19-12.007: Acceptance of Rollovers
PURPOSE AND EFFECT: These rules are promulgated to implement recently adopted policies and to reflect legislative changes in the FRS Investment Plan.
SUMMARY: Rule 19-12.007, F.A.C., provides procedures for accepting rollovers into the plan from former FRS Investment Plan members.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: The Board has prepared a statement and found the cost to be minimal.
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.
SPECIFIC AUTHORITY: 121.4501(5)(c) FS.
LAW IMPLEMENTED: 119.071, 121.4501 (5)(c), (21) 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:
DATE AND TIME: Tuesday, September 4, 2007, 2:00 p.m. – 4:30 p.m.
PLACE: Room 116 (Hermitage Conference Room), 1801 Hermitage Blvd., Tallahassee, Florida 32308
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Cindy Gokel, Assistant General Counsel, State Board of Administration, P. O. Drawer 13300, Tallahassee, FL 32317-3300; telephone: (850)413-1199
THE FULL TEXT OF THE PROPOSED RULE IS:
19-12.007 Acceptance of Rollovers.
(1) Notwithstanding the definitions of Rule 19-12.001, F.A.C., for purposes of this section the following words and terms have the following meanings:
(a) “Rollover” means either a direct rollover from another eligible retirement plan or a deposit of an eligible rollover distribution to the Investment Plan for the benefit of the participant that satisfies the time period requirement and other requirements of Code s. 402(c).
(b) A “direct rollover” means an eligible rollover that is made directly to the Investment Plan from another eligible retirement plan for the benefit of the participant.
(c) An “eligible rollover distribution” means any distribution of all or any portion of another eligible retirement account to the credit of the participant from an eligible retirement plan. Except for that portion of a distribution not includible in gross income which is transferred directly to the Plan in accordance with Code s. 402(c)(2), an eligible rollover distribution does not include any of the distributions described in the second sentence of the definition of “eligible rollover distribution” in Rule 19-12.001, F.A.C.
(d) An “eligible retirement plan” means any of the types of plans included in the definition of “eligible retirement plan” in Rule 19-12.001, F.A.C., that provides the participant’s eligible rollover distribution to the Investment Plan.
(2) It is intended that the Plan accept rollovers in accordance with the requirements of this rule. Except as otherwise provided below, before accepting a rollover to the Plan, the Investment Plan Administrator evaluating the rollover shall first obtain sufficient evidence to support a reasonable conclusion that the rollover is valid under the Code and shall determine that such rollover meets the requirements of this rule.
(3) The Plan Administrator shall accept that portion of a rollover in a direct trustee-to-trustee transfer which has been identified by the eligible retirement plan making the distribution as not includible in gross income if such portion is otherwise eligible for rollover. Such amount shall be accounted for separately, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible. The Plan Administrator may accept rollovers from a former Investment Plan member who has taken a distribution of all of his or her account balances. Such member shall use Form IPRO-1, as described in subsection (5), below. The Plan Administrator may not accept rollovers from a former spouse or former beneficiary of an Investment Plan member who had an account in the Investment Plan, established by terms of a qualified domestic relations order or by the Investment Plan Beneficiary Designation Form, and then removed all of the funds from the account. All rollovers from former Investment Plan members must be more than $1,000.00. The Plan Administrator may accept rollovers from participants in the Deferred Retirement Option Program (DROP), after the conclusion of such DROP participation. Members of the Teacher’s Retirement System and the State & County Officers & Employees Retirement System are eligible to roll over their DROP proceeds after their conclusion in the DROP.
(4) Payment to the Plan must be in cash in the form of a check. In a direct rollover the check should be made payable to the “FRS Investment Plan FBO (the participant’s name).”
(5) Instructions regarding check delivery and other information relating to the processing of rollovers may be obtained by calling the MyFRS Financial Guidance Line, which is a toll free line: (866)446-9377 or accessing the website at www.MyFRS.com. Participants shall use Form IPRO-1, rev. 09-05, “Employee Rollover Deposit Instructions and Form,” which is hereby adopted and incorporated by reference, to effect rollovers described in this rule. Former DROP members shall use form IP-DROP-RO-1, “DROP Direct Rollover Form for Former DROP Members,” rev. 07-05, and 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. 07-05, both of which are adopted and incorporated by reference, to effect rollovers described in this rule.
(6) Rollovers to the Plan shall be accounted for separately on the recordkeeping system of the Investment Plan Administrator.
Specific Authority 121.4501(5)(c) FS. Law Implemented 121.4501(5)(c), (21) FS. History–New 12-8-02, Amended 10-21-04, 3-9-06,_________.