RULE NO.: RULE TITLE:
19-11.001: Procedures Regarding Employer Contributions
19-11.002: Beneficiary Designation for FRS Investment Plan
19-11.003: Distributions from FRS Investment Plan Accounts
19-11.004: Excessive Trading in the FRS Investment Plan
19-11.005: FRS Investment Plan Complaint Procedures
19-11.006: Enrollment Procedures for New Hires
19-11.007: Second Election Enrollment Procedures for the FRS Retirement Programs
19-11.008: Forfeitures
19-11.009: Reemployment with an FRS-covered Employer after Retirement
19-11.010: FRS Investment Plan: Privacy
19-11.011: Employer and Employee Contributions
19-11.012: Acceptance of Rollovers by the FRS Investment Plan
PURPOSE AND EFFECT: To amend Rule 19-11.001, F.A.C., to include all pertinent definitions contained in Rule Chapters 19-11, 19-12 and 19-13, F.A.C., and to update such information. To amend Rule 19-11.002, F.A.C., to set forth information on distributions to beneficiaries currently set forth in Rule 19-11.003, F.A.C., to clarify, update, and detail such information; to set forth the requirements for distributions to minors when the amount will be in excess of $15,000, and to discuss disclaimers made by beneficiaries. To amend Rule 19-11.003, F.A.C. to update information on invalid distributions, and to remove information on distributions to beneficiaries that is more appropriately set forth in Rule 19-11.002, F.A.C. To amend Rule 19-11.004, F.A.C. to update information concerning excessive trading and to adopt the latest version of the paper trading form. To amend Rule 19-11.005, F.A.C. to update information concerning complaint procedures. To amend Rules 19-11.006, F.A.C. and Rule 19-11.007, F.A.C., to adopt the latest versions of the enrollment forms and second election enrollment forms and to remove unnecessary provisions in the rules, as such information is fully set forth in the adopted applicable forms. To amend Rule 19-11.008, F.A.C., to clarify information concerning forfeitures and to add information to indicate that a beneficiary who unlawfully and intentionally kills or procures the death of a member forfeits all rights to the member’s benefits. To amend Rule 19-11.009, F.A.C., to clarify information on reemployment with an FRS-covered employer. Rule 19-11.011 is being created to consolidate contributions provisions currently in Rules 19-11.001, 19-12.003 and 19-12.004, F.A.C., and add information pertaining to employee contributions. Rule 19-11.012, F.A.C. is being created to set forth information about rollovers currently set forth in Rule 19-12.007, F.A.C., in anticipation of the repeal of Chapter 19-12, F.A.C., to update and clarify such information, and to adopt forms for members to use when rolling qualified funds into the Investment Plan.
SUMMARY: To update information contained in all of the rules; to remove unnecessary and redundant rule provisions; to consolidate definitional provisions currently scattered throughout several rule chapters; to remove provisions that merely repeat statutory provisions; and to adopt the latest versions of applicable forms. There are no other rules incorporating any of these proposed rules.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:
The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency.
The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: Upon review of the proposed changes to the rules as well as all incorporated materials, the State Board of Administration has determined that the rules do not meet the statutory threshold for ratification by the legislature. There will be no impact on economic growth, job creation or employment, private-sector investment, or business competitiveness, and no increase in regulatory costs.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
RULEMAKING AUTHORITY: 121.4501(8) FS.
LAW IMPLEMENTED: 119.071, 120.569, 120.57, 120.573, 121.021, 121.051, 121.055, 121.091, 121.35, 121.4501(2), (3), (4), (5), (6), (8), (9), (10), (13),(14), (15), (20), 121.591, 121.71, 121.72, 121.74, 121.77, 121.78, 215.44(8)(b), 732.802, 744.301, 1012.875(3) FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE,TIME AND PLACE SHOWN BELOW(IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):
DATE AND TIME: Monday, June 4, 2012, 9:00 a.m. – 11:00 a.m.
PLACE: Hermitage Room, the Hermitage Centre, 1801 Hermitage Blvd., Tallahassee, Florida 32308
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Tina Joanos, Agency Clerk, Office of the General Counsel, State Board of Administration, 1801 Hermitage Blvd., Tallahassee, Florida 32308, (850)413-1197, tina.joanos@sbafla.com. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Ruth A. Smith, Assistant General Counsel, State Board of Administration, 1801 Hermitage Blvd., Tallahassee, Florida 32308, (850)413-1182, ruth.smith@sbafla.com

THE FULL TEXT OF THE PROPOSED RULE IS:

19-11.001 Definitions Procedures Regarding Employer Contributions.

(1) Purpose. This rule implements Section 121.78, F.S., and establishes procedures regarding employer contributions, late payrolls, assessments, and market losses.

(2) Definitions.

The following words and terms shall have the following meanings for purposes of Chapters 19-11 and 19-13, F.A.C.:

(1) “Accumulated Benefit Obligation” or “ABO” means the present value of a member’s benefit in the FRS Pension Plan, which is the defined benefit program of the Florida Retirement System, to which the member would be entitled if the member retired from the FRS Pension Plan. This present value shall be calculated in accordance with the formula set out in Section 121.4501(3)(b)1., F.S., by the Division of Retirement within the Department of Management Services. The ABO changes on a monthly basis based on the following factors: age, service, salary level, and membership class.

(2) “Administrator”, “Investment Plan Administrator”, or “Plan Choice Administrator,” means the entity hired by the SBA, pursuant to Section 121.4501(8)(a)1., F.S., to provide administrative services to the FRS Investment Plan or the entity responsible for processing enrollment forms received from employees making a retirement plan choice either by form or electronically.

(3) “Aggregate amount of $75,000 or more” means the total of the amounts transferred out of a fund by a member and into the same fund, in either order (i.e., in/out or out/in) during any rolling 30-calendar day period, regardless of the number of Round Trips.

(4) “Alternate Payee” is the person or persons eligible to receive payments under the Plan in accordance with a Qualified Domestic Relations Order (QDRO). A QDRO can only name a Member’s spouse, former spouse, child, or other dependent as an Alternate Payee.

(5) “Annual addition” means the sum for any limitation year of all employer and employee contributions which are treated as annual additions to a defined contribution plan for purposes of Section 415(c) of the U.S. Internal Revenue Code, as amended (“Code”) and forfeitures. Examples of such contributions to a defined contribution plan include the following: employer and employee contributions to the FRS Investment Plan; contributions to the Senior Management Service Optional Annuity Program described in Section 121.055(6), F.S.; contributions to a Code Section 401(k) plan; employer contributions to an individual retirement account; voluntary employee contributions to accounts in a defined benefit plan [but not including contributions to a qualified cost-of-living arrangement in accordance with Code Section. 415(k)]; amounts allocated to the separate account of a key employee for post-retirement medical benefits described in Code Section 419A(d)(2); and contributions to an individual medical benefit account, as described in Code Section 415(l). Examples of contributions which are not annual additions for purposes of Section 415(c) of the Code as applied to the FRS Investment Plan include the following: rollover contributions or transfers from another eligible retirement plan to the FRS Investment Plan; contributions to a Code Section 403(b) annuity plan; contributions to a Code Section 457 deferred compensation plan; and contributions which are additional elective deferrals under Code Section 414(v).

(6) “Benefits” is used in the same sense, and has the same meaning, as used in Section 121.4501(7), F.S.

(7) “Code” means the U.S. Internal Revenue Code, as amended. The Code is available free on the Internet at the following web site: uscode.house.gov.

(8) “Compensation” means the monthly salary paid by an employer to a member for work performed arising from that employment, as defined in Section 121.021(22), F.S.

(9)”Complaint” shall mean a member’s written or verbal expression of dissatisfaction with an FRS Investment Plan provider or one of its representatives.

(10) “Defined contribution plan” means a plan, such as the FRS Investment Plan, which provides for an individual account for each member and for benefits based solely on the amount contributed to the member’s account, and any income, expenses, gains and losses, and any forfeitures of accounts of other members which may be allocated to such member’s account.

(11) “De Minimus Distribution” is an automatic distribution made when an inactive member’s account balance is $1,000 or less.. However, such a distribution will not occur until the member has been terminated from all employment with FRS-covered employers for a minimum of six (6) calendar months.

(12) “Direct rollover” means a payment by the FRS Investment Plan to the eligible retirement plan specified by the distributee.

(13) “Distributee” means a member or former member who has taken a distribution from the FRS Investment Plan. In addition, the member’s or former member’s surviving spouse and the member’s or former member’s spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code s. 414(p), are distributees with regard to the interest of the spouse or former spouse.

(14) “Division” means the Division of Retirement within the Department of Management Services.

(15) “Domestic Relations Order” or “DRO” is any draft DRO, court judgment, decree, or order (including an approval of a property settlement agreement) that relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a member and that is made pursuant to a state domestic relations law (including a community property law).

(16) “Effective date of enrollment” or “effective enrollment in the FRS Investment Plan” means the employee completed the enrollment into the Plan by filing the appropriate enrollment form, or by electronic means, in the applicable membership class or by filing a separate document for the applicable membership class with the Administrator; the Administrator has entered the employee into its recordkeeping system; and the Administrator has informed the Division of the employee’s effective date of enrollment in either the FRS Pension Plan or the FRS Investment Plan. For purposes of this rule, the term “enrollment form” or “form” shall also refer to the separate document described in paragraph 19-11.006(2)(b), F.A.C.

(17) “Electronic Means” shall mean an enrollment made on the MyFRS.com website, by telephone or other technology as specified by the SBA.

(18) “Eligible retirement plan” means an individual retirement account described in Code s. 408(a), an individual retirement annuity described in Code s. 408(b), an annuity plan described in Code s. 403(a), an annuity contract described in Code s. 403(b), an eligible deferred compensation plan described in Code s. 457(b) which is maintained by an eligible employer described in Code s. 457(e)(1)(A) or a qualified trust described in Code s. 401(a), that accepts the distributee’s eligible rollover distribution.

(19) “Eligible rollover distribution” means any distribution of all or any portion of the balance of the member’s account(s) in the FRS Investment Plan to the credit of the distributee. An eligible rollover distribution does not include any distribution which is made upon hardship of the employee; any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee’s designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code s. 401(a)(9); the portion of any distribution that is not includible in gross income, unless transferred in accordance with the provisions of Code s. 402(c)(2) to a qualified trust which is part of a plan which is a defined contribution plan, or to an individual retirement account described in Code s. 408(a) or an individual retirement annuity described in Code s. 408(b); or a deemed distribution of a loan under Code s. 72(p).

(20) “Employee” means an eligible employee as defined in Section 121.4501(2)(d), F.S.

(21) “Employer” means an employer as defined in Section 121.4501(2)(e), F.S. For purposes of the FRS Investment Plan, there are three general categories of employers: state agencies; school districts; and local employers.

(22) “Excessive trading” means multiple occurrences of Market Timing Trades by a member. The definition of a Market Timing Trade is set forth in subsection (31) herein.

(23) “Exempt transaction” is any transaction that is initiated for purposes of: depositing employer payroll and employee contributions; processing a distribution; processing a Qualified Domestic Relations Order; or mapping funds from terminated products. Exempt transactions are not included in any calculations for the purposes of Rule 19-11.004, F.A.C.

(24) “FRS Investment Plan”, “Florida Retirement System Investment Plan,” or “Investment Plan” means the defined contribution retirement program of the Florida Retirement System, established in Parts II and III of Chapter 121, F.S. Although established in Parts II and III, certain parts of Part I of Chapter 121, F.S., also apply to the FRS Investment Plan. The FRS Investment Plan refers to both the FRS Investment Plan and the FRS Investment Plan Hybrid Option, also known as the FRS Hybrid Option.

(25) “FRS Investment Plan Hybrid Option” or “FRS Hybrid Option” means the plan choice option within the Florida Retirement System, established in Parts II and III of Chapter 121, F.S., in which a member chooses to retain his accrued service benefit in the FRS Pension Plan, in accordance with Section 121.4501(3)(b)1., F.S., and further chooses that all future employer and employee contributions be deposited in his FRS Investment Plan account.

(26) “FRS Investment Plan providers” are:

(a) The FRS Investment Plan Administrator;

(b) Companies providing educational services, which include retirement planning, financial planning services, and retirement plan choice guidance;

(c) Investment managers providing investment services supporting mutual funds or institutional funds offered in the FRS Investment Plan;

(d) Marketing companies providing marketing and educational support for their investment products or providing individual counseling; and

(e) Any other company or state agency providing Investment Plan services (including the State Board of Administration of Florida).

(27) “FRS Pension Plan” means the defined benefit retirement program of the Florida Retirement System, established in Part I of Chapter 121, F.S.

(28) “Florida Retirement System Trust Fund” or “FRSTF” shall mean the trust fund holding the assets of the FRS Pension Plan, which is the defined benefit plan of the Florida Retirement System.

(29) “Grace period” means that procedure described in subsection 19-11.006(3), F.A.C., which permits, under certain circumstances, the voiding of a retirement plan choice election.

(30) “In-service distribution” is an invalid distribution made to a member who is actively employed in a regularly established position at the time of taking a distribution.

(31) “Invalid distribution” is a distribution to a member to which the member was not entitled.

(32) “Limitation year” is the consecutive 12 month period of time to which Code limitations with respect to contributions and forfeitures are applied. For the FRS Investment Plan, the limitation year is the calendar year.

(33) “Market losses” shall be defined, for purposes of Section 121.78(3)(c), F.S., which states that employers shall reimburse FRS Investment Plan members for market losses resulting from late contributions, or from contribution adjustments as a result of employer errors or corrections, as the value of a member’s account that otherwise would have been realized had the employer and employee contributions and accompanying payroll data been submitted on a timely basis. “Market losses” applies only to the monthly contribution that is late, not to the member’s aggregate value in his or her Investment Plan account.

(34) “Market Timing Trade” is a member-directed series of trades with the following two characteristics:

1. At least one Roundtrip Trade within a 30-day period, and

2. The trade amount for all Roundtrip Trades is an aggregate amount of $75,000 or more.

(35) “Member”, “FRS Investment Plan Member,” or “Investment Plan Member means an employee who elected to participate, and has an account established, in the FRS Investment Plan as a result of current or previous employment with an FRS-covered employer; a person who has been designated as an alternate payee due to a qualified domestic relations order (“QDRO”); or a designated beneficiary when a member is deceased.

(a) “Public Employee Optional Retirement Program” or “PEORP” shall mean the optional defined contribution plan within the Florida Retirement System, established in Part II of Chapter 121, F.S.

(b) “PEORP Participant” shall mean an active member of the Florida Retirement System who has elected to join the PEORP.

(36)(c) “Member’s account” or “member’s accounts” “PEORP Participant’s accounts” or “PEORP accounts” shall mean an Iinvestment Plan accounts for an individual FRS Investment Plan member PEORP Participant in which employer and employee contributions and, if applicable, FRS Pension Plan benefit transfers, are invested for an FRS Investment Plan member PEORP Participant.

(d) For purposes of Section 121.78(3)(b), F.S., which states that employers shall reimburse PEORP Participants for market losses resulting from late contributions, or from contribution adjustments as a result of employer errors or corrections, the term “market losses” shall be defined as the value of a Participant’s account that otherwise would have been realized had the employer contribution and accompanying payroll data been submitted on a timely basis. “Market losses” applies only to the monthly contribution that is late, not to the Participant’s aggregate value in his PEORP account.

(37) “Qualified Domestic Relations Order” (“QDRO”) is a domestic relations order that has been determined to meet the FRS Investment Plan’s qualification requirements.

(38) “Required Minimum Distributions” (“RMD”) are the annual minimum distributions that must be taken by members who are age 70 1/2 or older from their qualified retirement plan accounts, including 401(k), 457, 403(b) plans and IRA accounts, when they terminate employment. The amount of an RMD in any year is based on account balances as of December 31st of the prior year. The member must have terminated all FRS covered employment in order for an RMD to be processed. Once the RMD has been calculated, the RMD will be paid to the member, even if the member returns to active FRS employment during the calendar year.

(39) “Retiree” is a member who has received a self-initiated distribution from the FRS Investment Plan.

(40) “Roundtrip Trade” occurs when a member conducts a series of at least two non-exempt transactions that include one or more transfers into an authorized investment fund and one or more transfers out of the same authorized investment fund in either order (i.e., in/out or out/in), regardless of any multiple transfers from or to other different authorized investment funds during the roundtrip.

(41)(e) “PEORP” Tthird Pparty Aadministrator” or “TPA” shall mean the Investment Plan third party Aadministrator hired by the Florida State Board of Administration pursuant to Section 121.4501(8), F.S.

(42) “SBA” means the State Board of Administration of Florida, the plan sponsor for the FRS Investment Plan.

(43) “True-up Amount” means the difference between the ABO calculated by using the member’s actual creditable service and the actual final average compensation as of the member’s effective date in the FRS Investment Plan and the ABO initially transferred.

(3) One percent penalty.

(a) The portion of the one percent penalty assessed on late contributions and accompanying payroll data attributable to contributions for the PEORP shall be deposited into the Participant’s account, using the PEORP Participant’s investment allocation in effect at the time of the deposit of the assessment in the Florida Retirement System Trust Fund.

(b) Any employer requesting a waiver of the delinquency fee in accordance with Section 121.78(3)(c), F.S., shall fully explain and certify such waiver request in writing to the Office of Defined Contribution Programs, State Board of Administration of Florida, 1801 Hermitage Blvd., Suite 100, Tallahassee, Florida 32308.

(4) Market loss calculation.

(a) The TPA will determine market losses using a PEORP Participant’s investment allocation in effect at the time of calculation. The TPA will perform the market value calculation using a period certain which is the 15th of the month in which the payroll is due, or the next succeeding business day if the day falls on a weekend or TPA-or Division of Retirement-observed legal holiday, in which contributions would have been processed, and ending on the date the payroll is received by the TPA.

(b) If contributions and accompanying payroll data are not received within the calendar month they are due, but that lateness does not result in market losses to participants, only the one percent late assessment will apply to the employer.

(c) The TPA will not perform the market loss calculation until a covered payroll and accompanying payroll data is received and processed by the TPA.

Rulemaking Specific Authority 121.78(3)(c), 121.4501(8) FS. Law Implemented 121.78, 121.4501 FS. History–New 12-8-02, Amended 3-9-06,________.

 

19-11.002 Beneficiary Designations and Distributions for FRS Investment Plan.

(1) An FRS Investment Plan member may designate name a beneficiary to receive the benefits which may be payable in the event of the member’s death. If the member does not designate name a beneficiary(ies), or if no designated beneficiary survives the member, then the member’s beneficiary(ies) will be those specified by as described in Section 121.4501(20), F.S. which are: first, the deceased member’s spouse; or if there is no surviving spouse, then the deceased member’s children, or their legal guardian, on their behalf if under 18 years of age; or if no children survive, the deceased if he or she is still living after the member’s death; second, living children, if the spouse is dead; third, the member’s father or mother, if living; otherwise fourth, to the deceased member’s estate. This means that the spouse will receive the member’s account balance if living; but if not, the children will receive the account balance, if living; but if not, the father or mother will receive the account balance, and if none of the people mentioned in this section are still living, the account balance will be paid to the member’s estate.

(2) Any such beneficiary designation may be made on Form IPBEN-1, rev. 03-11, http://www.flrules.org/Gateway/reference.asp?No=Ref-00255, which is hereby adopted and incorporated by reference. This form is available in paper form and may be obtained by calling the toll-free MyFRS Financial Guidance Line at 1(866)446-9377, Option 4 (TRS 711), Monday through Friday, except holidays, 9:00 a.m. to 8:00 p.m. or by accessing the MyFRS.com website and clicking on “Resources” and then “Forms.” The beneficiary designation form must be completed and received by the FRS Investment Plan Administrator before it becomes effective. Alternatively, a beneficiary may be designated electronically by logging on to MyFRS.com, clicking on “manage benefits,” then clicking on “manage investments,” and then clicking on “personal info”, or by calling the Investment Plan Administrator at 1(866)446-9377, Option 4 (TRS 711).

(3)(2) A designation of beneficiary designation shall only be effective once it is after it has been received by the FRS Investment Plan Administrator. The most recent designation of beneficiary designation filed with the FRS Investment Plan Administrator shall replace any previous designation whether made before or after the member’s termination of employment or retirement. After submitting the designation, tThe member is responsible for confirming whether the designation has been received by should determine after the designation has been mailed that the form has arrived in the offices of the FRS Investment Plan Administrator. It is the responsibility of the member to ensure the beneficiary designation has been made. The beneficiary designation is printed Beneficiary information can be reviewed every quarter on the member’s quarterly statement.

(4)(a)(3) If the FRS Investment Plan member enrolls in the FRS Investment Plan using the EZ Retirement Plan Enrollment Form for Regular, Special Risk and Special Risk Administrative Support Class Employees, Form ELE-1-EZ, rev. 11/11 06/06, the General Retirement Plan Enrollment Form for Regular Special Risk and Special Risk Administrative Support Class Employees, Form ELE-1, rev. 01/12 10/06, which are adopted and incorporated by reference in subsection 19-11.006(2)(4), F.A.C., or the 2nd Election EZ Retirement Plan Enrollment Form, Form ELE-2-EZ, rev. 07/11 12/06, or the 2nd Election Retirement Plan Enrollment Form, Form ELE-2, rev 01/12 12/06, which are adopted and incorporated by reference in subsection Rule 19-11.007(3), F.A.C., the member agrees to has chosen the beneficiary designation contained in Section 121.4501(20), F.S., unless the member submits a beneficiary designation as provided in subsection (2) herein. (See subsection (1), above.) Note that the

(b) statutory section provides that If the member dies prior to his or her effective date of retirement, the member’s spouse at the time of death shall be the member’s beneficiary unless the deceased member had designated a different beneficiary after his or her most recent marriage. Therefore,

(c) Iif the member marries after designating a beneficiary, the member must file an updated beneficiary designation form if the member wishes to name someone else other than the spouse as a beneficiary. If the member does not file an updated beneficiary designation form, the member’s spouse will be the beneficiary of the member’s account. Example: John is married to Betty and has named her as his beneficiary. John divorces Betty and marries Carol. Carol will be John’s beneficiary unless he files another beneficiary form and names, for example, his son, Bob. Pursuant to subsection (1),

(d) Oonce a the member is enrolled in the FRS Investment Plan, the member may designate a change his beneficiary designation at any time, as follows:.

(4) A member may name a beneficiary or beneficiaries at any time, as follows:

1.(a) A member may name a beneficiary or beneficiaries to receive the assets of the member’s FRS Investment Plan account, either sequentially or jointly.

2.(b) A member may name as beneficiary any person, organization, trust, or the member’s his estate.

(e)(c) A primary beneficiary is someone who will receive the member’s funds from the FRS Investment Plan account, if that person is living at the death of the member. If there are more than one primary beneficiary, is designated with specified named with percentages of the funds, they will each will receive their member-specified designated percentages if they are still living at the death of the member. Example: if the member names his four sons, in equal shares (25% each), but two of the four sons die before their father, the other two living sons split the funds two ways, 50% each. If joint primary beneficiaries are named but the member does not specify any percentages of the funds, the beneficiaries will receive equal portions of the remaining funds.

(f)(d) A contingent beneficiary is one or more persons who are named, in case all primary beneficiaries die before the member. Contingent beneficiaries may receive benefits jointly or sequentially. Naming a contingent beneficiary is optional. The member does not have to name anyone as a contingent beneficiary.

(e) Any such beneficiary designation may be made on Form IPBEN-1, rev. 03-11, http://www.flrules.org/Gateway/reference.asp?No=Ref-00255 which is hereby adopted and incorporated by reference. This form is available in paper form and may be obtained by calling the toll-free MyFRS Financial Guidance Line at 1(866)446-9377, Monday through Friday, except holidays, 9:00 a.m. to 8:00 p.m. or by accessing the MyFRS.com website and clicking on “Resources” and then “Forms.” The beneficiary designation form must be completed and received by the FRS Investment Plan Administrator before it becomes effective. Alternatively, a beneficiary may be designated electronically by logging on to MyFRS.com, clicking on “manage benefits,” then clicking on “manage investments,” and then clicking on “personal info.”

(g)(f) If a member inadvertently uses an incorrect beneficiary designation form, the FRS Investment Plan Administrator will notify the member and request that the member complete and submit the correct form, Beneficiary Designation Form IPBEN-1, rev. 03-11. If the member should die prior to completing and submitting the IPBEN-1 form, the FRS Investment Plan Administrator will consider the beneficiary set forth on the incorrect form as being the member’s intended beneficiary for the purpose of paying benefits.

(g) A member may change his beneficiary designation at any time by filing a new beneficiary designation form or by designating a new beneficiary electronically. There is no separate form for changes of beneficiary designation.

(5)(a) If a member is married and the names his or her spouse is designated as a primary beneficiary, regardless of whether the percentage allocated to the spouse on the form is less than 100%, the member is not required to notify the spouse.

(b) If However, if a member is married and names a primary beneficiary(ies) and the person(s) named is not the spouse of the member, then the member is required to notify the spouse that the spouse he or she is not a primary beneficiary of the proceeds of the member’s FRS Investment Plan account(s). The spouse must acknowledge that he or she understands that the spouse he or she is not a primary beneficiary of the member’s FRS Investment Plan account(s) by signing the beneficiary designation form, Form IPBEN-1, rev. 03-11, in the appropriate place.

(c) If a married member fails to obtain the spouse’s acknowledgment on the beneficiary designation form, then the Investment Plan Administrator will send to the member will be sent an Acknowledgement of Beneficiary Designation, reminding the member of the necessity of obtaining the spousal acknowledgement. The member can return this Acknowledgement of Beneficiary Designation with the spouse’s signature which will provide the acknowledgement from the spouse that the spouse is aware that he or she is not the primary beneficiary of the member’s FRS Investment Plan account(s). Alternatively, the member spouse may provide the FRS Investment Plan Administrator with a notarized statement reflecting the spouse’s understanding that the spouse is not the beneficiary of the member’s FRS Investment Plan account(s).

(d)(b) If the member fails to obtain the his or her spouse’s acknowledgement that a beneficiary, other than the spouse, has been designated as the primary beneficiary of the member’s Investment Plan benefit, the beneficiary designation on file with the FRS Investment Plan Administrator at the time of the member’s death will be honored only if the spouse’s rights as a beneficiary are not compromised under Florida law.

(6)(a) An Alternate Payee may name a beneficiary to receive the benefits which may be payable in the event of the Alternate Payee’s death at any time, as outlined in paragraphs (2) and (5) (4)(a) through (f) above, once the Alternate Payee’s account has been established by the FRS Investment Plan Administrator.

(b) If the Alternate Payee does not name a beneficiary(ies), then the Alternate Payee’s beneficiary(ies) will be those as described paragraph (1). in Section 121.4501(20)(a), F.S., which are: first, the spouse if he or she is still living after the member’s death; second, living children, if the spouse is dead; third, the member’s father or mother, if living; fourth, to the member’s estate. This means that the spouse will receive the member’s account balance if living; but if not, the children will receive the account balance, if living; but if not, the father or mother will receive the account balance, and if none of the people mentioned in this section are still living, the account balance will be paid to the Alternate Payee’s estate.

(7) Distributions to beneficiaries on the death of a member.

(a) If a member dies before his or her effective date of retirement, the member’s spouse at the time of his or her death shall be the member’s beneficiary, unless the member has designated a different beneficiary after the member’s most recent marriage. If the member did name another beneficiary after his or her most recent marriage, the named beneficiary will receive the member’s account balance.

(b) Upon notification of the member’s death, the FRS Investment Plan Administrator will contact the designated beneficiary or the family of the deceased member and provide instructions on how to claim any benefits.

(8) Distributions to designated or per Florida law spousal beneficiaries.

(a) The member’s surviving spouse, must provide a certified copy of the member’s death certificate and, if the spouse is not designated by the member, but is the beneficiary according to Florida law, the surviving spouse must provide a copy of the marriage certificate before benefits will be paid.

(b) Spousal beneficiaries may request the following distributions:

1. Full distribution, in which the entire account balance is paid in one lump sum. If this option is selected, the spouse no longer will be a member of the FRS Investment Plan.

2. Partial Distribution, which provides for a partial lump sum payment of the account balance. The remainder may be paid out through regular periodic payments that the spouse selects, such as monthly, quarterly, semi-annually or annually. The spouse also may defer payment of the remainder of the account balance and take additional partial lump sum payments as needed.

3. Periodic Payments, which allows for the establishment of a regular payment schedule of benefits, such as monthly, quarterly, semi-annually or annually. The amount of each benefit payment will be calculated by dividing the account balance on the date of the benefit payment by the remaining number of payments. As such, the amount of the benefit payment may change with each payment. If the account has multiple funds and sources, the periodic withdrawal amount will be prorated among all funds and sources in the account. The number of years over which the payments are made cannot exceed the spouse’s life expectancy, which is determined by an actuarial table prepared by the U.S. Department of the Treasury.

4. Deferrals until a certain age, which allows the spouse to defer the receipt of benefits until a later date. However, the spouse must begin receiving the benefit payout no later than April 1 in the calendar year after the member would have attained age 70 1/2. The spouse may elect a full distribution, partial distribution or periodic payment. However, the total annual benefit payment must equal or exceed the federal Required Minimum Distribution (RMD). An additional benefit payment will be sent to the spouse in December of any year in which the total periodic payments for that year do not equal or exceed the spouse’s RMD.

5. Roll over the account assets to another 401(a), 401(k) or a 403(b) plan, or to an Individual Retirement Account or Roth IRA.

(9) Distributions to designated non-spousal individual beneficiaries and look-through trusts or beneficiaries determined by Florida law.

(a) In accordance with Internal Revenue Service (IRS) rules, non-spousal beneficiary accounts cannot be held indefinitely in the FRS Investment Plan. The “required minimum distribution” is required by the Internal Revenue Service and spelled out in IRS Code Section 401(a)(9), requiring that if the beneficiary is not a spouse, the Investment Plan can hold the distribution for no more than 5 years from the date of the member’s death.

(b) For a non-spousal beneficiary or a look-through trust beneficiary, there are two possibilities, depending upon whether payments from the account had commenced before the member’s death:

1. Where distributions have already begun to the member, but the member dies before the entire account has been distributed, the remaining portion of the account must be distributed at least as rapidly as under the method of distribution being used as of the date of the member’s death.

2. If a member dies before the distribution of the member’s account has begun, the entire account of the member must be distributed within 5 years after the death of the member, unless:

a. The member’s account will be distributed over the life of the designated beneficiary or the beneficiary of the look-through trust (or over a period not extending beyond the life expectancy of such beneficiary), and

b. Such distributions begin no later than 1 year after the member’s death.

(c) The non-spousal beneficiary must decide within 1 year of the date of death to take lifetime installment or annuity payouts.

(d) If the whole amount is not paid out during the required 5-year period, the remaining funds in the account will be paid in a lump sum to the non-spousal beneficiary.

(e) Non-spousal individual beneficiaries and look-through trusts may request the following distributions:

1. Full distribution, in which the entire account balance is paid in one lump sum. If this option is selected, the beneficiary no longer will be a member of the FRS Investment Plan.

2. Partial Distribution, which provides for a partial lump sum payment of the account balance. The remainder may be paid out through regular periodic payments that the spouse selects, such as monthly, quarterly, semi-annually or annually. The beneficiary also may defer payment of the remainder of the account balance and take additional partial lump sum payments as needed.

3. Periodic Payments, which allows for the establishment of a regular payment schedule of benefits, such as monthly, quarterly, semi-annually or annually. The amount of each benefit payment will be calculated by dividing the account balance on the date of the benefit payment by the remaining number of payments. As such, the amount of the benefit payment may change with each payment. If the account has multiple funds and sources, the periodic withdrawal amount will be prorated among all funds and sources in the account. The number of years over which the payments are made cannot exceed the life expectancy of the non-spousal beneficiary or of the beneficiary of the look-through trust, which is determined by an actuarial table prepared by the U.S. Department of the Treasury. If the beneficiary stops the payment for any reason, then the payout of the benefits will be governed by the time limitations set forth in paragraph (b).

4. Deferrals of up to 5 years, however the benefit must be distributed within 5 years after the death of the member, if the conditions in subparagraph (b)2. above have not been met.

(10) Distributions to the member’s designated estate or to a designated non look-through trust.

(a) A beneficiary which is either the member’s estate or a non look-through trust is considered as non-persons. Pursuant to Code Section 401(a)(9), the entire interest of the member must be distributed to such beneficiary within 5 years after the death of the member.

(b) The estate or non look-through trust beneficiary has two options for receiving the benefit payment:

1. Full distribution, in which the entire account balance is paid in one lump sum. If this option is selected, the beneficiary no longer will be a member of FRS Investment Plan.

2. Deferrals of up to 5 years, however the benefit must be distributed within 5 years after the death of the member.

(11) Distributions to beneficiaries who are minors.

(a) A minor is a child under the age of 18.

(b) When a minor child or children are the designated beneficiary(ies) of the member, whether the member is the minor’s or minors’ parent, grandparent, sibling, other relative or any other person, a copy of the birth certificate of each minor child and the social security number for each minor child must be provided to the FRS Investment Plan Administrator, and must be received prior to any payout, regardless of the amount. The birth certificate provides proof as to identity of the natural guardian(s) of the children, so that appropriate payment arrangements may be made.

(c) Section 744.301, F.S., allows for the natural guardian (surviving parent(s)) to handle benefits to a minor child where that amount does not exceed $15,000, without court appointment, authority or bond.

(d) In all cases in which a minor is a beneficiary of an account balance which is greater than $15,000, the surviving parent(s), or other relative or other interested party, must apply for a formal guardianship. A court order or court appointment and Letters of Guardianship will be required prior to payout of any benefits to the minor. The FRS Investment Plan Administrator shall place a hold on any account where the minor beneficiary is to receive an amount in excess of $15,000 and advise the SBA.

(e) If the individual responding to the correspondence sent by the Administrator and providing instructions for payout is not the surviving parent(s), the Administrator shall request the individual to provide a Court Order wherein a guardian has been appointed for the minor, prior to payout of any benefit and the Administrator shall take directions only from the named guardian.

(f) If no instructions for payout are received, the Administrator shall notify the SBA and the SBA will contact the probate court with jurisdiction over the estate of the member to request direction on the disposition of the minor’s interest in the account. Expenses shall be deducted from the member’s account.

(12)(7) A beneficiary, whether designated or pursuant to Florida law, of a deceased member who, by a verdict of a jury or by a court trying the case without a jury, is found guilty, or who has entered a plea of guilty or nolo contendere, of unlawfully and intentionally killing or procuring the death of such member shall forfeit all rights to the deceased member’s retirement benefits. Any benefits will be paid as if such beneficiary had predeceased the deceased member. No benefits will be paid until there is a final resolution of such charges against the beneficiary.

(13)(8)(a) If the deceased member has designated named a beneficiary but has not provided the designated beneficiary’s social security number or address, or has set forth an incorrect if the social security number is incorrect, then, after at least three unsuccessful attempts by the SBA or the FRS Investment Plan Administrator to locate contact the beneficiary, the FRS Investment Plan Administrator will advise the SBA accordingly and the account will not be distributed.

(b) The FRS Investment Plan Administrator will, with the assistance of the SBA, at the time of notification of death, make a reasonable effort to obtain the beneficiary’s Social Security Number or Taxpayer Identification Number, using available search tools, including the internet, LexisNexis Accurint, the Internal Revenue Service, and the Social Security Administration.

(c) After one year from the date of the member’s death, if the beneficiary cannot be located, the account will be transferred to the Suspense Account. Additionally, Bby calendar year-end, of each year following the transfer to the Suspense Account, the FRS Investment Plan Administrator will attempt to locate and obtain the Social Security Number or the Taxpayer Identification Number of the beneficiary. The transferred funds shall be invested in the FRS Select U.S. Treasury Inflation-Protected Securities Index Fund. The amount will be held in the FRS Investment Plan Suspense Account until (1) the beneficiary contacts the FRS Investment Plan; or (2) another beneficiary requests consideration as the deceased’s proper beneficiary; or, (3) at the end of 10 years in the Suspense Account, the amount is transferred to the FRS Investment Plan Forfeiture Account, where it is held indicating the name of the deceased member and the name of the beneficiary, if known.

(c) If after one year from date of death no information is available to identify the beneficiary, the FRS Investment Plan Administrator will transfer the funds to the FRS Investment Plan Suspense Account, indicating the name of the deceased member and the name of the beneficiary. The transferrred funds shall be invested in the FRS Select U.S. Treasury Inflation-Protected Securities Index Fund. The amount will be held in the FRS Investment Plan Suspense Account until (1) the beneficiary contacts the FRS Investment Plan; or (2) another beneficiary requests consideration as the deceased’s proper beneficiary; or, (3) at the end of 10 years in the Suspense Account, the amount is transferred to the FRS Investment Plan Forfeiture Account, where it is held indicating the name of the deceased member and the name of the beneficiary if known.

(d) Should the beneficiary be located and provides a social security number, a check will be issued to the beneficiary, with actual earnings, from the date of transfer from the member’s account to the Suspense Account subject to applicable income tax withholding, which shall be paid to the tax authorities at the time of such payment to the beneficiary.

(14)(9)(a) Pursuant to Federal guidelines, if the deceased member’s account is to be paid to the member’s estate but no Estate Identification Number is provided, the account will not be paid to the Estate until receipt of the Estate Identification Number is received. In the event that no Estate Identification Number is provided within one year from the date of notification to the FRS Investment Plan Administrator of the member’s death, the FRS Investment Plan Administrator will transfer the deceased member’s account to the Suspense Account indicating the name of the deceased member and the name of the beneficiary. If after 10 years after the date of death, the FRS Investment Plan Administrator has not received an Estate Identification Number, the deceased member’s account will be transferred to the FRS Investment Plan Forfeiture Account where it will be held indicating the name of the deceased member. The transferred funds shall be invested in the FRS Select U.S. Treasury Inflation-Protected Securities Index Fund.

(b) The FRS Investment Plan Administrator will, at the time of the transfer to the Suspense Account, make a reasonable effort to obtain the Estate Identification Number. Additionally, by calendar year-end of each year following the transfer to the Suspense Account, the FRS Investment Plan Administrator will attempt to locate and obtain the Estate Identification Number.

(c) The amount will be held in the FRS Investment Plan Suspense Account until (1) the member’s estate representative contacts the FRS Investment Plan; or (2) a beneficiary requests consideration as the deceased’s proper beneficiary; or, (3) at the end of 10 years in the Suspense Account, the amount is transferred to the FRS Investment Plan Forfeiture Account, where it is held indicating the name of the deceased member.

(d) Should the estate’s representative subsequently provide an Estate Identification Number, a check will be issued to the estate, with actual earnings, from the date of transfer from the member’s account to the Suspense Account while invested in the FRS Select U.S. Treasury Inflation-Protected Securities Index Fund. Any applicable income tax withholding, which shall be paid to the appropriate tax authorities at the time of the benefit such payment to the estate.

(15)(10) If the social security number and date of birth of a the named beneficiary are known, an account will be established in the beneficiary’s name and funds will be transferred thereto. If any other beneficiaries are named, accounts also will be established in their names, provided their social security numbers and dates of birth are made known to the Investment Plan Administrator. However, no distribution will be made to any beneficiary until a certified copy of the member’s death certificate has been received. In the meantime, the beneficiary will have control over any investment elections/allocations for the account. The beneficiary will be notified of the establishment of the account and will receive a PIN to access information pertaining to the account.

(16)(a) A designated beneficiary may disclaim any monetary interest as provided in Chapter 739, Florida Statutes and Internal Revenue Code Section 2518. A beneficiary can make a partial disclaimer or disclaim the entire interest. When a beneficiary makes a disclaimer, the beneficiary is considered to have predeceased the member, and the other beneficiaries designated by the member may then accept or disclaim any interest to which they are entitled.

(b) The general requirements for a valid disclaimer are that:

1. The beneficiary must provide an irrevocable and unqualified refusal to accept the assets.

2. The refusal must be in writing.

3. The written disclaimer must be submitted to the FRS Investment Plan Administrator at the later of the following times:

a. Nine months after the retirement account owner dies.

b. Nine months after the beneficiary attains age 21, or if the beneficiary is 21 when the retirement account owner dies.

c. The beneficiary must not have accepted any of the inherited assets prior to the disclaimer.

d. The assets must pass to the successor beneficiary without any direction on the part of the person making the disclaimer.

(c) There is no special form or document that an individual must complete to disclaim inherited assets. A letter, duly notarized, is sufficient as long as it meets the requirements set forth in paragraph (b).

Rulemaking Authority 121.4501(8) FS. Law Implemented 121.091(5)(j), (8), 121.4501(20), 121.591(3), 732.802 FS. History– New 10-21-04, Amended 3-9-06, 11-26-07, 12-8-08, 1-7-10, 8-7-11,________.

 

19-11.003 Distributions from FRS Investment Plan Accounts.

(1) Purpose. The purpose of this rule is to clarify the provisions regarding distributions from FRS Investment Plan accounts. Distributions from FRS Investment Plan accounts are made either after the member account-holder terminates employment from all FRS-participating employers or after at the member’s account-holder’s death.

(2) Forms. All forms identified in this rule may be obtained by calling the (toll-free) MyFRS Financial Guidance Line at 1(866)446-9377, or by accessing the MyFRS website at www.MyFRS.com, clicking on Resources, and then on Forms.

(2)(3) Distributions available after the member terminates FRS-covered employment.

(a) An FRS Investment Plan member shall not be entitled to an account distribution until the member has from his account unless he has been terminated employment from all FRS-participating employers covered employment, including temporary, part-time, Other Personal Services (OPS) and any regularly established position with an FRS employer, for three (3) calendar months following the month of termination, except as provided in paragraph (2)(d) below. Example: If a member terminates on May 15, the three calendar months are June, July, and August. Therefore, the member cannot request a distribution until September.

(b) If the member’s termination date has not been submitted by the employer via the monthly payroll file within three (3) calendar months, the employer can complete and return the “Employment Termination Form,” Form ETF-2, rev. 08/10, http://www.flrules.org/Gateway/reference.asp?No=Ref-01105, which is hereby adopted and incorporated by this reference. The termination form can be obtained by accessing the MyFRS website at www.MyFRS.com, clicking on Resources, and then on Forms or by calling the MyFRS Financial Guidance Line at 1(866)446-9377, Option 4 or, for members who are deaf, hard of hearing, or speech impaired, TRS 711 found on the MyFRS.com website. This form has instructions and a section for the employer to provide the member’s date of termination certification. Alternatively, the employer can log onto the employer page at MyFRS.com and go to Online Payroll and submit the termination date electronically.

(c) Upon the expiration of the three calendar months after termination, the member may request a distribution from the FRS Investment Plan Administrator, by calling the toll free MyFRS Financial Guidance Line at 1(866)446-9377, Option 4 (TRS 711), or by logging on to the MyFRS.com website, accessing his or her personal account information, and then requesting the distribution through the online services.

(d) A member who has reached his or her normal retirement date, as provided in Section 121.021(29), F.S., and If a member has terminated employment from all FRS-covered employment for one calendar month and he has reached his normal retirement date, in accordance with Section 121.021(29), F.S., he may request a one-time distribution of up to 10 percent (10%) of the vested his account balance. For example, if such a member terminates on May 15, the one calendar month is June. Therefore, Tthe member can request a one-time distribution of up to 10 percent (10%) in July.

(e) A member who transfers to the Pension Plan from the Investment Plan and leaves a balance in the member’s Investment Plan account is a member of the Pension Plan and, as such, the member cannot take a distribution of the surplus Investment Plan funds until the member begins receiving his Pension Plan benefits.

(3)(4) All distributions of benefits from a member’s Participant’s account(s) in the Investment Plan shall begin and be made no later than as prescribed by Code s. 401(a)(9) and the regulations issued thereunder, including any proposed regulations, and shall be subject to the incidental death benefit rules of Code s. 401(a)(9)(G). A copy of the Code section can be obtained by accessing the IRS website at irs.gov and clicking on the Tax Professionals section, and then clicking on the Code, Regs. & Guidance section.

(a) Distribution of benefits to a member Participant shall be made or commence not later than April 1 following the close of the later of the calendar year during which the member Participant attains age 70 1/2 or retires.

(b) If distribution of benefits has commenced before a Participant’s death, any remaining benefits must be distributed at least as rapidly as under the method of distribution being used as of the date of the Participant’s death.

(c) If a Participant dies before the commencement of distributions from the Participant’s account(s) in the Plan, the method of distribution shall be as follows:

1. Any benefits not payable to a beneficiary designated by the Participant shall be distributed within five years after the Participant’s death.

(b)2. Any benefits payable to a beneficiary designated by the Participant shall be distributed as set forth in Rule 19-11.002, F.A.C. over the life of such beneficiary (or over a period certain not extending beyond the life expectancy of such beneficiary), commencing not later than the end of the calendar year immediately following the calendar year in which the Participant died. If the designated beneficiary is the surviving spouse of the Participant, distributions shall commence on or before the later of the end of the calendar year immediately following the calendar year in which the Participant died and the end of the calendar year in which the Participant would have attained age 701/2.

3. If the designated beneficiary is the surviving spouse of the Participant and the surviving spouse dies before distributions to such spouse begin, this paragraph (c) shall be applied as if the surviving spouse were the Participant.

(4)(5) A member may request bBenefits to shall be distributed to a Participant as a periodic or installment distribution, a partial lump-sum payment, a roll-over to another qualified plan, various annuity options, or a lump-sum distribution whereby a portion of the accrued benefit is paid to the Participant less withholding taxes remitted to the Internal Revenue Service and the remaining amount is transferred directly to the custodian of an eligible retirement plan on behalf of the Participant, or as otherwise provided by Section 121.591(1)(c), F.S. Any distribution, if applicable, will be subject to the withholding of taxes which are remitted to the Internal Revenue Service. Benefits shall be distributed to a survivor as provided in Section 121.591(3)(c), F.S. A distributee shall have the option to have all or any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

(5)(6) All distributions of benefits must be made in accordance with Code provisions, which shall override any distribution options inconsistent with such provisions.

(7) Distributions to beneficiaries on the death of a member.

(a) If a member dies before his effective date of retirement, the member’s spouse at the time of his or her death shall be the member’s beneficiary, unless the member has designated a different beneficiary after the member’s most recent marriage. If the member did name another beneficiary after his or her most recent marriage, the named beneficiary will receive the member’s account balance.

(b) Procedures for beneficiary designations are addressed in Rule 19-11.002, F.A.C.

(c) On the death of a member, the beneficiary must file Form IP-DBF, “Death Benefit Information and Distribution Claim Form,” rev. 01-10, http://www.flrules.org/Gateway/reference.asp?No=Ref-00425 which is hereby adopted and incorporated by reference, with the FRS Investment Plan Administrator, to receive benefits.

This form is available in paper form and may be obtained by calling the toll-free MyFRS Financial Guidance Line at 1(866)446-9377, Monday through Friday, except holidays, 9:00 a.m. to 8:00 p.m. or by accessing the MyFRS.com website and clicking on “Resources” and then “Forms.”

(d) A beneficiary, whether designated or pursuant to Florida law, of a deceased member who, by a verdict of a jury or by a court trying the case without a jury, is found guilty, or who has entered a plea of guilty or nolo contendere, of unlawfully and intentionally killing or procuring the death of such member shall forfeit all rights to the deceased member’s retirement benefits. Any benefits will be paid as if such beneficiary had predeceased the deceased member. No benefits will be paid until there is a final resolution of such charges against the beneficiary.

(6)(8) Distributions to Alternate Payees as a result of a Qualified Domestic Relations Order (QDRO).

(a) Upon receipt of a QDRO from a court of competent jurisdiction, the amount of the member’s Investment Plan assets specified by the QDRO will be transferred to the named alternate payee. Tthe named alternate payee may leave the transferred assets their account in the Investment Plan or request a distribution from the account once the account has been established in the alternate payee’s name as provided in the QDRO and the aAlternate pPayee has received a their Personal Identification Number (PIN).

(b) Upon receipt of the PIN, the alternate payee may request a distribution by calling the toll free MyFRS Financial Guidance Line at 1(866)446-9377, Option 4 or by logging on to MyFRS.com, go to “Manage My Benefits,” “Manage Investments,” accessing their personal account information, and then requesting the distribution through the online services.

(7)(9) De Minimus Distributions.

(a) If an inactive member’s account balance is $1,000 or less, such amount may be subject to an automatic distribution. However, a distribution will not occur until the member has been terminated from all employment with FRS-covered employers for a minimum of six (6) calendar months.

(b) If the member meets the termination requirements and upon receiving notification of the automatic distribution, the distribution either will be made as a complete lump-sum liquidation of the account balance, subject to the provisions of the Internal Revenue Code, or if so instructed by the member, a lump-sum direct rollover distribution on the member’s behalf paid directly to the custodian of an eligible retirement plan, as defined by the Internal Revenue Code. If a member rolls money into the Investment Plan from another qualified plan, which brings the account balance greater than $1,000, no automatic distribution will occur unless the balance should become $1,000 or less in the future.

(c) If such member returns to FRS-covered employment after receiving this automatic distribution, the member is not considered a reemployed retiree and will not be subject to any limitation applicable to such employees.

(8)(10) Required Minimum Distributions (“RMD”).

(a) Members, age 70 1/2 or older, must begin taking an annual minimum distribution from their qualified plan accounts including 401(k), 457, 403(b) plans and IRA accounts if they have terminated employment. The amount of an RMD in any year is based on account balances as of December 31st of the prior year. The member must have terminated all FRS covered employment in order for an RMD to be processed. Once the RMD has been calculated, the RMD will be paid to the member, even if the member returns to active FRS employment during the calendar year.

(b) The FRS Investment Plan Administrator will notify a member who is subject to an RMD distribution at the beginning of each calendar year. At the end of the calendar year in which the RMD was required to be paid, if the member has not requested the required RMD distribution amount, the FRS Investment Plan Administrator will initiate an automatic RMD to meet the mandatory required distribution amount. Members have the right to defer the initial RMD to April of the year following the year in which the RMD was payable. Members can defer the initial RMD by calling the FRS Investment Plan Administrator at 1(866)446-9377, Option 4 or, for members who are deaf, hard of hearing, or speech impaired, TRS 711, by November 30.

(c) If such member returns to FRS-covered employment after receiving this automatic distribution, the member is not considered a reemployed retiree and will not be subject to any limitations applicable to such employees.

(11) Distributions to non-spousal beneficiaries.

(a) In accordance with Internal Revenue Service (IRS) rules, non-spousal beneficiary accounts cannot be held indefinitely in the FRS Investment Plan. The amount of time a non-spousal beneficiary has before benefits must commence are more restrictive than for a spousal beneficiary. The “required minimum distribution” is required by the Internal Revenue Service and spelled out in IRS Code Section 401(a)(9), requiring that if the beneficiary is not a spouse, the Investment Plan can hold the distribution for no more than 5 years from the date of the member’s death.

(b) For a non-spousal beneficiary, there are two possibilities, depending upon whether payments from the account had commenced to the member before his or her death:

1. Where distributions have already begun to the member, but the member dies before his or her entire account has been distributed, the remaining portion of the account must be distributed at least as rapidly as under the method of distribution being used as of the date of the member’s death.

2. If a member dies before the distribution of the member’s account has begun, the entire account of the member must be distributed within 5 years after the death of the member, unless:

a. The member’s account will be distributed over the life of the designated beneficiary (or over a period not extending beyond the life expectancy of such beneficiary), and

b. Such distributions begin no later than 1 year after the date of the member’s death.

(c) The non-spousal beneficiary must decide within 1 year of the date of death to take lifetime installment or annuity payouts; otherwise, the entire account balance must be distributed within 5 years.

(d) If the whole amount is not paid out during the required 5-year period, the remaining funds in the account will be paid in a lump sum to the non-spousal beneficiary.

(12) Beneficiaries who are minors.

(a) A minor is a child under the age of 18. Section 744.301, F.S., allows for the natural guardian (surviving parent) to handle benefits to a minor child where that amount does not exceed $15,000, without court appointment, authority or bond.

(b) In all cases where a minor child or children are the beneficiary(ies) of the member, a copy of the birth certificate of all minor children shall be sent to the FRS Investment Plan Administrator, and shall be received prior to any payout, regardless of the amount. The purpose is to provide proof that the surviving parent is the natural guardian of the children. The FRS Investment Plan Administrator shall confirm that the surviving parent is providing the instructions for any payment arrangements being made.

(c) In all cases in which a minor is a beneficiary of an account balance which is greater than $15,000, the FRS Investment Plan Administrator shall place a hold on the account and advise the SBA of the situation and the SBA shall send instructions to the FRS Investment Plan Administrator for any additional action.

(d) If the individual responding to the correspondence sent by the Administrator and providing instructions for payout is not the surviving parent, the Administrator shall request the individual to provide a Court Order wherein a guardian has been appointed for the minor, prior to payout of any balance and the Administrator shall take directions only from the named guardian.

(e) If no instructions for payout are received, the Administrator shall notify the SBA and the SBA will contact the probate court with jurisdiction over the estate of the member to request direction on the disposition of the minor’s interest in the account. Expenses shall be deducted from the member’s account.

(9)(13) Invalid distributions.

(a) An “invalid distribution” is a distribution given to a member to which the member is not entitled.

(a)(b) If a member or a former member of the FRS Investment Plan receives an invalid distribution, the member or former member is required to repay the entire invalid distribution within 90 days of the member’s receipt of a final notification from the SBA, or in lieu of repayment, the member must terminate employment from all participating employers. If the member fails to repay the invalid distribution, or terminate employment, the employer is liable for the repayment of the invalid distribution even if the member signed a statement at the time the member was hired that no benefit had been received from the Plan.

1. If a member repays the entire distribution, the member’s repayment will be deposited in the his FRS Investment Plan account; the member he will be returned to the Investment Plan; and all future employer contributions will be deposited in the funds the member he has chosen.

2. If the employer repays the entire distribution, the repayment will be deposited in the Investment Plan Trust Fund and allocated to the Investment Plan’s forfeiture account to offset plan expenses. The member will be returned to the Investment Plan; and all future employer contributions will be deposited in the funds the member has chosen.

3. If the member fails to repay the invalid distribution and terminates employment, the SBA will declare the member a “retiree” and will not pursue the repayment of the invalid distribution pursuant to paragraph (b) above. As a “retiree,” the member is subject to the provisions restrictions of Section 121.122, F.S., which means that if the member is reemployed in the future with an FRS-covered employer, in a regularly established position the member is not eligible for Special Risk membership, or for the Deferred Retirement Option Program, nor for disability benefits. Section 121.122, F.S., has other restrictions and should be read by the member with his or her particular situation in mind.

(b)(c) The following are examples of scenarios that could result in invalid distributions. They are only examples and are not inclusive of all possible situations. Members and employers are encouraged to contact the FRS Investment Plan Administrator to discuss the particular situation.

1. Example 1: A member joined the FRS Investment Plan effective September 1, 2002. He terminated all employment from his FRS-covered employer on August 24, 2009. On December 15, 2009, he takes a partial distribution from his Investment Plan account. However, he returned to FRS-covered employment with a participating employer on December 1, 2009. The member took an invalid distribution because he was working for an participating FRS-covered employer at the time he received the distribution. His payroll record reflected the August 24, 2009, termination date but did not yet reflect his rehire date. Therefore, because the payroll report is not required from the employer to the Division of Retirement until the 5th business day of the month following the end of the work-month, the FRS Investment Plan Administrator, which receives its information from the Division of Retirement, had no knowledge of his return to work in the middle of December, since the information would not have arrived until at least January 6. The member is asked at the time of the distribution whether he is employed or pending employment with an FRS covered employer. If it is determined that the member knew or reasonably knew the answer to this question was yes, the member has taken an invalid distribution.

2. Example 2: A member joined the FRS Investment Plan effective April 1, 2004. He terminates all FRS-covered employment on November 12, 2009. The member has not reached his normal retirement date. On March 1, 2010, the member takes a total distribution from his Investment Plan account. The member returns to FRS-covered employment on April 15, 2010. The March 1, 2010 distribution is invalid since the member returned to work within 6 calendar months of his retirement date.

3. Example 3: A member joined the FRS Investment Plan effective May 1, 2005. The member He terminates all FRS-covered employment on November 12, 2009. The member has reached the his normal retirement date. On January 5, 2010, the member receives his one-time distribution of up to 10 percent from the his Investment Plan account. The member returns to FRS-covered employment on May 15, 2010. The January 5, 2010 distribution is invalid since the member returned to work within 6 calendar months of his retirement date.

(10)(14) Documentation of a distribution made prior to August 30, 2007.

A member or beneficiary who requests documentation of a distribution made prior to August 30, 2007 will incur a special service charge due to the extensive resources required to retrieve and produce such documentation. The requestor will be advised of the amount of such charge at the time request is made. Upon payment of the charge by the requestor, the request will be promptly processed.

Rulemaking Authority 121.4501(8)(a), FS. Law implemented 119.07(4)(d), 121.021(29), (39), 121.091(5)(j), 121.4501(20), 121.591, 121.77, 732.802 FS. History-New 3-9-06, Amended 11-26-07, 5-19-09, 1-7-10, 8-7-11,________.

 

19-11.004 Excessive Trading in the FRS Investment Plan.

(1) Purpose.

(a) The purpose of this rule is to mitigate the negative impact on members in the FRS Investment Plan from excessive trading and to establish limitations on such excessive trading. The Trustees of the State Board of Administration of Florida (SBA) have a fiduciary duty to make decisions about the FRS Investment Plan in the best interests of all members and beneficiaries.

(b) Excessive trading by just a few of a fund’s investors can disrupt fund operations, increase expenses and harm fund performance for all investors. In particular, some members have shown a high proclivity to make numerous short-term trades in foreign stock funds in an attempt to exploit funds’ pricing conventions and other technical factors. Therefore, this rule establishes limitations so that excessive trading between approved investment funds shall be prevented, without materially inhibiting all members’ opportunities to direct contributions and account balances between investment funds with a frequency that is appropriate in light of the market volatility of the funds.

(c) The Executive Director of the SBA is directed to establish a policy on excessive trading in Section V of the Investment Policy Statement, adopted and incorporated by reference in Rule 19-9.001, F.A.C. This rule establishes that policy.

(1) Excessive trading by Investment Plan members is prohibited.

(d)1. Effective October 16, 2007, Tthe United States Securities and Exchange Commission (SEC) has adopted Rule 22c-2 (17 CFR §270.22c-2.), regarding excessive trading for open-end mutual funds. Rule 22c-2 can be obtained by accessing the SEC website at sec.gov and clicking on the Laws and Regulations section. This rule does not apply to institutional funds nor to mutual funds for which the SBA has received exemptions. This rule gives mutual funds the right to ask the FRS Investment Plan Administrator for information about members and their trading activities. If the mutual funds determine that the member has engaged in excessive trading under the mutual funds’ policies, the mutual funds are entitled to impose redemption fees or prevent trading that violates the mutual funds’ excessive trading policies. It is the responsibility of the member to comply with the trading restrictions permitted by the SEC U.S. Securities and Exchange Commission. Any applicable fees will be deducted directly from the members’ accounts. To prevent FRS Investment Plan members from having to pay monetary penalties or being prevented from making additional transactions, the FRS has requested that the Administrator use its “best efforts,” by using a computer-based system, to monitor members’ trading activities and to prevent restricted trades from occurring in any of the three mutual funds in subparagraph 2., below. However, if a restricted trade is not prevented, the member will be responsible for paying any monetary penalties through a reduction in his or her account balance in the amount of the penalty and will also be subject to continued trading restrictions.

2. All approved mutual funds in the FRS Investment Plan have agreed to use the Investment Plan’s excessive trading policy as outlined in this rule except the following three funds: Fidelity Growth Company, T. Rowe Price Small Cap Stock, and PIMCO High Yield. When this list changes, members will be notified. Note that the restrictions in the SEC Rule 22c-2 are in addition to the restrictions in this Rule 19-11.004, F.A.C.

(2) Definitions.

(a) A “member” is a person who has an account established in the FRS Investment Plan as a result of current or previous employment with an FRS-covered employer, or being designated as an alternate payee due to a qualified domestic relations order (“QDRO”) or being a designated beneficiary when a member is deceased.

(b) A “Roundtrip Trade” occurs when a member conducts a series of at least two non-exempt transactions that include one or more transfers into an authorized investment fund AND one or more transfers out of the same authorized investment fund in either order (i.e., in/out or out/in), regardless of any multiple transfers from or to other different authorized investment funds during the roundtrip.

(c) An “exempt transaction” is any transaction that is initiated for purposes of: depositing employer payroll contributions; processing a distribution; processing a QDRO; or mapping funds from terminated products. Exempt transactions are not included in any calculations for the purposes of this rule.

(d) “Excessive trading” involves multiple occurrences of Market Timing Trades by a member over time.

(e) A “Market Timing Trade” is a member-directed series of trades with the following two characteristics:

1. At least one Roundtrip Trade within a 30-day period, and

2. The trade amount for all Roundtrip Trades is an aggregate amount of $75,000 or more.

(f) “Aggregate amount of $75,000 or more” means the total of the amounts transferred out of a fund and into the same fund, in either order (i.e., in/out or out/in) during any rolling 30-calendar day period, regardless of the number of Round Trips.

(2)(3) Limitations.

(a) Regarding authorized Fforeign and or global stock funds are subject to a minimum holding of seven (7) calendar days following any non-exempt transfers into such funds.: After making a non-exempt transaction by transferring any portion of their account balance into an authorized foreign or global or stock fund, members are prohibited from completing a Roundtrip Trade in that fund for a minimum of 7 calendar days, using the convention of last-dollar-in and first-dollar-out for the roundtrip calculation.

(b) Regarding Aall authorized investment funds, except for money market funds, are subject to the following controls:

1. Members who engage in Market Timing Trades (as defined in Rule 19-11.001, F.A.C.) in authorized funds will receive a warning letter sent by U.S. mail. The warning letter shall notify the member that excessive trades have been identified in the member’s his/her accounts and any additional violations will result in a direction letter.

2. Members who engage in Market Timing Trades in authorized funds and who have previously received a warning letter described in subparagraph 1., above, will be sent a direction letter delivered by courier. The direction letter shall require that the member shall not have access to automated online trade instructions for at least one full calendar month following the date of the direction letter. The member shall be required to conduct trades via telephone by contacting the Investment Plan Administrator for at least one full calendar month. “One full calendar month,” in this context, means the full calendar month following the month in which the direction letter is received.

3. Members who engage in Market Timing Trades and who have previously received a direction letter, as described in subparagraph 2., above, will be sent another direction letter, delivered by courier. This direction letter shall require that the member shall not have access to automated trade instructions for at least three full calendar months following the date of the direction letter. The member shall be required to conduct trades via telephone by contacting the Investment Plan Administrator for at least three full calendar months.

4. Members who engage in Market Timing Trades and who have previously received a direction letter as described in subparagraph 3., above, will be sent another direction letter, delivered by courier. The direction letter shall require that the member shall only be permitted to conduct trades via paper trading forms for at least three full calendar months following the date of the direction letter. The form to be used by the member in conducting the trades is the “Transfer Request Form, Excessive Fund Trading Violators,” Form EFTPV-1, rev. 063/1009, http://www.flrules.org/Gateway/reference.asp?No=Ref-01127, which hereby is adopted and incorporated by this reference. The form will be sent to the member by the Plan Administrator with the direction letter. This form must be notarized and returned to the Office of Defined Contribution Programs, via US mail, certified\return receipt requested.

5. Members who engage in Market Timing Trades and who have previously received a direction letter as described in subparagraph 4., above, will be sent another direction letter, delivered by courier. The direction letter shall require that the member shall only be permitted to conduct trades via paper trading forms for at least twelve full calendar months following the date of the direction letter. The form to be used by the member in conducting the trades is the “Transfer Request Form, Excessive Fund Trading Violators,” Form EFTPV-1, rev. 063/1009, which hereby is adopted and incorporated by this reference. This form must be notarized and returned to the Office of Defined Contribution Programs, via US mail, certified\return receipt requested.

6. Members who engage in Market Timing Trades and who have previously received a direction letter as described in subparagraph 5., above, will be sent another direction letter, delivered by courier. The direction letter shall require that the member shall only be permitted to conduct trades via paper trading forms for the remainder of any time that any balance exists in the member’s Investment Plan account following the date of the direction letter. The form to be used by the member in conducting the trades is the “Transfer Request Form, Excessive Fund Trading Violators,” Form EFTPV-1, rev. 063/1009, which hereby is adopted and incorporated by this reference. This form must be notarized and returned to the Office of Defined Contribution Programs, via US mail, certified\return receipt requested.

(c) If Member A receives a direction letter as described in subparagraph (3)(b)2., above, on November 15, Member A’s access to automated online trade instructions shall be denied until January 1. “One full calendar month,” in this context, means the full calendar month following the month in which the direction letter is received. The direction letter, in this example, was received in November. The “one full calendar month” is December. Therefore, access will not be resumed until January.

(3)(4) This subsection contains examples only. This subsection does not contain an exhaustive list of all possible transactions. Members avoiding these examples will not necessarily avoid the impact of this rule since other transactions will meet the definitions of Market Timing Trades or Excessive Trading.

(a) If Member A transfers $50,000 out of Fund A and into Fund B on Monday and then transfers $20,000 out of Fund B on Tuesday, the transaction is a Roundtrip Trade but is not a Market Timing Trade because the aggregate amount of $75,000 specified in subparagraph (2)(e)2., above, has not been met.

(b) If Member A transfers $50,000 out of Fund A and into Fund B on Monday and then transfers $55,000 out of Fund B on the following Monday, the transaction is a Roundtrip Trade and a Market Timing Trade because the aggregate amount of all trades in and out of Fund B has exceeded $75,000 ($50,000 + $55,000 = $105,000) within a 30 day period.

(c) If Member A transfers $5,000 out of Fund A and into Fund B on November 1 and then transfers $25,000 out of Fund A and into Fund B on November 3, and then transfers $10,000 out of Fund A and into Fund B on November 5 and then transfers $40,000 out of Fund B and into Fund A on November 15, the entire series of transactions constitutes a Roundtrip Trade and is a Market Timing Trade because the aggregate amount of all trades into and out of Funds A and B each exceeded $75,000 within a 30 day period.

(d) If Member A transfers $5,000 out of Fund A and puts $2,500 into Fund B and $2,500 into Fund C on December 1 and then transfers $25,000 out of Fund A and puts $20,000 into Fund B and $5,000 into Fund C on December 5, and then transfers $10,000 out of Fund A and puts $10,000 into Fund C on December 6 and then transfers $23,000 out of Fund B and into Fund A and $20,000 out of Fund C into Fund A on December 16, the entire series of transactions constitutes a Roundtrip Trade and is a Market Timing Trade because the aggregate amount of all trades into and out of Fund A exceeded $75,000 within a 30 day period. It is irrelevant that money has come out of one fund and been transferred into two funds because the money has been returned to the original fund.

(e) Member A transfers $50,000 out of Fund A and into a foreign stock fund, which already contains $100,000, on October 1, so that on October 1, the foreign stock fund contains $150,000. Member A must wait until October 9 to transfer any or all of the $150,000 in funds out of the foreign stock fund.

(f) Member A transfers $250,000 in his FRS Investment Plan account and is the subject of a QDRO with the result that the Member’s spouse becomes entitled to half of the Member’s FRS Investment Plan account. A total of $125,000 is transferred from the Member’s account to a newly-established account for the Member’s spouse and the funds are put into a foreign stock fund on December 1. On December 5, the Member’s spouse rolls over the entire $125,000 into an IRA. This is neither a Roundtrip Trade nor a Market Timing Trade because the transfer is an exempt transaction, as defined in Rule 19-11.001, F.A.C. as described in paragraph (2)(c), above.

(g) A member transfers $32,000 into Fund A on August 5 and then transfers $32,000 out of Fund A on August 11 and then transfers $31,000 into Fund A on August 17 and finally transfers $31,000 out of Fund A on August 18. The entire series of trades are Roundtrip Trades and the trades are also a Market Timing Trade because the aggregate amount of all trades exceeded $75,000 within a 30 day period.

(5) For all members, Roundtrip and Market Timing Trades are calculated using a rolling 30-calendar day time period. If a trade occurs on May 15 and the following 30-calendar day period, from May 165 through June 143, includes a sufficient number of trades to fit the definition of a Market Timing Trade, this rule shall apply.

Rulemaking Authority 121.4501(8) FS. Law Implemented 121.4501(13), (14), (15) FS. History–New 10-21-04, Amended 3-9-06, 10-25-07, 12-8-08, 1-7-10,________.

 

19-11.005 FRS Investment Plan Complaint Procedures.

(1) Request for Intervention Purpose. Section 121.4501(9)(f)3., F.S., requires that the State Board of Administration “. . . develop procedures to receive and resolve participant complaints against a provider or approved provider personnel, and, when appropriate, refer such complaints to the appropriate agency.” The following procedures outline the SBA’s policy in handling complaints filed against Investment Plan providers, including the third party administrator, education providers, and investment providers.

(2) Definitions.

(a) “Complaint” shall mean a participant’s written or verbal expression of dissatisfaction with an Investment Plan provider or one of its representatives.

(b) “Investment Plan” shall mean the Public Employee Optional Retirement Program as defined in Section 121.4501(2)(g), F.S.

(c) “Investment Plan providers” are:

1. Third Party Administrator, the FRS Investment Plan Administrator;

2. Companies providing Investment Plan education;

3. Investment managers providing investment services supporting mutual funds or institutional funds offered in the FRS Investment Plan;

4. Marketing companies providing marketing and educational support for their investment products or providing individual counseling; and

5. Any other company or state agency providing Investment Plan services (including the State Board of Administration of Florida).

(d) “Member” means an employee who elects to participate in the FRS Investment Plan and enrolls in such program as provided in Section 121.4501(4), F.S. For purposes of this rule, “member” also includes FRS employees who have not elected the FRS Investment Plan but who claim that they intended to join but were prevented for various reasons.

(e) “SBA” means the State Board of Administration of Florida, the plan sponsor for the FRS Investment Plan.

(3) Procedures.

(a) Any FRS Investment Plan or FRS Pension Plan member who has a complaint regarding the FRS laws, rules, plan provisions or services rendered by an Investment Plan or MyFRS Financial Guidance Program provider or one of the representatives thereof Intervention:

1. The Member may send a written Request for Intervention to the SBA for intervention and resolution. The written Request for Intervention shall be sent:

1.a. By regular US mail service to:

Investment Plan Complaint Resolution

Office of Defined Contribution Programs

State Board of Administration

P. O. Box 13300

Tallahassee, FL 32317-3300

2.b. By e-mail: DefinedContributionPrograms@sbafla.com; or

3.c. By fax: (850)413-1489.

(b)2. The Member shall use “FRS Investment Plan Request for Intervention,” Form SBA-RFI 01/2009, contained in the FRS Investment Plan Complaint Procedures package, http://www.flrules.org/Gateway/reference.asp?No=Ref-01128, which is hereby adopted and incorporated by reference. The form may be obtained by using the toll free number at 1(866)446-9377, Option 4, (TRS 711), and requesting that the form it be mailed to the Member or by accessing the MyFRS.com website, clicking on Resources, and then clicking on Forms. By using this form, the Member grants permission to the SBA to obtain any personally identifiable information shared with or generated by any services provider to the FRS, including the MyFRS Financial Guidance Program.

(c)3. The Member must provide all information requested by the form. If all information is not provided, the member form shall be required returned to submit another completed form, upon notification by the SBA the Member so that the missing information can be added.

(d)4. Upon receipt of the complete Request for Intervention, an acknowledgment will be sent by regular US mail or emailed to the Member.

(e)5. The SBA will conduct an investigation and will prepare and send to the Member an final agency action letter detailing the SBA’s findings; any proposed resolution; and information on any the next steps in the dispute resolution process.

(2)(b) Second Step: Hearing Request for Hearing.

(a)1. If the Member is not satisfied with the proposed resolution as set out in the final agency action letter and the Member wishes to protest the determination, the Member must may file a fully-completed Petition for Hearing, “FRS Investment Plan Petition for Hearing,” Form SBA-PFH 01/2009, contained in the FRS Investment Plan Complaint Procedures package, http://www.flrules.org/Gateway/reference.asp?No=Ref-01128, which is hereby adopted and incorporated by reference, with the SBA. The Petition for Hearing is routinely attached to the final agency action letter and may also be obtained by calling the toll free number at 1(866)446-9377, Option 4, (TRS 711), and requesting that it be sent to the Member or by accessing the MyFRS.com website, and clicking on Resources and then clicking on Forms. The Petition for Hearing must be received within 21 days of the Member’s receipt of the final agency action letter or it will be rejected as untimely and the Member will have waived his right to a hearing.

(b)2. The Member shall use “FRS Investment Plan Petition for Hearing,” Form SBA-PFH 01/2009. By signing the FRS Investment Plan Petition for Hearing, using this form, the Member thereby grants permission to the SBA to obtain any personally identifiable information shared with or generated by any services provider to the FRS, including the MyFRS Financial Guidance Program. Any such information obtained will be used by the SBA for the sole purpose of resolving the complaint.

(c)3. Upon receipt of the Petition for Hearing, Tthe SBA has 15 days to respond to the Ppetition for Hearing, in accordance with Section 120.569(2)(a), F.S.

(d)4. If the hearing request contains a disputed issue of material fact, the SBA shall, within the required 15 days, forward the hearing request to the Division of Administrative Hearings, requesting that an administrative law judge be assigned to conduct the hearing and will so notify the Member accordingly.

(e)5. If there is no disputed issue of material fact, then the SBA shall assign the matter to a presiding officer, who will send out a “Notice of Proceeding and Initial Order of Instructions” to the Petitioner and to Respondent’s counsel.

(f)6. The balance of the hearing process shall conform to the requirements of Chapter 120, F.S.

(g) A Final Order will be issued by the SBA after the conclusion of the hearing process. The Member will have appeal rights as set forth in Section 120.68, F.S.

Rulemaking Authority 121.4501(8)(a) FS. Law Implemented 120.569, 120.57, 120.573, 121.4501(8)(g)(9)(f)3. FS. History–New 10-21-04, Amended 3-9-06, 11-26-07, 5-19-09,________.

 

19-11.006 Enrollment Procedures for New Hires.

(1) Purpose. This rule adopts procedures and forms for enrollment in the Florida Retirement System Investment Plan for employees who become employed in a regularly established position with a state employer commencing after April 1, 2002; or with a district school board employer commencing after July 1, 2002; or with a local employer commencing after October 1, 2002.

(2) Definitions.

(a) “ABO,” which is the acronym for the “accumulated benefit obligation,” means the present value of a member’s benefit in the FRS Pension Plan, which is the defined benefit program of the Florida Retirement System, to which the member would be entitled if the member retired from the FRS Pension Plan. This present value shall be calculated in accordance with the formula set out in Section 121.4501(3)(c)2., F.S., by the Division of Retirement within the Department of Management Services. The ABO changes on a monthly basis based on the following factors: age, service, salary level, and membership class.

(b) “Division” means the Division of Retirement within the Department of Management Services.

(c) “Administrator” means the entity hired by the SBA, pursuant to Section 121.4501(8)(b)1., F.S., to provide administrative services to the FRS Investment Plan and is responsible for processing enrollment forms received from employees making a retirement plan choice either by form, by telephone, or on the MyFRS.com website.

(d) “Effective date of enrollment or effective enrollment in the FRS Investment Plan” means that the employee has completed enrollment by filing the enrollment form for his membership class or by filing a separate document for his membership class with the Administrator; that the Administrator has entered the employee into its recordkeeping system; and that the Administrator has informed the Division of the employee’s effective date of enrollment in either the FRS Pension Plan or the FRS Investment Plan. For purposes of this rule, the term “enrollment form” or “form” shall also refer to the separate document described in paragraph 19-11.006(4)(b), F.A.C., below.

(e) “Electronic Means” shall mean an enrollment on the MyFRS.com website, by telephone or other technology as specified by the SBA in a subsequent amended rule.

(f) “Employee” means an eligible employee as defined in Section 121.4501(2)(d), F.S.

(g) “Employer” means an employer as defined in Section 121.4501(2)(e), F.S. For purposes of the FRS Investment Plan, there are three general categories of employers: state agencies; school districts; and local employers.

(h) “FRS Investment Plan” means the defined contribution retirement program of the Florida Retirement System, established in Parts II and III of Chapter 121, F.S. Although established in Parts II and III, certain parts of Part I of Chapter 121, F.S., also apply to the FRS Investment Plan. The FRS Investment Plan has two parts: the FRS Investment Plan and the FRS Investment Plan Hybrid Option, also known as the FRS Hybrid Option.

(i) “FRS Pension Plan” means the defined benefit retirement program of the Florida Retirement System, established in Part I of Chapter 121, F.S.

(j) “Florida Retirement System Trust Fund” or “FRSTF” shall mean the trust fund holding the assets of the FRS Pension Plan, which is the defined benefit plan of the Florida Retirement System.

(k) “Grace Period” means that procedure described in subsection (6), below, which permits, under certain circumstances, the voiding of a retirement plan election.

(l) “Member” means an employee who elects to join the FRS Investment Plan or the FRS Investment Plan Hybrid Option.

(m) “Public Employee Optional Retirement Program’’ or “PEORP” means the defined contribution retirement program of the Florida Retirement System established by Section 121.4501, F.S., more commonly known as the FRS Investment Plan.

(n) “SBA” means the State Board of Administration of Florida.

(o) “True-up Amount” means the difference between the ABO calculated by using the member’s actual creditable service and the actual final average compensation as of the member’s effective date in the FRS Investment Plan and the ABO initially transferred.

(1)(3) General Enrollment Procedures.

(a) All newly-hired employees are initially enrolled in the FRS Pension Plan. If a newly-hired employee chooses, within the statutory election period, to enroll in the FRS Investment Plan, or the FRS Investment Plan Hybrid Option, the effective date of enrollment in the FRS Investment Plan or the FRS Investment Plan Hybrid Option is the date of hire of the employee. However, the employer contributions received by an employee prior to effective enrollment in the FRS Investment Plan or the FRS Investment Plan Hybrid Option will be transferred into the employee’s FRS Investment Plan or FRS Investment Plan Hybrid Option account at the rate the employer was required to contribute for that employee. Only after effective enrollment in the FRS Investment Plan or the FRS Investment Plan Hybrid Option will the employee receive the employer contribution at the FRS Investment Plan or FRS Investment Plan Hybrid Option rate appropriate to that employee’s class of membership, as specified in Section 121.4501(4)(a)2.b., (b)2.b., and (c)2.b., F.S.

(b) Eligible newly-hired employees enrolled in the regular, special risk, and special risk administrative support classes may choose to enroll in the FRS Investment Plan by submitting an enrollment form or by electronic means.

(c) Eligible newly-hired employees may enroll in the FRS Investment Hybrid Option if they have at least 5 years of FRS Pension Plan service, if enrolled in the FRS prior to July 1, 2011, or at least 8 years of FRS Pension Plan service, if initially enrolled in the FRS on or after July 1, 2011.

(d)(c) Eligible newly-hired employees enrolled in the Elected Officers’ Class or Senior Management Service Class may only enroll in the FRS Investment Plan by submitting an enrollment form.

(e)(d) Eligible newly-hired employees eligible to enroll in the Community College Optional Retirement Program or State University System Optional Retirement Program may only enroll in the FRS Investment Plan by submitting an enrollment form.

(f)(e) Enrollment forms are available in the enrollment package which is sent to an employee’s address of record or by accessing www.MyFRS.com, and clicking on Resources and then on Forms; or by calling toll-free 1(866)446-9377, or for the hearing impaired TRS 711 1(888)429-2160.

(2)(4) Specific Enrollment Procedures.

(a) All newly-hired employees may enroll in the FRS Investment Plan no later than 4:00 p.m. Eastern Time the last business day of the 5th month following the employee’s month of hire or may elect to remain in the FRS Pension Plan. Example: If an employee is hired on January 15, the employee he must complete a plan choice elect the FRS Investment Plan no later than 4:00 p.m. Eastern Time the last business day of June. If no plan choice is filed, the employee will default to the FRS Pension Plan.

(b) The employee must be actively employed, earning salary and service credit when the plan choice is processed by the FRS Plan Choice Administrator.

(c)(b) The SBA has designed the following forms set forth below for ease of use for employees in the several membership classes of the Florida Retirement System. As an alternative, an employee not wishing to use the forms may provide the same information requested by the forms available for use outlined in this Rule 19-11.006, F.A.C., for the appropriate his membership class in a separate document. Employees may determine their membership class by contacting the agency’s inquiry of their human resources office at their agency. The forms available are: an EZ Retirement Plan Enrollment Fform, Form ELE-1-EZ, rev. 11-11, http://www.flrules.org/Gateway/reference.asp?No=Ref-01073, which is only for regular, special risk, and special risk administrative support class employees; a General Retirement Plan Enrollment Fform, Form ELE-1, rev. 01-12 http://www.flrules.org/Gateway/reference.asp?No=Ref-01074 for regular, special risk, and special risk administrative support class employees; an Elected Officers’ Class Retirement Plan Fform, Form EOC-1, rev. 01-12, http://www.flrules.org/Gateway/reference.asp?No=Ref-01075; a Community College Optional Retirement Program (CCORP) Enrollment Form Retirement Plan Choice form, Form OCC-1, rev. 01-12, http://www.flrules.org/Gateway/reference.asp?No=Ref-01076; a State University System Optional Retirement Program (SUSORP) Retirement Plan Enrollment Form, Form ORP-16, rev. 01-12, http://www.flrules.org/Gateway/reference.asp?No=Ref-01077 ORP-Eligible Employee Retirement Plan form; a State Senior Management Service Employees Retirement Plan Enrollment Fform, Form SMS-1, Rev. 01-12, http://www.flrules.org/Gateway/reference.asp?No=Ref-01078; and a Local Senior Management Service Employees Retirement Plan Enrollment Fform, Form SMS-3, rev. 01-12, http://www.flrules.org/Gateway/reference.asp?No=Ref-01079. All of the preceding forms are hereby adopted and incorporated by this reference.

1. All enrollment forms can be obtained at the sources listed in paragraph (1)(f) (3)(b), above.

2. Only members of the regular, special risk, and special risk administrative support classes of employees may use the EZ form, “EZ Retirement Plan Enrollment Form for Regular, Special Risk and Special Risk Administrative Support Class Employees,” Form ELE-1-EZ, rev. 01/10, which is hereby adopted and incorporated by reference http://www.flrules.org/Gateway/reference.asp?No=Ref-00420. If an employee chooses to use the EZ form, only limited information (i.e., name, plan choice, social security number and signature) is required. The FRS Select Moderate Balanced Fund is the only initial investment option (although that investment option may be changed by the mMember once the account is funded). Beneficiary designations may be made as set forth in Rule 19-11.002, F.A.C. No beneficiary identifying information is required on the EZ form. However, beneficiary designations must be made either on forms prescribed for that purpose or electronically by logging onto MyFRS.com, clicking on “manage benefits,” then clicking on “manage investments,” and then clicking on “personal info.” If no beneficiary designation is made, the Plan funds will be distributed, at the Member’s death, in accordance with Florida law and Rule 19-11.002, F.A.C. Beneficiary designation forms may be obtained from the same sources listed in paragraph (3)(b), above.

(c) If one of the other forms is used, consistent with the employee’s membership class, or if the employee chooses to submit a separate document, consistent with the employee’s membership class, the employee shall provide the following information:

1. Employee’s name and social security number;

2.a. For an employee who is not a member of any of the retirement plan options detailed in sub-subparagraphs b. through f., below, a selection as to whether the employee decides to stay in the FRS Pension Plan, or transfer his ABO, if any, to the FRS Investment Plan, or transfer to the FRS Investment Plan Hybrid Option and leave his ABO, if any, in the FRS Pension Plan; or

b. For a state employee who is eligible for membership in the State Senior Management Service Class, a selection as to whether the employee wishes to elect:

i. The FRS Pension Plan; or

ii. The FRS Investment Plan and have future employer contributions sent to the FRS Investment Plan account; or

iii. To retain any accrued benefit in the FRS Pension Plan benefit and switch prospectively into the FRS Investment Plan Hybrid Option, which requires that the employee must have at least 5 years of previous Pension Plan service to select this option iii.; or

iv. To switch prospectively to the Senior Management Service Optional Annuity Program (SMSOAP) and retain any accrued benefit in the FRS Pension Plan, which requires that the choice form must be received no later than 4:00 p.m. Eastern Time on the 90th day from the employee’s date of hire, in accordance with Section 121.055(6)(c)2., F.S.;

c. For a local employee who is eligible for the Senior Management Service Class, a selection as to whether the employee wishes to elect:

i. The FRS Pension Plan; or

ii. The FRS Investment Plan and have all future employer contributions sent to the FRS Investment Plan account; or

iii. To retain any FRS Pension Plan benefit and switch prospectively into the FRS Investment Plan Hybrid Option, which requires that the employee must have at least 5 years of previous Pension Plan service to select this option iii.; or

iv. To withdraw from the Florida Retirement System, which requires contacting the employee’s employer and submitting the appropriate form to that employer;

d. For an employee who is eligible for the State University System Optional Retirement Program (SUSORP), a selection as to whether the employee wishes to elect:

i. To join SUSORP and retain any accrued benefit in the FRS Pension Plan, which requires making such election no later than the 90th day after the date of hire by executing a contract with a SUSORP provider company and which also requires that eligible clinical faculty employed at a state university with a faculty practice plan shall elect this option, which requires the selection to be made no later than 4:00 p.m. Eastern Time on the 90th day from the employee’s date of hire, in accordance with Section 121.35(3), F.S.; or

ii. To join the FRS Pension Plan which must be completed no later than the last business day of the 5th month after the month of hire; or

iii. To join the FRS Investment Plan and to transfer the present value, if any, of the FRS Pension Plan benefit to the FRS Investment Plan and to have future contributions sent to the FRS Investment Plan account; or

iv. To switch prospectively to the FRS Investment Plan Hybrid Option and retain any accrued benefit in the FRS Pension Plan, which requires that the eligible employee must have 5 years of previous Pension Plan service to select this option iv.;

e. For an employee who is eligible for the Community College Optional Retirement Program, a selection as to whether the employee wishes to elect:

i. To join the FRS Pension Plan; or

ii. To join the FRS Investment Plan and to transfer any accrued benefit from the FRS Pension Plan to the FRS Investment Plan and to have future employer contributions sent to the FRS Investment Plan account; or

iii. To join the FRS Investment Plan Hybrid Option and to retain any accrued benefit in the FRS Pension Plan which requires that the eligible employee must have 5 years of previous Pension Plan service to select this option iii.; or

iv. To withdraw from the Florida Retirement System and participate in the Community College Optional Retirement Program (CCORP) which requires that the selection must be completed within 90 days of commencing CCORP qualifying employment, in accordance with Section 1012.875(3), F.S.;

f. For an employee who is eligible for the Elected Officers’ Class, a selection as to whether the employee wishes to elect:

i. To join the FRS Pension Plan; or

ii. To join the FRS Investment Plan and to transfer any accrued benefit from the FRS Pension Plan to the FRS Investment Plan and to have future employer contributions sent to the FRS Investment Plan account; or

iii. To join the FRS Investment Plan Hybrid Option and to retain any accrued benefit in the FRS Pension Plan which requires that the eligible employee must have 5 years of previous Pension Plan service to select this option iii.; or

iv. To join the Senior Management Service Class of the FRS Pension Plan and retain any accrued benefit in the FRS Investment Plan, which requires the eligible employee to make the choice no later than the last day of the 6th month after assuming his elected office, in accordance with Section 121.052(3)(a), F.S.; or

v. To switch prospectively to the State Senior Management Service Optional Annuity Program and retain any accrued benefit in the FRS Pension Plan, which selection must be made no later than the last business day of the 6th month after assuming elected office and that the employee must be a state elected officer to select this option v.; or

vi. To withdraw from the Florida Retirement System and participate in a local government Optional Annuity Program, which decision is irrevocable so long as the employee holds a position which is eligible for the Senior Management Service Class and which election must be made no later than the last business day of the 6th month after assuming elected office and that the employee must be a local elected officer to select this option vi.; or

vii. To withdraw from the Florida Retirement System altogether, which means that the employee will not participate in the Florida Retirement System or any retirement plan offered by his employer; that the effective date of the election will be the date he assumed elected office; that the employee can rejoin the Elected Officers Class upon written request; that the employee’s decision must be made no later than the last business day of the 6th month after assuming elected office; and that this option vii. is not available to any member who has already retired from a State of Florida administered retirement plan.

3. Understand that benefits will be distributed in accordance with Section 121.091(8), F.S., in the absence of the member’s filing a beneficiary designation form, which is available from the sources listed in paragraph (3)(b), above;

4. Select any combination of investment funds from among any of the balanced funds and other investment funds shown, provided, however, that the percentage of the employee’s contributions for all of the funds selected must equal 100 percent. Any member who does not select investment options will be defaulted into the FRS Select Moderate Balanced Fund. Any member so defaulted retains the option at any time once the account is activated to make other investment selections. Both the accumulated benefit obligation and all future contributions will be invested in the FRS Select Moderate Balanced Fund unless and until the member chooses other investment options;

5. Sign and date a section indicating that, depending on which options were selected as described in Section 1 of the form and in subparagraph 2., above:

a. The employee understands that he can obtain a description of his rights and responsibilities under the FRS Pension Plan and the FRS Investment Plan by calling a toll-free number or accessing an internet website;

b. The employee understands the elections he has made by choosing among the various options available to him as described in Section 1 of the form and in subparagraph 2., above;

c. The employee understands that if he has elected the FRS Investment Plan, the initial ABO is an estimate which will be reconciled within 60 days and that if the employee is a member of the FRS Investment Plan Hybrid Option, he cannot make this choice unless he has at least 5 years of previous Pension Plan service and that if he is currently a member of the FRS Pension Plan, the election may constitute his second choice as provided under Section 121.4501(4)(e), F.S.;

d. The employee understands that he should review the fund profiles and the Investment Fund Summary before choosing investment funds and that information will be available electronically unless the employee requests hard copies and that if the employee does not choose specific funds, his assets will be invested in the FRS Select Moderate Balanced Fund;

e. The employee understands that investment management fees may change and that funds may be added or terminated and that if funds are terminated, the employee has the choice of moving his assets into other investment options or, if the employee does not make an affirmative decision, his assets will be moved to the FRS Select fund with the most similar risk characteristics or into a replacement fund designated by the Plan’s Trustees;

f. The Florida Statutes incorporate federal law concepts of participant control so that if the employee exercises control over his assets in accordance with section 404(c) of the federal Employee Retirement Income Security Act of 1974, no program fiduciary shall be liable for any loss to his account which results from the employee’s control;

g. The employee understands that he has a one time opportunity to switch plans and that to switch to the Pension Plan there will be a buy-in cost for doing so; [The Division of Retirement is responsible for calculating the buyback amount for those wishing to use their second elections to transfer to the FRS Pension Plan. The actuarial calculation is a forward-looking projection based on the employee’s salary and service and rises when additional creditable service or salary is earned.]

h. The employee understands that he can change his fund allocations at any time after the account is activated;

i. The employee understands that his account will be available by the last business day of the month following the date of his election;

j. The employee understands that by not selecting any investment options, he is authorizing that his assets be invested in the FRS Select Moderate Balanced Fund;

k. The employee understands that the FRS Investment Plan is not designed to facilitate short-term excessive trading; that foreign and international funds are subject to a 7-day holding period and that the excessive trading policy in Rule 19-11.004, F.A.C., applies to all members;

l. The employee understands that he cannot file a second election using the initial enrollment form;

m. The employee understands that if he has chosen the Senior Management Service Optional Annuity Program, he must contact the plan marketing companies to receive information about investment funds; that his participation in any other state-administered retirement plan is inactivated once enrolled in SMSOAP; that he is not eligible for disability benefits; that his SMSOAP election is irrevocable so long as he is employed in a SMSOAP position; that the State of Florida does not guarantee or insure SMSOAP benefits; and that any employee contributions to SMSOAP are after-tax deductions that are not tax-deferred;

n. The employee understands that if he has chosen to withdraw from the Florida Retirement System, that his participation in any other state-administered retirement plan is inactivated once the withdrawal is complete; that he is not eligible for disability benefits; that his withdrawal decision is irrevocable so long as he is employed in a position eligible for participation in the Senior Management Service Class;

o. The employee understands that if he has chosen the State University System Optional Retirement Program (SUSORP), he must contact the plan marketing companies to receive information about investment funds; that his participation in any other state-administered retirement plan is inactivated once enrolled in SUSORP; that he cannot participate in SUSORP if he is a retiree or receiving an annuity payment from the SUSORP; that he is not eligible for disability benefits; that his SUSORP election is irrevocable so long as he is employed in a SUSORP position; that the State of Florida does not guarantee or insure SUSORP benefits; and that any employee can contribute up to the statutory amount of his gross salary as an employee contribution and that these contributions to SUSORP shall be tax-deferred;

p. The employee understands that if he has chosen to withdraw from the Florida Retirement System and participate in the Community College Optional Retirement Program (CCORP), he must contract with the individual provider company(ies) for CCORP within 90 days of his employment; that failure to join CCORP will make him a compulsory member of the FRS Pension Plan; that by electing to withdraw from the Florida Retirement System, he must become a program participant in the CCORP’s lifetime monthly annuity program; that his participation in any other state-administered retirement plan is inactivated once enrolled in CCORP; that he is not eligible for disability benefits; and that he has one opportunity to join either the FRS Pension Plan or the FRS Investment Plan;

q. The elected employee understands that if he has chosen to join the SMSOAP, he must be an elected officer; and that he must contact the marketing company(ies) to receive information about the plan; that his participation in any other state-administered retirement plan is inactivated; that the State of Florida does not guarantee or insure any benefits paid under the program; and that any employee contributions he makes are not tax-deferred;

r. The elected employee understands that if he has chosen to withdraw from the Florida Retirement System and participate in a local government annuity program, his effective date will be the first day of the month following the receipt of his written election to the FRS Plan Choice Administrator; and

s. The elected employee understands that if he has chosen to withdraw from the Florida Retirement System altogether, he may rejoin upon written request and that this option is not available to members who have already retired from a State of Florida administered retirement plan.

6. For employees who have chosen to participate in the Senior Management Service Optional Annuity Program, fill out a section designating marketing companies and contribution amounts for that option and check a statement that the employee has reviewed the investment fund options offered by the marketing companies and has signed the necessary contract(s) with the company(ies) for the deposit of the employees contributions as authorized in the section.

7. For employees who have chosen to participate in the State University System Optional Retirement Program, fill out a section designating marketing companies and contribution amounts for that option and check a statement that the employee has reviewed the investment fund options offered by the marketing companies and has signed the necessary contract(s) with the company(ies) for the deposit of the employees contributions as authorized in the section.

(d)1. The enrollment by form or electronic means shall be complete and the election shall be final if all the required information is clearly indicated and if the enrollment is received by the FRS Plan Choice Administrator by 4:00 p.m. Eastern Time on the last business day of the 5th month following the date of hire. The form shall be transmitted via the U.S. mail, courier, or by fax to 1(888)310-5559.

2. The FRS Plan Choice Administrator shall determine that the employee’s enrollment in the FRS Investment Plan is within the prescribed time period, is complete, and the employee’s election is clearly indicated. If the Administrator determines that the enrollment is incomplete, the employee will be required to resubmit a completed enrollment. An incomplete enrollment by form is a form which is missing the name of the member, social security number, plan selection, or signatures, or one on which the investment elections total greater than or less than 100% or dates. If the form is incomplete only because the member has made no investment selection, the form will be processed and the member will be defaulted into the FRS Select Moderate Balanced Fund for investing his accumulated benefit obligation and all future contributions. Note that this default selection may be changed by the member at any time once the account is activated transfer has been made. An incomplete enrollment by electronic means is one in which the FRS Plan Choice Administrator has no record of receipt and/or processing of the electronic enrollment.

(e) Upon receipt of the completed enrollment form by the FRS Plan Choice Administrator, the FRS Plan Choice Administrator shall enroll the employee in the indicated FRS retirement plan FRS Investment Plan. Upon completion of the enrollment, but no later than two working days after enrollment, the FRS Plan Choice Administrator shall send confirmation of the effective enrollment to the employee at the employee’s home address of record, to the employee’s employer, and to the Ddivision to inform the Ddivision of the employees retirement plan choice that the employee is no longer in the FRS Pension Plan. The employer shall change its employee records to reflect the employee’s plan choice, if applicable

(f) Employers shall remit pay retirement contributions monthly for their FRS Investment Plan employees or the FRS Investment Plan Hybrid Option and those contributions are due to the Ddivision by the 5th working day of the month following the month for which the contributions are made. The employer shall change its employee records to reflect that the contribution rates effective on the effective date of enrollment are applicable to those of its employees who have elected to enroll in the FRS Investment Plan or the FRS Investment Plan Hybrid Option.

(5) Asset Transfer and True-Up Procedures for Newly-hired Employees with Previous FRS Service.

(a) For employees with previous FRS service who elect to enroll in the FRS Investment Plan with a transfer of his or her ABO, the division shall determine the amount of the employee’s ABO. This amount shall be transferred to the employee’s FRS Investment Plan account and shall be allocated to each investment product selected by the participant on his or her enrollment form.

(b)1. The Division shall determine the employee’s ABO as of the last day of the month prior to the employee’s effective date of enrollment in the FRS Investment Plan.

2. Example: If the Division receives the enrollment during the month of June, the effective date of enrollment for the employee in the FRS Investment Plan is July 1. The Division shall determine the employee’s ABO, if any, through June 30.

(c) By the 15th day of the month, the Division shall notify the Administrator of the ABO for each employee whose effective date of enrollment is the first day of the month and the Administrator shall notify the SBA of the aggregate ABO of employees whose effective date of enrollment is the first day of the month.

(d) On the last business day of the effective month of enrollment in the FRS Investment Plan, the SBA shall transfer the aggregate ABO amount to the FRS Investment Plan custodian for distribution to the FRS Investment Plan participant accounts. Such distribution shall be directed by the Administrator and shall be based on the percentage of the total investment allocated to each investment option designated by the participant on the enrollment form.

(e) The total amount initially credited to each FRS Investment Plan member’s account who chooses to move his or her ABO out of the FRS Pension Plan is an estimate of the participant’s ABO as calculated by the Division. Thereafter, pursuant to Section 121.4501(3)(c)3., F.S., the Division shall recompute the ABO not later than 60 days after the initial transfer of funds and, if the recomputed amount differs from the transferred ABO amount by $10 or more, the Division shall cause an adjustment of the transfer of assets between FRS Investment Plan account(s) of the affected member(s) through a true-up transfer in accordance with that statutory section.

(f) If the recomputed ABO is greater than the initial amount transferred by $10 or more, the amount to be transferred to the member’s FRS Investment Plan account from the FRS Trust Fund will equal the excess of the recomputed ABO over the amount initially transferred plus interest. The amount transferred to each investment product shall be based on the percentage of the total investment allocated to each investment product by the member on his or her enrollment form.

(g) If the recomputed ABO is less than the original amount transferred by $10 or more, the Administrator shall cause to be transferred from the member’s FRS Investment Plan account to the FRSTF an amount equal to the excess of the initial amount transferred over the recomputed ABO plus interest. The amount transferred from each investment product shall be based on the percentage of the total investment allocated to each investment product by the member on his or her enrollment form.

(h) The Division shall notify the SBA of the aggregate true-up amount plus interest within 45 days of the initial transfer. The Division shall notify the Administrator of the true-up amounts plus interest by member account within 45 days of the initial transfer. The true-up transfer shall include the true-up amount determined by the Division plus interest at the rates specified in Section 121.4501(3)(c)3., F.S., from the date of the initial transfer to the date of the true-up transfer. The transfer of the true-up amount plus interest shall occur on the 60th day following the initial transfer. In the event the 60th day following the initial transfer falls on a Saturday, Sunday, or a legal holiday, the true-up transfer shall occur on the last business day of the month preceding the Saturday, Sunday, or legal holiday.

(i) The Division shall calculate the interest owed on true-up amounts. If the recomputed ABO is greater than the original amount transferred by $10 or more, the member will be owed a true-up amount plus interest. Interest will be calculated using the rate of 8% effective annual interest, compounded annually, and the number of days from the date of the initial transfer to the date of the true-up transfer, as specified in paragraph (h), above. If the recomputed ABO is less than the original amount transferred by $10 or more, the member will owe a true-up amount plus interest. Interest will be calculated on the amount owed based upon 6% effective annual interest, compounded annually, and the number of days from the date of the initial transfer to the date of the true-up transfer.

(3)(6) Grace Period.

(a) If a member files an election with the FRS Plan Choice Administrator and the member realizes that the election was made in error, or if the member has reconsidered the election made, the SBA will consider, on a case-by-case basis, whether the election will be voided, subject to the following requirements:

(b) The member must notify the SBA, by a telephone call to the toll-free MyFRS Financial Guidance Line at 1(866)446-9377 or by written correspondence directly to the SBA, to the Plan Choice Administrator, or to the Division no later than 4:00 p.m. Eastern Time on the last business day of the election effective month.

(c)(b) If the request to reverse the election is made timely and the SBA finds that the election was made in error, the member will be required to sign a release and return it to the SBA no later than 4:00 p.m. Eastern Time, on the last business day of the election effective month prior to the election’s being officially reversed. The member will acknowledge that failure to return a signed release by the requested due date will result in the original election being reinstated.

(d)(c) Upon receipt of the release, the Division and the Plan Choice Administrator will be directed to do the following:

1. The Division will revise its database to reflect the member’s plan change. The member will have until his or her choice period deadline date to make a new election. If the member’s choice period has ended, the member will have one calendar month to make a new election. Failure to make a new election will result in the member’s defaulting into the Pension Plan, except for the situation described in subparagraph 3., below.

2. The Plan Choice Administrator will send the member written confirmation that the election has been reversed.

3. If the member had elected the FRS Investment Plan and decided to remain in the FRS Pension Plan, there is no need for another election, because the member is already in the FRS Pension Plan, his election to the FRS Investment Plan having been reversed.

(e)(d) Nothing contained in this subsection will interfere with a member’s right to file a complaint, as permitted by Section 121.4501(8)(9)(g)(f)3., F.S., and discussed in Rule 19-11.005, F.A.C.

(7) Costs associated with the liquidation or transfer of assets from the FRS Trust Fund to the FRS Investment Plan will be deducted from the FRS Trust Fund. The FRS Trust Fund will not be responsible for any transaction costs associated with the purchase of FRS Investment Plan assets. Those costs will be deducted from FRS Investment Plan accounts or otherwise charged to FRS Investment Plan members.

(8) The amount transferred to each investment product shall be based on the percentage of the total investment allocated to each fund by the member on his or her enrollment form as described in paragraph (3)(b), above. However, pursuant to Section 121.4501(4)(d), F.S., amounts not specified will be invested in the default option designated in the Investment Policy Statement, as approved by the Trustees and adopted and incorporated by reference in Rule 19-9.001, F.A.C.

(9) In order to effectively and efficiently administer the investment programs of the SBA and in accordance with Section 215.44(8)(b), F.S., the records and other information relating to investments made by the SBA will be confidential and exempt from Chapter 119, F.S., until 30 days after completion of each investment transaction.

Rulemaking Authority 121.4501(3)(c)4., (8)(a) FS. Law Implemented 121.051, 121.055, 121.35, 121.4501(2), (3), (4), (5), (6), (8), (15), 121.73, 121.74, 121.78, 215.44(8)(b), 1012.875(3) FS. History–New 10-21-04, Amended 3-9-06, 10-25-07, 12-8-08, 5-19-09, 2-4-10,________.

 

19-11.007 Second Election Enrollment Procedures for the FRS Retirement Programs.

(1) Purpose. The purpose of this rule is to establish procedures for making the second election permitted by Section 121.4501(4) (e), F.S. This rule includes procedures for members who initially chose the FRS Investment Plan or the FRS Investment Plan Hybrid Option to use their 2nd election to transfer to the FRS Pension Plan; and for members who chose or defaulted into the FRS Pension Plan to use their 2nd election to transfer to the FRS Investment Plan or the FRS Investment Plan Hybrid Option.

(2) A member may make a valid 2nd election only if the 2nd election is made and processed by the Plan Choice Administrator while the member is actively employed and earning salary and service credit in an employer-employee relationship consistent with the requirements of Section 121.021(17)(b), F.S. FRS members must be actively employed earning salary and service credit to be eligible to make a valid 2nd Election. Members on an unpaid leave of absence, terminated members, or employees of an educational institution on summer break cannot use their 2nd eElection until they return to covered FRS employment. In general terms, this means that the 2nd election must be made and processed while the member is actively working and being paid for that work. It is the responsibility of the member to assure that the 2nd election is received by the Plan Choice Administrator no later than 4:00 p.m. Eastern Time on the last business day the member is earning salary and earning service credit.

(2) Definitions.

(a) “FRS Investment Plan” means the optional defined contribution retirement plan within the Florida Retirement System, established in Parts II and III of Chapter 121, F.S., in which a member chooses to transfer his accrued service benefit in the FRS Pension Plan, if any, to the FRS Investment Plan or the FRS Investment Plan Hybrid Option and further chooses that all future employer contributions be deposited in his FRS Investment Plan account. Although established in Parts II and III, certain parts of Part I of Chapter 121 also apply to the FRS Investment Plan. Any accrued service benefit transferred from the FRS Pension Plan to the FRS Investment Plan will be subject to the vesting requirements of the FRS Pension Plan.

(b) “FRS Investment Plan Hybrid Option” or “FRS Hybrid Option” means the optional defined contribution retirement plan within the Florida Retirement System, established in Parts II and III of Chapter 121, F.S., in which a member chooses to retain his accrued service benefit in the FRS Pension Plan, in accordance with Section 121.4501(3)(c)1., F.S., and further chooses that all future employer contributions be deposited in his FRS Investment Plan Hybrid Option account. Although established in Parts II and III, certain parts of Part I of Chapter 121, F.S., also apply to the FRS Investment Plan Hybrid Option.

(c) “FRS Pension Plan” means the defined benefit retirement plan within the Florida Retirement System, established in Part I of Chapter 121, F.S.

(d) “I,” “you,” or “your:” these references are to the member in the context of relevant parts of the two enrollment forms described in this rule.

(e) “ABO” “Accrued service benefit” or “accumulated benefit obligation” means the present value amount already earned by a member in the FRS Pension Plan which, if the participant uses the 2nd election, will be transferred to his or her account in the FRS Investment Plan.

(f) “Electronic Means” shall mean an enrollment on the MyFRS.com website, by telephone or other technology as specified by the SBA in a subsequent amended rule.

(3) General Procedures.

(a) All members who wish to change their FRS retirement plan using their 2nd election must use a 2nd election enrollment form or, if moving from the FRS Pension Plan to the FRS Investment Plan or FRS Investment Plan Hybrid Option, may do so online by accessing the Second Choice Service at MyFRS.com. There are two types of enrollment forms. The “2nd Election Retirement Plan Enrollment Form”, Form ELE-2, rev. 01-12, http://www.flrules.org/Gateway/reference.asp?No=Ref-01068 which is hereby adopted and incorporated by reference. This form allows the member to select different choose the investment funds options he wishes to use if the member is changing from the FRS Pension Plan to either the FRS Investment Plan or the FRS Investment Plan Hybrid Option. Alternatively, the member can complete by using the “2nd Election EZ Retirement Plan Enrollment Form,” Form ELE-2EZ, rev. 07/11, http://www.flrules.org/Gateway/reference.asp?No=Ref-01069, which is hereby adopted and incorporated by reference. By completing this form, the member is choosing to have his employer and employee contributions and any transfers from the FRS Pension Plan invested in the FRS Select Moderate Balanced Fund. The member may change the investment selection at any time after the FRS Investment Plan or the FRS Investment Plan Hybrid Option account is activated. Activation occurs when contributions are deposited to the member’s FRS Investment Plan account.

(b) Both forms are available by calling the toll-free number for the MyFRS Financial Guidance Line: 1(866)446-9377, Option 4 or for members who are deaf, hard of hearing, or speech-impaired: TRS 711 the hearing-impaired 1(888)429-2160; or by using the MyFRS.com website and clicking on Resources and then on Forms.

(c) Elections made by form must be mailed to the FRS Plan Choice Administrator, P. O. Box 785027, Orlando, FL 32878-5027; Box 56290, Jacksonville, Florida 32241-6290 or faxed toll-free to (888)310-5559.

(d) For members transferring to the FRS Pension Plan, if the member’s Investment Plan account balance was less than the calculated amount required to buy back into the FRS Pension Plan, the election will require a personal payment The member will receive notification and proper instructions from the Division detailing where and in what form to send any personal payments. Such payment, if necessary, must be received by the date determined by the Division. If the required amount is not received by the Division by the date due, the election will be voided.

(e) A confirmation statement will be mailed to the member’s address of record once the completed form is received and processed.

(f) The member should carefully review the form and be sure that it is signed, dated, and sets forth the member’s second election plan choice. A copy of the form should be retained for the member’s records.

(g) If the member submits a form that is incomplete, it will not be processed. An incomplete form is a form which is missing the name of the member, social security number, plan selection, or signature, or one on which the total investment elections are greater or less than 100%. The member will be required to resubmit a completed second election enrollment form. If the form is incomplete only because the member has made no investment selection, the form will be processed and the member will be defaulted into the FRS Select Moderate Balanced Fund for investing the member’s accumulated benefit obligation and all future contributions. Note that this default selection may be changed by the member at any time once the account is activated.

(h) The second election will become final at 4:00 p.m. Eastern Time on the day it is received by the Plan Choice Administrator. Elections received after 4:00 p.m. Eastern Time will be considered as being received on the next business day. Elections received on a Saturday, Sunday or holiday will be considered as being received on the next business day.

(d) The member may elect to move between the Florida Retirement System retirement programs only if the member is earning service credit in an employer-employee relationship consistent with the requirements under Section 121.021(17)(b), F.S. FRS members must be actively employed earning salary and service credit to be eligible to make a valid 2nd Election. Members on an unpaid leave of absence, terminated members, or employees of an educational institution on summer break cannot use their 2nd Election until they return to covered FRS employment. The election must be received and processed by the FRS Plan Choice Administrator before the member terminates covered FRS employment. It is the responsibility of the member to ensure the election is received by the Plan Choice Administrator no later than 4:00 p.m. Eastern Time on the last business day the member is earning salary and earning service credit.

(4) Specific Procedures for the “2nd Election Retirement Plan Enrollment Form.”

(a) All members are required to fill out Section 1 of the form by providing the member’s name and Social Security number and checking only one of three boxes, indicating which choice the member is making. These boxes contain the following information:

1. Change from the FRS Investment Plan or FRS Investment Plan Hybrid Option to the FRS Pension Plan (Please complete Section 4, as described in paragraph (d) below). I understand I am using my existing FRS Investment Plan account balance to “buy” into the FRS Pension Plan. I understand that if my account balance is not sufficient to cover the cost of the “buy in”, I must pay the balance due from my personal funds before being allowed into the FRS Pension Plan. The Division of Retirement is responsible for calculating the buyback amount for those wishing to use their second elections to transfer to the FRS Pension Plan. The actuarial calculation is a forward-looking projection based on the employee’s salary and service and increases as additional creditable service and salary are earned. I understand that I may move my FRS Investment Plan account balance into more conservative, less risky investment options within the FRS Investment Plan in order to potentially reduce the volatility of my account balance prior to liquidation and movement to the FRS Pension Plan. Note that if a member transfers from the Investment Plan to the Pension Plan and leaves a balance in the member’s Investment Plan account, the member is a member of the Pension Plan. As such, the member cannot take a distribution of the surplus Investment Plan funds until he begins receiving his Pension Plan benefits.

2. Change from the FRS Pension Plan to the FRS Investment Plan (Please complete Sections 3 and 4, as described in paragraphs (c) and (d), below). I understand I am transferring the present value, if any, of my FRS Pension Plan benefit to the FRS Investment Plan. I understand that I will have future employer contributions deposited in my Investment Plan account.

3. Change from the FRS Pension Plan to the FRS Investment Plan Hybrid Option (Please complete Sections 3 and 4, as described in paragraphs (c) and (d) below). I am retaining any accrued benefit in the FRS Pension Plan with future employer contributions deposited in my FRS Investment Plan Hybrid Option account. I understand that I must have 5 years of Pension Plan service to select this option.

(b) The second section on the form discusses the beneficiary designation. The designation cannot be made on the enrollment form. This section contains the following information:

1. A beneficiary designation can be completed after you qualify for a retirement benefit (i.e. become “vested”). If you do not designate a beneficiary after you are vested, your benefit will be distributed in accordance with Section 121.091(8) or 121.4501(20), F.S., as applicable.

2. You may designate a beneficiary by completing a Beneficiary Designation Form (BEN-001 Pension Plan or IPBEN-1 Investment Plan). Both forms are available online at www.MyFRS.com or by calling the MyFRS Financial Guidance Line.

(c)1. The third section on the form discusses and describes the FRS Investment Plan Fund Selections. A member who has checked the first box in the first section of the form, indicating a change to the FRS Pension Plan, must not complete this section. Members who have checked either the second or the third boxes in the first section of the form must complete this section by choosing their investment fund options.

2. The investment fund selection must be indicated by:

a. Writing the percentage you wish to allocate to each investment option. Use whole percentages only.

b. Choosing your investment funds from the balanced funds, the other investment funds OR from a combination of the two.

c. Ensuring that the total of all your selections equals 100%.

d. Any member who does not select any investment options will be defaulted into the FRS Select Moderate Balanced Fund. Any member so defaulted retains the option at any time to make other investment selections. Both the accumulated benefit obligation and all future contributions will be invested in the FRS Select Moderate Balanced Fund unless and until the member chooses other investment options.

(d) The fourth section on the form is an authorization section which will ensure that all members understand the information described. All members must read the information in the fourth section before signing the form. The information which follows is applicable as indicated depending on the choice the member has made.

1. For all members: I understand that I can find a description of my rights and responsibilities under the FRS Pension Plan and the FRS Investment Plan in the respective Summary Plan Descriptions, Florida Statutes, and Administrative Rules available through the MyFRS Financial Guidance Line at: 1(866)44-MyFRS (1(866)446-9377; or TTY: 1(888)429-2160) or at MyFRS.com.

2. For members choosing to transfer to the FRS Pension Plan:

a. I understand that I have elected to change retirement plans to the FRS Pension Plan.

b. I understand that this election will constitute my one-time second election as provided under the FRS and that I must remain in this retirement plan until my retirement.

c. I understand that there may be a cost to change to the FRS Pension Plan, which I can get by calling the MyFRS Financial Guidance Line and connecting to the Division of Retirement, and that such cost may require that I pay some amount greater than my current FRS Investment Plan account balance. Such payment, if necessary, must be received by the date determined by the Division of Retirement. If the required amount is not received by the Division of Retirement by the date due, the election will be voided. The participant will receive notification and proper instructions from the Division of Retirement detailing where and in what form to send any personal payments. The Division of Retirement is responsible for calculating that amount for those wishing to use their second elections to transfer to the FRS Pension Plan. The actuarial calculation is a forward-looking projection based on the employee’s salary and service and increases as additional creditable service and salary are earned.

d. I understand that I have the ability to move my FRS Investment Plan account balance into conservative investment options within the FRS Investment Plan in order to potentially reduce the volatility of my account balance prior to liquidation and movement to the FRS Pension Plan.

e. I understand that my one-time second election is irrevocable.

3. For members choosing to transfer to the FRS Investment Plan:

a. I understand that I have elected to change retirement plans to the FRS Investment Plan, and that any accrued benefit value I may have in the FRS Pension Plan will be transferred to the FRS Investment Plan.

b. I understand that this election will constitute my one-time second election as provided under the FRS and that I must remain in this retirement plan until my retirement.

c. I understand the initial transfer amount (the accrued benefit value or the accumulated benefit obligation) is an estimate and that within 60 days of that transfer, there will be a reconciliation pursuant to Florida law, which will use my actual FRS membership record. The amount could be more or less than the estimate I received.

d. I understand that I can get the amount of my accrued benefit value by calling the MyFRS Financial Guidance Line and connecting to the Division of Retirement.

e. I understand that if I am currently a member of the FRS Investment Plan Hybrid Option, I cannot make this election.

f. I understand my one-time second election is irrevocable and I understand that I must remain in this plan until my retirement.

4. For members choosing to transfer to the FRS Investment Plan Hybrid Option:

I understand that I have elected to change retirement plans to the FRS Investment Plan Hybrid Option and that my FRS Pension Plan benefit already accrued will remain with the FRS Pension Plan and that a FRS Investment Plan Hybrid Option account will be established to receive all future employer contributions.

5. For participants choosing to transfer either to the FRS Investment Plan or to the FRS Investment Plan Hybrid Option:

a. I understand that I should review the Fund Profiles and the Investment Fund Summary at www.MyFRS.com before making any changes to my investment fund selections. I understand that information on investment funds will be provided in electronic format, unless I request hard copies. I understand that I can change my fund allocations at any time after my account is activated by accessing www.MyFRS.com or by calling the toll-free MyFRS Financial Guidance Line. I understand that my account will be available by the end of the month following the effective date of this election. If I do not choose specific investment funds, I authorize the FRS Plan Choice Administrator to invest my accumulated benefit obligation and future contributions in the FRS Select Moderate Balanced Fund. I understand that the FRS Investment Plan is not designed to facilitate short-term excessive fund trading. Foreign and global investment funds are subject to a minimum holding period of seven (7) calendar days following any non-exempt transfers into such funds and I may be subject to trading controls on other funds in the event that I trade excessively.

b. I understand that investment management fees will be deducted from my FRS Investment Plan account or the FRS Investment Plan Hybrid Option account. I also understand that these fees may change in the future and that funds may be added or terminated. I understand that if any of the funds I select in the FRS Investment Plan or the FRS Investment Plan Hybrid Option account are terminated in the future, I will be able to move my assets into other investment funds prior to termination. Otherwise, my assets in the terminated fund(s) will be automatically moved into a replacement fund designated at that time.

c. I understand that Sections 121.4501(8)(b)4. and 121.4501(15)(b), F.S., of Florida law incorporate the federal law concept of participant control, established by regulations of the U.S. Department of Labor under section 404(c) of the Employee Retirement Income Security Act of 1974. If I exercise control over the assets in my FRS Investment Plan account, pursuant to section 404(c) regulations and all applicable laws governing the operation of the FRS Investment Plan, no program fiduciary shall be liable for any loss to my account which results from my exercise of control.

(e) The form must be signed and dated by the member and must include a daytime telephone number. Inclusion of an e-mail address or the name of the member’s employing agency is optional on the member’s part.

(f) The form must be mailed to the address set out in paragraph (2)(c), above.

(g) The member must put his Social Security number at the bottom of each page of the form so that if the pages become separated, they can be properly reassembled.

(h) For members transferring to the FRS Pension Plan, the election may require a personal payment if the member’s account balance was less than the calculated amount required to buy back into the FRS Pension Plan. Such payment, if necessary, must be received by the date determined by the Division. If the required amount is not received by the Division by the date due, the election will be voided. The member will receive notification and proper instructions from the Division detailing where and in what form to send any personal payments.

(i) A confirmation statement will be mailed to the member’s address of record once the completed form is received and processed.

(j) The member should carefully review the form and be sure that it is signed and dated. The member should keep a copy for his records.

(k) If the member submits a form that is incomplete, it will not be processed. An incomplete form is a form which is missing the name of the member, social security number, plan selection, or signature. The member will be required to resubmit a completed enrollment form. If the form is incomplete only because the member has made no investment selection, the form will be processed and the member will be defaulted into the FRS Select Moderate Balanced Fund for investing his accumulated benefit obligation and all future contributions. Note that this default selection may be changed by the member at any time once the transfer has been made.

(5) Specific Procedures for the “2nd Election EZ Retirement Plan Enrollment Form.”

(a) Form ELE-2EZ, “2nd Election EZ Retirement Plan Enrollment Form,” Rev. 11-08, is hereby adopted and incorporated by reference.

(b) All members choosing to use this form are required to fill out Section 1 of the form by providing the member’s name and Social Security number and checking only one of three boxes, indicating which choice the member is making.

(c) The form must be signed and dated by the member and must include a daytime telephone number. Inclusion of an e-mail address or the name of the member’s employing agency is optional on the member’s part.

(d) The form must be mailed to the address set out in paragraph (3)(c), above.

(e) The member must put his Social Security number at the bottom of each page of the form so that if the pages become separated, they can be properly reassembled.

(f) For members transferring to the FRS Pension Plan, the election may require a personal payment if the member’s account balance was less than the calculated amount required to buy back into the FRS Pension Plan. Such payment, if necessary, must be received by the date determined by the Division. If the required amount is not received by the Division by the date due, the election will be voided. The member will receive notification and proper instructions from the Division detailing where and in what form to send any personal payments. The Division is responsible for calculating that amount for those wishing to use their second elections to transfer to the FRS Pension Plan. The actuarial calculation is a forward-looking projection based on the employee’s salary and service and increases as additional creditable service and salary are earned.

(g) A confirmation statement will be mailed to the member’s address of record once the completed form is received and processed.

(h) The member should carefully review the form and be sure that it is signed and dated. The member should keep a copy for his records.

(i) If the member submits a form that is incomplete, it will not be processed. An incomplete form is a form which is missing the name of the member, social security number, the plan selection, or signature. The member will be required to submit a completed enrollment form.

(4)(6) Grace Period.

(a) If a member files an election with the Plan Choice Administrator and the member realizes that the election was made in error, or if the member has reconsidered his or her plan choice, the SBA will consider, on a case-by-case basis, whether the election will be reversed, subject to the following: The member must notify the SBA by a telephone call to the toll free MyFRS Financial Guidance Line at: (866)446-9377, or by written correspondence directly to the SBA, to the Plan Choice Administrator, to the Financial Guidance Line, or to the Division, no later than 4:00 p.m. Eastern Time on the last business day of the election effective month.

(b) If the request to reverse the election is made timely and the SBA finds the election was made in error, the member will be required to sign a release and return it to the SBA no later than 4:00 p.m., Eastern Time, on the last business day of the election effective month prior to the election being officially reversed. Upon receipt of the release, the Division and the FRS Plan Choice Administrator will be directed to take the necessary steps to reverse the election and to correct the member’s records to reflect the election reversal. do the following:

(c) A confirmation that the election was reversed will be sent to the member by the FRS Plan Choice Administrator.

1. The Division will revise its database to reflect the election has been reversed.

2. The Plan Choice Administrator will send the member written confirmation that the election has been voided.

(d)3. The member retains the right to file a subsequent second election will make a new election consistent with subsections (2)(3) and (3)(4), above.

(e)(c) Nothing contained in this subsection will interfere with a member’s right to file a complaint, as permitted by Section 121.4501(8)(9)(g)(f)3., F.S. and discussed in Rule 19-11.005, F.A.C.

Rulemaking Authority 121.4501(8)(a) FS. Law Implemented 121.4501(3), (4), (8)(b)4., (15)(b), (20) FS. History–New 10-21-04, Amended 3-9-06, 10-25-07, 12-8-08, 5-19-09, 1-7-10,________.

 

19-11.008 Forfeitures.

(1) Purpose. The purpose of this rule is to clarify the provisions regarding forfeitures of account balances.

(1)(2) Forfeitures after Separation or Retirement from FRS Employment.

(a) If a member terminates FRS-covered employment before vesting in an his Investment Plan benefit or any transferred Pension Plan benefit, the member he will not be entitled to any benefit. In such case, the unvested The account balance will be placed in a suspense account for a period not to exceed five (5) years from the date of the member’s termination. The suspense account shall be invested in the FRS Select U.S. Treasury Inflation-Protected Securities (TIPS) Fund, where it will accrue actual investment earnings.

(b) If the member returns to work for an FRS employer in an FRS-covered position within the five (5) years from the date of termination, the member will be returned to the Investment Plan and the unvested account balance, plus any earnings while invested in the TIPS Fund, will be returned to the member’s account, together with the associated service credit. Any additional service credit earned The service credit for the restored service, combined with any future service credit, will be applied towards vesting of the member’s benefit account.

(c) If the member never returns to work for an FRS employer in an FRS-covered position or if the member returns to FRS covered employment 5 or more years after the date of termination, the member will forfeit the unvested account balance and the associated service credit.

(d)(b) If the member leaves FRS-covered employment after vesting in an his Investment Plan benefit account, but before the member vests in any transferred Pension Plan benefit, the member shall only be entitled to receive the vested Investment Plan benefit. However, if the member takes any self-initiated distribution from the his vested Investment Plan benefit account, the unvested Pension Plan benefit transferred into the Investment Plan, plus any earnings on these funds will be forfeited along with the associated service credit.

(e) If the member does not take a self-initiated distribution of any vested from his Investment Plan benefit after terminating from all FRS employment, account the unvested Pension Plan benefit will be transferred six months following termination to a suspense account. The suspense account is invested in the FRS Select U.S. Treasury Inflation-Protected Securities (TIPS) Fund, where it will accrue actual investment earnings. If the member returns to work for an FRS covered employment employer within five (5) years from the date of termination, the member’s benefit account balance, plus any earnings while invested in the TIPS Fund, will be returned to the member’s account. The service credit for the restored service, together with the associated service credit. Any additional service credit earned will be combined with any future service credit, will be applied towards the vesting of the member’s benefit account.

(f)(c) If an FRS Investment Plan Hybrid Option member leaves FRS-covered employment after vesting in the his .Investment Plan benefit account, but before vesting in the he vests in his Pension Plan benefit, the member shall only be entitled to receive the vested Investment Plan benefit. However, if the member takes any self-initiated distribution of the from his vested Investment Plan benefit account, the unvested Pension Plan benefit will be forfeited along with the associated service credit. If the member is required to receive a required minimum distribution (RMD), the unvested Pension Plan benefit and the associated service credit, will not be forfeited, when the first RMD payment is received. If the member does not take a distribution from the his Investment Plan account and later returns to work for an FRS covered employer, the member will be returned to the FRS Investment Plan Hybrid Option and the service credit for the existing Pension Plan and Investment Plan service, combined with any future service credit, will be applied towards vesting of the member’s account.

(g) If a the member is required to receive a required minimum distribution (RMD), the unvested Pension Plan benefit and the associated service credit, will not be forfeited, when the first RMD payment is received.

(h)(d) If a member’s benefit and service are forfeited because the member did not return to FRS-covered employment within five (5) years, but the member later returns to FRS-covered employment after the forfeiture has occurred, the member will be returned to the plan in which he or she was participating at the time of the forfeiture. If the member’s benefit and service credit in the Pension Plan are forfeited because the member took a self-initiated distribution of the his vested Investment Plan benefit, and the member later returns to FRS-covered employment, the member he will be considered a new employee and will be entitled to a new retirement plan choice, if applicable during his new employee window period.

(2)(3) Forfeitures of FRS Investment Plan accounts Due to Criminal Activity.

(a) Any member who has been found guilty by a verdict of a jury or by the court trying the case without a jury, or who has entered a plea of guilty or a plea of nolo contendere to certain specified offenses committed prior to retirement; or any member whose employment is terminated because the member admitted commission, aiding, or abetting, of any of such offense or any elected official who is convicted by the Senate of an impeachable offense, shall forfeit all rights and benefits under the FRS except for return of any accumulated employee contributions. Specified offenses are the committing, aiding, or abetting any embezzlement or theft from the member’s employer; bribery in connection with employment; any other felony specified in Chapter 838, F.S., except for commercial bribery as provided in Section 838.15 or 838.16, F.S.; committing an impeachable offense; willfully committing any felony with intent to defraud the public or the public agency which employs the member or for which the member acts, of the right to receive the faithful performance of the member’s duties while realizing or attempting to realize a profit, gain or advantage for the member or for someone else through the powers, rights, privileges and duties of the member’s office or position; committing any felony described in Section 800.04, F.S., against a victim younger than 16 years of age, or any felony described in Chapter 794, F.S., against a victim younger than 18 years of age while using or attempting to use the power, rights, privileges, or duties of the member’s office or employment position. The Florida Constitution (Section 8, Article II) and Florida statutes provide that any member of the Florida Retirement System who commits certain crimes and is found guilty by a jury or by the court hearing the case without a jury shall forfeit all rights and benefits under Chapter 121, F.S. These crimes include embezzlement or theft from his or her employer, bribery in connection with the employment, engaging in strikes as a public employee, or killing the member to receive the member’s benefits. Please see Sections 112.3173 and 121.091(5), F.S., and the other statutory sections mentioned therein, since these may be changed by the Legislature.

(b) When the SBA, on behalf of the FRS Investment Plan, becomes aware of any accusation of criminal wrongdoing against any employee who is a member of the FRS Investment Plan, the SBA will put a hold on the member’s account to preclude the member from removing any his or her money from the account, until a determination is made on whether charges have been filed and whether the charges are for a forfeitable offense.

(c) If the charges against the member are not pursued and are dropped by law enforcement officials, the hold on the member’s account will be released upon receipt of notification from the proper law enforcement agency.

(d) If the member is indicted and convicted, or pleads guilty, or pleads nolo contendere, the SBA will acquire a certified copy of the judgment and will contact the member to advise the member that the Investment Plan benefit his account is forfeited and that the member, if he wants to contest the forfeiture, he has the right to a hearing to contest the forfeiture. The hold on the member’s account will remain in place until:

1. The time to request a hearing has passed and no request for a hearing is made, or

2. The conclusion of the hearing and any appeal of the final order issued after the conclusion of the hearing.

(e) At the conclusion of either subparagraph (d)1. above, or subparagraph (d)2. above, if the member’s hearing and/or appeal are is unsuccessful, the SBA will direct the Investment Plan Administrator to transfer the member’s account balance to the Investment Plan Forfeiture Account. If such member is subsequently reemployed, the member shall be eligible for benefits based on creditable service earned subsequent to the reemployment. The member shall not be eligible to claim as creditable service, rights or benefits for any period prior to the employment which was forfeited, provided the member did not take a self-initiated distribution of employee contributions.

(f) If a member has requested a self-initiated distribution of all or part of any benefit, the member shall be required to repay the benefit, if it is determined that the member forfeited all rights and benefits under the FRS. Any such member may contest the forfeiture as stated in subsection (d) above. If the member fails to repay the benefit, the SBA may pursue all legal options.

(g) If a member receives a pardon for any crime applicable to any FRS employment, the member shall have all benefits previously forfeited returned to his FRS Investment Plan account plus any earnings while invested in the TIPS Fund.

(3) Forfeiture of Beneficiary’s Rights Due to Criminal Activity.

(a) A beneficiary, whether designated or pursuant to Florida law, of a deceased member who, by a verdict of a jury or by a court trying the case without a jury, is found guilty, or who has entered a plea of nolo contendere, of unlawfully and intentionally killing or procuring the death of such member, shall forfeit all rights to the deceased member’s retirement benefits. Any benefits will be paid as such beneficiary had predeceased the deceased member.

(b) No benefits will be paid until there is a final resolution of such charges against the beneficiary, including any appeals.

(4) Authorized uses of the Investment Plan Trust Fund Forfeiture Account.

(a) The Investment Plan Forfeiture Account is funded with unvested account balances forfeited by members as described above in this rule and with account balances forfeited due to criminal activity as described above in this rule.

(b) Section 121.4501(13), F.S., requires that the Investment Plan be administered so as to comply with the requirements of the Internal Revenue Code in order to maintain a tax-qualified status.

(c) Pursuant to a private letter ruling from the Internal Revenue Service, the Forfeiture Account may be used for two purposes:

1. Payment of Investment Plan Administrative expenses, such as fees related to the activities of the FRS Investment Plan Administrator and the custodian, investment and administrative consulting fees, and services rendered for the benefit of members of both the FRS Investment Plan and the FRS Pension Plan where costs can reasonably be allocated to each plan;, and

2. Reduction of future employer contributions to the Investment Plan.

(d) Consistent with Internal Revenue Service Rulings 80-155 and 74-340, unallocated reserves within the Forfeiture Account will be used as quickly and as prudently as possible considering fiduciary duty. The expected withdrawals from the Account should endeavor to reduce the Account to zero each fiscal year end.

Rulemaking Specific Authority 121.4501(8)(a) FS. Law implemented 112.3173, 121.021(29), (39), 121.091(5), 121.4501(b),(13), (20), 121.591, 732.802 744.301 FS. History–New 11-26-07, Amended 12-8-08,_________.

 

19-11.009 Reemployment with an FRS-covered Employer after Retirement.

(1) Purpose: The purpose of this rule is to clarify the provisions regarding reemployment after retirement for FRS Investment Plan members. The limitations of this rule apply to reemployment in any capacity irrespective of the category of funds from which the member is compensated.

(2)(a) A member who has terminated FRS-covered employment and has taken a distribution from his Investment Plan account is considered a retiree, as of the date of the distribution, in accordance with Section 121.4501(2)(j), F.S. As a retiree, the former member shall not be reemployed with an FRS-covered employer until he has been retired for 12 months, except under certain limitations. Any retiree may return to employment with an FRS-covered employer after 12 calendar months of retirement and may take distributions from prior career benefits, even while reemployed. A retiree may work for any private employer or for any public employer who does not participate in the FRS without affecting his/her FRS retirement benefits.

(b) A member who is reemployed with an employer during the first six calendar months after retirement shall be deemed to not have retired. The distribution will be deemed an invalid distribution. The member shall be required to repay the entire invalid distribution within 90 days of the member’s receipt of a final notification.

(c) There are exceptions to paragraph (2)(a) above. This paragraph does not contain an exhaustive list of all possible situations. Members who are not in exactly the same circumstances as described in this paragraph should call the toll-free MyFRS Financial Guidance Line at 1(866)446-9377, Option 1, to have their situations properly analyzed.

(1)1. If reemployed prior to July 1, 2010, a member who has reached his normal retirement date, in accordance with Section 121.021(29), F.S., may return to FRS-covered employment after being retired for six calendar months. Six calendar months means six full calendar months following the month the member retired. For example, if a member retires in January, the six calendar months are February, March, April, May, June, and July. The retiree may return to employment in August. The retiree may return to employment in one of the excepted positions identified in Section 121.091(9)(b), F.S., and continue to take distributions from prior career benefits. If the retiree returns to work in a position that is not one of the exceptions allowed by law, the he/she must suspend receipt of any remaining retirement benefits is suspended until either employment is terminated or the completion of 12 calendar months of retirement.

(2)2. If reemployed on or after July 1, 2010, a member may return to work in any position with an FRS-covered employer after being retired for six calendar months. Six calendar months means six full calendar months following the month the member retired. For example, if a member retires in January, the six calendar months are February, March, April, May, June, and July. The retiree may return to employment in August. The member must suspend receipt of any remaining retirement benefits until either employment is terminated or the completion of 12 calendar months of retirement. Effective July 1, 2010, there are no excepted positions. A member reemployed on or after July 1, 2010 will not be permitted to renew membership in the FRS.

(3) The Plan Choice Administrator must be informed whenever an FRS Investment Plan retiree returns to employment with an FRS-covered employer during the first 12 calendar months of retirement.

(a) Any retiree employed in violation of the FRS Investment Plan reemployment limitations and an employer that employs or appoints such person are jointly and severally liable to the retirement trust fund for reimbursement of any benefits paid.

(3)(b) To help prevent hiring an ineligible retiree this issue, the employer should obtain a written statement from each prospective employee as to the employee’s retirement status. The written statement can be set forth on the “Certification Form,” Form CERT, rev. 02-12 09-10 http://www.flrules.org/Gateway/reference.asp?No=Ref-01067 which is hereby adopted and incorporated by reference http://www.flrules.org/Gateway/reference.asp?No=Ref-00425. The form and can be found on the MyFRS.com website. This form should be retained in the employee’s personnel file.

(c) When a prospective employee signs the Certification Form, the employee is certifying that he or she has not retired from any State of Florida administered retirement plan nor concluded participation in the Deferred Retirement Option Program (DROP) within the past 12 months, or received an initial distribution or rollover from the FRS Investment Plan within the last 6 calendar months.

Rulemaking Authority 121.4501(8)(a) FS. Law Implemented 121.021(29), (39), 121.091(9)(b), (c), 121.4501(2)(j), 121.591(1)(a)4. FS. History–New 11-26-07, Amended 12-8-08, 8-7-11,_________.

 

19-11.010 FRS Investment Plan: Privacy.

(1) The State Board of Administration (SBA), as the Plan Sponsor of the FRS Investment Plan, provides for the collection of personal identifying information from each of its members and beneficiaries are required to submit certain personal identifying information, including their federally-issued social security number. This information is collected by the Investment Plan’s Recordkeeper and Plan Choice Administrator. This information is collected so that each member can be properly and definitively identified to ensure that he or she is correctly identified for the day-to-day administration of the FRS Investment Plan and that he or she is the actual person who is in fact a member of the FRS Investment Plan and so that unauthorized persons are prevented from having personal, familial, medical, and financial information. Each of the vendors under contract with the SBA has its own privacy policy which the SBA has approved is contractually obligated to protect this information to the fullest extent permissible by law.

(2) Section 121.4501(19), F.S., prevents the SBA from sharing “[a]ll personal identifying information” under Chapter 119, F.S., the Public Records Law. The section does permit the SBA to use this information in an administrative or legal proceeding, as necessary.

(2)(3) A member of the FRS Investment Plan may is allowed to authorize a particular person such as the member’s spouse or financial advisor, to receive personal identifying information by giving the person a power of attorney or by submitting a signed and notarized consent clearly identifying the person to whom the information may be given as well as specifying exactly what information may be disclosed. Such a person is often the member’s spouse or financial advisor. To allow the FRS Investment Plan Administrator or Plan Choice Administrator to reveal personal identifying information, the member must provide authorization in advance of any discussion, naming the person and identifying that person in a way that can be verified.

(3)(4) Upon the death of When an Investment Plan member who had submitted submits a beneficiary designation form and then dies, the person or persons named as beneficiary(ies) must provide certain personal identifying information to the SBA before any information regarding the member will may be released by the SBA. The This types of information are is letters of administration issued by the relevant probate court; certified copies of the death certificate; copies of marriage certificates; the member’s social security number; and any other requested information that can be verified with a governmental agency.

Rulemaking Specific Authority 121.4501(8)(a) FS. Law Implemented 119.071, 121.4501(19) FS. History–New 11-26-07, Amended________.

 

19-11.011 Employer and Employee Contributions and ABO or Present Value Transfer Procedures.

(1) Employer and Employee contributions.

(a) All state, school district, and local employers who participate in the Florida Retirement System (FRS) (employers) and each employee are responsible for making the contributions required by Chapter 121, F.S.

(b) Employers shall submit a monthly payroll report and accompanying employer and employee contributions by the fifth (5th) business day following the month in which the salary was paid. For example, if the salary is paid in March, the monthly payroll report and contributions are due to the Division by the 5th business day of April.

(2) One Percent Penalty for Late Payroll Reporting.

(a) The portion of the one percent penalty assessed on late contributions and accompanying payroll data attributable to contributions for the FRS Investment Plan members shall be proportionally divided and deposited into affected member accounts, using the members’ FRS Investment Plan investment allocation in effect at the time of the deposit.

(b) Any employer requesting a waiver of the delinquency fee in accordance with Section 121.78(3)(e), F.S., shall make a written request, setting forth a full description of the facts and circumstances, to the Office of Defined Contribution Programs, State Board of Administration of Florida, 1801 Hermitage Blvd., Suite 100, Tallahassee, Florida 32308. Waiver of the fee is at the discretion of the SBA. A waiver may be granted only once for an employer in any one fiscal year. Once a delinquency fee has been paid to a member’s account, it cannot be waived.

(3) Market loss calculation for late payroll reporting.

(a) A market loss occurs when an employer fails to timely remit the monthly payroll file and accompanying employer and employee contributions to the Division by the 5th business day of the next month the payroll file and associated employer and employee contributions are due as described in subsection (1) above and the receipt of monthly payroll file and/or the employer and employee contributions are received in the month following the due date or after.

(b) The Division will notify the administrator of the late filing by the employer. Upon notification, the Administrator will determine market losses using the affected member’s investment allocation on record with the Administrator at the time of calculation.

(c) The Administrator will perform the market value calculation using a period certain which is the 15th of the month in which the payroll is due, or the next succeeding business day if the day falls on a weekend or legal holiday, in which contributions would have been processed, and ending on the date the payroll is received by the Administrator.

(d) If contributions and accompanying payroll data are not received within the calendar month they are due, but that lateness does not result in market losses to members, only the one percent late assessment will apply to the employer.

(e) The Administrator will not perform the market loss calculation until a covered payroll and accompanying payroll data is received and processed by the Administrator.

(4) Prior Period Adjustments.

(a) Employer and employee contributions paid for a prior period shall be subject to a delinquent fee of 1.0 percent for each calendar month or part thereof that said contributions should have been paid. This includes prior period contributions due to incorrect wages and contributions for an earlier report or wages and contributions that should have been reported, but were not. If the delinquent assessment is not remitted within 30 days following the Division’s invoice date, an additional delinquent assessment of 1.0 percent on the invoiced amount shall be assessed for each calendar month or part there of that said invoice is delinquent. This delinquent assessment cannot be waived.

(b) When an employer requests an adjustment to retirement contributions or accompanying payroll data for prior periods for FRS Investment Plan members, the adjustment will be processed to the extent administratively possible. Under no circumstance shall the SBA, the FRS Investment Plan Trust Fund, or the Florida Retirement System Trust Fund incur any loss or gain as a result of an employer’s adjustments for an FRS Investment Plan member or a former member.

(5) If an agency fails to pay the total amount due within 120 calendar days from the date of the Division’s invoice, the procedures outlined in the Division’s subsection 60S-3.011(5), F.A.C., shall be applicable.

(6) Federally Mandated Monitoring of Contributions.

(a) The FRS Investment Plan Administrator will be responsible for monitoring federally mandated contribution limits pursuant to Internal Revenue Code Section 415(c) (“Section 415(c) limitation”).

(b) In no event shall the aggregate of the allocation of employer and employee contributions to an FRS Investment Plan member’s account(s) in the FRS Investment Plan and the annual addition to an FRS Investment Plan member’s account(s) in any other defined contribution plan maintained by the employer exceed the Section 415(c) limitations for defined contribution plans.

(c) Employers shall cooperate with the FRS Investment Plan Administrator or its agent in order for the Administrator or its agent to be able to monitor the 415(c) limitation on employer and employee contributions.

(d) Employers shall be responsible for providing all financial and payroll data which the FRS Investment Plan Administrator or its agent must use to determine whether or not the 415(c) limitation has been exceeded.

(e) Pursuant to Section 121.4501(5)(d), F.S., the Administrator will notify the employer regarding maximum contribution levels permitted under the Internal Revenue Code and if a member exceeds those limits.

(f) The Employer is responsible for notifying a member if the total contributions made to the FRS Investment Plan and to any other such plan exceed federally permitted maximums and to take appropriate steps to correct such excess contributions as set forth in paragraphs (g) and (h) below.

(g) In the event the aggregate annual additions to a member’s account(s) in the FRS Investment Plan and in any other defined contribution plan maintained by the employer exceed the 415(c) limitation during any limitation year, the excess shall be attributed first to such other plans.

(h) If any excess remains after attribution to such other plans, the amount of any such excess attributable to the allocation of forfeitures, to a reasonable error in estimating a member’s annual compensation or to any other circumstances that the Commissioner of Internal Revenue finds is justified, in accordance with Treasury Regulation 1.415-6(b)(6), shall be used to reduce the employer’s contributions for such member under the FRS Investment Plan in the next and succeeding limitation years; provided, however, that if the member is not covered by the FRS Investment Plan at the end of the limitation year, such excess amount will be used to reduce the employer’s contributions to remaining members under the FRS Investment Plan in the next, and succeeding, limitation years.

(i) If the correction method, above, is not available, other methods of correcting excess annual additions are permitted if in accordance with Treasury Regulation 1.415-6(b)(6).

(7) Contribution Rates.

(a) The employer and employee contributions received by a member of the FRS Investment Plan prior to effective enrollment in the FRS Investment Plan will be at the rate established pursuant to Section 121.71, F.S. The amount will be transferred into the employee’s FRS Investment Plan account as the opening account balance.

(b) After effective enrollment in the FRS Investment Plan, the member shall receive the employer and employee contribution at the rate established by Section 121.71, F.S. and Section 121.72, F.S. appropriate to that member’s class of membership.

(8) Asset Transfer and True-Up Procedures for Newly-hired Employees with Previous FRS Service.

(a) For members with previous FRS service who elect to enroll in the FRS Investment Plan who have prior FRS credible service, the Division shall calculate the amount of the member’s ABO or present value of the FRS Pension Plan benefit. This amount shall be transferred to the member’s FRS Investment Plan account and shall be allocated to each investment product selected by the member.

(b) The Division shall determine the member’s ABO or present value as of the last day of the month prior to the employee’s effective date of enrollment in the FRS Investment Plan. For example, if the Division receives the enrollment during the month of June, the effective date of enrollment for the employee in the FRS Investment Plan is July 1 and the Division shall calculate the member’s ABO or present value, if any, through June 30.

(c) By the 25th day of the month, the Division shall notify the FRS Investment Plan Administrator of the ABO or present value for each Investment Plan member whose effective date of enrollment is the first day of the month. The Administrator shall notify the SBA of the aggregate ABO or present value of members whose effective date of enrollment is the first day of the month.

(d) On the last business day of the effective month of enrollment in the FRS Investment Plan, the SBA shall effectuate the transfer of the aggregate ABO or present value amount to the FRS Investment Plan Administrator for allocation to the applicable FRS Investment Plan member accounts based on the investment option designated by the member, and if no allocations were provided by the member, then to the Moderate Balance Fund.

(e) The total amount initially credited to each FRS Investment Plan member’s account who elected to transfer the ABO or present value from the FRS Pension Plan was an estimate of the member’s ABO or present value. Pursuant to Section 121.4501(3)(b)2., F.S., the Division shall re-compute the ABO or present value not later than 60 days after the initial transfer of funds. If the re-computed amount differs from the estimated ABO amount by plus or minus $10 or more, the Division shall provide the aggregate adjustment amount to be transferred to or from the FRS Investment Plan Administrator for the affected member(s).

(f) The Division shall notify the Administrator of the true-up amounts plus interest by member account within 50 days of the initial transfer. The true-up transfer shall include the true-up amount determined by the Division plus interest at the rates specified in Section 121.4501(3)(b)2., F.S., from the date of the initial transfer to the date of the true-up transfer. The transfer of the true-up amount plus interest shall occur on the 60th day following the initial transfer. In the event the 60th day following the initial transfer falls on a Saturday, Sunday, or a legal holiday, the true-up transfer shall occur on the last business day of the month preceding the Saturday, Sunday, or legal holiday.

(g) The Division shall calculate the interest owed on true-up amounts. If the re-computed ABO is greater than the original amount transferred by plus or minus $10 or more, the member will be owed a true-up amount plus interest. Interest will be calculated pursuant to Section 121.4501(3)(b)2., F.S. If the re-computed ABO is less than the original amount transferred by plus or minus $10 or more, the member will owe a true-up amount plus interest. Interest will be calculated pursuant to Section 121.4501(3)(b)2., F.S.

(h) The Administrator shall notify the SBA of the aggregate true-up value for those members determined to have a true-up adjustment. On the last business day of the month in which the true-up amount is due, the SBA shall effectuate the transfer of the aggregate true-up amount to the FRS Investment Plan Administrator for allocation to the applicable member accounts based on the investment fund allocations designated by the member(s).

Rulemaking Authority 121.78(3)(c), 121.4501(8) FS. Law Implemented 121.71, 121.72, 121.78, 121.4501 FS. History– New_________.

 

19-11.012 Acceptance of Rollovers by the FRS Investment Plan.

(1) An FRS Investment Plan member may rollover assets from other qualified plans into the Investment Plan. These qualified assets can come from:

(a) A qualified Traditional IRA at another custodian;

(b) An eligible retirement plan (Code Section 401 defined contribution plan, Code Section 401 defined benefit plan, Code Section 457 plan, or Code Section 403(b) plan); or

(c) The Federal Employee’s Thrift Savings Plan.

(2) A member may not rollover assets into the Investment Plan from the following:

(a) Roth IRAs;

(b) Payments spread out over long periods of time, for example, from an annuity. These would include payments made at least once a year and lasting for the lifetime or life expectancy of the member, or for the lifetime (or life expectancies) of the member and the member’s beneficiary, or for a period of 10 years or more;

(c) A Required Minimum Distributions required to be paid to a member who has reached age 70 1/2;

(d) Emergency withdrawals from a Code Section 457 plan; or

(e) Hardship withdrawals from a Code Section 401 or 403(b) plan.

(3) Before accepting a rollover to the Plan, the Investment Plan Administrator evaluating the rollover shall first obtain sufficient evidence from the member to support a reasonable conclusion that the rollover is valid under the Code.

(4) The Investment Plan Administrator shall accept that portion of a rollover in a direct trustee-to-trustee transfer which include both taxable and non-taxable amounts. The amount of any rollover with both taxable and non-taxable amounts shall be accounted for separately by the retirement plan making the distribution rollover to the Investment Plan.

(5) The member must complete the rollover deposit within 60 days of receiving the assets. Otherwise, the member may be subject to federal income tax and early withdrawal penalty.

(6)(a) The Investment Plan Administrator may accept rollovers from:

1. A current or former Investment Plan member. Such member shall use Form IPRO-1, as described in subsection (8), below

2. Participants in the Deferred Retirement Option Program (DROP), after the conclusion of such DROP participation. Such member shall use Form IPDROP-AD-1, as described in subsection (8) below.

3. Former DROP members who had previously rolled over their DROP accumulation:

a. To the Investment Plan and subsequently rolled their DROP account balance out of the Investment Plan. Such member shall use Form IPDROP-RO-1, as described in subsection (8) below.

b. To another qualified retirement account and want to invest the DROP accumulation in the Investment Plan. Such member shall use Form IPDROP-RO-1, as described in subsection (8) below.

4. Members of the Teacher’s Retirement System and the State & County Officers & Employees Retirement System with eligible DROP proceeds after their conclusion in the DROP. Such member shall use Form IPDROP-AD-1, as described in subsection (8) below.

(b) All rollovers from into the Investment Plan must be more than $1,000.00 or such amount that will cause the account balance to be greater than $1,000.00.

(c) The Investment Plan Administrator may not accept rollovers from:

1. The former spouse of an Investment Plan member who had an account in the Investment Plan, established by terms of a qualified domestic relations order and then removed all of the funds from the account.

2. The former beneficiary of an Investment Plan member who removed all of the funds from the account.

(7) Payment to the Investment Plan must be in the form of a check made payable to the “FRS Investment Plan – FBO (the participant’s name).”

(8)(a) Instructions regarding check delivery and other information relating to the processing of rollovers, including all applicable forms, may be obtained by calling the MyFRS Financial Guidance Line, which is a toll free line: 1(866)446-9377, Option 4, or, for members who are deaf, hard of hearing, or speech impaired, TRS 711, or by accessing the website at www.MyFRS.com.

(b) Current members shall use Form IPRO-1, rev. 12-09, “Employee Rollover Deposit Instructions and Form,” http://www.flrules.org/Gateway/reference.asp?No=Ref-01124, which is hereby adopted and incorporated by reference, to effect rollovers described in this rule.

(c) Current DROP members planning to roll over their DROP accumulation shall use Form IP-DROP-AD-1, “DROP Accumulation Direct Rollover Form for Current DROP Members,” rev. 03-11, http://www.flrules.org/Gateway/reference.asp?No=Ref-01126, which hereby is adopted and incorporated by reference, to effect rollovers described in this rule.

(d) Former DROP members shall use Form IP-DROP-RO-1, “DROP Direct Rollover Form for Former DROP Members,” rev. 03-11, http://www.flrules.org/Gateway/reference.asp?No=Ref-01125, which hereby is adopted and incorporated by reference, to effect rollovers described in this rule.

(9) Rollovers to the Investment Plan shall be accounted for separately on the recordkeeping system of the Investment Plan Administrator.

(10) Member rollover deposits will be reported to the Internal Revenue Service.

(11) Once an active Investment Plan member rolls over monies into the Investment Plan, the member cannot receive a distribution of these monies, or the member’s account balance, until the expiration of the three calendar months after terminating all FRS-covered employment. A member who has reached the normal retirement date as provided in Section 121.021(29), F.S., and who has terminated employment from all FRS-covered employment for one calendar month may request a one-time distribution of up to 10 percent (10%) of the vested account balance.

(12) An Investment Plan member electing to transfer to the Pension Plan and that has an excess balance remaining in the Investment Plan account after satisfying any required Pension Plan buy-in amounts, may elect to use all or part of that remaining balance to purchase service credit in the Pension Plan. The member will need to complete Form PRO-2, “Pre-tax Direct Rolloever/Transfer Form,” rev. 10-10, http://www.flrules.org/Gateway/reference.asp?No=Ref-01184, which hereby is adopted and incorporated by reference, to effect this purchase. The completed form is to be sent to the Investment Plan Administrator.

Rulemaking Authority 121.4501(8), (5)(e) FS. Law Implemented 121.4501(4)(g)5., (5)(e), (21), 121.591 FS. History–New_________.

NAME OF PERSON ORIGINATING PROPOSED RULE: Ron Poppell, Senior Officer, Defined Contributions Programs
NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Trustees of the State Board of Administration
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: April 24, 2012
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: March 23, 2012