Bill Text: FL S2100 | 2011 | Regular Session | Enrolled
Bill Title: Retirement
Spectrum: Committee Bill
Status: (Enrolled - Dead) 2011-05-06 - Ordered engrossed, then enrolled -SJ 1832 [S2100 Detail]
Download: Florida-2011-S2100-Enrolled.html
ENROLLED 2011 Legislature SB 2100, 3rd Engrossed 20112100er 1 2 An act relating to retirement; amending ss. 110.123, 3 112.0801, 112.363, 112.65, and 121.011, F.S.; 4 conforming provisions to changes made by the act; 5 amending s. 121.021, F.S.; revising definitions; 6 amending s. 121.051, F.S.; requiring that a local 7 governmental entity or the governing body of a charter 8 school or charter technical career center make certain 9 elections regarding benefits at the time the entity or 10 governing body joins the Florida Retirement System; 11 requiring employee retirement contributions; providing 12 that employer-paid employee contributions are subject 13 to certain taxes; amending s. 121.0515, F.S.; 14 redefining membership in the Special Risk Class; 15 redefining criteria for Special Risk Class membership; 16 providing for employee contributions to be used, if 17 applicable, when purchasing credit for past service; 18 amending s. 121.052, F.S., relating to the membership 19 class of elected officers; conforming provisions to 20 changes made by the act; requiring member 21 contributions; providing for a refund of contributions 22 under certain circumstances for an officer who leaves 23 office; providing that a member who obtains a refund 24 of contributions waives certain rights under the 25 Florida Retirement System; amending s. 121.053, F.S.; 26 clarifying the employer contributions required for 27 Elected Officers’ Class members who participate in the 28 Deferred Retirement Option Program; amending s. 29 121.055, F.S., relating to the Senior Management 30 Service Class; conforming provisions to changes made 31 by the act; requiring employee contributions; 32 providing for a refund of contributions under certain 33 circumstances for a member who terminates employment; 34 providing that a member who obtains a refund of 35 contributions waives certain rights under the Florida 36 Retirement System; limiting the payment of benefits 37 prior to a participant’s termination of employment; 38 amending s. 121.061, F.S.; conforming provisions to 39 changes made by the act; amending s. 121.071, F.S.; 40 requiring employer and employee contributions to the 41 retirement system; providing for a refund of 42 contributions under certain circumstances following 43 termination of employment; prohibiting such refund if 44 an approved qualified domestic relations order is 45 filed against the participant’s retirement account; 46 providing that a member who obtains a refund of 47 contributions waives certain rights under the Florida 48 Retirement System; requiring repayment plus interest 49 of an invalid refund; amending s. 121.081, F.S.; 50 providing and revising requirements for contributions 51 for prior service performed on or after a certain 52 date; amending s. 121.091, F.S.; modifying the early 53 retirement benefit calculation for those members 54 retiring on or after a certain date or before the 55 normal retirement date to reflect the change in normal 56 retirement age; revising provisions relating to 57 disability retirement for judges; providing for the 58 refund of accumulated contributions if a member’s 59 employment is terminated for any reason other than 60 retirement; revising the interest rate on benefits for 61 members enrolling in drop after a certain date; 62 conforming provisions to changes made by the act; 63 amending s. 121.1001, F.S.; conforming provisions to 64 changes made by the act; amending s. 121.101, F.S.; 65 revising the cost-of-living adjustment depending on 66 the date of retirement; amending s. 121.1115, F.S.; 67 conforming provisions to changes made by the act; 68 amending s. 121.1122, F.S.; conforming provisions to 69 changes made by the act; amending s. 121.121, F.S.; 70 requiring that the purchase of creditable service 71 following an authorized leave of absence be purchased 72 at the employer and employee contribution rates in 73 effect during the leave of absence after a certain 74 date; amending s. 121.125, F.S.; requiring that a 75 penalty be assessed against certain employers that 76 fail to pay the required contributions for workers’ 77 compensation; reenacting s. 121.161, F.S.; conforming 78 provisions to changes made by the act; amending s. 79 121.182, F.S.; conforming provisions to changes made 80 by the act; amending s. 121.35, F.S., relating to the 81 optional retirement program for the State University 82 System; requiring employee contributions; limiting the 83 payment of benefits before a participant’s termination 84 of employment; conforming provisions to changes made 85 by the act; amending s. 121.355, F.S.; conforming 86 provisions to changes made by the act; amending s. 87 121.4501, F.S.; changing the name of the Public 88 Employee Optional Retirement Program to the Florida 89 Retirement System Investment Plan; requiring members 90 to make certain contributions to the plan; revising 91 and providing definitions; revising the benefit 92 commencement age for a member enrolled on or after a 93 certain date; providing for contribution adjustments 94 as a result of employer errors or corrections; 95 requiring an employer to receive a credit for excess 96 contributions and to reimburse an employee for excess 97 contributions, subject to certain limitations; 98 providing for a pension plan participant to retain his 99 or her prior plan choice following a return to 100 employment; prohibiting a retiree who is reemployed 101 from renewing membership in the plan; limiting certain 102 refunds of contributions which exceed the amount that 103 would have accrued had the member remained in the 104 defined benefit program; providing certain 105 requirements and limitations with respect to 106 contributions; clarifying that participant and 107 employer contributions are earmarked for specified 108 purposes; providing duties of the third-party 109 administrator; providing that a member is fully and 110 immediately vested with respect to employee 111 contributions paid by the member; providing for the 112 forfeiture of nonvested employer contributions and 113 service credit under certain circumstances; conforming 114 provisions to changes made by the act; amending s. 115 121.4502, F.S.; changing the name of the Public 116 Employee Optional Retirement Program Trust Fund to the 117 Florida Retirement System Investment Plan Trust Fund; 118 amending s. 121.4503, F.S.; providing for the deposit 119 of employee contributions into the Florida Retirement 120 System Contributions Clearing Trust Fund; amending s. 121 121.571, F.S.; providing requirements for submitting 122 employee contributions; amending s. 121.591, F.S.; 123 limiting the payment of benefits prior to a member’s 124 termination of employment; providing for the 125 forfeiture of nonvested accumulations and service 126 credits upon payment of certain vested benefits; 127 providing that the distribution payment method 128 selected by the member or beneficiary is final and 129 irrevocable at the time of benefit distribution; 130 prohibiting a distribution of employee contributions 131 if a qualified domestic relations order is filed 132 against the participant’s account; conforming 133 provisions to changes made by the act; amending s. 134 121.5911, F.S.; conforming provisions to changes made 135 by the act; amending s. 121.70, F.S.; revising 136 legislative intent; amending s. 121.71, F.S.; 137 requiring that employee contributions be deducted from 138 the employee’s monthly salary, beginning on a 139 specified date, and treated as employer contributions 140 under certain provisions of federal law; clarifying 141 that an employee may not receive such contributions 142 directly; specifying the required employee retirement 143 contribution rates for the membership of each 144 membership class and subclass of the Florida 145 Retirement System; specifying the required employer 146 retirement contribution rates for each membership 147 class and subclass of the Florida Retirement System in 148 order to address unfunded actuarial liabilities of the 149 system; requiring an assessment to be imposed if the 150 employee contributions remitted are less than the 151 amount required under certain circumstances; providing 152 for the employer to receive a credit for excess 153 contributions remitted and to apply such credit 154 against future contributions owed; amending ss. 155 121.72, 121.73, 121.74, 121.75, and 121.77, F.S.; 156 conforming provisions to changes made by the act; 157 amending s. 121.78, F.S.; requiring that certain fees 158 be imposed for delinquent payments for retirement 159 contributions; providing that an employer is 160 responsible for recovering any refund provided to an 161 employee in error; revising the terms of an authorized 162 waiver of delinquency; requiring an employer to 163 receive a credit for excess contributions and to 164 reimburse an employee for excess contributions, 165 subject to certain limitations; amending s. 1012.875, 166 F.S.; requiring employer and employee contributions 167 for members of the State Community College System 168 Optional Retirement Program on a certain date; 169 limiting the payment of benefits prior to a 170 participant’s termination of employment; requiring the 171 State Board of Administration and the Department of 172 Management Services to request a determination letter 173 and private letter ruling from the United States 174 Internal Revenue Service; providing legislative 175 findings; providing that the act fulfills an important 176 state interest; providing appropriations to and 177 authorizing additional positions for the Division of 178 Retirement within the Department of Management 179 Services; providing effective dates. 180 181 Be It Enacted by the Legislature of the State of Florida: 182 183 Section 1. Paragraph (g) of subsection (2) of section 184 110.123, Florida Statutes, is amended to read: 185 110.123 State group insurance program.— 186 (2) DEFINITIONS.—As used in this section, the term: 187 (g) “Retired state officer or employee” or “retiree” means 188 any state or state university officer or employee who retires 189 under a state retirement system or a state optional annuity or 190 retirement program or is placed on disability retirement, and 191 who was insured under the state group insurance program at the 192 time of retirement, and who begins receiving retirement benefits 193 immediately after retirement from state or state university 194 office or employment. The term also includesIn addition to195these requirements,any state officer or state employee who 196 retires under the Florida Retirement System Investment Plan 197Public Employee Optional Retirement Programestablished under 198 part II of chapter 121shall be considered a “retired state199officer or employee” or “retiree” as used in this sectionif he 200 or she: 201 1. Meets the age and service requirements to qualify for 202 normal retirement as set forth in s. 121.021(29); or 203 2. Has attained the age specified by s. 72(t)(2)(A)(i) of 204 the Internal Revenue Code and has 6 years of creditable service. 205 Section 2. Section 112.0801, Florida Statutes, is amended 206 to read: 207 112.0801 Group insurance; participation by retired 208 employees.— 209 (1) Any state agency, county, municipality, special 210 district, community college, or district school board thatwhich211 provides life, health, accident, hospitalization, or annuity 212 insurance, or all of any kinds of such insurance, for its 213 officers and employees and their dependents upon a group 214 insurance plan or self-insurance plan shall allow all former 215 personnel whohaveretired beforeprior toOctober 1, 1987, as 216 well as those who retire on or after such date, and their 217 eligible dependents, the option of continuing to participate in 218 thesuchgroup insurance plan or self-insurance plan. Retirees 219 and their eligible dependents shall be offered the same health 220 and hospitalization insurance coverage as is offered to active 221 employees at a premium cost of no more than the premium cost 222 applicable to active employees. Fortheretired employees and 223 their eligible dependents, the cost ofany suchcontinued 224 participationin any type of plan or any of the cost thereofmay 225 be paid by the employer or by the retired employees. To 226 determine health and hospitalization plan costs, the employer 227 shall commingle the claims experience of the retiree group with 228 the claims experience of the active employees; and, for other 229 types of coverage, the employer may commingle the claims 230 experience of the retiree group with the claims experience of 231 active employees. Retirees covered under Medicare may be 232 experience-rated separately from the retirees not covered by 233 Medicare and from active employees if, provided thatthe total 234 premium does not exceed that of the active group and coverage is 235 basically the same as for the active group. 236 (2) For purposes of this section, “retiree” means any 237 officer or employee who retires under a state retirement system 238 or a state optional annuity or retirement program or is placed 239 on disability retirement and who begins receiving retirement 240 benefits immediately after retirement from employment. In 241 addition to these requirements, any officer or employee who 242 retires under the Florida Retirement System Investment Plan 243Public Employee Optional Retirement Programestablished under 244 part II of chapter 121 isshall beconsidered a “retired officer 245 or employee” or “retiree” as used in this section if he or she: 246 (a) Meets the age and service requirements to qualify for 247 normal retirement as set forth in s. 121.021(29); or 248 (b) Has attained the age specified by s. 72(t)(2)(A)(i) of 249 the Internal Revenue Code and has the years of service required 250 for vesting as set forth in s. 121.021(45)6 years of creditable251service. 252 Section 3. Paragraphs (b) and (c) of subsection (2) and 253 paragraph (e) of subsection (3) of section 112.363, Florida 254 Statutes, are amended to read: 255 112.363 Retiree health insurance subsidy.— 256 (2) ELIGIBILITY FOR RETIREE HEALTH INSURANCE SUBSIDY.— 257 (b) For purposes of this section, a person is deemed 258 retired from a state-administered retirement system when he or 259 she terminates employment with all employers participating in 260 the Florida Retirement System as described in s. 121.021(39) 261 and: 262 1. For a memberparticipantof the investment planPublic263Employee Optional Retirement Programestablished under part II 264 of chapter 121, the participant meets the age or service 265 requirements to qualify for normal retirement as set forth in s. 266 121.021(29) and meets the definition of retiree in s. 267 121.4501(2). 268 2. For a member of the Florida Retirement System Pension 269 Plandefined benefit program, or any employee who maintains 270 creditable service underboththe pension plandefined benefit271programand the investment planPublic Employee Optional272Retirement Program, the member begins drawing retirement 273 benefits from the pension plandefined benefit program of the274Florida Retirement System. 275 (c)1.Effective July 1, 2001, any person retiring on or 276 after thatsuchdate as a member of the Florida Retirement 277 System, including a memberany participantof the investment 278 plandefined contribution programadministered pursuant to part 279 II of chapter 121, must have satisfied the vesting requirements 280 for his or her membership class under the pension planFlorida281Retirement System defined benefit programas administered under 282 part I of chapter 121. However, 2832. Notwithstanding the provisions of subparagraph 1.,a 284 person retiring due to disability musteitherqualify for a 285 regular or in-line-of-duty disability benefit as provided in s. 286 121.091(4) or qualify for a disability benefit under a 287 disability plan established under part II of chapter 121, as 288 appropriate. 289 (3) RETIREE HEALTH INSURANCE SUBSIDY AMOUNT.— 290 (e)1. Beginning July 1, 2001, each eligible retiree of the 291 pension plandefined benefit programof the Florida Retirement 292 System, or, if the retiree is deceased, his or her beneficiary 293 who is receiving a monthly benefit from such retiree’s account 294 and who is a spouse, or a person who meets the definition of 295 joint annuitant in s. 121.021(28), shall receive a monthly 296 retiree health insurance subsidy payment equal to the number of 297 years of creditable service, as defined in s. 121.021(17), 298 completed at the time of retirement multiplied by $5; however, 299 no eligible retiree or beneficiary may receive a subsidy payment 300 of more than $150 or less than $30. If there are multiple 301 beneficiaries, the total payment maymustnot be greater than 302 the payment to which the retiree was entitled. The health 303 insurance subsidy amount payable to any person receiving the 304 retiree health insurance subsidy payment on July 1, 2001, may 305shallnot be reduced solely by operation of this subparagraph. 306 2. Beginning July 1, 2002, each eligible memberparticipant307 of the investment planPublic Employee Optional Retirement308Programof the Florida Retirement System who has met the 309 requirements of this section, or, if the memberparticipantis 310 deceased, his or her spouse who is the member’sparticipant’s311 designated beneficiary, shall receive a monthly retiree health 312 insurance subsidy payment equal to the number of years of 313 creditable service, as provided in this subparagraph, completed 314 at the time of retirement, multiplied by $5; however, anno315 eligible retiree or beneficiary may not receive a subsidy 316 payment of more than $150 or less than $30. For purposes of 317 determining a member’sparticipant’screditable service used to 318 calculate the health insurance subsidy, a member’sparticipant’s319 years of service credit or fraction thereof shall be based on 320 the member’sparticipant’swork year as defined in s. 321 121.021(54). Credit mustshallbe awarded for a full work year 322 ifwheneverhealth insurance subsidy contributions have been 323 madeas required by lawfor each month in the member’s 324participant’swork year. In addition, all years of creditable 325 service retained under the Florida Retirement System Pension 326 Plan mustdefined benefit program shallbe included as 327 creditable service for purposes of this section. Notwithstanding 328 any other provision in this sectionto the contrary, the spouse 329 at the time of death isshall bethe member’sparticipant’s330 beneficiary unless such memberparticipanthas designated a 331 different beneficiary subsequent to the member’sparticipant’s332 most recent marriage. 333 Section 4. Subsection (1) of section 112.65, Florida 334 Statutes, is amended to read: 335 112.65 Limitation of benefits.— 336 (1) ESTABLISHMENT OF PROGRAM.—The normal retirement benefit 337 or pension payable to a retiree who becomes a member of any 338 retirement system or plan and who has not previously 339 participated in such plan, on or after January 1, 1980, may 340shallnot exceed 100 percent of his or her average final 341 compensation. However,nothing contained inthis section does 342 notshallapply to supplemental retirement benefits or to 343 pension increases attributable to cost-of-living increases or 344 adjustments. For the purposes of this section, benefits accruing 345 in individual memberparticipantaccounts established under the 346 investment planPublic Employee Optional Retirement Program347 established in part II of chapter 121 are considered 348 supplemental benefits. As used in this section, the term 349 “average final compensation” means the average of the member’s 350 earnings over a period of time which the governmental entity has 351 established by statute, charter, or ordinance. 352 Section 5. Paragraph (g) of subsection (3) of section 353 121.011, Florida Statutes, is amended, and paragraph (h) is 354 added to that subsection, to read: 355 121.011 Florida Retirement System.— 356 (3) PRESERVATION OF RIGHTS.— 357 (g) Any member of the Florida Retirement System or any 358 member of an existing system under this chapter who is not 359 retired and who is, has been, or shall be dismissed from 360 employment shall be considered terminated from active membership 361 in such system. 362 1. If such dismissal is rescinded by proper authority or 363 through legal proceedings, the member is eligible to receive 364 retirement service credit for such period of dismissal if 365provided: 366 a. The dismissal action taken against the member is 367 determined to be incorrect and is negated, the employee is made 368 whole for the period of the dismissal or any portion thereof, 369 and employment is reinstated; and 370 b. The employer pays into the Retirement System Trust Fund 371 the total required employer contributions for the period for 372 which the employee is made whole, plus interest at 6.5 percent 373 compounded annually until full payment is made. The employee 374 shall pay the total employee contributions, plus interest,if 375 applicable. The employer shall pay the interest on employee 376 contributions, if applicable. 377 2. If the dismissal action is subsequently changed to a 378 suspension by proper authority or through legal proceedings, the 379 member is eligible to receive retirement service credit, 380 provided the member’s employment is reinstated, restoring the 381 employee-employer relationship, and the employee pays the total 382 required employer and employee contributions and complies with 383 all requirements in paragraph (e). 384 (h) Effective July 1, 2011, the retirement system shall 385 require employer and employee contributions as provided in s. 386 121.071 and part III of this chapter. 387 Section 6. Subsections (3), (7), and (15), paragraph (a) of 388 subsection (19), paragraph (b) of subsection (22), and 389 subsections (24), (29), (38), (39), (45), (55), and (59) of 390 section 121.021, Florida Statutes, are amended 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 (7) “Division” means the Division of Retirement in the 406 department.“City” means any municipality duly incorporated407under the laws of the state.408 (15) “Special risk member” or “Special Risk Class member” 409 means a member of the Florida Retirement System who meets the 410 eligibility and criteria required under s. 121.0515 for 411 participation in the Special Risk Class. 412(a) Until October 1, 1978, “special risk member” means any413officer or employee whose application is approved by the414administrator and who receives salary payments for work415performed as a peace officer; law enforcement officer; police416officer; highway patrol officer; custodial employee at a417correctional or detention facility; correctional agency employee418whose duties and responsibilities involve direct contact with419inmates, but excluding secretarial and clerical employees;420firefighter; or an employee in any other job in the field of law421enforcement or fire protection if the duties of such person are422certified as hazardous by his or her employer.423(b) Effective October 1, 1978, “special risk member” means424a member of the Florida Retirement System who is designated as a425special risk member by the division in accordance with s.426121.0515. Such member must be employed as a law enforcement427officer, a firefighter, or a correctional officer and must meet428certain other special criteria as set forth in s.121.0515.429(c) Effective October 1, 1999, “special risk member” means430a member of the Florida Retirement System who is designated as a431special risk member by the division in accordance with s.432121.0515. Such member must be employed as a law enforcement433officer, a firefighter, a correctional officer, an emergency434medical technician, or a paramedic and must meet certain other435special criteria as set forth in s.121.0515.436(d)1. Effective January 1, 2001, “special risk member”437includes any member who is employed as a community-based438correctional probation officer and meets the special criteria439set forth in s.121.0515(2)(e).4402. Effective January 1, 2001, “special risk member”441includes any professional health care bargaining unit or non442unit member who is employed by the Department of Corrections or443the Department of Children and Family Services and meets the444special criteria set forth in s.121.0515(2)(f).445(e) Effective July 1, 2001, the term “special risk member”446includes any member who is employed as a youth custody officer447by the Department of Juvenile Justice and meets the special448criteria set forth in s.121.0515(2)(g).449(f) Effective August 1, 2008, “special risk member”450includes any member who meets the special criteria for continued451membership set forth in s.121.0515(2)(k).452 (19) “Prior service” under part I of this chapter means: 453 (a) Service for which the member had credit under one of 454 the existing systems and received a refund of his or her 455 contributions upon termination of employment. Prior service 456shallalso includesinclude thatservicebetween December 1,4571970, and the date the system becomes noncontributoryfor which 458 the member had credit under the Florida Retirement System and 459 received a refund of his or her contributions upon termination 460 of employment. 461 (22) “Compensation” means the monthly salary paid a member 462 by his or her employer for work performed arising from that 463 employment. 464 (b)Under no circumstances shallCompensation for a member 465 participating in the pension plandefined benefit retirement466programor the investment planPublic Employee Optional467Retirement Programof the Florida Retirement System may not 468 include: 469 1. Fees paid professional persons for special or particular 470 services orincludesalary payments made from a faculty practice 471 plan authorized by the Board of Governors of the State 472 University System for eligible clinical faculty at a college in 473 a state university that has a faculty practice plan; or 474 2. Any bonuses or other payments prohibited from inclusion 475 in the member’s average final compensationand defined in476subsection (47). 477 (24)(a) “Average final compensation” means: 478 1. For members initially enrolled before July 1, 2011, the 479 average of the 5 highest fiscal years of compensation for 480 creditable service beforeprior toretirement, termination, or 481 death. For in-line-of-duty disability benefits, if less than 5 482 years of creditable service have been completed, the term 483“average final compensation”means the average annual 484 compensation of the total number of years of creditable service. 485 Each year used to calculate thein the calculation ofaverage 486 final compensation commencesshall commenceon July 1. 487 2. For members initially enrolled on or after July 1, 2011, 488 the average of the 8 highest fiscal years of compensation for 489 creditable service before retirement, termination, or death. For 490 in-line-of-duty disability benefits, if less than 8 years of 491 creditable service have been completed, the term means the 492 average annual compensation of the total number of years of 493 creditable service. Each year used to calculate average final 494 compensation commences on July 1. 495 (b)(a)The average final compensation includesshall496include: 497 1. Accumulated annual leave payments, not to exceed 500 498 hours; and 499 2. All payments defined as compensation in subsection (22). 500 (c)(b)The average final compensation doesshallnot 501 include: 502 1. Compensation paid to professional persons for special or 503 particular services; 504 2. Payments for accumulated sick leave made due to 505 retirement or termination; 506 3. Payments for accumulated annual leave in excess of 500 507 hours; 508 4. Bonuses as defined in subsection (47); 509 5. Third party payments made on and after July 1, 1990; or 510 6. Fringe benefits (for example, automobile allowances or 511 housing allowances). 512 (29) “Normal retirement date” means the date a member 513 attains normal retirement age and is vested, which is determined 514 as follows: 515 (a)1. If a Regular Class member, a Senior Management 516 Service Class member, or an Elected Officers’ Class member 517 initially enrolled before July 1, 2011: 518 a.1.The first day of the month the membercompletes 6 or519more years of creditable service andattains age 62; or 520 b.2.The first day of the month following the date the 521 member completes 30 years of creditable service, regardless of 522 age. 523 2. If a Regular Class member, a Senior Management Service 524 Class member, or an Elected Officers’ Class member initially 525 enrolled on or after July 1, 2011: 526 a. The first day of the month the member attains age 65; or 527 b. The first day of the month following the date the member 528 completes 33 years of creditable service, regardless of age. 529 (b)1. If a Special Risk Class member initially enrolled 530 before July 1, 2011: 531 a.1.The first day of the month the membercompletes 6 or532more years of creditable service in the Special Risk Class and533 attains age 55 and completes the years of creditable service in 534 the Special Risk Class equal to or greater than the years of 535 service required for vesting; 536 b.2.The first day of the month following the date the 537 member completes 25 years of creditable service in the Special 538 Risk Class, regardless of age; or 539 c.3.The first day of the month following the date the 540 member completes 25 years of creditable service and attains age 541 52, which service may include a maximum of 4 years of military 542 service credit ifas long assuch credit is not claimed under 543 any other system and the remaining years are in the Special Risk 544 Class. 545 2. If a Special Risk Class member initially enrolled on or 546 after July 1, 2011: 547 a. The first day of the month the member attains age 60 and 548 completes the years of creditable service in the Special Risk 549 Class equal to or greater than the years of service required for 550 vesting; 551 b. The first day of the month following the date the member 552 completes 30 years of creditable service in the Special Risk 553 Class, regardless of age; or 554 c. The first day of the month following the date the member 555 completes 30 years of creditable service and attains age 57, 556 which service may include a maximum of 4 years of military 557 service credit if such credit is not claimed under any other 558 system and the remaining years are in the Special Risk Class. 559 560 “Normal retirement age” is attained on the “normal retirement 561 date.” 562 (38) “Continuous service” means creditable service as a 563 member, beginning with the first day of employment with an 564 employer covered under a state-administered retirement system 565 consolidated herein and continuing for as long as the member 566 remains in an employer-employee relationship with an employer 567 covered under this chapter. An absence of 1 calendar month or 568 more from an employer’s payroll shall be considered a break in 569 continuous service, except for periods of absence during which 570 an employer-employee relationship continues to exist and such 571 period of absence is creditable under this chapter or under one 572 of the existing systems consolidated herein. However, a law 573 enforcement officer as defined in s. 121.0515(3)(2)(a) who was a 574 member of a state-administered retirement system under chapter 575 122 or chapter 321 and who resigned and was subsequently 576 reemployed in a law enforcement position within 12 calendar 577 months of such resignation by an employer under such state 578 administered retirement system shall be deemed to have not 579 experienced a break in service. Further, with respect to a 580 state-employed law enforcement officer who meets the criteria 581 specified in s. 121.0515(3)(2)(a), if the absence from the 582 employer’s payroll is the result of a “layoff” as defined in s. 583 110.107 or a resignation to run for an elected office that meets 584 the criteria specified in s. 121.0515(3)(2)(a), no break in 585 continuous service shall be deemed to have occurred if the 586 member is reemployed as a state law enforcement officer or is 587 elected to an office which meets the criteria specified in s. 588 121.0515(3)(2)(a) within 12 calendar months after the date of 589 the layoff or resignation, notwithstanding the fact that such 590 period of layoff or resignation is not creditable service under 591 this chapter. A withdrawal of contributions will constitute a 592 break in service. Continuous service also includes past service 593 purchased under this chapter, provided such service is 594 continuous within this definition and the rules established by 595 the administrator. The administrator may establish 596 administrative rules and procedures for applying this definition 597 to creditable service authorized under this chapter. Any 598 correctional officer, as defined in s. 943.10, whose 599 participation in the state-administered retirement system is 600 terminated due to the transfer of a county detention facility 601 through a contractual agreement with a private entity pursuant 602 to s. 951.062, shall be deemed an employee with continuous 603 service in the Special Risk Class, provided return to employment 604 with the former employer takes place within 3 years due to 605 contract termination or the officer is employed by a covered 606 employer in a special risk position within 1 year after his or 607 her initial termination of employment by such transfer of its 608 detention facilities to the private entity. 609 (39)(a) “Termination” occurs, except as provided in 610 paragraph (b), when a member ceases all employment relationships 611 with participating employersan employer, however: 612 1. For retirements effective before July 1, 2010, if a 613 member is employed by any such employer within the next calendar 614 month, termination shall be deemed not to have occurred. A leave 615 of absence constitutes a continuation of the employment 616 relationship, except that a leave of absence without pay due to 617 disability may constitute termination if such member makes 618 application for and is approved for disability retirement in 619 accordance with s. 121.091(4). The department or state board may 620 require other evidence of termination as it deems necessary. 621 2. For retirements effective on or after July 1, 2010, if a 622 member is employed by any such employer within the next 6 623 calendar months, termination shall be deemed not to have 624 occurred. A leave of absence constitutes a continuation of the 625 employment relationship, except that a leave of absence without 626 pay due to disability may constitute termination if such member 627 makes application for and is approved for disability retirement 628 in accordance with s. 121.091(4). The department or state board 629 may require other evidence of termination as it deems necessary. 630 (b) “Termination” for a member electing to participate in 631 the Deferred Retirement Option Program occurs when the program 632 participant ceases all employment relationships with 633 participating employersan employerin accordance with s. 634 121.091(13), however: 635 1. For termination dates occurring before July 1, 2010, if 636 the memberparticipantis employed by any such employer within 637 the next calendar month, termination will be deemed not to have 638 occurred, except as provided in s. 121.091(13)(b)4.c. A leave of 639 absence shall constitute a continuation of the employment 640 relationship. 641 2. For termination dates occurring on or after July 1, 642 2010, if the memberparticipantbecomes employed by any such 643 employer within the next 6 calendar months, termination will be 644 deemed not to have occurred, except as provided in s. 645 121.091(13)(b)4.c. A leave of absence constitutes a continuation 646 of the employment relationship. 647 (c) Effective July 1, 2011, “termination” for a member 648 receiving a refund of employee contributions occurs when a 649 member ceases all employment relationships with participating 650 employers for 3 calendar months. A leave of absence constitutes 651 a continuation of the employment relationship. 652 (45)(a)“Vested” or “vesting” means the guarantee that a 653 member is eligible to receive a future retirement benefit upon 654 completion of the required years of creditable service for the 655 employee’s class of membership, even though the member may have 656 terminated covered employment before reaching normal or early 657 retirement date. Being vested does not entitle a member to a 658 disability benefit. Provisions governing entitlement to 659 disability benefits are set forth under s. 121.091(4). 660 (a)(b)Effective July 1, 2001, through June 30, 2011, a 6 661 year vesting requirement shall be implemented for thedefined662benefit program of theFlorida Retirement System Pension Plan 663System. Pursuant thereto: 664 1. Any member employed in a regularly established position 665 on July 1, 2001, who completes or has completed a total of 6 666 years of creditable service isshall beconsidered vestedas667described in paragraph (a). 668 2. Any member not employed in a regularly established 669 position on July 1, 2001, shall be deemed vested upon completion 670 of 6 years of creditable service if, provided thatsuch member 671 is employed in a covered position for at least 1 work year after 672 July 1, 2001. However, anomember is notshall berequired to 673 complete more years of creditable service than would have been 674 required for that member to vest under retirement laws in effect 675 before July 1, 2001. 676 3. Any member initially enrolled in the Florida Retirement 677 System on July 1, 2001, through June 30, 2011, shall be deemed 678 vested upon completion of 6 years of creditable service. 679 (b) Any member initially enrolled in the Florida Retirement 680 System on or after July 1, 2011, shall be vested upon completion 681 of 8 years of creditable service. 682 (55) “Benefit” means any pension payment, lump-sum or 683 periodic, to a member, retiree, or beneficiary, based partially 684 or entirely on employer contributions or employee contributions, 685 if applicable. 686 (59) “Payee” means a retiree or beneficiary of a retiree 687 who has received or is receiving a retirement benefit payment. 688 Section 7. Paragraphs (b) and (c) of subsection (2) and 689 subsection (3) of section 121.051, Florida Statutes, are amended 690 to read: 691 121.051 Participation in the system.— 692 (2) OPTIONAL PARTICIPATION.— 693 (b)1. The governing body of any municipality, metropolitan 694 planning organization, or special district in the state may 695 elect to participate in the Florida Retirement System upon 696 proper application to the administrator and may cover allor any697 of its units as approved by the Secretary of Health and Human 698 Services and the administrator. The department shall adopt rules 699 establishing proceduresprovisionsfor the submission of 700 documents necessary for such application. BeforePrior tobeing 701 approved for participation in theFlorida Retirementsystem, the 702 governing body of aany suchmunicipality, metropolitan planning 703 organization, or special district that has a local retirement 704 system mustshallsubmit to the administrator a certified 705 financial statement showing the condition of the local 706 retirement systemas of a datewithin 3 months beforeprior to707 the proposed effective date of membership in the Florida 708 Retirement System. The statement must be certified by a 709 recognized accounting firm that is independent of the local 710 retirement system. All required documents necessary for 711 extending Florida Retirement System coverage must be received by 712 the department for consideration at least 15 days beforeprior713tothe proposed effective date of coverage. If the municipality, 714 metropolitan planning organization, or special district does not 715 comply with this requirement, the department may require that 716 the effective date of coverage be changed. 717 2. A municipalityAny city, metropolitan planning 718 organization, or special district that has an existing 719 retirement system covering the employees in the units that are 720 to be brought under the Florida Retirement System may 721 participate only after holding a referendum in which all 722 employees in the affected units have the right to participate. 723 Only those employees electing coverage under the Florida 724 Retirement System by affirmative vote in thesaidreferendum are 725shall beeligible for coverage under this chapter, and those not 726 participating or electing not to be covered by the Florida 727 Retirement System shall remain in their present systems and are 728shallnotbeeligible for coverage under this chapter. After the 729 referendum is held, all future employees areshall becompulsory 730 members of the Florida Retirement System. 731 3. At the time of joining the Florida Retirement System, 732 the governing body of a municipalityany city, metropolitan 733 planning organization, or special district complying with 734 subparagraph 1. may elect to provide, or not provide, benefits 735 based on past service of officers and employees as described in 736 s. 121.081(1). However, if such employer elects to provide past 737 service benefits, such benefits must be provided for all 738 officers and employees of its covered group. 739 4. Once this election is made and approved it may not be 740 revoked, except pursuant to subparagraphs 5. and 6., and all 741 present officers and employees electing coverageunder this742chapterand all future officers and employees areshall be743 compulsory members of the Florida Retirement System. 744 5. Subject tothe conditions set forth insubparagraph 6., 745 the governing body of aanyhospital licensed under chapter 395 746 which is governed by the board of a special district as defined 747 in s. 189.403(1)or by the board of trustees of a public health 748 trust created under s. 154.07, hereinafter referred to as 749 “hospital district,” and which participates in the Florida 750 Retirement System, may elect to cease participation in the 751 system with regard to future employees in accordance with the 752 followingprocedure: 753 a. No more than 30 days and at least 7 days before adopting 754 a resolution to partially withdraw from theFlorida Retirement755 system and establish an alternative retirement plan for future 756 employees, a public hearing must be held on the proposed 757 withdrawal and proposed alternative plan. 758 b. From 7 to 15 days before such hearing, notice of intent 759 to withdraw, specifying the time and place of the hearing, must 760 be provided in writing to employees of the hospital district 761 proposing partial withdrawal and must be published in a 762 newspaper of general circulation in the area affected, as 763 provided by ss. 50.011-50.031. Proof of publication mustof such764notice shallbe submitted to the Department of Management 765 Services. 766 c. The governing body of aanyhospital district seeking to 767 partially withdraw from the system must, before such hearing, 768 have an actuarial report prepared and certified by an enrolled 769 actuary, as defined in s. 112.625(3), illustrating the cost to 770 the hospital district of providing, through the retirement plan 771 that the hospital district is to adopt, benefits for new 772 employees comparable to those provided under theFlorida773Retirementsystem. 774 d. Upon meeting all applicable requirements of this 775 subparagraph, and subject tothe conditions set forth in776 subparagraph 6., partial withdrawal from the system and adoption 777 of the alternative retirement plan may be accomplished by 778 resolution duly adopted by the hospital district board. The 779 hospital district board must provide written notice of such 780 withdrawal to the division by mailing a copy of the resolution 781 to the division, postmarked byno later thanDecember 15, 1995. 782 The withdrawal shall take effect January 1, 1996. 783 6. Following the adoption of a resolution under sub 784 subparagraph 5.d., all employees of the withdrawing hospital 785 district who were members ofparticipants intheFlorida786Retirementsystem beforeprior toJanuary 1, 1996, shall remain 787 as members ofparticipants inthe system for as long as they are 788 employees of the hospital district, and all rights, duties, and 789 obligations between the hospital district, the system, and the 790 employeesshallremain in full force and effect. Any employee 791 who is hired or appointed on or after January 1, 1996, may not 792 participate in theFlorida Retirementsystem, and the 793 withdrawing hospital district hasshall haveno obligation to 794 the system with respect to such employees. 795 (c) Employees of public community colleges or charter 796 technical career centers sponsored by public community colleges, 797 designated in s. 1000.21(3), who are members of the Regular 798 Class of the Florida Retirement System and who comply with the 799 criteria set forth in this paragraph and s. 1012.875 may, in 800 lieu of participating in the Florida Retirement System, elect to 801 withdraw from the system altogether and participate in the State 802 Community College System Optional Retirement Program provided by 803 the employing agency under s. 1012.875. 804 1.a. Through June 30, 2001, the cost to the employer for 805 benefits under the optional retirement programsuch annuity806 equals the normal cost portion of the employer retirement 807 contribution which would be required if the employee were a 808 member of the pension plan’s Regular Classdefined benefit809program, plus the portion of the contribution rate required by 810 s. 112.363(8) which would otherwise be assigned to the Retiree 811 Health Insurance Subsidy Trust Fund. 812 b. Effective July 1, 2001, through June 30, 2011, each 813 employer shall contribute on behalf of each member of 814participant inthe optional program an amount equal to 10.43 815 percent of the employee’sparticipant’sgross monthly 816 compensation. The employer shall deduct an amount for the 817 administration of the program. 818 c. Effective July 1, 2011, each member shall contribute an 819 amount equal to the employee contribution required under s. 820 121.71(3). The employer shall contribute on behalf of each 821 program member an amount equal to the difference between 10.43 822 percent of the employee’s gross monthly compensation and the 823 employee’s required contribution based on the employee’s gross 824 monthly compensation. 825 d. The employer shall contribute an additional amount to 826 the Florida Retirement System Trust Fund equal to the unfunded 827 actuarial accrued liability portion of the Regular Class 828 contribution rate. 829 2. The decision to participate in theanoptional 830 retirement program is irrevocable as long as the employee holds 831 a position eligible for participation, except as provided in 832 subparagraph 3. Any service creditable under the Florida 833 Retirement System is retained after the member withdraws from 834 the system; however, additional service credit in the system may 835 not be earned while a member of the optional retirement program. 836 3. An employee who has elected to participate in the 837 optional retirement program shall have one opportunity, at the 838 employee’s discretion, to transfer from the optional retirement 839 program to the pension plandefined benefit programof the 840 Florida Retirement System or to the investment plan established 841 under part II of this chapterPublic Employee Optional842Retirement Program, subject to the terms of the applicable 843 optional retirement program contracts. 844 a. If the employee chooses to move to the investment plan 845Public Employee Optional Retirement Program, any contributions, 846 interest, and earnings creditable to the employee under the 847State Community College Systemoptional retirement program are 848 retained by the employee in theState Community College System849 optional retirement program, and the applicable provisions of s. 850 121.4501(4) govern the election. 851 b. If the employee chooses to move to the pension plan 852defined benefit programof the Florida Retirement System, the 853 employee shall receive service credit equal to his or her years 854 of service under theState Community College Systemoptional 855 retirement program. 856 (I) The cost for such credit is the amount representing the 857 present value of the employee’s accumulated benefit obligation 858 for the affected period of service. The cost shall be calculated 859 as if the benefit commencement occurs on the first date the 860 employee becomes eligible for unreduced benefits, using the 861 discount rate and other relevant actuarial assumptions that were 862 used to value the Florida Retirement System Pensiondefined863benefitPlan liabilities in the most recent actuarial valuation. 864 The calculation must include any service already maintained 865 under the pensiondefined benefitplan in addition to the years 866 under theState Community College Systemoptional retirement 867 program. The present value of any service already maintained 868 must be applied as a credit to total cost resulting from the 869 calculation. The division shall ensure that the transfer sum is 870 prepared using a formula and methodology certified by an 871 enrolled actuary. 872 (II) The employee must transfer from his or herState873Community College Systemoptional retirement program account and 874 from other employee moneys as necessary, a sum representing the 875 present value of the employee’s accumulated benefit obligation 876 immediately following the time of such movement, determined 877 assuming that attained service equals the sum of service in the 878 pension plandefined benefit programand service in theState879Community College Systemoptional retirement program. 880 4. Participation in the optional retirement program is 881 limited to employees who satisfy the following eligibility 882 criteria: 883 a. The employee ismust beotherwise eligible for 884 membership or renewed membership in the Regular Class of the 885 Florida Retirement System, as provided in s. 121.021(11) and 886 (12) or s. 121.122. 887 b. The employee ismust beemployed in a full-time position 888 classified in the Accounting Manual for Florida’s Public 889 Community Colleges as: 890 (I) Instructional; or 891 (II) Executive Management, Instructional Management, or 892 Institutional Management and the, if acommunity college 893 determines that recruiting to fill a vacancy in the position is 894 to be conducted in the national or regional market, and the 895 duties and responsibilities of the position include the 896 formulation, interpretation, or implementation of policies, or 897 the performance of functions that are unique or specialized 898 within higher education and that frequently support the mission 899 of the community college. 900 c. The employee ismust beemployed in a position not 901 included in the Senior Management Service Class of the Florida 902 Retirement System,as described in s. 121.055. 903 5. Members ofParticipants inthe program are subject to 904 the same reemployment limitations, renewed membership 905 provisions, and forfeiture provisionsas areapplicable to 906 regular members of the Florida Retirement System under ss. 907 121.091(9), 121.122, and 121.091(5), respectively. A member 908participantwho receives a program distribution funded by 909 employer and required employee contributions isshall bedeemed 910 to be retired from a state-administered retirement system if the 911 memberparticipantis subsequently employed with an employer 912 that participates in the Florida Retirement System. 913 6. Eligible community college employees are compulsory 914 members of the Florida Retirement System until, pursuant to s. 915 1012.875, a written election to withdraw from the system and 916 participate in theState Community College Systemoptional 917 retirement program is filed with the program administrator and 918 received by the division. 919 a. A community college employee whose program eligibility 920 results from initial employment shallmustbe enrolled in the 921State Community College Systemoptional retirement program 922 retroactive to the first day of eligible employment. The 923 employer and employee retirement contributions paid through the 924 month of the employee plan change shall be transferred to the 925 community college to the employee’s optional program account, 926 and, effective the first day of the next month, the employer 927 shall pay the applicable contributions based upon subparagraph 928 1. 929 b. A community college employee whose program eligibility 930 is due to the subsequent designation of the employee’s position 931 as one of those specified in subparagraph 4., or due to the 932 employee’s appointment, promotion, transfer, or reclassification 933 to a position specified in subparagraph 4., must be enrolled in 934 the program on the first day of the first full calendar month 935 that such change in status becomes effective. The employer and 936 employee retirement contributions paid from the effective date 937 through the month of the employee plan change must be 938 transferred to the community college to the employee’s optional 939 program account, and, effective the first day of the next month, 940 the employer shall pay the applicable contributions based upon 941 subparagraph 1. 942 7. Effective July 1, 2003, through December 31, 2008, any 943 memberparticipantof theState Community College System944 optional retirement program who has service credit in the 945 pensiondefined benefitplan of the Florida Retirement System 946 for the period between his or her first eligibility to transfer 947 from the pensiondefined benefitplan to the optional retirement 948 program and the actual date of transfer may, during employment, 949 transfer to the optional retirement program a sum representing 950 the present value of the accumulated benefit obligation under 951 the defined benefit retirement program for the period of service 952 credit. Upon transfer, all service credit previously earned 953 under the pension plandefined benefit program of the Florida954Retirement Systemduring this period is nullified for purposes 955 of entitlement to a future benefit under the pension plan 956defined benefit program of the Florida Retirement System. 957 (3) SOCIAL SECURITY COVERAGE.—Social security coverage 958 shall be provided for all officers and employees who become 959 members underthe provisions ofsubsection (1) or subsection 960 (2). Any modification of the present agreement with the Social 961 Security Administration, or referendum required under the Social 962 Security Act, for the purpose of providing social security 963 coverage for any member shall be requested by the state agency 964 in compliance with the applicable provisions of the Social 965 Security Act governing such coverage. However, retroactive 966 social security coverage for service beforeprior toDecember 1, 967 1970, with the employer mayshallnot be provided for aany968 member who was not covered under the agreement as of November 969 30, 1970. The employer-paid employee contributions specified in 970 s. 121.71(3) are subject to taxes imposed under the Federal 971 Insurance Contributions Act, 26 U.S.C. ss. 3101-3128. 972 Section 8. Section 121.0515, Florida Statutes, is amended 973 to read: 974 121.0515 Special Risk Classmembership.— 975 (1) ESTABLISHMENT OF CLASSLEGISLATIVE INTENT.—A separate 976In creating the Special Riskclass of membership within the 977 Florida Retirement System, to be known as the “Special Risk 978 Class,” is establishedit is the intent and purpose of the979Legislatureto recognize that persons employed in certain 980 categories of law enforcement, firefighting, criminal detention, 981 and emergency medical care positions are required as one of the 982 essential functions of their positions to perform work that is 983 physically demanding or arduous, or work that requires 984 extraordinary agility and mental acuity, and that such persons, 985 because of diminishing physical and mental faculties, may find 986 that they are not able, without risk to the health and safety of 987 themselves, the public, or their coworkers, to continue 988 performing such duties and thus enjoy the full career and 989 retirement benefits enjoyed by persons employed in other 990 membership classespositionsand that, if they find it 991 necessary, due to the physical and mental limitations of their 992 age, to retire at an earlier age and usually with less service, 993 they will suffer an economic deprivation therefrom. To address 994Therefore, as a means of recognizingthe peculiar and special 995 problems of this class of employees,it is the intent and996purpose of the Legislature to establisha class of retirement 997 membership is established that awards more retirement credit per 998 year of service than that awarded to other employees; however, 999 nothing contained herein shall require ineligibility for Special 1000 Risk Class membership upon reaching age 55. 1001 (2) MEMBERSHIP.— 1002 (a) Until October 1, 1978, “special risk member” means any 1003 officer or employee whose application is approved by the 1004 administrator and who receives salary payments for work 1005 performed as a peace officer; law enforcement officer; police 1006 officer; highway patrol officer; custodial employee at a 1007 correctional or detention facility; correctional agency employee 1008 whose duties and responsibilities involve direct contact with 1009 inmates, but excluding secretarial and clerical employees; 1010 firefighter; or an employee in any other job in the field of law 1011 enforcement or fire protection if the duties of such person are 1012 certified as hazardous by his or her employer. 1013 (b) Effective October 1, 1978, through September 30, 1999, 1014 “special risk member” means a member of the Florida Retirement 1015 System who is designated as a special risk member by the 1016 division in accordance with this section. Such member must be 1017 employed as a law enforcement officer, a firefighter, or a 1018 correctional officer and must meet certain other special 1019 criteria as set forth in this section. 1020 (c) Effective October 1, 1999, “special risk member” means 1021 a member of the Florida Retirement System who is designated as a 1022 special risk member by the division in accordance with this 1023 section. Such member must be employed as a law enforcement 1024 officer, a firefighter, a correctional officer, an emergency 1025 medical technician, or a paramedic and must meet certain other 1026 special criteria as set forth in this section. 1027 (d) Effective January 1, 2001, “special risk member” 1028 includes: 1029 1. Any member who is employed as a community-based 1030 correctional probation officer and meets the special criteria 1031 set forth in paragraph (3)(e). 1032 2. Any professional health care bargaining unit or non-unit 1033 member who is employed by the Department of Corrections or the 1034 Department of Children and Family Services and meets the special 1035 criteria set forth in paragraph (3)(f). 1036 (e) Effective July 1, 2001, “special risk member” includes 1037 any member who is employed as a youth custody officer by the 1038 Department of Juvenile Justice and meets the special criteria 1039 set forth in paragraph (3)(g). 1040 (f) Effective October 1, 2005, through June 30, 2008, the 1041 member must be employed by a law enforcement agency or medical 1042 examiner’s office in a forensic discipline and meet the special 1043 criteria set forth in paragraph (3)(h). 1044 (g) Effective July 1, 2008, the member must be employed by 1045 the Department of Law Enforcement in the crime laboratory or by 1046 the Division of State Fire Marshal in the forensic laboratory 1047 and meet the special criteria set forth in paragraph (3)(i). 1048 (h) Effective July 1, 2008, the member must be employed by 1049 a local government law enforcement agency or medical examiner’s 1050 office and meet the special criteria set forth in paragraph 1051 (3)(j). 1052 (i) Effective August 1, 2008, “special risk member” 1053 includes any member who meets the special criteria for continued 1054 membership set forth in paragraph (3)(k). 1055 (3)(2)CRITERIA.—A member, to be designated as a special 1056 risk member, must meet the following criteria: 1057 (a) Effective October 1, 1978, the member must be employed 1058 as a law enforcement officer and be certified, or required to be 1059 certified, in compliance with s. 943.1395; however, sheriffs and 1060 elected police chiefs areshall beexcluded from meeting the 1061 certification requirements of this paragraph. In addition, the 1062 member’s duties and responsibilities must include the pursuit, 1063 apprehension, and arrest of law violators or suspected law 1064 violators; or as of July 1, 1982, the member must be an active 1065 member of a bomb disposal unit whose primary responsibility is 1066 the location, handling, and disposal of explosive devices; or 1067 the member must be the supervisor or command officer of a member 1068 or members who have such responsibilities.; provided, however,1069 Administrative support personnel, including, but not limited to, 1070 those whose primary duties and responsibilities are in 1071 accounting, purchasing, legal, and personnel, areshallnotbe1072 included; 1073 (b) Effective October 1, 1978, the member must be employed 1074 as a firefighter and be certified, or required to be certified, 1075 in compliance with s. 633.35 and be employed solely within the 1076 fire department of a local government employer or an agency of 1077 state government with firefighting responsibilities. In 1078 addition, the member’s duties and responsibilities must include 1079 on-the-scene fighting of fires; as of October 1, 2001, fire 1080 prevention,or firefighter training; as of October 1, 2001, 1081 direct supervision of firefighting units, fire prevention, or 1082 firefighter training; or as of July 1, 2001, aerial firefighting 1083 surveillance performed by fixed-wing aircraft pilots employed by 1084 the Division of Forestry of the Department of Agriculture and 1085 Consumer Services; or the member must be the supervisor or 1086 command officer of a member or members who have such 1087 responsibilities.; provided, however,Administrative support 1088 personnel, including, but not limited to, those whose primary 1089 duties and responsibilities are in accounting, purchasing, 1090 legal, and personnel, areshallnotbeincluded.and further1091provided thatAll periods of creditable service in fire 1092 prevention or firefighter training, or as the supervisor or 1093 command officer of a member or members who have such 1094 responsibilities, and for which the employer paid the special 1095 risk contribution rate, areshall beincluded; 1096 (c) Effective October 1, 1978, the member must be employed 1097 as a correctional officer and be certified, or required to be 1098 certified, in compliance with s. 943.1395. In addition, the 1099 member’s primary duties and responsibilities must be the 1100 custody, and physical restraint when necessary, of prisoners or 1101 inmates within a prison, jail, or other criminal detention 1102 facility, or while on work detail outside the facility, or while 1103 being transported; or as of July 1, 1984, the member must be the 1104 supervisor or command officer of a member or members who have 1105 such responsibilities.; provided, however,Administrative 1106 support personnel, including, but not limited to, those whose 1107 primary duties and responsibilities are in accounting, 1108 purchasing, legal, and personnel, areshallnotbeincluded; 1109 however, wardens and assistant wardens, as defined by rule, are 1110 includedshall participate in the Special Risk Class; 1111 (d) Effective October 1, 1999, the member must be employed 1112 by a licensed Advance Life Support (ALS) or Basic Life Support 1113 (BLS) employer as an emergency medical technician or a paramedic 1114 and be certified in compliance with s. 401.27. In addition, the 1115 member’s primary duties and responsibilities must include on 1116 the-scene emergency medical care or as of October 1, 2001, 1117 direct supervision of emergency medical technicians or 1118 paramedics, or the member must be the supervisor or command 1119 officer of one or more members who have such responsibility. 1120However,Administrative support personnel, including, but not 1121 limited to, those whose primary responsibilities are in 1122 accounting, purchasing, legal, and personnel, areshallnotbe1123 included; 1124 (e) Effective January 1, 2001, the member must be employed 1125 as a community-based correctional probation officer and be 1126 certified, or required to be certified, in compliance with s. 1127 943.1395. In addition, the member’s primary duties and 1128 responsibilities must be the supervised custody, surveillance, 1129 control, investigation, and counseling of assigned inmates, 1130 probationers, parolees, or community controllees within the 1131 community; or the member must be the supervisor of a member or 1132 members who have such responsibilities. Administrative support 1133 personnel, including, but not limited to, those whose primary 1134 duties and responsibilities are in accounting, purchasing, legal 1135 services, and personnel management, areshallnotbeincluded; 1136 however, probation and parole circuit and deputy circuit 1137 administrators are includedshall participate in the Special1138Risk Class; 1139 (f) Effective January 1, 2001, the member must be employed 1140 in one of the following classes and must spend at least 75 1141 percent of his or her time performing duties which involve 1142 contact with patients or inmates in a correctional or forensic 1143 facility or institution: 1144 1. Dietitian (class codes 5203 and 5204); 1145 2. Public health nutrition consultant (class code 5224); 1146 3. Psychological specialist (class codes 5230 and 5231); 1147 4. Psychologist (class code 5234); 1148 5. Senior psychologist (class codes 5237 and 5238); 1149 6. Regional mental health consultant (class code 5240); 1150 7. Psychological Services Director—DCF (class code 5242); 1151 8. Pharmacist (class codes 5245 and 5246); 1152 9. Senior pharmacist (class codes 5248 and 5249); 1153 10. Dentist (class code 5266); 1154 11. Senior dentist (class code 5269); 1155 12. Registered nurse (class codes 5290 and 5291); 1156 13. Senior registered nurse (class codes 5292 and 5293); 1157 14. Registered nurse specialist (class codes 5294 and 1158 5295); 1159 15. Clinical associate (class codes 5298 and 5299); 1160 16. Advanced registered nurse practitioner (class codes 1161 5297 and 5300); 1162 17. Advanced registered nurse practitioner specialist 1163 (class codes 5304 and 5305); 1164 18. Registered nurse supervisor (class codes 5306 and 1165 5307); 1166 19. Senior registered nurse supervisor (class codes 5308 1167 and 5309); 1168 20. Registered nursing consultant (class codes 5312 and 1169 5313); 1170 21. Quality management program supervisor (class code 1171 5314); 1172 22. Executive nursing director (class codes 5320 and 5321); 1173 23. Speech and hearing therapist (class code 5406); or 1174 24. Pharmacy manager (class code 5251); 1175 (g) Effective July 1, 2001, the member must be employed as 1176 a youth custody officer and be certified, or required to be 1177 certified, in compliance with s. 943.1395. In addition, the 1178 member’s primary duties and responsibilities must be the 1179 supervised custody, surveillance, control, investigation, 1180 apprehension, arrest, and counseling of assigned juveniles 1181 within the community; 1182 (h) Effective October 1, 2005, through June 30, 2008, the 1183 member must be employed by a law enforcement agency or medical 1184 examiner’s office in a forensic discipline recognized by the 1185 International Association for Identification and must qualify 1186 for active membership in the International Association for 1187 Identification. The member’s primary duties and responsibilities 1188 must include the collection, examination, preservation, 1189 documentation, preparation, or analysis of physical evidence or 1190 testimony, or both, or the member must be the direct supervisor, 1191 quality management supervisor, or command officer of one or more 1192 individuals with such responsibility. Administrative support 1193 personnel, including, but not limited to, those whose primary 1194 responsibilities are clerical or in accounting, purchasing, 1195 legal, and personnel, areshallnotbeincluded; 1196 (i) Effective July 1, 2008, the member must be employed by 1197 the Department of Law Enforcement in the crime laboratory or by 1198 the Division of State Fire Marshal in the forensic laboratory in 1199 one of the following classes: 1200 1. Forensic technologist (class code 8459); 1201 2. Crime laboratory technician (class code 8461); 1202 3. Crime laboratory analyst (class code 8463); 1203 4. Senior crime laboratory analyst (class code 8464); 1204 5. Crime laboratory analyst supervisor (class code 8466); 1205 6. Forensic chief (class code 9602); or 1206 7. Forensic services quality manager (class code 9603); 1207 (j) Effective July 1, 2008, the member must be employed by 1208 a local government law enforcement agency or medical examiner’s 1209 office and must spend at least 65 percent of his or her time 1210 performing duties that involve the collection, examination, 1211 preservation, documentation, preparation, or analysis of human 1212 tissues or fluids or physical evidence having potential 1213 biological, chemical, or radiological hazard or contamination, 1214 or use chemicals, processes, or materials that may have 1215 carcinogenic or health-damaging properties in the analysis of 1216 such evidence, or the member must be the direct supervisor of 1217 one or more individuals having such responsibility. If a special 1218 risk member changes to another position within the same agency, 1219 he or she must submit a complete application as provided in 1220 paragraph (4)(3)(a); or 1221 (k) The member must have already qualified for and be 1222 actively participating in special risk membership under 1223 paragraph (a), paragraph (b), or paragraph (c), must have 1224 suffered a qualifying injury as defined in this paragraph, must 1225 not be receiving disability retirement benefits as provided in 1226 s. 121.091(4), and must satisfy the requirements of this 1227 paragraph. 1228 1. The ability to qualify for the class of membership 1229 defined in paragraph (2)(f) occurss.121.021(15)(f) shall occur1230 when two licensed medical physicians, one of whom is a primary 1231 treating physician of the member, certify the existence of the 1232 physical injury and medical condition that constitute a 1233 qualifying injury as defined in this paragraph and that the 1234 member has reached maximum medical improvement after August 1, 1235 2008. The certifications from the licensed medical physicians 1236 must include, at a minimum, that the injury to the special risk 1237 member has resulted in a physical loss, or loss of use, of at 1238 least two of the following: left arm, right arm, left leg, or 1239 right leg; and: 1240 a. That this physical loss or loss of use is total and 1241 permanent, except in the event that the loss of use is due to a 1242 physical injury to the member’s brain, in which event the loss 1243 of use is permanent with at least 75-percent loss of motor 1244 function with respect to each arm or leg affected. 1245 b. That this physical loss or loss of use renders the 1246 member physically unable to perform the essential job functions 1247 of his or her special risk position. 1248 c. That, notwithstanding this physical loss or loss of use, 1249 the individual is able to perform the essential job functions 1250 required by the member’s new position, as provided in 1251 subparagraph 3. 1252 d. That use of artificial limbs is either not possible or 1253 does not alter the member’s ability to perform the essential job 1254 functions of the member’s position. 1255 e. That the physical loss or loss of use is a direct result 1256 of a physical injury and not a result of any mental, 1257 psychological, or emotional injury. 1258 2. For the purposes of this paragraph, “qualifying injury” 1259 means an injury sustained in the line of duty, as certified by 1260 the member’s employing agency, by a special risk member that 1261 does not result in total and permanent disability as defined in 1262 s. 121.091(4)(b). An injury is a qualifying injury ifwhenthe 1263 injury is a physical injury to the member’s physical body 1264 resulting in a physical loss, or loss of use, of at least two of 1265 the following: left arm, right arm, left leg, or right leg. 1266 Notwithstanding any other provision ofanything inthis section 1267to the contrary, an injury that would otherwise qualify as a 1268 qualifying injury isshallnotbeconsidered a qualifying injury 1269 if and when the member ceases employment with the employer for 1270 whom he or she was providing special risk services on the date 1271 the injury occurred. 1272 3. The new position, as described in sub-subparagraph 1.c., 1273 that is required for qualification as a special risk member 1274 under this paragraph is not required to be a position with 1275 essential job functions that entitle an individual to special 1276 risk membership. Whether a new position as described in sub 1277 subparagraph 1.c. exists and is available to the special risk 1278 member is a decision to be made solely by the employer in 1279 accordance with its hiring practices and applicable law. 1280 4. This paragraph does not grant or create additional 1281 rights for any individual to continued employment or to be hired 1282 or rehired by his or her employer that are not already provided 1283 within the Florida Statutes, the State Constitution, the 1284 Americans with Disabilities Act, if applicable, or any other 1285 applicable state or federal law. 1286 (4)(3)PROCEDURE FOR DESIGNATING.— 1287 (a) Any member of the Florida Retirement System employed by 1288 a county, municipalitycity, or special district who feels that 1289 his or her positionhe or shemeets the criteria set forth in 1290 this section for membership in the Special Risk Class may 1291 request that his or her employer submit an application to the 1292 department requesting that the department designate him or her 1293 as a Special Risk member. If the employer agrees that the member 1294 meets the requirements for Special Risk Class membership, the 1295 employer shall submit an application to the department onin1296 behalf of the employee containing a certification that the 1297 member meets the criteria for Special Risk Class membership set 1298 forth in this section and such other supporting documentation as 1299 may be required by administrative rule. The department shall, 1300 within 90 days,eitherdesignate or refuse to designate the 1301 member as a special risk member. If the employer declines to 1302 submit the member’s application to the department or if the 1303 department does not designate the member as a special risk 1304 member, the member or the employer may appeal to the State 1305 Retirement Commission, as provided in s. 121.23, for designation 1306 as a special risk member. A member who receives a final 1307 affirmative ruling pursuant to such appealfor Special Risk1308membershipshall have Special Risk Class membership retroactive 1309 to the date such member would have had Special Risk Class 1310 membership had such membership been approved by the employer and 1311 the department, as determined by the department, and the 1312 employer contributions shall be paid in full within 1 year after 1313 such final ruling. 1314 (b)1.Applying the criteria set forth in this section, the 1315 departmentof Management Servicesshall specify which current 1316 and newly created classes of positions under the uniform 1317 classification plan established pursuant to chapter 110 entitle 1318 the incumbents of positions in those classes to membership in 1319 the Special Risk Class. Only employees employed in the classes 1320 so specified shall be special risk members. 13212.IfWhena class is not specified by the departmentas1322provided in subparagraph 1., the employing agency may petition 1323 the State Retirement Commission for approval in accordance with 1324 s. 121.23. 1325 (5)(4)REMOVAL OF SPECIAL RISK CLASS MEMBERSHIP.— 1326 (a) Any member who is a special risk member on October 1, 1327 1978, and who fails to meet the criteria for Special Risk Class 1328 membership established by this section shall have his or her 1329 special risk designation removed and thereafter shall be a 1330 regular member andshallearn only regular membership credit. 1331 The department mayshall have the authority toreview the 1332 special risk designation of members to determine whether or not 1333 those members continue to meet the criteria for Special Risk 1334 Class membership. 1335 (b) Any member who is a special risk member on July 1, 1336 2008, and who became eligible to participate under paragraph 1337 (3)(2)(h) but fails to meet the criteria for Special Risk Class 1338 membership established by paragraph (3)(2)(i) or paragraph 1339 (3)(2)(j) shall have his or her special risk designation removed 1340 and thereafter shall be a Regular Class member and earn only 1341 Regular Class membership credit. The department may review the 1342 special risk designation of members to determine whether or not 1343 those members continue to meet the criteria for Special Risk 1344 Class membership. 1345 (6)(5)CREDIT FOR PAST SERVICE.—A special risk member may 1346 purchase retirement credit in the Special Risk Class based upon 1347 past service, and may upgrade retirement credit for such past 1348 service, to the extent of 2 percent of the member’s average 1349 monthly compensation as specified in s. 121.091(1)(a) for such 1350 service as follows: 1351 (a) The member may purchase special risk credit for past 1352 service with a municipalitycityor special district which has 1353 elected to join the Florida Retirement System, or with a 1354 participating agency to which a member’s governmental unit was 1355 transferred, merged, or consolidated as provided in s. 1356 121.081(1)(f), if the member was employed with the municipality 1357cityor special district at the time it commenced participating 1358 in the Florida Retirement System or with the governmental unit 1359 at the time of its transfer, merger, or consolidation with the 1360 participating agency. The service must satisfy the criteria set 1361 forth in subsection (3)(2)for Special Risk Class membership as 1362 a law enforcement officer, firefighter, or correctional officer; 1363 however, anocertificate or waiver of certificate of compliance 1364 with s. 943.1395 or s. 633.35 is notshall berequired for such 1365 service. 1366 (b) Contributions for upgrading the additional special risk 1367 credit mustpursuant to this subsection shallbe equal to the 1368 difference in the employer and, if applicable, employee 1369 contributions paid and the special risk percentage rate of gross 1370 salary in effect at the time of purchase for the period being 1371 claimed, plus interest thereon at the rate of 4 percent a year 1372 compounded annually from the date of such service until July 1, 1373 1975, and 6.5 percent a year thereafter until the date of 1374 payment. This past service may be purchased by the member or by 1375 the employer on behalf of the member. 1376 (7)(6)CREDIT FOR PRIOR SERVICE.—A special risk member who 1377 has creditable service with an employer under chapter 122 or 1378 chapter 321, or was employed as a correctional counselor with 1379 the Department of Corrections between December 1, 1970, and 1380 September 30, 1979, in a position thatwhichsatisfies the 1381 criteria providedforin subsection (3)(2)for Special Risk 1382 Class membership except the requirement for a certificate or 1383 waiver of certificate, shall have those years of service counted 1384 towards the attainment of the normal retirement date as a 1385 special risk member under this chapter. The percentage value of 1386 each such year of creditable service under chapter 122, chapter 1387 321, or as a correctional counselor mayshallnot change as a 1388 result of the application of this subsection. A special risk 1389 member who has taken a refund of contributions for such 1390 creditable service under chapter 122 or chapter 321 and has 1391 reclaimed it as prior service credit under this chapter shall be 1392 permitted to have such creditable service counted towards the 1393 attainment of the normal retirement date for the Special Risk 1394 Class of membership under this chapter. 1395 (8)(7)SPECIAL RISK ADMINISTRATIVE SUPPORT CLASSRETENTION1396OF SPECIAL RISK NORMAL RETIREMENT DATE.— 1397 (a) A special risk member who is moved or reassigned to a 1398 nonspecial risk law enforcement, firefighting, correctional, or 1399 emergency medical care administrative support position with the 1400 same agency, or who is subsequently employed in such a position 1401 withinwithany law enforcement, firefighting, correctional, or 1402 emergency medical care agency under the Florida Retirement 1403 System, shall participate in the Special Risk Administrative 1404 Support Class andshallearn credit for such service at the same 1405 percentage rate as that earned by a regular member. 1406 Notwithstandingthe provisions ofsubsection (5)(4), service in 1407suchan administrative support positionshall, for purposes of 1408 s. 121.091, appliesapplytoward satisfaction of the special 1409 risk normal retirement date, as defined in s. 121.021(29)(b)if, 1410provided that,while in such position, the member remains 1411 certified as a law enforcement officer, firefighter, 1412 correctional officer, emergency medical technician, or 1413 paramedic; remains subject to reassignment at any time to a 1414 position qualifying for special risk membership; and completes 1415 an aggregate of the6 or moreyears of service as a designated 1416 special risk member beforeprior toretirement which is equal to 1417 or greater than the years of service required to be vested. 1418 (b) Upon application by a member, the provisions of this 1419 subsectionshallapply, with respect to such member, 1420 retroactively to October 1, 1978, ifprovided thatthe member 1421 was removed from the Special Risk Class effective October 1, 1422 1978, due to a change in special risk criteria as a result of 1423 the enactment of chapter 78-308, Laws of Florida, or was 1424 reassigned or employed for training or career development or to 1425 fill a critical agency need. 1426 (c) The department shall adoptsuchrules asarerequired 1427 to administer this subsection. 1428 (d) Notwithstanding any other provision of this subsection 1429to the contrary, this subsection does not apply to any special 1430 risk member who qualifies for continued membership pursuant to 1431the provisions ofparagraph (3)(2)(k). 1432 (9)(8)RESTORATION OF SPECIAL RISK CREDIT FOR SPECIFIED 1433 PERIOD OF EMPLOYMENT.—A special risk member who was removed from 1434 the Special Risk Class effective October 1978, for the sole 1435 reason that he or she did not possess the required certificate 1436 or temporary waiver of certificate, and who obtained 1437 certification and was approved for Special Risk Class membership 1438 on or before June 30, 1982, mayshall be permitted tohave 1439 special risk credit restored for that period upon: 1440 (a) Certification by his or her employer that all 1441 requirements for Special Risk Class membership except the 1442 requirement for certification or temporary waiver of 1443 certification were met; and 1444 (b) Payment of contributions equal to the difference in the 1445 contributions that were paid during the period and the 1446 contributions required for special risk members during that 1447 period, plus 6.5 percent interest thereon, compounded each June 1448 30 from date of service until date of payment. 1449 1450 This credit may be purchased by the member or by the employer on 1451 behalf of the member. 1452 (10)(9)CREDIT FOR UPGRADED SERVICE.— 1453 (a) Any member of the Special Risk Class who has earned 1454 creditable service through September 30, 1999, in another 1455 membership class of the Florida Retirement System as an 1456 emergency medical technician or paramedic, which service is 1457 within the purview of the Special Risk Class, may purchase 1458 additional retirement credit to upgrade such service to Special 1459 Risk Class service, to the extent of the percentages of the 1460 member’s average final compensation provided in s. 1461 121.091(1)(a)2. Contributions for upgrading such service to 1462 Special Risk Class credit mustunder this subsection shallbe 1463 equal to the difference in the contributions paid and the 1464 Special Risk Class contribution rate as a percentage of gross 1465 salary in effect for the period being claimed, plus interest 1466 thereon at the rate of 6.5 percent a year, compounded annually 1467 until the date of payment. This service credit may be purchased 1468 by the employer on behalf of the member. 1469 (b) Any member of the Special Risk Class who has earned 1470 creditable service through September 30, 2001, in another 1471 membership class of the Florida Retirement System whose 1472 responsibilities included fire prevention or firefighter 1473 training, which service is within the purview of the Special 1474 Risk Class, may purchase additional retirement credit to upgrade 1475 such service to Special Risk Class service, to the extent of the 1476 percentages of the member’s average final compensation provided 1477 in s. 121.091(1)(a)2. Contributions for upgrading such service 1478 to Special Risk Class credit mustunder this subsection shallbe 1479 equal to the difference in the contributions paid and the 1480 Special Risk Class contribution rate as a percentage of gross 1481 salary in effect for the period being claimed, plus interest 1482 thereon at the rate of 6.5 percent a year, compounded annually 1483 until the date of payment. This service credit may be purchased 1484 by the employer on behalf of the member. 1485 (c) Any member of the Special Risk Class who has earned 1486 creditable service through June 30, 2008, in another membership 1487 class of the Florida Retirement System in a position with the 1488 Department of Law Enforcement or the Division of State Fire 1489 Marshal and became covered by the Special Risk Class as 1490 described in paragraph (3)(2)(i), or with a local government law 1491 enforcement agency or medical examiner’s office and became 1492 covered by the Special Risk Class as described in paragraph 1493 (3)(2)(j), which service is within the purview of the Special 1494 Risk Class, and is employed in such position on or after July 1, 1495 2008, may purchase additional retirement credit to upgrade such 1496 service to Special Risk Class service, to the extent of the 1497 percentages of the member’s average final compensation provided 1498 in s. 121.091(1)(a)2. The cost for such credit mustshallbe an 1499 amount representing the actuarial accrued liability for the 1500 difference in accrual value during the affected period of 1501 service. The cost shall be calculated using the discount rate 1502 and other relevant actuarial assumptions that were used to value 1503 the Florida Retirement System Pensiondefined benefitPlan 1504 liabilities in the most recent actuarial valuation. The division 1505 shall ensure that the transfer sum is prepared using a formula 1506 and methodology certified by an enrolled actuary. The cost must 1507 be paid immediately upon notification by the division. The local 1508 government employer may purchase the upgraded service credit on 1509 behalf of the member if the member has been employed by that 1510 employer for at least 3 years. 1511 Section 9. Paragraphs (a) and (d) of subsection (4), 1512 paragraph (b) of subsection (7), and subsections (8) and (10) of 1513 section 121.052, Florida Statutes, are amended, present 1514 paragraph (c) of subsection (7) of that section is redesignated 1515 as paragraph (d), and a new paragraph (c) is added to that 1516 subsection, to read: 1517 121.052 Membership class of elected officers.— 1518 (4) PARTICIPATION BY ELECTED OFFICERS SERVING A SHORTENED 1519 TERM DUE TO APPORTIONMENT, FEDERAL INTERVENTION, ETC.— 1520 (a) AAnyduly elected officer whose term of office was 1521 shortened by legislative or judicial apportionment pursuant to 1522the provisions ofs. 16, Art. III of the State Constitution may, 1523 after the term of office to which he or she was elected is 1524 completed, pay into the Florida Retirement System Trust Fund the 1525 amount of contributions that would have been made by the officer 1526 or the officer’s employer on his or her behalf, plus 4 percent 1527 interest compounded annually from the date he or she left office 1528 until July 1, 1975, and 6.5 percent interest compounded annually 1529 thereafter, and may receive service credit for the length of 1530 time the officer would have served if such term had not been 1531 shortened by apportionment. 1532 (d)1. Any justice or judge, or any retired justice or judge 1533 who retired before July 1, 1993, who has attained the age of 70 1534 years and who is prevented under s. 8, Art. V of the State 1535 Constitution from completing his or her term of office because 1536 of age may elect to purchase credit for all or a portion of the 1537 months he or she would have served during the remainder of the 1538 term of office; however,buthe or she may claim those months 1539 only after the date the service would have occurred. The justice 1540 or judge must pay into the Florida Retirement System Trust Fund 1541 the amount of contributions that would have been made by the 1542 employer on his or her behalf for the period of time being 1543 claimed, plus 6.5 percent interest thereon compounded each June 1544 30 from the date he or she left office, in order to receive 1545 service credit in this class for the period of time being 1546 claimed. After the date the service would have occurred, and 1547 upon payment of the required contributions, the retirement 1548 benefit of a retired justice or judge shallwillbe adjusted 1549 prospectively to include thethisadditional creditable service; 1550 however, such adjustment may be made only once. 1551 2. Any justice or judge who does not seek election to a 1552 subsequent term of office because he or she would be prevented 1553 under s. 8, Art. V of the State Constitution from completing 1554 such term of office upon attaining the age of 70 years may elect 1555 to purchase service credit for service as a temporary judge as 1556 assigned by the court if the temporary assignmentfollows1557 immediately follows the last full term of office served and the 1558 purchase is limited to the number of months of service needed to 1559 vest retirement benefits. To receive retirement credit for such 1560 temporary service beyond termination, the justice or judge must 1561 pay into the Florida Retirement System Trust Fund the amount of 1562 contributions that would have been made by the justice or judge 1563 and the employer on his or her behalf had he or she continued in 1564 office for the period of time being claimed, plus 6.5 percent 1565 interest thereon compounded each June 30 from the date he or she 1566 left office. 1567 (7) CONTRIBUTIONS.— 1568 (b) The employer paying the salary of a member of the 1569 Elected Officers’ Class shall contribute an amount as specified 1570 in this subsection or s. 121.71, as appropriate, which shall 1571 constitute theentireemployer retirement contribution with 1572 respect to such member. The employer shall also withhold one 1573 half of the entire contribution of the member required for 1574 social security coverage. Effective July 1, 2011, each member of 1575 the Elected Officers’ Class shall pay employee contributions as 1576 specified in s. 121.71. 1577 (c) If a member of the Elected Officers’ Class ceases to 1578 fill an office covered by this class for 3 calendar months for 1579 any reason other than retirement and has not been employed in 1580 any capacity with any participating employer for 3 calendar 1581 months, the member may receive a refund of all contributions he 1582 or she has made to the pension plan, subject to the restrictions 1583 otherwise provided in this chapter. Partial refunds are not 1584 permitted. The refund shall not include any interest earnings on 1585 the contributions for a member of the pension plan. Employer 1586 contributions made on behalf of the member are not refundable. A 1587 member may not receive a refund of employee contributions if a 1588 pending or an approved qualified domestic relations order is 1589 filed against the member’s retirement account. By obtaining a 1590 refund of contributions, a member waives all rights under the 1591 Florida Retirement System and the health insurance subsidy 1592 provided under s. 112.363 to the service credit represented by 1593 the refunded contributions, except the right to purchase his or 1594 her prior service credit in accordance with s. 121.081(2). 1595 (8) NORMAL RETIREMENT DATE; VESTING REQUIREMENT.—A member 1596 of the Elected Officers’ Class shall have the same normal 1597 retirement date and vesting requirement, as those terms are 1598 defined in s. 121.021(29) and (45), for a member of the regular 1599 class of the Florida Retirement System. Any public service 1600 commissioner who was removed from the Elected State Officers’ 1601 Class on July 1, 1979, after attaining at least 8 years of 1602 creditable service in that class isshall beconsidered to have 1603 reached the normal retirement date upon attaining age 62 as 1604 required in s. 121.021(29)(a). 1605 (10) ACCRUED SERVICE VALUE.—A member of the Elected 1606 Officers’ Class who is a Supreme Court justice, district court 1607 of appeal judge, circuit judge, or county court judge shall 1608 receive judicial retirement credit of 3 1/3 percent of average 1609 final compensation, and all other members shall receive elected 1610 officer accrual valueretirement creditof 3 percent of average 1611 final compensation, for each year of creditable service in such 1612 class. 1613 Section 10. Paragraph (a) of subsection (7) of section 1614 121.053, Florida Statutes, is amended to read: 1615 121.053 Participation in the Elected Officers’ Class for 1616 retired members.— 1617 (7) A member who is elected or appointed to an elective 1618 office and who is participating in the Deferred Retirement 1619 Option Program is not subject to termination as defined in s. 1620 121.021, or reemployment limitations as provided in s. 1621 121.091(9), until the end of his or her current term of office 1622 or, if the officer is consecutively elected or reelected to an 1623 elective office eligible for coverage under the Florida 1624 Retirement System, until he or she no longer holds an elective 1625 office, as follows: 1626 (a) At the end of the 60-month DROP period: 1627 1. The officer’s DROP account may not accrue additional 1628 monthly benefits, but does continue to earn interest as provided 1629 in s. 121.091(13). However, an officer whose DROP participation 1630 begins on or after July 1, 2010, may not continue to earn such 1631 interest. 1632 2. Retirement contributions, except for unfunded actuarial 1633 liability and health insurance subsidy contributions required in 1634 ss. 121.71(5) and 121.76, are not required of the employer of 1635 the elected officer and additional retirement credit may not be 1636 earned under the Florida Retirement System. 1637 Section 11. Paragraphs (b) and (j) of subsection (1), 1638 paragraph (b) of subsection (3), paragraph (b) of subsection 1639 (4), and paragraphs (c), (d), and (e) of subsection (6) of 1640 section 121.055, Florida Statutes, are amended, present 1641 paragraph (c) of subsection (3) of that section is redesignated 1642 as paragraph (d), and a new paragraph (c) is added to that 1643 subsection, to read: 1644 121.055 Senior Management Service Class.—There is hereby 1645 established a separate class of membership within the Florida 1646 Retirement System to be known as the “Senior Management Service 1647 Class,” which shall become effective February 1, 1987. 1648 (1) 1649 (b)1. Except as provided in subparagraph 2., effective 1650 January 1, 1990, participation in the Senior Management Service 1651 Class isshall becompulsory for the president of each community 1652 college, the manager of each participating municipalitycityor 1653 county, and all appointed district school superintendents. 1654 Effective January 1, 1994, additional positions may be 1655 designated for inclusion in the Senior Management Service Class 1656 ifof the Florida Retirement System, provided that: 1657 a. Positions to be included in the class areshall be1658 designated by the local agency employer. Notice of intent to 1659 designate positions for inclusion in the class mustshallbe 1660 published once a week for 2 consecutive weeks in a newspaper of 1661 general circulation published in the county or counties 1662 affected, as provided in chapter 50. 1663 b. Up to 10 nonelective full-time positions may be 1664 designated for each local agency employer reporting to the 1665 departmentof Management Services; for local agencies with 100 1666 or more regularly established positions, additional nonelective 1667 full-time positions may be designated, not to exceed 1 percent 1668 of the regularly established positions within the agency. 1669 c. Each position added to the class must be a managerial or 1670 policymaking position filled by an employee who is not subject 1671 to continuing contract and serves at the pleasure of the local 1672 agency employer without civil service protection, and who: 1673 (I) Heads an organizational unit; or 1674 (II) Has responsibility to effect or recommend personnel, 1675 budget, expenditure, or policy decisions in his or her areas of 1676 responsibility. 1677 2. In lieu of participation in the Senior Management 1678 Service Class, members of the Senior Management Service Class, 1679 pursuant tothe provisions ofsubparagraph 1., may withdraw from 1680 the Florida Retirement System altogether. The decision to 1681 withdraw from theFlorida Retirementsystem isshall be1682 irrevocableforas long as the employee holds thesuch a1683 position. Any service creditable under the Senior Management 1684 Service Class shall be retained after the member withdraws from 1685 theFlorida Retirementsystem; however, additional service 1686 credit in the Senior Management Service Class mayshallnot be 1687 earned after such withdrawal. Such members areshallnotbe1688 eligible to participate in the Senior Management Service 1689 Optional Annuity Program. 1690 3. Effective January 1, 2006, through June 30, 2006, an 1691 employee who has withdrawn from the Florida Retirement System 1692 under subparagraph 2. has one opportunity to elect to 1693 participate ineitherthe pension plandefined benefit program1694 or the investment planPublic Employee Optional Retirement1695Program of the Florida Retirement System. 1696 a. If the employee elects to participate in the investment 1697 planPublic Employee Optional Retirement Program, membership 1698 shall be prospective, and the applicable provisions of s. 1699 121.4501(4)shallgovern the election. 1700 b. If the employee elects to participate in the pension 1701 plandefined benefit program of the Florida Retirement System, 1702 the employee shall, upon payment to the system trust fund of the 1703 amount calculated under sub-sub-subparagraph (I), receive 1704 service credit for prior service based upon the time during 1705 which the employee had withdrawn from the system. 1706 (I) The cost for such credit shall be an amount 1707 representing the actuarial accrued liability for the affected 1708 period of service. The cost shall be calculated using the 1709 discount rate and other relevant actuarial assumptions that were 1710 used to value the pensionFlorida Retirement System defined1711benefitplan liabilities in the most recent actuarial valuation. 1712 The calculation mustshallinclude any service already 1713 maintained under the pensiondefined benefitplan in addition to 1714 the period of withdrawal. The actuarial accrued liability 1715 attributable to any service already maintained under the pension 1716defined benefitplan shall be applied as a credit to the total 1717 cost resulting from the calculation. The division mustshall1718 ensure that the transfer sum is prepared using a formula and 1719 methodology certified by an actuary. 1720 (II) The employee must transfer a sum representing the net 1721 cost owed for the actuarial accrued liability in sub-sub 1722 subparagraph (I) immediately following the time of such 1723 movement, determined assuming that attained service equals the 1724 sum of service in the pension plandefined benefit programand 1725 the period of withdrawal. 1726 (j) Except as may otherwise be provided, aanymember of 1727 the Senior Management Service Class may purchase additional 1728 retirement credit in such class for creditable service within 1729 the purview of the Senior Management Service Class retroactive 1730 to February 1, 1987, and may upgrade retirement credit for such 1731 service, to the extent of 2 percent of the member’s average 1732 monthly compensation as specified in paragraph (4)(d) for such 1733 service. Contributions for upgrading the additional Senior 1734 Management Service credit mustpursuant to this paragraph shall1735 be equal to the difference in the employer and, if applicable, 1736 employee contributions paid and the Senior Management Service 1737 Class contribution rate as a percentage of gross salary in 1738 effect for the period being claimed, plus interest thereon at 1739 the rate of 6.5 percent a year, compounded annually until the 1740 date of payment. This service credit may be purchased by the 1741 employer on behalf of the member. 1742 (3) 1743 (b) The employer paying the salary of a member of the 1744 Senior Management Service Class shall contribute an amount as 1745 specified in this section or s. 121.71, as appropriate, which 1746 shall constitute the entire employer retirement contribution 1747 with respect to such member. The employer shall also withhold 1748 one-half of the entire contribution of the member required for 1749 social security coverage. Effective July 1, 2011, each member 1750 shall pay employee contributions as specified in s. 121.71. 1751 (c) Upon termination of employment from all participating 1752 employers for 3 calendar months for any reason other than 1753 retirement pursuant to s. 121.021(39)(c), a member may receive a 1754 refund of all contributions he or she has made to the pension 1755 plan, subject to the restrictions otherwise provided in this 1756 chapter. Partial refunds are not permitted. The refund shall not 1757 include any interest earnings on the contributions for a member 1758 of the pension plan. Employer contributions made on behalf of 1759 the member are not refundable. A member may not receive a refund 1760 of employee contributions if a pending or an approved qualified 1761 domestic relations order is filed against the member’s 1762 retirement account. By obtaining a refund of contributions, a 1763 member waives all rights under the Florida Retirement System and 1764 the health insurance subsidy provided under s. 112.363 to the 1765 service credit represented by the refunded contributions, except 1766 the right to purchase his or her prior service credit in 1767 accordance with s. 121.081(2). 1768 (4) 1769 (b) Service in an eligible position beforeprior to1770 February 1, 1987, or after January 31, 1987, shall satisfy the 1771 requirement of attaining the normal retirement date as defined 1772 in s. 121.021(29) for a Senior Management Service Class member, 1773 ifprovidedthe employee is a member of the Senior Management 1774 Service Class after January 31, 1987. A member of this class who 1775 fails to complete the6years of creditable service required for 1776 vesting in an eligible position mustshall be required to1777 satisfy the requirements for the normal retirement date for a 1778 regular member as provided in s. 121.021(29) and vesting as 1779 provided in s. 121.021(45). 1780 (6) 1781 (c) Participation.— 1782 1. An eligible employee who is employed on or before 1783 February 1, 1987, may elect to participate in the optional 1784 annuity program in lieu of participatingparticipationin the 1785 Senior Management Service Class. Such election must be made in 1786 writing and filed with the department and the personnel officer 1787 of the employer on or before May 1, 1987. An eligible employee 1788 who is employed on or before February 1, 1987, and who fails to 1789 make an election to participate in the optional annuity program 1790 by May 1, 1987, shall be deemed to have elected membership in 1791 the Senior Management Service Class. 1792 2. Except as provided in subparagraph 6., an employee who 1793 becomes eligible to participate in the optional annuity program 1794 by reason of initial employment commencing after February 1, 1795 1987, may, within 90 days after the date of commencing 1796 employment, elect to participate in the optional annuity 1797 program. Such election must be made in writing and filed with 1798 the personnel officer of the employer. An eligible employee who 1799 does not within 90 days after commencing employment elect to 1800 participate in the optional annuity program shall be deemed to 1801 have elected membership in the Senior Management Service Class. 1802 3. A person who is appointed to a position in the Senior 1803 Management Service Class and who is a member of an existing 1804 retirement system or the Special Risk or Special Risk 1805 Administrative Support Classes of the Florida Retirement System 1806 may elect to remain in such system or class in lieu of 1807 participatingparticipationin the Senior Management Service 1808 Class or optional annuity program. Such election must be made in 1809 writing and filed with the department and the personnel officer 1810 of the employer within 90 days afterofsuch appointment. AnAny1811 eligible employee who fails to make an election to participate 1812 in the existing system, the Special Risk Class of the Florida 1813 Retirement System, the Special Risk Administrative Support Class 1814 of the Florida Retirement System, or the optional annuity 1815 program shall be deemed to have elected membership in the Senior 1816 Management Service Class. 1817 4. Except as provided in subparagraph 5., an employee’s 1818 election to participate in the optional annuity program is 1819 irrevocable if the employee continues to be employed in an 1820 eligible position and continues to meet the eligibility 1821 requirements set forth in this paragraph. 1822 5. Effective from July 1, 2002, through September 30, 2002, 1823 ananyactive employee in a regularly established position who 1824 has elected to participate in the Senior Management Service 1825 Optional Annuity Program has one opportunity to choose to move 1826 from the Senior Management Service Optional Annuity Program to 1827 the Florida Retirement System Pension PlanSystem defined1828benefit program. 1829 a. The election must be made in writing and must be filed 1830 with the department and the personnel officer of the employer 1831 before October 1, 2002, or, in the case of an active employee 1832 who is on a leave of absence on July 1, 2002, within 90 days 1833 after the conclusion of the leave of absence. This election is 1834 irrevocable. 1835 b. The employee shall receive service credit under the 1836 pension plandefined benefit program of the Florida Retirement1837Systemequal to his or her years of service under the Senior 1838 Management Service Optional Annuity Program. The cost for such 1839 credit is the amount representing the present value of that 1840 employee’s accumulated benefit obligation for the affected 1841 period of service. 1842 c. The employee must transfer the total accumulated 1843 employer contributions and earnings on deposit in his or her 1844 Senior Management Service Optional Annuity Program account. If 1845 the transferred amount is not sufficient to pay the amount due, 1846 the employee must pay a sum representing the remainder of the 1847 amount due. The employee may not retain any employer 1848 contributions or earningsthereonfrom the Senior Management 1849 Service Optional Annuity Program account. 1850 6. A retiree of a state-administered retirement system who 1851 is initially reemployed on or after July 1, 2010, may not renew 1852 membership in the Senior Management Service Optional Annuity 1853 Program. 1854 (d) Contributions.— 1855 1.a. Through June 30, 2001, each employer shall contribute 1856 on behalf of each member ofparticipant inthe Senior Management 1857 Service Optional Annuity Program an amount equal to the normal 1858 cost portion of the employer retirement contribution which would 1859 be required if the memberparticipantwere a Senior Management 1860 Service Class member of the Florida Retirement System Pension 1861 Plandefined benefit program, plus the portion of the 1862 contribution rate required in s. 112.363(8) that would otherwise 1863 be assigned to the Retiree Health Insurance Subsidy Trust Fund. 1864 b. Effective July 1, 2001, through June 30, 2011, each 1865 employer shall contribute on behalf of each member of 1866participant inthe optional program an amount equal to 12.49 1867 percent of the employee’sparticipant’sgross monthly 1868 compensation. 1869 c. Effective July 1, 2011, each member of the optional 1870 annuity program shall contribute an amount equal to the employee 1871 contribution required under s. 121.71(3). The employer shall 1872 contribute on behalf of such employee an amount equal to the 1873 difference between 12.49 percent of the employee’s gross monthly 1874 compensation and the amount equal to the employee’s required 1875 contribution based on the employee’s gross monthly compensation. 1876 d. The department shall deduct an amount approved by the 1877 Legislature to provide for the administration of this program. 1878ThePayment of the contributions, including contributions made 1879 by the employee,to the optional program which is required by1880this subparagraph for each participantshall be made by the 1881 employer to the department, which shall forward the 1882 contributions to the designated company or companies contracting 1883 for payment of benefits for the memberparticipantunder the 1884 program. 1885 2. Each employer shall contribute on behalf of each member 1886 ofparticipant inthe Senior Management Service Optional Annuity 1887 Program an amount equal to the unfunded actuarial accrued 1888 liability portion of the employer contribution which would be 1889 required for members of the Senior Management Service Class in 1890 the Florida Retirement System. This contribution shall be paid 1891 to the department for transfer to the Florida Retirement System 1892 Trust Fund. 1893 3. An Optional Annuity Program Trust Fund shall be 1894 established in the State Treasury and administered by the 1895 department to make payments to provider companies on behalf of 1896 the optional annuity program membersparticipants, and to 1897 transfer the unfunded liability portion of the state optional 1898 annuity program contributions to the Florida Retirement System 1899 Trust Fund. 1900 4. Contributions required for social security by each 1901 employer and employeeeach participant, in the amount required 1902 for social security coverage as now or hereafter may be provided 1903 by the federal Social Security Act shall be maintained for each 1904 member ofparticipant inthe Senior Management Service 1905 retirement program and areshall bein addition to the 1906 retirement contributions specified in this paragraph. 1907 5. Each member ofparticipant inthe Senior Management 1908 Service Optional Annuity Program may contribute by way of salary 1909 reduction or deduction a percentage amount of the employee’s 1910participant’sgross compensation not to exceed the percentage 1911 amount contributed by the employer to the optional annuity 1912 program. Payment of the employee’sparticipant’scontributions 1913 shall be made by the employer to the department, which shall 1914 forward the contributions to the designated company or companies 1915 contracting for payment of benefits for the memberparticipant1916 under the program. 1917 (e) Benefits.— 1918 1. Benefits under the Senior Management Service Optional 1919 Annuity Program are payable only to members ofparticipants in1920 the program, or their beneficiaries as designated by the member 1921participantin the contract with the provider company, and must 1922 be paid by the designated company in accordance with the terms 1923 of the annuity contract applicable to the memberparticipant. A 1924 memberparticipantmust be terminated from all employment 1925 relationships with Florida Retirement System employers for 3 1926 calendar monthsas provided in s.121.021(39)to begin receiving 1927 the employer-funded and employee-funded benefit. The member must 1928 meet the definition of termination in s. 121.021(39) beginning 1929 the month after receiving a benefit, including a distribution. 1930 Benefits funded by employer and employee contributions are 1931 payable under the terms of the contract to the member 1932participant, his or her beneficiary, or his or her estate, in 1933 addition to: 1934 a. A lump-sum payment to the beneficiary upon the death of 1935 the memberparticipant; 1936 b. A cash-out of a de minimis account upon the request of a 1937 former memberparticipantwho has been terminated for a minimum 1938 of 6 calendar months from the employment that entitled him or 1939 her to optional annuity program participation. Such cash-out 1940 must be a complete liquidation of the account balance with that 1941 company and is subject to the Internal Revenue Code; 1942 c. A mandatory distribution of a de minimis account of a 1943 former memberparticipantwho has been terminated for a minimum 1944 of 6 calendar months from the employment that entitled him or 1945 her to optional annuity program participation as authorized by 1946 the department; or 1947 d. A lump-sum direct rollover distribution whereby all 1948 accrued benefits, plus interest and investment earnings, are 1949 paid from the member’sparticipant’saccount directly to the 1950 custodian of an eligible retirement plan, as defined in s. 1951 402(c)(8)(B) of the Internal Revenue Code, on behalf of the 1952 memberparticipant. 1953 2. Under the Senior Management Service Optional Annuity 1954 Program, benefits, including employee contributions, are not 1955 payable for employee hardships, unforeseeable emergencies, 1956 loans, medical expenses, educational expenses, purchase of a 1957 principal residence, payments necessary to prevent eviction or 1958 foreclosure on an employee’s principal residence, or any other 1959 reason before termination from all employment relationships with 1960 participating employers for 3 calendar months. 1961 3.2.The benefits payable to any person under the Senior 1962 Management Service Optional Annuity Program, and any 1963 contribution accumulated under such program, are not subject to 1964 assignment, execution, or attachment or to any legal process 1965 whatsoever. 1966 4.3.Except as provided in subparagraph 5.4., a member 1967participantwho terminates employment and receives a 1968 distribution, including a rollover or trustee-to-trustee 1969 transfer, funded by employer and required employee contributions 1970 isshall bedeemed to be retired from a state-administered 1971 retirement system if the memberparticipantis subsequently 1972 employed with an employer that participates in the Florida 1973 Retirement System. 1974 5.4.A memberparticipantwho receives optional annuity 1975 program benefits funded by employer and employee contributions 1976 as a mandatory distribution of a de minimis account authorized 1977 by the department is not considered a retiree. 1978 1979 As used in this paragraph, a “de minimis account” means an 1980 account with a provider company containing employer and employee 1981 contributions and accumulated earnings of not more than $5,000 1982 made under this chapter. 1983 Section 12. Subsection (2) of section 121.061, Florida 1984 Statutes, is amended to read: 1985 121.061 Funding.— 1986 (2)(a) Should any employer other than a state employer fail 1987 to make the retirement and social security contributions, both 1988 member and employer contributions, required by this chapter, 1989 then, upon request by the administrator, the Department of 1990 Revenue or the Department of Financial Services, as the case may 1991 be, shall deduct the amount owed by the employer from any funds 1992 to be distributed by it to the county, municipalitycity, 1993 metropolitan planning organization, special district, or 1994 consolidated form of government. The amounts so deducted shall 1995 be transferred to the administrator for further distribution to 1996 the trust funds in accordance with this chapter. 1997 (b) Should any employer for whom the municipalitycityor 1998 county tax collector collects taxes, fail to make the retirement 1999 and social security contributions required by this chapter, the 2000 tax collector, at the request of the administrator and upon 2001 receipt of a certificate from the administrator showing the 2002 amount owed by the employer, shall deduct the amount so 2003 certified from any taxes collected for the employer and remit 2004 the amount to the administrator for further distribution to the 2005 trust funds in accordance with this chapter. 2006 (c) The governing body of each county, municipalitycity, 2007 metropolitan planning organization, special district, or 2008 consolidated form of government participating under this chapter 2009 or the administrator, acting individually or jointly, is hereby 2010 authorized to file and maintain an action in the courts of the 2011 state to require any employer to remit any retirement or social 2012 security member contributions or employer matching payments due 2013 the retirement or social security trust funds under the 2014 provisions of this chapter. 2015 (d) Should the income of any constitutional fee officer, in 2016 any year, be insufficient to make the matching payments required 2017 by this chapter, the board of county commissioners shall provide 2018 such fee officer sufficient funds to make these required 2019 payments when due. 2020 Section 13. Subsections (2) and (5) and paragraph (c) of 2021 subsection (6) of section 121.071, Florida Statutes, are 2022 amended, present paragraph (d) of subsection (6) of that section 2023 is redesignated as paragraph (e), a new paragraph (d) is added 2024 to that subsection, and subsection (7) is added to that section, 2025 to read: 2026 121.071 Contributions.—Contributions to the system shall be 2027 made as follows: 2028 (2)(a) Effective January 1, 1975, or October 1, 1975, as 2029 applicable, and through June 30, 2011, each employer shall make 2030accomplishthe contribution required by subsection (1) by a 2031 procedure in which no employee’s gross salary isshall be2032 reduced. Effective July 1, 2011, each employer and employee 2033 shall pay retirement contributions as specified in s. 121.71. 2034 (b) Upon termination of employment from all participating 2035 employers for 3 calendar months for any reason other than 2036 retirement pursuant to s. 121.021(39)(c), a member may receive 2037shall be entitled toafullrefund of allthecontributions he 2038 or she has made to the pensionprior or subsequent to2039participation in the noncontributoryplan, subject to the 2040 restrictions otherwise provided in this chapter. Partial refunds 2041 are not permitted. The refund may not include any interest 2042 earnings on the contributions for a member of the pension plan. 2043 Employer contributions made on behalf of the member are not 2044 refundable. A member may not receive a refund of employee 2045 contributions if a pending or an approved qualified domestic 2046 relations order is filed against his or her retirement account. 2047 By obtaining a refund of contributions, a member waives all 2048 rights under the Florida Retirement System and the health 2049 insurance subsidy to the service credit represented by the 2050 refunded contributions, except the right to purchase his or her 2051 prior service credit in accordance with s. 121.081(2). 2052 (5) Contributions made in accordance with subsections (1), 2053 (2), (3), and (4),and s. 121.71 shall be paidby the employer2054 into the system trust funds in accordance with rules adopted by 2055 the administrator pursuant to chapter 120, except as may be 2056 otherwise specified herein. Effective July 1, 2002, 2057 contributions paid under subsections (1) and (4) and 2058 accompanying payroll data are due and payable no later than the 2059 5th working day of the month immediately following the month 2060 during which the payroll period ended. 2061 (6) 2062 (c) By obtaining a refund of contributions, a member waives 2063 all rights under the Florida Retirement System and the health 2064 insurance subsidy as provided in s. 112.363 to the service 2065 credit represented by the refunded contributions, except the 2066 right to purchase his or her prior service credit in accordance 2067 with s. 121.081(2). 2068 (d) If a member or former member of the pension plan 2069 receives an invalid refund from the Florida Retirement System 2070 Trust Fund, such person must repay the full amount of the 2071 invalid refund, plus interest at 6.5 percent compounded annually 2072 on each June 30 from the date of refund until full payment is 2073 made to the trust fund. The invalid refund must be repaid before 2074 the member retires or, if applicable, transfers to the 2075 investment plan. 2076 (7) Before termination of employment, benefits, including 2077 employee contributions, are not payable under the pension plan 2078 for employee hardships, unforeseeable emergencies, loans, 2079 medical expenses, educational expenses, purchase of a principal 2080 residence, payments necessary to prevent eviction or foreclosure 2081 on an employee’s principal residence, or any other reason before 2082 termination from all employment relationships with participating 2083 employers. 2084 Section 14. Paragraphs (b) and (c) of subsection (1) and 2085 subsection (2) of section 121.081, Florida Statutes, are amended 2086 to read: 2087 121.081 Past service; prior service; contributions. 2088 Conditions under which past service or prior service may be 2089 claimed and credited are: 2090 (1) 2091 (b) Past service earned after January 1, 1975, may be 2092 claimed by officers or employees of a municipality, metropolitan 2093 planning organization, charter school, charter technical career 2094 center, or special district who become a covered group under 2095 this system. The governing body of a covered group may elect to 2096 provide benefits for past service earned after January 1, 1975, 2097 in accordance with this chapter., andThe cost for such past 2098 service is established by applying the following formula: The 2099 employer shall contribute an amount equal to the employer 2100 contribution rate in effect at the time the service was earned 2101 and, if applicable, the employee contribution rate, multiplied 2102 by the employee’s gross salary for each year of past service 2103 claimed, plus 6.5 percent6.5-percentinterest thereon, 2104 compounded annually, forfigured oneach year of past service, 2105 with interest compounded from date of annual salary earned until 2106 date of payment. 2107 (c) If an employer joins the Florida Retirement System and 2108 doesShould the employernot elect to provide past service for 2109 the member at the time of joining,thenthe member may claim and 2110 pay for the service as provided insame, based onparagraphs (a) 2111 and (b). 2112 (2) Prior service, as defined in s. 121.021(19), may be 2113 claimed as creditable service under the Florida Retirement 2114 System after a member has been reemployed for 1 complete year of 2115 creditable servicewithin a period of 12 consecutive months, 2116 except as provided in paragraph (c). Service performed as a 2117 memberparticipantof the optional retirement program for the 2118 State University System under s. 121.35 or the Senior Management 2119 Service Optional Annuity Program under s. 121.055 may be used to 2120 satisfy the reemployment requirement of 1 complete year of 2121 creditable service. The member shall not be permitted to make 2122 any contributions for prior service until after completion of 2123 the 1 year of creditable service. If a member does not wish to 2124 claim credit for all of his or her prior service, the service 2125 the member claims must be the most recent period of service. The 2126 required contributions for claiming the various types of prior 2127 service are: 2128 (a) For prior service performed beforeprior tothe date 2129 the system becomes noncontributory for the member and for which 2130 the member had credit under one of the existing retirement 2131 systems and received a refund of contributions upon termination 2132 of employment, the member shall contribute 4 percent of all 2133 salary received during the period being claimed, plus 4 percent 21344-percentinterest compounded annually from date of refund until 2135 July 1, 1975, and 6.5 percent6.5-percentinterest compounded 2136 annually thereafter, until full payment is made to the Florida 2137 Retirement System Trust Fund, andshallreceive credit in the 2138 Regular Class. A member who elected to transfer to the Florida 2139 Retirement System from an existing system may receive credit for 2140 prior service under the existing system if he or she was 2141 eligible under the existing system to claim the prior service at 2142 the time of the transfer. Contributions for such prior service 2143 shall be determined by the applicable provisions of the system 2144 under which the prior service is claimed and shall be paid by 2145 the member, with matching contributions paid by the employer at 2146 the time the service was performed. Effective July 1, 1978, the 2147 account of a person who terminated under s. 238.05(3) may not be 2148 charged interest for contributions that remained on deposit in 2149 the Annuity Savings Trust Fund established under chapter 238, 2150 upon retirement under this chapter or chapter 238. 2151 (b) For prior service performed beforeprior tothe date 2152 the system becomes noncontributory for the member and for which 2153 the member had credit under the Florida Retirement System and 2154 received a refund of contributions upon termination of 2155 employment, the member shall contribute at the rate that was 2156 required of him or her during the period of service being 2157 claimed, on all salary received during such period, plus 4 2158 percent4-percentinterest compounded annually from date of 2159 refund until July 1, 1975, and 6.5 percent6.5-percentinterest 2160 compounded annually thereafter, until the full payment is made 2161 to the Florida Retirement System Trust Fund, andshallreceive 2162 credit in the membership class in which the member participated 2163 during the period claimed. 2164 (c) For prior service as defined in s. 121.021(19)(b) and 2165 (c) during which no contributions were made because the member 2166 did not participate in a retirement system, the member shall 2167 contribute 14.38 percent of all salary received during such 2168 period or 14.38 percent of $100 per month during such period, 2169 whichever is greater, plus 4 percent4-percentinterest 2170 compounded annually from the first year of service claimed until 2171 July 1, 1975, and 6.5 percent6.5-percentinterest compounded 2172 annually thereafter, until full payment is made to the 2173 Retirement Trust Fund, and shall receive credit in the Regular 2174 Class. 2175 (d) In order to claim credit for prior service as defined 2176 in s. 121.021(19)(d) for which no retirement contributions were 2177 paid during the period of such service, the member shall 2178 contribute the total employee and employer contributions which 2179 were required to be made to the Highway Patrol Pension Trust 2180 Fund, as provided in chapter 321, during the period claimed, 2181 plus 4 percent4-percentinterest compounded annually from the 2182 first year of service until July 1, 1975, and 6.5 percent6.52183percentinterest compounded annually thereafter, until full 2184 payment is made to the Retirement Trust Fund. However, any 2185 governmental entity thatwhichemployed such member may elect to 2186 pay up to 50 percent of the contributions and interest required 2187 to purchase thethisprior service credit. The service shall be 2188 credited in accordance withthe provisions ofthe Highway Patrol 2189 Pension Plan in effect during the period claimed unless the 2190 member terminated and withdrew his or her retirement 2191 contributions and was thereafter enrolled in the State and 2192 County Officers and Employees’ Retirement System or the Florida 2193 Retirement System, in which case the service shall be credited 2194 as Regular Class service. 2195 (e) For service performed under the Florida Retirement 2196 System after December 1, 1970, whichthatwas never reported to 2197 the division or the department due to error, retirement credit 2198 may be claimed by a member of the Florida Retirement System. The 2199 department shall adopt rules establishing criteria for claiming 2200 such credit and detailing the documentation required to 2201 substantiate the error. 2202 (f) For prior service performed on or after July 1, 2011, 2203 for which the member had credit under the Florida Retirement 2204 System and received a refund of contributions 3 calendar months 2205 after termination of employment, the member shall contribute at 2206 the rate that was required during the period of service being 2207 claimed, plus 6.5 percent interest, compounded annually on each 2208 June 30 from date of refund until the full payment is made to 2209 the Florida Retirement System Trust Fund, and receive credit in 2210 the membership class in which the member participated during the 2211 period claimed. 2212 (g)(f)The employer may not be required to make 2213 contributions for prior service credit for any member, except 2214 that the employer shall pay the employer portion of 2215 contributions for any legislator who elects to withdraw from the 2216 Florida Retirement System and later rejoins the system and pays 2217 any employee contributions required in accordance with s. 2218 121.052(3)(d). 2219 Section 15. Paragraphs (a) and (b) of subsection (3), 2220 paragraphs (a) and (j) of subsection (4), paragraphs (a) and (c) 2221 of subsection (5), paragraph (d) of subsection (9), paragraphs 2222 (a) and (c) of subsection (13), and paragraph (d) of subsection 2223 (14) of section 121.091, Florida Statutes, are amended to read: 2224 121.091 Benefits payable under the system.—Benefits may not 2225 be paid under this section unless the member has terminated 2226 employment as provided in s. 121.021(39)(a) or begun 2227 participation in the Deferred Retirement Option Program as 2228 provided in subsection (13), and a proper application has been 2229 filed in the manner prescribed by the department. The department 2230 may cancel an application for retirement benefits when the 2231 member or beneficiary fails to timely provide the information 2232 and documents required by this chapter and the department’s 2233 rules. The department shall adopt rules establishing procedures 2234 for application for retirement benefits and for the cancellation 2235 of such application when the required information or documents 2236 are not received. 2237 (3) EARLY RETIREMENT BENEFIT.—Upon retirement on his or her 2238 early retirement date, the member shall receive an immediate 2239 monthly benefit that shall begin to accrue on the first day of 2240 the month of the retirement date and be payable on the last day 2241 of that month and each month thereafter during his or her 2242 lifetime. Such benefit shall be calculated as follows: 2243 (a) For a member initially enrolled: 2244 1. Before July 1, 2011, the amount of each monthly payment 2245 shall be computed in the same manner as for a normal retirement 2246 benefit, in accordance with subsection (1), but shall be based 2247 on the member’s average monthly compensation and creditable 2248 service as of the member’s early retirement date. The benefit so 2249 computed shall be reduced by five-twelfths of 1 percent for each 2250 complete month by which the early retirement date precedes the 2251 normal retirement date of age 62 for a member of the Regular 2252 Class, Senior Management Service Class, or the Elected Officers’ 2253 Class, and age 55 for a member of the Special Risk Class, or age 2254 52 if a Special Risk member has completed 25 years of creditable 2255 service in accordance with s. 121.021(29)(b)1.c. 2256121.021(29)(b)3.2257 2. On or after July 1, 2011, the amount of each monthly 2258 payment shall be computed in the same manner as for a normal 2259 retirement benefit, in accordance with subsection (1), but shall 2260 be based on the member’s average monthly compensation and 2261 creditable service as of the member’s early retirement date. The 2262 benefit so computed shall be reduced by five-twelfths of 1 2263 percent for each complete month by which the early retirement 2264 date precedes the normal retirement date of age 65 for a member 2265 of the Regular Class, Senior Management Service Class, or the 2266 Elected Officers’ Class, and age 60 for a member of the Special 2267 Risk Class, or age 57 if a special risk member has completed 30 2268 years of creditable service in accordance with s. 2269 121.021(29)(b)2.c. 2270 (b) If the employment of a member is terminated by reason 2271 of death within 10 years before normal retirement as described 2272 in s. 121.021(29)(a)1.b. or s. 121.021(29)(a)2.b.subsequent to2273the completion of 20 years of creditable service, the monthly 2274 benefit payable to the member’s beneficiary shall be calculated 2275 in accordance with subsection (1), but mustshallbe based on 2276 average monthly compensation and creditable service as of the 2277 date of death. The benefit so computed shall be reduced by five 2278 twelfths of 1 percent for each complete month by which death 2279 precedes the normal retirement date specified above or the date 2280 on which the member would have attained the normal retirement 2281 date30 years of creditable servicehad he or she survived and 2282 continued his or her employment, whichever provides a higher 2283 benefit. 2284 (4) DISABILITY RETIREMENT BENEFIT.— 2285 (a) Disability retirement; entitlement and effective date.— 2286 1.a. A member who becomes totally and permanently disabled, 2287 as defined in paragraph (b), after completing 5 years of 2288 creditable service, or a member who becomes totally and 2289 permanently disabled in the line of duty regardless of service, 2290 isshall beentitled to a monthly disability benefit; except 2291 that any member with less than 5 years of creditable service on 2292 July 1, 1980, or any person who becomes a member of the Florida 2293 Retirement System on or after such date must have completed 10 2294 years of creditable service beforeprior tobecoming totally and 2295 permanently disabled in order to receive disability retirement 2296 benefits for any disability which occurs other than in the line 2297 of duty. However, if a member employed on July 1, 1980, who has 2298withless than 5 years of creditable service as of that date,2299 becomes totally and permanently disabled after completing 5 2300 years of creditable service and is found not to have attained 2301 fully insured status for benefits under the federal Social 2302 Security Act, such member isshall beentitled to a monthly 2303 disability benefit. 2304 b. Effective July 1, 2001, a member of the pension plan 2305defined benefit retirement programwho becomes totally and 2306 permanently disabled, as defined in paragraph (b), after 2307 completing 8 years of creditable service, or a member who 2308 becomes totally and permanently disabled in the line of duty 2309 regardless of service, isshall beentitled to a monthly 2310 disability benefit. 2311 2. If the division has received from the employer the 2312 required documentation of the member’s termination of 2313 employment, the effective retirement date for a member who 2314 applies and is approved for disability retirement shall be 2315 established by rule of the division. 2316 3. For a member who is receiving Workers’ Compensation 2317 payments, the effective disability retirement date may not 2318 precede the date the member reaches Maximum Medical Improvement 2319 (MMI), unless the member terminates employment beforeprior to2320 reaching MMI. 2321 (j) Disability retirement of justice or judge by order of 2322 Supreme Court.— 2323 1. If a member is a justice of the Supreme Court, judge of 2324 a district court of appeal, circuit judge, or judge of a county 2325 court who has served for the number of years equal to, or 2326 greater than, the vesting requirement in s. 121.021(45)6 years2327or moreas an elected constitutional judicial officer, including 2328 service as a judicial officer, in any court abolished pursuant 2329 to Art. V of the State Constitution, and who is retired for 2330 disability by order of the Supreme Court upon recommendation of 2331 the Judicial Qualifications Commission pursuant tothe2332provisions ofArt. V of the State Constitution, the member’s 2333 Option 1 monthly benefit as provided in subparagraph (6)(a)1. 2334 mayshallnot be less than two-thirds of his or her monthly 2335 compensation as of the member’s disability retirement date. Such 2336amember may alternatively elect to receive a disability 2337 retirement benefit under any other option as provided in 2338 paragraph (6)(a). 2339 2. Should any justice or judge who is a member of the 2340 Florida Retirement System be retired for disability by order of 2341 the Supreme Court upon recommendation of the Judicial 2342 Qualifications Commission pursuant tothe provisions ofArt. V 2343 of the State Constitution, then all contributions to his or her 2344 account and all contributions made on his or her behalf by the 2345 employer shall be transferred to and deposited in the General 2346 Revenue Fund of the state, and there is hereby appropriated 2347 annually out of the General Revenue Fund, to be paid into the 2348 Florida Retirement System Fund, an amount necessary to pay the 2349 benefits of all justices and judges retired from the Florida 2350 Retirement System pursuant to Art. V of the State Constitution. 2351 (5) TERMINATION BENEFITS.—A member whose employment is 2352 terminated prior to retirement retains membership rights to 2353 previously earned member-noncontributory service credit, and to 2354 member-contributory service credit, if the member leaves the 2355 member contributions on deposit in his or her retirement 2356 account. If a terminated member receives a refund of member 2357 contributions, such member may reinstate membership rights to 2358 the previously earned service credit represented by the refund 2359 by completing 1 year of creditable service and repaying the 2360 refunded member contributions, plus interest. 2361 (a) A member whose employment is terminated for any reason 2362 other than death or retirement beforeprior tobecoming vested 2363 is entitled to the return of his or her accumulated 2364 contributions as of the date of termination. Effective July 1, 2365 2011, upon termination of employment from all participating 2366 employers for 3 calendar months as defined in s. 121.021(39)(c) 2367 for any reason other than retirement, a member may receive a 2368 refund of all contributions he or she has made to the pension 2369 plan, subject to the restrictions otherwise provided in this 2370 chapter. The refund may be received as a lump-sum payment, a 2371 rollover to a qualified plan, or a combination of these methods. 2372 Partial refunds are not permitted. The refund may not include 2373 any interest earnings on the contributions for a member of the 2374 pension plan. Employer contributions made on behalf of the 2375 member are not refundable. A member may not receive a refund of 2376 employee contributions if a pending or an approved qualified 2377 domestic relations order is filed against his or her retirement 2378 account. By obtaining a refund of contributions, a member waives 2379 all rights under the Florida Retirement System and the health 2380 insurance subsidy to the service credit represented by the 2381 refunded contributions, except the right to purchase his or her 2382 prior service credit in accordance with s. 121.081(2). 2383 (c) In lieu of the deferred monthly benefit provided in 2384 paragraph (b), the terminated member may elect to receive a 2385 lump-sum amount equal to his or her accumulated contributions as 2386 of the date of termination. Effective July 1, 2011, upon 2387 termination of employment from all participating employers for 3 2388 calendar months as defined in s. 121.021(39)(c) for any reason 2389 other than retirement, a member may receive a refund of all 2390 contributions he or she has made to the pension plan, subject to 2391 the restrictions otherwise provided in this chapter. Partial 2392 refunds are not permitted. The refund may not include any 2393 interest earnings on the contributions for a member of the 2394 pension plan. Employer contributions made on behalf of the 2395 member are not refundable. A member may not receive a refund of 2396 employee contributions if a pending or an approved qualified 2397 domestic relations order is filed against his or her retirement 2398 account. By obtaining a refund of contributions, a member waives 2399 all rights under the Florida Retirement System and the health 2400 insurance subsidy to the service credit represented by the 2401 refunded contributions, except the right to purchase his or her 2402 prior service credit in accordance with s. 121.081(2). 2403 (9) EMPLOYMENT AFTER RETIREMENT; LIMITATION.— 2404 (d)The provisions ofThis subsection appliesapplyto 2405 retirees, as defined in s. 121.4501(2), of the Florida 2406 Retirement System Investment PlanPublic Employee Optional2407Retirement Program, subject to the following conditions: 2408 1. A retireeThe retireesmay not be reemployed with an 2409 employer participating in the Florida Retirement System until 2410 such person has been retired for 6 calendar months. 2411 2. A retiree employed in violation of this subsection and 2412 an employer that employs or appoints such person are jointly and 2413 severally liable for reimbursement of any benefits paid to the 2414 retirement trust fund from which the benefits were paid,2415including the Retirement System Trust Fund and the Public2416Employee Optional Retirement Program Trust Fund, as appropriate. 2417 The employer must have a written statement from the retiree that 2418 he or she is not retired from a state-administered retirement 2419 system. 2420 (13) DEFERRED RETIREMENT OPTION PROGRAM.—In general, and 2421 subject to this section, the Deferred Retirement Option Program, 2422 hereinafter referred to as DROP, is a program under which an 2423 eligible member of the Florida Retirement System may elect to 2424 participate, deferring receipt of retirement benefits while 2425 continuing employment with his or her Florida Retirement System 2426 employer. The deferred monthly benefits shall accrue in the 2427 Florida Retirement System on behalf of the memberparticipant, 2428 plus interest compounded monthly, for the specified period of 2429 the DROP participation, as provided in paragraph (c). Upon 2430 termination of employment, the memberparticipantshall receive 2431 the total DROP benefits and begin to receive the previously 2432 determined normal retirement benefits. Participation in the DROP 2433 does not guarantee employment for the specified period of DROP. 2434 Participation in DROP by an eligible member beyond the initial 2435 60-month period as authorized in this subsection shall be on an 2436 annual contractual basis for all participants. 2437 (a) Eligibility of member to participate in DROP.—All 2438 active Florida Retirement System members in a regularly 2439 established position, and all active members of the Teachers’ 2440 Retirement System established in chapter 238 or the State and 2441 County Officers’ and Employees’ Retirement System established in 2442 chapter 122, which are consolidated within the Florida 2443 Retirement System under s. 121.011, are eligible to elect 2444 participation in DROP if: 2445 1. The member is not a renewed member under s. 121.122 or a 2446 member of the State Community College System Optional Retirement 2447 Program under s. 121.051, the Senior Management Service Optional 2448 Annuity Program under s. 121.055, or the optional retirement 2449 program for the State University System under s. 121.35. 2450 2. Except as provided in subparagraph 6., election to 2451 participate is made within 12 months immediately following the 2452 date on which the member first reaches normal retirement date, 2453 or, for a member who reaches normal retirement date based on 2454 service before he or she reaches age 62, or age 55 for Special 2455 Risk Class members, election to participate may be deferred to 2456 the 12 months immediately following the date the member attains 2457 age 57, or age 52 for Special Risk Class members. A member who 2458 delays DROP participation during the 12-month period immediately 2459 following his or her maximum DROP deferral date, except as 2460 provided in subparagraph 6., loses a month of DROP participation 2461 for each month delayed. A member who fails to make an election 2462 within the 12-month limitation period forfeits all rights to 2463 participate in DROP. The member shall advise his or her employer 2464 and the division in writing of the date DROP begins. The 2465 beginning date may be subsequent to the 12-month election period 2466 but must be within the original 60-month participation period 2467 provided in subparagraph (b)1. When establishing eligibilityof2468the memberto participate in DROP, the member may elect to 2469 include or exclude any optional service credit purchased by the 2470 member from the total service used to establish the normal 2471 retirement date. A member who has dual normal retirement dates 2472 is eligible to elect to participate in DROP after attaining 2473 normal retirement date in either class. 2474 3. The employer of a member electing to participate in 2475 DROP, or employers if dually employed, shall acknowledge in 2476 writing to the division the date the member’s participation in 2477 DROP begins and the date the member’s employment and DROP 2478 participation terminateswill terminate. 2479 4. Simultaneous employment of a memberparticipantby 2480 additional Florida Retirement System employers subsequent to the 2481 commencement of a member’s participation in DROP is permissible 2482 if such employers acknowledge in writing a DROP termination date 2483 no later than the member’sparticipant’sexisting termination 2484 date or the maximum participation period provided in 2485 subparagraph (b)1. 2486 5. A memberDROP participantmay change employers while 2487 participating in DROP, subject to the following: 2488 a. A change of employment takesmust takeplace without a 2489 break in service so that the member receives salary for each 2490 month of continuous DROP participation. If a member receives no 2491 salary during a month, DROP participation ceasesshall cease2492 unless the employer verifies a continuation of the employment 2493 relationship for such memberparticipantpursuant to s. 2494 121.021(39)(b). 2495 b. The memberSuch participantand new employershall2496 notify the division of the identity of the new employer on forms 2497 required by the division. 2498 c. The new employer acknowledgesshall acknowledge, in 2499 writing, the member’sparticipant’sDROP termination date, which 2500 may be extended but not beyond the maximum participation period 2501 provided in subparagraph (b)1., acknowledgesshall acknowledge2502 liability for any additional retirement contributions and 2503 interest required if the memberparticipantfails to timely 2504 terminate employment, and is subject to the adjustment required 2505 in sub-subparagraph (c)5.d. 2506 6. Effective July 1, 2001, for instructional personnel as 2507 defined in s. 1012.01(2), election to participate in DROP may be 2508 made at any time following the date on which the member first 2509 reaches normal retirement date. The member shall advise his or 2510 her employer and the division in writing of the date on which 2511 DROP begins. When establishing eligibility of the member to 2512 participate in DROP for the 60-month participation period 2513 provided in subparagraph (b)1., the member may elect to include 2514 or exclude any optional service credit purchased by the member 2515 from the total service used to establish the normal retirement 2516 date. A member who has dual normal retirement dates is eligible 2517 to elect to participate in either class. 2518 (c) Benefits payable under DROP.— 2519 1. Effective on the date of DROP participation, the 2520 member’s initial normal monthly benefit, including creditable 2521 service, optional form of payment, and average final 2522 compensation, and the effective date of retirement are fixed. 2523 The beneficiary established under the Florida Retirement System 2524 is the beneficiary eligible to receive any DROP benefits payable 2525 if the DROP participant dies before completing the period of 2526 DROP participation. If a joint annuitant predeceases the member, 2527 the member may name a beneficiary to receive accumulated DROP 2528 benefits payable. The retirement benefit, the annual cost of 2529 living adjustments provided in s. 121.101, and interest accrue 2530 monthly in the Florida Retirement System Trust Fund. For members 2531 whose DROP participation begins: 2532 a. Before July 1, 2011, the interest accrues at an 2533 effective annual rate of 6.5 percent compounded monthly, on the 2534 prior month’s accumulated ending balance, up to the month of 2535 termination or death, except as provided in s. 121.053(7). 2536 b. On or after July 1, 2011, the interest accrues at an 2537 effective annual rate of 1.3 percent, compounded monthly, on the 2538 prior month’s accumulated ending balance, up to the month of 2539 termination or death, except as provided in s. 121.053(7). 2540 2. Each employee who elects to participate in DROP may 2541 elect to receive a lump-sum payment for accrued annual leave 2542 earned in accordance with agency policy upon beginning 2543 participation in DROP. The accumulated leave payment certified 2544 to the division upon commencement of DROP shall be included in 2545 the calculation of the member’s average final compensation. The 2546 employee electing the lump-sum payment is not eligible to 2547 receive a second lump-sum payment upon termination, except to 2548 the extent the employee has earned additional annual leave 2549 which, combined with the original payment, does not exceed the 2550 maximum lump-sum payment allowed by the employing agency’s 2551 policy or rules. An early lump-sum payment shall be based on the 2552 hourly wage of the employee at the time he or she begins 2553 participation in DROP. If the member elects to wait and receive 2554 a lump-sum payment upon termination of DROP and termination of 2555 employment with the employer, any accumulated leave payment made 2556 at that time may not be included in the member’s retirement 2557 benefit, which was determined and fixed by law when the employee 2558 elected to participate in DROP. 2559 3. The effective date of DROP participation and the 2560 effective date of retirement of a DROP participant shall be the 2561 first day of the month selected by the member to begin 2562 participation in DROP, provided such date is properly 2563 established, with the written confirmation of the employer, and 2564 the approval of the division, on forms required by the division. 2565 4. Normal retirement benefits and any interestshall2566 continue to accrue in DROP until the established termination 2567 date of DROP or until the memberparticipantterminates 2568 employment or dies beforeprior tosuch date, except as provided 2569 in s. 121.053(7). Although individual DROP accounts mayshall2570 not be established, a separate accounting of each member’s 2571participant’saccrued benefits under DROP shall be calculated 2572 and provided to the memberparticipants. 2573 5. At the conclusion of the member’s participation inthe2574participant’sDROP, the division shall distribute the member’s 2575participant’stotal accumulated DROP benefits, subject to the 2576 following: 2577 a. The division shall receive verification by the member’s 2578participant’semployer or employers that the memberparticipant2579 has terminated all employment relationships as provided in s. 2580 121.021(39). 2581 b. The terminated DROP participant or, if deceased, the 2582 member’sparticipant’snamed beneficiary, shall elect on forms 2583 provided by the division to receive payment of the DROP benefits 2584 in accordance with one of the options listed below. If a member 2585participantor beneficiary fails to elect a method of payment 2586 within 60 days after termination of DROP, the division shall pay 2587 a lump sum as provided in sub-sub-subparagraph (I). 2588 (I) Lump sum.—All accrued DROP benefits, plus interest, 2589 less withholding taxes remitted to the Internal Revenue Service, 2590 shall be paid to the DROP participant or surviving beneficiary. 2591 (II) Direct rollover.—All accrued DROP benefits, plus 2592 interest, shall be paid from DROP directly to the custodian of 2593 an eligible retirement plan as defined in s. 402(c)(8)(B) of the 2594 Internal Revenue Code. However, in the case of an eligible 2595 rollover distribution to the surviving spouse of a deceased 2596 memberparticipant, an eligible retirement plan is an individual 2597 retirement account or an individual retirement annuity as 2598 described in s. 402(c)(9) of the Internal Revenue Code. 2599 (III) Partial lump sum.—A portion of the accrued DROP 2600 benefits shall be paid to DROP participant or surviving spouse, 2601 less withholding taxes remitted to the Internal Revenue Service, 2602 and the remaining DROP benefits must be transferred directly to 2603 the custodian of an eligible retirement plan as defined in s. 2604 402(c)(8)(B) of the Internal Revenue Code. However, in the case 2605 of an eligible rollover distribution to the surviving spouse of 2606 a deceased memberparticipant, an eligible retirement plan is an 2607 individual retirement account or an individual retirement 2608 annuity as described in s. 402(c)(9) of the Internal Revenue 2609 Code. The proportions must be specified by the DROP participant 2610 or surviving beneficiary. 2611 c. The form of payment selected by the DROP participant or 2612 surviving beneficiary must comply with the minimum distribution 2613 requirements of the Internal Revenue Code. 2614 d. A DROP participant who fails to terminate all employment 2615 relationships as provided in s. 121.021(39) shall be deemed as 2616 not retired, and the DROP election is null and void. Florida 2617 Retirement System membership shall be reestablished 2618 retroactively to the date of the commencement of DROP, and each 2619 employer with whom the memberparticipantcontinues employment 2620 must pay to the Florida Retirement System Trust Fund the 2621 difference between the DROP contributions paid in paragraph (i) 2622 and the contributions required for the applicable Florida 2623 Retirement System class of membership during the period the 2624 member participated in DROP, plus 6.5 percent interest 2625 compounded annually. 2626 6. The retirement benefits of any DROP participant who 2627 terminates all employment relationships as provided in s. 2628 121.021(39) but is reemployed in violation of the reemployment 2629 provisions of subsection (9) areshall besuspended during those 2630 months in which the retiree is in violation. Any retiree in 2631 violation of this subparagraph and any employer that employs or 2632 appoints such person without notifying the divisionof2633Retirementto suspend retirement benefits are jointly and 2634 severally liable for any benefits paid during the reemployment 2635 limitation period. The employer must have a written statement 2636 from the retiree that he or she is not retired from a state 2637 administered retirement system. Any retirement benefits received 2638 by a retiree while employed in violation of the reemployment 2639 limitations must be repaid to the Florida Retirement System 2640 Trust Fund, and his or her retirement benefits shall remain 2641 suspended until payment is made. Benefits suspended beyond the 2642 end of the reemployment limitation period apply toward repayment 2643 of benefits received in violation of the reemployment 2644 limitation. 2645 7. The accrued benefits of any DROP participant, and any 2646 contributions accumulated under the program, are not subject to 2647 assignment, execution, attachment, or any legal process 2648whatsoever,except for qualified domestic relations court orders 2649by a court of competent jurisdiction, income deduction orders as 2650 provided in s. 61.1301, and federal income tax levies. 2651 8. DROP participants are not eligible for disability 2652 retirement benefits as provided in subsection (4). 2653 (14) PAYMENT OF BENEFITS.—This subsection applies to the 2654 payment of benefits to a payee (retiree or beneficiary) under 2655 the Florida Retirement System: 2656 (d) A payee whose retirement benefits are reduced by the 2657 application of maximum benefit limits under s. 415(b) of the 2658 Internal Revenue Code, as specified in s. 121.30(5), shall have 2659 the portion of his or her calculated benefit in the Florida 2660 Retirement System PensionSystem defined benefitPlan which 2661 exceeds such federal limitation paid through the Florida 2662 Retirement System Preservation of Benefits Plan, as provided in 2663 s. 121.1001. 2664 Section 16. Subsection (1) and paragraph (a) of subsection 2665 (2) of section 121.1001, Florida Statutes, are amended to read: 2666 121.1001 Florida Retirement System Preservation of Benefits 2667 Plan.—Effective July 1, 1999, the Florida Retirement System 2668 Preservation of Benefits Plan is established as a qualified 2669 governmental excess benefit arrangement pursuant to s. 415(m) of 2670 the Internal Revenue Code. The Preservation of Benefits Plan is 2671 created as a separate portion of the Florida Retirement System, 2672 for the purpose of providing benefits to a payee (retiree or 2673 beneficiary) of the Florida Retirement System whose benefits 2674 would otherwise be limited by s. 415(b) of the Internal Revenue 2675 Code. 2676 (1) ELIGIBILITY TO PARTICIPATE IN THE PRESERVATION OF 2677 BENEFITS PLAN.—A payee of the Florida Retirement System shall 2678 participate in the Preservation of Benefits Plan ifwheneverhis 2679 or her earned benefit under the Florida Retirement System 2680 PensionSystem defined benefitPlan exceeds the benefit maximum 2681 established under s. 415(b) of the Internal Revenue Code. 2682 Participation in the Preservation of Benefits Plan shall 2683 continue for as long as the payee’s earned benefit under the 2684 pensionFlorida Retirement System defined benefitplan is 2685 reduced by the application of the maximum benefit limit under s. 2686 415(b) of the Internal Revenue Code. 2687 (2) BENEFITS PAYABLE UNDER THE PRESERVATION OF BENEFITS 2688 PLAN.— 2689 (a) On and after July 1, 1999, the divisionof Retirement2690 shall pay to each eligible payee of the Florida Retirement 2691 System who retires before, on, or after thatsuchdate, a 2692 supplemental retirement benefit equal to the difference between 2693 the amount of the payee’s monthly retirement benefit which would 2694 have been payable under the Florida Retirement System Pension 2695System defined benefitPlan if not for a reduction due to the 2696 application of s. 415(b) of the Internal Revenue Code and the 2697 reduced monthly retirement benefit as paid to the payee. The 2698 Preservation of Benefits Plan benefit shall be computed and 2699 payable under the same terms and conditions and to the same 2700 person as would have applied under the pensionFlorida2701Retirement System defined benefitplan were it not for the 2702 federal limitation. 2703 Section 17. Subsections (1) and (3) of section 121.101, 2704 Florida Statutes, are amended, present subsections (4) through 2705 (7) of that section are redesignated as subsections (6) through 2706 (9), respectively, and new subsections (4) and (5) are added to 2707 that section, to read: 2708 121.101 Cost-of-living adjustment of benefits.— 2709 (1) The purpose of this section is to provide cost-of 2710 living adjustments to the monthly benefits payable toall2711 retired members of state-supported retirement systems. 2712 (3) Commencing July 1, 1987, the benefit of each retiree 2713 and annuitant whose effective retirement date is before July 1, 2714 2011, shall be adjusted annually oneachJuly 1thereafter,as 2715 follows: 2716 (a) For those retirees and annuitants who have never 2717 received a cost-of-living adjustment under this section, the 2718 amount of the monthly benefit payable for the 12-month period 2719 commencing on the adjustment date shall be the amount of the 2720 member’s initial benefit plus an amount equal to a percentage of 2721 the member’s initial benefit; this percentage is derived by 2722 dividing the number of months the member has received an initial 2723 benefit by 12, and multiplying the result by 3. 2724 (b) For those retirees and annuitants who have received a 2725 cost-of-living adjustment under this subsectionsection, the 2726 adjusted monthly benefit shall be the amount of the monthly 2727 benefit being received on June 30 immediately preceding the 2728 adjustment date plus an amount equal to 3 percent of this 2729 benefit. 2730 (4) For members whose effective retirement date is on or 2731 after July 1, 2011, the benefit of each retiree and annuitant 2732 shall be adjusted annually on July 1 as follows: 2733 (a) For those retirees and annuitants who have never 2734 received a cost-of-living adjustment under this subsection, the 2735 amount of the monthly benefit payable for the 12-month period 2736 commencing on the adjustment date shall be the amount of the 2737 member’s initial benefit plus an amount equal to a percentage of 2738 the member’s initial benefit. This percentage is derived by 2739 dividing the number of months the member has received an initial 2740 benefit by 12, and multiplying the result by the factor 2741 calculated pursuant to paragraph (c). 2742 (b) For those retirees and annuitants who have received a 2743 cost-of-living adjustment under this subsection, the adjusted 2744 monthly benefit shall be the amount of the monthly benefit being 2745 received on June 30 immediately preceding the adjustment date 2746 plus an amount determined by multiplying the benefit by the 2747 factor calculated pursuant to paragraph (c). 2748 (c) The department shall calculate a cost-of-living factor 2749 for each retiree and beneficiary retiring on or after July 1, 2750 2011. This factor shall equal the product of 3 percent 2751 multiplied by the quotient of the sum of the member’s service 2752 credit earned for service before July 1, 2011, divided by the 2753 sum of the member’s total service credit earned. 2754 (5) Subject to the availability of funding and the 2755 Legislature enacting sufficient employer contributions 2756 specifically for the purpose of funding the expiration of the 2757 cost-of-living adjustment specified in subsection (4), in 2758 accordance with s. 14, Art. X of the State Constitution, the 2759 cost-of-living adjustment formula provided for in subsection (4) 2760 shall expire effective June 30, 2016, and the benefit of each 2761 retiree and annuitant shall be adjusted on each July 1 2762 thereafter, as provided in subsection (3). 2763 Section 18. Paragraph (b) of subsection (1) of section 2764 121.1115, Florida Statutes, is amended to read: 2765 121.1115 Purchase of retirement credit for out-of-state or 2766 federal service.—Effective January 1, 1995, a member may 2767 purchase creditable service for periods of public employment in 2768 another state and receive creditable service for such periods of 2769 employment. Service with the Federal Government, including any 2770 active military service, may be claimed. Upon completion of each 2771 year of service earned under the Florida Retirement System, a 2772 member may purchase up to 1 year of retirement credit for his or 2773 her out-of-state service, subject to the following provisions: 2774 (1) LIMITATIONS AND CONDITIONS.—To receive credit for the 2775 out-of-state service: 2776 (b) The member must have completed thea minimum of 6years 2777 of creditable service required for vesting under the Florida 2778 Retirement System, excluding out-of-state service and in-state 2779 service claimed and purchased under s. 121.1122. 2780 Section 19. Paragraph (a) of subsection (2) of section 2781 121.1122, Florida Statutes, is amended to read: 2782 121.1122 Purchase of retirement credit for in-state public 2783 service and in-state service in accredited nonpublic schools and 2784 colleges, including charter schools and charter technical career 2785 centers.—Effective January 1, 1998, a member of the Florida 2786 Retirement System may purchase creditable service for periods of 2787 certain public or nonpublic employment performed in this state, 2788 as provided in this section. 2789 (2) LIMITATIONS AND CONDITIONS.— 2790 (a) A member is not eligible to receive credit for in-state 2791 service under this section until he or she has completed the62792 years of creditable service required for vesting under the 2793 Florida Retirement System, excluding service purchased under 2794 this section and out-of-state service claimed and purchased 2795 under s. 121.1115. 2796 Section 20. Subsection (1) of section 121.121, Florida 2797 Statutes, is amended to read: 2798 121.121 Authorized leaves of absence.— 2799 (1) A member may purchase creditable service for up to 2 2800 work years of authorized leaves of absence, including any leaves 2801 of absence covered under the Family Medical Leave Act, if: 2802 (a) The member has completed thea minimum of 6years of 2803 creditable service required for vesting, excluding periods for 2804 which a leave of absence was authorized; 2805 (b) The leave of absence is authorized in writing by the 2806 employer of the member and approved by the administrator; 2807 (c) The member returns to active employment performing 2808 service with a Florida Retirement System employer in a regularly 2809 established position immediately upon termination of the leave 2810 of absence and remains on the employer’s payroll for 1 calendar 2811 month, except that a member who retires on disability while on a 2812 medical leave of absence mayshallnot be required to return to 2813 employment. A member whose work year is less than 12 months and 2814 whose leave of absence terminates between school years is 2815 eligible to receive credit for the leave of absence ifas long2816ashe or she returns to the employmentof his or her employerat 2817 the beginning of the next school year and remains on the 2818 employer’s payroll for 1 calendar month; and 2819 (d) The member makes the required contributions for service 2820 credit during the leave of absence, which shall be 8 percent 2821 until January 1, 1975, and 9 percent thereafter of his or her 2822 rate of monthly compensation in effect immediately beforeprior2823tothe commencement of such leave for each month of such period, 2824 plus 4 percent interest until July 1, 1975, and 6.5 percent 2825 interest thereafter on such contributions, compounded annually 2826 each June 30 from the due date of the contribution to date of 2827 payment. 2828 1. Effective July 1, 1980, any leave of absence purchased 2829 pursuant to this section isshall beat the contribution rates 2830 specified in s. 121.071 or s. 121.71 in effect at the time the 2831 leave is granted for the class of membership from which the 2832 leave of absence was granted; however, any member who purchased 2833 leave-of-absence credit beforeprior toJuly 1, 1980, for a 2834 leave of absence from a position in a class other than the 2835 regular membership class, may pay the appropriate additional 2836 contributions plus compound interest thereon and receive 2837 creditable service for such leave of absence in the membership 2838 class from which the member was granted the leave of absence. 2839 2. Effective July 1, 2011, any leave of absence purchased 2840 by the member pursuant to this section shall be at the employer 2841 and employee contribution rates specified in s. 121.71 in effect 2842 during the leave for the class of membership from which the 2843 leave of absence was granted. 2844 Section 21. Section 121.125, Florida Statutes, is amended 2845 to read: 2846 121.125 Credit for workers’ compensation payment periods.—A 2847 member of the retirement system created by this chapter who has 2848 been eligible or becomes eligible to receive workers’ 2849 compensation payments for an injury or illness occurring during 2850 his or her employment while a member of any state retirement 2851 system shall, upon return to active employment with a covered 2852 employer for 1 calendar month or upon approval for disability 2853 retirement in accordance with s. 121.091(4), receive full 2854 retirement credit for the period prior to such return to active 2855 employment or disability retirement for which the workers’ 2856 compensation payments were received. However, anomember may 2857 not receive retirement credit for any such period occurring 2858 after the earlier of the date of maximum medical improvement as 2859 defined in s. 440.02 or the date termination has occurred as 2860 defined in s. 121.021(39). The employer of record at the time of 2861 the worker’s compensation injury or illness shall make the 2862 required employer and employee retirement contributions based on 2863 the member’s rate of monthly compensation immediately prior to 2864 his or her receiving workers’ compensation payments for 2865 retirement credit received by the member. The employer of record 2866 at the time of the workers’ compensation injury or illness shall 2867 be assessed by the division a penalty of 1 percent of the 2868 contributions on all contributions not paid on the first payroll 2869 report after the member becomes eligible to receive credit. This 2870 delinquent assessment may not be waived. 2871 Section 22. Section 121.161, Florida Statutes, is reenacted 2872 to read: 2873 121.161 References to other laws include amendments. 2874 References in this chapter to state or federal laws or 2875 agreements are intended to include such laws as they now exist 2876 or may hereafter be amended. 2877 Section 23. Section 121.182, Florida Statutes, is amended 2878 to read: 2879 121.182 Retirement annuities authorized for city and county 2880 personnel.—MunicipalitiesCitiesand counties are authorized to 2881 purchase annuities for all municipalcityand county personnel 2882 with 25 or more years of creditable service who have reached age 2883 50 and have applied for retirement under the Florida Retirement 2884 System. No such annuity shall provide for more than the total 2885 difference in retirement income between the retirement benefit 2886 based on average monthly compensation and creditable service as 2887 of the member’s early retirement date and the early retirement 2888 benefit. MunicipalitiesCitiesand counties may also purchase 2889 annuities for members of the Florida Retirement System who have 2890 out-of-state service in another state or country which is 2891 documented as valid by the appropriate city or county. Such 2892 annuities may be based on no more than 5 years of out-of-state 2893 service and may equal, but not exceed, the benefits that would 2894 be payable under the Florida Retirement System if credit for 2895 out-of-state service was authorized under that system. 2896 MunicipalitiesCitiesand counties are authorized to invest 2897 funds, purchase annuities, or provide local supplemental 2898 retirement programs for purposes of providing annuities for city 2899 or county personnel. All retirement annuities shall comply with 2900 s. 14, Art. X of the State Constitution. 2901 Section 24. Paragraphs (g) and (i) of subsection (3), 2902 subsection (4), and subsection (5) of section 121.35, Florida 2903 Statutes, are amended to read: 2904 121.35 Optional retirement program for the State University 2905 System.— 2906 (3) ELECTION OF OPTIONAL PROGRAM.— 2907 (g) An eligible employee who is a member of the Florida 2908 Retirement System at the time of election to participate in the 2909 optional retirement program shall retain all retirement service 2910 credit earned under the Florida Retirement System,at the rate 2911 earned.NoAdditional service credit in the Florida Retirement 2912 System may notshallbe earned while the employee participates 2913 in the optional program, andnor shallthe employee is notbe2914 eligible for disability retirement under the Florida Retirement 2915 System. An eligible employee may transfer from the Florida 2916 Retirement System to his or her accounts under the State 2917 University System Optional Retirement Program a sum representing 2918 the present value of the employee’s accumulated benefit 2919 obligation underthe defined benefit program ofthe pension plan 2920Florida Retirement Systemfor any service credit accrued from 2921 the employee’s first eligible transfer date to the optional 2922 retirement program through the actual date of such transfer, if 2923 such service credit was earnedin the periodfrom July 1, 1984, 2924 through December 31, 1992. The present value of the employee’s 2925 accumulated benefit obligation shall be calculated as described 2926 in s. 121.4501(3)(c)2. Uponsuchtransfer, allsuchservice 2927 creditpreviouslyearned under thedefined benefit program of2928thepension planFlorida Retirement Systemduring this period is 2929shall benullified for purposes of entitlement to a future 2930 benefit under the pension plandefined benefit program of the2931Florida Retirement System. 2932 (i) Effective January 1, 2008, through December 31, 2008, 2933 except for an employee who is a mandatory participant of the 2934 State University System Optional Retirement Program, an employee 2935 who has elected to participate in the State University System 2936 Optional Retirement Program shall have one opportunity, at the 2937 employee’s discretion,to chooseto transfer from this program 2938 to thedefined benefit program of theFlorida Retirement System 2939 Pension Plan or to the investment planPublic Employee Optional2940Retirement Program, subject to the terms of the applicable 2941 contracts of the State University System Optional Retirement 2942 Program. 2943 1. If the employee chooses to move to the investment plan 2944Public Employee Optional Retirement Program, any contributions, 2945 interest, and earnings creditable to the employee under the 2946 State University System Optional Retirement Program mustshall2947 be retained by the employee in the State University System 2948 Optional Retirement Program, and the applicable provisions of s. 2949 121.4501(4) shall govern the election. 2950 2. If the employee chooses to move to the pension plan 2951defined benefit programof the Florida Retirement System, the 2952 employee shall receive service credit equal to his or her years 2953 of service under the State University System Optional Retirement 2954 Program. 2955 a. The cost for such credit must be inshall bean amount 2956 representing the actuarial accrued liability for the affected 2957 period of service. The cost mustshallbe calculated using the 2958 discount rate and other relevant actuarial assumptions that were 2959 used to value the Florida Retirement System Pensiondefined2960benefitPlan liabilities in the most recent actuarial valuation. 2961 The calculation mustshallinclude any service already 2962 maintained under the pensiondefined benefitplan in addition to 2963 the years under the State University System Optional Retirement 2964 Program. The actuarial accrued liability of any service already 2965 maintained under the pensiondefined benefitplan mustshallbe 2966 applied as a credit to total cost resulting from the 2967 calculation. The division mustshallensure that the transfer 2968 sum is prepared using a formula and methodology certified by an 2969 enrolled actuary. 2970 b. The employee must transfer from his or her State 2971 University System Optional Retirement Program account, and from 2972 other employee moneys as necessary, a sum representing the 2973 actuarial accrued liability immediately following the time of 2974 such movement, determined assuming that attained service equals 2975 the sum of service in the pension plandefined benefit program2976 and service in the State University System Optional Retirement 2977 Program. 2978 (4) CONTRIBUTIONS.— 2979 (a)1. Through June 30, 2001, each employer shall contribute 2980 on behalf of each member ofparticipant inthe optional 2981 retirement program an amount equal to the normal cost portion of 2982 the employer retirement contribution which would be required if 2983 the employeeparticipantwere a regular member of the Florida 2984 Retirement System Pension PlanSystem defined benefit program, 2985 plus the portion of the contribution rate required in s. 2986 112.363(8) that would otherwise be assigned to the Retiree 2987 Health Insurance Subsidy Trust Fund. 2988 2. Effective July 1, 2001, through June 30, 2011, each 2989 employer shall contribute on behalf of each member of 2990participant inthe optional retirement program an amount equal 2991 to 10.43 percent of the employee’sparticipant’sgross monthly 2992 compensation. 2993 3. Effective July 1, 2011, each member of the optional 2994 retirement program shall contribute an amount equal to the 2995 employee contribution required in s. 121.71(3). The employer 2996 shall contribute on behalf of each such member an amount equal 2997 to the difference between 10.43 percent of the employee’s gross 2998 monthly compensation and the amount equal to the employee’s 2999 required contribution based on the employee’s gross monthly 3000 compensation. 3001 4.The department shall deduct an amount approved by the3002Legislature to provide for the administration of this program.3003 The payment of the contributions, including contributions by the 3004 employee,to the optional program which is required by this3005paragraph for each participantshall be made by the employer to 3006 the department, which shall forward the contributions to the 3007 designated company or companies contracting for payment of 3008 benefits for members ofthe participant underthe program. 3009 However, such contributions paid on behalf of an employee 3010 described in paragraph (3)(c) mayshallnot be forwarded to a 3011 company and doshallnot begin to accrue interest until the 3012 employee has executed a contract and notified the department. 3013 The department shall deduct an amount from the contributions to 3014 provide for the administration of this program. 3015 (b) Each employer shall contribute on behalf of each member 3016 ofparticipant inthe optional retirement program an amount 3017 equal to the unfunded actuarial accrued liability portion of the 3018 employer contribution which would be required for members of the 3019 Florida Retirement System. This contribution shall be paid to 3020 the department for transfer to the Florida Retirement System 3021 Trust Fund. 3022 (c) An Optional Retirement Program Trust Fund shall be 3023 established in the State Treasury and administered by the 3024 department to make payments to the provider companies on behalf 3025 oftheoptional retirement program membersparticipants, and to 3026 transfer the unfunded liability portion of the state optional 3027 retirement program contributions to the Florida Retirement 3028 System Trust Fund. 3029 (d) Contributions required for social security by each 3030 employer and each employeeparticipant, in the amount required 3031 for social security coverage as now or hereafter may be provided 3032 by the federal Social Security Act, shall be maintained for each 3033 member ofparticipant inthe optional retirement program and are 3034shall bein addition to the retirement contributions specified 3035 in this subsection. 3036 (e) Each member ofparticipant inthe optional retirement 3037 program who has executed a contract may contribute by way of 3038 salary reduction or deduction a percentage amount of the 3039 employee’sparticipant’sgross compensation not to exceed the 3040 percentage amount contributed by the employer to the optional 3041 program, butin no case maysuch contribution may not exceed 3042 federal limitations. Payment of the employee’sparticipant’s3043 contributions shall be made by the financial officer of the 3044 employer to the division which shall forward the contributions 3045 to the designated company or companies contracting for payment 3046 of benefits for members ofthe participant underthe program. A 3047 memberparticipantmay not make, through salary reduction, any 3048 voluntary employee contributions to any other plan under s. 3049 403(b) of the Internal Revenue Code, with the exception of a 3050 custodial account under s. 403(b)(7) of the Internal Revenue 3051 Code, until he or she has made an employee contribution to his 3052 or her optional program equal to the employer contribution. An 3053 employeeA participantis responsible for monitoring his or her 3054 individual tax-deferred income to ensure he or she does not 3055 exceed the maximum deferral amounts permitted under the Internal 3056 Revenue Code. 3057 (f) The Optional Retirement Trust Fund may accept for 3058 deposit into memberparticipantcontracts contributions in the 3059 form of rollovers or direct trustee-to-trustee transfers by or 3060 on behalf of membersparticipantswho are reasonably determined 3061 by the department to be eligible for rollover or transfer to the 3062 optional retirement program pursuant to the Internal Revenue 3063 Code,if such contributions are made in accordance with rules 3064 adopted by the department. Such contributions shall be accounted 3065 for in accordance with any applicable requirements of the 3066 Internal Revenue Code and department rulesof the department. 3067 (g) Effective July 1, 2008, for purposes of paragraph (a) 3068 and notwithstanding s. 121.021(22)(b)1., the term “employee’s 3069participant’sgross monthly compensation” includes salary 3070 payments made to eligible clinical faculty from a state 3071 university using funds provided by a faculty practice plan 3072 authorized by the Board of Governors of the State University 3073 System if: 3074 1. There is nonot anyemployer contribution from the state 3075 university to any other retirement program with respect to such 3076 salary payments; and 3077 2. The employer contribution on behalf of a member ofthe3078participant inthe optional retirement program with respect to 3079 such salary payments is made using funds provided by the faculty 3080 practice plan. 3081 (5) BENEFITS.— 3082 (a) Benefits are payable under the optional retirement 3083 program only to vested members participatingparticipantsin the 3084 program, or their beneficiaries as designated by the member 3085participantin the contract with a provider company, and such 3086 benefits shall be paid only by the designated company in 3087 accordance with s. 403(b) of the Internal Revenue Code and the 3088 terms of the annuity contract or contracts applicable to the 3089 memberparticipant. Benefits accrue in individual accounts that 3090 are member-directedparticipant-directed, portable, and funded 3091 by employer and employee contributions and the earnings thereon. 3092 The memberparticipantmust be terminated for 3 calendar months 3093 from all employment relationships with all Florida Retirement 3094 System employers, as provided in s.121.021(39),to begin 3095 receiving theemployer-fundedbenefit. Benefits funded by 3096 employer and employee contributions are payable in accordance 3097 with the following terms and conditions: 3098 1. Benefits shall be paid only to a participating member 3099participant, to his or her beneficiaries, or to his or her 3100 estate, as designated by the memberparticipant. 3101 2. Benefits shall be paid by the provider company or 3102 companies in accordance with the law, the provisions of the 3103 contract, and any applicable department rule or policy. 3104 3. In the event of a member’sparticipant’sdeath, moneys 3105 accumulated by, or on behalf of, the memberparticipant, less 3106 withholding taxes remitted to the Internal Revenue Service, if 3107 any, shall be distributed to the member’sparticipant’s3108 designated beneficiary or beneficiaries, or to the member’s 3109participant’sestate, as if the memberparticipantretired on 3110 the date of death, as provided in paragraph (d)(c). No other 3111 death benefits are available to survivors of members 3112participantsunder the optional retirement program except for 3113 such benefits, or coverage for such benefits, as are separately 3114 afforded by the employer, at the employer’s discretion. 3115 (b) Benefits, including employee contributions, are not 3116 payable for employee hardships, unforeseeable emergencies, 3117 loans, medical expenses, educational expenses, purchase of a 3118 principal residence, payments necessary to prevent eviction or 3119 foreclosure on an employee’s principal residence, or any other 3120 reason before termination from all employment relationships with 3121 participating employers for 3 calendar months. 3122 (c)(b)Upon receipt by the provider company of a properly 3123 executed application for distribution of benefits, the total 3124 accumulated benefit isshall bepayable to the participating 3125 memberparticipant, as: 3126 1. A lump-sum distribution to the memberparticipant; 3127 2. A lump-sum direct rollover distribution whereby all 3128 accrued benefits, plus interest and investment earnings, are 3129 paid from the member’sparticipant’saccount directly to an 3130 eligible retirement plan, as defined in s. 402(c)(8)(B) of the 3131 Internal Revenue Code, on behalf of the memberparticipant; 3132 3. Periodic distributions; 3133 4. A partial lump-sum payment whereby a portion of the 3134 accrued benefit is paid to the memberparticipantand the 3135 remaining amount is transferred to an eligible retirement plan, 3136 as defined in s. 402(c)(8)(B) of the Internal Revenue Code, on 3137 behalf of the memberparticipant; or 3138 5. Such other distribution options as are providedforin 3139 the member’sparticipant’soptional retirement program contract. 3140 (d)(c)Survivor benefits areshall bepayable as: 3141 1. A lump-sum distribution payable to the beneficiaries or 3142 to the deceased member’sparticipant’sestate; 3143 2. An eligible rollover distribution on behalf of the 3144 surviving spouse of a deceased memberparticipant, whereby all 3145 accrued benefits, plus interest and investment earnings, are 3146 paid from the deceased member’sparticipant’saccount directly 3147 to an eligible retirement plan, as described in s. 402(c)(8)(B) 3148 of the Internal Revenue Code, on behalf of the surviving spouse; 3149 3. Such other distribution options as are providedforin 3150 the member’sparticipant’soptional retirement program contract; 3151 or 3152 4. A partial lump-sum payment whereby a portion of the 3153 accrued benefit is paid to the deceased member’sparticipant’s3154 surviving spouse or other designated beneficiaries, less 3155 withholding taxes remitted to the Internal Revenue Service, if 3156 any, and the remaining amount is transferred directly to an 3157 eligible retirement plan, as described in s. 402(c)(8)(B) of the 3158 Internal Revenue Code, on behalf of the surviving spouse. The 3159 proportions must be specified by the memberparticipantor the 3160 surviving beneficiary. 3161 3162 This paragraph does not abrogate other applicable provisions of 3163 state or federal law providing payment of death benefits. 3164 (e)(d)The benefits payable to any person under the 3165 optional retirement program, and any contribution accumulated 3166 under such program, areshallnotbesubject to assignment, 3167 execution, or attachment or to any legal processwhatsoever. 3168 (f)(e)A participating memberparticipantwho chooses to 3169 receive his or her benefits must be terminated for 3 calendar 3170 months to be eligible to receive benefits funded by employer and 3171 employee contributions. The memberupon termination as defined3172in s.121.021must notify the provider company of the date he or 3173 she wishes benefits funded by required employer and employee 3174 contributions to begin and must be terminated as defined in s. 3175 121.021 after the initial benefit payment or distribution is 3176 received. Benefits may be deferred until the memberparticipant3177 chooses to make such application. 3178 (g)(f)Benefits funded by the participating member’s 3179 voluntaryparticipant’spersonal contributions may be paid out 3180 at any time and in any form within the limits provided in the 3181 contract between the memberparticipantand thehis or her3182 provider company. The memberparticipantshall notify the 3183 provider company regarding the date and provisions under which 3184 he or she wants to receive the employee-funded portion of the 3185 plan. 3186 (h)(g)For purposes of this section, “retiree” means a 3187 former participating memberparticipantof the optional 3188 retirement program who has terminated employment and has taken a 3189 distribution as provided in this subsection, except for a 3190 mandatory distribution of a de minimis account authorized by the 3191 department. 3192 Section 25. Section 121.355, Florida Statutes, is amended 3193 to read: 3194 121.355 Community College Optional Retirement Program and 3195 State University System Optional Retirement Program member 3196 transfer.—Effective January 1, 2009, through December 31, 2009, 3197 an employee who is a former member ofparticipant inthe 3198 Community College Optional Retirement Program or the State 3199 University System Optional Retirement Program and present 3200 mandatory member ofparticipant inthe Florida Retirement System 3201 PensionSystem defined benefitPlan may receive service credit 3202 equal to his or her years of service under the Community College 3203 Optional Retirement Program or the State University System 3204 Optional Retirement Program under the following conditions: 3205 (1) The cost for such credit must representshall be an3206amount representingthe actuarial accrued liability for the 3207 affected period of service. The cost shall be calculated using 3208 the discount rate and other relevant actuarial assumptions that 3209 were used to value the Florida Retirement System PensionSystem3210defined benefitPlan liabilities in the most recent actuarial 3211 valuation. The calculation mustshallinclude any service 3212 already maintained under the pensiondefined benefitplan in 3213 addition to the years under the Community College Optional 3214 Retirement Program or the State University System Optional 3215 Retirement Program. The actuarial accrued liability of any 3216 service already maintained under the pensiondefined benefit3217 plan shall be applied as a credit to total cost resulting from 3218 the calculation. The division shall ensure that the transfer sum 3219 is prepared using a formula and methodology certified by an 3220 enrolled actuary. 3221 (2) The employee must transfer from his or her Community 3222 College Optional Retirement Program account or State University 3223 System Optional Retirement Program account, subject to the terms 3224 of the applicable optional retirement program contract, and from 3225 other employee moneys as necessary, a sum representing the 3226 actuarial accrued liability immediately following the time of 3227 such movement, determined assuming that attained service equals 3228 the sum of service in the pension plandefined benefit program3229 and service in the Community College Optional Retirement Program 3230 or State University System Optional Retirement Program. 3231 (3) The employee may not receive service credit for a 3232 period of mandatory participation in the State University 3233 Optional Retirement Program or for a period for which a 3234 distribution was received from the Community College Optional 3235 Retirement Program or State University System Optional 3236 Retirement Program. 3237 Section 26. Section 121.4501, Florida Statutes, is amended 3238 to read: 3239 121.4501 Florida Retirement System Investment PlanPublic3240Employee Optional Retirement Program.— 3241 (1) The Trustees of the State Board of Administration shall 3242 establish aan optionaldefined contributionretirementprogram 3243 called the “Florida Retirement System Investment Plan” or 3244 “investment plan” for members of the Florida Retirement System 3245 under which retirement benefits will be provided for eligible 3246 employees who elect to participate in the program. The 3247 retirement benefitsto be provided for or on behalf of3248participants in such optional retirement programshall be 3249 provided through member-directedemployee-directedinvestments, 3250 in accordance with s. 401(a) of the Internal Revenue Code and 3251itsrelated regulations. The employer and employeeemployers3252 shall make contributionscontribute, as provided in this section 3253 and,ss. 121.571,and 121.71, to the Florida Retirement System 3254 Investment PlanPublic Employee Optional Retirement Program3255 Trust Fund toward the funding ofsuch optionalbenefits. 3256 (2) DEFINITIONS.—As used in this part, the term: 3257 (a) “Approved provider” or “provider” means a private 3258 sector company that is selected and approved by the state board 3259 to offer one or more investment products or services to the 3260 investment planoptional retirement program. The term includes a 3261 bundled provider that offers membersparticipantsa range of 3262 individually allocated or unallocated investment products and 3263 may offer a range of administrative and customer services, which 3264 may include accounting and administration of individual member 3265participantbenefits and contributions; individual member 3266participantrecordkeeping; asset purchase, control, and 3267 safekeeping; direct execution of the member’sparticipant’s3268 instructions as to asset and contribution allocation; 3269 calculation of daily net asset values; direct access to member 3270participantaccount information; periodic reporting to members 3271participants, at least quarterly, on account balances and 3272 transactions; guidance, advice, and allocation services directly 3273 relating to the provider’s own investment options or products, 3274 but only if the bundled provider complies with the standard of 3275 care of s. 404(a)(1)(A-B) of the Employee Retirement Income 3276 Security Act of 1974 (ERISA), and if providing such guidance, 3277 advice, or allocation services does not constitute a prohibited 3278 transaction under s. 4975(c)(1) of the Internal Revenue Code or 3279 s. 406 of ERISA, notwithstanding that such prohibited 3280 transaction provisions do not apply to theoptionalretirement 3281 program; a broad array of distribution options; asset 3282 allocation; and retirement counseling and education. Private 3283 sector companies include investment management companies, 3284 insurance companies, depositories, and mutual fund companies. 3285 (b) “Average monthly compensation” means one-twelfth of 3286 average final compensation as defined in s. 121.021. 3287 (c) “Covered employment” means employment in a regularly 3288 established position as defined in s. 121.021. 3289(d) “Defined benefit program” means the defined benefit3290program of the Florida Retirement System administered under part3291I of this chapter.3292(e) “Division” means the Division of Retirement within the3293department.3294 (d)(f)“Electronic means” means by telephone, if the 3295 required information is received on a recorded line, or through 3296 Internet access, if the required information is captured online. 3297 (e)(g)“Eligible employee” means an officer or employee, as 3298 defined in s. 121.021, who: 3299 1. Is a member of, or is eligible for membership in, the 3300 Florida Retirement System, including any renewed member of the 3301 Florida Retirement System initially enrolled before July 1, 3302 2010; or 3303 2. Participates in, or is eligible to participate in, the 3304 Senior Management Service Optional Annuity Program as 3305 established under s. 121.055(6), the State Community College 3306 System Optional Retirement Program as established under s. 3307 121.051(2)(c), or the State University System Optional 3308 Retirement Program established under s. 121.35. 3309 3310 The term does not include any member participating in the 3311 Deferred Retirement Option Program established under s. 3312 121.091(13), a retiree of a state-administered retirement system 3313 initially reemployed on or after July 1, 2010, or a mandatory 3314 participant of the State University System Optional Retirement 3315 Program established under s. 121.35. 3316 (f)(h)“Employer” means an employer, as defined in s. 3317 121.021, of an eligible employee. 3318 (g)(i)“Florida Retirement System Investment Plan” or 3319 “investment plan”“Optional retirement program” or “optional3320program”means the defined contribution programPublic Employee3321Optional Retirement Programestablished under this part. 3322 (h) “Florida Retirement System Pension Plan” or “pension 3323 plan” means the defined benefit program of the Florida 3324 Retirement System administered under part I of this chapter. 3325 (i)(j)“Member” or “employee”“Participant”means an 3326 eligible employee who enrolls in the investment planoptional3327programas provided in subsection (4),ora terminated Deferred 3328 Retirement Option Program memberparticipantas described in 3329 subsection (21), or a beneficiary or alternate payee of a member 3330 or employee. 3331 (j) “Member contributions” or “employee contributions” 3332 means the sum of all amounts deducted from the salary of a 3333 member by his or her employer in accordance with s. 121.71(3) 3334 and credited to his or her individual account in the investment 3335 plan, plus any earnings on such amounts and any contributions 3336 specified in paragraph (5)(e). 3337 (k) “Retiree” means a former memberparticipantof the 3338 investment planoptional retirement programwho has terminated 3339 employment andhastaken a distribution of vested employee or 3340 employer contributions as provided in s. 121.591, except for a 3341 mandatory distribution of a de minimis account authorized by the 3342 state board or a minimum required distribution provided by s. 3343 401(a)(9) of the Internal Revenue Code. 3344 (l) “Vested” or “vesting” means the guarantee that a member 3345participantis eligible to receive a retirement benefit upon 3346 completion of the required years of service under the investment 3347 planoptional retirement program. 3348 (3)ELIGIBILITY;RETIREMENT SERVICE CREDIT; TRANSFER OF 3349 BENEFITS.— 3350(a) Participation in the Public Employee Optional3351Retirement Program is limited to eligible employees.3352Participation in the optional retirement program is in lieu of3353participation in the defined benefit program of the Florida3354Retirement System.3355 (a)(b)An eligible employee who is employed in a regularly 3356 established position by a state employer on June 1, 2002; by a 3357 district school board employer on September 1, 2002; or by a 3358 local employer on December 1, 2002, and who is a member of the 3359 pension plandefined benefit retirement program of the Florida3360Retirement Systemat the time of his or her election to 3361 participate in the investment planPublic Employee Optional3362Retirement Programshall retain all retirement service credit 3363 earned under the pension plandefined benefit retirement program3364of the Florida Retirement Systemas credited under the system 3365 and isshall beentitled to a deferred benefit upon termination,3366if eligible under the system. However, election to enroll 3367participatein the investment planPublic Employee Optional3368Retirement Programterminates the active membership of the 3369 employee in the pension plandefined benefit program of the3370Florida Retirement System, and the service of a member 3371participantin the investment plan isPublic Employee Optional3372Retirement Program shallnotbecreditable under the pension 3373 plandefined benefit retirement program of the Florida3374Retirement Systemfor purposes of benefit accrual but is 3375 creditableshall be creditedfor purposes of vesting. 3376 (b)(c)1.Notwithstanding paragraph (a), an(b), each3377 eligible employee who elects to participate in the investment 3378 planPublic Employee Optional Retirement Programand establishes 3379 one or more individual memberparticipantaccountsunder the3380optional programmay elect to transfer to the investment plan 3381optional programa sum representing the present value of the 3382 employee’s accumulated benefit obligation under the pension plan 3383defined benefit retirement program of the Florida Retirement3384System. Uponsuchtransfer, all service creditpreviouslyearned 3385 under the pension plan isdefined benefit program of the Florida3386Retirement System shall benullified for purposes of entitlement 3387 to a future benefit under the pension plandefined benefit3388program of the Florida Retirement System. A member may not 3389 transferparticipant is precluded from transferringthe 3390 accumulated benefit obligation balance from the pension plan 3391 after the timedefined benefit program upon the expiration of3392theperiod for enrollingafforded to enrollin the investment 3393 plan has expiredoptional program. 3394 1.2.For purposes of this subsection, the present value of 3395 the member’s accumulated benefit obligation is based upon the 3396 member’s estimated creditable service and estimated average 3397 final compensation under the pension plandefined benefit3398program, subject to recomputation under subparagraph 2.3.For 3399 state employeesenrolling under subparagraph (4)(a)1., initial 3400 estimates shallwillbe based upon creditable service and 3401 average final compensation as of midnight on June 30, 2002; for 3402 district school board employeesenrolling under subparagraph3403(4)(b)1., initial estimates shallwillbe based upon creditable 3404 service and average final compensation as of midnight on 3405 September 30, 2002; and for local government employeesenrolling3406under subparagraph (4)(c)1., initial estimates shallwillbe 3407 based upon creditable service and average final compensation as 3408 of midnight on December 31, 2002. The datesrespectively3409 specified areabove shall be construed asthe “estimate date” 3410 for these employees. The actuarial present value of the 3411 employee’s accumulated benefit obligation shall be based on the 3412 following: 3413 a. The discount rate and other relevant actuarial 3414 assumptions used to value the Florida Retirement System Trust 3415 Fund at the time the amount to be transferred is determined, 3416 consistent with the factors provided in sub-subparagraphs b. and 3417 c. 3418 b. A benefit commencement age, based on the member’s 3419 estimated creditable service as of the estimate date. 3420 c. Except as provided under sub-subparagraph d., for a 3421 member initially enrolled: 3422 (I) Before July 1, 2011, the benefit commencement age is 3423shall bethe younger of the following, but mayshallnot be 3424 younger than the member’s age as of the estimate date: 3425 (A)(I)Age 62; or 3426 (B)(II)The age the member would attain if the member 3427 completed 30 years of service with an employer, assuming the 3428 member worked continuously from the estimate date, and 3429 disregarding any vesting requirement that would otherwise apply 3430 under the pension plandefined benefit program of the Florida3431Retirement System. 3432 (II) On or after July 1, 2011, the benefit commencement age 3433 is the younger of the following, but may not be younger than the 3434 member’s age as of the estimate date: 3435 (A) Age 65; or 3436 (B) The age the member would attain if the member completed 3437 33 years of service with an employer, assuming the member worked 3438 continuously from the estimate date, and disregarding any 3439 vesting requirement that would otherwise apply under the pension 3440 plan. 3441 d.c.For members of the Special Risk Class and for members 3442 of the Special Risk Administrative Support Class entitled to 3443 retain the special risk normal retirement date: 3444 (I) Initially enrolled before July 1, 2011, the benefit 3445 commencement age isshall bethe younger of the following, but 3446 mayshallnot be younger than the member’s age as of the 3447 estimate date: 3448 (A)(I)Age 55; or 3449 (B)(II)The age the member would attain if the member 3450 completed 25 years of service with an employer, assuming the 3451 member worked continuously from the estimate date, and 3452 disregarding any vesting requirement that would otherwise apply 3453 under the pension plandefined benefit program of the Florida3454Retirement System. 3455 (II) Initially enrolled on or after July 1, 2011, the 3456 benefit commencement age is the younger of the following, but 3457 may not be younger than the member’s age as of the estimate 3458 date: 3459 (A) Age 60; or 3460 (B) The age the member would attain if the member completed 3461 30 years of service with an employer, assuming the member worked 3462 continuously from the estimate date, and disregarding any 3463 vesting requirement that would otherwise apply under the pension 3464 plan. 3465 e.d.The calculation mustshalldisregard vesting 3466 requirements and early retirement reduction factors that would 3467 otherwise apply under the pension plandefined benefit3468retirement program. 3469 2.3.For each memberparticipantwho elects to transfer 3470 moneys from the pension plandefined benefit programto his or 3471 her account in the investment planoptional program, the 3472 division shall recompute the amount transferred under 3473 subparagraph 1. within2. not later than60 days after the 3474 actual transfer of funds based upon the member’sparticipant’s3475 actual creditable service and actual final average compensation 3476 as of the initial date of participation in the investment plan 3477optional program. If the recomputed amount differs from the 3478 amount transferredunder subparagraph 2.by $10 or more, the 3479 division shall: 3480 a. Transfer, or cause to be transferred, from the Florida 3481 Retirement System Trust Fund to the member’sparticipant’s3482 accountin the optional programthe excess, if any, of the 3483 recomputed amount over the previously transferred amount 3484 together with interest from the initial date of transfer to the 3485 date of transfer under this subparagraph, based upon the 3486 effective annual interest equal to the assumed return on the 3487 actuarial investment which was used in the most recent actuarial 3488 valuation of the system, compounded annually. 3489 b. Transfer, or cause to be transferred, from the member’s 3490participant’saccount to the Florida Retirement System Trust 3491 Fund the excess, if any, of the previously transferred amount 3492 over the recomputed amount, together with interest from the 3493 initial date of transfer to the date of transfer under this 3494 subparagraph, based upon 6 percent effective annual interest, 3495 compounded annually, pro rata based on the member’s 3496participant’sallocation plan. 3497 3. If contribution adjustments are made as a result of 3498 employer errors or corrections, including plan corrections, 3499 following recomputation of the amount transferred under 3500 subparagraph 1., the member is entitled to the additional 3501 contributions or is responsible for returning any excess 3502 contributions resulting from the correction. However, any return 3503 of such erroneous excess pretax contribution by the plan must be 3504 made within the period allowed by the Internal Revenue Service. 3505 The present value of the member’s accumulated benefit obligation 3506 shall not be recalculated. 3507 4. As directed by the memberparticipant, the state board 3508 shall transfer or cause to be transferred the appropriate 3509 amounts to the designated accounts within. The board shall3510establish transfer procedures by rule, but the actual transfer3511shall not be later than30 days after the effective date of the 3512 member’s participation in the investment planoptional program3513 unless the major financial markets for securities available for 3514 a transfer are seriously disrupted by an unforeseen event that 3515which alsocauses the suspension of trading on any national 3516 securities exchange in the country where the securities were 3517 issued. In that event, thesuch30-day periodof timemay be 3518 extended by a resolution of the state boardtrustees. Transfers 3519 are not commissionable or subject to other fees and may be in 3520 the form of securities or cash, as determined by the state 3521 board. Such securities areshall bevalued as of the date of 3522 receipt in the member’sparticipant’saccount. 3523 5. If the state board or the division receives notification 3524 from the United States Internal Revenue Service that this 3525 paragraph or any portion of this paragraph will cause the 3526 retirement system, or a portion thereof, to be disqualified for 3527 tax purposes under the Internal Revenue Code,thenthe portion 3528 that will cause the disqualification does not apply. Upon such 3529 notice, the state board and the division shall notify the 3530 presiding officers of the Legislature. 3531 (4) PARTICIPATION; ENROLLMENT.— 3532 (a)1. With respect to an eligible employee who is employed 3533 in a regularly established position on June 1, 2002, by a state 3534 employer: 3535 a. Any such employee may elect to participate in the 3536 investment planPublic Employee Optional Retirement Programin 3537 lieu of retaining his or her membership in the pension plan 3538defined benefit program of the Florida Retirement System. The 3539 election must be made in writing or by electronic means and must 3540 be filed with the third-party administrator by August 31, 2002, 3541 or, in the case of an active employee who is on a leave of 3542 absence on April 1, 2002, by the last business day of the 5th 3543 month following the month the leave of absence concludes. This 3544 election is irrevocable, except as provided in paragraph (g) 3545(e). Upon making such election, the employee shall be enrolled 3546 as a memberparticipantof the investment planPublic Employee3547Optional Retirement Program, the employee’s membership in the 3548 Florida Retirement System isshall begoverned by the provisions 3549 of this part, and the employee’s membership in the pension plan 3550 terminatesdefined benefit program of the Florida Retirement3551System shall terminate. The employee’s enrollment in the 3552 investment plan isPublic Employee Optional Retirement Program3553shall beeffective the first day of the month for which a full 3554 month’s employer contribution is made to the investment plan 3555optional program. 3556 b. Any such employee who fails to elect to participate in 3557 the investment planPublic Employee Optional Retirement Program3558 within the prescribed time period is deemed to have elected to 3559 retain membership in the pension plandefined benefit program of3560the Florida Retirement System, and the employee’s option to 3561 elect to participate in the investment planoptional programis 3562 forfeited. 3563 2. With respect to employees who become eligible to 3564 participate in the investment planPublic Employee Optional3565Retirement Programby reason of employment in a regularly 3566 established position with a state employer commencing after 3567 April 1, 2002: 3568 a. Any such employee shall, by default, be enrolled in the 3569 pension plandefined benefit retirement program of the Florida3570Retirement Systemat the commencement of employment, and may, by 3571 the last business day of the 5th month following the employee’s 3572 month of hire, elect to participate in the investment plan 3573Public Employee Optional Retirement Program. The employee’s 3574 election must be made in writing or by electronic means and must 3575 be filed with the third-party administrator. The election to 3576 participate in the investment planoptional programis 3577 irrevocable, except as provided in paragraph (g)(e). 3578 b. If the employee files such election within the 3579 prescribed time period, enrollment in the investment plan is 3580optional program shall beeffective on the first day of 3581 employment. Theemployerretirement contributions paid through 3582 the month of the employee plan change shall be transferred to 3583 the investmentoptionalprogram, and, effective the first day of 3584 the next month, the employer and employee mustshallpay the 3585 applicable contributions based on the employee membership class 3586 in theoptionalprogram. 3587 c. AnAny suchemployee who fails to elect to participate 3588 in the investment planPublic Employee Optional Retirement3589Programwithin the prescribed time period is deemed to have 3590 elected to retain membership in the pension plandefined benefit3591program of the Florida Retirement System, and the employee’s 3592 option to elect to participate in the investment planoptional3593programis forfeited. 3594 3. With respect to employees who become eligible to 3595 participate in the investment planPublic Employee Optional3596Retirement Programpursuant to s. 121.051(2)(c)3. or s. 3597 121.35(3)(i), theany suchemployee may elect to participate in 3598 the investment planPublic Employee Optional Retirement Program3599 in lieu of retaining his or her membershipparticipationin the 3600 State Community College System Optional Retirement Program or 3601 the State University System Optional Retirement Program. The 3602 election must be made in writing or by electronic means and must 3603 be filed with the third-party administrator. This election is 3604 irrevocable, except as provided in paragraph (g)(e). Upon 3605 making such election, the employee shall be enrolled as a member 3606 inparticipant ofthe investment planPublic Employee Optional3607Retirement Program, the employee’s membership in the Florida 3608 Retirement System isshall begoverned by the provisions of this 3609 part, and the employee’s participation in the State Community 3610 College System Optional Retirement Program or the State 3611 University System Optional Retirement Program terminatesshall3612terminate. The employee’s enrollment in the investment plan is 3613Public Employee Optional Retirement Program shall beeffective 3614 on the first day of the month for which a full month’s employer 3615 and employee contribution is made to the investment plan 3616optional program. 3617 4. For purposes of this paragraph, “state employer” means 3618 any agency, board, branch, commission, community college, 3619 department, institution, institution of higher education, or 3620 water management district of the state, which participates in 3621 the Florida Retirement System for the benefit of certain 3622 employees. 3623 (b)1. With respect to an eligible employee who is employed 3624 in a regularly established position on September 1, 2002, by a 3625 district school board employer: 3626 a. Any such employee may elect to participate in the 3627 investment planPublic Employee Optional Retirement Programin 3628 lieu of retaining his or her membership in the pension plan 3629defined benefit program of the Florida Retirement System. The 3630 election must be made in writing or by electronic means and must 3631 be filed with the third-party administrator by November 30, or, 3632 in the case of an active employee who is on a leave of absence 3633 on July 1, 2002, by the last business day of the 5th month 3634 following the month the leave of absence concludes. This 3635 election is irrevocable, except as provided in paragraph (g) 3636(e). Upon making such election, the employee shall be enrolled 3637 as a memberparticipantof the investment planPublic Employee3638Optional Retirement Program, the employee’s membership in the 3639 Florida Retirement System isshall begoverned by the provisions 3640 of this part, and the employee’s membership in the pension plan 3641 terminatesdefined benefit program of the Florida Retirement3642System shall terminate. The employee’s enrollment in the 3643 investment plan isPublic Employee Optional Retirement Program3644shall beeffective the first day of the month for which a full 3645 month’s employer contribution is made to the investmentoptional3646 program. 3647 b. Any such employee who fails to elect to participate in 3648 the investment planPublic Employee Optional Retirement Program3649 within the prescribed time period is deemed to have elected to 3650 retain membership in the pension plandefined benefit program of3651the Florida Retirement System, and the employee’s option to 3652 elect to participate in the investment planoptional programis 3653 forfeited. 3654 2. With respect to employees who become eligible to 3655 participate in the investment planPublic Employee Optional3656Retirement Programby reason of employment in a regularly 3657 established position with a district school board employer 3658 commencing after July 1, 2002: 3659 a. Any such employee shall, by default, be enrolled in the 3660 pension plandefined benefit retirement program of the Florida3661Retirement Systemat the commencement of employment, and may, by 3662 the last business day of the 5th month following the employee’s 3663 month of hire, elect to participate in the investment plan 3664Public Employee Optional Retirement Program. The employee’s 3665 election must be made in writing or by electronic means and must 3666 be filed with the third-party administrator. The election to 3667 participate in the investment planoptional programis 3668 irrevocable, except as provided in paragraph (g)(e). 3669 b. If the employee files such election within the 3670 prescribed time period, enrollment in the investment plan is 3671optional program shall beeffective on the first day of 3672 employment. The employer retirement contributions paid through 3673 the month of the employee plan change shall be transferred to 3674 the investment planoptional program, and, effective the first 3675 day of the next month, the employer shall pay the applicable 3676 contributions based on the employee membership class in the 3677 investment planoptional program. 3678 c. Any such employee who fails to elect to participate in 3679 the investment planPublic Employee Optional Retirement Program3680 within the prescribed time period is deemed to have elected to 3681 retain membership in the pension plandefined benefit program of3682the Florida Retirement System, and the employee’s option to 3683 elect to participate in the investment planoptional programis 3684 forfeited. 3685 3. For purposes of this paragraph, “district school board 3686 employer” means any district school board that participates in 3687 the Florida Retirement System for the benefit of certain 3688 employees, or a charter school or charter technical career 3689 center that participates in the Florida Retirement System as 3690 provided in s. 121.051(2)(d). 3691 (c)1. With respect to an eligible employee who is employed 3692 in a regularly established position on December 1, 2002, by a 3693 local employer: 3694 a. Any such employee may elect to participate in the 3695 investment planPublic Employee Optional Retirement Programin 3696 lieu of retaining his or her membership in the pension plan 3697defined benefit program of the Florida Retirement System. The 3698 election must be made in writing or by electronic means and must 3699 be filed with the third-party administrator by February 28, 3700 2003, or, in the case of an active employee who is on a leave of 3701 absence on October 1, 2002, by the last business day of the 5th 3702 month following the month the leave of absence concludes. This 3703 election is irrevocable, except as provided in paragraph (g) 3704(e). Upon making such election, the employee shall be enrolled 3705 as a participant of the investment planPublic Employee Optional3706Retirement Program, the employee’s membership in the Florida 3707 Retirement System isshall begoverned by the provisions of this 3708 part, and the employee’s membership in the pension plan 3709 terminatesdefined benefit program of the Florida Retirement3710System shall terminate. The employee’s enrollment in the 3711 investment plan isPublic Employee Optional Retirement Program3712shall beeffective the first day of the month for which a full 3713 month’s employer contribution is made to the investment plan 3714optional program. 3715 b. Any such employee who fails to elect to participate in 3716 the investment planPublic Employee Optional Retirement Program3717 within the prescribed time period is deemed to have elected to 3718 retain membership in the pension plandefined benefit program of3719the Florida Retirement System, and the employee’s option to 3720 elect to participate in the investment planoptional programis 3721 forfeited. 3722 2. With respect to employees who become eligible to 3723 participate in the investment planPublic Employee Optional3724Retirement Programby reason of employment in a regularly 3725 established position with a local employer commencing after 3726 October 1, 2002: 3727 a. Any such employee shall, by default, be enrolled in the 3728 pension plandefined benefit retirement program of the Florida3729Retirement Systemat the commencement of employment, and may, by 3730 the last business day of the 5th month following the employee’s 3731 month of hire, elect to participate in the investment plan 3732Public Employee Optional Retirement Program. The employee’s 3733 election must be made in writing or by electronic means and must 3734 be filed with the third-party administrator. The election to 3735 participate in the investment planoptional programis 3736 irrevocable, except as provided in paragraph (g)(e). 3737 b. If the employee files such election within the 3738 prescribed time period, enrollment in the investment plan is 3739optional program shall beeffective on the first day of 3740 employment. The employer retirement contributions paid through 3741 the month of the employee plan change shall be transferred to 3742 the investment planoptional program, and, effective the first 3743 day of the next month, the employer shall pay the applicable 3744 contributions based on the employee membership class in the 3745 investment planoptional program. 3746 c. Any such employee who fails to elect to participate in 3747 the investment planPublic Employee Optional Retirement Program3748 within the prescribed time period is deemed to have elected to 3749 retain membership in the pension plandefined benefit program of3750the Florida Retirement System, and the employee’s option to 3751 elect to participate in the investment planoptional programis 3752 forfeited. 3753 3. For purposes of this paragraph, “local employer” means 3754 any employer not included in paragraph (a) or paragraph (b). 3755 (d) Contributions available for self-direction by a member 3756participantwho has not selected one or more specific investment 3757 products shall be allocated as prescribed by the state board. 3758 The third-party administrator shall notify the memberany such3759participantat least quarterly that the memberparticipant3760 should take an affirmative action to make an asset allocation 3761 among the investmentoptional programproducts. 3762 (e) On or after July 1, 2011, a member of the pension plan 3763 who obtains a refund of employee contributions retains his or 3764 her prior plan choice upon return to employment in a regularly 3765 established position with a participating employer. 3766 (f) A member of the investment plan who takes a 3767 distribution of any contributions from his or her investment 3768 plan account is considered a retiree. A retiree who is initially 3769 reemployed on or after July 1, 2010, is not eligible for renewed 3770 membership. 3771 (g)(e)After the period during which an eligible employee 3772 had the choice to elect the pension plandefined benefit program3773 or the investment planoptional retirement program, or the month 3774 following the receipt of the eligible employee’s plan election, 3775 if sooner, the employee shall have one opportunity, at the 3776 employee’s discretion, to choose to move from the pension plan 3777defined benefit programto the investment planoptional3778retirement programor from the investment planoptional3779retirement programto the pension plandefined benefit program. 3780 Eligible employees may elect to move between plansFlorida3781Retirement System programsonly if they are earning service 3782 credit in an employer-employee relationship consistent with s. 3783 121.021(17)(b), excluding leaves of absence without pay. 3784 Effective July 1, 2005, such elections are effective on the 3785 first day of the month following the receipt of the election by 3786 the third-party administrator and are not subject to the 3787 requirements regarding an employer-employee relationship or 3788 receipt of contributions for the eligible employee in the 3789 effective month, except when the election is received by the 3790 third-party administrator. This paragraph is contingent upon 3791 approval byfromthe Internal Revenue Servicefor including the3792choice described herein within the programs offered by the3793Florida Retirement System. 3794 1. If the employee chooses to move to the investment plan 3795optional retirement program, theapplicableprovisions of 3796 subsection (3)this section shallgovern the transfer. 3797 2. If the employee chooses to move to the pension plan 3798defined benefit program, the employee must transfer from his or 3799 her investment planoptional retirement programaccount, and 3800 from other employee moneys as necessary, a sum representing the 3801 present value of that employee’s accumulated benefit obligation 3802 immediately following the time of such movement, determined 3803 assuming that attained service equals the sum of service in the 3804 pension plandefined benefit programand service in the 3805 investment planoptional retirement program. Benefit 3806 commencement occurs on the first date the employee is eligible 3807 for unreduced benefits, using the discount rate and other 3808 relevant actuarial assumptions that were used to value the 3809 pensiondefined benefitplan liabilities in the most recent 3810 actuarial valuation. For any employee who, at the time of the 3811 second election, already maintains an accrued benefit amount in 3812 the pension plandefined benefit program, the then-present value 3813 of the accrued benefit isshall bedeemed part of the required 3814 transfer amount. The division mustshallensure that the 3815 transfer sum is prepared using a formula and methodology 3816 certified by an enrolled actuary. A refund of any employee 3817 contributions or additional member payments made which exceed 3818 the employee contributions that would have accrued had the 3819 member remained in the pension plan and not transferred to the 3820 investment plan is not permitted. 3821 3. Notwithstanding subparagraph 2., an employee who chooses 3822 to move to the pension plandefined benefit programand who 3823 became eligible to participate in the investment planoptional3824retirement programby reason of employment in a regularly 3825 established position with a state employer after June 1, 2002; a 3826 district school board employer after September 1, 2002; or a 3827 local employer after December 1, 2002, must transfer from his or 3828 her investment planoptional retirement programaccount, and 3829 from other employee moneys as necessary, a sum representing the 3830 employee’s actuarial accrued liability. A refund of any employee 3831 contributions or additional participant payments made which 3832 exceed the employee contributions that would have accrued had 3833 the member remained in the pension plan and not transferred to 3834 the investment plan is not permitted. 3835 4. An employee’s ability to transfer from the pension plan 3836defined benefit programto the investment planoptional3837retirement programpursuant to paragraphs (a)-(d), and the 3838 ability of a current employee to have an option to later 3839 transfer back into the pension plandefined benefit program3840 under subparagraph 2., shall be deemed a significant system 3841 amendment. Pursuant to s. 121.031(4), any resulting unfunded 3842 liability arising from actual original transfers from the 3843 pension plandefined benefit programto the investment plan 3844optional programmust be amortized within 30 plan years as a 3845 separate unfunded actuarial base independent of the reserve 3846 stabilization mechanism defined in s. 121.031(3)(f). For the 3847 first 25 years, a direct amortization payment may not be 3848 calculated for this base. During this 25-year period, the 3849 separate base shall be used to offset the impact of employees 3850 exercising their second program election under this paragraph. 3851It is the intent of the Legislature thatThe actuarial funded 3852 status of the pension plan willdefined benefit programnot be 3853 affected by such second program elections in any significant 3854 manner, after due recognition of the separate unfunded actuarial 3855 base. Following the initial 25-year period, any remaining 3856 balance of the original separate base shall be amortized over 3857 the remaining 5 years of the required 30-year amortization 3858 period. 3859 5. If the employee chooses to transfer from the investment 3860 planoptional retirement programto the pension plandefined3861benefit programand retains an excess account balance in the 3862 investment planoptional programafter satisfying the buy-in 3863 requirements under this paragraph, the excess may not be 3864 distributed until the member retires from the pension plan 3865defined benefit program. The excess account balance may be 3866 rolled over to the pension plandefined benefit programand used 3867 to purchase service credit or upgrade creditable service in the 3868 pension planthat program. 3869 (5) CONTRIBUTIONS.— 3870 (a) The employee andEachemployer shall make the required 3871 contributions tocontribute on behalf of each participant inthe 3872 investment plan based on a percentage of the employee’s gross 3873 monthly compensationPublic Employee Optional Retirement3874Program, as provided in part III of this chapter. 3875 (b) Employee contributions shall be paid as provided in s. 3876 121.71. 3877 (c) The state board, acting as plan fiduciary, mustshall3878 ensure that all plan assets are held in a trust, pursuant to s. 3879 401 of the Internal Revenue Code. The fiduciary mustshall3880 ensure that suchsaidcontributions are allocated as follows: 3881 1. The employer and employee contribution portion earmarked 3882 for memberparticipantaccounts shall be used to purchase 3883 interests in the appropriate investment vehiclesfor the3884accounts of each participantas specified by the member 3885participant, or in accordance with paragraph (4)(d). 3886 2. The employer contribution portion earmarked for 3887 administrative and educational expenses shall be transferred to 3888 the Florida Retirement System Investment Plan Trust Fundboard. 3889 3. The employer contribution portion earmarked for 3890 disability benefits shall be transferred to the Florida 3891 Retirement System Trust Funddepartment. 3892 (d)(b)The third-party administrator isEmployers are3893 responsible for monitoring and notifying employers of the 3894participants regardingmaximum contribution levels allowed for 3895 memberspermittedunder the Internal Revenue Code. If a member 3896participantcontributes to any other tax-deferred plan, the 3897 memberhe or sheis responsible for ensuring that total 3898 contributions made to the investment planoptional programand 3899 to any other such plan do not exceed federally permitted 3900 maximums. 3901 (e)(c)The investment planPublic Employee Optional3902Retirement Programmay accept for deposit into member 3903participantaccounts contributions in the form of rollovers or 3904 direct trustee-to-trustee transfers by or on behalf of members 3905participants, reasonably determined by the state board to be 3906 eligible for rollover or transfer to the investment plan 3907optional retirement programpursuant to the Internal Revenue 3908 Code, if such contributions are made in accordance with rulesas3909may beadopted by the board. Such contributions mustshallbe 3910 accounted for in accordance withanyapplicable Internal Revenue 3911 Code requirements and rules of the state board. 3912 (6) VESTING REQUIREMENTS.— 3913 (a) A member is fully and immediately vested in all 3914 employee contributions paid to the investment plan as provided 3915 in s. 121.71, plus interest and earnings thereon and less 3916 investment fees and administrative charges. 3917 (b)(a)1. With respect to employer contributions paid on 3918 behalf of the memberparticipantto the investment planoptional3919retirement program, plus interest and earnings thereon and less 3920 investment fees and administrative charges, a memberparticipant3921 is vested after completing 1 work year with an employer, 3922 including any service while the memberparticipantwas a member 3923 of the pension plandefined benefit programor an optional 3924 retirement program authorized under s. 121.051(2)(c) or s. 3925 121.055(6). 3926 2. If the memberparticipantterminates employment before 3927 satisfying the vesting requirements, the nonvested accumulation 3928 must be transferred from the member’sparticipant’saccounts to 3929 the state board for deposit and investment by the state board in 3930 itsthesuspense account created within the Florida Retirement 3931 System Investment PlanPublic Employee Optional Retirement3932ProgramTrust Fund. If the terminated memberparticipantis 3933 reemployed as an eligible employee within 5 years, the state 3934 board shall transfer to the member’sparticipant’saccount any 3935 amount previously transferred from the member’sparticipant’s3936 accounts to the suspense account, plus actual earnings on such 3937 amount while in the suspense account. 3938 (c)(b)1. With respect to amounts contributed by an employer 3939 and transferred from the pension plandefined benefit programto 3940 the investment planprogram, plus interest and earnings, and 3941 less investment fees and administrative charges, a member 3942participantshall be vested in the amount transferred upon 3943 meeting the vestingservicerequirements for the member’s 3944participant’smembership class as set forth in s. 121.021(45) 3945121.021(29). The third-party administrator shall account for 3946 such amounts for each memberparticipant. The division shall 3947 notify the memberparticipantand the third-party administrator 3948 when the memberparticipanthas satisfied the vesting period for 3949 Florida Retirement System purposes. 3950 2. If the memberparticipantterminates employment before 3951 satisfying the vesting requirements, the nonvested accumulation 3952 must be transferred from the member’sparticipant’saccounts to 3953 the state board for deposit and investment by the state board in 3954 the suspense account created within the Florida Retirement 3955 System Investment PlanPublic Employee Optional Retirement3956ProgramTrust Fund. If the terminated memberparticipantis 3957 reemployed as an eligible employee within 5 years, the state 3958 board shall transfer to the member’s accountsparticipant’s3959accountany amount previously transferred from the member’s 3960participant’saccounts to the suspense account, plus the actual 3961 earnings on such amount while in the suspense account. 3962 (d)(c)Any nonvested accumulations transferred from a 3963 member’sparticipant’saccount to the state board’s suspense 3964 account shall be forfeited, including accompanying service 3965 credit, by the memberparticipantif the memberparticipantis 3966 not reemployed as an eligible employee within 5 years after 3967 termination. 3968 (e) If the member elects to receive any of his or her 3969 vested employee or employer contributions upon termination of 3970 employment as provided in s. 121.021(39)(a), except for a 3971 mandatory distribution of a de minimis account authorized by the 3972 state board or a minimum required distribution provided by s. 3973 401(a)(9) of the Internal Revenue Code, the member shall forfeit 3974 all nonvested employer contributions, and accompanying service 3975 credit, paid on behalf of the member to the investment plan. 3976 (7) BENEFITS.—Under the investment plan, benefits must 3977Public Employee Optional Retirement Program: 3978 (a)Benefits shallBe provided in accordance with s. 401(a) 3979 of the Internal Revenue Code. 3980 (b)Benefits shallAccrue in individual accounts that are 3981 member-directedparticipant-directed, portable, and funded by 3982 employer and employee contributions and earnings thereon. 3983 (c)Benefits shallBe payable in accordance withthe3984provisions ofs. 121.591. 3985 (8) INVESTMENT PLAN ADMINISTRATIONOF PROGRAM.— 3986(a)The investment planoptional retirement programshall 3987 be administered by the state board and affected employers. The 3988 state board may require oaths, by affidavit or otherwise, and 3989 acknowledgments from persons in connection with the 3990 administration of its statutory duties and responsibilities for 3991 the investment planthis program. An oath, by affidavit or 3992 otherwise, may not be required of a memberan employee3993participantat the time of enrollment. Acknowledgment of an 3994 employee’s election to participate in the program shall be no 3995 greater than necessary to confirm the employee’s election. The 3996 state board shall adopt rules to carry out its statutory duties 3997 with respect to administering the investment planoptional3998retirement program, including establishing the roles and 3999 responsibilities of affected state, local government, and 4000 education-related employers, the state board, the department, 4001 and third-party contractors. The department shall adopt rules 4002 necessary to administer the investment planoptional programin 4003 coordination with the pension plandefined benefit programand 4004 the disability benefits available under the investment plan 4005optional program. 4006 (a)(b)1. The state board shall select and contract with a 4007onethird-party administrator to provide administrative services 4008 if those services cannot be competitively and contractually 4009 provided by the divisionof Retirement within the Department of4010Management Services. With the approval of the state board, the 4011 third-party administrator may subcontractwith other4012organizations or individualsto provide components of the 4013 administrative services. As a cost of administration, the state 4014 board may compensate any such contractor for its services, in 4015 accordance with the terms of the contract, as is deemed 4016 necessary or proper by the board. The third-party administrator 4017 may not be an approved provider or be affiliated with an 4018 approved provider. 4019 2. These administrative services may include, but are not 4020 limited to, enrollment of eligible employees, collection of 4021 employer and employee contributions, disbursement ofsuch4022 contributions to approved providers in accordance with the 4023 allocation directions of membersparticipants; services relating 4024 to consolidated billing; individual and collective recordkeeping 4025 and accounting; asset purchase, control, and safekeeping; and 4026 direct disbursement of funds to and from the third-party 4027 administrator, the division, the state board, employers, members 4028participants, approved providers, and beneficiaries. This 4029 section does not prevent or prohibit a bundled provider from 4030 providing any administrative or customer service, including 4031 accounting and administration of individual memberparticipant4032 benefits and contributions; individual memberparticipant4033 recordkeeping; asset purchase, control, and safekeeping; direct 4034 execution of the member’sparticipant’sinstructions as to asset 4035 and contribution allocation; calculation of daily net asset 4036 values; direct access to memberparticipantaccount information; 4037 or periodic reporting to membersparticipants, at least 4038 quarterly, on account balances and transactions, if these 4039 services are authorized by the state board as part of the 4040 contract. 4041 (b)1.3.The state board shall select and contract with one 4042 or more organizations to provide educational services. With 4043 approval of the state board, the organizations may subcontract 4044with other organizations or individualsto provide components of 4045 the educational services. As a cost of administration, the state 4046 board may compensate any such contractor for its services in 4047 accordance with the terms of the contract, as is deemed 4048 necessary or proper by the board. The education organization may 4049 not be an approved provider or be affiliated with an approved 4050 provider. 4051 2.4.Educational services shall be designed by the state 4052 board and department to assist employers, eligible employees, 4053 membersparticipants, and beneficiaries in order to maintain 4054 compliance with United States Department of Labor regulations 4055 under s. 404(c) of the Employee Retirement Income Security Act 4056 of 1974 and to assist employees in their choice of pension plan 4057defined benefitor investment plandefined contribution4058 retirement alternatives. Educational services include, but are 4059 not limited to, disseminating educational materials; providing 4060 retirement planning education; explaining the pension 4061differences between the defined benefit retirementplan and the 4062 investmentdefined contribution retirementplan; and offering 4063 financial planning guidance on matters such as investment 4064 diversification, investment risks, investment costs, and asset 4065 allocation. An approved provider may also provide educational 4066 information, including retirement planning and investment 4067 allocation information concerning its products and services. 4068 (c)1. In evaluating and selecting a third-party 4069 administrator, the state board shall establish criteria for 4070 evaluatingunder which it shall considerthe relative 4071 capabilities and qualifications of each proposed administrator. 4072 In developing such criteria, the state board shall consider: 4073 a. The administrator’s demonstrated experience in providing 4074 administrative services to public or private sector retirement 4075 systems. 4076 b. The administrator’s demonstrated experience in providing 4077 daily valued recordkeeping to defined contribution programs 4078plans. 4079 c. The administrator’s ability and willingness to 4080 coordinate its activities withthe Florida Retirement System4081 employers, the state board, and the division, and to supply to 4082 such employers, the board, and the division the information and 4083 data they require, including, but not limited to, monthly 4084 management reports, quarterly memberparticipantreports, and ad 4085 hoc reports requested by the department or state board. 4086 d. The cost-effectiveness and levels of the administrative 4087 services provided. 4088 e. The administrator’s ability to interact with the members 4089participants, the employers, the state board, the division, and 4090 the providers; the means by which membersparticipantsmay 4091 access account information, direct investment of contributions, 4092 make changes to their accounts, transfer moneys between 4093 available investment vehicles, and transfer moneys between 4094 investment products; and any fees that apply to such activities. 4095 f. Any other factor deemed necessary by theTrustees of the4096 state boardof Administration. 4097 2. In evaluating and selecting an educational provider, the 4098 state board shall establish criteria under which it shall 4099 consider the relative capabilities and qualifications of each 4100 proposed educational provider. In developing such criteria, the 4101 state board shall consider: 4102 a. Demonstrated experience in providing educational 4103 services to public or private sector retirement systems. 4104 b. Ability and willingness to coordinate its activities 4105 with theFlorida Retirement Systememployers, the state board, 4106 and the division, and to supply to such employers, the board, 4107 and the division the information and data they require, 4108 including, but not limited to, reports on educational contacts. 4109 c. The cost-effectiveness and levels of the educational 4110 services provided. 4111 d. Ability to provide educational services via different 4112 media, including, but not limited to, the Internet, personal 4113 contact, seminars, brochures, and newsletters. 4114 e. Any other factor deemed necessary by theTrustees of the4115 state boardof Administration. 4116 3. The establishment of the criteria shall be solely within 4117 the discretion of the state board. 4118 (d) The state board shall develop the form and content of 4119 any contracts to be offered under the investment planPublic4120Employee Optional Retirement Program. In developing theits4121 contracts, the board shallmustconsider: 4122 1. The nature and extent of the rights and benefits to be 4123 afforded in relation to therequiredcontributions required 4124 under the planprogram. 4125 2. The suitability of the rights and benefits providedto4126be affordedand the interests of employers in the recruitment 4127 and retention of eligible employees. 4128 (e)1. The state board may contractwith any consultantfor 4129 professional services, including legal, consulting, accounting, 4130 and actuarial services, deemed necessary to implement and 4131 administer the investment planoptional program by the Trustees4132of the State Board of Administration. The state board may enter 4133 into a contract with one or more vendors to provide low-cost 4134 investment advice to membersparticipants, supplemental to 4135 education provided by the third-party administrator. All fees 4136 under any such contract shall be paid by those members 4137participantswho choose to use the services of the vendor. 4138 2. The department may contractwith consultantsfor 4139 professional services, including legal, consulting, accounting, 4140 and actuarial services, deemed necessary to implement and 4141 administer the investment planoptional programin coordination 4142 with the pension plandefined benefit program of the Florida4143Retirement System. The department, in coordination with the 4144 state board, may enter into a contract with the third-party 4145 administrator in order to coordinate services common to the 4146 various programs within the Florida Retirement System. 4147 (f) The third-party administrator mayshallnot receive 4148 direct or indirect compensation from an approved provider, 4149 except as specifically provided for in the contract with the 4150 state board. 4151 (g) The state board shall receive and resolve member 4152participantcomplaints against the program, the third-party 4153 administrator, or any program vendor or provider; shall resolve 4154 any conflict between the third-party administrator and an 4155 approved provider if such conflict threatens the implementation 4156 or administration of the program or the quality of services to 4157 employees; and may resolve any other conflicts. The third-party 4158 administrator shall retain all memberparticipantrecords for at 4159 least 5 years for use in resolving any memberparticipant4160 conflicts. The state board, the third-party administrator, or a 4161 provider is not required to produce documentation or an audio 4162 recording to justify action taken with regard to a member 4163participantif the action occurred 5 or more years before the 4164 complaint is submitted to the state board. It is presumed that 4165 all action taken 5 or more years before the complaint is 4166 submitted was taken at the request of the memberparticipantand 4167 with the member’sparticipant’sfull knowledge and consent. To 4168 overcome this presumption, the memberparticipantmust present 4169 documentary evidence or an audio recording demonstrating 4170 otherwise. 4171 (9) INVESTMENT OPTIONS OR PRODUCTS; PERFORMANCE REVIEW.— 4172 (a) The state board shall develop policy and procedures for 4173 selecting, evaluating, and monitoring the performance of 4174 approved providers and investment productsto which employees4175may direct retirement contributionsunder the investment plan 4176program. In accordance with such policy and procedures, the 4177 state board shall designate and contract for a number of 4178 investment products as determined by the board. The board shall 4179 also select one or more bundled providers, each of whichwhom4180 may offer multiple investment options and related services, if 4181whensuchanapproach is determined by the board to provide 4182affordvalue to the membersparticipantsotherwise not available 4183 through individual investment products. Each approved bundled 4184 provider may offer investment options that provide members 4185participantswith the opportunity to invest in each of the 4186 following asset classes, to be composed of individual options 4187 that representeithera single asset class or a combination 4188 thereof: money markets, United States fixed income, United 4189 States equities, and foreign stock. The state board shall review 4190 and manage all educational materials, contract terms, fee 4191 schedules, and other aspects of the approved provider 4192 relationships to ensure that no provider is unduly favored or 4193 penalized by virtue of its status within the investment plan. 4194 (b) The state board shall consider investment options or 4195 products it considers appropriate to give membersparticipants4196 the opportunity to accumulate retirement benefits, subject to 4197 the following: 4198 1. The investment planPublic Employee Optional Retirement4199Programmust offer a diversified mix of low-cost investment 4200 products that span the risk-return spectrum and may include a 4201 guaranteed account as well as investment products, such as 4202 individually allocated guaranteed and variable annuities, which 4203 meet the requirements of this subsection and combine the ability 4204 to accumulate investment returns with the option of receiving 4205 lifetime income consistent with the long-term retirement 4206 security of a pension plan and similar to the lifetime-income 4207 benefit provided by the Florida Retirement System. 4208 2. Investment options or products offered bythe group of4209 approved providers may include mutual funds, group annuity 4210 contracts, individual retirement annuities, interests in trusts, 4211 collective trusts, separate accounts, and other such financial 4212 instruments, andmay includeproducts that give members 4213participantsthe option of committing their contributions for an 4214 extended time period in an effort to obtain returns higher than 4215 those that could be obtained from investment products offering 4216 full liquidity. 4217 3. The state board mayshallnot contract with aany4218 provider that imposes a front-end, back-end, contingent, or 4219 deferred sales charge, or any other fee that limits or restricts 4220 the ability of membersparticipantsto select any investment 4221 product available in the investment planoptional program. This 4222 prohibition does not apply to fees or charges that are imposed 4223 on withdrawals from products that give membersparticipantsthe 4224 option of committingtheircontributions for an extended time 4225 period in an effort to obtain returns higher than those that 4226 could be obtained from investment products offering full 4227 liquidity, ifprovided thatthe productin question, net of all 4228 fees and charges, produces material benefits relative to other 4229 comparable products in the investment planprogramoffering full 4230 liquidity. 4231 4. Fees or charges for insurance features, such as 4232 mortality and expense-risk charges, must be reasonable relative 4233 to the benefits provided. 4234 (c) In evaluating and selecting approved providers and 4235 products, the state board shall establish criteria for 4236 evaluatingunder which it shall considerthe relative 4237 capabilities and qualifications of each proposed provider 4238 company and product. In developing such criteria, the board 4239 shall consider the following to the extent such factors may be 4240 applied in connection with investment products, services, or 4241 providers: 4242 1. Experience in the United States providing retirement 4243 products and related financial services under defined 4244 contribution retirement programsplans. 4245 2. Financial strength and stability aswhich shall be4246 evidenced by the highest ratings assigned by nationally 4247 recognized rating services when comparing proposed providers 4248 that are so rated. 4249 3. Intrastate and interstate portability of the product 4250 offered, including early withdrawal options. 4251 4. Compliance with the Internal Revenue Code. 4252 5. The cost-effectiveness of the product provided and the 4253 levels of service supporting the product relative to its 4254 benefits and its characteristics, including, without limitation,4255 the level of risk borne by the provider. 4256 6. The provider company’s ability and willingness to 4257 coordinate its activities with Florida Retirement System 4258 employers, the department, and the state board, and to supply 4259 theto suchemployers, the department, and the board with the 4260 information and data they require. 4261 7. The methods available to membersparticipantsto 4262 interact with the provider company; the means by which members 4263participantsmay access account information, direct investment 4264 of contributions, make changes to their accounts, transfer 4265 moneys between available investment vehicles, and transfer 4266 moneys between provider companies; and any fees that apply to 4267 such activities. 4268 8. The provider company’s policies with respect to the 4269 transfer of individual account balances, contributions, and 4270 earnings thereon, both internally among investment products 4271 offered by the provider company and externally between approved 4272 providers, as well as any fees, charges, reductions, or 4273 penalties that may be applied. 4274 9. An evaluation of specific investment products, taking 4275 into account each product’s experience in meeting its investment 4276 return objectives net of all related fees, expenses, and 4277 charges, including, but not limited to, investment management 4278 fees, loads, distribution and marketing fees, custody fees, 4279 recordkeeping fees, education fees, annuity expenses, and 4280 consulting fees. 4281 10. Organizational factors, including, but not limited to, 4282 financial solvency, organizational depth, and experience in 4283 providing institutional and retail investment services. 4284 (d) By March 1, 2010, the state board shall identify and 4285 offer at least one terror-free investment product that allocates 4286 its funds among securities not subject to divestiture as 4287 provided in s. 215.473 if the investment product is deemed by 4288 the state board to be consistent with prudent investor 4289 standards. ANoperson may not bring a civil, criminal, or 4290 administrative action against an approved provider; the state 4291 board; or any employee, officer, director, or trustee of such 4292 provider based upon the divestiture of any security or the 4293 offering of a terror-free investment product as specified in 4294 this paragraph. 4295 (e) As a condition of offering ananyinvestment option or 4296 product in the investment planoptional retirement program, the 4297 approved provider must agree to make the investment product or 4298 service available under the most beneficial terms offered to any 4299 other customer, subject to approval by theTrustees of thestate 4300 boardof Administration. 4301 (f) The state board shall regularly review the performance 4302 of each approved provider and product and related organizational 4303 factors to ensure continued compliance with established 4304 selection criteria and with board policy and procedures. 4305 Providers and products may be terminated subject to contract 4306 provisions. The state board shall adopt procedures to transfer 4307 account balances from terminated products or providers to other 4308 products or providers in the investment planoptional program. 4309 (g)1. An approved provider shall comply with all applicable 4310 federal and state securities and insurance laws and regulations 4311applicable to the provider, as well as with the applicable rules 4312 and guidelines of the National Association of Securities Dealers 4313 which govern the ethical marketing of investment products. In 4314 furtherance of this mandate, an approved provider must agree in 4315 its contract with the state board to establish and maintain a 4316 compliance education and monitoring system to supervise the 4317 activities of all personnel who directly communicate with 4318 individual membersparticipantsand recommend investment 4319 products, which system is consistent with rules of the National 4320 Association of Securities Dealers. 4321 2. Approved provider personnel who directly communicate 4322 with individual membersparticipantsand who recommend 4323 investment products shall make an independent and unbiased 4324 determination as to whether an investment product is suitable 4325 for a particular memberparticipant. 4326 3. The state board shall develop procedures to receive and 4327 resolve memberparticipantcomplaints against a provider or 4328 approved provider personnel, and, ifwhenappropriate, refer 4329 such complaints to the appropriate agency. 4330 4. Approved providers may not sell or in any way distribute 4331 any customer list or memberparticipantidentification 4332 information generated through their offering of products or 4333 services through the investment planoptional retirement4334program. 4335 (10) EDUCATION COMPONENT.— 4336 (a) The state board, in coordination with the department, 4337 shall provide for an education component for system members in a 4338 manner consistent with the provisions of this section. The 4339 education component must be available to eligible employees at 4340 least 90 days prior to the beginning date of the election period 4341 for the employees of the respective types of employers. 4342 (b) The education component must provide system members 4343 with impartial and balanced information about plan choices. The 4344 education component must involve multimedia formats. Program 4345 comparisons must, to the greatest extent possible, be based upon 4346 the retirement income that different retirement programs may 4347 provide to the memberparticipant. The state board shall monitor 4348 the performance of the contract to ensure that the program is 4349 conducted in accordance with the contract, applicable law, and 4350 the rules of the state board. 4351 (c) The state board, in coordination with the department, 4352 shall provide for an initial and ongoing transfer education 4353 component to provide system members with information necessary 4354 to make informed plan choice decisions. The transfer education 4355 component must include, but is not limited to, information on: 4356 1. The amount of money available to a member to transfer to 4357 the defined contribution program. 4358 2. The features of and differences between the pension plan 4359defined benefit programand the defined contribution program, 4360 both generally and specifically, as those differences may affect 4361 the member. 4362 3. The expected benefit available if the member were to 4363 retire under each of the retirement programs, based on 4364 appropriate alternative sets of assumptions. 4365 4. The rate of return from investments in the defined 4366 contribution program and the period of time over which such rate 4367 of return must be achieved to equal or exceed the expected 4368 monthly benefit payable to the member under the pension plan 4369defined benefit program. 4370 5. The historical rates of return for the investment 4371 alternatives available in the defined contribution programs. 4372 6. The benefits and historical rates of return on 4373 investments available in a typical deferred compensation plan or 4374 a typical plan under s. 403(b) of the Internal Revenue Code for 4375 which the employee may be eligible. 4376 7. The program choices available to employees of the State 4377 University System and the comparative benefits of each available 4378 program, if applicable. 4379 8. Payout options available in each of the retirement 4380 programs. 4381 (d) An ongoing education and communication component must 4382 provide eligible employeessystem memberswith information 4383 necessary to make informed decisions about choices within their 4384 retirement systemprogram of membershipand in preparation for 4385 retirement. The component must include, but is not limited to, 4386 information concerning: 4387 1. Rights and conditions of membership. 4388 2. Benefit features within the program, options, and 4389 effects of certain decisions. 4390 3. Coordination of contributions and benefits with a 4391 deferred compensation plan under s. 457 or a plan under s. 4392 403(b) of the Internal Revenue Code. 4393 4. Significant program changes. 4394 5. Contribution rates and program funding status. 4395 6. Planning for retirement. 4396 (e) Descriptive materials must be prepared under the 4397 assumption that the employee is an unsophisticated investor, and 4398 all materials used in the education component must be approved 4399 by the state board prior to dissemination. 4400 (f) The state board and the department shall also establish 4401 a communication component to provide program information to 4402 participating employers and the employers’ personnel and payroll 4403 officers and to explain their respective responsibilities in 4404 conjunction with the retirement programs. 4405 (g) Funding for education of new employees may reflect 4406 administrative costs to the investment planoptional programand 4407 the pension plandefined benefit program. 4408 (h) Pursuant to subsectionparagraph(8)(a), all Florida 4409 Retirement System employers have an obligation to regularly 4410 communicate the existence of the two Florida Retirement System 4411 plans and the plan choice in the natural course of administering 4412 their personnel functions, using the educational materials 4413 supplied by the state board and the Department of Management 4414 Services. 4415 (11) MEMBERPARTICIPANTINFORMATION REQUIREMENTS.—The state 4416 board shall ensure that each memberparticipantis provided a 4417 quarterly statement that accounts for the contributions made on 4418 behalf of the membersuch participant; the interest and 4419 investment earnings thereon; and any fees, penalties, or other 4420 deductions that applythereto. At a minimum, such statements 4421 must: 4422 (a) Indicate the member’sparticipant’sinvestment options. 4423 (b) State the market value of the account at the close of 4424 the current quarter and previous quarter. 4425 (c) Show account gains and lossesfor the periodand 4426 changes in account accumulation unit values for the quarter 4427period. 4428 (d) Itemize account contributions for the quarter. 4429 (e) Indicate any account changes due to adjustment of 4430 contribution levels, reallocation of contributions, balance 4431 transfers, or withdrawals. 4432 (f) Set forth any fees, charges, penalties, and deductions 4433 that apply to the account. 4434 (g) Indicate the amount of the account in which the member 4435participantis fully vested and the amount of the account in 4436 which the memberparticipantis not vested. 4437 (h) Indicate each investment product’s performance relative 4438 to an appropriate market benchmark. 4439 4440 The third-party administrator shall provide quarterly and annual 4441 summary reports to the state board and any other reports 4442 requested by the department or the state board. In any 4443 solicitation or offer of coverage under the investment planan4444optional retirement program, a provider company shall be 4445 governed by the contract readability provisions of s. 627.4145, 4446 notwithstanding s. 627.4145(6)(c). In addition, all descriptive 4447 materials must be prepared under the assumption that the member 4448participantis an unsophisticated investor. Provider companies 4449 must maintain an internal system of quality assurance, have 4450 proven functional systems that are date-calculation compliant, 4451 and be subject to a due-diligence inquiry that proves their 4452 capacity and fitness to undertake service responsibilities. 4453 (12) ADVISORY COUNCIL TO PROVIDE ADVICE AND ASSISTANCE.—The 4454 Investment Advisory Council, created pursuant to s. 215.444, 4455 shall assist the state board in implementing and administering 4456 the investment planPublic Employee Optional Retirement Program. 4457 TheInvestment Advisorycouncil, created pursuant to s.215.444,4458 shall review the state board’s initial recommendations regarding 4459 the criteria to be used in selecting and evaluating approved 4460 providers and investment products. The council may provide 4461 comments on the recommendations to the state board within 45 4462 days after receiving the initial recommendations. The state 4463 board shall make the final determination as to whether any 4464 investment provider or product, any contractor, or any and all 4465 contract provisions areshall beapproved for the investment 4466 planprogram. 4467 (13) FEDERAL REQUIREMENTS.— 4468 (a)Provisions ofThis section shall be construed, and the 4469 investment planPublic Employee Optional Retirement Program4470 shall be administered, so as to comply with the Internal Revenue 4471 Code, 26 U.S.C., and specifically with plan qualification 4472 requirements imposed on governmental plans under s. 401(a) of 4473 the Internal Revenue Code. The state board mayshall have the4474power and authority toadopt rules reasonably necessary to 4475 establish or maintain the qualified status of the investment 4476 planOptional Retirement Programunder the Internal Revenue Code 4477 and to implement and administer the investment planOptional4478Retirement Programin compliance with the Internal Revenue Code 4479 and as designated under this part; provided however, that the 4480 board shall not have the authority to adopt any rule which makes 4481 a substantive change to the investment planOptional Retirement4482Programas designed by this part. 4483 (b) Any section or provision of this chapter which is 4484 susceptible to more than one construction shallmustbe 4485 interpreted in favor of the construction most likely to satisfy 4486 requirements imposed by s. 401(a) of the Internal Revenue Code. 4487 (c) Contributions payable under this section for any 4488 limitation year may not exceed the maximum amount allowable for 4489 qualified defined contribution pension plans under applicable 4490 provisions of the Internal Revenue Code. If an employee who is 4491 enrolledhas elected to participatein the investment plan 4492Public Employee Optional Retirement Programparticipates in any 4493 other plan that is maintained by the participating employer, 4494 benefits that accrue under the investment planPublic Employee4495Optional Retirement Programshall be considered primary for any 4496 aggregate limitation applicable under s. 415 of the Internal 4497 Revenue Code. 4498 (14) INVESTMENT POLICY STATEMENT.— 4499 (a) Investment products and approved providers selected for 4500 the investment plan mustPublic Employee Optional Retirement4501Program shallconform with the Florida Retirement System 4502 Investment PlanPublic Employee Optional Retirement Program4503 Investment Policy Statement, herein referred to as the 4504 “statement,” as developed and approved by the trustees of the 4505 state boardof Administration. The statement must include, among 4506 other items, the investment objectives of the investment plan 4507Public Employee Optional Retirement Program, manager selection 4508 and monitoring guidelines, and performance measurement criteria. 4509 As required from time to time, the executive director of the 4510 state board may present recommended changes in the statement to 4511 the board for approval. 4512 (b) Prior to presenting the statement,or any recommended 4513 changesthereto,to the state board, the executive director of 4514 the board shall present such statement or changes to the 4515 Investment Advisory Council for review. The council shall 4516 present the results of its review to the board prior to the 4517 board’s final approval of the statement or changes in the 4518 statement. 4519 (15) STATEMENT OF FIDUCIARY STANDARDS AND 4520 RESPONSIBILITIES.— 4521 (a) Investment ofoptionaldefined contributionretirement4522 plan assets shall be made for the sole interest and exclusive 4523 purpose of providing benefits to membersplan participantsand 4524 beneficiaries and defraying reasonable expenses of administering 4525 the plan. The program’s assets shallare tobe invested,on 4526 behalf of the program membersparticipants,with the care, 4527 skill, and diligence that a prudent person acting in a like 4528 manner would undertake. The performance of the investment duties 4529 set forth in this paragraph shall comply with the fiduciary 4530 standards set forth in the Employee Retirement Income Security 4531 Act of 1974 at 29 U.S.C. s. 1104(a)(1)(A)-(C). In case of 4532 conflict with other provisions of law authorizing investments, 4533 the investment and fiduciary standards set forth in this 4534 subsection shall prevail. 4535 (b) If a memberparticipantor beneficiary of the 4536 investment planPublic Employee Optional Retirement Program4537 exercises control over the assets in his or her account, as 4538 determined by reference to regulations of the United States 4539 Department of Labor under s. 404(c) of the Employee Retirement 4540 Income Security Act of 1974 and all applicable laws governing 4541 the operation of the program, anoprogram fiduciary is not 4542shall beliable for any loss to a member’sparticipant’sor 4543 beneficiary’s account which results from the member’ssuch4544participant’sor beneficiary’s exercise of control. 4545 (c) Subparagraph (8)(b)2.4.and paragraph(15)(b) 4546 incorporate the federal law concept of participant control, 4547 established by regulations of the United States Department of 4548 Labor under s. 404(c) of the Employee Retirement Income Security 4549 Act of 1974 (ERISA). The purpose of this paragraph is to assist 4550 employers and the state boardof Administrationin maintaining 4551 compliance with s. 404(c), while avoiding unnecessary costs and 4552 eroding memberparticipantbenefits under the investment plan 4553Public Employee Optional Retirement Program. Pursuant to 29 4554 C.F.R. s. 2550.404c-1(b)(2)(i)(B)(1)(viii), the state boardof4555Administrationor its designated agents shall deliver to members 4556participantsof the investment planPublic Employee Optional4557Retirement Programa copy of the prospectus most recently 4558 provided to the plan, and, pursuant to 29 C.F.R. s. 2550.404c 4559 1(b)(2)(i)(B)(2)(ii), shall provide such membersparticipantsan 4560 opportunity to obtain this information, except that: 4561 1. The requirement to deliver a prospectus shall bedeemed4562to besatisfied by delivery of a fund profile or summary profile 4563 that contains the information that would be included in a 4564 summary prospectus as described by Rule 498 under the Securities 4565 Act of 1933, 17 C.F.R. s. 230.498. IfWhenthe transaction fees, 4566 expense information or other information provided by a mutual 4567 fund in the prospectus does not reflect terms negotiated by the 4568 state boardof Administrationor its designated agents, the 4569aforementionedrequirement isdeemed to besatisfied by delivery 4570 of a separate document described by Rule 498 substituting 4571 accurate information; and 4572 2. Delivery shall bedeemed to have beeneffected if 4573 delivery is through electronic means and the following standards 4574 are satisfied: 4575 a. Electronically-delivered documents are prepared and 4576 provided consistent with style, format, and content requirements 4577 applicable to printed documents; 4578 b. Each memberparticipantis provided timely and adequate 4579 notice of the documents that are to be delivered, and their 4580 significance thereof, and of the member’sparticipant’sright to 4581 obtain a paper copy of such documents free of charge; 4582 c.(I)MembersParticipantshave adequate access to the 4583 electronic documents, at locations such as their worksites or 4584 public facilities, and have the ability to convert the documents 4585 to paper free of charge by the state boardof Administration, 4586 and the board or its designated agents take appropriate and 4587 reasonable measures to ensure that the system for furnishing 4588 electronic documents results in actual receipt., or4589(II)MembersParticipantshave provided consent to receive 4590 information in electronic format, which consent may be revoked; 4591 and 4592 d. The state boardof Administration, or its designated 4593 agent, actually provides paper copies of the documents free of 4594 charge, upon request. 4595 (16) DISABILITY BENEFITS.—For any memberparticipantof the 4596 investment planoptional retirement programwho becomes totally 4597 and permanently disabled, benefits mustshallbe paid in 4598 accordance with the provisions of s. 121.591. 4599 (17) SOCIAL SECURITY COVERAGE.—Social security coverage 4600 shall be provided for all officers and employees who become 4601 membersparticipantsof the investment planoptional program. 4602 Any modification of the present agreement with the Social 4603 Security Administration, or referendum required under the Social 4604 Security Act, for the purpose of providing social security 4605 coverage for any member shall be requested by the state agency 4606 in compliance with the applicable provisions of the Social 4607 Security Act governing such coverage. However, retroactive 4608 social security coverage for service prior to December 1, 1970, 4609 with the employer mayshallnot be provided for any member who 4610 was not covered under the agreement as of November 30, 1970. 4611 (18) RETIREE HEALTH INSURANCE SUBSIDY.—All officers and 4612 employees who are membersparticipantsof the investment plan 4613 areoptional program shall beeligible to receive the retiree 4614 health insurance subsidy, subject to the provisions of s. 4615 112.363. 4616 (19) MEMBERPARTICIPANTRECORDS.—Personal identifying 4617 information of a memberparticipantin the investment plan 4618Public Employee Optional Retirement Programcontained in Florida 4619 Retirement System records held by the state boardof4620Administrationor the departmentof Management Servicesis 4621 exempt from s. 119.07(1) and s. 24(a), Art. I of the State 4622 Constitution. 4623 (20) DESIGNATION OF BENEFICIARIES.— 4624 (a) Each memberparticipantmay, by electronic means or on 4625 a form provided for that purpose, signed and filed with the 4626 third-party administrator, designate a choice of one or more 4627 persons, named sequentially or jointly, as his or her 4628 beneficiary for receivingwho shall receivethe benefits, if 4629 any, which may be payable pursuant to this chapter in the event 4630 of the member’sparticipant’sdeath. If no beneficiary is named 4631 in this manner, or if no beneficiary designated by the member 4632participantsurvives the memberparticipant, the beneficiary 4633 shall be the spouse of the deceased, if living. If the member’s 4634participant’sspouse is not alive at the time of the member’s 4635his or herdeath, the beneficiary shall be the living children 4636 of the memberparticipant. If no children survive, the 4637 beneficiary shall be the member’sparticipant’sfather or 4638 mother, if living; otherwise, the beneficiary shall be the 4639 member’sparticipant’sestate. The beneficiary most recently 4640 designated by a memberparticipant on a form or letter filed4641with the third-party administratorshall be the beneficiary 4642 entitled to any benefits payable at the time of the member’s 4643participant’sdeath. HoweverNotwithstanding any other provision4644in this subsection to the contrary, for a memberparticipantwho 4645 dies prior to his or her effective date of retirement, the 4646 spouse at the time of death shall be the member’sparticipant’s4647 beneficiary unless the membersuch participantdesignates a 4648 different beneficiaryas provided in this subsectionsubsequent 4649 to the member’sparticipant’smost recent marriage. 4650 (b) If a memberparticipantdesignates a primary 4651 beneficiary other than the member’sparticipant’sspouse, the 4652 member’sparticipant’sspouse must sign the beneficiary 4653 designation form to acknowledge the designation. This 4654 requirement does not apply to the designation of one or more 4655 contingent beneficiaries to receive benefits remaining upon the 4656 death of the primary beneficiary or beneficiaries. 4657 (c) Notwithstanding the member’sparticipant’sdesignation 4658 of benefits to be paid through a trust to a beneficiary that is 4659 a natural person,andnotwithstandingthe provisions of the 4660 trust, benefits mustshallbe paid directly to the beneficiary 4661 if the person is no longer a minor or an incapacitated person as 4662 defined in s. 744.102. 4663 (21) PARTICIPATION BY TERMINATED DEFERRED RETIREMENT OPTION 4664 PROGRAM MEMBERSPARTICIPANTS.—Notwithstanding any other 4665 provision of lawto the contrary, membersparticipantsin the 4666 Deferred Retirement Option Program offered under part I may, 4667 after conclusion of their participation in the program, elect to 4668 roll over or authorize a direct trustee-to-trustee transfer to 4669 an account under the investment planPublic Employee Optional4670Retirement Programof their Deferred Retirement Option Program 4671 proceeds distributed as provided under s. 121.091(13)(c)5. The 4672 transaction must constitute an “eligible rollover distribution” 4673 within the meaning of s. 402(c)(4) of the Internal Revenue Code. 4674 (a) The investment planPublic Employee Optional Retirement4675Programmay accept such amounts for deposit into member 4676participantaccounts as provided in paragraph (5)(e)(c). 4677 (b) The affected memberparticipantshall direct the 4678 investment of his or her investment account; however, unless he 4679 or she becomes a renewed member of the Florida Retirement System 4680 under s. 121.122 and elects to participate in the investment 4681 planPublic Employee Optional Retirement Program, noemployer4682 contributions maynotbe made to the member’sparticipant’s4683 account as provided under paragraph (5)(a). 4684 (c) The state board or the department is not responsible 4685 for locating those persons who may be eligible to participate in 4686 the investment planPublic Employee Optional Retirement Program4687 under this subsection. 4688 (22) CREDIT FOR MILITARY SERVICE.—Creditable service of any 4689 member of the investment plan includesPublic Employee Optional4690Retirement Program shall includemilitary service in the Armed 4691 Forces of the United States as provided inthe conditions4692outlined ins. 121.111(1). 4693 Section 27. Section 121.4502, Florida Statutes, is amended 4694 to read: 4695 121.4502 Florida Retirement System Investment PlanPublic4696Employee Optional Retirement ProgramTrust Fund.— 4697 (1) The Florida Retirement System Investment PlanPublic4698Employee Optional Retirement ProgramTrust Fund is created to 4699 hold the assets of the Florida Retirement System Investment Plan 4700Public Employee Optional Retirement Programin trust for the 4701 exclusive benefit of the plan’s memberssuch program’s4702participantsand beneficiaries, and for the payment of 4703 reasonable administrative expenses of the planprogram, in 4704 accordance with s. 401 of the Internal Revenue Code, and shall 4705 be administered by the state boardof Administrationas trustee. 4706 Funds shall be credited to the trust fund as provided in this 4707 part, to be used for the purposes of this part. The trust fund 4708 is exempt from the service charges imposed by s. 215.20. 4709 (2) The Florida Retirement System Investment PlanPublic4710Employee Optional Retirement ProgramTrust Fund is a retirement 4711 trust fund of the Florida Retirement System that accounts for 4712 retirement plan assets held by the state in a trustee capacity 4713 as a fiduciary for individual participants in the Florida 4714 Retirement System Investment PlanPublic Employee Optional4715Retirement Programand, pursuant to s. 19(f), Art. III of the 4716 State Constitution, is not subject to termination. 4717 (3) A forfeiture account shall be created within the 4718 Florida Retirement System Investment PlanPublic Employee4719Optional Retirement ProgramTrust Fund to hold the assets 4720 derived from the forfeiture of benefits by participants. 4721 Pursuant to a private letter ruling from the Internal Revenue 4722 Service, the forfeiture account may be used only for paying 4723 expenses of the Florida Retirement System Investment PlanPublic4724Employee Optional Retirement Programand reducing future 4725 employer contributions to the program. Consistent with Rulings 4726 80-155 and 74-340 of the Internal Revenue Service, unallocated 4727 reserves within the forfeiture account must be used as quickly 4728 and as prudently as possible considering the state board’s 4729 fiduciary duty. Expected withdrawals from the account must 4730 endeavor to reduce the account to zero each fiscal year. 4731 Section 28. Subsections (1) and (3) of section 121.4503, 4732 Florida Statutes, are amended to read: 4733 121.4503 Florida Retirement System Contributions Clearing 4734 Trust Fund.— 4735 (1) The Florida Retirement System Contributions Clearing 4736 Trust Fund is created as a clearing fund for disbursing employer 4737 and employee contributions to the component plans of the Florida 4738 Retirement System and shall be administered by the Department of 4739 Management Services. Funds shall be credited to the trust fund 4740 as provided in this chapter andshall beheld in trust for the 4741 contributing employees and employers until such time as the 4742 assets are transferred by the department to the Florida 4743 Retirement System Trust Fund, the Florida Retirement System 4744 Investment PlanPublic Employee Optional Retirement Program4745 Trust Fund, or other trust funds as authorized by law, to be 4746 used for the purposes of this chapter. The trust fund is exempt 4747 from the service charges imposed by s. 215.20. 4748 (3) The Department of Management Services may adopt rules 4749 governing the receipt and disbursement of amounts received by 4750 the Florida Retirement System Contributions Clearing Trust Fund 4751 from employers and employees contributing to the component plans 4752 of the Florida Retirement System. 4753 Section 29. Section 121.571, Florida Statutes, is amended 4754 to read: 4755 121.571 Contributions.—Contributions to the Florida 4756 Retirement System Investment PlanPublic Employee Optional4757Retirement Programshall be made as follows: 4758 (1) CONTRIBUTORYNONCONTRIBUTORYPLAN.—Each employer and 4759 employee shall submitaccomplish thecontributions as required 4760 by s. 121.71by a procedure in which no employee’s gross salary4761shall be reduced. 4762 (2) CONTRIBUTION RATES GENERALLY.—Contributions to fund the 4763 retirement and disability benefits provided under this part must 4764shallbe based on the uniform contribution rates established by 4765 s. 121.71 and on the membership class or subclass of the member 4766participant. Such contributions mustshallbe allocated as 4767 provided in ss. 121.72 and 121.73. 4768 (3) CONTRIBUTIONS FOR SOCIAL SECURITY COVERAGE AND FOR 4769 RETIREE HEALTH INSURANCE SUBSIDY.—Contributions required under 4770 s. 121.71 arethis section shall bein addition to employer and 4771 member contributionsrequiredfor social security and the 4772 Retiree Health Insurance Subsidy Trust Fund as required under 4773provided inss. 112.363, 121.052, 121.055, and 121.071, as 4774 appropriate. 4775 Section 30. Section 121.591, Florida Statutes, is amended 4776 to read: 4777 121.591 Payment of benefitspayable under the Public4778Employee Optional Retirement Program of the Florida Retirement4779System.—Benefits may not be paid under the Florida Retirement 4780 System Investment Planthis sectionunless the member has 4781 terminated employment as provided in s. 121.021(39)(a) or is 4782 deceased and a proper application has been filed asin the4783mannerprescribed by the state board or the department. Before 4784 termination of employment, benefits, including employee 4785 contributions, are not payable under the investment plan for 4786 employee hardships, unforeseeable emergencies, loans, medical 4787 expenses, educational expenses, purchase of a principal 4788 residence, payments necessary to prevent eviction or foreclosure 4789 on an employee’s principal residence, or any other reason prior 4790 to termination from all employment relationships with 4791 participating employers. The state board or department, as 4792 appropriate, may cancel an application for retirement benefits 4793 ifwhenthe member or beneficiary fails to timely provide the 4794 information and documents required by this chapter and the rules 4795 of the state board and department. In accordance with their 4796 respective responsibilitiesas provided herein, the state board 4797of Administrationand the departmentof Management Services4798 shall adopt rules establishing procedures for application for 4799 retirement benefits and for the cancellation of such application 4800 ifwhenthe required information or documents are not received. 4801 The state boardof Administrationand the departmentof4802Management Services, as appropriate, are authorized to cash out 4803 a de minimis account of a memberparticipantwho has been 4804 terminated from Florida Retirement System covered employment for 4805 a minimum of 6 calendar months. A de minimis account is an 4806 account containing employer and employee contributions and 4807 accumulated earnings of not more than $5,000 made under the 4808 provisions of this chapter. Such cash-out musteitherbe a 4809 complete lump-sum liquidation of the account balance, subject to 4810 the provisions of the Internal Revenue Code, or a lump-sum 4811 direct rollover distribution paid directly to the custodian of 4812 an eligible retirement plan, as defined by the Internal Revenue 4813 Code, on behalf of the memberparticipant. Any nonvested 4814 accumulations and associated service credit, including amounts 4815 transferred to the suspense account of the Florida Retirement 4816 System Investment Plan Trust Fund authorized under s. 4817 121.4501(6), shall be forfeited upon payment of any vested 4818 benefit to a member or beneficiary, except for de minimis 4819 distributions or minimum required distributions as provided 4820 under this section. If any financial instrument issued for the 4821 payment of retirement benefits under this section is not 4822 presented for payment within 180 days after the last day of the 4823 month in which it was originally issued, the third-party 4824 administrator or other duly authorized agent of the state board 4825of Administrationshall cancel the instrument and credit the 4826 amount of the instrument to the suspense account of the Florida 4827 Retirement System Investment PlanPublic Employee Optional4828Retirement ProgramTrust Fund authorized under s. 121.4501(6). 4829 Anysuchamounts transferred to the suspense account are payable 4830 upon a proper application, not to include earnings thereon, as 4831 provided in this section, within 10 years after the last day of 4832 the month in which the instrument was originally issued, after 4833 which time such amounts and any earnings attributable to 4834 employer contributionsthereonshall be forfeited. Anysuch4835 forfeited amounts are assets of thePublic Employee Optional4836Retirement Programtrust fund and are not subject tothe4837provisions ofchapter 717. 4838 (1) NORMAL BENEFITS.—Under the investment planPublic4839Employee Optional Retirement Program: 4840 (a) Benefits in the form of vested accumulations as 4841 described in s. 121.4501(6) are payable under this subsection in 4842 accordance with the following terms and conditions: 4843 1.To the extent vested,Benefits are payable only to a 4844 member, an alternate payee of a qualified domestic relations 4845 order, or a beneficiaryparticipant. 4846 2. Benefits shall be paid by the third-party administrator 4847 or designated approved providers in accordance with the law, the 4848 contracts, and any applicable board rule or policy. 4849 3.To receive benefits,The memberparticipantmust be 4850 terminated from all employment with all Florida Retirement 4851 System employers, as provided in s. 121.021(39). 4852 4. Benefit payments may not be made until the member 4853participanthas been terminated for 3 calendar months, except 4854 that the state board may authorize by rule for the distribution 4855 of up to 10 percent of the member’sparticipant’saccount after 4856 being terminated for 1 calendar month if the memberparticipant4857 has reached the normal retirement date as defined in s. 121.021 4858of the defined benefit plan. 4859 5. If a member or former member of the Florida Retirement 4860 System receives an invalid distributionfrom the Public Employee4861Optional Retirement Program Trust Fund, such person must either 4862 repay the full amountinvalid distribution to the trust fund4863 within 90 days after receipt of final notification by the state 4864 board or the third-party administrator that the distribution was 4865 invalid, or, in lieu of repayment, the member must terminate 4866 employment from all participating employers. If such person 4867 fails to repay the full invalid distribution within 90 days 4868 after receipt of final notification, the person may be deemed 4869 retired from the investment planoptional retirement programby 4870 the state board, as provided pursuant to s.121.4501(2)(k),and 4871 is subject to s. 121.122. If such person is deemed retiredby4872the state board, any joint and several liability set out in s. 4873 121.091(9)(d)2. isbecomes null andvoid, and the state board, 4874 the department, or the employing agency is not liable for gains 4875 on payroll contributions that have not been deposited to the 4876 person’s account in the investment planretirement program, 4877 pending resolution of the invalid distribution. The member or 4878 former member who has been deemed retired or who has been 4879 determined by the state board to have taken an invalid 4880 distribution may appeal the agency decision through the 4881 complaint process as provided under s. 121.4501(9)(g)3. As used 4882 in this subparagraph, the term “invalid distribution” means any 4883 distribution from an account in the investment planoptional4884retirement programwhich is taken in violation of this section, 4885 s. 121.091(9), or s. 121.4501. 4886 (b) If a memberparticipantelects to receive his or her 4887 benefits upon termination of employment as defined in s. 4888 121.021, the memberparticipantmust submit a written 4889 application or an application by electronic means to the third 4890 party administrator indicating his or her preferred distribution 4891 date and selecting an authorized method of distribution as 4892 provided in paragraph (c). The memberparticipantmay defer 4893 receipt of benefits until he or she chooses to make such 4894 application, subject to federal requirements. 4895 (c) Upon receipt by the third-party administrator of a 4896 properly executed application for distribution of benefits, the 4897 total accumulated benefit isshall bepayable to the member pro 4898 rata across all Florida Retirement System benefit sources 4899participant, as: 4900 1. A lump-sum or partial distribution to the member 4901participant; 4902 2. A lump-sum direct rollover distribution whereby all 4903 accrued benefits, plus interest and investment earnings, are 4904 paid from the member’sparticipant’saccount directly to the 4905 custodian of an eligible retirement plan, as defined in s. 4906 402(c)(8)(B) of the Internal Revenue Code, on behalf of the 4907 memberparticipant; or 4908 3. Periodic distributions, as authorized by the state 4909 board. 4910 (d) The distribution payment method selected by the member 4911 or beneficiary, and the retirement of the member or beneficiary, 4912 is final and irrevocable at the time a benefit distribution 4913 payment is cashed, deposited, or transferred to another 4914 financial institution. Any additional service that remains 4915 unclaimed at retirement may not be claimed or purchased, and the 4916 type of retirement may not be changed, except that if a member 4917 recovers from a disability, the member may subsequently request 4918 benefits under subsection (2). 4919 (e) A member may not receive a distribution of employee 4920 contributions if a pending qualified domestic relations order is 4921 filed against the member’s investment plan account. 4922 (2) DISABILITY RETIREMENT BENEFITS.—Benefits provided under 4923 this subsection are payable in lieu of the benefits thatwhich4924 would otherwise be payable under the provisions of subsection 4925 (1). Such benefits mustshallbe fundedentirelyfrom employer 4926 contributions made under s. 121.571, transferred employee 4927 contributions andparticipantfunds accumulated pursuant to 4928 paragraph (a), and interest and earnings thereon.Pursuant4929thereto:4930 (a) Transfer of funds.—To qualify to receive monthly 4931 disability benefits under this subsection: 4932 1. All moneys accumulated in the member’s account 4933participant’s Public Employee Optional Retirement Program4934accounts, including vested and nonvested accumulations as 4935 described in s. 121.4501(6), mustshallbe transferred from such 4936 individual accounts to the divisionof Retirementfor deposit in 4937 the disability account of the Florida Retirement System Trust 4938 Fund. Such moneys mustshallbeseparatelyaccounted for 4939 separately. Earnings mustshallbe credited on an annual basis 4940 for amounts held in the disability accounts of the Florida 4941 Retirement System Trust Fund based on actual earnings of the 4942Florida Retirement Systemtrust fund. 4943 2. If the memberparticipanthas retained retirement credit 4944he or she hadearned under the pension plandefined benefit4945program of the Florida Retirement Systemas provided in s. 4946 121.4501(3)(b), a sum representing the actuarial present value 4947 of such credit within the Florida Retirement System Trust Fund 4948 shall be reassigned by the divisionof Retirementfrom the 4949 pension plandefined benefit programto the disability program 4950 as implemented under this subsection and shall be deposited in 4951 the disability account of theFlorida Retirement Systemtrust 4952 fund. Such moneys mustshallbeseparatelyaccounted for 4953 separately. 4954 (b) Disability retirement; entitlement.— 4955 1. A memberparticipantof the investment planPublic4956Employee Optional Retirement Programwho becomes totally and 4957 permanently disabled, as defined in paragraph (d)s.4958121.091(4)(b), after completing 8 years of creditable service, 4959 or a memberparticipantwho becomes totally and permanently 4960 disabled in the line of duty regardless ofhis or herlength of 4961 service, isshall beentitled to a monthly disability benefitas4962provided herein. 4963 2. In order for service to apply toward the 8 years of 4964 creditable service requiredto vestfor regular disability 4965 benefits, or toward the creditable service used in calculating a 4966 service-based benefit as providedforunder paragraph (g), the 4967 service must be creditable service as described below: 4968 a. The member’sparticipant’speriod of service under the 4969 investment plan shallPublic Employee Optional Retirement4970Program willbe considered creditable service, except as 4971 provided in subparagraph d. 4972 b. If the memberparticipanthas elected to retain credit 4973 forhis or herservice under the pension plandefined benefit4974program of the Florida Retirement Systemas provided under s. 4975 121.4501(3)(b), all such service shallwillbe considered 4976 creditable service. 4977 c. If the member electsparticipant has electedto transfer 4978 to his or her memberparticipantaccounts a sum representing the 4979 present value of his or her retirement credit under the pension 4980 plandefined benefit programas provided under s. 4981 121.4501(3)(c), the period of service under the pension plan 4982defined benefit programrepresented in the present value amounts 4983 transferred shallwillbe considered creditable servicefor4984purposes of vesting for disability benefits, except as provided 4985 in subparagraph d. 4986 d. If a memberWhenever a participanthas terminated 4987 employment and has taken distribution of his or her funds as 4988 provided in subsection (1), all creditable service represented 4989 by such distributed funds is forfeited for purposes of this 4990 subsection. 4991 (c) Disability retirement effective date.—The effective 4992 retirement date for a memberparticipantwho applies and is 4993 approved for disability retirement shall be established as 4994 provided under s. 121.091(4)(a)2. and 3. 4995 (d) Total and permanent disability.—A memberparticipant4996 shall be considered totally and permanently disabled if, in the 4997 opinion of the division, he or she is prevented, by reason of a 4998 medically determinable physical or mental impairment, from 4999 rendering useful and efficient service as an officer or 5000 employee. 5001 (e) Proof of disability.—The division,Before approving 5002 payment of any disability retirement benefit, the division shall 5003 require proof that the memberparticipantis totally and 5004 permanently disabledin the same manneras providedfor members5005of the defined benefit program of the Florida Retirement System5006 under s. 121.091(4)(c). 5007 (f) Disability retirement benefit.—Upon the disability 5008 retirement of a memberparticipantunder this subsection, the 5009 memberparticipantshall receive a monthly benefit that begins 5010 accruingshall begin to accrueon the first day of the month of 5011 disability retirement, as approved by the division, and isshall5012bepayable on the last day of that month and each month 5013 thereafter during his or her lifetime and continued disability. 5014 All disability benefits mustpayable to such member shallbe 5015 paid out of the disability account of the Florida Retirement 5016 System Trust Fund established under this subsection. 5017 (g) Computation of disability retirement benefit.—The 5018 amount of each monthly payment mustshallbe calculatedin the5019same manneras providedfor members of the defined benefit5020program of the Florida Retirement Systemunder s. 121.091(4)(f). 5021For such purpose,Creditable service under both the pension plan 5022defined benefit programand the investment planPublic Employee5023Optional Retirement Program of the Florida Retirement System5024 shall be applicable as provided under paragraph (b). 5025 (h) Reapplication.—A memberparticipantwhose initial 5026 application for disability retirement ishas beendenied may 5027 reapply for disability benefitsin the same manner, and under5028the same conditions,as provided infor members of the defined5029benefit program of the Florida Retirement System unders. 5030 121.091(4)(g). 5031 (i) Membership.—Upon approval of a member’sanapplication 5032 for disability benefitsunder this subsection, the member 5033applicantshall be transferred to the pension plandefined5034benefit program of the Florida Retirement System, effective upon 5035 his or her disability retirement effective date. 5036 (j) Option to cancel.—A memberAny participantwhose 5037 application for disability benefits is approved may cancel the 5038his or herapplication iffor disability benefits, provided that5039 the cancellation request is received by the division before a 5040 disability retirement warrant has been deposited, cashed, or 5041 received by direct deposit. Uponsuchcancellation: 5042 1. The member’sparticipant’stransfer to the pension plan 5043defined benefit programunder paragraph (i) shall be nullified; 5044 2. The memberparticipantshall be retroactively reinstated 5045 in the investment planPublic Employee Optional Retirement5046Programwithout hiatus; 5047 3. All funds transferred to the Florida Retirement System 5048 Trust Fund under paragraph (a) mustshallbe returned to the 5049 memberparticipantaccounts from which thesuchfunds were 5050 drawn; and 5051 4. The memberparticipantmay elect to receive the benefit 5052 payable underthe provisions ofsubsection (1) in lieu of 5053 disability benefitsas provided under this subsection. 5054 (k) Recovery from disability.— 5055 1. The division may require periodic reexaminations at the 5056 expense of the disability program account of the Florida 5057 Retirement System Trust Fund. Except asotherwiseprovided in 5058 subparagraph 2.,the requirements, procedures, and restrictions5059relating to the conduct and review of such reexaminations,5060discontinuation or termination of benefits, reentry into5061employment, disability retirement after reentry into covered5062employment, andall other matters relating to recovery from 5063 disability shall bethe sameas providedare set forthunder s. 5064 121.091(4)(h). 5065 2. Upon recovery from disability, theanyrecipient of 5066 disability retirement benefits under this subsection shall be a 5067 compulsory member of the investment planPublic Employee5068Optional Retirement Program of the Florida Retirement System. 5069 The net difference between the recipient’s original account 5070 balance transferred to the Florida Retirement System Trust Fund, 5071 including earnings, under paragraph (a)and total disability 5072 benefits paid to such recipient, if any, shall be determined as 5073 provided in sub-subparagraph a. 5074 a. An amount equal to the total benefits paid shall be 5075 subtracted from that portion of the transferred account balance 5076 consisting of vested accumulations as described under s. 5077 121.4501(6), if any, and an amount equal to the remainder of 5078 benefit amounts paid, if any, shallthenbe subtracted from any 5079 remainingportion consisting ofnonvested accumulationsas5080described under s.121.4501(6). 5081 b. Amounts subtracted under sub-subparagraph a. mustshall5082 be retained within the disability account of the Florida 5083 Retirement System Trust Fund. Any remaining account balance 5084 shall be transferred to the third-party administrator for 5085 disposition as provided under sub-subparagraph c. or sub 5086 subparagraph d., as appropriate. 5087 c. If the recipient returns to covered employment, 5088 transferred amounts mustshallbe deposited in individual 5089 accounts under the investment planPublic Employee Optional5090Retirement Program, as directed by the memberparticipant. 5091 Vested and nonvested amounts shall beseparatelyaccounted for 5092 separately as provided in s. 121.4501(6). 5093 d. If the recipient fails to return to covered employment 5094 upon recovery from disability: 5095 (I) Any remaining vested amount mustshallbe deposited in 5096 individual accounts under the investment planPublic Employee5097Optional Retirement Program, as directed by the member 5098participant, and isshall bepayable as provided in subsection 5099 (1). 5100 (II) Any remaining nonvested amount mustshallbe held in a 5101 suspense account and isshall beforfeitable after 5 years as 5102 provided in s. 121.4501(6). 5103 3. If present value was reassigned from the pension plan 5104defined benefit programto the disability programof the Florida5105Retirement Systemas provided under subparagraph (a)2., the full 5106 present value amount mustshallbe returned to the defined 5107 benefit account within the Florida Retirement System Trust Fund 5108 and the member’saffected individual’sassociated retirement 5109 credit under the pension plan mustdefined benefit program shall5110 be reinstated in full. Any benefit based upon such credit must 5111shallbe calculated as provided in s. 121.091(4)(h)1. 5112 (l) Nonadmissible causes of disability.—A member is 5113participant shallnotbeentitled toreceivea disability 5114 retirement benefit if the disability results from any injury or 5115 diseasesustained or inflictedas described in s. 121.091(4)(i). 5116 (m) Disability retirement of justice or judge by order of 5117 Supreme Court.— 5118 1. If a memberparticipantis a justice of the Supreme 5119 Court, judge of a district court of appeal, circuit judge, or 5120 judge of a county court who has served for the years equal to, 5121 or greater than, the vesting requirement in s. 121.021(45)65122years or moreas an elected constitutional judicial officer, 5123 including service as a judicial officer in any court abolished 5124 pursuant to Art. V of the State Constitution, and who is retired 5125 for disabilityby order of the Supreme Court upon recommendation5126of the Judicial Qualifications Commissionpursuant to s. 12,the5127provisions ofArt. V of the State Constitution, the member’s 5128participant’sOption 1 monthly disability benefit amount as 5129 provided in s. 121.091(6)(a)1. shall be two-thirds of his or her 5130 monthly compensation as of the member’sparticipant’sdisability 5131 retirement date. The memberSuch a participantmay alternatively 5132 elect to receive an actuarially adjusted disability retirement 5133 benefit under any other option as provided in s. 121.091(6)(a), 5134 or to receive the normal benefit payable underthe Public5135Employee Optional Retirement Program as set forth insubsection 5136 (1). 5137 2. If any justice or judge who is a memberparticipantof 5138 the investment planPublic Employee Optional Retirement Program5139of the Florida Retirement Systemis retired for disabilityby5140order of the Supreme Court upon recommendation of the Judicial5141Qualifications Commissionpursuant to s. 12,the provisions of5142 Art. V of the State Constitution and elects to receive a monthly 5143 disability benefit under the provisions of this paragraph: 5144 a. Any present value amount that was transferred to his or 5145 her investment planprogramaccount and all employer and 5146 employee contributions made to such account on his or her 5147 behalf, plus interest and earnings thereon, mustshallbe 5148 transferred to and deposited in the disability account of the 5149 Florida Retirement System Trust Fund; and 5150 b. The monthly disability benefits payable under this 5151 paragraphfor any affected justice or judge retired from the5152Florida Retirement System pursuant to Art. V of the State5153Constitutionshall be paid from the disability account of the 5154 Florida Retirement System Trust Fund. 5155 (n) Death of retiree or beneficiary.—Upon the death of a 5156 disabled retiree or beneficiary of the retireethereofwho is 5157 receiving monthly disability benefits under this subsection, the 5158 monthly benefits shall be paid through the last day of the month 5159 of death and shall terminate, or be adjusted, if applicable, as 5160 of that date in accordance with the optional form of benefit 5161 selected at the time of retirement. The departmentof Management5162Servicesmay adopt rules necessary to administer this paragraph. 5163 (3) DEATH BENEFITS.—Under the Florida Retirement System 5164 Investment PlanPublic Employee Optional Retirement Program: 5165 (a) Survivor benefits areshall bepayable in accordance 5166 with the following terms and conditions: 5167 1. To the extent vested, benefits areshall bepayable only 5168 to a member’sparticipant’sbeneficiary or beneficiaries as 5169 designated by the memberparticipantas provided in s. 5170 121.4501(20). 5171 2. Benefits shall be paid by the third-party administrator 5172 or designated approved providers in accordance with the law, the 5173 contracts, and any applicable state board rule or policy. 5174 3. To receive benefitsunder this subsection, the member 5175participantmust be deceased. 5176 (b) In the event of a member’sparticipant’sdeath, all 5177 vested accumulations as described in s. 121.4501(6), less 5178 withholding taxes remitted to the Internal Revenue Service, 5179 shall be distributed, as provided in paragraph (c) or as 5180 described in s. 121.4501(20), as if the memberparticipant5181 retired on the date of death. No other death benefits areshall5182beavailable for survivors of membersparticipants under the5183Public Employee Optional Retirement Program, except forsuch5184 benefits, or coverage forsuchbenefits, as are otherwise 5185 provided by law orareseparately providedaffordedby the 5186 employer, at the employer’s discretion. 5187 (c) Upon receipt by the third-party administrator of a 5188 properly executed application for distribution of benefits, the 5189 total accumulated benefit isshall bepayable by the third-party 5190 administrator to the member’sparticipant’ssurviving 5191 beneficiary or beneficiaries, as: 5192 1. A lump-sum distribution payable to the beneficiary or 5193 beneficiaries, or to the deceased member’sparticipant’sestate; 5194 2. An eligible rollover distribution, if permitted, on 5195 behalf of the surviving spouse of a deceased memberparticipant, 5196 whereby all accrued benefits, plus interest and investment 5197 earnings, are paid from the deceased member’sparticipant’s5198 account directly to the custodian of an eligible retirement 5199 plan, as described in s. 402(c)(8)(B) of the Internal Revenue 5200 Code, on behalf of the surviving spouse; or 5201 3. A partial lump-sum payment whereby a portion of the 5202 accrued benefit is paid to the deceased member’sparticipant’s5203 surviving spouse or other designated beneficiaries, less 5204 withholding taxes remitted to the Internal Revenue Service, and 5205 the remaining amount is transferred directly to the custodian of 5206 an eligible retirement plan, if permitted, as described in s. 5207 402(c)(8)(B) of the Internal Revenue Code, on behalf of the 5208 surviving spouse. The proportions must be specified by the 5209 memberparticipantor the surviving beneficiary. 5210 5211 This paragraph does not abrogate other applicable provisions of 5212 state or federal law providing for payment of death benefits. 5213 (4) LIMITATION ON LEGAL PROCESS.—The benefits payable to 5214 any person under the Florida Retirement System Investment Plan 5215Public Employee Optional Retirement Program, and any 5216 contributions accumulated under the plansuch program, are not 5217 subject to assignment, execution, attachment, or any legal 5218 process, except for qualified domestic relations orders by a 5219 court of competent jurisdiction, income deduction orders as 5220 provided in s. 61.1301, and federal income tax levies. 5221 Section 31. Section 121.5911, Florida Statutes, is amended 5222 to read: 5223 121.5911 Disability retirement program; qualified status; 5224 rulemaking authority.—It is the intent of the Legislature that 5225 the disability retirement program for membersparticipantsof 5226 the Florida Retirement System Investment PlanPublic Employee5227Optional Retirement Program as created in this act mustmeet all 5228 applicable requirements of federal law for a qualified plan. The 5229 departmentof Management Servicesshall seek a private letter 5230 ruling from the Internal Revenue Service on the disability 5231 retirement programfor participants of the Public Employee5232Optional Retirement Program. Consistent with the private letter 5233 ruling, the departmentof Management Servicesshall adoptany5234necessaryrules necessaryrequiredto maintain the qualified 5235 status of the disability retirement program and the Florida 5236 Retirement System Pensiondefined benefitPlan. 5237 Section 32. Section 121.70, Florida Statutes, is amended to 5238 read: 5239 121.70 Legislative purpose and intent.— 5240 (1) This part provides for a uniform system for funding 5241 benefits provided under the Florida Retirement System Pension 5242 Plandefined benefit programestablished under part I of this 5243 chapter (referred to in this part as the pension plandefined5244benefit program) and under the Florida Retirement System 5245 Investment PlanPublic Employee Optional Retirement Program5246 established under part II of this chapter (referred to in this 5247 part as the investment planoptional retirement program). The 5248 Legislature recognizes and declares that the Florida Retirement 5249 System is a single retirement system, consisting of two 5250 retirement plans and other nonintegrated programs. Employees and 5251 employers participating in the Florida Retirement System 5252 collectively shall be responsible for making contributions to 5253 support the benefits providedaffordedunder both plans. The 5254 employees andAs provided in this part,employersparticipating5255in the Florida Retirement Systemshall make contributions based 5256 upon uniform contribution rates determined as a percentage of 5257 the employee’s gross monthly compensationtotal payrollfor the 5258 employee’seachclass or subclass of Florida Retirement System 5259 membership, irrespective of thewhichretirement plan in which 5260 the individual employee is enrolledemployees may elect. This 5261 shall be known as a uniform or blended contribution rate system. 5262 (2) In establishing a uniform contribution rate system, it 5263 is the intent of the Legislature to: 5264 (a) Provide greater stability and certainty in financial 5265 planning and budgeting for Florida Retirement System employers 5266 by eliminating the fiscal instability that would be caused by 5267 dual rates coupled with employee-selected plan participation; 5268 (b) Provide greater fiscal equity and uniformity for system 5269 employers by effectively distributing the financial burden and 5270 benefit of short-term system deficits and surpluses, 5271 respectively, in proportion to total system payroll; and 5272 (c) Allow employees to make their retirement plan selection 5273 decisions free of circumstances that may cause employers to 5274 favor one plan choice over another. 5275 Section 33. Section 121.71, Florida Statutes, is amended to 5276 read: 5277 121.71 Uniform rates; process; calculations; levy.— 5278 (1) In conducting the system actuarial study required under 5279 s. 121.031, the actuary shall follow all requirements specified 5280thereunderto determine, by Florida Retirement System employee 5281 membership class, the dollar contribution amounts necessary for 5282 the nextforthcomingfiscal year for the pension plandefined5283benefit program. In addition, the actuary shall determine, by 5284 Florida Retirement System membership class, based on an estimate 5285 for the nextforthcomingfiscal year of the gross compensation 5286 of employees participating in the investment planoptional5287retirement program, the dollar contribution amounts necessary to 5288 make the allocations required under ss. 121.72 and 121.73. For 5289 each employee membership class and subclass, the actuarial study 5290 mustshallestablish a uniform rate necessary to fund the 5291 benefit obligations under both Florida Retirement System 5292 retirement plans by dividing the sum of total dollars required 5293 by the estimated gross compensation of members in both plans. 5294 (2) Based on the uniform rates set forth in subsections 5295subsection(3), (4), and (5), employees and employers shall make 5296 monthly contributions to the Division of Retirement as required 5297 in s. 121.061(1), which shall initially deposit the funds into 5298 the Florida Retirement System Contributions Clearing Trust Fund. 5299 A change in a contribution rate is effective the first day of 5300 the month for which a full month’s employer and employee 5301 contribution may be made on or after the beginning date of the 5302 change. Beginning July 1, 2011, each employee shall contribute 5303 the contributions required in subsection (3). The employer shall 5304 deduct the contribution from the employee’s monthly salary, and 5305 the contribution shall be submitted to the division. These 5306 contributions shall be reported as employer-paid employee 5307 contributions, and credited to the account of the employee. The 5308 contributions shall be deducted from the employee’s salary 5309 before the computation of applicable federal taxes and treated 5310 as employer contributions under 26 U.S.C. s. 414(h)(2). The 5311 employer specifies that the contributions, although designated 5312 as employee contributions, are being paid by the employer in 5313 lieu of contributions by the employee. The employee does not 5314 have the option of choosing to receive the contributed amounts 5315 directly instead of having them paid by the employer to the 5316 plan. Such contributions are mandatory and each employee is 5317 considered to have consented to payroll deductions. Payment of 5318 an employee’s salary or wages, less the contribution, is a full 5319 and complete discharge and satisfaction of all claims and 5320 demands for the service rendered by employees during the period 5321 covered by the payment, except their claims to the benefits to 5322 which they may be entitled under this chapter. 5323 (3) Required employee retirement contribution rates for 5324 each membership class and subclass of the Florida Retirement 5325 System for both retirement plans are as follows: 5326 5327 Membership Class Percentage of Gross Compensation,Effective July 1, 2011 5328 Regular Class 3.00% 5329 Special Risk Class 3.00% 5330 Special Risk Administrative Support Class 3.00% 5331 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 3.00% 5332 Elected Officers’ Class— Justices, Judges 3.00% 5333 Elected Officers’ Class— County Elected Officers 3.00% 5334 Senior Management Service Class 3.00% 5335 DROP 0.00% 5336 (4)(3)Required employer retirement contribution rates for 5337 each membership class and subclass of the Florida Retirement 5338 System for both retirement plans are as follows: 5339 5340 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 20112009Percentage ofGrossCompensation,EffectiveJuly 1, 201220105341 5342 Regular Class 3.28%8.69%3.28%9.63%5343 Special Risk Class 10.21%19.76%10.21%22.11%5344 Special Risk Administrative Support Class 4.07%11.39%4.07%12.10%5345 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 7.02%13.32%7.02%15.20%5346 Elected Officers’ Class— Justices, Judges 9.78%18.40%9.78%20.65%5347 Elected Officers’ Class— County Elected Officers 9.27%15.37%9.27%17.50%5348 Senior Management Service Class 4.81%11.96%4.81%13.43%5349 DROP 3.31%9.80%3.31%11.14%5350 (5) In order to address unfunded actuarial liabilities of 5351 the system, the required employer retirement contribution rates 5352 for each membership class and subclass of the Florida Retirement 5353 System for both retirement plans are as follows: 5354 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2011Percentage ofGrossCompensation,EffectiveJuly 1, 2012 5355 Regular Class 0.49% 2.16% 5356 Special Risk Class 2.75% 8.21% 5357 Special Risk Administrative Support Class 0.83% 21.40% 5358 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 0.88% 21.76% 5359 Elected Officers’ Class— Justices, Judges 0.77% 12.86% 5360 Elected Officers’ Class— County Elected Officers 0.73% 22.05% 5361 Senior Management Service Class 0.32% 10.51% 5362 DROP 0.00% 6.36% 5363 (6) If a member is reported under an incorrect membership 5364 class and the amount of contributions reported and remitted are 5365 less than the amount required, the employer shall owe the 5366 difference, plus the delinquent fee, of 1 percent for each 5367 calendar month or part thereof that the contributions should 5368 have been paid. The delinquent assessment may not be waived. If 5369 the contributions reported and remitted are more than the amount 5370 required, the employer shall receive a credit to be applied 5371 against future contributions owed. 5372 (7)(4)The state actuary shall recognize and use an 5373 appropriate level of available excess assets of the Florida 5374 Retirement System Trust Fund to offset the difference between 5375 the normal costs of the Florida Retirement System and the 5376 statutorily prescribed contribution rates. 5377 Section 34. Section 121.72, Florida Statutes, is amended to 5378 read: 5379 121.72 Allocations to investment plan memberoptional5380retirement program participantaccounts; percentage amounts.— 5381 (1) The allocations established in subsection (4) shall 5382 fund retirement benefits under the investment planoptional5383retirement programand shall be transferred monthly by the 5384 Division of Retirement from the Florida Retirement System 5385 Contributions Clearing Trust Fund to the third-party 5386 administrator for deposit in each participating employee’s 5387 individual account based on the membership class of the 5388 participant. 5389 (2) The allocations are stated as a percentage of each 5390 investment plan member’soptional retirement program5391participant’sgross compensation for the calendar month. A 5392 change in a contribution percentage is effective the first day 5393 of the month for which retirement contributionsa full month’s5394employer contributionmay be made on or after the beginning date 5395 of the change. Contribution percentages may be modified by 5396 general law. 5397 (3) Employer and employeeparticipantcontributions to 5398 memberparticipantaccounts shall be accounted for separately. 5399Participant contributions may be made only if expressly5400authorized by law.Interest and investment earnings on 5401 contributions shall accrue on a tax-deferred basis until 5402 proceeds are distributed. 5403 (4) Effective July 1, 2002, allocations from the Florida 5404 Retirement System Contributions Clearing Trust Fund to 5405 investment plan memberoptional retirement program participant5406 accounts areshall beas follows: 5407 Membership Class Percentage of Gross Compensation 5408 Regular Class 9.00% 5409 Special Risk Class 20.00% 5410 Special Risk Administrative Support Class 11.35% 5411 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 13.40% 5412 Elected Officers’ Class— Justices, Judges 18.90% 5413 Elected Officers’ Class— County Elected Officers 16.20% 5414 Senior Management Service Class 10.95% 5415 Section 35. Section 121.73, Florida Statutes, is amended to 5416 read: 5417 121.73 Allocations for memberoptional retirement program5418participantdisability coverage; percentage amounts.— 5419 (1) The allocations established in subsection (3) shall be 5420 used to provide disability coverage for membersparticipantsin 5421 the investment planoptional retirement programand shall be 5422 transferred monthly by the Division of Retirement from the 5423 Florida Retirement System Contributions Clearing Trust Fund to 5424 the disability account of the Florida Retirement System Trust 5425 Fund. 5426 (2) The allocations are stated as a percentage of each 5427 investment plan member’soptional retirement program5428participant’sgross compensation for the calendar month. A 5429 change in a contribution percentage is effective the first day 5430 of the month for which retirement contributionsa full month’s5431employer contributionmay be made on or after the beginning date 5432 of the change. Contribution percentages may be modified by 5433 general law. 5434 (3) Effective July 1, 2002, allocations from the Florida 5435 Retirement System ContributionsFRSContributionClearing Trust 5436 Fund to provide disability coverage for membersparticipantsin 5437 the investment planoptional retirement program, and to offset 5438 the costs of administering said coverage, areshall beas 5439 follows: 5440 Membership Class Percentage of Gross Compensation 5441 Regular Class 0.25% 5442 Special Risk Class 1.33% 5443 Special Risk Administrative Support Class 0.45% 5444 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 0.41% 5445 Elected Officers’ Class— Justices, Judges 0.73% 5446 Elected Officers’ Class— County Elected Officers 0.41% 5447 Senior Management Service Class 0.26% 5448 Section 36. Section 121.74, Florida Statutes, is amended to 5449 read: 5450 121.74 Administrative and educational expenses.—In addition 5451 to contributions required under ss.s.121.71 and 121.73, 5452 effective July 1, 2010, through June 30, 2014, employers 5453 participating in the Florida Retirement System shall contribute 5454 an amount equal to 0.03 percent of the payroll reported for each 5455 class or subclass of Florida Retirement System membership.;5456 Effective July 1, 2014, the contribution rate shall be 0.04 5457 percent of the payroll reported for each class or subclass of 5458 membership. The amount contributed shall be transferred by the 5459 Division of Retirement from the Florida Retirement System 5460 Contributions Clearing Trust Fund to the State Board of 5461 Administration’s Administrative Trust Fund to offset the costs 5462 of administering the investment planoptional retirement program5463 and the costs of providing educational services to members of 5464 the Florida Retirement Systemparticipants in the defined5465benefit program and the optional retirement program. Approval of 5466 the trustees is required before the expenditure of these funds. 5467 Payments for third-party administrative or educational expenses 5468 shall be made only pursuant to the terms of the approved 5469 contracts for such services. 5470 Section 37. Section 121.75, Florida Statutes, is amended to 5471 read: 5472 121.75 Allocation for pension plandefined benefit5473program.—After making the transfers required pursuant to ss. 5474 121.71, 121.72, 121.73, and 121.74, the monthly balance of funds 5475 in the Florida Retirement System Contributions Clearing Trust 5476 Fund shall be transferred to the Florida Retirement System Trust 5477 Fund to pay the costs of providing pension plandefined benefit5478programbenefits and plan administrative costs under the pension 5479 plandefined benefit program. 5480 Section 38. Section 121.77, Florida Statutes, is amended to 5481 read: 5482 121.77 Deductions from memberparticipantaccounts.—The 5483 State Board of Administration may authorize the third-party 5484 administrator to deduct reasonable fees and apply appropriate 5485 charges to investment plan memberoptional retirement program5486participantaccounts. In no event mayshalladministrative and 5487 educational expenses exceed the portion of employer 5488 contributions earmarked for such expenses under this part, 5489 except for reasonable administrative charges assessed against 5490 memberparticipantaccounts of persons for whom no employer 5491 contributions are made during the calendar quarter. Investment 5492 management fees shall be deducted from memberparticipant5493 accounts, pursuant to the terms of the contract between the 5494 provider and the board. 5495 Section 39. Section 121.78, Florida Statutes, is amended to 5496 read: 5497 121.78 Payment and distribution of contributions.— 5498 (1) Contributions made pursuant to this part shall be paid 5499 by the employer, including the employee contribution, to the 5500 Division of Retirement by electronic funds transfer no later 5501 than the 5th working day of the month immediately following the 5502 month during which the payroll period ended. Accompanying 5503 payroll data must be transmitted to the division concurrent with 5504 the contributions. 5505 (2) The division, the State Board of Administration, and 5506 the third-party administrator, as applicable, shall ensure that 5507 the contributions are distributed to the appropriate trust funds 5508 or participant accounts in a timely manner. 5509 (3)(a) Employee and employer contributions and accompanying 5510 payroll data received after the 5th working day of the month are 5511 considered late. The employer shall be assessed by the Division 5512 of Retirement a penalty of 1 percent of the contributions due 5513 for each calendar month or part thereof that the contributions 5514 or accompanying payroll data are late. Proceeds from the 1 5515 percent1-percentassessment against contributions made on 5516 behalf of membersparticipantsof the pension plan mustdefined5517benefit program shallbe deposited in the Florida Retirement 5518 System Trust Fund, and proceeds from the 1-percent assessment 5519 against contributions made on behalf of membersparticipantsof 5520 the investment planoptional retirement programshall be 5521 transferred to the third-party administrator for deposit into 5522 memberparticipantaccounts, as provided in paragraph (c)(b). 5523 (b) Retirement contributions paid for a prior period shall 5524 be charged a delinquent fee of 1 percent for each calendar month 5525 or part thereof that the contributions should have been paid. 5526 This includes prior period contributions due to incorrect wages 5527 and contributions from an earlier report or wages and 5528 contributions that should have been reported but were not. The 5529 delinquent assessments may not be waived. 5530 (c)(b)If employee contributions or contributions made by 5531 an employer on behalf of membersparticipantsof the investment 5532 planoptional retirement programor accompanying payroll data 5533 are not received within the calendar month they are due, 5534 including, but not limited to, contribution adjustments as a 5535 result of employer errors or corrections, and if that 5536 delinquency results in market losses to membersparticipants, 5537 the employer shall reimburse each member’sparticipant’saccount 5538 for market losses resulting from the late contributions. If a 5539 memberparticipanthas terminated employment and taken a 5540 distribution, the memberparticipantis responsible for 5541 returning any excess contributions erroneously provided by 5542 employers, adjusted for any investment gain or loss incurred 5543 during the period such excess contributions were in the member’s 5544participant’saccount. The state board or its designated agent 5545 shall communicate to terminated membersparticipantsany 5546 obligation to repay such excess contribution amounts. However, 5547 the state board, its designated agents, the Florida Retirement 5548 System Investment PlanPublic Employee Optional Retirement5549ProgramTrust Fund, the department, or the Florida Retirement 5550 System Trust Fund may not incur any loss or gain as a result of 5551 an employer’s correction of such excess contributions. The 5552 third-party administrator, hired by the state board pursuant to 5553 s. 121.4501(8), shall calculate the market losses for each 5554 affected memberparticipant. If contributions made on behalf of 5555 membersparticipantsof the investment planoptional retirement5556programor accompanying payroll data are not received within the 5557 calendar month due, the employer shall also pay the cost of the 5558 third-party administrator’s calculation and reconciliation 5559 adjustments resulting from the late contributions. The third 5560 party administrator shall notify the employer of the results of 5561 the calculations and the total amount due from the employer for 5562 such losses and the costs of calculation and reconciliation. The 5563 employer shall remit to the Division of Retirement the amount 5564 due within 30 working days after the date of the penalty notice 5565 sent by the division. The division shall transfer that amount to 5566 the third-party administrator, which shall deposit proceeds from 5567 the 1-percent assessment and from individual market losses into 5568 memberparticipantaccounts, as appropriate. The state board may 5569 adopt rules to administer the provisions regarding late 5570 contributions, late submission of payroll data, the process for 5571 reimbursing memberparticipantaccounts for resultant market 5572 losses, and the penalties charged to the employers. 5573 (d) If employee contributions reported by an employer on 5574 behalf of members are reduced as a result of employer errors or 5575 corrections, and the member has terminated employment and taken 5576 a refund or distribution, the employer shall be billed and is 5577 responsible for recovering from the member any excess 5578 contributions erroneously provided by the employer. 5579 (e)(c)Delinquency fees specified in paragraph (a) may be 5580 waived by the divisionof Retirement, with regard to pension 5581 plandefined benefit programcontributions, and by the state 5582 board, with regard to investment planoptional retirement5583programcontributions, only if, in the opinion of the division 5584 or the board, as appropriate, exceptional circumstances beyond 5585 the employer’s control prevented remittance by the prescribed 5586 due date notwithstanding the employer’s good faith efforts to 5587 effect delivery. Such a waiver of delinquency may be granted an 5588 employer only once each planstate fiscalyear. 5589 (f) If the employer submits excess employer or employee 5590 contributions, the employer shall receive a credit to be applied 5591 against future contributions owed. The employer is responsible 5592 for reimbursing the member for any excess contributions 5593 submitted if any return of such an erroneous excess pretax 5594 contribution by the program is made within 1 year after making 5595 erroneous contributions or such other period allowed under 5596 applicable Internal Revenue guidance. 5597 (g)(d)If contributions made by an employer on behalf of 5598 membersparticipantsin the investment planoptional retirement5599programare delayed in posting to memberparticipantaccounts 5600 due to acts of God beyond the control of the Division of 5601 Retirement, the state board, or the third-party administrator, 5602 as applicable, market losses resulting from the late 5603 contributions are not payable to the membersparticipants. 5604 Section 40. Paragraph (a) of subsection (4) and paragraph 5605 (b) of subsection (5) of section 1012.875, Florida Statutes, are 5606 amended, and subsection (7) is added to that section, to read: 5607 1012.875 State Community College System Optional Retirement 5608 Program.—Each community college may implement an optional 5609 retirement program, if such program is established therefor 5610 pursuant to s. 1001.64(20), under which annuity or other 5611 contracts providing retirement and death benefits may be 5612 purchased by, and on behalf of, eligible employees who 5613 participate in the program, in accordance with s. 403(b) of the 5614 Internal Revenue Code. Except as otherwise provided herein, this 5615 retirement program, which shall be known as the State Community 5616 College System Optional Retirement Program, may be implemented 5617 and administered only by an individual community college or by a 5618 consortium of community colleges. 5619 (4)(a)1. Through June 30, 2011, each college must 5620 contribute on behalf of each program memberparticipantan 5621 amount equal to 10.43 percent of the employee’sparticipant’s5622 gross monthly compensation. 5623 2. Effective July 1, 2011, each member shall contribute an 5624 amount equal to the employee contribution required under s. 5625 121.71(3). The employer shall contribute on behalf of each 5626 program member an amount equal to the difference between 10.43 5627 percent of the employee’s gross monthly compensation and the 5628 employee’s required contribution based on the employee’s gross 5629 monthly compensation. 5630 3. The college shall deduct an amount approved by the 5631 district board of trustees of the college to provide for the 5632 administration of the optional retirement program. Payment of 5633 this contribution must be madeeitherdirectly by the college or 5634 through the program administrator to the designated company 5635 contracting for payment of benefits to the program member 5636participant. 5637 (5) 5638 (b) Benefits are payable under the optional retirement 5639 program to program participants or their beneficiaries, andthe5640benefits must bepaid only by the designated company in 5641 accordance with the terms of the contracts applicable to the 5642 program participant. Benefits shall accrue in individual 5643 accounts that are participant-directed, portable, and funded by 5644 employer and employee contributions and the earnings thereon. 5645 Benefits funded by employer and employee contributions are 5646 payable in accordance with the following terms and conditions: 5647 1. Benefits shall be payable only to a participant, to his 5648 or her beneficiaries, or to his or her estate, as designated by 5649 the participant. 5650 2. Benefits shall be paid by the provider company or 5651 companies in accordance with the law, the provisions of the 5652 contract, and any applicable employer rule or policy. 5653 3. In the event of a participant’s death, moneys 5654 accumulated by, or on behalf of, the participant, less 5655 withholding taxes remitted to the Internal Revenue Service, if 5656 any, shall be distributed to the participant’s designated 5657 beneficiary or beneficiaries, or to the participant’s estate, as 5658 if the participant retired on the date of death as provided in 5659 paragraph (d). No other death benefits areshall beavailable 5660 for survivors of participants under the optional retirement 5661 program except for such benefits, or coverage for such benefits, 5662 as are separately afforded by the employer at the employer’s 5663 discretion. 5664 (7) Benefits, including employee contributions, are not 5665 payable for employee hardships, unforeseeable emergencies, 5666 loans, medical expenses, educational expenses, purchase of a 5667 principal residence, payments necessary to prevent eviction or 5668 foreclosure on an employee’s principal residence, or any other 5669 reason before termination from all employment relationships with 5670 participating employers for 3 calendar months. 5671 Section 41. (1) Effective upon this act becoming a law, the 5672 State Board of Administration and the Department of Management 5673 Services shall request, as soon as practicable, a determination 5674 letter and private letter ruling from the United States Internal 5675 Revenue Service. If the United States Internal Revenue Service 5676 refuses to act upon a request for a private letter ruling, then 5677 a legal opinion from a qualified tax attorney or firm may be 5678 substituted for such private letter ruling. 5679 (2) If the board or the department receives notification 5680 from the United States Internal Revenue Service that this act or 5681 any portion of this act will cause the Florida Retirement 5682 System, or a portion thereof, to be disqualified for tax 5683 purposes under the Internal Revenue Code, then the portion that 5684 will cause the disqualification does not apply. Upon receipt of 5685 such notice, the state board and the department shall notify the 5686 presiding officers of the Legislature. 5687 Section 42. The Legislature finds that a proper and 5688 legitimate state purpose is served when employees and retirees 5689 of the state and its political subdivisions, and the dependents, 5690 survivors, and beneficiaries of such employees and retirees, are 5691 extended the basic protections afforded by governmental 5692 retirement systems. These persons must be provided benefits that 5693 are fair and adequate and that are managed, administered, and 5694 funded in an actuarially sound manner, as required by s. 14, 5695 Article X of the State Constitution and part VII of chapter 112, 5696 Florida Statutes. Therefore, the Legislature determines and 5697 declares that this act fulfills an important state interest. 5698 Section 43. For the 2011-2012 fiscal year, the sums of 5699 $207,070 of recurring funds and $31,184 of nonrecurring funds 5700 from the Florida Retirement System Operating Trust Fund are 5701 appropriated to, and four full-time equivalent positions are 5702 authorized for, the Division of Retirement within the Department 5703 of Management Services for the purpose of implementing this act. 5704 Section 44. Except as otherwise expressly provided in this 5705 act and except for this section, which shall take effect upon 5706 this act becoming a law, this act shall take effect July 1, 5707 2011.