 593 disability benefits are set forth under s. 121.091(4). 594 (a)(b)Effective July 1, 2001, and for members initially 595 enrolled before July 1, 2011, a 6-year vesting requirement shall 596 be implemented for thedefined benefit program of theFlorida 597 Retirement System’s pension planSystem. Pursuant thereto: 598 1. Any member employed in a regularly established position 599 on July 1, 2001, who completes or has completed a total of 6 600 years of creditable service isshall be consideredvestedas601described in paragraph (a). 602 2. Any member not employed in a regularly established 603 position on July 1, 2001, shall be deemed vested upon completion 604 of 6 years of creditable service if, provided thatsuch member 605 is employed in a covered position for at least 1 work year after 606 July 1, 2001. However, anomember may notshallbe required to 607 complete more years of creditable service than would have been 608 required for that member to vest under retirement laws in effect 609 before July 1, 2001. 610 (b) Any member initially enrolled on or after July 1, 2011, 611 is vested upon completion of 10 years of creditable service. 612 (55) “Benefit” means any pension payment, lump-sum or 613 periodic, to a member, retiree, or beneficiary, basedpartially614or entirelyon employer and employee contributions as 615 applicable. 616 (59) “Payee” means a retiree or beneficiary of a retiree 617 who has received or is receiving a retirement benefit payment. 618 (65) “Division” means the Division of Retirement in the 619 department. 620 Section 7. Paragraphs (b), (c), and (d) of subsection (2) 621 of section 121.051, Florida Statutes, are amended, present 622 paragraphs (e) and (f) of that subsection are redesignated as 623 subsections (f) and (g), respectively, a new subsection (e) is 624 added to that subsection, and subsection (3) of that section is 625 amended, to read: 626 121.051 Participation in the system.— 627 (2) OPTIONAL PARTICIPATION.— 628 (b)1. The governing body of any municipality, metropolitan 629 planning organization, or special district in the state may 630 elect to participate in the Florida Retirement System upon 631 proper application to the administrator and may cover allor any632 of its units as approved by the Secretary of Health and Human 633 Services and the administrator. The department shall adopt rules 634 establishing proceduresprovisionsfor the submission of 635 documents necessary for such application. BeforePrior tobeing 636 approved for participationin the Florida Retirement System, the 637 governing body of aany suchmunicipality, metropolitan planning 638 organization, or special district that has a local retirement 639 system mustshallsubmit to the administrator a certified 640 financial statement showing the condition of the local 641 retirement systemas of a datewithin 3 months beforeprior to642 the proposed effective date of membership in the Florida 643 Retirement System. The statement must be certified by a 644 recognized accounting firm that is independent of the local 645 retirement system. All required documentsnecessary for646extending Florida Retirement System coveragemust be received by 647 the department for consideration at least 15 days beforeprior648tothe proposed effective date of coverage. If the governing 649 bodymunicipality, metropolitan planning organization, or650special districtdoes not comply with this requirement, the 651 department may require that the effective date of coverage be 652 changed. 653 2. A municipalityAny city, metropolitan planning 654 organization, or special district that has an existing 655 retirement system covering the employees in the units that are 656 to be brought under the Florida Retirement System may 657 participate only after holding a referendum in which all 658 employees in the affected units have the right to participate. 659 Only those employees electing coverage under the Florida 660 Retirement System by affirmative vote in thesaidreferendum are 661shall beeligible for coverage under this chapter, and those not 662 participating or electing not to be covered by the Florida 663 Retirement System shall remain in their present systems and are 664shallnotbeeligible for coverage under this chapter. After the 665 referendum is held, all future employees areshall becompulsory 666 members of the Florida Retirement System. 667 3. At the time of joining the Florida Retirement System, 668 the governing body of a municipalityany city, metropolitan 669 planning organization, or special district complying with 670 subparagraph 1. may elect to provide, or not provide, benefits 671 based on past service of officers and employees as described in 672 s. 121.081(1). However, if such employer elects to provide past 673 service benefits, such benefits must be provided for all 674 officers and employees of its covered group. 675 4. Once this election is made and approved it may not be 676 revoked, except pursuant to subparagraphs 5. and 6., and all 677 present officers and employees electing coverageunder this678chapterand all future officers and employees areshall be679 compulsory members of the Florida Retirement System. 680 5. Subject tothe conditions set forth insubparagraph 6., 681 the governing body of aanyhospital licensed under chapter 395 682 which is governed by the board of a special district as defined 683 in s. 189.403(1)or by the board of trustees of a public health 684 trust created under s. 154.07, hereinafter referred to as 685 “hospital district,” and which participates in the Florida 686 Retirement System, may elect to cease participation in the 687 system with regard to future employees in accordance with the 688 followingprocedure: 689 a. No more than 30 days and at least 7 days before 690 adopting a resolution to partially withdraw from theFlorida691Retirementsystem and establish an alternative retirement plan 692 for future employees, a public hearing must be held on the 693 proposed withdrawal and proposed alternative plan. 694 b. From 7 to 15 days before such hearing, notice of intent 695 to withdraw, specifying the time and place of the hearing, must 696 be provided in writing to employees of the hospital district 697 proposing partial withdrawal and must be published in a 698 newspaper of general circulation in the area affected, as 699 provided by ss. 50.011-50.031. Proof of publication mustof such700notice shallbe submitted to the departmentof Management701Services. 702 c. The governing body of aanyhospital district seeking to 703 partially withdraw from the system must, before such hearing, 704 have an actuarial report prepared and certified by an enrolled 705 actuary, as defined in s. 112.625(3), illustrating the cost to 706 the hospital district of providing, through the retirement plan 707 that the hospital district is to adopt, benefits for new 708 employees comparable to those provided under theFlorida709Retirementsystem. 710 d. Upon meeting all applicable requirements of this 711 subparagraph, and subject tothe conditions set forth in712 subparagraph 6., partial withdrawal from the system and adoption 713 of the alternative retirement plan may be accomplished by 714 resolutiondulyadopted by the hospital district board. The 715 hospital district board must provide written notice of such 716 withdrawal to the division by mailing a copy of the resolution 717 to the division, postmarked byno later thanDecember 15, 1995. 718 The withdrawal shall take effect January 1, 1996. 719 6. Following the adoption of a resolution under sub 720 subparagraph 5.d., all employees of the withdrawing hospital 721 district who were members ofparticipants intheFlorida722Retirementsystem beforeprior toJanuary 1, 1996, shall remain 723 as members ofparticipants inthe system for as long as they are 724 employees of the hospital district, and all rights, duties, and 725 obligations between the hospital district, the system, and the 726 employeesshallremain in full force and effect. Any employee 727 who is hired or appointed on or after January 1, 1996, may not 728 participate in theFlorida Retirementsystem, and the 729 withdrawing hospital district hasshall haveno obligation to 730 the system with respect to such employees. 731 (c) Employees of public community colleges or charter 732 technical career centers sponsored by public community colleges, 733 designated in s. 1000.21(3), who are members of the Regular 734 Class of the Florida Retirement System and who comply with the 735 criteria set forth in this paragraph and s. 1012.875 may, in 736 lieu of participating in the Florida Retirement System, elect to 737 withdraw from the system altogether and participate in the State 738 Community College System Optional Retirement Program provided by 739 the employing agency under s. 1012.875. 740 1. Through June 30, 2001, the cost to the employer for a 741 benefit under the optional retirement programsuch annuity742 equals the normal cost portion of the employer retirement 743 contribution which would be required if the employee were a 744 member of the Regular Class pension plandefined benefit745program, plus the portion of the contribution rate required by 746 s. 112.363(8) which would otherwise be assigned to the Retiree 747 Health Insurance Subsidy Trust Fund. Effective July 1, 2001, 748 each employer shall contribute on behalf of each member of 749participant inthe optional program an amount equal to 10.43 750 percent of the employee’sparticipant’sgross monthly 751 compensation. The employer shall deduct an amount for the 752 administration of the program. The employer shall contribute an 753 additional amount to the Florida Retirement System Trust Fund 754 equal to the unfunded actuarial accrued liability portion of the 755 Regular Class contribution rate. 756 2. The decision to participate in theanoptional 757 retirement program is irrevocable as long as the employee holds 758 a position eligible for participation, except as provided in 759 subparagraph 3. Any service creditable under the Florida 760 Retirement System is retained after the member withdraws from 761 the system; however, additional service credit in the system may 762 not be earned while a member of the optional retirement program. 763 3. An employee who has elected to participate in the 764 optional retirement program shall have one opportunity, at the 765 employee’s discretion, to transfer from the optional retirement 766 program to thedefined benefit program of theFlorida Retirement 767 System’s pension planSystemor to the investment plan 768 established under part II of this chapterPublic Employee769Optional Retirement Program, subject to the terms of the 770 applicable optional retirement program contracts. 771 a. If the employee chooses to move to the investment plan 772Public Employee Optional Retirementprogram, any contributions, 773 interest, and earnings creditable to the employee under the 774State Community College Systemoptional retirement program are 775 retained by the employee in theState Community College System776 optional retirement program, and the applicable provisions of s. 777 121.4501(4) govern the election. 778 b. If the employee chooses to move to the pension plan 779defined benefit program of the Florida Retirement System, the 780 employee shall receive service credit equal to his or her years 781 of service under theState Community College Systemoptional 782 retirement program. 783 (I) The cost for such credit is the amount representing the 784 present value of the employee’s accumulated benefit obligation 785 for the affected period of service. The cost shall be calculated 786 as if the benefit commencement occurs on the first date the 787 employee becomes eligible for unreduced benefits, using the 788 discount rate and other relevant actuarial assumptions that were 789 used to value the pensionFlorida Retirement System defined790benefitplan liabilities in the most recent actuarial valuation. 791 The calculation must include any service already maintained 792 under the pensiondefined benefitplan in addition to the years 793 under theState Community College Systemoptional retirement 794 program. The present value of any service already maintained 795 must be applied as a credit to total cost resulting from the 796 calculation. The division shall ensure that the transfer sum is 797 prepared using a formula and methodology certified by an 798 enrolled actuary. 799 (II) The employee must transfer from his or herState800Community College Systemoptional retirement program account and 801 from other employee moneys as necessary, a sum representing the 802 present value of the employee’s accumulated benefit obligation 803 immediately following the time of such movement, determined 804 assuming that attained service equals the sum of service in the 805 pension plandefined benefit programand service in theState806Community College Systemoptional retirement program. 807 4. Participation in the optional retirement program is 808 limited to employees who satisfy the following eligibility 809 criteria: 810 a. The employee ismust beotherwise eligible for 811 membership or renewed membership in the Regular Class of the 812 Florida Retirement System, as provided in s. 121.021(11) and 813 (12) or s. 121.122. 814 b. The employee ismust beemployed in a full-time position 815 classified in the Accounting Manual for Florida’s Public 816 Community Colleges as: 817 (I) Instructional; or 818 (II) Executive Management, Instructional Management, or 819 Institutional Management, and the, if acommunity college 820 determines that recruiting to fill a vacancy in the position is 821 to be conducted in the national or regional market, and the 822 duties and responsibilities of the position include the 823 formulation, interpretation, or implementation of policies, or 824 the performance of functions that are unique or specialized 825 within higher education and that frequently support the mission 826 of the community college. 827 c. The employee ismust beemployed in a position not 828 included in the Senior Management Service Class of the Florida 829 Retirement System, as described in s. 121.055. 830 5. Members ofParticipants inthe program are subject to 831 the same reemployment limitations, renewed membership 832 provisions, and forfeiture provisionsas areapplicable to 833 regular members of the Florida Retirement System under ss. 834 121.091(9), 121.122, and 121.091(5), respectively. A member 835participantwho receives a program distribution funded by 836 employer contributions isshall bedeemed to be retired from a 837 state-administered retirement system if the retireeparticipant838 is subsequently employed with an employer that participates in 839 the Florida Retirement System. 840 6. Eligible community college employees are compulsory 841 members of the Florida Retirement System until, pursuant to s. 842 1012.875, a written election to withdraw from the system and 843 participate in theState Community College Systemoptional 844 retirement program is filed with the program administrator and 845 received by the division. 846 a. A community college employee whose program eligibility 847 results from initial employment shallmustbe enrolled in the 848State Community College Systemoptional retirement program 849 retroactive to the first day of eligible employment. The 850 employer retirement contributions paid through the month of the 851 employee plan change shall be transferred to the community 852 college to the employee’s optional program account, and, 853 effective the first day of the next month, the employer shall 854 pay the applicable contributions based upon subparagraph 1. 855 b. A community college employee whose program eligibility 856 is due to the subsequent designation of the employee’s position 857 as one of those specified in subparagraph 4., or due to the 858 employee’s appointment, promotion, transfer, or reclassification 859 to a position specified in subparagraph 4., must be enrolled in 860 the program on the first day of the first full calendar month 861 that such change in status becomes effective. The employer 862 retirement contributions paid from the effective date through 863 the month of the employee plan change must be transferred to the 864 community college to the employee’s optional program account, 865 and, effective the first day of the next month, the employer 866 shall pay the applicable contributions based upon subparagraph 867 1. 868 7. Effective July 1, 2003, through December 31, 2008, any 869 memberparticipantof theState Community College System870 optional retirement program who has service credit in the 871 pensiondefined benefitplan of the Florida Retirement System 872 for the period between his or her first eligibility to transfer 873 from the pensiondefined benefitplan to the optional retirement 874 program and the actual date of transfer may, during employment, 875 transfer to the optional retirement program a sum representing 876 the present value of the accumulated benefit obligation under 877 the pension plandefined benefit retirement programfor the 878 period of service credit. Upon transfer, all service credit 879 previously earned under the pension plandefined benefit program880of the Florida Retirement Systemduring this period is nullified 881 for purposes of entitlement to a future benefit under the 882 pension plandefined benefit program ofthe Florida Retirement883System. 884 (d) The governing body of a charter school or a charter 885 technical career center may elect to participate in the system 886 upon proper application to the administrator and shall cover its 887 units as approved by the Secretary of Health and Human Services 888 and the administrator. Once this election is made and approved, 889 it may not be revoked, and all present officers and employees 890 selecting coverage under this chapter and all future officers 891 and employees shall be compulsory members of the Florida 892 Retirement System. 893 (e) All eligible employees initially enrolled on or after 894 July 1, 2011, who are members of the Elected Officers’ Class and 895 Senior Management Class are compulsory members of the investment 896 plan and membership in the revision plan is not permitted except 897 as provided in s. 121.591, F.S. 898 (3) SOCIAL SECURITY COVERAGE.—Social security coverage 899 shall be provided for all officers and employees who become 900 members underthe provisions ofsubsection (1) or subsection 901 (2). Any modification of the present agreement with the Social 902 Security Administration, or referendum required under the Social 903 Security Act, for the purpose of providing social security 904 coverage for any member shall be requested by the state agency 905 in compliance with the applicable provisions of the Social 906 Security Act governing such coverage. However, retroactive 907 social security coverage for serviceprior to December 1, 1970,908 with the employer before December 1, 1970, mayshallnot be 909 provided for aanymember who was not covered under the 910 agreement as of November 30, 1970. The employer-paid employee 911 contributions specified in s. 121.71(2) are subject to taxes 912 imposed under the Federal Insurance Contributions Act, 26 U.S.C. 913 ss. 3101-3128. 914 Section 8. Paragraph (b) of subsection (5), paragraph (a) 915 of subsection (7), and paragraph (c) of subsection (9) of 916 section 121.0515, Florida Statutes, are amended to read: 917 121.0515 Special risk membership.— 918 (5) CREDIT FOR PAST SERVICE.—A special risk member may 919 purchase retirement credit in the Special Risk Class based upon 920 past service, and may upgrade retirement credit for such past 921 service, to the extent of 2 percent of the member’s average 922 monthly compensation as specified in s. 121.091(1)(a) for such 923 service as follows: 924 (b) Contributions for upgrading the additional special risk 925 credit arepursuant to this subsection shall beequal to the 926 difference in the employer and, if applicable, employee 927 contributions paid and the special risk percentage rate of gross 928 salary in effect at the time of purchase for the period being 929 claimed, plus interest thereon at the rate of 4 percent a year 930 compounded annually from the date of such service until July 1, 931 1975, and 6.5 percent a year thereafter until the date of 932 payment.ThisPast service may be purchased by the member or by 933 the employer on behalf of the member. 934 (7) RETENTION OF SPECIAL RISK NORMAL RETIREMENT DATE.— 935 (a) A special risk member who is moved or reassigned to a 936 nonspecial risk law enforcement, firefighting, correctional, or 937 emergency medical care administrative support position within 938withthe same agency, or who is subsequently employed in such a 939 position with any law enforcement, firefighting, correctional, 940 or emergency medical care agency under the Florida Retirement 941 System, shall participate in the Special Risk Administrative 942 Support Class andshallearn credit for such service at the same 943 percentage rate as that earned by a regular member. 944 Notwithstandingthe provisions ofsubsection (4), service in 945suchan administrative support positionshall, for purposes of 946 s. 121.091, appliesapplytoward satisfaction of the special 947 risk normal retirement date, as defined in s. 121.021(29)(b)if, 948provided that,while in such position, the member remains 949 certified as a law enforcement officer, firefighter, 950 correctional officer, emergency medical technician, or 951 paramedic; remains subject to reassignment at any time to a 952 position qualifying for special risk membership; and completes 953 an aggregate of 6 or more years of service as a designated 954 special risk member beforeprior toretirement. 955 (9) CREDIT FOR UPGRADED SERVICE.— 956 (c) Any member of the Special Risk Class who has earned 957 creditable service in another membership class of the Florida 958 Retirement System in a position with the Department of Law 959 Enforcement or the Division of State Fire Marshal and became 960 covered by the Special Risk Class as described in paragraph 961 (2)(i), or with a local government law enforcement agency or 962 medical examiner’s office and became covered by the Special Risk 963 Class as described in paragraph (2)(j), which service is within 964 the purview of the Special Risk Class, and is employed in such 965 position on or after July 1, 2008, may purchase additional 966 retirement credit to upgrade such service to Special Risk Class 967 service, to the extent of the percentages of the member’s 968 average final compensation provided in s. 121.091(1)(a)2. The 969 cost for such credit mustshallbe an amount representing the 970 actuarial accrued liability for the difference in accrual value 971 during the affected period of service. The cost shall be 972 calculated using the discount rate and other relevant actuarial 973 assumptions that were used to value the Florida Retirement 974 System’s pensionSystem defined benefitplan liabilities in the 975 most recent actuarial valuation. The division shall ensure that 976 the transfer sum is prepared using a formula and methodology 977 certified by an enrolled actuary. The cost must be paid 978 immediately upon notification by the division. The local 979 government employer may purchase the upgraded service credit on 980 behalf of the member if the member has been employed by that 981 employer for at least 3 years. 982 Section 9. Paragraphs (a) and (d) of subsection (4) and 983 paragraph (b) of subsection (7) of section 121.052, Florida 984 Statutes, are amended, present paragraph (c) of subsection (7) 985 of that section is redesignated as paragraph (d), a new 986 paragraph (c) is added to that subsection, and subsection (8) of 987 that section is amended, to read: 988 121.052 Membership class of elected officers.— 989 (4) PARTICIPATION BY ELECTED OFFICERS SERVING A SHORTENED 990 TERM DUE TO APPORTIONMENT, FEDERAL INTERVENTION, ETC.— 991 (a) AnAny dulyelected officer whose term of office was 992 shortened by legislative or judicial apportionment pursuant to 993the provisions ofs. 16, Art. III of the State Constitution may, 994 after the term of office to which he or she was elected is 995 completed, pay into the Florida Retirement System Trust Fund the 996 amount of contributions that would have been made by the officer 997 or the officer’s employer on his or her behalf, plus 4 percent 998 interest compounded annually from the date he or she left office 999 until July 1, 1975, and 6.5 percent interest compounded annually 1000 thereafter, and may receive service credit for the length of 1001 time the officer would have served if such term had not been 1002 shortened by apportionment. 1003 (d)1. Any justice or judge, or any retired justice or judge 1004 who retired before July 1, 1993, who has attained the age of 70 1005 years and who is prevented under s. 8, Art. V of the State 1006 Constitution from completing his or her term of office because 1007 of age may elect to purchase credit for all or a portion of the 1008 months he or she would have served during the remainder of the 1009 term of office; however,buthe or she may claim those months 1010 only after the date the service would have occurred. The justice 1011 or judge must pay into the Florida Retirement System Trust Fund 1012 the amount of contributions that would have been made by the 1013 employer on his or her behalf for the period of time being 1014 claimed, plus 6.5 percent interest thereon compounded each June 1015 30 from the date he or she left office, in order to receive 1016 service credit in this class for the period of time being 1017 claimed. After the date the service would have occurred, and 1018 upon payment of the required contributions, the retirement 1019 benefit of a retired justice or judge shallwillbe adjusted 1020 prospectively to include thethisadditional creditable service; 1021 however, such adjustment may be made only once. 1022 2. Any justice or judge who does not seek election to a 1023 subsequent term of office because he or she would be prevented 1024 under s. 8, Art. V of the State Constitution from completing 1025 such term of office upon attaining the age of 70 years may elect 1026 to purchase service credit for service as a temporary judge as 1027 assigned by the court if the temporary assignmentfollows1028 immediately follows the last full term of office served and the 1029 purchase is limited to the number of months of service needed to 1030 vest retirement benefits. To receive retirement credit forsuch1031 temporary service beyond termination, the justice or judge must 1032 pay into the Florida Retirement System Trust Fund the amount of 1033 contributions that would have been made by the justice or judge 1034 and the employer on his or her behalf had he or she continued in 1035 office for the period of time being claimed, plus 6.5 percent 1036 interest thereon compounded each June 30 from the date he or she 1037 left office. 1038 (7) CONTRIBUTIONS.— 1039 (b) The employer paying the salary of a member of the 1040 Elected Officers’ Class shall contribute an amount as specified 1041 in this subsection or s. 121.71, as appropriate, which shall 1042 constitute theentireemployer retirement contribution with 1043 respect to such member. The employer shall also withhold one 1044 half of the entire contribution of the member required for 1045 social security coverage. Effective July 1, 2011, members of the 1046 Elected Officers’ Class shall pay retirement contributions as 1047 specified in s. 121.71. 1048 (c) If a member of the Elected Officers’ Class ceases to 1049 fill an office covered by this class for 3 calendar months for 1050 any reason other than retirement and has not been employed in 1051 any capacity with any participating employer for 3 calendar 1052 months, the member is entitled to receive a refund of all 1053 contributions he or she made to the pension plan, subject to the 1054 restrictions otherwise provided in this chapter. Partial refunds 1055 are not permitted. The refund may not include any interest 1056 earnings on contributions to the pension plan. Employer 1057 contributions made on behalf of the member are not refundable. A 1058 member may not receive a refund of employee contributions if a 1059 pending or an approved qualified domestic relations order is 1060 filed against the member’s retirement account. By obtaining a 1061 refund of contributions, a member waives all rights under the 1062 Florida Retirement System, including the health insurance 1063 subsidy under this subsection, to the service credit represented 1064 by the refunded contributions, except the right to purchase 1065 prior service credit in accordance with s. 121.081(2). 1066 (8) NORMAL RETIREMENT DATE; VESTING REQUIREMENT.—A member 1067 of the Elected Officers’ Class hasshall havethe same normal 1068 retirement date as defined in s. 121.021(29)for a member of the 1069 regular class of the Florida Retirement System. AAnypublic 1070 service commissioner who was removed from the Elected State 1071 Officers’ Class on July 1, 1979, after attaining at least 8 1072 years of creditable service in that class isshall beconsidered 1073 to have reached the normal retirement date upon attaining the 1074 required age as provided62 as requiredin s. 121.021(29)(a). 1075 Section 10. Paragraph (a) of subsection (7) of section 1076 121.053, Florida Statutes, is amended to read: 1077 121.053 Participation in the Elected Officers’ Class for 1078 retired members.— 1079 (7) A member who is elected or appointed to an elective 1080 office and who is participating in the Deferred Retirement 1081 Option Program is not subject to termination as defined in s. 1082 121.021, or reemployment limitations as provided in s. 1083 121.091(9), until the end of his or her current term of office 1084 or, if the officer is consecutively elected or reelected to an 1085 elective office eligible for coverage under the Florida 1086 Retirement System, until he or she no longer holds an elective 1087 office, as follows: 1088 (a) At the end of the 60-month DROP period: 1089 1. The officer’s DROP account may not accrue additional 1090 monthly benefits, but does continue to earn interest as provided 1091 in s. 121.091(13). However, an officer whose DROP participation 1092 begins on or after July 1, 2010, may not continue to earn such 1093 interest. 1094 2. Except for unfunded actuarial liability and health 1095 insurance subsidy contributions required under ss. 121.71(5) and 1096 121.76, retirement contributions are not required of the 1097 employer of the elected officer and additional retirement credit 1098 may not be earned under the Florida Retirement System. 1099 Section 11. Paragraphs (b) and (j) of subsection (1), 1100 paragraph (b) of subsection (3), and paragraphs (c), (d), and 1101 (e) of subsection (6) of section 121.055, Florida Statutes, are 1102 amended, present paragraph (c) of subsection (3) of that section 1103 is redesignated as paragraph (d), and a new paragraph (c) is 1104 added to that subsection, to read: 1105 121.055 Senior Management Service Class.—There is hereby 1106 established a separate class of membership within the Florida 1107 Retirement System to be known as the “Senior Management Service 1108 Class,” which shall become effective February 1, 1987. 1109 (1) 1110 (b)1. Except as provided in subparagraph 2., effective 1111 January 1, 1990, participation in the Senior Management Service 1112 Class isshall becompulsory for the president of each community 1113 college, the manager of each participating city or county, and 1114 all appointed district school superintendents. Effective January 1115 1, 1994, additional positions may be designated for inclusion in 1116 the Senior Management Service Class ifof the Florida Retirement1117System, provided that: 1118 a. Positions to be included in the class areshall be1119 designated by the local agency employer. Notice of intent to 1120 designate positions for inclusion in the class mustshallbe 1121 published once a week for 2 consecutive weeks in a newspaper of 1122 general circulation published in the county or counties 1123 affected, as provided underinchapter 50. 1124 b. Up to 10 nonelective full-time positions may be 1125 designated for each local agency employer reporting to the 1126 departmentof Management Services; for local agencies with 100 1127 or more regularly established positions, additional nonelective 1128 full-time positions may be designated, up tonot to exceed1 1129 percent of the regularly established positions within the 1130 agency. 1131 c. Each position added to the class must be a managerial or 1132 policymaking position filled by an employee who is not subject 1133 to continuing contract and serves at the pleasure of the local 1134 agency employer without civil service protection, and who: 1135 (I) Heads an organizational unit; or 1136 (II) Has responsibility to effect or recommend personnel, 1137 budget, expenditure, or policy decisions in his or her areas of 1138 responsibility. 1139 2. In lieu of participation in the Senior Management 1140 Service Class, members of theSenior Management Serviceclass, 1141 pursuant tothe provisions ofsubparagraph 1., may withdraw from 1142 the Florida Retirement System altogether. The decision to 1143 withdraw from theFlorida Retirementsystem isshall be1144 irrevocableforas long as the employee holds thesuch a1145 position. Any service creditable under the Senior Management 1146 Service Class shall be retained after the member withdraws from 1147 theFlorida Retirementsystem; however, additional service 1148 credit in the Senior Management Service Class mayshallnot be 1149 earned after such withdrawal. Such members areshallnotbe1150 eligible to participate in the Senior Management Service 1151 Optional Annuity Program. 1152 3. Effective January 1, 2006, through June 30, 2006, an 1153 employee who has withdrawn from the Florida Retirement System 1154 under subparagraph 2. has one opportunity to elect to 1155 participate ineitherthe pension plan or investment plan 1156defined benefit program or the Public Employee Optional1157Retirement Programof the Florida Retirement System. 1158 a. If the employee elects to participate in the investment 1159 planPublic Employee Optional Retirement Program, membership is 1160shall beprospective, and the applicable provisions of s. 1161 121.4501(4) shall govern the election. 1162 b. If the employee elects to participate in the pension 1163 plandefined benefit program of theFlorida Retirement System, 1164 the employee shall, upon payment to the system trust fund of the 1165 amount calculated under sub-sub-subparagraph (I), receive 1166 service credit for prior service based upon the time during 1167 which the employee had withdrawn from the system. 1168 (I) The cost for such credit shall be an amount 1169 representing the actuarial accrued liability for the affected 1170 period of service. The cost shall be calculated using the 1171 discount rate and other relevant actuarial assumptions that were 1172 used to value pensionthe Florida Retirement System defined1173benefitplan liabilities in the most recent actuarial valuation. 1174 The calculation mustshallinclude any service already 1175 maintained under the pensiondefined benefitplan in addition to 1176 the period of withdrawal. The actuarial accrued liability 1177 attributable to any service already maintained under the pension 1178defined benefitplan shall be applied as a credit to the total 1179 cost resulting from the calculation. The division mustshall1180 ensure that the transfer sum is prepared using a formula and 1181 methodology certified by an actuary. 1182 (II) The employee must transfer a sum representing the net 1183 cost owed for the actuarial accrued liability in sub-sub 1184 subparagraph (I) immediately following the time of such 1185 movement, determined assuming that attained service equals the 1186 sum of service in the pension plandefined benefit programand 1187 the period of withdrawal. 1188 (j) Except as may otherwise be provided, aanymember of 1189 the Senior Management Service Class may purchase additional 1190 retirement credit in such class for creditable service within 1191 the purview of the Senior Management Service Class retroactive 1192 to February 1, 1987, and may upgrade retirement credit for such 1193 service,to the extent of 2 percent of the member’s average 1194 monthly compensation as specified in paragraph (4)(d) for such 1195 service. Contributions for upgradingtheadditional Senior 1196 Management Service credit arepursuant to this paragraph shall1197beequal to the difference in the employer and, if applicable, 1198 employee contributions paid and the Senior Management Service 1199 Class contribution rate as a percentage of gross salary in 1200 effect for the period being claimed, plus interest thereon at 1201 the rate of 6.5 percent a year, compounded annually until the 1202 date of payment. TheThisservice credit may be purchased by the 1203 employer on behalf of the member. 1204 (3) 1205 (b) The employer or member of the Senior Management Service 1206 Class, as applicable,paying the salary of a member of the1207Senior Management Service Classshall contribute an amount as 1208 specified in this section or s. 121.71, as appropriate, which 1209 shall constitute the entireemployerretirement contribution 1210 with respect to such member. The employer shall also withhold 1211 one-half of the entire contribution of the member required for 1212 social security coverage. Effective July 1, 2011, each member 1213 shall pay employee contributions as specified in s. 121.71. 1214 (c) Upon termination of employment from all participating 1215 employers for 3 calendar months as defined in s. 121.021(39)(c) 1216 for any reason other than retirement, a member may receive a 1217 refund of all contributions he or she has made to the pension 1218 plan, subject to the restrictions otherwise provided in this 1219 chapter. Partial refunds are not permitted. The refund may not 1220 include any interest earnings on the contributions for a member 1221 of the pension plan. Employer contributions made on behalf of 1222 the member are not refundable. A member may not receive a refund 1223 of employee contributions if a pending or an approved qualified 1224 domestic relations order is filed against the member’s 1225 retirement account. By obtaining a refund of contributions, a 1226 member waives all rights under the Florida Retirement System and 1227 the health insurance subsidy provided under s. 112.363 to the 1228 service credit represented by the refunded contributions, except 1229 the right to purchase prior service credit in accordance with s. 1230 121.081(2). 1231 (6) 1232 (c) Participation.— 1233 1. An eligible employee who is employed on or before 1234 February 1, 1987, may elect to participate in the optional 1235 annuity program in lieu of participatingparticipationin the 1236 Senior Management Service Class. Such election must be made in 1237 writing and filed with the department and the personnel officer 1238 of the employer on or before May 1, 1987. An eligible employee 1239 who is employed on or before February 1, 1987, and who fails to 1240 make an election to participate in the optional annuity program 1241 by May 1, 1987, shall be deemed to have elected membership in 1242 the Senior Management Service Class. 1243 2. Except as provided in subparagraph 6., an employee who 1244 becomes eligible to participate in the optional annuity program 1245 by reason of initial employment commencing after February 1, 1246 1987, may, within 90 days after the date of commencing 1247 employment, elect to participate in the optional annuity 1248 program. Such election must be made in writing and filed with 1249 the personnel officer of the employer. An eligible employee who 1250 does not within 90 days after commencing employment elect to 1251 participate in the optional annuity program shall be deemed to 1252 have elected membership in the Senior Management Service Class. 1253 3. A person who is appointed to a position in the Senior 1254 Management Service Class and who is a member of an existing 1255 retirement system or the Special Risk or Special Risk 1256 Administrative Support Classes of the Florida Retirement System 1257 may elect to remain in such system or class in lieu of 1258 participatingparticipationin the Senior Management Service 1259 Class or optional annuity program. Such election must be made in 1260 writing and filed with the department and the personnel officer 1261 of the employer within 90 days afterofsuch appointment. AnAny1262 eligible employee who fails to make an election to participate 1263 in the existing system, the Special Risk Class of the Florida 1264 Retirement System, the Special Risk Administrative Support Class 1265 of the Florida Retirement System, or the optional annuity 1266 program shall be deemed to have elected membership in the Senior 1267 Management Service Class. 1268 4. Except as provided in subparagraph 5., an employee’s 1269 election to participate in the optional annuity program is 1270 irrevocable if the employee continues to be employed in an 1271 eligible position and continues to meet the eligibility 1272 requirements set forth in this paragraph. 1273 5. Effective from July 1, 2002, through September 30, 2002, 1274 ananyactive employee in a regularly established position who 1275 has elected to participate in the Senior Management Service 1276 Optional Annuity Program has one opportunity to choose to move 1277 from the Senior Management Service Optional Annuity Program to 1278 the Florida Retirement System’s pension planSystem defined1279benefit program. 1280 a. The election must be made in writing and must be filed 1281 with the department and the personnel officer of the employer 1282 before October 1, 2002, or, in the case of an active employee 1283 who is on a leave of absence on July 1, 2002, within 90 days 1284 after the conclusion of the leave of absence. This election is 1285 irrevocable. 1286 b. The employee shall receive service credit under the 1287 pension plandefined benefit program of the Florida Retirement1288Systemequal to his or her years of service under the Senior 1289 Management Service Optional Annuity Program. The cost for such 1290 credit is the amount representing the present value of that 1291 employee’s accumulated benefit obligation for the affected 1292 period of service. 1293 c. The employee must transfer the total accumulated 1294 employer contributions and earnings on deposit in his or her 1295 Senior Management Service Optional Annuity Program account. If 1296 the transferred amount is not sufficient to pay the amount due, 1297 the employee must pay a sum representing the remainder of the 1298 amount due. The employee may not retain any employer 1299 contributions or earningsthereonfrom the Senior Management 1300 Service Optional Annuity Program account. 1301 6. A retiree of a state-administered retirement system who 1302 is initially reemployed on or after July 1, 2010, may not renew 1303 membership in the Senior Management Service Optional Annuity 1304 Program. 1305 (d) Contributions.— 1306 1.a. Through June 30, 2001, each employer shall contribute 1307 on behalf of each member ofparticipant inthe Senior Management 1308 Service Optional Annuity Program an amount equal to the normal 1309 cost portion of the employer retirement contribution which would 1310 be required if the employeeparticipantwere a Senior Management 1311 Service Class member of the Florida Retirement System’s pension 1312 planSystem defined benefit program, plus the portion of the 1313 contribution rate required in s. 112.363(8) whichthatwould 1314 otherwise be assigned to the Retiree Health Insurance Subsidy 1315 Trust Fund. 1316 b. Effective July 1, 2001, each employer shall contribute 1317 on behalf of each member ofparticipant inthe optional annuity 1318 program an amount equal to 12.49 percent of the employee’s 1319participant’sgross monthly compensation. 1320 c. Effective July 1, 2011, each member of the optional 1321 annuity program shall contribute an amount equal to the employee 1322 contribution required in s. 121.71(3). The employer shall 1323 contribute on behalf of each such employee an amount equal to 1324 the difference between 12.49 percent of the employee’s gross 1325 monthly compensation and the amount equal to the employee’s 1326 required contribution based on the employee’s gross monthly 1327 compensation. 1328 d.The department shall deduct an amount approved by the1329Legislature to provide for the administration of this program.1330ThePayment of the contributions, including contributions made 1331 by the employee,to the optional program which is required by1332this subparagraph for each participantshall be made by the 1333 employer to the department, which shall forward the 1334 contributions to the designated company or companies contracting 1335 for payment of benefits for members ofthe participant underthe 1336 optional annuity program. The department shall deduct an amount 1337 approved by the Legislature to provide for the administration of 1338 the program. 1339 2. Each employer shall contribute on behalf of each member 1340 ofparticipant inthe Senior Management Service Optional Annuity 1341 Program an amount equal to the unfunded actuarial accrued 1342 liability portion of the employer contribution which would be 1343 required for members of the Senior Management Service Class in 1344 the Florida Retirement System. This contribution shall be paid 1345 to the department for transfer to the Florida Retirement System 1346 Trust Fund. 1347 3. An Optional Annuity Program Trust Fund shall be 1348 established in the State Treasury and administered by the 1349 department to make payments to provider companies on behalf of 1350 the optional annuity program membersparticipants, and to 1351 transfer the unfunded liability portion of the state optional 1352 annuity program contributions to the Florida Retirement System 1353 Trust Fund. 1354 4. Contributions required for social security by each 1355 employer and each employeeparticipant, in the amount required 1356 for social security coverage as now or hereafter may be provided 1357 by the federal Social Security Act, shall be maintained for each 1358 member ofparticipant inthe Senior Management Service 1359 retirement program and areshall bein addition to the 1360 retirement contributions specified in this paragraph. 1361 5. Each member ofparticipant intheSenior Management1362Serviceoptional annuity program may contribute by way of salary 1363 reduction or deduction a percentage amount of the employee’s 1364participant’sgross compensation not to exceed the percentage 1365 amount contributed by the employer to the optional annuity 1366 program. Payment of the employee’sparticipant’scontributions 1367 shall be made by the employer to the department, which shall 1368 forward the contributions to the designated company or companies 1369 contracting for payment of benefits for membersthe participant1370 under the program. 1371 (e) Benefits.— 1372 1. Benefits under the Senior Management Service Optional 1373 Annuity Program are payable only to members ofparticipants in1374 the program, or their beneficiaries as designated by the member 1375participantin the contract with the provider company, and must 1376 be paid by the designated company in accordance with the terms 1377 of the annuity contract applicable to the memberparticipant. A 1378 memberparticipantmust be terminated from all employment 1379 relationships with Florida Retirement System employers as 1380 provided in s. 121.021(39) to begin receiving the employer 1381 funded and employee-funded benefit. Benefits funded by employer 1382 and employee contributions are payable under the terms of the 1383 contract to the memberparticipant, his or her beneficiary, or 1384 his or her estate, in addition to: 1385 a. A lump-sum payment to the beneficiary upon the death of 1386 the memberparticipant; 1387 b. A cash-out of a de minimis account upon the request of a 1388 former memberparticipantwho has been terminated for a minimum 1389 of 6 calendar months from the employment that entitled him or 1390 her to optional annuity program participation. Such cash-out 1391 must be a complete liquidation of the account balance with that 1392 company and is subject to the Internal Revenue Code; 1393 c. A mandatory distribution of a de minimis account of a 1394 former memberparticipantwho has been terminated for a minimum 1395 of 6 calendar months from the employment that entitled him or 1396 her to optional annuity program participation as authorized by 1397 the department; or 1398 d. A lump-sum direct rollover distribution whereby all 1399 accrued benefits, plus interest and investment earnings, are 1400 paid from the member’sparticipant’saccount directly to the 1401 custodian of an eligible retirement plan, as defined in s. 1402 402(c)(8)(B) of the Internal Revenue Code, on behalf of the 1403 memberparticipant. 1404 2. Benefits are not payable for employee hardships, 1405 unforeseeable emergencies, loans, medical expenses, educational 1406 expenses, purchase of a principal residence, payments necessary 1407 to prevent eviction or foreclosure on an employee’s principal 1408 residence, or any other reason before termination from all 1409 employment relationships with participating employers, as 1410 provided in s. 121.021(39). 1411 3.2.The benefits payable to any person under theSenior1412Management Serviceoptional annuity program, and any 1413 contribution accumulated under such program, are not subject to 1414 assignment, execution, or attachment or to any legal process 1415whatsoever. 1416 4.3.Except as provided in subparagraph 5.4., a member 1417participantwho terminates employment and receives a 1418 distribution, including a rollover or trustee-to-trustee 1419 transfer, funded by employer or employee contributions isshall1420bedeemed to be retired from a state-administered retirement 1421 system if the retireeparticipantis subsequently employed with 1422 an employer that participates in the Florida Retirement System. 1423 5.4.A memberparticipantwho receives optional annuity 1424 program benefits funded by employer or employee contributions as 1425 a mandatory distribution of a de minimis account authorized by 1426 the department is not considered a retiree. 1427 1428 As used in this paragraph, a “de minimis account” means an 1429 account with a provider company containing employer or employee 1430 contributions and accumulated earnings of not more than $5,000 1431 made under this chapter. 1432 Section 12. Subsections (2) and (5) and paragraph (c) of 1433 subsection (6) of section 121.071, Florida Statutes, are 1434 amended, present paragraph (d) of subsection (6) of that section 1435 is redesignated as paragraph (e), and a new paragraph (d) is 1436 added to that subsection, to read: 1437 121.071 Contributions.—Contributions to the system shall be 1438 made as follows: 1439 (2)(a) Effective January 1, 1975, or October 1, 1975, as 1440 applicable, and through June 30, 2011, each employer shall make 1441accomplishthe contribution required by subsection (1) by a 1442 procedure in which no employee’s gross salary isshall be1443 reduced. Effective July 1, 2011, each employee, and his or her 1444 employer, shall pay retirement contributions as specified in s. 1445 121.71. 1446 (b) Upon termination of employment from all participating 1447 employers for 3 calendar months as defined in s. 121.021(39)(c) 1448 for any reason other than retirement, a member may receive a 1449shall be entitled to a fullrefund of allthecontributions he 1450 or shehasmade to the pensionprior or subsequent to1451participation in the noncontributoryplan, subject tothe1452 restrictions otherwise provided in this chapter. Partial refunds 1453 are not permitted. The refund may not include any interest 1454 earnings on the contributions for a member of the pension plan. 1455 Employer contributions made on behalf of the member are not 1456 refundable. A member may not receive a refund of employee 1457 contributions if a pending or an approved qualified domestic 1458 relations order is filed against his or her retirement account. 1459 By obtaining a refund of contributions, a member waives all 1460 rights under the Florida Retirement System and the health 1461 insurance subsidy to the service credit represented by the 1462 refunded contributions, except the right to purchase prior 1463 service credit in accordance with s. 121.081(2). 1464 (5) Contributions made in accordance with subsections (1), 1465 (2), (3), and (4), and s. 121.71 shall be paidby the employer1466 into the system trust funds in accordance with rules adopted by 1467 the administrator pursuant to chapter 120, except asmay be1468 otherwise specified herein. Effective July 1, 2002, 1469 contributions paid under subsections (1) and (4) and 1470 accompanying payroll data are due and payable byno later than1471 the 5th working day of the month immediately following the month 1472 during which the payroll period ended. 1473 (6) 1474 (c) By obtaining a refund of contributions, a member waives 1475 all rights under the Florida Retirement System, including the 1476 health insurance subsidy under subsection (4), to the service 1477 credit represented by the refunded contributions, except the 1478 right to purchasehis or herprior service credit in accordance 1479 with s. 121.081(2). 1480 (d) If a member or former member of the pension plan 1481 receives an invalid refund from the Florida Retirement System 1482 Trust Fund, such person must repay the full amount of the 1483 refund, plus interest at 6.5 percent compounded annually on each 1484 June 30 from the date of refund until full repayment is made. 1485 The invalid refund must be repaid before the member retires or, 1486 if applicable, transfers to the investment plan. 1487 Section 13. Paragraphs (b) and (c) of subsection (1) and 1488 subsection (2) of section 121.081, Florida Statutes, are amended 1489 to read: 1490 121.081 Past service; prior service; contributions. 1491 Conditions under which past service or prior service may be 1492 claimed and credited are: 1493 (1) 1494 (b) Past service earned after January 1, 1975, may be 1495 claimed by officers or employees of a municipality, metropolitan 1496 planning organization, charter school, charter technical career 1497 center, or special district who become a covered group under 1498 this system. The governing body of a covered group may elect to 1499 provide benefits for past service earned after January 1, 1975, 1500 in accordance with this chapter., andThe cost for such past 1501 service is established by applying the following formula: The 1502 employer shall contribute an amount equal to the employer or 1503 employee contribution rate in effect at the time the service was 1504 earned, as applicable, multiplied by the employee’s gross salary 1505 for each year of past service claimed, plus 6.5 percent6.51506percentinterest thereon, compounded annually, forfiguredon1507 each year of past service, with interest compounded from date of 1508 annual salary earned until date of payment. 1509 (c) If anShould theemployer does not elect to provide 1510 past service for the member on the date of joining the system, 1511thenthe member may claim and pay for the service as provided in 1512same, based onparagraphs (a) and (b). 1513 (2) Prior service, as defined in s. 121.021(19), may be 1514 claimed as creditable service under the Florida Retirement 1515 System after a member has been reemployed for 1 complete year of 1516 creditable servicewithin a period of 12 consecutive months, 1517 except as provided in paragraph (c). Service performed as a 1518 memberparticipantof the optional retirement program for the 1519 State University System under s. 121.35 or the Senior Management 1520 Service Optional Annuity Program under s. 121.055 may be used to 1521 satisfy the reemployment requirement of 1 complete year of 1522 creditable service. The member mayshallnotbe permitted to1523 make any contributions for prior service until after completion 1524 of the 1 year of creditable service. If a member does not wish 1525 to claim credit for all of his or her prior service, the service 1526 the member claims must be the most recent period of service. The 1527 required contributions for claiming the various types of prior 1528 service are: 1529 (a) For prior service performed beforeprior tothe date 1530 the system becomes noncontributory for the member and for which 1531 the member had credit under one of the existing retirement 1532 systems and received a refund of contributions upon termination 1533 of employment, the member shall contribute 4 percent of all 1534 salary received during the period being claimed, plus 4 percent 15354-percentinterest compounded annually from date of refund until 1536 July 1, 1975, and 6.5 percent6.5-percentinterest compounded 1537 annually thereafter, until full payment is made to the Florida 1538 Retirement System Trust Fund, and shall receive credit in the 1539 Regular Class. A member who elected to transfer to the Florida 1540 Retirement System from an existing system may receive credit for 1541 prior service under the existing system if he or she was 1542 eligible under the existing system to claim the prior service at 1543 the time of the transfer. Contributions for such prior service 1544 shall be determined by the applicable provisions of the system 1545 under which the prior service is claimed and shall be paid by 1546 the member, with matching contributions paid by the employer at 1547 the time the service was performed. Effective July 1, 1978, the 1548 account of a person who terminated under s. 238.05(3) may not be 1549 charged interest for contributions that remained on deposit in 1550 the Annuity Savings Trust Fund established under chapter 238, 1551 upon retirement under this chapter or chapter 238. 1552 (b) For prior service performed beforeprior tothe date 1553 the system becomes noncontributory for the member and for which 1554 the member had credit under the Florida Retirement System and 1555 received a refund of contributions upon termination of 1556 employment, the member shall contribute at the rate that was 1557 required of him or her during the period of service being 1558 claimed, on all salary received during such period, plus 4 1559 percent4-percentinterest compounded annually from date of 1560 refund until July 1, 1975, and 6.5 percent6.5-percentinterest 1561 compounded annually thereafter, until the full payment is made 1562 to the Florida Retirement System Trust Fund, andshallreceive 1563 credit in the membership class in which the member participated 1564 during the period claimed. 1565 (c) For prior service as defined in s. 121.021(19)(b) and 1566 (c) during which no contributions were made because the member 1567 did not participate in a retirement system, the member shall 1568 contribute 14.38 percent of all salary received during such 1569 period or 14.38 percent of $100 per month during such period, 1570 whichever is greater, plus 4 percent4-percentinterest 1571 compounded annually from the first year of service claimed until 1572 July 1, 1975, and 6.5 percent6.5-percentinterest compounded 1573 annually thereafter, until full payment is made to the 1574 Retirement Trust Fund, and shall receive credit in the Regular 1575 Class. 1576 (d) In order to claim credit for prior service as defined 1577 in s. 121.021(19)(d) for which no retirement contributions were 1578 paid during the period of such service, the member shall 1579 contribute the total employee and employer contributions which 1580 were required to be made to the Highway Patrol Pension Trust 1581 Fund, as provided in chapter 321, during the period claimed, 1582 plus 4 percent4-percentinterest compounded annually from the 1583 first year of service until July 1, 1975, and 6.5 percent6.51584percentinterest compounded annually thereafter, until full 1585 payment is made to the Retirement Trust Fund. However, any 1586 governmental entity thatwhichemployed such member may elect to 1587 pay up to 50 percent of the contributions and interest required 1588 to purchase thethisprior service credit. The service shall be 1589 credited in accordance with theprovisions of theHighway Patrol 1590 Pension Plan in effect during the period claimed unless the 1591 member terminated and withdrew his or her retirement 1592 contributions and was thereafter enrolled in the State and 1593 County Officers and Employees’ Retirement System or the Florida 1594 Retirement System, in which case the service shall be credited 1595 as Regular Class service. 1596 (e) For service performed under the Florida Retirement 1597 System after December 1, 1970, whichthatwas never reported to 1598 the division or the department due to error, retirement credit 1599 may be claimed by a member of the Florida Retirement System. The 1600 department shall adopt rules establishing criteria for claiming 1601 such credit and detailing the documentation required to 1602 substantiate the error. 1603 (f) For prior service performed on or after July 1, 2011, 1604 for which the member had credit under the Florida Retirement 1605 System and received a refund of contributions 3 calendar months 1606 after termination of employment, the member shall contribute at 1607 the rate that was required during the period of service being 1608 claimed, plus 6.5 percent interest, compounded annually on each 1609 June 30 from date of refund until the full payment is made to 1610 the Florida Retirement System Trust Fund, and shall receive 1611 credit in the membership class in which the member participated 1612 during the period claimed. 1613 (g)(f)The employer may notbe required tomake 1614 contributions for prior service credit for any member, except 1615 that the employer shall pay the employer portion of 1616 contributions for any legislator who elects to withdraw from the 1617 Florida Retirement System and later rejoins the system and pays 1618 any employee contributions required in accordance with s. 1619 121.052(3)(d). 1620 Section 14. Paragraph (a) of subsection (3), paragraph (a) 1621 of subsection (4), paragraphs (a) and (c) of subsection (5), 1622 paragraph (d) of subsection (9), paragraphs (a) and (c) of 1623 subsection (13), and paragraph (d) of subsection (14) of section 1624 121.091, Florida Statutes, are amended to read: 1625 121.091 Benefits payable under the system.—Benefits may not 1626 be paid under this section unless the member has terminated 1627 employment as provided in s. 121.021(39)(a) or begun 1628 participation in the Deferred Retirement Option Program as 1629 provided in subsection (13), and a proper application has been 1630 filed in the manner prescribed by the department. The department 1631 may cancel an application for retirement benefits when the 1632 member or beneficiary fails to timely provide the information 1633 and documents required by this chapter and the department’s 1634 rules. The department shall adopt rules establishing procedures 1635 for application for retirement benefits and for the cancellation 1636 of such application when the required information or documents 1637 are not received. 1638 (3) EARLY RETIREMENT BENEFIT.—Upon retirement on his or her 1639 early retirement date, the member shall receive an immediate 1640 monthly benefit that shall begin to accrue on the first day of 1641 the month of the retirement date and be payable on the last day 1642 of that month and each month thereafter during his or her 1643 lifetime. Such benefit shall be calculated as follows: 1644 (a) The amount of each monthly payment shall be computed in 1645 the same manner asfora normal retirement benefit,in 1646 accordance with subsection (1), but shall be based on the 1647 member’s average monthly compensation and creditable service as 1648 of the member’s early retirement date. The benefit so computed 1649 shall be reduced by five-twelfths of 1 percent for each complete 1650 month by which the early retirement date precedes the normal 1651 retirement dateof age 62 for a member of the Regular Class,1652Senior Management Service Class, or the Elected Officers’ Class,1653and age 55 for a member of the Special Risk Class, or age 52 if1654a Special Risk member has completed 25 years of creditable1655servicein accordance with s. 121.021(29)(b)3. 1656 (4) DISABILITY RETIREMENT BENEFIT.— 1657 (a) Disability retirement; entitlement and effective date.— 1658 1.a. A member who becomes totally and permanently disabled, 1659 as defined in paragraph (b), after completing 5 years of 1660 creditable service, or a member who becomes totally and 1661 permanently disabled in the line of duty regardless of service, 1662 isshall beentitled to a monthly disability benefit; except 1663 that any member with less than 5 years of creditable service on 1664 July 1, 1980, or any person who becomes a member of the Florida 1665 Retirement System on or after such date must have completed 10 1666 years of creditable service beforeprior tobecoming totally and 1667 permanently disabled in order to receive disability retirement 1668 benefits for any disability which occurs other than in the line 1669 of duty. However, if a member employed on July 1, 1980, having 1670withless than 5 years of creditable service as of that date, 1671 becomes totally and permanently disabled after completing 5 1672 years of creditable service and is found not to have attained 1673 fully insured status for benefits under the federal Social 1674 Security Act, such member isshall beentitled to a monthly 1675 disability benefit. 1676 b. Effective July 1, 2001, a member of the pension plan 1677defined benefit retirement programwho becomes totally and 1678 permanently disabled, as defined in paragraph (b), after 1679 completing 8 years of creditable service, or a member who 1680 becomes totally and permanently disabled in the line of duty 1681 regardless of service, isshall beentitled to a monthly 1682 disability benefit. 1683 2. If the division has received from the employer the 1684 required documentation of the member’s termination of 1685 employment, the effective retirement date for a member who 1686 applies and is approved for disability retirement shall be 1687 established by rule of the division. 1688 3. For a member who is receiving Workers’ Compensation 1689 payments, the effective disability retirement date may not 1690 precede the date the member reaches Maximum Medical Improvement 1691 (MMI), unless the member terminates employment beforeprior to1692 reaching MMI. 1693 (5) TERMINATION BENEFITS.—A member whose employment is 1694 terminated beforeprior toretirement retains membership rights 1695 to previously earned member-noncontributory service credit, and 1696 to member-contributory service credit, if the member leaves the 1697 member contributions on deposit in his or her retirement 1698 account. If a terminated member receives a refund of member 1699 contributions, such member may reinstate membership rights to 1700 the previously earned service credit represented by the refund 1701 by completing 1 year of creditable service and repaying the 1702 refunded member contributions, plus interest. 1703 (a) A member whose employment is terminated for any reason 1704 other than death or retirement beforeprior tobecoming vested 1705 is entitled to the return of his or her accumulated employee 1706 contributions as of the date of termination. Effective July 1, 1707 2011, upon termination of employment from all participating 1708 employers for 3 calendar months as defined in s. 121.021(39)(c) 1709 for any reason other than retirement, a member may receive a 1710 refund of all contributions he or she has made to the pension 1711 plan, subject to the restrictions otherwise provided in this 1712 chapter. Partial refunds are not permitted. The refund may not 1713 include any interest earnings on the contributions for a member 1714 of the pension plan. Employer contributions made on behalf of 1715 the member are not refundable. A member may not receive a refund 1716 of employee contributions if a pending or an approved qualified 1717 domestic relations order is filed against his or her retirement 1718 account. By obtaining a refund of contributions, a member waives 1719 all rights under the Florida Retirement System and the health 1720 insurance subsidy to the service credit represented by the 1721 refunded contributions, except the right to purchase prior 1722 service credit in accordance with s. 121.081(2). 1723 (c) In lieu of the deferred monthly benefit provided in 1724 paragraph (b), the terminated member may elect to receive a 1725 lump-sum amount equal to his or her accumulated employee 1726 contributions as of the date of termination. Effective July 1, 1727 2011, upon termination of employment from all participating 1728 employers for 3 calendar months as defined in s. 121.021(39)(c) 1729 for any reason other than retirement, a member may receive a 1730 refund of all contributions he or she has made to the pension 1731 plan, subject to the restrictions otherwise provided in this 1732 chapter. Partial refunds are not permitted. The refund may not 1733 include any interest earnings on the contributions for a member 1734 of the pension plan. Employer contributions made on behalf of 1735 the member are not refundable. A member may not receive a refund 1736 of employee contributions if a pending or an approved qualified 1737 domestic relations order is filed against his or her retirement 1738 account. By obtaining a refund of contributions, a member waives 1739 all rights under the Florida Retirement System and the health 1740 insurance subsidy to the service credit represented by the 1741 refunded contributions, except the right to purchase prior 1742 service credit in accordance with s. 121.081(2). 1743 (9) EMPLOYMENT AFTER RETIREMENT; LIMITATION.— 1744 (d)The provisions ofThis subsection appliesapplyto 1745 retirees, as defined in s. 121.4501(2), of the FloridaPublic1746Employee OptionalRetirement System Investment PlanProgram, 1747 subject to the following conditions: 1748 1. The retireeretireesmay not be reemployed with an 1749 employer participating in the Florida Retirement System until 1750 such person has been retired for 6 calendar months. 1751 2. A retiree employed in violation of this subsection and 1752 an employer that employs or appoints such person are jointly and 1753 severally liable for reimbursement of any benefits paid to the 1754 retirement trust fund from which the benefits were paid,1755including the Retirement System Trust Fund and the Public1756Employee Optional Retirement Program Trust Fund, as appropriate. 1757 The employer must have a written statement from the retiree that 1758 he or she is not retired from a state-administered retirement 1759 system. 1760 (13) DEFERRED RETIREMENT OPTION PROGRAM.—In general, and 1761 subject to this section, the Deferred Retirement Option Program, 1762 hereinafter referred to as DROP, is a program under which an 1763 eligible member of the Florida Retirement System may elect to 1764 participate, deferring receipt of retirement benefits while 1765 continuing employment with his or her Florida Retirement System 1766 employer. The deferred monthly benefits shall accrue in the 1767 Florida Retirement System on behalf of the participant, plus 1768 interest compounded monthly, for the specified period of the 1769 DROP participation, as provided in paragraph (c). Upon 1770 termination of employment, the participant shall receive the 1771 total DROP benefits and begin to receive the previously 1772 determined normal retirement benefits. Participation in the DROP 1773 does not guarantee employment for the specified period of DROP. 1774 Participation in DROP by an eligible member beyond the initial 1775 60-month period as authorized in this subsection shall be on an 1776 annual contractual basis for all participants. 1777 (a) Eligibility of member to participate in DROP.—All 1778 active Florida Retirement System members in a regularly 1779 established position, and all active members of the Teachers’ 1780 Retirement System established in chapter 238 or the State and 1781 County Officers’ and Employees’ Retirement System established in 1782 chapter 122, which are consolidated within the Florida 1783 Retirement System under s. 121.011, are eligible to elect 1784 participation in DROP if: 1785 1. The member is not a renewed member under s. 121.122 or a 1786 member of the State Community College System Optional Retirement 1787 Program under s. 121.051, the Senior Management Service Optional 1788 Annuity Program under s. 121.055, or the optional retirement 1789 program for the State University System under s. 121.35. 1790 2. Except as provided in subparagraph 6., election to 1791 participate is made within 12 months immediately following the 1792 date on which the member first reaches normal retirement date, 1793 or, for a member who reaches normal retirement date based on 1794 service before he or she reaches age 62, or age 55 for Special 1795 Risk Class members, election to participate may be deferred to 1796 the 12 months immediately following the date the member attains 1797 age 57, or age 52 for Special Risk Class members. A member who 1798 delays DROP participation during the 12-month period immediately 1799 following his or her maximum DROP deferral date, except as 1800 provided in subparagraph 6., loses a month of DROP participation 1801 for each month delayed. A member who fails to make an election 1802 within the 12-month limitation period forfeits all rights to 1803 participate in DROP. The member shall advise his or her employer 1804 and the division in writing of the date DROP begins. The 1805 beginning date may be subsequent to the 12-month election period 1806 but must be within the original 60-month participation period 1807 provided in subparagraph (b)1. When establishing eligibilityof1808the memberto participate in DROP, the member may elect to 1809 include or exclude any optional service credit purchased by the 1810 member from the total service used to establish the normal 1811 retirement date. A member who has dual normal retirement dates 1812 is eligible to elect to participate in DROP after attaining 1813 normal retirement date in either class. 1814 3. The employer of a member electing to participate in 1815 DROP, or employers if dually employed, shall acknowledge in 1816 writing to the division the date the member’s participation in 1817 DROP begins and the date the member’s employment and DROP 1818 participation terminateswill terminate. 1819 4. Simultaneous employment of a memberparticipantby 1820 additional Florida Retirement System employers subsequent to the 1821 commencement of a member’s participation in DROP is permissible 1822 if such employers acknowledge in writing a DROP termination date 1823 no later than the member’sparticipant’sexisting termination 1824 date or the maximum participation period provided in 1825 subparagraph (b)1. 1826 5. A memberDROP participantmay change employers while 1827 participating in DROP, subject to the following: 1828 a. A change of employment must take place without a break 1829 in service so that the member receives salary for each month of 1830 continuous DROP participation. If a member receives no salary 1831 during a month, DROP participation ceasesshall ceaseunless the 1832 employer verifies a continuation of the employment relationship 1833 for such memberparticipantpursuant to s. 121.021(39)(b). 1834 b. The memberSuch participantand new employershall1835 notify the division of the identity of the new employer on forms 1836 required by the division. 1837 c. The new employer acknowledgesshall acknowledge, in 1838 writing, the member’sparticipant’sDROP termination date, which 1839 may be extended but not beyond the maximum participation period 1840 provided in subparagraph (b)1., acknowledgesshall acknowledge1841 liability for any additional retirement contributions and 1842 interest required if the memberparticipantfails to timely 1843 terminate employment, and is subject to the adjustment required 1844 in sub-subparagraph (c)5.d. 1845 6. Effective July 1, 2001, for instructional personnel as 1846 defined in s. 1012.01(2), election to participate in DROP may be 1847 made at any time following the date on which the member first 1848 reaches normal retirement date. The member shall advise his or 1849 her employer and the division in writing of the date on which 1850 DROP begins. When establishing eligibility of the member to 1851 participate in DROP for the 60-month participation period 1852 provided in subparagraph (b)1., the member may elect to include 1853 or exclude any optional service credit purchased by the member 1854 from the total service used to establish the normal retirement 1855 date. A member who has dual normal retirement dates is eligible 1856 to elect to participate in either class. 1857 7. The effective date for DROP participation is before July 1858 1, 2016. 1859 (l) Closure of program to new participants.-Effective July 1860 1, 2016, DROP is closed to new participants. Only members whose 1861 DROP effective date is before July 1, 2016, may participate in 1862 DROP. 1863 (c) Benefits payable under DROP.— 1864 1. Effective on the date of DROP participation, the 1865 member’s initial normal monthly benefit, including creditable 1866 service, optional form of payment, and average final 1867 compensation, and the effective date of retirement are fixed. 1868 The beneficiary established under the Florida Retirement System 1869 is the beneficiary eligible to receive any DROP benefits payable 1870 if the DROP participant dies before completing the period of 1871 DROP participation. If a joint annuitant predeceases the member, 1872 the member may name a beneficiary to receive accumulated DROP 1873 benefits payable. The retirement benefit, the annual cost of 1874 living adjustments provided in s. 121.101, and interest accrue 1875 monthly in the Florida Retirement System Trust Fund. 1876 a. For members initially enrolled in the system before July 1877 1, 2011, the interest accrues at an effective annual rate of 6.5 1878 percent compounded monthly, on the prior month’s accumulated 1879 ending balance, up to the month of termination or death, except 1880 as provided in s. 121.053(7). 1881 b. For members initially enrolled in the system on or after 1882 July 1, 2011, the interest accrues at an effective annual rate 1883 of 2 percent compounded monthly, on the prior month’s 1884 accumulated ending balance, up to the month of termination or 1885 death, except as provided in s. 121.053(7). 1886 2. Each employee who elects to participate in DROP may 1887 elect to receive a lump-sum payment for accrued annual leave 1888 earned in accordance with agency policy upon beginning 1889 participation in DROP. The accumulated leave payment certified 1890 to the division upon commencement of DROP shall be included in 1891 the calculation of the member’s average final compensation. The 1892 employee electing the lump-sum payment is not eligible to 1893 receive a second lump-sum payment upon termination, except to 1894 the extent the employee has earned additional annual leave 1895 which, combined with the original payment, does not exceed the 1896 maximum lump-sum payment allowed by the employing agency’s 1897 policy or rules. An early lump-sum payment shall be based on the 1898 hourly wage of the employee at the time he or she begins 1899 participation in DROP. If the member elects to wait and receive 1900 a lump-sum payment upon termination of DROP and termination of 1901 employment with the employer, any accumulated leave payment made 1902 at that time may not be included in the member’s retirement 1903 benefit, which was determined and fixed by law when the employee 1904 elected to participate in DROP. 1905 3. The effective date of DROP participation and the 1906 effective date of retirement of a DROP participant shall be the 1907 first day of the month selected by the member to begin 1908 participation in DROP, provided such date is properly 1909 established, with the written confirmation of the employer, and 1910 the approval of the division, on forms required by the division. 1911 4. Normal retirement benefits and any interestshall1912 continue to accrue in DROP until the established termination 1913 date of DROP or until the memberparticipantterminates 1914 employment or dies beforeprior tosuch date, except as provided 1915 in s. 121.053(7). Although individual DROP accounts mayshall1916 not be established, a separate accounting of each member’s 1917participant’saccrued benefits under DROP shall be calculated 1918 and provided to the memberparticipants. 1919 5. At the conclusion of the member’s participation inthe1920participant’sDROP, the division shall distribute the member’s 1921participant’stotal accumulated DROP benefits, subject to the 1922 following: 1923 a. The division shall receive verification by the member’s 1924participant’semployer or employers that the memberparticipant1925 has terminated all employment relationships as provided in s. 1926 121.021(39). 1927 b. The terminated DROP participant or, if deceased, the 1928 member’sparticipant’snamed beneficiary, shall elect on forms 1929 provided by the division to receive payment of the DROP benefits 1930 in accordance with one of the options listed below. If a member 1931participantor beneficiary fails to elect a method of payment 1932 within 60 days after termination of DROP, the division shall pay 1933 a lump sum as provided in sub-sub-subparagraph (I). 1934 (I) Lump sum.—All accrued DROP benefits, plus interest, 1935 less withholding taxes remitted to the Internal Revenue Service, 1936 shall be paid to the DROP participant or surviving beneficiary. 1937 (II) Direct rollover.—All accrued DROP benefits, plus 1938 interest, shall be paid from DROP directly to the custodian of 1939 an eligible retirement plan as defined in s. 402(c)(8)(B) of the 1940 Internal Revenue Code. However, in the case of an eligible 1941 rollover distribution to the surviving spouse of a deceased 1942 memberparticipant, an eligible retirement plan is an individual 1943 retirement account or an individual retirement annuity as 1944 described in s. 402(c)(9) of the Internal Revenue Code. 1945 (III) Partial lump sum.—A portion of the accrued DROP 1946 benefits shall be paid to DROP participant or surviving spouse, 1947 less withholding taxes remitted to the Internal Revenue Service, 1948 and the remaining DROP benefits must be transferred directly to 1949 the custodian of an eligible retirement plan as defined in s. 1950 402(c)(8)(B) of the Internal Revenue Code. However, in the case 1951 of an eligible rollover distribution to the surviving spouse of 1952 a deceased memberparticipant, an eligible retirement plan is an 1953 individual retirement account or an individual retirement 1954 annuity as described in s. 402(c)(9) of the Internal Revenue 1955 Code. The proportions must be specified by the DROP participant 1956 or surviving beneficiary. 1957 c. The form of payment selected by the DROP participant or 1958 surviving beneficiary must comply with the minimum distribution 1959 requirements of the Internal Revenue Code. 1960 d. A DROP participant who fails to terminate all employment 1961 relationships as provided in s. 121.021(39) shall be deemed as 1962 not retired, and the DROP election is null and void. Florida 1963 Retirement System membership shall be reestablished 1964 retroactively to the date of the commencement of DROP, and each 1965 employer with whom the memberparticipantcontinues employment 1966 must pay to the Florida Retirement System Trust Fund the 1967 difference between the DROP contributions paid in paragraph (i) 1968 and the contributions required for the applicable Florida 1969 Retirement System class of membership during the period the 1970 member participated in DROP, plus 6.5 percent interest 1971 compounded annually. 1972 6. The retirement benefits of any DROP participant who 1973 terminates all employment relationships as provided in s. 1974 121.021(39) but is reemployed in violation of the reemployment 1975 provisions of subsection (9) areshall besuspended during those 1976 months in which the retiree is in violation. Any retiree in 1977 violation of this subparagraph and any employer that employs or 1978 appoints such person without notifying the divisionof1979Retirementto suspend retirement benefits are jointly and 1980 severally liable for any benefits paid during the reemployment 1981 limitation period. The employer must have a written statement 1982 from the retiree that he or she is not retired from a state 1983 administered retirement system. Any retirement benefits received 1984 by a retiree while employed in violation of the reemployment 1985 limitations must be repaid to the Florida Retirement System 1986 Trust Fund, and his or her retirement benefits shall remain 1987 suspended until payment is made. Benefits suspended beyond the 1988 end of the reemployment limitation period apply toward repayment 1989 of benefits received in violation of the reemployment 1990 limitation. 1991 7. The accrued benefits of any DROP participant, and any 1992 contributions accumulated under the program, are not subject to 1993 assignment, execution, attachment, or any legal process 1994whatsoever,except for qualified domestic relations court orders 1995by a court of competent jurisdiction, income deduction orders as 1996 provided in s. 61.1301, and federal income tax levies. 1997 8. DROP participants are not eligible for disability 1998 retirement benefits as provided in subsection (4). 1999 (14) PAYMENT OF BENEFITS.—This subsection applies to the 2000 payment of benefits to a payee (retiree or beneficiary) under 2001 the Florida Retirement System: 2002 (d) A payee whose retirement benefits are reduced by the 2003 application of maximum benefit limits under s. 415(b) of the 2004 Internal Revenue Code, as specified in s. 121.30(5), shall have 2005 the portion of his or her calculated benefit in the Florida 2006 Retirement System’s pensionSystem defined benefitplan which 2007 exceeds such federal limitation paid through the Florida 2008 Retirement System Preservation of Benefits Plan, as provided in 2009 s. 121.1001. 2010 Section 15. Subsection (1) and paragraph (a) of subsection 2011 (2) of section 121.1001, Florida Statutes, are amended to read: 2012 121.1001 Florida Retirement System Preservation of Benefits 2013 Plan.—Effective July 1, 1999, the Florida Retirement System 2014 Preservation of Benefits Plan is established as a qualified 2015 governmental excess benefit arrangement pursuant to s. 415(m) of 2016 the Internal Revenue Code. The Preservation of Benefits Plan is 2017 created as a separate portion of the Florida Retirement System, 2018 for the purpose of providing benefits to a payee (retiree or 2019 beneficiary) of the Florida Retirement System whose benefits 2020 would otherwise be limited by s. 415(b) of the Internal Revenue 2021 Code. 2022 (1) ELIGIBILITY TO PARTICIPATE IN THE PRESERVATION OF 2023 BENEFITS PLAN.—A payee of the Florida Retirement System shall 2024 participate in the Preservation of Benefits Plan ifwheneverhis 2025 or her earned benefit under the Florida Retirement System’s 2026 pensionSystem defined benefitplan exceeds the benefit maximum 2027 established under s. 415(b) of the Internal Revenue Code. 2028 Participation in the Preservation of Benefits Plan shall 2029 continue for as long as the payee’s earned benefit under the 2030 pensionFlorida Retirement System defined benefitplan is 2031 reduced by the application of the maximum benefit limit under s. 2032 415(b) of the Internal Revenue Code. 2033 (2) BENEFITS PAYABLE UNDER THE PRESERVATION OF BENEFITS 2034 PLAN.— 2035 (a) On and after July 1, 1999, the divisionof Retirement2036 shall pay to each eligible payee of the Florida Retirement 2037 System who retires before, on, or after thatsuchdate, a 2038 supplemental retirement benefit equal to the difference between 2039 the amount of the payee’s monthly retirement benefit which would 2040 have been payable under the Florida Retirement System’s pension 2041System defined benefitplan if not for a reduction due to the 2042 application of s. 415(b) of the Internal Revenue Code and the 2043 reduced monthly retirement benefit as paid to the payee. The 2044 Preservation of Benefits Plan benefit shall be computed and 2045 payable under the same terms and conditions and to the same 2046 person as would have applied under the pensionFlorida2047Retirement System defined benefitplan were it not for the 2048 federal limitation. 2049 Section 16. Subsections (1) and (3) of section 121.101, 2050 Florida Statutes, are amended, present subsections (4) through 2051 (7) of that section are redesignated as subsections (5) through 2052 (8), respectively, and a new subsection (4) is added to that 2053 section, to read: 2054 121.101 Cost-of-living adjustment of benefits.— 2055 (1) The purpose of this section is to provide cost-of 2056 living adjustments to the monthly benefits payable toall2057 retired members of state-supported retirement systems. 2058 (3) Commencing July 1, 1987, the benefit of each retiree 2059 and annuitant retiring before July 1, 2011, shall be adjusted 2060 annually oneachJuly 1thereafter,as follows: 2061 (a) For those retirees and annuitants who have never 2062 received a cost-of-living adjustment under this section, the 2063 amount of the monthly benefit payable for the 12-month period 2064 commencing on the adjustment date shall be the amount of the 2065 member’s initial benefit plus an amount equal to a percentage of 2066 the member’s initial benefit; this percentage is derived by 2067 dividing the number of months the member has received an initial 2068 benefit by 12, and multiplying the result by 3. 2069 (b) For those retirees and annuitants who have received a 2070 cost-of-living adjustment under this subsectionsection, the 2071 adjusted monthly benefit shall be the amount of the monthly 2072 benefit being received on June 30 immediately preceding the 2073 adjustment date plus an amount equal to 3 percent of this 2074 benefit. 2075 (4) For members retiring on or after July 1, 2011, the 2076 benefit of each retiree and annuitant shall be adjusted annually 2077 on July 1 as follows: 2078 (a) For those retirees and annuitants who have never 2079 received a cost-of-living adjustment under this subsection, the 2080 amount of the monthly benefit payable for the 12-month period 2081 commencing on the adjustment date shall be the amount of the 2082 member’s initial benefit plus an amount equal to a percentage of 2083 the member’s initial benefit. This percentage is derived by 2084 dividing the number of months the member has received an initial 2085 benefit by 12, and multiplying the result by the factor 2086 calculated pursuant to paragraph (c). 2087 (b) For those retirees and annuitants who have received a 2088 cost-of-living adjustment under this subsection, the adjusted 2089 monthly benefit shall be the amount of the monthly benefit being 2090 received on June 30 immediately preceding the adjustment date 2091 plus an amount determined by multiplying the benefit by the 2092 factor calculated pursuant to paragraph (c). 2093 (c) The department shall calculate a cost-of-living factor 2094 for each retiree and beneficiary retiring on or after July 1, 2095 2011. This factor shall equal the product of 3 percent 2096 multiplied by the quotient of the sum of the member’s service 2097 credit earned for service before July 1, 2011, divided by the 2098 sum of the member’s total service credit earned. 2099 Section 17. Subsection (1) of section 121.121, Florida 2100 Statutes, is amended to read: 2101 121.121 Authorized leaves of absence.— 2102 (1) A member may purchase creditable service for up to 2 2103 work years of authorized leaves of absence, including any leaves 2104 of absence covered under the Family Medical Leave Act, if: 2105 (a) The member has completed a minimum of 6 years of 2106 creditable service, excluding periods for which a leave of 2107 absence was authorized; 2108 (b) The leave of absence is authorized in writing by the 2109 employer of the member and approved by the administrator; 2110 (c) The member returns to active employment performing 2111 service with a Florida Retirement System employer in a regularly 2112 established position immediately upon termination of the leave 2113 of absence and remains on the employer’s payroll for 1 calendar 2114 month, except that a member who retires on disability while on a 2115 medical leave of absence mayshallnot be required to return to 2116 employment. A member whose work year is less than 12 months and 2117 whose leave of absence terminates between school years is 2118 eligible to receive credit for the leave of absence ifas long2119ashe or she returns to the employmentof his or her employerat 2120 the beginning of the next school year and remains on the 2121 employer’s payroll for 1 calendar month; and 2122 (d) The member makes the required contributions for service 2123 credit during the leave of absence, which shall be 8 percent 2124 until January 1, 1975, and 9 percent thereafter of his or her 2125 rate of monthly compensation in effect immediately beforeprior2126tothe commencement of such leave for each month of such period, 2127 plus 4 percent interest until July 1, 1975, and 6.5 percent 2128 interest thereafter on such contributions, compounded annually 2129 each June 30 from the due date of the contribution to date of 2130 payment. Effective July 1, 1980, any leave of absence purchased 2131 pursuant to this section isshall beat the contribution rates 2132 specified in s. 121.071 or s. 121.71 in effect at the time the 2133 leave is granted for the class of membership from which the 2134 leave of absence was granted; however, any member who purchased 2135 leave-of-absence credit beforeprior toJuly 1, 1980, for a 2136 leave of absence from a position in a class other than the 2137 regular membership class, may pay the appropriate additional 2138 contributions plus compound interest thereon and receive 2139 creditable service for such leave of absence in the membership 2140 class from which the member was granted the leave of absence. 2141 Effective July 1, 2011, any leave of absence purchased pursuant 2142 to this section shall be at the employee and employer 2143 contribution rates specified in s. 121.71 in effect during the 2144 leave for the class of membership from which the leave of 2145 absence was granted. 2146 Section 18. Subsection (2) of section 121.122, Florida 2147 Statutes, is amended, and subsection (3) is added to that 2148 section, to read: 2149 121.122 Renewed membership in system.— 2150 (2) A retiree of a state-administered retirement system who 2151 is initially reemployed on or after July 1, 2010, through June 2152 30, 2011, shall become a member of the Regular Class and be 2153 enrolled in the Florida Retirement System Investment Plan on 2154 July 1, 2011, and must resatisfy the vesting requirements and 2155 other provisions provided in this chapteris not eligible for2156renewed membership. This subsection does not apply to retirees 2157 from the Elected Officers’ Class or the Senior Management 2158 Service Class. 2159 (a) Creditable service, including credit towards the 2160 retiree health insurance subsidy provided in s. 112.363, does 2161 not accrue for a retiree’s employment in a regularly established 2162 position with a covered employer during the period from July 1, 2163 2010, through June 30, 2011. 2164 (b) Employer contributions, interest, earnings, or any 2165 other funds may not be paid into a renewed member’s investment 2166 plan account for any employment in a regularly established 2167 position with a covered employer during the period from July 1, 2168 2010, through June 30, 2011. 2169 (c) To be eligible to receive a retirement benefit under 2170 the investment plan, the renewed member must meet the vesting 2171 requirements of the plan as provided in s. 121.4501(6). 2172 (d) The member is not entitled to disability benefits as 2173 provided in s. 121.091(4) or s. 121.591(2). 2174 (e) The member must meet the limitations on reemployment 2175 after retirement as provided in s. 121.091(9), as applicable. 2176 (f) Upon the renewed membership or reemployment of a 2177 retiree, the employer of such member and the retiree shall pay 2178 the applicable employer and employee contributions as required 2179 by ss. 112.363, 121.71, 121.74, and 121.76. Such contributions 2180 are payable only for employment in a regularly established 2181 position with a covered employer on or after July 1, 2011. 2182 (g) The member may not purchase any prior or past service 2183 in the investment plan, including employment in a regularly 2184 established position with a covered employer during the period 2185 from July 1, 2010, through June 30, 2011. 2186 (h) A renewed member who is not receiving the maximum 2187 health insurance subsidy provided in s. 112.363 is entitled to 2188 earn additional credit toward the subsidy. Such credit may be 2189 earned only for employment in a regularly established position 2190 with a covered employer on or after July 1, 2011. Any additional 2191 subsidy due because of additional credit may be received only at 2192 the time of paying the second career retirement benefit. The 2193 total health insurance subsidy received by a retiree receiving 2194 benefits from initial and renewed membership may not exceed the 2195 maximum allowed under s. 112.363. 2196 (3) Any retiree of a state-administered retirement system 2197 who is initially reemployed on or after July 1, 2011, except for 2198 retirees from the Elected Officers’ Class or the Senior 2199 Management Service Class, shall become a member of the Regular 2200 Class and be enrolled in the Florida Retirement System 2201 Investment Plan, and must resatisfy the vesting requirements and 2202 other provisions of this chapter. Retirees from the Elected 2203 Officers’ Class or the Senior Management Service Class may not 2204 be enrolled in a state-administered retirement system. 2205 (a) To be eligible to receive a retirement benefit under 2206 the investment plan, the renewed member must meet the vesting 2207 requirements of the investment plan as provided in s. 2208 121.4501(6). 2209 (b) The member is not entitled to disability benefits as 2210 provided in s. 121.091(4) or s. 121.591(2). 2211 (c) The member must meet the limitations on reemployment 2212 after retirement provided in s. 121.091(9), as applicable. 2213 (d) Upon renewed membership or reemployment of a retiree, 2214 the employer of such member and the retiree must pay the 2215 applicable employer and employee contributions as required by 2216 ss. 112.363, 121.71, 121.74, and 121.76. 2217 (e) The member may not purchase any prior or past service 2218 in the investment plan. 2219 (f) A renewed member who is not receiving the maximum 2220 health insurance subsidy provided in s. 112.363 is entitled to 2221 earn additional credit toward the subsidy. Any additional 2222 subsidy due because of additional credit may be received only at 2223 the time of paying the second career retirement benefit. The 2224 total health insurance subsidy received by a retiree receiving 2225 benefits from initial and renewed membership may not exceed the 2226 maximum allowed under s. 112.363. 2227 Section 19. Section 121.125, Florida Statutes, is amended 2228 to read: 2229 121.125 Credit for workers’ compensation payment periods.—A 2230 member of the retirement system created by this chapter who has 2231 been eligible or becomes eligible forto receiveworkers’ 2232 compensation payments for an injury or illness that occurred 2233occurringduringhis or heremployment while a member of aany2234 state retirement system shall, upon return to active employment 2235 with a covered employer for 1 calendar month or upon approval 2236 for disability retirement in accordance with s. 121.091(4), 2237 receive full retirement credit for the period beforeprior to2238 such return to active employment or disability retirement for 2239 which the workers’ compensation payments were received. However, 2240 anomember may not receive retirement credit foranysuch 2241 period occurring after the earlier of the date of maximum 2242 medical improvement as defined in s. 440.02 or the date 2243 termination has occurred as defined in s. 121.021(39). The 2244 employer of record at the time of the worker’s compensation 2245 injury or illness shall make the required employee and employer 2246 retirement contributions based on the member’s rate of monthly 2247 compensation immediately beforeprior to his or herreceiving 2248 workers’ compensation payments for retirement credit received by 2249 the member. The employer of record at the time of the workers’ 2250 compensation injury or illness shall be assessed by the division 2251 a penalty of 1 percent of the contributions on all contributions 2252 not paid on the first payroll report after the member becomes 2253 eligible to receive credit. This delinquent assessment may not 2254 be waived. 2255 Section 20. Paragraphs (g) and (i) of subsection (3) and 2256 subsections (4) and (5) of section 121.35, Florida Statutes, are 2257 amended to read: 2258 121.35 Optional retirement program for the State University 2259 System.— 2260 (3) ELECTION OF OPTIONAL PROGRAM.— 2261 (g) An eligible employee who is a member of the Florida 2262 Retirement System at the time of electingelectionto 2263 participate in the optional retirement program shall retain all 2264 retirement service credit earned under the Florida Retirement 2265 System,at the rate earned.NoAdditional service credit in the 2266Florida Retirementsystem may notshallbe earned while the 2267 employee participates in the optional program, andnor shallthe 2268 employee is notbeeligible for disability retirement under the 2269Florida Retirementsystem. An eligible employee may transfer 2270 from the Florida Retirement System to his or her accounts under 2271 the State University System Optional Retirement Program a sum 2272 representing the present value of the employee’s accumulated 2273 benefit obligation under thedefined benefit program of the2274 Florida Retirement System’s pension planSystemfor any service 2275 credit accrued from the employee’s first eligible transfer date 2276 to the optional retirement program through the actual date of 2277 such transfer, if such service credit was earnedin the period2278 from July 1, 1984, through December 31, 1992. The present value 2279 of the employee’s accumulated benefit obligation shall be 2280 calculated as described in s. 121.4501(3)s.121.4501(3)(c)2. 2281 Uponsuchtransfer, allsuchservice creditpreviouslyearned 2282 under the pension plandefined benefit program of the Florida2283Retirement Systemduring this period isshall benullified for 2284 purposes of entitlement to a future benefit under the pension 2285 plandefined benefit program ofthe Florida Retirement System. 2286 (i) Effective January 1, 2008, through December 31, 2008, 2287 except for an employee who is a mandatory memberparticipantof 2288 the State University System Optional Retirement Program, an 2289 employee who has elected to participate in the State University 2290 System Optional Retirement Program shall have one opportunity, 2291 at the employee’s discretion,to chooseto transfer from this 2292 program to the pension plan or the investment plandefined2293benefit program of the Florida Retirement System or to the2294Public Employee Optional Retirement Program, subject to the 2295 terms of the applicable contracts of the State University System 2296 Optional Retirement Program. 2297 1. If the employee chooses to move to the investment plan 2298Public Employee Optional Retirement Program, any contributions, 2299 interest, and earnings creditable to the employee under the 2300 State University System Optional Retirement Program mustshall2301 be retained by the employee in the State University System 2302 Optional Retirement Program, and the applicable provisions of s. 2303 121.4501(4) shall govern the election. 2304 2. If the employee chooses to move to the pension plan 2305defined benefit program of theFlorida Retirement System, the 2306 employee shall receive service credit equal to his or her years 2307 of service under the State University System Optional Retirement 2308 Program. 2309 a. The cost for such credit must be inshall bean amount 2310 representing the actuarial accrued liability for the affected 2311 period of service. The cost mustshallbe calculated using the 2312 discount rate and other relevant actuarial assumptions that were 2313 used to value the pensionFlorida Retirement System defined2314benefitplan liabilities in the most recent actuarial valuation. 2315 The calculation mustshallinclude any service already 2316 maintained under the pensiondefined benefitplan in addition to 2317 the years under the State University System Optional Retirement 2318 Program. The actuarial accrued liability of any service already 2319 maintained under the pensiondefined benefitplan mustshallbe 2320 applied as a credit to total cost resulting from the 2321 calculation. The division mustshallensure that the transfer 2322 sum is prepared using a formula and methodology certified by an 2323 enrolled actuary. 2324 b. The employee must transfer from his or her State 2325 University System Optional Retirement Program account, and from 2326 other employee moneys as necessary, a sum representing the 2327 actuarial accrued liability immediately following the time of 2328 such movement, determined assuming that attained service equals 2329 the sum of service in the pension plandefined benefit program2330 and service in the State University System Optional Retirement 2331 Program. 2332 (4) CONTRIBUTIONS.— 2333 (a)1. Through June 30, 2001, each employer shall contribute 2334 on behalf of each member ofparticipant inthe optional 2335 retirement program an amount equal to the normal cost portion of 2336 the employer retirement contribution which would be required if 2337 the employeeparticipantwere a regular member of the Florida 2338 Retirement System’s pension planSystem defined benefit program, 2339 plus the portion of the contribution rate required in s. 2340 112.363(8) that would otherwise be assigned to the Retiree 2341 Health Insurance Subsidy Trust Fund. 2342 2. Effective July 1, 2001, through June 30, 2011, each 2343 employer shall contribute on behalf of each member of 2344participant inthe optional retirement program an amount equal 2345 to 10.43 percent of the employee’sparticipant’sgross monthly 2346 compensation. 2347 3. Effective July 1, 2011, each member of the optional 2348 retirement program shall contribute an amount equal to the 2349 employee contribution required in s. 121.71(3). The employer 2350 shall contribute on behalf of each such member an amount equal 2351 to the difference between 10.43 percent of the employee’s gross 2352 monthly compensation and the amount equal to the employee’s 2353 required contribution based on the employee’s gross monthly 2354 compensation. 2355 4.The department shall deduct an amount approved by the2356Legislature to provide for the administration of this program.2357 The payment of the contributions, including contributions by the 2358 employee,to the optional program which is required by this2359paragraph for each participantshall be made by the employer to 2360 the department, which shall forward the contributions to the 2361 designated company or companies contracting for payment of 2362 benefits for members ofthe participant underthe program. 2363 However, such contributions paid on behalf of an employee 2364 described in paragraph (3)(c) mayshallnot be forwarded to a 2365 company and doshallnot begin to accrue interest until the 2366 employee has executed a contract and notified the department. 2367 The department shall deduct an amount from the contributions to 2368 provide for the administration of this program. 2369 (b) Each employer shall contribute on behalf of each member 2370 ofparticipant inthe optional retirement program an amount 2371 equal to the unfunded actuarial accrued liability portion of the 2372 employer contribution which would be required for members of the 2373 Florida Retirement System. This contribution shall be paid to 2374 the department for transfer to the Florida Retirement System 2375 Trust Fund. 2376 (c) An Optional Retirement Program Trust Fund shall be 2377 established in the State Treasury and administered by the 2378 department to make payments to the provider companies on behalf 2379 oftheoptional retirement program membersparticipants, and to 2380 transfer the unfunded liability portion of the state optional 2381 retirement program contributions to the Florida Retirement 2382 System Trust Fund. 2383 (d) Contributions required for social security by each 2384 employer and each employeeparticipant, in the amount required 2385 for social security coverage as now or hereafter may be provided 2386 by the federal Social Security Act, shall be maintained for each 2387 member ofparticipant inthe optional retirement program and are 2388shall bein addition to the retirement contributions specified 2389 in this subsection. 2390 (e) Each member ofparticipant inthe optional retirement 2391 program who has executed a contract may contribute by way of 2392 salary reduction or deduction a percentage amount of the 2393 employee’sparticipant’sgross compensation not to exceed the 2394 percentage amount contributed by the employer to the optional 2395 program, butin no case maysuch contribution may not exceed 2396 federal limitations. Payment of the employee’sparticipant’s2397 contributions shall be made by the financial officer of the 2398 employer to the division which shall forward the contributions 2399 to the designated company or companies contracting for payment 2400 of benefits for membersthe participantunder the program. A 2401 memberparticipantmay not make, through salary reduction, any 2402 voluntary employee contributions to any other plan under s. 2403 403(b) of the Internal Revenue Code, with the exception of a 2404 custodial account under s. 403(b)(7) of the Internal Revenue 2405 Code, until he or she has made an employee contribution to his 2406 or her optional program equal to the employer contribution. An 2407 employeeA participantis responsible for monitoring his or her 2408 individual tax-deferred income to ensure he or she does not 2409 exceed the maximum deferral amounts permitted under the Internal 2410 Revenue Code. 2411 (f) The Optional Retirement Trust Fund may accept for 2412 deposit into memberparticipantcontracts contributions in the 2413 form of rollovers or direct trustee-to-trustee transfers by or 2414 on behalf of membersparticipantswho are reasonably determined 2415 by the department to be eligible for rollover or transfer to the 2416 optional retirement program pursuant to the Internal Revenue 2417 Code,if such contributions are made in accordance with rules 2418 adopted by the department. Such contributions shall be accounted 2419 for in accordance with any applicable requirements of the 2420 Internal Revenue Code and department rulesof the department. 2421 (g) Effective July 1, 2008, for purposes of paragraph (a) 2422 and notwithstanding s. 121.021(22)(b)1., the term “employee’s 2423participant’sgross monthly compensation” includes salary 2424 payments made to eligible clinical faculty from a state 2425 university using funds provided by a faculty practice plan 2426 authorized by the Board of Governors of the State University 2427 System if: 2428 1. There is nonot anyemployer contribution from the state 2429 university to any other retirement program with respect to such 2430 salary payments; and 2431 2. The employer contribution on behalf of a member ofthe2432participant inthe optional retirement program with respect to 2433 such salary payments is made using funds provided by the faculty 2434 practice plan. 2435 (5) BENEFITS.— 2436 (a) Benefits are payable under the optional retirement 2437 program only to vested members participatingparticipantsin the 2438 program, or their beneficiaries as designated by the member 2439participantin the contract with a provider company, and such 2440 benefits shall be paid only by the designated company in 2441 accordance with s. 403(b) of the Internal Revenue Code and the 2442 terms of the annuity contract or contracts applicable to the 2443 memberparticipant. Benefits accrue in individual accounts that 2444 are member-directedparticipant-directed, portable, and funded 2445 by employer contributions and the earnings thereon. The member 2446participantmust be terminated for 3 calendar months from all 2447 employment relationships with all Florida Retirement System 2448 employers, as provided in s. 121.021(39), to begin receiving the 2449employer-fundedbenefit. Benefits funded by employer 2450 contributions are payable in accordance with the following terms 2451 and conditions: 2452 1. Benefits shall be paid only to a participating member 2453participant, to his or her beneficiaries, or to his or her 2454 estate, as designated by the memberparticipant. 2455 2. Benefits shall be paid by the provider company or 2456 companies in accordance with the law, the provisions of the 2457 contract, and any applicable department rule or policy. 2458 3. In the event of a member’sparticipant’sdeath, moneys 2459 accumulated by, or on behalf of, the memberparticipant, less 2460 withholding taxes remitted to the Internal Revenue Service, if 2461 any, shall be distributed to the member’sparticipant’s2462 designated beneficiary or beneficiaries, or to the member’s 2463participant’sestate, as if the memberparticipantretired on 2464 the date of death, as provided in paragraph (d)(c). No other 2465 death benefits are available to survivors of members 2466participantsunder the optional retirement program except for 2467 such benefits, or coverage for such benefits, as are separately 2468 afforded by the employer, at the employer’s discretion. 2469 (b) Benefits are not payable for employee hardships, 2470 unforeseeable emergencies, loans, medical expenses, educational 2471 expenses, purchase of a principal residence, payments necessary 2472 to prevent eviction or foreclosure on an employee’s principal 2473 residence, or any other reason before termination from all 2474 employment relationships with participating employers, as 2475 provided in s. 121.021(39). 2476 (c)(b)Upon receipt by the provider company of a properly 2477 executed application for distribution of benefits, the total 2478 accumulated benefit areshall bepayable to the participating 2479 memberparticipant, as: 2480 1. A lump-sum distribution to the memberparticipant; 2481 2. A lump-sum direct rollover distribution whereby all 2482 accrued benefits, plus interest and investment earnings, are 2483 paid from the participant’s account directly to an eligible 2484 retirement plan, as defined in s. 402(c)(8)(B) of the Internal 2485 Revenue Code, on behalf of the memberparticipant; 2486 3. Periodic distributions; 2487 4. A partial lump-sum payment whereby a portion of the 2488 accrued benefit is paid to the memberparticipantand the 2489 remaining amount is transferred to an eligible retirement plan, 2490 as defined in s. 402(c)(8)(B) of the Internal Revenue Code, on 2491 behalf of the memberparticipant; or 2492 5. Such other distribution options as are providedforin 2493 the participant’s optional retirement program contract. 2494 (d)(c)Survivor benefits areshall bepayable as: 2495 1. A lump-sum distribution payable to the beneficiaries or 2496 to the deceased member’sparticipant’sestate; 2497 2. An eligible rollover distribution on behalf of the 2498 surviving spouse of a deceased memberparticipant, whereby all 2499 accrued benefits, plus interest and investment earnings, are 2500 paid from the deceased member’sparticipant’saccount directly 2501 to an eligible retirement plan, as described in s. 402(c)(8)(B) 2502 of the Internal Revenue Code, on behalf of the surviving spouse; 2503 3. Such other distribution options as are providedforin 2504 the member’sparticipant’soptional retirement program contract; 2505 or 2506 4. A partial lump-sum payment whereby a portion of the 2507 accrued benefit is paid to the deceased member’sparticipant’s2508 surviving spouse or other designated beneficiaries, less 2509 withholding taxes remitted to the Internal Revenue Service, if 2510 any, and the remaining amount is transferred directly to an 2511 eligible retirement plan, as described in s. 402(c)(8)(B) of the 2512 Internal Revenue Code, on behalf of the surviving spouse. The 2513 proportions must be specified by the memberparticipantor the 2514 surviving beneficiary. 2515 2516 This paragraph does not abrogate other applicable provisions of 2517 state or federal law providing payment of death benefits. 2518 (e)(d)The benefits payable to any person under the 2519 optional retirement program, and any contribution accumulated 2520 under such program, areshallnotbesubject to assignment, 2521 execution, or attachment or to any legal processwhatsoever. 2522 (f)(e)A participating memberparticipantwho chooses to 2523 receive his or her benefits must be terminated for 3 calendar 2524 months to be eligible to receive benefits funded by employer 2525 contributions. The memberupon termination as defined in s.2526121.021must notify the provider company of the date he or she 2527 wishes benefits funded by required employer and employee 2528 contributions to begin and must be terminated as defined in s. 2529 121.021 after the initial benefit payment or distribution. 2530 Benefits may be deferred until the memberparticipantchooses to 2531 make such application. 2532 (g)(f)Benefits funded by the participating member’s 2533 voluntaryparticipant’spersonal contributions may be paid out 2534 at any time and in any form within the limits provided in the 2535 contract between the memberparticipantand thehis or her2536 provider company. The memberparticipantshall notify the 2537 provider company regarding the date and provisions under which 2538 he or she wants to receive the employee-funded portion of the 2539 plan. 2540 (h)(g)For purposes of this section, “retiree” means a 2541 former participating memberparticipantof the optional 2542 retirement program who has terminated employment and has taken a 2543 distribution as provided in this subsection, except for a 2544 mandatory distribution of a de minimis account authorized by the 2545 department. 2546 Section 21. Section 121.355, Florida Statutes, is amended 2547 to read: 2548 121.355 Community College Optional Retirement Program and 2549 State University System Optional Retirement Program member 2550 transfer.—Effective January 1, 2009, through December 31, 2009, 2551 an employee who is a former member ofparticipant inthe 2552 Community College Optional Retirement Program or the State 2553 University System Optional Retirement Program and present 2554 mandatory member ofparticipant inthe Florida Retirement 2555 System’s pensionSystem defined benefitplan may receive service 2556 credit equal to his or her years of service under the Community 2557 College Optional Retirement Program or the State University 2558 System Optional Retirement Program under the following 2559 conditions: 2560 (1) The cost for such credit must representshall be an2561amount representingthe actuarial accrued liability for the 2562 affected period of service. The cost shall be calculated using 2563 the discount rate and other relevant actuarial assumptions that 2564 were used to value the Florida Retirement System’s pension 2565System defined benefitplan liabilities in the most recent 2566 actuarial valuation. The calculation mustshallinclude any 2567 service already maintained under the pensiondefined benefit2568 plan in addition to the years under the Community College 2569 Optional Retirement Program or the State University System 2570 Optional Retirement Program. The actuarial accrued liability of 2571 any service already maintained under the pensiondefined benefit2572 plan shall be applied as a credit to total cost resulting from 2573 the calculation. The division shall ensure that the transfer sum 2574 is prepared using a formula and methodology certified by an 2575 enrolled actuary. 2576 (2) The employee must transfer from his or her Community 2577 College Optional Retirement Program account or State University 2578 System Optional Retirement Program account, subject to the terms 2579 of the applicable optional retirement program contract, and from 2580 other employee moneys as necessary, a sum representing the 2581 actuarial accrued liability immediately following the time of 2582 such movement, determined assuming that attained service equals 2583 the sum of service in the pension plandefined benefit program2584 and service in the Community College Optional Retirement Program 2585 or State University System Optional Retirement Program. 2586 (3) The employee may not receive service credit for a 2587 period of mandatory participation in the State University 2588 Optional Retirement Program or for a period for which a 2589 distribution was received from the Community College Optional 2590 Retirement Program or State University System Optional 2591 Retirement Program. 2592 Section 22. Section 121.4501, Florida Statutes, is amended 2593 to read: 2594 121.4501 FloridaPublic Employee OptionalRetirement System 2595 Investment PlanProgram.— 2596 (1) The Trustees of the State Board of Administration shall 2597 establish aan optionaldefined contributionretirementprogram 2598 called the Florida Retirement System Investment Plan for members 2599 of the Florida Retirement System under which retirement benefits 2600 arewill beprovided for eligible employees initially employed 2601 before July 1, 2011, who elect to enrollparticipatein the 2602 plan. Enrollment is compulsory for members of the Elected 2603 Officers’ Class and the Senior Management Class, who are 2604 employed on or after July 1, 2011, except for those who are 2605 eligible to and elect to enroll in an optional retirement 2606 program established under s. 121.055(6), s. 121.35, or s. 2607 1012.875, or those who qualify for special risk membership 2608 pursuant to s. 121.0515program. The retirement benefitsto be2609provided for or on behalf of participants in such optional2610retirement programshall be provided through employee-directed 2611 investments, in accordance with s. 401(a) of the Internal 2612 Revenue Code anditsrelated regulations.TheEmployers and 2613 employees shall make contributionscontribute, as provided in 2614 this section and,ss. 121.571,and 121.71, to the FloridaPublic2615Employee OptionalRetirement System Investment PlanProgram2616 Trust Fund toward the funding ofsuchoptionalbenefits. 2617 (2) DEFINITIONS.—As used in this part, the term: 2618 (a) “Approved provider” or “provider” means a private 2619 sector company that is selected and approved by the state board 2620 to offer one or more investment products or services to the 2621 investment planoptional retirement program. The term includes a 2622 bundled provider that offers plan membersparticipantsa range 2623 of individually allocated or unallocated investment products and 2624 may offer a range of administrative and customer services, which 2625 may include accounting and administration of individual member 2626participantbenefits and contributions; individual member 2627participantrecordkeeping; asset purchase, control, and 2628 safekeeping; direct execution of the member’sparticipant’s2629 instructions as to asset and contribution allocation; 2630 calculation of daily net asset values; direct access to member 2631participantaccount information; periodic reporting to members 2632participants, at least quarterly, on account balances and 2633 transactions; guidance, advice, and allocation services directly 2634 relating to the provider’s own investment options or products, 2635 but only if the bundled provider complies with the standard of 2636 care of s. 404(a)(1)(A-B) of the Employee Retirement Income 2637 Security Act of 1974 (ERISA) and if providing such guidance, 2638 advice, or allocation services does not constitute a prohibited 2639 transaction under s. 4975(c)(1) of the Internal Revenue Code or 2640 s. 406 of ERISA, notwithstanding that such prohibited 2641 transaction provisions do not apply to theoptionalretirement 2642 program; a broad array of distribution options; asset 2643 allocation; and retirement counseling and education. Private 2644 sector companies include investment management companies, 2645 insurance companies, depositories, and mutual fund companies. 2646 (b) “Average monthly compensation” means one-twelfth of 2647 average final compensation as defined in s. 121.021. 2648 (c) “Covered employment” means employment in a regularly 2649 established position as defined in s. 121.021. 2650(d) “Defined benefit program” means the defined benefit2651program of the Florida Retirement System administered under part2652I of this chapter.2653(e) “Division” means the Division of Retirement within the2654department.2655 (d)(f)“Electronic means” means by telephone, ifthe2656requiredinformation is received on a recorded line, or through 2657 Internet access, ifthe requiredinformation is captured online. 2658(g) “Eligible employee” means an officer or employee, as2659defined in s.121.021, who:26601. Is a member of, or is eligible for membership in, the2661Florida Retirement System, including any renewed member of the2662Florida Retirement System initially enrolled before July 1,26632010; or26642. Participates in, or is eligible to participate in, the2665Senior Management Service Optional Annuity Program as2666established under s.121.055(6), the State Community College2667System Optional Retirement Program as established under s.2668121.051(2)(c), or the State University System Optional2669Retirement Program established under s.121.35.2670 2671The term does not include any member participating in the2672Deferred Retirement Option Program established under s.2673121.091(13), a retiree of a state-administered retirement system2674initially reemployed on or after July 1, 2010, or a mandatory2675participant of the State University System Optional Retirement2676Program established under s.121.35.2677 (e)(h)“Employer” means an employer, as defined in s. 2678 121.021, of an eligible employee. 2679 (f) “Florida Retirement System Investment Plan” or 2680 “investment plan” means the defined contribution program of the 2681 Florida Retirement System established under this part. 2682 (g) “Florida Retirement System Pension Plan” or pension 2683 plan” means the defined benefit program of the Florida 2684 Retirement System administered under part I of this chapter. 2685(i) “Optional retirement program” or “optional program”2686means the Public Employee Optional Retirement Program2687established under this part.2688 (h)(j)“Member” or “employee”“participant”means an 2689 eligible employee who is enrolledenrollsin the investment plan 2690optional programas provided in subsection (4),ora terminated 2691 Deferred Retirement Option Program memberparticipantas 2692 described in subsection (21), or a beneficiary or alternate 2693 payee of a member or employee. 2694 (i) “Member contributions” or “employee contributions” mean 2695 the sum of all amounts deducted from the salary of a member by 2696 his or her employer in accordance with s. 121.71(2) and credited 2697 to his or her individual account in the investment plan, plus 2698 any earnings on such amounts and any contributions specified in 2699 paragraph (5)(e). 2700 (j)(k)“Retiree” means a former memberparticipantof the 2701 investment planoptional retirement programwho has terminated 2702 employment andhastaken a distribution of vested employer or 2703 employee contributions as provided in s. 121.591, except for a 2704 mandatory distribution of a de minimis account authorized by the 2705 state board. 2706 (k)(l)“Vested” or “vesting” means the guarantee that a 2707 memberparticipantis eligible to receive a retirement benefit 2708 upon completion of the required years of service under the 2709 investment planoptional retirement program. 2710 (3)ELIGIBILITY;RETIREMENT SERVICE CREDIT; TRANSFER OF 2711 BENEFITS.— 2712(a)Participation in the Public Employee Optional2713Retirement Program is limited to eligible employees.2714Participation in the optional retirement program is in lieu of2715participation in the defined benefit program of the Florida2716Retirement System.2717 (a)(b)An eligible employee who is employed in a regularly 2718 established position by a state employer on June 1, 2002; by a 2719 district school board employer on September 1, 2002; or by a 2720 local employer on December 1, 2002, and who is a member of the 2721 pension plandefined benefit retirement program of the Florida2722Retirement Systemat the time of his or her election to enroll 2723participatein the investment planPublic Employee Optional2724Retirement Programshall retain all retirement service credit 2725 earned under the pension plandefined benefit retirement program2726of the Florida Retirement Systemas credited under the Florida 2727 Retirement System and isshall beentitled to a deferred benefit 2728 upon termination, if eligibleunder the system. However, 2729 election to enrollparticipatein the investment planPublic2730Employee Optional Retirement Programterminates the active 2731 membership of the employee in the pension plandefined benefit2732program ofthe Florida Retirement System, and the service of a 2733 member ofparticipant inthe investment plan isPublic Employee2734Optional Retirement Program shallnotbecreditable under the 2735 pension plandefined benefit retirement program of the Florida2736Retirement Systemfor purposes of benefit accrual but is 2737 creditableshall be creditedfor purposes of vesting. 2738 (b)(c)1.Notwithstanding paragraph (a), an(b), each2739 eligible employee who elects to enrollparticipatein the 2740 investment planPublic Employee Optional Retirement Programand 2741 establishes one or more individual memberparticipantaccounts 2742under the optional programmay elect to transfer to the 2743 investment planoptional programa sum representing the present 2744 value of the employee’s accumulated benefit obligation under the 2745 pension plandefined benefit retirement program of the Florida2746Retirement System. Uponsuchtransfer, all service credit 2747previouslyearned under the pension plan isdefined benefit2748program of the Florida Retirement System shall benullified for 2749 purposes of entitlement to a future benefit under the pension 2750 plandefined benefit program of the Florida Retirement System. A 2751 member may not transferparticipant is precluded from2752transferringthe accumulated benefit obligation balance from the 2753 pension plan after the timedefined benefit program uponthe2754expiration of theperiod for enrollingafforded to enrollin the 2755 investment plan has expiredoptional program. 2756 1.2.For purposes of this subsection, the present value of 2757 the member’s accumulated benefit obligation is based upon the 2758 member’s estimated creditable service and estimated average 2759 final compensation under the pension plandefined benefit2760 program, subject to recomputation under subparagraph 2.3.For 2761 state employeesenrolling under subparagraph (4)(a)1., initial 2762 estimates shallwillbe based upon creditable service and 2763 average final compensation as of midnight on June 30, 2002; for 2764 district school board employeesenrolling under subparagraph2765(4)(b)1., initial estimates shallwillbe based upon creditable 2766 service and average final compensation as of midnight on 2767 September 30, 2002; and for local government employeesenrolling2768under subparagraph (4)(c)1., initial estimates shallwillbe 2769 based upon creditable service and average final compensation as 2770 of midnight on December 31, 2002. The datesrespectively2771 specified areabove shall be construed asthe “estimate date” 2772 for these employees. The actuarial present value of the 2773 employee’s accumulated benefit obligation shall be based on the 2774 following: 2775 a. The discount rate and other relevant actuarial 2776 assumptions used to value the Florida Retirement System Trust 2777 Fund at the time the amount to be transferred is determined, 2778 consistent with the factors provided in sub-subparagraphs b. and 2779 c. 2780 b. A benefit commencement age, based on the member’s 2781 estimated creditable service as of the estimate date. The 2782 benefit commencement age isshall bethe younger of the 2783 following, but mayshallnot be younger than the member’s age as 2784 of the estimate date: 2785 (I) Age 62; or 2786 (II) The age the member would attain if the member 2787 completed 30 years of service with an employer, assuming the 2788 member worked continuously from the estimate date, and 2789 disregarding any vesting requirement that would otherwise apply 2790 under the pension plandefined benefit program of the Florida2791Retirement System. 2792 c. For members of the Special Risk Class, and for members 2793 of the Special Risk Administrative Support Class entitled to 2794 retain the special risk normal retirement date, the benefit 2795 commencement age isshall bethe younger of the following, but 2796 mayshallnot be younger than the member’s age as of the 2797 estimate date: 2798 (I) Age 55 or, for members enrolled on or after July 1, 2799 2011, age 62; or 2800 (II) The age the member would attain if the member 2801 completed 25 years of service with an employer, or, for members 2802 enrolled on or after July 1, 2011, 30 years of service with an 2803 employer, assuming the member worked continuously from the 2804 estimate date, and disregarding any vesting requirement that 2805 would otherwise apply under the pension plandefined benefit2806program ofthe Florida Retirement System. 2807 d. The calculation mustshalldisregard vesting 2808 requirements and early retirement reduction factors that would 2809 otherwise apply under the pension plandefined benefit2810retirement program. 2811 2.3.For each memberparticipantwho elects to transfer 2812 moneys from the pension plandefined benefit programto his or 2813 her account in the investment planoptional program, the 2814 division shall recompute the amount transferred under 2815 subparagraph 1. within2. not later than60 days after the 2816 actual transfer of funds based upon the member’sparticipant’s2817 actual creditable service and actual final average compensation 2818 as of the initial date of participation in the investment plan 2819optional program. If the recomputed amount differs from the 2820 amount transferredunder subparagraph 2.by $10 or more, the 2821 division shall: 2822 a. Transfer, or cause to be transferred, from the Florida 2823 Retirement System Trust Fund to the member’sparticipant’s2824 accountin the optional programthe excess, if any, of the 2825 recomputed amount over the previously transferred amount 2826 together with interest from the initial date of transfer to the 2827 date of transfer under this subparagraph, based upon the 2828 effective annual interest equal to the assumed return on the 2829 actuarial investment which was used in the most recent actuarial 2830 valuation of the system, compounded annually. 2831 b. Transfer, or cause to be transferred, from the member’s 2832participant’saccount to the Florida Retirement System Trust 2833 Fund the excess, if any, of the previously transferred amount 2834 over the recomputed amount, together with interest from the 2835 initial date of transfer to the date of transfer under this 2836 subparagraph, based upon 6 percent effective annual interest, 2837 compounded annually, pro rata based on the member’s 2838participant’sallocation plan. 2839 3. If contribution adjustments are made as a result of 2840 employer errors or corrections, including plan corrections, 2841 following recomputation of the amount transferred under 2842 subparagraph 1., the member is entitled to the additional 2843 contributions or is responsible for returning any excess 2844 contributions resulting from the correction. However, the return 2845 of such erroneous excess pretax contribution by the plan must be 2846 made within the period allowed by the Internal Revenue Service. 2847 The present value of the member’s accumulated benefit obligation 2848 may not be recalculated. 2849 4. As directed by the memberparticipant, the state board 2850 shall transfer or cause to be transferred the appropriate 2851 amounts to the designated accounts within. The board shall2852establish transfer procedures by rule, but the actual transfer2853shall notbe later than30 days after the effective date of the 2854 member’s participation in the investment planoptional program2855 unless the major financial markets for securities available for 2856 a transfer are seriously disrupted by an unforeseen event that 2857which alsocauses the suspension of trading on any national 2858 securities exchange in the country where the securities arewere2859 issued. In that event, thesuch30-day periodof timemay be 2860 extended by a resolution of the state boardtrustees. Transfers 2861 are not commissionable or subject to other fees and may be in 2862 the form of securities or cash, as determined by the state 2863 board. Such securities areshall bevalued as of the date of 2864 receipt in the member’sparticipant’saccount. 2865 5. If the state board or the division receives notification 2866 from the United States Internal Revenue Service that this 2867 paragraph or any portion of this paragraph will cause the 2868 retirement system, or a portion thereof, to be disqualified for 2869 tax purposes under the Internal Revenue Code,thenthe portion 2870 that will cause the disqualification does not apply. Upon such 2871 notice, the state board and the division shall notify the 2872 presiding officers of the Legislature. 2873 (4) PARTICIPATION; ENROLLMENT.— 2874 (a)1.Between June 1, 2001, and February 28, 2003, eligible 2875 employees were provided a 90-day period to elect membership in 2876 the investment plan. An employee who failed to elect the 2877 investment plan during the election period remained in the 2878 pension plan. An eligible employee who was employed in a 2879 regularly established position during the election period was 2880 also provided one opportunity to change plans, as provided under 2881 paragraph (e). With respect to an eligible employee who did not 2882 participate in the initial election period and an eligible 2883 employee who is initially employed in a regularly established 2884 position after the close of the initial election period but 2885 before June 30, 2011, theon June 1, 2002, by a state employer:2886a.Any such employee may elect to participate in the Public2887Employee Optional Retirement Program in lieu of retaining his or2888her membership in the defined benefit program of the Florida2889Retirement System. The election must be made in writing or by2890electronic means and must be filed with the third-party2891administrator by August 31, 2002, or, in the case of an active2892employee who is on a leave of absence on April 1, 2002, by the2893last business day of the 5th month following the month the leave2894of absence concludes. This election is irrevocable, except as2895provided in paragraph (e). Upon making such election, the2896employee shall be enrolled as a participant of the Public2897Employee Optional Retirement Program, the employee’s membership2898in the Florida Retirement System shall be governed by the2899provisions of this part, and the employee’s membership in the2900defined benefit program of the Florida Retirement System shall2901terminate. The employee’s enrollment in the Public Employee2902Optional Retirement Program shall be effective the first day of2903the month for which a full month’s employer contribution is made2904to the optional program.2905b.Any such employee who fails to elect to participate in2906the Public Employee Optional Retirement Program within the2907prescribed time period is deemed to have elected to retain2908membership in the defined benefit program of the Florida2909Retirement System, and the employee’s option to elect to2910participate in the optional program is forfeited.29112.With respect to employees who become eligible to2912participate in the Public Employee Optional Retirement Program2913by reason of employment in a regularly established position with2914a state employer commencing after April 1, 2002:2915a.Any suchemployee shall, by default, be enrolled in the 2916 pension plandefined benefit retirement program of the Florida2917Retirement Systemat the commencement of employment, and may, by 2918 the last business day of the 5th month following the employee’s 2919 month of hire, elect to enrollparticipatein the investment 2920 planPublic Employee Optional Retirement Program. The employee’s 2921 election must be made in writing or by electronic means and must 2922 be filed with the third-party administrator. The election to 2923 enrollparticipatein the investment planoptional programis 2924 irrevocable, except as provided in paragraph (e). 2925 1.b.If the employee files such election within the 2926 prescribed time period, enrollment in the investment plan is 2927optional program shall beeffective on the first day of 2928 employment. The employer and employeeretirementcontributions 2929 paid through the month of the employee plan change shall be 2930 transferred to the investment planoptional program, and, 2931 effective the first day of the next month, the employer and 2932 employee mustshallpay the applicable contributions based on 2933 the employee membership class in the planoptional program. 2934 2.c.AnAny suchemployee who fails to elect to enroll 2935participatein the investment planPublic Employee Optional2936Retirement Programwithin the prescribed time period is deemed 2937 to have elected to retain membership in the pension plandefined2938benefit program of the Florida RetirementSystem, and the 2939 employee’s option to elect to enrollparticipatein the 2940 investment planoptional programis forfeited. 2941 3. With respect to employees who become eligible to enroll 2942participatein the investment planPublic Employee Optional2943Retirement Programpursuant to s. 121.051(2)(c)3. or s. 2944 121.35(3)(i), theany suchemployee may elect to enroll 2945participatein the investment planPublic Employee Optional2946Retirement Programin lieu of retaining his or her participation 2947 in the State Community College System Optional Retirement 2948 Program or the State University System Optional Retirement 2949 Program. The election must be made in writing or by electronic 2950 means and must be filed with the third-party administrator. This 2951 election is irrevocable, except as provided in paragraph (e). 2952 Upon making such election, the employee shall be enrolled inas2953a participant ofthe investment planPublic Employee Optional2954RetirementProgram, the employee’s membership in the Florida 2955 Retirement System shall be governed by the provisions of this 2956 part, and the employee’s participation in the State Community 2957 College System Optional Retirement Program or the State 2958 University System Optional Retirement Program shall terminate. 2959 The employee’s enrollment in the investment plan isPublic2960Employee Optional Retirement Program shall beeffective on the 2961 first day of the month for which a full month’s of employee 2962 contributions areemployercontribution ismade to the 2963 investment planoptional program. 29644.For purposes of this paragraph,“state employer”means2965any agency, board, branch, commission, community college,2966department, institution, institution of higher education, or2967water management district of the state, which participates in2968the Florida Retirement System for the benefit of certain2969employees.2970(b)1.With respect to an eligible employee who is employed2971in a regularly established position on September 1, 2002, by a2972district school board employer:2973a.Any such employee may elect to participate in the Public2974Employee Optional Retirement Program in lieu of retaining his or2975her membership in the defined benefit program of the Florida2976Retirement System. The election must be made in writing or by2977electronic means and must be filed with the third-party2978administrator by November 30, or, in the case of an active2979employee who is on a leave of absence on July 1, 2002, by the2980last business day of the 5th month following the month the leave2981of absence concludes. This election is irrevocable, except as2982provided in paragraph (e). Upon making such election, the2983employee shall be enrolled as a participant of the Public2984Employee Optional Retirement Program, the employee’s membership2985in the Florida Retirement System shall be governed by the2986provisions of this part, and the employee’s membership in the2987defined benefit program of the Florida Retirement System shall2988terminate. The employee’s enrollment in the Public Employee2989Optional Retirement Program shall be effective the first day of2990the month for which a full month’s employer contribution is made2991to the optional program.2992b.Any such employee who fails to elect to participate in2993the Public Employee Optional Retirement Program within the2994prescribed time period is deemed to have elected to retain2995membership in the defined benefit program of the Florida2996Retirement System, and the employee’s option to elect to2997participate in the optional program is forfeited.29982.With respect to employees who become eligible to2999participate in the Public Employee Optional Retirement Program3000by reason of employment in a regularly established position with3001a district school board employer commencing after July 1, 2002:3002a.Any such employee shall, by default, be enrolled in the3003defined benefit retirement program of the Florida Retirement3004System at the commencement of employment, and may, by the last3005business day of the 5th month following the employee’s month of3006hire, elect to participate in the Public Employee Optional3007Retirement Program. The employee’s election must be made in3008writing or by electronic means and must be filed with the third3009party administrator. The election to participate in the optional3010program is irrevocable, except as provided in paragraph (e).3011b.If the employee files such election within the3012prescribed time period, enrollment in the optional program shall3013be effective on the first day of employment. The employer3014retirement contributions paid through the month of the employee3015plan change shall be transferred to the optional program, and,3016effective the first day of the next month, the employer shall3017pay the applicable contributions based on the employee3018membership class in the optional program.3019c.Any such employee who fails to elect to participate in3020the Public Employee Optional Retirement Program within the3021prescribed time period is deemed to have elected to retain3022membership in the defined benefit program of the Florida3023Retirement System, and the employee’s option to elect to3024participate in the optional program is forfeited.30253.For purposes of this paragraph,“district school board3026employer”means any district school board that participates in3027the Florida Retirement System for the benefit of certain3028employees, or a charter school or charter technical career3029center that participates in the Florida Retirement System as3030provided in s.121.051(2)(d).3031(c)1.With respect to an eligible employee who is employed3032in a regularly established position on December 1, 2002, by a3033local employer:3034a.Any such employee may elect to participate in the Public3035Employee Optional Retirement Program in lieu of retaining his or3036her membership in the defined benefit program of the Florida3037Retirement System. The election must be made in writing or by3038electronic means and must be filed with the third-party3039administrator by February 28, 2003, or, in the case of an active3040employee who is on a leave of absence on October 1, 2002, by the3041last business day of the 5th month following the month the leave3042of absence concludes. This election is irrevocable, except as3043provided in paragraph (e). Upon making such election, the3044employee shall be enrolled as a participant of the Public3045Employee Optional Retirement Program, the employee’s membership3046in the Florida Retirement System shall be governed by the3047provisions of this part, and the employee’s membership in the3048defined benefit program of the Florida Retirement System shall3049terminate. The employee’s enrollment in the Public Employee3050Optional Retirement Program shall be effective the first day of3051the month for which a full month’s employer contribution is made3052to the optional program.3053b.Any such employee who fails to elect to participate in3054the Public Employee Optional Retirement Program within the3055prescribed time period is deemed to have elected to retain3056membership in the defined benefit program of the Florida3057Retirement System, and the employee’s option to elect to3058participate in the optional program is forfeited.30592.With respect to employees who become eligible to3060participate in the Public Employee Optional Retirement Program3061by reason of employment in a regularly established position with3062a local employer commencing after October 1, 2002:3063a.Any such employee shall, by default, be enrolled in the3064defined benefit retirement program of the Florida Retirement3065System at the commencement of employment, and may, by the last3066business day of the 5th month following the employee’s month of3067hire, elect to participate in the Public Employee Optional3068Retirement Program. The employee’s election must be made in3069writing or by electronic means and must be filed with the third3070party administrator. The election to participate in the optional3071program is irrevocable, except as provided in paragraph (e).3072b.If the employee files such election within the3073prescribed time period, enrollment in the optional program shall3074be effective on the first day of employment. The employer3075retirement contributions paid through the month of the employee3076plan change shall be transferred to the optional program, and,3077effective the first day of the next month, the employer shall3078pay the applicable contributions based on the employee3079membership class in the optional program.3080c.Any such employee who fails to elect to participate in3081the Public Employee Optional Retirement Program within the3082prescribed time period is deemed to have elected to retain3083membership in the defined benefit program of the Florida3084Retirement System, and the employee’s option to elect to3085participate in the optional program is forfeited.30863.For purposes of this paragraph,“local employer”means3087any employer not included in paragraph (a) or paragraph (b).3088 (b)(d)Contributions available for self-direction by a 3089 memberparticipantwho has not selected one or more specific 3090 investment products shall be allocated as prescribed by the 3091 state board. The third-party administrator shall notify the 3092 memberany such participantat least quarterly that the member 3093participantshould take an affirmative action to make an asset 3094 allocation among the investment planoptional programproducts. 3095 (c) On or after July 1, 2011, a member of the pension plan 3096 who obtains a refund of employee contributions retains his or 3097 her prior plan choice upon return to employment in a regularly 3098 established position with a participating employer. 3099 (d) A member of the investment plan who takes a 3100 distribution of any contributions from his investment plan 3101 account is considered a retiree. Upon reemployment in a 3102 regularly established position with a participating employer, 3103 the member returns as a new hire and, if applicable, may 3104 participate in the Florida Retirement System. 3105 (e) After the period during which an eligible employee had 3106 the choice to elect the pension plandefined benefit programor 3107 the investment planoptional retirement program, or the month 3108 following the receipt of the eligible employee’s plan election, 3109 if sooner, the employee shall have one opportunity, at the 3110 employee’s discretion, to choose to move from the pension plan 3111defined benefit programto the investment planoptional3112retirement programor from the investment planoptional3113retirement programto the pension plandefined benefit program. 3114 Eligible employees may elect to move between Florida Retirement 3115 System programs only if they are earning service credit in an 3116 employer-employee relationship consistent with s. 3117 121.021(17)(b), excluding leaves of absence without pay. 3118 Effective July 1, 2005, such elections are effective on the 3119 first day of the month following the receipt of the election by 3120 the third-party administrator and are not subject to the 3121 requirements regarding an employer-employee relationship or 3122 receipt of contributions for the eligible employee in the 3123 effective month, except when the election is received by the 3124 third-party administrator. This paragraph is contingent upon 3125 receiving approval from the Internal Revenue Service to include 3126for includingthe choice described herein within the programs 3127 offered by the Florida Retirement System. 3128 1. If the employee chooses to move to the investment plan 3129optional retirement program, the applicable provisions of 3130 subsection (3)this section shallgovern the transfer. 3131 2. If the employee chooses to move to the pension plan 3132defined benefit program, the employee must transfer from his or 3133 her investment planoptional retirement programaccount, and 3134 from other employee moneys as necessary, a sum representing the 3135 present value of that employee’s accumulated benefit obligation 3136 immediately following the time of such movement, determined 3137 assuming that attained service equals the sum of service in the 3138 pension plandefined benefit programand service in the 3139 investment planoptional retirement program. Benefit 3140 commencement occurs on the first date the employee is eligible 3141 for unreduced benefits, using the discount rate and other 3142 relevant actuarial assumptions that were used to value the 3143 pensiondefined benefitplan liabilities in the most recent 3144 actuarial valuation. For any employee who, at the time of the 3145 second election, already maintains an accrued benefit amount in 3146 the pension plandefined benefit program, the then-present value 3147 of the accrued benefit shall be deemed part of the required 3148 transfer amount. The division shall ensure that the transfer sum 3149 is prepared using a formula and methodology certified by an 3150 enrolled actuary. A refund of any employee contributions or 3151 additional member payments made which exceed the employee 3152 contributions that would have accrued had the member remained in 3153 the pension plan and not transferred to the investment plan is 3154 not permitted. 3155 3. Notwithstanding subparagraph 2., an employee who chooses 3156 to move to the pension plandefined benefit program and who3157became eligible to participatein the optional retirement3158program by reason of employment in a regularly established3159position with a state employer after June 1, 2002; a district3160school board employer after September 1, 2002; or a local3161employer after December 1, 2002,must transfer from his or her 3162 investment planoptional retirement programaccount, and from 3163 other employee moneys as necessary, a sum representing the 3164 employee’s actuarial accrued liability. A refund of any employee 3165 contributions or additional participant payments made which 3166 exceed the employee contributions that would have accrued had 3167 the member remained in the pension plan and not transferred to 3168 the investment plan is not permitted. 3169 4. An employee’s ability to transfer from the pension plan 3170defined benefit programto the investment planoptional3171retirement programpursuant to paragraphs (a) and (b)(a)-(d), 3172 and the ability of a current employee to have an option to later 3173 transfer back into the pension plandefined benefit program3174 under subparagraph 2., shall be deemed a significant system 3175 amendment. Pursuant to s. 121.031(4), any resulting unfunded 3176 liability arising from actual original transfers from the 3177 pension plandefined benefit programto the investment plan 3178optional programmust be amortized within 30 plan years as a 3179 separate unfunded actuarial base independent of the reserve 3180 stabilization mechanism defined in s. 121.031(3)(f). For the 3181 first 25 years, a direct amortization payment may not be 3182 calculated for this base. During this 25-year period, the 3183 separate base shall be used to offset the impact of employees 3184 exercising their second program election under this paragraph. 3185 It is the intent of the Legislature that the actuarial funded 3186 status of the pension plandefined benefit programnot be 3187 affected by such second program elections in any significant 3188 manner, after due recognition of the separate unfunded actuarial 3189 base. Following the initial 25-year period, any remaining 3190 balance of the original separate base shall be amortized over 3191 the remaining 5 years of the required 30-year amortization 3192 period. 3193 5. If the employee chooses to transfer from the investment 3194 planoptional retirement programto the pension plandefined3195benefit programand retains an excess account balance in the 3196 investment planoptional programafter satisfying the buy-in 3197 requirements under this paragraph, the excess may not be 3198 distributed until the member retires from the pension plan 3199defined benefit program. The excess account balance may be 3200 rolled over to the pension plandefined benefit programand used 3201 to purchase service credit or upgrade creditable service in that 3202 program. 3203 (f) On or after July 1, 2011, a member of the pension plan 3204 who obtains a refund of employee contributions retains his or 3205 her prior plan choice upon return to employment in a regularly 3206 established position with a participating employer. 3207 (g) A member of the investment plan who takes a 3208 distribution of any contributions from his or her investment 3209 plan account is considered a retiree. Upon reemployment in a 3210 regularly established position with a participating employer, 3211 the member returns as a new hire and, if applicable, may 3212 participate in the Florida Retirement System. 3213 (5) CONTRIBUTIONS.— 3214 (a) TheEachemployer and employee shall make the required 3215 contributions to the investment plan based on a percentage of 3216 the employee’s gross monthly compensationcontribute on behalf3217of each participantin the Public Employee optional retirement3218Program, as provided in part III of this chapter. 3219 (b) Employee contributions shall be paid on a pretax basis, 3220 as provided in s. 121.71(2). 3221 (c) The state board, acting as plan fiduciary, shall ensure 3222 that all plan assets are held in a trust, pursuant to s. 401 of 3223 the Internal Revenue Code. The fiduciary shall ensure that said 3224 contributions are allocated as follows: 3225 1. The employer and employee portion earmarked for member 3226participantaccounts shall be used to purchase interests in the 3227 appropriate investment vehiclesfor the accounts of each3228participantas specified by the memberparticipant, or in 3229 accordance with paragraph (4)(b)(4)(d). 3230 2. The employer portion earmarked for administrative and 3231 educational expenses shall be transferred to the state board. 3232 3. The employer portion earmarked for disability benefits 3233 shall be transferred to the department. 3234 (d)(b)The third-party administrator isEmployers are3235 responsible for monitoring and notifying employers of the 3236participants regardingmaximum contribution levels allowed for 3237 memberspermittedunder the Internal Revenue Code. If a member 3238participantcontributes to any other tax-deferred plan, the 3239 memberhe or sheis responsible for ensuring that total 3240 contributions made to the investment planoptional programand 3241 to any other such plan do not exceed federally permitted 3242 maximums. 3243 (e)(c)The investment planPublic Employee Optional3244Retirement Programmay accept for deposit into member 3245participantaccounts contributions in the form of rollovers or 3246 direct trustee-to-trustee transfers by or on behalf of members 3247participants, reasonably determined by the state board to be 3248 eligible for rollover or transfer to the investment plan 3249optional retirement programpursuant to the Internal Revenue 3250 Code, if such contributions are made in accordance with rulesas3251may beadopted by the board. Such contributions mustshallbe 3252 accounted for in accordance withanyapplicable Internal Revenue 3253 Code requirements and rules of the state board. 3254 (6) VESTING REQUIREMENTS.— 3255 (a) A member is fully and immediately vested in all 3256 employee contributions paid to the investment plan as provided 3257 in s. 121.72(2), plus interest and earnings thereon and less 3258 investment fees and administrative charges. 3259 (b)(a)1. With respect to employer contributions paid on 3260 behalf of a member ofthe participant tothe investment plan 3261optional retirement program, plus interest and earnings thereon 3262 and less investment fees and administrative charges, a member 3263 who voluntarily elected to enroll in the investment plan before 3264 July 1, 2011, or an eligible employee initially enrolled in the 3265 Florida Retirement System before July 1, 2011, who has the 3266 option to voluntarily elect to enroll in the investment plan, 3267participantis vested after completing 1 work year with an 3268 employer, including any service while the employeeparticipant3269 was a member of the pension plandefined benefit programor an 3270 optional retirement program authorized under s. 121.051(2)(c), 3271ors. 121.055(6), or s. 121.35. 3272 2. With respect to employer contributions paid on behalf of 3273 the member of the investment plan, plus interest and earnings 3274 thereon and less investment fees and administrative charges, an 3275 employee initially enrolled in the Florida Retirement System on 3276 or after July 1, 2011, is vested according to the following 3277 schedule: 3278 a. Upon completion of 1 year of service.................20% 3279 b. Upon completion of 2 years of service................40% 3280 c. Upon completion of 3 years of service................60% 3281 d. Upon completion of 4 years of service................80% 3282 e. Upon completion of 5 or more years of service.......100% 3283 3284 Years of service includes any service completed while the 3285 employee was a member of the pension plan or an optional 3286 retirement program authorized under s. 121.051(2)(c), s. 3287 121.055(6), or s. 121.35. 3288 3.2.If the memberparticipantterminates employment before 3289 satisfying the vesting requirements, the nonvested accumulation 3290 must be transferred from the member’sparticipant’saccounts to 3291 the state board for deposit and investment by the state board in 3292 the suspense account created within the FloridaPublic Employee3293OptionalRetirement System Investment PlanProgramTrust Fund. 3294 If the terminated memberparticipantis reemployed as an 3295 eligible employee within 5 years, the state board shall transfer 3296 to the member’sparticipant’saccount any amount previously 3297 transferred from the member’sparticipant’saccounts to the 3298 suspense account, plus actual earnings on such amount while in 3299 the suspense account. 3300 (c)(b)1. With respect to amounts contributed by an employer 3301 and transferred from the pension plandefined benefit programto 3302 the investment planprogram, plus interest and earnings, and 3303 less investment fees and administrative charges, a member 3304participantshall be vested in the amount transferred upon 3305 meeting the service requirements for the member’sparticipant’s3306 membership class as set forth in s. 121.021(29). The third-party 3307 administrator shall account for such amounts for each member 3308participant. The division shall notify the memberparticipant3309 and the third-party administrator when the memberparticipant3310 has satisfied the vesting period for Florida Retirement System 3311 purposes. 3312 2. If the memberparticipantterminates employment before 3313 satisfying the vesting requirements, the nonvested employer 3314 accumulation must be transferred from the member’sparticipant’s3315 accounts to the state board for deposit and investment by the 3316 state board in the suspense account created within the Florida 3317Public Employee OptionalRetirement System Investment Plan 3318ProgramTrust Fund. If the terminated memberparticipantis 3319 reemployed as an eligible employee within 5 years, the state 3320 board shall transfer to the member’sparticipant’saccount any 3321 amount previously transferred from the member’sparticipant’s3322 accounts to the suspense account, plus the actual earnings on 3323 such amount while in the suspense account. 3324 (d)(c)Any nonvested accumulations transferred from a 3325 member’sparticipant’saccount to the state board’s suspense 3326 account, including any accompanying service credit, shall be 3327 forfeited by the memberparticipantif the memberparticipantis 3328 not reemployed as an eligible employee within 5 years after 3329 termination. 3330 (e) If the member elects to receive any of his or her 3331 vested employer or employee contributions upon termination of 3332 employment as defined in s. 121.021, except for a mandatory 3333 distribution of a de minimis account authorized by the state 3334 board or a minimum required distribution provided by s. 3335 401(a)(9) of the Internal Revenue Code, the employee shall 3336 forfeit all nonvested employer contributions and accompanying 3337 service credit paid on behalf of the employee to the investment 3338 plan. 3339 (7) BENEFITS.—Under the investment plan the normal 3340 retirement date is the date on which a member attains age 62 or 3341 completes 5 years of service, whichever occurs later. Plan 3342 benefits mustPublic Employee Optional Retirement program: 3343 (a)Benefits shallBe provided in accordance with s. 401(a) 3344 of the Internal Revenue Code. 3345 (b)Benefits shallAccrue in individual accounts that are 3346 member-directedparticipant-directed, portable, and funded by 3347 employer and employee contributions and earnings thereon. 3348 (c)Benefits shallBe payable in accordance withthe3349provisions ofs. 121.591. 3350 (8) ADMINISTRATION OF PLANPROGRAM.— 3351(a)The investment planoptional retirement programshall 3352 be administered by the state board and affected employers. The 3353 state board may require oaths, by affidavit or otherwise, and 3354 acknowledgments from persons in connection with the 3355 administration of its statutory duties and responsibilities for 3356 the planthis program. An oath, by affidavit or otherwise, may 3357 not be required of an employeeparticipantat the time of 3358 enrollment. For members enrolled before July 1, 2011, 3359 acknowledgment of an employee’s election to enrollparticipate3360 in the plan mayprogram shallbe no greater than necessary to 3361 confirm the employee’s election. The state board shall adopt 3362 rules to carry out its statutory duties with respect to 3363 administering the investment planoptional retirement program, 3364 includingestablishingthe roles and responsibilities of 3365 affected state, local government, and education-related 3366 employers, the state board, the department, and third-party 3367 contractors. The department shall adopt rules necessary to 3368 administer the investment planoptional programin coordination 3369 with the pension plandefined benefit programand the disability 3370 benefits available under the investment planoptional program. 3371 (a)(b)1. The state board shall select and contract with a 3372onethird-party administrator to provide administrative services 3373 if those services cannot be competitively and contractually 3374 provided by the divisionof Retirement within the Department of3375Management Services. With the approval of the state board, the 3376 third-party administrator may subcontractwith other3377organizations or individualsto provide components of the 3378 administrative services. As a cost of administration, the state 3379 board may compensateanysuch contractor for its services, in 3380 accordance with the terms of the contract, as is deemed 3381 necessary or proper by the board. The third-party administrator 3382 may not be an approved provider or be affiliated with an 3383 approved provider. 3384 2. These administrative services may include, but are not 3385 limited to, enrollment of eligible employees, collection of 3386 employer and employee contributions, disbursement ofsuch3387 contributions to approved providers in accordance with the 3388 allocation directions of membersparticipants; services relating 3389 to consolidated billing; individual and collective recordkeeping 3390 and accounting; asset purchase, control, and safekeeping; and 3391 direct disbursement of funds to and from the third-party 3392 administrator, the division, the state board, employers, plan 3393 membersparticipants, approved providers, and beneficiaries. 3394 This section does not prevent or prohibit a bundled provider 3395 from providing any administrative or customer service, including 3396 accounting and administration of individual memberparticipant3397 benefits and contributions; individual memberparticipant3398 recordkeeping; asset purchase, control, and safekeeping; direct 3399 execution of the member’sparticipant’sinstructions as to asset 3400 and contribution allocation; calculation of daily net asset 3401 values; direct access to memberparticipantaccount information; 3402 or periodic reporting to membersparticipants, at least 3403 quarterly, on account balances and transactions, if these 3404 services are authorized by the state board as part of the 3405 contract. 3406 (b)1.3.The state board shall select and contract with one 3407 or more organizations to provide educational services. With 3408 approval of the state board, the organizations may subcontract 3409with other organizations or individualsto provide components of 3410 the educational services. As a cost of administration, the state 3411 board may compensate any such contractor for its services in 3412 accordance with the terms of the contract, as is deemed 3413 necessary or proper by the board. The education organization may 3414 not be an approved provider or be affiliated with an approved 3415 provider. 3416 2.4.Educational services shall be designed by the state 3417 board and department to assist employers, eligible employees, 3418 membersparticipants, and beneficiaries in order to maintain 3419 compliance with United States Department of Labor regulations 3420 under s. 404(c) of the Employee Retirement Income Security Act 3421 of 1974,andto assist employees in understanding theirchoice3422of defined benefit or defined contributionretirement program, 3423 and, if applicable, the choice between the pension plan and the 3424 investment planalternatives. Educational services include, but 3425 are not limited to, disseminating educational materials; 3426 providing retirement planning education; explaining the pension 3427differences between the defined benefit retirementplan and the 3428 investmentdefined contribution retirementplan; and offering 3429 financial planning guidance on matters such as investment 3430 diversification, investment risks, investment costs, and asset 3431 allocation. An approved provider may also provide educational 3432 information, including retirement planning and investment 3433 allocation information concerning its products and services. 3434 (c)1. In evaluating and selecting a third-party 3435 administrator, the state board shall establish criteria for 3436 evaluatingunder which it shall considerthe relative 3437 capabilities and qualifications of each proposed administrator. 3438 In developing such criteria, the state board shall consider: 3439 a. The administrator’s demonstrated experience in providing 3440 administrative services to public or private sector retirement 3441 systems. 3442 b. The administrator’s demonstrated experience in providing 3443 daily valued recordkeeping for investmentto defined3444contributionplans. 3445 c. The administrator’s ability and willingness to 3446 coordinate its activities withthe Florida Retirement System3447 employers, the state board, and the division, and to supply to 3448 such employers, the board, and the division the information and 3449 data they require, including, but not limited to, monthly 3450 management reports, quarterly memberparticipantreports, and ad 3451 hoc reports requested by the department or state board. 3452 d. The cost-effectiveness and levels of the administrative 3453 services provided. 3454 e. The administrator’s ability to interact with the members 3455participants, the employers, the state board, the division, and 3456 the providers; the means by which membersparticipantsmay 3457 access account information, direct investment of contributions, 3458 make changes to their accounts, transfer moneys between 3459 available investment vehicles, and transfer moneys between 3460 investment products; and any fees that apply to such activities. 3461 f. Any other factor deemed necessary by theTrustees of the3462 state boardof Administration. 3463 2. In evaluating and selecting an educational provider, the 3464 state board shall establish criteria under which it shall 3465 consider the relative capabilities and qualifications of each 3466 proposed educational provider. In developing such criteria, the 3467 board shall consider: 3468 a. Demonstrated experience in providing educational 3469 services to public or private sector retirement systems. 3470 b. Ability and willingness to coordinate its activities 3471 with theFlorida Retirement Systememployers, the state board, 3472 and the division, and to supply to such employers, the board, 3473 and the division the information and data they require, 3474 including, but not limited to, reports on educational contacts. 3475 c. The cost-effectiveness and levels of the educational 3476 services provided. 3477 d. Ability to provide educational services via different 3478 media, including, but not limited to, the Internet, personal 3479 contact, seminars, brochures, and newsletters. 3480 e. Any other factor deemed necessary by theTrustees of the3481 state boardof Administration. 3482 3. The establishment of the criteria shall be solely within 3483 the discretion of the state board. 3484 (d) The state board shall develop the form and content of 3485 any contracts to be offered under the investment planPublic3486Employee Optional Retirement Program. In developing theits3487 contracts, the state board shallmustconsider: 3488 1. The nature and extent of the rights and benefits to be 3489 afforded in relation to therequiredcontributions required 3490 under the planprogram. 3491 2. The suitability of the rights and benefits providedto3492be affordedand the interests of employers in the recruitment 3493 and retention of eligible employees. 3494 (e)1. The state board may contractwith any consultantfor 3495 professional services, including legal, consulting, accounting, 3496 and actuarial services, deemed necessary to implement and 3497 administer the investment planoptional program bythe Trustees3498of the state board of Administration. The state board may enter 3499 into a contract with one or more vendors to provide low-cost 3500 investment advice to membersparticipants, supplemental to 3501 education provided by the third-party administrator. All fees 3502 underanysuch contract shall be paid by those members 3503participantswho choose to use the services of the vendor. 3504 2. The department may contractwith consultantsfor 3505 professional services, including legal, consulting, accounting, 3506 and actuarial services, deemed necessary to implement and 3507 administer the investment planoptional programin coordination 3508 with the pension plandefined benefit program of the Florida3509Retirement System. The department, in coordination with the 3510 state board, may enter into a contract with the third-party 3511 administrator in order to coordinate services common to the 3512 various programs within the Florida Retirement System. 3513 (f) The third-party administrator mayshallnot receive 3514 direct or indirect compensation from an approved provider, 3515 except as specifically provided for in the contract with the 3516 state board. 3517 (g) The state board shall receive and resolve member 3518participantcomplaints against the investment planprogram, the 3519 third-party administrator, or any planprogramvendor or 3520 provider; shall resolve any conflict between the third-party 3521 administrator and an approved provider if such conflict 3522 threatens the implementation or administration of the plan 3523programor the quality of services to employees; and may resolve 3524 any other conflicts. The third-party administrator shall retain 3525 all memberparticipantrecords for at least 5 years for use in 3526 resolving any memberparticipantconflicts. The state board, the 3527 third-party administrator, or a provider is not required to 3528 produce documentation or an audio recording to justify action 3529 taken with regard to a memberparticipantif the action occurred 3530 5 or more years before the complaint is submitted to the state 3531 board. It is presumed that all action taken 5 or more years 3532 before the complaint is submitted was taken at the request of 3533 the memberparticipantand with the member’sparticipant’sfull 3534 knowledge and consent. To overcome this presumption, the member 3535participantmust present documentary evidence or an audio 3536 recording demonstrating otherwise. 3537 (9) INVESTMENT OPTIONS OR PRODUCTS; PERFORMANCE REVIEW.— 3538 (a) The state board shall develop policy and procedures for 3539 selecting, evaluating, and monitoring the performance of 3540 approved providers and investment productsto which employees3541may direct retirement contributionsunder the investment plan 3542program. In accordance with such policy and procedures, the 3543 state board shall designate and contract for a number of 3544 investment products as determined by the state board. The state 3545 board shall also select one or more bundled providers, each of 3546 whichwhommay offer multiple investment options and related 3547 services, ifwhensuchanapproach is determined by the state 3548 board to provideaffordvalue to the membersparticipants3549 otherwise not available through individual investment products. 3550 Each approved bundled provider may offer investment options that 3551 provide membersparticipantswith the opportunity to invest in 3552 each of the following asset classes, to be composed of 3553 individual options that representeithera single asset class or 3554 a combination thereof: money markets, United States fixed 3555 income, United States equities, and foreign stock. The state 3556 board shall review and manage all educational materials, 3557 contract terms, fee schedules, and other aspects oftheapproved 3558 provider relationships to ensure that no provider is unduly 3559 favored or penalized by virtue of its status within the 3560 investment plan. 3561 (b) The state board shall consider investment options or 3562 products it considers appropriate to give membersparticipants3563 the opportunity to accumulate retirement benefits, subject to 3564 the following: 3565 1. The investment planPublic Employee Optional Retirement3566Programmust offer a diversified mix of low-cost investment 3567 products that span the risk-return spectrum and may include a 3568 guaranteed account as well as investment products, such as 3569 individually allocated guaranteed and variable annuities, which 3570 meet the requirements of this subsection and combine the ability 3571 to accumulate investment returns with the option of receiving 3572 lifetime income consistent with the long-term retirement 3573 security of a pension plan and similar to the lifetime-income 3574 benefit provided by the Florida Retirement System. 3575 2. Investment options or products offered bythe group of3576 approved providers may include mutual funds, group annuity 3577 contracts, individual retirement annuities, interests in trusts, 3578 collective trusts, separate accounts, and other such financial 3579 instruments, andmay includeproducts that give members 3580participantsthe option of committing their contributions for an 3581 extended time period in an effort to obtain returns higher than 3582 those that could be obtained from investment products offering 3583 full liquidity. 3584 3. The state board mayshallnot contract with aany3585 provider that imposes a front-end, back-end, contingent, or 3586 deferred sales charge, or any other fee that limits or restricts 3587 the ability of membersparticipantsto select any investment 3588 product available in the investment planoptional program. This 3589 prohibition does not apply to fees or charges that are imposed 3590 on withdrawals from products that give membersparticipantsthe 3591 option of committingtheircontributions for an extended time 3592 period in an effort to obtain returns higher than those that 3593 could be obtained from investment products offering full 3594 liquidity, provided that the productin question, net of all 3595 fees and charges, produces material benefits relative to other 3596 comparable products in the planprogramoffering full liquidity. 3597 4. Fees or charges for insurance features, such as 3598 mortality and expense-risk charges, must be reasonable relative 3599 to the benefits provided. 3600 (c) In evaluating and selecting approved providers and 3601 products, the state board shall establish criteria for 3602 evaluatingunder which it shall considerthe relative 3603 capabilities and qualifications of each proposed provider 3604 company and product. In developing such criteria, the state 3605 board shall consider the following to the extent such factors 3606 may be applied in connection with investment products, services, 3607 or providers: 3608 1. Experience in the United States providing retirement 3609 products and related financial services under investmentdefined3610contribution retirementplans. 3611 2. Financial strength and stability aswhich shall be3612 evidenced by the highest ratings assigned by nationally 3613 recognized rating services when comparing proposed providers 3614 that are so rated. 3615 3. Intrastate and interstate portability of the product 3616 offered, including early withdrawal options. 3617 4. Compliance with the Internal Revenue Code. 3618 5. The cost-effectiveness of the product provided and the 3619 levels of service supporting the product relative to its 3620 benefits and its characteristics, including, without limitation,3621 the level of risk borne by the provider. 3622 6. The provider company’s ability and willingness to 3623 coordinate its activities with Florida Retirement System 3624 employers, the department, and the state board, and to supplyto3625 thesuchemployers, the department, and the state board with the 3626 information and data they require. 3627 7. The methods available to membersparticipantsto 3628 interact with the provider company; the means by which members 3629participantsmay access account information, direct investment 3630 of contributions, make changes to their accounts, transfer 3631 moneys between available investment vehicles, and transfer 3632 moneys between provider companies; and any fees that apply to 3633 such activities. 3634 8. The provider company’s policies with respect to the 3635 transfer of individual account balances, contributions, and 3636 earnings thereon, both internally among investment products 3637 offered by the provider company and externally between approved 3638 providers, as well as any fees, charges, reductions, or 3639 penalties that may be applied. 3640 9. An evaluation of specific investment products, taking 3641 into account each product’s experience in meeting its investment 3642 return objectives net of all related fees, expenses, and 3643 charges, including, but not limited to, investment management 3644 fees, loads, distribution and marketing fees, custody fees, 3645 recordkeeping fees, education fees, annuity expenses, and 3646 consulting fees. 3647 10. Organizational factors, including, but not limited to, 3648 financial solvency, organizational depth, and experience in 3649 providing institutional and retail investment services. 3650 (d)By March 1, 2010,The state board shall identify and 3651 offer at least one terror-free investment product that allocates 3652 its funds among securities not subject to divestiture as 3653 provided in s. 215.473 if the investment product is deemed by 3654 the state board to be consistent with prudent investor 3655 standards. No person may bring a civil, criminal, or 3656 administrative action against an approved provider; the state 3657 board; or any employee, officer, director, or trustee of such 3658 provider based upon the divestiture of any security or the 3659 offering of a terror-free investment product as specified in 3660 this paragraph. 3661 (e) As a condition of offering ananyinvestment option or 3662 product in the investment planoptional retirement program, the 3663 approved provider must agree to make the investment product or 3664 service available under the most beneficial terms offered to any 3665 other customer, subject to approval by theTrustees of thestate 3666 boardof Administration. 3667 (f) The state board shall regularly review the performance 3668 of each approved provider and product and related organizational 3669 factors to ensure continued compliance with established 3670 selection criteria and with board policy and procedures. 3671 Providers and products may be terminated subject to contract 3672 provisions. The state board shall adopt procedures to transfer 3673 account balances from terminated products or providers to other 3674 products or providers in the investment planoptional program. 3675 (g)1. An approved provider shall comply with all applicable 3676 federal and state securities and insurance laws and regulations 3677applicable to the provider, as well as with the applicable rules 3678 and guidelines of the National Association of Securities Dealers 3679 which govern the ethical marketing of investment products. In 3680 furtherance of this mandate, an approved provider must agree in 3681 its contract with the state board to establish and maintain a 3682 compliance education and monitoring system to supervise the 3683 activities of all personnel who directly communicate with 3684 individual membersparticipantsand recommend investment 3685 products, which system is consistent with rules of the National 3686 Association of Securities Dealers. 3687 2. Approved provider personnel who directly communicate 3688 with individual membersparticipantsand who recommend 3689 investment products shall make an independent and unbiased 3690 determination as to whether an investment product is suitable 3691 for a particular memberparticipant. 3692 3. The state board shall develop procedures to receive and 3693 resolve memberparticipantcomplaints against a provider or 3694 approved provider personnel, and, ifwhenappropriate, refer 3695 such complaints to the appropriate agency. 3696 4. Approved providers may not sell or in any way distribute 3697 any customer list or memberparticipantidentification 3698 information generated through their offering of products or 3699 services through the investment planoptional retirement3700program. 3701 (10) EDUCATION COMPONENT.— 3702 (a) The state board, in coordination with the department, 3703 shall provideforan education component for eligible employees 3704system membersin a manner consistent withthe provisions of3705 this section. The education component must be available to 3706 eligible employees at least 90 days beforeprior tothe 3707 beginning date of the election period for the employees of the 3708 respective types of employers. 3709 (b) The education component must provide eligible employees 3710system memberswith impartial and balanced information about 3711 plan choices. The education component must involve multimedia 3712 formats. PlanProgramcomparisons must, to the greatest extent 3713 possible, be based upon the retirement income that different 3714 retirement programs may provide to the memberparticipant. The 3715 state board shall monitor the performance of the contract for 3716 the education component to ensure that the program is conducted 3717 in accordance with the contract, applicable law, and the rules 3718 of the board. 3719 (c) The state board, in coordination with the department, 3720 shall provide for an initial and ongoing transfer education 3721 component to provide system members with information necessary 3722 to make informed plan choice decisions. The transfer education 3723 component must include, but is not limited to, information on: 3724 1. The amount of money available to a member to transfer to 3725 the investment plandefined contribution program. 3726 2. The features of and differences between the pension plan 3727defined benefit programand the investment plandefined3728contribution program, both generally and specifically, as those 3729 differences may affect the member. 3730 3. The expected benefit available if the member were to 3731 retire under each of the retirement programs, based on 3732 appropriate alternative sets of assumptions. 3733 4. The rate of return from investments in the investment 3734 plandefined contribution programand the period of time over 3735 which such rate of return must be achieved to equal or exceed 3736 the expected monthly benefit payable to the member under the 3737 pension plandefined benefit program. 3738 5. The historical rates of return for the investment 3739 alternatives available in the investment plandefined3740contribution programs. 3741 6. The benefits and historical rates of return on 3742 investments available in a typical deferred compensation plan or 3743 a typical plan under s. 403(b) of the Internal Revenue Code for 3744 which the employee may be eligible. 3745 7. The program choices available to employees of the State 3746 University System and the comparative benefits of each available 3747 program, if applicable. 3748 8. Payout options available in each of the retirement 3749 programs. 3750 (d) An ongoing education and communication component must 3751 provide eligible employeessystem memberswith information 3752 necessary to make informed decisions about choices within their 3753 retirement programof membershipand in preparation for 3754 retirement. The component must include, but is not limited to, 3755 information concerning: 3756 1. Rights and conditions of membership. 3757 2. Benefit features within the program, options, and 3758 effects of certain decisions. 3759 3. Coordination of contributions and benefits with a 3760 deferred compensation plan under s. 457 or a plan under s. 3761 403(b) of the Internal Revenue Code. 3762 4. Significant program changes. 3763 5. Contribution rates and program funding status. 3764 6. Planning for retirement. 3765 (e) Descriptive materials must be prepared under the 3766 assumption that the employee is an unsophisticated investor, and 3767 all materials used in the education component must be approved 3768 by the state board beforeprior todissemination. 3769 (f) The state board and the department shall also establish 3770 a communication component to provide program information to 3771 participating employers and the employers’ personnel and payroll 3772 officers and to explain their respective responsibilities in 3773 conjunction with the retirement programs. 3774 (g) Funding for education of new employees may reflect 3775 administrative costs to the investment planoptional programand 3776 the pension plandefined benefit program. 3777 (h) Pursuant to paragraph (8)(a), all Florida Retirement 3778 System employers have an obligation to regularly communicate the 3779 existence of the two Florida Retirement System plans and the 3780 plan choice in the natural course of administering their 3781 personnel functions, using the educational materials supplied by 3782 the state board and the departmentof Management Services. 3783 (11) MEMBERPARTICIPANTINFORMATION REQUIREMENTS.—The state 3784 board shall ensure that each memberparticipantis provided a 3785 quarterly statement that accounts for employer and employeethe3786 contributions made on behalf of the membersuch participant; the 3787 interest and investment earnings thereon; and any fees, 3788 penalties, or other deductions that applythereto. At a minimum, 3789 such statements must: 3790 (a) Indicate the member’sparticipant’sinvestment options. 3791 (b) State the market value of the account at the close of 3792 the current quarter and previous quarter. 3793 (c) Show account gains and lossesfor the periodand 3794 changes in account accumulation unit values for the quarter 3795period. 3796 (d) Itemize account contributions for the quarter. 3797 (e) Indicate any account changes due to adjustment of 3798 contribution levels, reallocation of contributions, balance 3799 transfers, or withdrawals. 3800 (f) Set forth any fees, charges, penalties, and deductions 3801 that apply to the account. 3802 (g) Indicate the amount of the account in which the member 3803participantis fully vested and the amount of the account in 3804 which the memberparticipantis not vested. 3805 (h) Indicate each investment product’s performance relative 3806 to an appropriate market benchmark. 3807 3808 The third-party administrator shall provide quarterly and annual 3809 summary reports to the state board and any other reports 3810 requested by the department or the board. In any solicitation or 3811 offer of coverage under the investment planan optional3812retirement program, a provider company shall be governed by the 3813 contract readability provisions of s. 627.4145, notwithstanding 3814 s. 627.4145(6)(c). In addition, all descriptive materials must 3815 be prepared under the assumption that the memberparticipantis 3816 an unsophisticated investor. Provider companies must maintain an 3817 internal system of quality assurance, have proven functional 3818 systems that are date-calculation compliant, and be subject to a 3819 due-diligence inquiry that proves their capacity and fitness to 3820 undertake service responsibilities. 3821 (12) ADVISORY COUNCIL TO PROVIDE ADVICE AND ASSISTANCE.—The 3822 Investment Advisory Council, created pursuant to s. 215.444, 3823 shall assist the state board in implementing and administering 3824 the investment planPublic Employee Optional Retirement Program. 3825 TheInvestment Advisorycouncil, created pursuant to s.215.444,3826 shall review the state board’s initial recommendations regarding 3827 the criteria to be used in selecting and evaluating approved 3828 providers and investment products. The council may provide 3829 comments on the recommendations to the board within 45 days 3830 after receiving the initial recommendations. The state board 3831 shall make the final determination as to whether any investment 3832 provider or product, any contractor, or any and all contract 3833 provisions areshall beapproved for the investment plan 3834program. 3835 (13) FEDERAL REQUIREMENTS.— 3836 (a)Provisions ofThis section shall be construed, and the 3837 investment planPublic Employee Optional Retirement Program3838 shall be administered, so as to comply with the Internal Revenue 3839 Code, 26 U.S.C., and specifically with plan qualification 3840 requirements imposed on governmental plans under s. 401(a) of 3841 the Internal Revenue Code. The state board mayshall have the3842power and authority toadopt rules reasonably necessary to 3843 establish or maintain the qualified status of the investment 3844 planOptional Retirement Programunder the Internal Revenue Code 3845 and to implement and administer the planOptional Retirement3846Programin compliance with the Internal Revenue Code and this 3847 part;providedhowever,thatthe board mayshallnothave the3848authority toadopt any rule which makes a substantive change to 3849 the investment planOptional Retirement Programas designed by 3850 this part. 3851 (b) Any section or provision of this chapter which is 3852 susceptible to more than one construction shallmustbe 3853 interpreted in favor of the construction most likely to satisfy 3854 requirements imposed by s. 401(a) of the Internal Revenue Code. 3855 (c) Employer and employee contributions payable under this 3856 section for any limitation year may not exceed the maximum 3857 amount allowable for qualified defined contributionpension3858 plans under applicable provisions of the Internal Revenue Code. 3859 If an employee who is enrolledwho has elected to participatein 3860 the investment plan enrollsPublic Employee Optional Retirement3861Programparticipatesin any other plan that is maintained by the 3862 participating employer, benefits that accrue under the 3863 investment plan arePublic Employee Optional Retirement Program3864shallbeconsidered primary for any aggregate limitation 3865 applicable under s. 415 of the Internal Revenue Code. 3866 (14) INVESTMENT POLICY STATEMENT.— 3867 (a) Investment products and approved providers selected for 3868 the investment planPublic Employee Optional Retirement Program3869 mustshallconform with the FloridaPublic Employee Optional3870 Retirement SystemProgramInvestment Plan Policy Statement, 3871 herein referred to as the “statement,” as developed and approved 3872 by theTrustees of thestate boardof Administration. The 3873 statement must include, among other items, the investment 3874 objectives of the investment planPublic Employee Optional3875Retirement Program, manager selection and monitoring guidelines, 3876 and performance measurement criteria. As required from time to 3877 time, the executive director of the state board may present 3878 recommended changes in the statement to the board for approval. 3879 (b) BeforePrior topresenting the statement, or any 3880 recommended changesthereto, to the state board, the executive 3881 director of the board shall present such statement or changes to 3882 the Investment Advisory Council for review. The council shall 3883 present the results of its review to the board prior to the 3884 board’s final approval of the statement or changes in the 3885 statement. 3886 (15) STATEMENT OF FIDUCIARY STANDARDS AND 3887 RESPONSIBILITIES.— 3888 (a) Investment of investment planoptional defined3889contribution retirement planassets shall be made for the sole 3890 interest and exclusive purpose of providing benefits to plan 3891 membersparticipantsand beneficiaries and defraying reasonable 3892 expenses of administering the plan. The program’s assets shall 3893are tobe invested,on behalf of the membersprogram3894participants,with the care, skill, and diligence that a prudent 3895 person acting in a like manner would undertake. The performance 3896 of the investment duties set forth in this paragraph shall 3897 comply with the fiduciary standards set forth in the Employee 3898 Retirement Income Security Act of 1974 at 29 U.S.C. s. 3899 1104(a)(1)(A)-(C). In case of conflict with other provisions of 3900 law authorizing investments, the investment and fiduciary 3901 standards set forth in this subsection shall prevail. 3902 (b) If a memberparticipantor beneficiary of the 3903 investment planPublic Employee Optional Retirement program3904 exercises control over the assets in his or her account, as 3905 determined by reference to regulations of the United States 3906 Department of Labor under s. 404(c) of the Employee Retirement 3907 Income Security Act of 1974 and all applicable laws governing 3908 the operation of the program, anoprogram fiduciary is not 3909shall beliable for any loss to a member’sparticipant’sor 3910 beneficiary’s account which results from the member’ssuch3911participant’sor beneficiary’s exercise of control. 3912 (c) Subparagraph (8)(b)2.(8)(b)4.and paragraph(15)(b) 3913 incorporate the federal law concept of memberparticipant3914 control, established by regulations of the United States 3915 Department of Labor under s. 404(c) of the Employee Retirement 3916 Income Security Act of 1974 (ERISA). The purpose of this 3917 paragraph is to assist employers and the state boardof3918Administrationin maintaining compliance with s. 404(c), while 3919 avoiding unnecessary costs and eroding memberparticipant3920 benefits under the investment planPublic Employee Optional3921Retirement program. Pursuant to 29 C.F.R. s. 2550.404c 3922 1(b)(2)(i)(B)(1)(viii), the state boardof Administrationor its 3923 designated agents shall deliver to membersparticipantsof the 3924 investment planPublic Employee Optional Retirement programa 3925 copy of the prospectus most recently provided to the plan, and, 3926 pursuant to 29 C.F.R. s. 2550.404c-1(b)(2)(i)(B)(2)(ii), shall 3927 provide such membersparticipantsan opportunity to obtain this 3928 information, except that: 3929 1. The requirement to deliver a prospectus shall bedeemed3930to besatisfied by delivery of a fund profile or summary profile 3931 that contains the information that would be included in a 3932 summary prospectus as described by Rule 498 under the Securities 3933 Act of 1933, 17 C.F.R. s. 230.498. IfWhenthe transaction fees, 3934 expense information, or other information provided by a mutual 3935 fund in the prospectus does not reflect terms negotiated by the 3936 state boardof Administrationor its designated agents, the 3937aforementionedrequirement isdeemed to besatisfied by delivery 3938 of a separate document described by Rule 498 substituting 3939 accurate information; and 3940 2. Delivery shall bedeemed to have beeneffected if 3941 delivery is through electronic means and the following standards 3942 are satisfied: 3943 a. Electronically-delivered documents are prepared and 3944 provided consistent with style, format, and content requirements 3945 applicable to printed documents; 3946 b. Each memberparticipantis provided timely and adequate 3947 notice of the documents that are to be delivered and their 3948 significance thereof, and of the member’sparticipant’sright to 3949 obtain a paper copy of such documents free of charge; 3950 c.(I)MembersParticipantshave adequate access to the 3951 electronic documents, at locations such as their worksites or 3952 public facilities, and have the ability to convert the documents 3953 to paper free of charge by the state boardof Administration, 3954 and the board or its designated agents take appropriate and 3955 reasonable measures to ensure that the system for furnishing 3956 electronic documents results in actual receipt., or3957(II)MembersParticipantshave provided consent to receive 3958 information in electronic format, which consent may be revoked; 3959 and 3960 d. The state boardof Administration, or its designated 3961 agent, actually provides paper copies of the documents free of 3962 charge, upon request. 3963 (16) DISABILITY BENEFITS.—For any memberparticipantof the 3964 investment planoptional retirement programwho becomes totally 3965 and permanently disabled, benefits mustshallbe paid in 3966 accordance withthe provisions ofs. 121.591. 3967 (17) SOCIAL SECURITY COVERAGE.—Social security coverage 3968 shall be provided for all officers and employees who become 3969 membersparticipantsof the investment planoptional program. 3970 Any modification of the present agreement with the Social 3971 Security Administration, or referendum required under the Social 3972 Security Act, for the purpose of providing social security 3973 coverage for any member shall be requested by the state agency 3974 in compliance with the applicable provisions of the Social 3975 Security Act governing such coverage. However, retroactive 3976 social security coverage for service beforeprior toDecember 1, 3977 1970, with the employer mayshallnot be provided for any member 3978 who was not covered under the agreement as of November 30, 1970. 3979 (18) RETIREE HEALTH INSURANCE SUBSIDY.—All officers and 3980 employees who are membersparticipantsof the investment plan 3981 areoptional program shall beeligible to receive the retiree 3982 health insurance subsidy, subject tothe provisions ofs. 3983 112.363. 3984 (19) MEMBERPARTICIPANTRECORDS.—Personal identifying 3985 information of a member ofparticipant inthe investment plan 3986Public Employee Optional Retirement Programcontained in Florida 3987 Retirement System records held by the state boardof3988Administrationor the departmentof Management Servicesis 3989 exempt from s. 119.07(1) and s. 24(a), Art. I of the State 3990 Constitution. 3991 (20) DESIGNATION OF BENEFICIARIES.— 3992 (a) Each memberparticipantmay, by electronic means or on 3993 a form provided for that purpose, signed and filed with the 3994 third-party administrator, designate a choice of one or more 3995 persons, named sequentially or jointly, as his or her 3996 beneficiary for receivingwho shall receivethe benefits, if 3997 any, which may be payable pursuant to this chapter in the event 3998 of the member’sparticipant’sdeath. If no beneficiary is named 3999 in this manner, or if no beneficiary designated by the member 4000participantsurvives the memberparticipant, the beneficiary 4001 shall be the spouse of the deceased, if living. If the member’s 4002participant’sspouse is not alive at the time of the 4003 beneficiary’shis or herdeath, the beneficiary shall be the 4004 member’s living childrenof the participant. If no children 4005 survive, the beneficiary shall be the member’sparticipant’s4006 father or mother, if living; otherwise, the beneficiary shall be 4007 the member’sparticipant’sestate. The beneficiary most recently 4008 designated by a memberparticipant ona form or letter filed4009with the third-party administratorshall be the beneficiary 4010 entitled to any benefits payable at the time of the member’s 4011participant’sdeath. HoweverNotwithstanding any other provision4012in this subsection to the contrary, if a memberfor a4013participant whodies beforeprior tohis or her effective date 4014 of retirement, the spouse at the time of death shall be the 4015 member’sparticipant’sbeneficiary unless the membersuch4016participantdesignates a different beneficiaryas provided in4017this subsectionsubsequent to the member’sparticipant’smost 4018 recent marriage. 4019 (b) If a memberparticipantdesignates a primary 4020 beneficiary other than the member’sparticipant’sspouse, the 4021 member’sparticipant’sspouse must sign the beneficiary 4022 designation form to acknowledge the designation. This 4023 requirement does not apply to the designation of one or more 4024 contingent beneficiaries to receive benefits remaining upon the 4025 death of the primary beneficiary or beneficiaries. 4026 (c) Notwithstanding the member’sparticipant’sdesignation 4027 of benefits to be paid through a trust to a beneficiary that is 4028 a natural person,andnotwithstandingthe provisions of the 4029 trust, benefits mustshallbe paid directly to the beneficiary 4030 if the person is no longer a minor or an incapacitated person as 4031 defined in s. 744.102. 4032 (21) PARTICIPATION BY TERMINATED DEFERRED RETIREMENT OPTION 4033 PROGRAM PARTICIPANTS.—Notwithstanding any other provision of law 4034to the contrary, members participatingparticipantsin the 4035 Deferred Retirement Option Program offered under part I may, 4036 after conclusion of their participation in the program, elect to 4037 roll over or authorize a direct trustee-to-trustee transfer to 4038 an account under the investment planPublic Employee Optional4039Retirement Programof their Deferred Retirement Option Program 4040 proceeds distributed as provided under s. 121.091(13)(c)5. The 4041 transaction must constitute an “eligible rollover distribution” 4042 within the meaning of s. 402(c)(4) of the Internal Revenue Code. 4043 (a) The investment planPublic Employee Optional Retirement4044Programmay accept such amounts for deposit into member 4045participantaccounts as provided in paragraph (5)(e)(5)(c). 4046 (b) The affected memberparticipantshall direct the 4047 investment of his or her investment account; however, unless he 4048 or she becomes a renewed member of the Florida Retirement System 4049 under s. 121.122 and elects to enrollparticipatein the 4050 investment planPublic Employee Optional Retirement program, 4051 employer and employee contributions may not be made to the 4052 member’sparticipant’saccount as provided under paragraph 4053 (5)(a). 4054 (c) The state board or the department is not responsible 4055 for locating those persons who may be eligible to enroll 4056participatein the investment planPublic Employee Optional4057Retirement Programunder this subsection. 4058 (22) CREDIT FOR MILITARY SERVICE.—Creditable service of any 4059 member of the investment program includesPublic Employee4060Optional Retirement Program shall includemilitary service in 4061 the Armed Forces of the United States as provided inthe4062conditions outlined ins. 121.111(1). 4063 Section 23. Section 121.4502, Florida Statutes, is amended 4064 to read: 4065 121.4502 FloridaPublic Employee OptionalRetirement System 4066 Investment PlanProgramTrust Fund.— 4067 (1) The FloridaPublic Employee OptionalRetirement System 4068 Investment PlanProgramTrust Fund is created to hold the assets 4069 of the FloridaPublic Employee OptionalRetirement System 4070 Investment PlanProgramin trust for the exclusive benefit of 4071 plan memberssuch program’s participantsand beneficiaries, and 4072 for the payment of reasonable administrative expenses of the 4073 planprogram, in accordance with s. 401 of the Internal Revenue 4074 Code, and shall be administered by the State Board of 4075 Administration as trustee. Funds shall be credited to the trust 4076 fund as provided in this part and, to beused for the purposes 4077 of this part. The trust fund is exempt from the service charges 4078 imposed by s. 215.20. 4079 (2) The FloridaPublic Employee OptionalRetirement System 4080 Investment PlanProgramTrust Fund is aretirementtrust fund of 4081 the Florida Retirement System that accounts for retirement plan 4082 assets held by the state in a trustee capacity as a fiduciary 4083 for individual membersparticipantsin the FloridaPublic4084Employee OptionalRetirement System Investment PlanProgramand, 4085 pursuant to s. 19(f), Art. III of the State Constitution, is not 4086 subject to termination. 4087 (3) A forfeiture account shall be created within the 4088 Florida Retirement System Investment PlanPublic Employee4089Optional Retirement ProgramTrust Fund to hold the assets 4090 derived from the forfeiture of benefits by participating members 4091participants. Pursuant to a private letter ruling from the 4092 Internal Revenue Service, the forfeiture account may be used 4093 only for paying expenses of the Florida Retirement System 4094 Investment PlanPublic Employee Optional Retirement Programand 4095 reducing future employer contributions to the program. 4096 Consistent with Rulings 80-155 and 74-340 of the Internal 4097 Revenue Service, unallocated reserves within the forfeiture 4098 account must be used as quickly and as prudently as possible 4099 considering the state board’s fiduciary duty. Expected 4100 withdrawals from the account must endeavor to reduce the account 4101 to zero each fiscal year. 4102 Section 24. Subsections (1) and (3) of section 121.4503, 4103 Florida Statutes, are amended to read: 4104 121.4503 Florida Retirement System Contributions Clearing 4105 Trust Fund.— 4106 (1) The Florida Retirement System Contributions Clearing 4107 Trust Fund is created as a clearing fund for disbursing employer 4108 and employee contributions to the component plans of the Florida 4109 Retirement System and shall be administered by the departmentof4110Management Services. Funds shall be credited to the trust fund 4111 as provided in this chapter andshall beheld in trust for the 4112 contributing employers and employees untilsuch time asthe 4113 assets are transferred by the department to the Florida 4114 Retirement System Trust Fund, the FloridaPublic Employee4115OptionalRetirement System Investment PlanProgramTrust Fund, 4116 or other trust funds as authorized by law, to be used for the 4117 purposes of this chapter. The trust fund is exempt from the 4118 service charges imposed by s. 215.20. 4119 (3) The departmentof Management Servicesmay adopt rules 4120 governing the receipt and disbursement of amounts received by 4121 the Florida Retirement System Contributions Clearing Trust Fund 4122 from employers and employees contributing to the component plans 4123 of the Florida Retirement System. 4124 Section 25. Section 121.571, Florida Statutes, is amended 4125 to read: 4126 121.571 Contributions.—Contributions to the FloridaPublic4127Employee OptionalRetirement System Investment PlanProgram4128 shall be made as follows: 4129 (1) CONTRIBUTORYNONCONTRIBUTORYPLAN.—Each employer and 4130 employee shall submitaccomplish thecontributions as required 4131 underbys. 121.71by a procedure in which no employee’s gross4132salary shall be reduced. 4133 (2) CONTRIBUTION RATES GENERALLY.—Contributions to fund the 4134 retirement and disability benefits provided under this part must 4135shallbe based on the uniform contribution rates established by 4136 s. 121.71 and on the membership class or subclass of the 4137 employeeparticipant. Such contributions mustshallbe allocated 4138 as provided in ss. 121.72 and 121.73. 4139 (3) CONTRIBUTIONS FOR SOCIAL SECURITY COVERAGE AND FOR 4140 RETIREE HEALTH INSURANCE SUBSIDY.—Contributions required under 4141 s. 121.71 arethis section shall bein addition to employer and 4142 member contributionsrequiredfor social security and the 4143 Retiree Health Insurance Subsidy Trust Fund as required under 4144provided inss. 112.363, 121.052, 121.055, and 121.071, as 4145 appropriate. 4146 Section 26. Section 121.591, Florida Statutes, is amended 4147 to read: 4148 121.591 Payment of benefitspayable under the Public4149Employee Optional Retirement Program of the Florida Retirement4150System.—Benefits may not be paid under the Florida Retirement 4151 System Investment Planthis sectionunless the member has 4152 terminated employment as provided in s. 121.021(39)(a) or is 4153 deceased and a proper application has been filed asin the4154mannerprescribed by the state board or the department. Before 4155 termination of employment, benefits are not payable under the 4156 investment plan for employee hardships, unforeseeable 4157 emergencies, loans, medical expenses, educational expenses, 4158 purchase of a principal residence, payments necessary to prevent 4159 eviction or foreclosure on an employee’s principal residence, or 4160 any other reason prior to termination from all employment 4161 relationships with participating employers. The state board or 4162 department, as appropriate, may cancel an application for 4163 retirement benefits ifwhenthe member or beneficiary fails to 4164 timely provide the information and documents required by this 4165 chapter and the rules of the state board and department. In 4166 accordance with their respective responsibilitiesas provided4167herein, the state boardof Administrationand the departmentof4168Management Servicesshall adopt rules establishing procedures 4169 for application for retirement benefits and for the cancellation 4170 of such application ifwhenthe required information or 4171 documents are not received. The state boardof Administration4172 and the departmentof Management Services, as appropriate, are 4173 authorized to cash out a de minimis account of not more than 4174 $5,000 of a memberparticipantwho has been terminated from 4175 Florida Retirement System covered employment for a minimum of 6 4176 calendar months.A de minimis account is an account containing4177employer contributions and accumulated earnings of not more than4178$5,000 made under the provisions of this chapter.Such cash-out 4179 musteitherbe a complete lump-sum liquidation of the account 4180 balance, subject to the provisions of the Internal Revenue Code, 4181 or a lump-sum direct rollover distribution paid directly to the 4182 custodian of an eligible retirement plan, as defined by the 4183 Internal Revenue Code, on behalf of the memberparticipant. Any 4184 nonvested accumulations, including amounts transferred to the 4185 suspense account of the Florida Retirement System Investment 4186 Plan Trust Fund, are forfeited upon payment of any vested 4187 benefit to a member or beneficiary, except for de minimis 4188 distributions or minimum required distributions as provided 4189 under this section. If any financial instrument issued for the 4190 payment of retirement benefits under this section is not 4191 presented for payment within 180 days after the last day of the 4192 month in which it was originally issued, the third-party 4193 administrator or other duly authorized agent of the state board 4194of Administrationshall cancel the instrument and credit the 4195 amount of the instrument to the suspense account of the Florida 4196Public Employee OptionalRetirement System Investment Plan 4197ProgramTrust Fund authorized under s. 121.4501(6). Anysuch4198 amounts transferred to the suspense account are payable upon a 4199 proper application, not to include earnings thereon, as provided 4200 in this section, within 10 years after the last day of the month 4201 in which the instrument was originally issued, after which time 4202 such amounts and any earnings attributable to employer 4203 contributions arethereon shall beforfeited. Anysuchforfeited 4204 amounts are assets of thePublic Employee Optional Retirement4205Programtrust fund and are not subject to the provisions of 4206 chapter 717. 4207 (1) NORMAL BENEFITS.—Under the FloridaPublic Employee4208OptionalRetirement System Investment PlanProgram: 4209 (a) Benefits in the form of vested accumulations as 4210 described in s. 121.4501(6) are payable under this subsection in 4211 accordance with the following terms and conditions: 4212 1.To the extent vested,Benefits are payable only to a 4213 member, alternate payee of a qualified domestic relations order, 4214 or a beneficiaryparticipant. 4215 2. Benefits shall be paid by the third-party administrator 4216 or designated approved providers in accordance with the law, the 4217 contracts, and any applicable board rule or policy. 4218 3.To receive benefits,The memberparticipantmust be 4219 terminated from all employment with all Florida Retirement 4220 System employers, as provided in s. 121.021(39). 4221 4. Benefit payments may not be made until the member 4222participanthas been terminated for 3 calendar months, except 4223 that the state board may authorize by rule for the distribution 4224 of up to 10 percent of the member’sparticipant’saccount after 4225 being terminated for 1 calendar month if the memberparticipant4226 has reached the normal retirement date as defined in s. 121.021 4227of the defined benefit plan. 4228 5. If a member or former member of the Florida Retirement 4229 System receives an invalid distributionfrom the Public Employee4230Optional Retirement Program Trust Fund, such person must repay 4231 the full amountinvalid distribution to the trust fundwithin 90 4232 days after receipt of final notification by the state board or 4233 the third-party administrator that the distribution was invalid, 4234 or, in lieu of repayment, must terminate employment from all 4235 participating employers. If such person fails to repay the full 4236 invalid distribution within 90 days after receipt of final 4237 notification, the person may be deemed retired from the 4238 investment planoptional retirement programby the state board,4239as provided pursuant to s.121.4501(2)(k),and is subject to s. 4240 121.122. If such person is deemed retiredby the state board, 4241 any joint and several liability set out in s. 121.091(9)(d)2. is 4242becomesnull and void, and the state board, the department, or 4243 the employing agency is not liable for gains on payroll 4244 contributions that have not been deposited to the person’s 4245 account in the investment planretirement program, pending 4246 resolution of the invalid distribution. The member or former 4247 member who has been deemed retired or who has been determined by 4248 the state board to have taken an invalid distribution may appeal 4249 the agency decision through the complaint process as provided 4250 under s. 121.4501(9)(g)3. As used in this subparagraph, the term 4251 “invalid distribution” means any distribution from an account in 4252 the investment planoptional retirement programwhich is taken 4253 in violation of this section, s. 121.091(9), or s. 121.4501. 4254 (b) If a memberparticipantelects to receive his or her 4255 benefits upon termination of employment as defined in s. 4256 121.021, the memberparticipantmust submit a written 4257 application or an application by electronic means to the third 4258 party administrator indicating his or her preferred distribution 4259 date and selecting an authorized method of distribution as 4260 provided in paragraph (c). The memberparticipantmay defer 4261 receipt of benefits until he or she chooses to make such 4262 application, subject to federal requirements. 4263 (c) Upon receipt by the third-party administrator of a 4264 properly executed application for distribution of benefits, the 4265 total accumulated benefit isshall bepayable to the member pro 4266 rata across all Florida Retirement System benefit sources 4267participant, as: 4268 1. A lump-sum or partial distribution to the member 4269participant; 4270 2. A lump-sum direct rollover distribution whereby all 4271 accrued benefits, plus interest and investment earnings, are 4272 paid from the member’sparticipant’saccount directly to the 4273 custodian of an eligible retirement plan, as defined in s. 4274 402(c)(8)(B) of the Internal Revenue Code, on behalf of the 4275 memberparticipant; or 4276 3. Periodic distributions, as authorized by the state 4277 board. 4278 (d) The distribution payment method selected by the plan 4279 member or beneficiary, and the retirement of the member or 4280 beneficiary, is final and irrevocable at the time a benefit 4281 distribution payment is cashed, deposited, or transferred to 4282 another financial institution. Any additional service that 4283 remains unclaimed at retirement may not be claimed or purchased, 4284 and the type of retirement may not be changed, except that if a 4285 member recovers from a disability, the member may subsequently 4286 request normal service benefits under subsection (2). 4287 (e) A member may not receive a distribution of employee 4288 contributions if a pending or approved qualified domestic 4289 relations order is filed against the member’s investment plan 4290 account. 4291 (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under 4292 this subsection are payable in lieu of the benefits thatwhich4293 would otherwise be payable under the provisions of subsection 4294 (1). Such benefits mustshallbe fundedentirelyfrom employer 4295 contributionsmade under s.121.571, transferred employee 4296 contributions andparticipantfunds accumulated pursuant to 4297 paragraph (a), and interest and earnings thereon.Pursuant4298thereto:4299 (a) Transfer of funds.—To qualify forto receivemonthly 4300 disability benefits under this subsection: 4301 1. All moneys accumulated in a member’s accountthe4302participant’s Public Employee Optional Retirement Program4303accounts, including vested and nonvested accumulations as 4304 described in s. 121.4501(6), mustshallbe transferred from such 4305 individual accounts to the divisionof Retirementfor deposit in 4306 the disability account of the Florida Retirement System Trust 4307 Fund. Such moneys mustshallbeseparatelyaccounted for 4308 separately. Earnings mustshallbe credited on an annual basis 4309 for amounts held in the disability accountsof the Florida4310Retirement System Trust Fundbased on actual earnings of the 4311Florida Retirement Systemtrust fund. 4312 2. If the memberparticipanthas retained retirement credit 4313he or she hadearned under the pension plandefined benefit4314program of the Florida Retirement Systemas provided in s. 4315 121.4501(3)s.121.4501(3)(b), a sum representing the actuarial 4316 present value of such credit within the Florida Retirement 4317 System Trust Fund shall be reassigned by the divisionof4318Retirementfrom the pension plandefined benefit programto the 4319 disability program as implemented under this subsection and 4320 shall be deposited in the disability account of theFlorida4321Retirement Systemtrust fund. Such moneys mustshallbe 4322separatelyaccounted for separately. 4323 (b) Disability retirement; entitlement.— 4324 1. A memberparticipantof the investment planPublic4325Employee Optional Retirement programwho becomes totally and 4326 permanently disabled, as defined in paragraph (d)s.4327121.091(4)(b), after completing 8 years of creditable service, 4328 or a memberparticipantwho becomes totally and permanently 4329 disabled in the line of duty regardless ofhis or herlength of 4330 service, isshall beentitled to a monthly disability benefitas4331provided herein. 4332 2. In order for service to apply toward the 8 years of 4333 creditable service requiredto vestfor regular disability 4334 benefits, or toward the creditable service used in calculating a 4335 service-based benefit as providedforunder paragraph (g), the 4336 service must be creditable service as described below: 4337 a. The member’sparticipant’speriod of service under the 4338 investment plan shallPublic Employee Optional Retirement4339program willbe considered creditable service, except as 4340 provided in subparagraph d. 4341 b. If the memberparticipanthas elected to retain credit 4342 forhis or herservice under the pension plandefined benefit4343program of the Florida Retirement Systemas provided under s. 4344 121.4501(3)s.121.4501(3)(b), all such service shallwillbe 4345 considered creditable service. 4346 c. If the member electsparticipant has electedto transfer 4347 to his or her memberparticipantaccounts a sum representing the 4348 present value of his or her retirement credit under the pension 4349 plandefined benefit programas provided under s. 121.4501(3)s.4350121.4501(3)(c), the period of service under the pension plan 4351defined benefit programrepresented in the present value amounts 4352 transferred shallwillbe considered creditable servicefor4353purposes of vesting for disability benefits, except as provided 4354 in subparagraph d. 4355 d. If a memberWhenever a participanthas terminated 4356 employment and has taken distribution of his or her funds as 4357 provided in subsection (1), all creditable service represented 4358 by such distributed funds is forfeited for purposes of this 4359 subsection. 4360 (c) Disability retirement effective date.—The effective 4361 retirement date for a memberparticipantwho applies and is 4362 approved for disability retirement shall be established as 4363 provided under s. 121.091(4)(a)2. and 3. 4364 (d) Total and permanent disability.—A member isparticipant4365shall beconsidered totally and permanently disabled if, in the 4366 opinion of the division, he or she is prevented, by reason of a 4367 medically determinable physical or mental impairment, from 4368 rendering useful and efficient service as an officer or 4369 employee. 4370 (e) Proof of disability.—The division,Before approving 4371 payment of any disability retirement benefit, the division shall 4372 require proof that the memberparticipantis totally and 4373 permanently disabledin the same manneras providedfor members4374of the defined benefit program of the Florida Retirement System4375 under s. 121.091(4)(c). 4376 (f) Disability retirement benefit.—Upon the disability 4377 retirement of a memberparticipantunder this subsection, the 4378 memberparticipantshall receive a monthly benefit that begins 4379 accruingshall begin to accrueon the first day of the month of 4380 disability retirement, as approved by the division, and isshall4381bepayable on the last day of that month and each month 4382 thereafter during his or her lifetime and continued disability. 4383 All disability benefits mustpayable to such member shallbe 4384 paid out of the disability account of the Florida Retirement 4385 System Trust Fund established under this subsection. 4386 (g) Computation of disability retirement benefit.—The 4387 amount of each monthly payment mustshallbe calculatedin the4388same manneras providedfor members of the defined benefit4389program of the Florida Retirement Systemunder s. 121.091(4)(f). 4390For such purpose,Creditable service under both the pension plan 4391defined benefit programand the investment planPublic Employee4392Optional Retirement Program of the Florida Retirement System4393 shall be applicable as provided under paragraph (b). 4394 (h) Reapplication.—A memberparticipantwhose initial 4395 application for disability retirement ishas beendenied may 4396 reapply for disability benefits in the same manner, and under 4397 the same conditions, as provided for members of the pension plan 4398defined benefit program of the Florida Retirement Systemunder 4399 s. 121.091(4)(g). 4400 (i) Membership.—Upon approval of a member’sanapplication 4401 for disability benefitsunder this subsection, the applicant 4402 shall be transferred to the pension plandefined benefit program4403of the Florida Retirement System, effective upon his or her 4404 disability retirement effective date. 4405 (j) Option to cancel.—A memberAny participantwhose 4406 application for disability benefits is approved may cancel the 4407his or herapplication iffor disability benefits, provided that4408 the cancellation request is received by the division before a 4409 disability retirement warrant has been deposited, cashed, or 4410 received by direct deposit. Uponsuchcancellation: 4411 1. The member’sparticipant’stransfer to the pension plan 4412defined benefit programunder paragraph (i) shall be nullified; 4413 2. The memberparticipantshall be retroactively reinstated 4414 in the investment planPublic Employee Optional Retirement4415programwithout hiatus; 4416 3. All funds transferred to the Florida Retirement System 4417 Trust Fund under paragraph (a) mustshallbe returned to the 4418 memberparticipantaccounts from which thesuchfunds were 4419 drawn; and 4420 4. The memberparticipantmay elect to receive the benefit 4421 payable underthe provisions ofsubsection (1) in lieu of 4422 disability benefitsas provided under this subsection. 4423 (k) Recovery from disability.— 4424 1. The division may require periodic reexaminations at the 4425 expense of the disability program account of the Florida 4426 Retirement System Trust Fund. Except asotherwiseprovided in 4427 subparagraph 2.,the requirements, procedures, and restrictions4428relating to the conduct and review of such reexaminations,4429discontinuation or termination of benefits, reentry into4430employment, disability retirement after reentry into covered4431employment, andall other matters relating to recovery from 4432 disability shall bethe sameas providedare set forthunder s. 4433 121.091(4)(h). 4434 2. Upon recovery from disability, theanyrecipient of 4435 disability retirement benefits under this subsection shall be 4436 transferred back to the investment plana compulsory member of4437the Public Employee Optional Retirement Program of the Florida4438Retirement System. The net difference between the recipient’s 4439 original account balance transferred to the Florida Retirement 4440 System Trust Fund, including earnings,under paragraph (a)and 4441 total disability benefits paid to such recipient, if any, shall 4442 be determined as provided in sub-subparagraph a. 4443 a. An amount equal to the total benefits paid shall be 4444 subtracted from that portion of the transferred account balance 4445 consisting of vested accumulations as described under s. 4446 121.4501(6), if any, and an amount equal to the remainder of 4447 benefit amounts paid, if any, shallthenbe subtracted from any 4448 remainingportion consisting ofnonvested accumulationsas4449described under s.121.4501(6). 4450 b. Amounts subtracted under sub-subparagraph a. mustshall4451 be retained within the disability account of the Florida 4452 Retirement System Trust Fund. Any remaining account balance 4453 shall be transferred to the third-party administrator for 4454 disposition as provided under sub-subparagraph c. or sub 4455 subparagraph d., as appropriate. 4456 c. If the recipient returns to covered employment, 4457 transferred amounts mustshallbe deposited in individual 4458 accounts under the investment planPublic Employee Optional4459Retirement program, as directed by the memberparticipant. 4460 Vested and nonvested amounts shall be separately accounted for 4461 as provided in s. 121.4501(6). 4462 d. If the recipient fails to return to covered employment 4463 upon recovery from disability: 4464 (I) Any remaining vested amount mustshallbe deposited in 4465 individual accounts under the investment planPublic Employee4466Optional Retirement program, as directed by the member 4467participant, and isshall bepayable as provided in subsection 4468 (1). 4469 (II) Any remaining nonvested amount mustshallbe held in a 4470 suspense account and isshall beforfeitable after 5 years as 4471 provided in s. 121.4501(6). 4472 3. If present value was reassigned from the pension plan 4473defined benefit programto the disability programof the Florida4474Retirement Systemas provided under subparagraph (a)2., the full 4475 present value amount mustshallbe returned to the pension plan 4476defined benefit accountwithin the Florida Retirement System 4477 Trust Fund and the recipient’saffected individual’sassociated 4478 retirement credit under the pension plan mustdefined benefit4479program shallbe reinstated in full. Any benefit based upon such 4480 credit mustshallbe calculated as provided in s. 4481 121.091(4)(h)1. 4482 (l) Nonadmissible causes of disability.—A member is 4483participant shallnotbeentitled toreceivea disability 4484 retirement benefit if the disability results from any injury or 4485 diseasesustained or inflictedas described in s. 121.091(4)(i). 4486 (m) Disability retirement of justice or judge by order of 4487 Supreme Court.— 4488 1. If a memberparticipantis a justice of the Supreme 4489 Court, judge of a district court of appeal, circuit judge, or 4490 judge of a county court who has served for 6 years or more as an 4491 elected constitutional judicial officer, including service as a 4492 judicial officer in any court abolished pursuant to Art. V of 4493 the State Constitution, and who is retired for disabilityby4494order of the Supreme Court upon recommendation of the Judicial4495Qualifications Commissionpursuant to s. 12,the provisions of4496 Art. V of the State Constitution, the member’sparticipant’s4497 Option 1 monthly disability benefit amount as provided in s. 4498 121.091(6)(a)1. shall be two-thirds of his or her monthly 4499 compensation as of the member’sparticipant’sdisability 4500 retirement date. The memberSuch a participantmay alternatively 4501 elect to receive an actuarially adjusted disability retirement 4502 benefit under any other option as provided in s. 121.091(6)(a), 4503 ortoreceive the normal benefit payable underthe Public4504Employee Optional Retirement Program as set forth insubsection 4505 (1). 4506 2. If any justice or judge who is a memberparticipantof 4507 the investment planPublic Employee Optional Retirement program4508ofthe Florida Retirement Systemis retired for disabilityby4509order of the Supreme Court upon recommendation of the Judicial4510Qualifications Commissionpursuant to s. 12,the provisions of4511 Art. V of the State Constitution, and elects to receive a 4512 monthly disability benefit underthe provisions ofthis 4513 paragraph: 4514 a. Any present value amount that was transferred to his or 4515 her planprogramaccount and all employer and employee 4516 contributions made to such account on his or her behalf, plus 4517 interest and earnings thereon, mustshallbe transferred to and 4518 deposited in the disability account of the Florida Retirement 4519 System Trust Fund; and 4520 b. The monthly disability benefits payable under this 4521 paragraph for any affected justice or judge retired from the 4522 Florida Retirement System pursuant to Art. V of the State 4523 Constitution shall be paid from the disability account of the 4524 Florida Retirement System Trust Fund. 4525 (n) Death of retiree or beneficiary.—Upon the death of a 4526 disabled retiree or beneficiary of the retireethereofwho is 4527 receiving monthly disability benefits under this subsection, the 4528 monthly benefits shall be paid through the last day of the month 4529 of death and shall terminate, or be adjusted, if applicable, as 4530 of that date in accordance with the optional form of benefit 4531 selected at the time of retirement. The departmentof Management4532Servicesmay adopt rules necessary to administer this paragraph. 4533 (3) DEATH BENEFITS.—Under the FloridaPublic Employee4534OptionalRetirement System Investment PlanProgram: 4535 (a) Survivor benefits areshall bepayable in accordance 4536 with the following terms and conditions: 4537 1.To the extent vested,Benefits areshall bepayable only 4538 to a member’sparticipant’s beneficiary orbeneficiaries as 4539 designated by the memberparticipantas provided in s. 4540 121.4501(20). 4541 2. Benefits shall be paid by the third-party administrator 4542 or designated approved providers in accordance with the law, the 4543 contracts, and any applicable state board rule or policy. 4544 3. To receive benefitsunder this subsection, the member 4545participantmust be deceased. 4546 (b) Except as provided in paragraph (d), if the employment 4547 of a member is terminated by reason of his or herIn the event4548of a participant’sdeath:,4549 1. Before being vested, only the member’s accumulated 4550 contributions are payable to his or her designated beneficiary. 4551 2. After being vested, all vested accumulations as 4552 described in s. 121.4501(6), less withholding taxes remitted to 4553 the Internal Revenue Service, shall be distributed, as provided 4554 in paragraph (c) or as described in s. 121.4501(20), as if the 4555 memberparticipantretired on the date of death. No other death 4556 benefits areshall beavailable for survivors of members 4557participantsunder the investment planPublic Employee Optional4558Retirement Program, except forsuchbenefits, or coverage for 4559suchbenefits, as are otherwise provided by law orare4560 separately providedaffordedby the employer, at the employer’s 4561 discretion. 4562 (c) Upon receipt by the third-party administrator of a 4563 properly executed application for distribution of benefits under 4564 paragraph (b), the total accumulated benefit isshall bepayable 4565 by the third-party administrator to the member’sparticipant’s4566 surviving beneficiary or beneficiaries, as: 4567 1. A lump-sum distribution payable to the beneficiary or 4568 beneficiaries, or to the deceased member’sparticipant’sestate; 4569 2. An eligible rollover distribution on behalf of the 4570 surviving spouse of a deceased memberparticipant, whereby all 4571 accrued benefits, plus interest and investment earnings, are 4572 paid from the deceased member’sparticipant’saccount directly 4573 to the custodian of an eligible retirement plan, as described in 4574 s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the 4575 surviving spouse; or 4576 3. A partial lump-sum payment whereby a portion of the 4577 accrued benefit is paid to the deceased member’sparticipant’s4578 surviving spouse or other designated beneficiaries, less 4579 withholding taxes remitted to the Internal Revenue Service, and 4580 the remaining amount is transferred directly to the custodian of 4581 an eligible retirement plan, as described in s. 402(c)(8)(B) of 4582 the Internal Revenue Code, on behalf of the surviving spouse. 4583 The proportions must be specified by the memberparticipantor 4584 the surviving beneficiary. 4585 4586 This paragraph does not abrogate other applicable provisions of 4587 state or federal law providing for payment of death benefits. 4588 (4) LIMITATION ON LEGAL PROCESS.—The benefits payable to 4589 any person under the FloridaPublic Employee OptionalRetirement 4590 System Investment PlanProgram, and any contributions 4591 accumulated under such planprogram, are not subject to 4592 assignment, execution, attachment, or any legal process, except 4593 for qualified domestic relations orders by a court of competent 4594 jurisdiction, income deduction orders as provided in s. 61.1301, 4595 and federal income tax levies. 4596 Section 27. Section 121.5911, Florida Statutes, is amended 4597 to read: 4598 121.5911 Disability retirement program; qualified status; 4599 rulemaking authority.—It is the intent of the Legislature that 4600 the disability retirement program for membersparticipantsof 4601 the FloridaPublic Employee OptionalRetirement System 4602 Investment PlanProgram ascreated in this act mustmeet all 4603 applicable requirements of federal law for a qualified plan. The 4604 departmentof Management Servicesshall seek a private letter 4605 ruling from the Internal Revenue Service on the disability 4606 retirement programfor participants of the Public Employee4607Optional Retirement Program. Consistent with the private letter 4608 ruling, the departmentof Management Servicesshall adoptany4609necessaryrules necessaryrequiredto maintain the qualified 4610 status of the disability retirement program and the Florida 4611 Retirement System’s pensionSystem defined benefitplan. 4612 Section 28. Subsection (1) of section 121.70, Florida 4613 Statutes, is amended to read: 4614 121.70 Legislative purpose and intent.— 4615 (1) This part provides for a uniform system for funding 4616 benefits provided under the Florida Retirement System defined 4617 benefit program established under part I of this chapter, 4618(referred to in this part as the pension plan,defined benefit4619program)and under the FloridaPublic Employee Optional4620 Retirement System Investment PlanProgramestablished under part 4621 II of this chapter,(referred to in this part as the investment 4622 planoptional retirement program). The Legislature recognizes 4623 and declares that the Florida Retirement System is a single 4624 retirement system, consisting of two retirement plans and other 4625 nonintegrated programs. Employers and employees participating in 4626 the Florida Retirement System collectively shall be responsible 4627 for making contributions to support the benefits provided 4628affordedunder both programsplans. TheAs provided in this4629part,employers and employeesparticipating in the Florida4630Retirement Systemshall make contributions based upon uniform 4631 contribution rates determined as a percentage of the total 4632 payroll for each class or subclass of Florida Retirement System 4633 membership, irrespective of which retirement program theplan4634 individual employee is enrolled inemployees may elect. This 4635 shall be known as a uniform or blended contribution rate system. 4636 Section 29. Subsections (1) and (2) of section 121.71, 4637 Florida Statutes, are amended, present subsections (3) and (4) 4638 of that section are renumbered as subsections (5) and (8), 4639 respectively, and new subsections (3), (4), (6), and (7) are 4640 added to that section, to read: 4641 121.71 Uniform rates; process; calculations; levy.— 4642 (1) In conducting the system actuarial study required under 4643 s. 121.031, the actuary shall follow all requirements specified 4644thereunderto determine, by Florida Retirement System employee 4645 membership class, the dollar contribution amounts necessary for 4646 the nextforthcomingfiscal year for the pension plandefined4647benefit program. In addition, the actuary shall determine, by 4648 Florida Retirement System membership class, based on an estimate 4649 for the forthcoming fiscal year of the gross compensation of 4650 employees participating in the investment planoptional4651retirement program, the dollar contribution amounts necessary to 4652 make the allocations required under ss. 121.72 and 121.73. For 4653 each employee membership class and subclass, the actuarial study 4654 mustshallestablish a uniform rate necessary to fund the 4655 benefit obligations under both Florida Retirement System 4656 retirement plans by dividing the sum of total dollars required 4657 by the estimated gross compensation of members in both plans. 4658 (2) Based on the uniform rates set forth in subsections 4659subsection(3), (4), and (5), employers and employees shall make 4660 monthly contributions to the division as required under s. 4661 121.061(1)of Retirement, which shall initially deposit the 4662 funds into the Florida Retirement System Contributions Clearing 4663 Trust Fund. A change in a contribution rate is effective on the 4664 first day of the month for which a full month’semployer4665 contribution may be made on or after the beginning date of the 4666 change. Beginning July 1, 2011, each employee, except those 4667 participating in the Deferred Retirement Option Program, shall 4668 contribute the contributions required in subsection (3) to the 4669 plan. The employer shall deduct the contribution from the 4670 employee’s monthly salary and submit it to the division. The 4671 contributions shall be reported as employer-paid employee 4672 contributions, and shall be credited to the account of the 4673 employee. The contributions shall be deducted from the 4674 employee’s salary before the computation of applicable federal 4675 taxes and treated as employer contributions under 26 U.S.C. 4676 414(h)(2). Although designated as employee contributions, the 4677 employer specifies that the contributions are being paid by the 4678 employer in lieu of contributions by the employee. The employee 4679 does not have the option of choosing to receive the contributed 4680 amounts directly instead of having them paid to the plan. Such 4681 contributions are mandatory and each employee is deemed to have 4682 consented to the payroll deductions. Payment of an employee’s 4683 salary or wages, less the contribution, is a full and complete 4684 discharge and satisfaction of all claims and demands for the 4685 service rendered by employees during the period covered by the 4686 payment, except for claims to benefits to which they may be 4687 entitled under this chapter. 4688 (3) Effective July 1, 2011, the required employee 4689 retirement contribution rates for all members of the Florida 4690 Retirement System shall be 2 percent for gross compensation up 4691 to and including $25,000, 4 percent for gross compensation 4692 greater than $25,000 and up to and including $50,000, and 6 4693 percent for gross compensation greater than $50,000. This 4694 subsection does not apply to members participating in the 4695 Deferred Option Retirement Program. 4696 (4) Effective July 1, 2011, the required employee 4697 retirement contribution rate for those members of the Elected 4698 Officers’ Class who are members of the Florida Legislature and 4699 all Statewide Elected Officials (for both the pension and 4700 investment plans) shall be 3 percent for gross compensation up 4701 to and including $25,000, 5 percent for gross compensation 4702 greater than $25,000 and up to and including $50,000, and 7 4703 percent for gross compensation greater than $50,000. 4704 (5)(3)Required employer retirement contribution rates for 4705 each membership class and subclass of the Florida Retirement 4706 System for both retirement plans are as follows: 4707 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 20112009Percentage ofGrossCompensation,EffectiveJuly 1,20104708 4709 Regular Class 5.09%8.69%9.63%4710 Special Risk Class 13.80%19.76%22.11%4711 Special Risk Administrative Support Class 6.67%11.39%12.10%4712 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 9.46%13.32%15.20%4713 Elected Officers’ Class— Justices, Judges 12.02%18.40%20.65%4714 Elected Officers’ Class— County Elected Officers 11.44%15.37%17.50%4715 Senior Management Class 6.88%11.96%13.43%4716 DROP 3.12%9.80%11.14%4717 (6) In order to address unfunded actuarial liabilities of 4718 the system, the required employer retirement contribution rates 4719 for each membership class and subclass of the Florida Retirement 4720 System for both retirement plans are as follows: 4721 4722 4723 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2011 4724 Regular Class 0.00% 4725 Special Risk Class 0.00% 4726 Special Risk Administrative Support Class 0.00% 4727 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 0.00% 4728 Elected Officers’ Class— Justices, Judges 0.00% 4729 Elected Officers’ Class— County Elected Officers 0.00% 4730 Senior Management Class 0.00% 4731 DROP 0.00% 4732 (7) If a member is reported under an incorrect membership 4733 class and the amount of contributions reported and remitted are 4734 less than the amount required, the employer shall owe the 4735 difference plus the delinquent fee of 1 percent for each 4736 calendar month or part thereof that the contributions should 4737 have been paid. This delinquent assessment may not be waived. If 4738 the contributions reported and remitted are more than the amount 4739 required, the employer shall receive a credit to be applied 4740 against future contributions owed. 4741 (8)(4)The state actuary shall recognize and use an 4742 appropriate level of available excess assets of the Florida 4743 Retirement System Trust Fund to offset the difference between 4744 the normal costs of the Florida Retirement System and the 4745 statutorily prescribed contribution rates. 4746 Section 30. Section 121.72, Florida Statutes, is amended to 4747 read: 4748 121.72 Allocations to investment plan memberoptional4749retirement program participantaccounts; percentage amounts.— 4750 (1) The allocations established in subsection (4) shall 4751 fund retirement benefits under the investment plan under part II 4752 of this chapteroptional retirement programand shall be 4753 transferred monthly by the divisionof Retirementfrom the 4754 Florida Retirement System Contributions Clearing Trust Fund to 4755 the third-party administrator for deposit in each participating 4756 employee’s individual account based on the membership class of 4757 the employeeparticipant. 4758 (2) The allocations are stated as a percentage of each 4759 investment plan member’soptional retirement program4760participant’sgross compensation for the calendar month. A 4761 change in a contribution percentage is effective the first day 4762 of the month for which retirement contributionsa full month’s4763employer contributionmay be made on or after the beginning date 4764 of the change. Contribution percentages may be modified by 4765 general law. 4766 (3) Employer and employeeparticipantcontributions to 4767 member’sparticipantaccounts shall be accounted for separately. 4768Participant contributions may be made only if expressly4769authorized by law.Interest and investment earnings on 4770 contributions shall accrue on a tax-deferred basis until 4771 proceeds are distributed. 4772 (4) Effective July 1, 2011July 1, 2002, allocations from 4773 the Florida Retirement System Contributions Clearing Trust Fund 4774 to investment plan memberoptional retirement program4775participantaccounts, including employee contributions required 4776 under s. 121.71(3), areshall beas follows: 4777 Membership Class Percentage of Gross Compensation 4778 Regular Class 9.00% 4779 Special Risk Class 20.00% 4780 Special Risk Administrative Support Class 11.35% 4781 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 13.40% 4782 Elected Officers’ Class— Justices, Judges 18.90% 4783 Elected Officers’ Class— County Elected Officers 16.20% 4784 Senior Management Service Class 10.95% 4785 Section 31. Section 121.73, Florida Statutes, is amended to 4786 read: 4787 121.73 Allocations for memberoptional retirement program4788participantdisability coverage; percentage amounts.— 4789 (1) The allocations established in subsection (3) shall be 4790 used to provide disability coverage for members of the 4791 investment planparticipants in the optional retirement program4792 and shall be transferred monthly by the divisionof Retirement4793 from the Florida Retirement System Contributions Clearing Trust 4794 Fund to the disability account of the Florida Retirement System 4795 Trust Fund. 4796 (2) The allocations are stated as a percentage of each 4797 investment plan member’soptional retirement program4798participant’sgross compensation for the calendar month. A 4799 change in a contribution percentage is effective the first day 4800 of the month for which retirement contributionsa full month’s4801employer contributionmay be made on or after the beginning date 4802 of the change. Contribution percentages may be modified by 4803 general law. 4804 (3) Effective July 1, 2002, allocations from the Florida 4805 Retirement SystemFRSContribution Clearing Fund to provide 4806 disability coverage for members of the investment plan 4807participants in the optional retirement program, and to offset 4808 the costs of administering said coverage, shall be as follows: 4809 Membership Class Percentage of Gross Compensation 4810 Regular Class 0.25% 4811 Special Risk Class 1.33% 4812 Special Risk Administrative Support Class 0.45% 4813 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 0.41% 4814 Elected Officers’ Class— Justices, Judges 0.73% 4815 Elected Officers’ Class— County Elected Officers 0.41% 4816 Senior Management Service Class 0.26% 4817 (4) Effective July 1, 2011, allocations from the Florida 4818 Retirement System Contribution Clearing Fund to provide 4819 disability coverage for members of the investment plan and to 4820 offset the costs of administering such coverage shall be the 4821 actuarially indicated amount necessary to fund the statutorily 4822 authorized benefit for the plan year as determined by the 4823 department’s actuary. 4824 Section 32. Section 121.74, Florida Statutes, is amended to 4825 read: 4826 121.74 Administrative and educational expenses.—In addition 4827 to contributions required under ss.s.121.71 and 121.73, 4828 effective July 1, 2010, through June 30, 2014, employers 4829 participating in the Florida Retirement System shall contribute 4830 an amount equal to 0.03 percent of the payroll reported for each 4831 class or subclass of Florida Retirement System membership; 4832 effective July 1, 2014, the contribution rate shall be 0.04 4833 percent of the payroll reported for each class or subclass of 4834 membership. The amount contributed shall be transferred by the 4835 divisionof Retirementfrom the Florida Retirement System 4836 Contributions Clearing Trust Fund to the state board’sBoard of4837Administration’sadministrative trust fund to offset the costs 4838 of administering the investment planoptional retirement program4839 and the costs of providing educational services to members 4840 participatingparticipantsin the pension plandefined benefit4841programand the investment planoptional retirement program. 4842 Approval of the trustees is required before the expenditure of 4843 these funds. Payments for third-party administrative or 4844 educational expenses shall be made only pursuant to the terms of 4845 the approved contracts for such services. 4846 Section 33. Section 121.75, Florida Statutes, is amended to 4847 read: 4848 121.75 Allocation for pension plandefined benefit4849program.—After making the transfers required pursuant to ss. 4850 121.71, 121.72, 121.73, and 121.74, the monthly balance of funds 4851 in the Florida Retirement System Contributions Clearing Trust 4852 Fund shall be transferred to the Florida Retirement System Trust 4853 Fund to pay the costs of providing pension plandefined benefit4854programbenefits and plan administrative costs under the pension 4855 plandefined benefit program. 4856 Section 34. Section 121.77, Florida Statutes, is amended to 4857 read: 4858 121.77 Deductions from memberparticipantaccounts.—The 4859 State Board of Administration may authorize the third-party 4860 administrator to deduct reasonable fees and apply appropriate 4861 charges to investment plan memberoptional retirement program4862participantaccounts. In no event mayshalladministrative and 4863 educational expenses exceed the portion of employer 4864 contributions earmarked for such expenses under this part, 4865 except for reasonable administrative charges assessed against 4866 memberparticipantaccounts of persons for whom no employer 4867 contributions are made during the calendar quarter. Investment 4868 management fees shall be deducted from memberparticipant4869 accounts, pursuant to the terms of the contract between the 4870 provider and the board. 4871 Section 35. Subsections (1) and (3) of section 121.78, 4872 Florida Statutes, are amended to read: 4873 121.78 Payment and distribution of contributions.— 4874 (1) Contributions made pursuant to this part, including the 4875 employee contributions, shall be paid by the employer to the 4876 divisionof Retirementby electronic funds transfer no later 4877 than the 5th working day of the month immediately following the 4878 month during which the payroll period ended. Accompanying 4879 payroll data must be transmitted to the division concurrent with 4880 the contributions. 4881 (3)(a) Employer and employee contributions and accompanying 4882 payroll data received after the 5th working day of the month are 4883 considered late. The employer shall be assessed by the division 4884of Retirementa penalty of 1 percent of the contributions due 4885 for each calendar month or part thereof that the contributions 4886 or accompanying payroll data are late. Proceeds from the 1 4887 percent1-percentassessment against contributions made on 4888 behalf of members of the pension planparticipants of the4889defined benefit programshall be deposited in the Florida 4890 Retirement System Trust Fund, and proceeds from the 1 percent14891percentassessment against contributions made on behalf of 4892 members of the investment planparticipants of the optional4893retirement programshall be transferred to the third-party 4894 administrator for deposit into memberparticipantaccounts, as 4895 provided in paragraph (c)(b). 4896 (b) Retirement contributions paid for a prior period shall 4897 be charged a delinquent fee of 1 percent for each calendar month 4898 or part thereof that the contributions should have been paid. 4899 This includes prior period contributions due to incorrect wages, 4900 contributions from an earlier report or wages, and contributions 4901 that should have been reported but were not. The delinquent 4902 assessments may not be waived. 4903 (c)(b)If employee contributions or contributions made by 4904 an employer on behalf of members of the investment plan 4905participants of the optional retirement programor accompanying 4906 payroll data are not received within the calendar month they are 4907 due, including, but not limited to, contribution adjustments as 4908 a result of employer errors or corrections, and if that 4909 delinquency results in market losses to membersparticipants, 4910 the employer shall reimburse each member’sparticipant’saccount 4911 for market losses resulting from the late contributions. If a 4912 memberparticipanthas terminated employment and taken a 4913 distribution, the memberparticipantis responsible for 4914 returning any excess contributions erroneously provided by 4915 employers, adjusted for any investment gain or loss incurred 4916 during the period such excess contributions were in the member’s 4917participant’saccount. The state board or its designated agent 4918 shall communicate to terminated membersparticipantsany 4919 obligation to repay such excess contribution amounts. However, 4920 the state board, its designated agents, the FloridaPublic4921Employee OptionalRetirement System Investment PlanProgram4922 Trust Fund, the department, or the Florida Retirement System 4923 Trust Fund may not incur any loss or gain as a result of an 4924 employer’s correction of such excess contributions. The third 4925 party administrator, hired by the state board pursuant to s. 4926 121.4501(8), shall calculate the market losses for each affected 4927 memberparticipant. If contributions made on behalf of members 4928 of the investment planparticipants of the optional retirement4929programor accompanying payroll data are not received within the 4930 calendar month due, the employer shall also pay the cost of the 4931 third-party administrator’s calculation and reconciliation 4932 adjustments resulting from the late contributions. The third 4933 party administrator shall notify the employer of the results of 4934 the calculations and the total amount due from the employer for 4935 such losses and the costs of calculation and reconciliation. The 4936 employer shall remit to the divisionof Retirementthe amount 4937 due within 30 working days after the date of the penalty notice 4938 sent by the division. The division shall transfer that amount to 4939 the third-party administrator, which shall deposit proceeds from 4940 the 1 percent1-percentassessment and from individual market 4941 losses into memberparticipantaccounts, as appropriate. The 4942 state board may adopt rules to administer the provisions 4943 regarding late contributions, late submission of payroll data, 4944 the process for reimbursing memberparticipantaccounts for 4945 resultant market losses, and the penalties charged to the 4946 employers. 4947 (d) If employee contributions reported by an employer on 4948 behalf of the employee are reduced as a result of employer 4949 errors or corrections and the employee has terminated employment 4950 and taken a refund or distribution, the employer shall be billed 4951 and is responsible for recovering from the employee any excess 4952 contributions erroneously provided by the employer. 4953 (e)(c)Delinquency fees specified in paragraph (a) may be 4954 waived by the divisionof Retirement, with regard to pension 4955 plandefined benefit programcontributions, and by the state 4956 board, with regard to investment planoptional retirement4957programcontributions, only if, in the opinion of the division 4958 or the board, as appropriate, exceptional circumstances beyond 4959 the employer’s control prevented remittance by the prescribed 4960 due date notwithstanding the employer’s good faith efforts to 4961 effect delivery. Such a waiver of delinquency may be granted an 4962 employer only once each planstate fiscalyear. 4963 (f) If the employer submits excess employer or employee 4964 contributions, the employer shall receive a credit to be applied 4965 against future contributions owed. The employer is responsible 4966 for reimbursing the employee for any excess contributions 4967 submitted if any return of such an erroneous excess pretax 4968 contribution by the program is made within 1 year after making 4969 erroneous contributions or such other period as allowed under 4970 applicable Internal Revenue Service guidance. 4971 (g)(d)If contributions made by an employer on behalf of 4972 members of the investment programparticipants in the optional4973retirement programare delayed in posting to memberparticipant4974 accounts due to acts of God beyond the control of the division 4975of Retirement, the state board, or the third-party 4976 administrator, as applicable, market losses resulting from the 4977 late contributions are not payable to the membersparticipants. 4978 Section 36. Subsection (1) of section 175.121, Florida 4979 Statutes, is amended to read: 4980 175.121 Department of Revenue and Division of Retirement to 4981 keep accounts of deposits; disbursements.—For any municipality 4982 or special fire control district having a chapter or local law 4983 plan established pursuant to this chapter: 4984 (1) The Department of Revenue shall keep a separate account 4985 of all moneys collected for each municipality and each special 4986 fire control district pursuant tounder the provisions ofthis 4987 chapter. All moneys so collected must be transferred to the 4988 Police and Firefighters’ Premium Tax Trust Fund andshall be4989 separately accounted for by the division. The moneys budgeted as 4990 necessary to pay the expenses of the division for the daily 4991 oversight and monitoring of the firefighters’ pension plans 4992 under this chapter and for the oversight and actuarial reviews 4993 conducted under part VII of chapter 112 are annually 4994 appropriated from the following sources in the order listed: 4995 (a) Interest and investment income earned on the moneys 4996 collected for each municipality or special fire control district 4997 and deposited in the Police and Firefighters’ Premium Tax Trust 4998 Fund. Interest and investment income remainingthereafterin the 4999 trust fund which is unexpended and otherwise unallocated by law 5000 shall revert to the General Revenue Fund on June 30 of each 5001 year. 5002 (b) Moneys collected for each municipality or special fire 5003 control district and deposited in the Police and Firefighters’ 5004 Premium Tax Trust Fund. Moneys used pursuant to this paragraph 5005 shall be reimbursed during years in which there is an excess of 5006 interest and investment income under paragraph (a). 5007 Section 37. Subsection (1) of section 175.341, Florida 5008 Statutes, is amended to read: 5009 175.341 Duties of Division of Retirement; rulemaking 5010 authority; investments by State Board of Administration.— 5011 (1) The division isshall beresponsible for the daily 5012 oversight and monitoring of theforactuarial soundness of the 5013 firefighters’ pension plans, whether chapter or local law plans, 5014 established under this chapter, for receiving and holding the 5015 premium tax moneys collected under this chapter, and, upon 5016 determining compliance with the provisions of this chapter, for 5017 disbursing those moneys to the firefighters’ pension plans. The 5018 funds necessary to pay expenses for such administration shall be 5019 annually appropriated as provided in s. 175.121(1)from the5020interest and investment income earned on moneys deposited in the5021trust fund. 5022 Section 38. Subsection (1) of section 185.10, Florida 5023 Statutes, is amended to read: 5024 185.10 Department of Revenue and Division of Retirement to 5025 keep accounts of deposits; disbursements.—For any municipality 5026 having a chapter plan or local law plan under this chapter: 5027 (1) The Department of Revenue shall keep a separate account 5028 of all moneys collected for each municipality pursuant tounder5029the provisions ofthis chapter. All moneys so collected must be 5030 transferred to the Police and Firefighters’ Premium Tax Trust 5031 Fund andshall beseparately accounted for by the division. The 5032 moneys budgeted as necessary to pay the expenses of the division 5033 for the daily oversight and monitoring of the police officers’ 5034 retirement plans under this chapter and for the oversight and 5035 actuarial reviews conducted under part VII of chapter 112 are 5036 annually appropriated from the following sources in the order 5037 listed: 5038 (a) Interest and investment income earned on the moneys 5039 collected for each municipality or special fire control district 5040 and deposited in the Police and Firefighters’ Premium Tax Trust 5041 Fund. Interest and investment income remainingthereafterin the 5042 trust fund which is unexpended and otherwise unallocated by law 5043 shall revert to the General Revenue Fund on June 30 of each 5044 year. 5045 (b) Moneys collected for each municipality or special fire 5046 control district and deposited in the Police and Firefighters’ 5047 Premium Tax Trust Fund. Moneys used pursuant to this paragraph 5048 shall be reimbursed during years in which there is an excess of 5049 interest and investment income under paragraph (a). 5050 Section 39. Subsection (1) of section 185.23, Florida 5051 Statutes, is amended to read: 5052 185.23 Duties of Division of Retirement; rulemaking 5053 authority; investments by State Board of Administration.— 5054 (1) The division isshall beresponsible for the daily 5055 oversight and monitoring of theforactuarial soundness of the 5056 municipal police officers’ retirement plans, whether chapter or 5057 local law plans, established under this chapter, for receiving 5058 and holding the premium tax moneys collected under this chapter, 5059 and, upon determining compliance with the provisions of this 5060 chapter, for disbursing those moneys to the municipal police 5061 officers’ retirement plans. The funds to pay the expenses for 5062 such administration shall be annually appropriated as provided 5063 in s. 185.10(1)from the interest and investment income earned5064on moneys deposited in the trust fund. 5065 Section 40. Subsection (1) of section 250.22, Florida 5066 Statutes, is amended to read: 5067 250.22 Retirement.— 5068 (1) Any person who is at least 62 years of age andwhohas 5069 completed at leastnot less than30 years of service as an 5070 officer or enlisted person in the Florida National Guard, 5071(exclusive of time served on the inactive or retired lists,) on,5072before, or subsequent to the passage of this sectionis eligible 5073 upon application, whether on the active or retired list of the 5074 Florida National Guard, to be retired under the provisions of 5075 this section at the highest rank attained while serving in the 5076 Florida National Guard or the federal military forces. 5077 (a) Such person, andshall initially receive pay in an 5078 amount equal to one-half of the base pay asis now or hereafter5079may beprescribed on the date of retirement in the applicable 5080 pay tables for similar grades and periods of service of 5081 personnel in the United States Army or Air Force if; provided5082that, in computing service in the Florida National Guard, 5083 service in federal military forces during a period of war or 5084 upon order of the President of the United States, in any 5085 military duty, where the applicant has been inducted from the 5086 Florida National Guard isshall beincluded; andprovided5087further that, in computing such service performed after July 1, 5088 1955, only federally recognized service isshall beincluded. 5089 Eligibility for retirement under this section is in addition to 5090 any other retirement that such person is eligible to receive; 5091provided,however, suchthatretirement payunder this section5092 shall be reduced by any amount of retirement pay, pension, or 5093 compensation which such person is eligible to receive from the 5094 Federal Government for military service. Unless otherwise 5095 provided by law, effective July 1, 2011, the retirement pay of a 5096 member or former member of the Florida National Guard may not be 5097 recomputed to reflect an increase in the rates of base pay for 5098 active members of the armed forces. 5099 (b) Effective July 1, 2012, and annually thereafter on July 5100 1, the Division of Retirement shall adjust the retirement pay of 5101 persons eligible under this section based on s. 121.101(3). 5102 Section 41. Paragraph (a) of subsection (4) of section 5103 1012.875, Florida Statutes, is amended to read: 5104 1012.875 State Community College System Optional Retirement 5105 Program.—Each community college may implement an optional 5106 retirement program, if such program is established therefor 5107 pursuant to s. 1001.64(20), under which annuity or other 5108 contracts providing retirement and death benefits may be 5109 purchased by, and on behalf of, eligible employees who 5110 participate in the program, in accordance with s. 403(b) of the 5111 Internal Revenue Code. Except as otherwise provided herein, this 5112 retirement program, which shall be known as the State Community 5113 College System Optional Retirement Program, may be implemented 5114 and administered only by an individual community college or by a 5115 consortium of community colleges. 5116 (4)(a) Through June 30, 2011, each college must contribute 5117 on behalf of each program memberparticipantan amount equal to 5118 10.43 percent of the employee’sparticipant’sgross monthly 5119 compensation. Effective July 1, 2011, each member shall 5120 contribute an amount equal to the employee contribution required 5121 under s. 121.71(3). Effective July 1, 2011, each employer shall 5122 contribute on behalf of each program member an amount equal to 5123 the difference between 10.43 percent of the employee’s gross 5124 monthly compensation and the employee’s required contribution 5125 based on the employee’s gross monthly compensation. The college 5126 shall deduct an amount approved by the district board of 5127 trustees of the college to provide for the administration of the 5128 optional retirement program. Payment of this contribution must 5129 be madeeitherdirectly by the college or through the program 5130 administrator to the designated company contracting for payment 5131 of benefits to the program memberparticipant. 5132 Section 42. The Legislature finds that a proper and 5133 legitimate state purpose is served when employees and retirees 5134 of the state and its political subdivisions, and the dependents, 5135 survivors, and beneficiaries of such employees and retirees, are 5136 extended the basic protections afforded by governmental 5137 retirement systems. These persons must be provided benefits that 5138 are fair and adequate and that are managed, administered, and 5139 funded in an actuarially sound manner, as required by s. 14, 5140 Article X of the State Constitution and part VII of chapter 112, 5141 Florida Statutes. Therefore, the Legislature determines and 5142 declares that this act fulfills an important state interest. 5143 Section 43. The Division of Statutory Revision is requested 5144 to rename the title of part II of chapter 121, Florida Statutes, 5145 as “Florida Retirement System Investment Plan.” 5146 Section 44. (1) Effective upon this act becoming a law, the 5147 State Board of Administration and the Department of Management 5148 Services shall, as soon as practicable, request a determination 5149 letter and private letter ruling from the United States Internal 5150 Revenue Service. If the Internal Revenue Service refuses to act 5151 upon a request for a private letter ruling, the legal opinion 5152 from a qualified tax attorney or firm may be substituted for the 5153 private letter ruling. 5154 (2) If the board or the department receives notification 5155 from the United States Internal Revenue Service that this act or 5156 any portion of this act will cause the Florida Retirement 5157 System, or a portion thereof, to be disqualified for tax 5158 purposes under the Internal Revenue Code, then that portion does 5159 not apply. Upon such notice, the state board and the department 5160 shall notify the presiding officers of the Legislature. 5161 Section 45. This act shall take effect June 30, 2011.