19-11.003: Distributions from FRS Investment Plan Accounts
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
PURPOSE AND EFFECT: To adopt amended forms, to adopt two definitions.
SUMMARY: To adopt four revised forms and two definitions and provide indications of the definitions’ usage.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: The agency has determined that these rules will not have an impact on small business. A SERC has been prepared in an abundance of caution.
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(3)(c)4., (8)(a) FS.
LAW IMPLEMENTED: 120.569, 120.57, 120.573, 121.012(29), (39), 121.051, 121.055, 121.35, 121.4501(2), (3), (4), (5), (6), (8)(b)4., (9)(f)3., (15)(b), 121.591, 121.73, 121.77, 121.78, 215.44(8)(b), 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:
DATE AND TIME: Monday, April 13, 2009, 9:00 a.m. – 11:00 a.m.
PLACE: Hermitage Room, Hermitage Centre, 1801 Hermitage Blvd., Tallahassee, FL 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: Cindy Morea, Office of Defined Contributions, SBA, 1801 Hermitage Blvd., Tallahassee, FL 32308; (850)413-1491; cindy.morea@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: Cindy Gokel, SBA, 1801 Hermitage Blvd., Tallahassee, FL 32308; (850)413-1199; cindy.gokel@sbafla.com
THE FULL TEXT OF THE PROPOSED RULE IS:
19-11.003 Distributions from FRS Investment Plan Accounts.
(1) through (2) No change.
(3) Distributions available after the member terminates FRS-covered employment.
(a) An FRS Investment Plan member shall not be entitled to a distribution from his account unless he has been terminated from all FRS-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. 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. The termination form is called “Employment Termination Form,” Form ETF-2, rev. 01/09 and can be found on the MyFRS website. This form has instructions and a section for employer certification.
(b) 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.
(c) 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 his account balance. For example, if a member terminates on May 15, the one calendar month is June. Therefore, the member can request a one-time distribution of up to 10 percent (10%) in July.
(d) 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 he begins receiving his Pension Plan benefits.
(4) 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 IPDB, “Death Benefit Information and Distribution Claim Form,” rev. 01-09 08-06, which is hereby adopted and incorporated by reference, with the FRS Investment Plan Administrator, to receive benefits.
(5) through (7) No change.
Rulemaking Specific Authority 121.4501(8)(a) FS. Law Implemented 121.021(29), (39), 121.4501(20), 121.591, 121.77 FS. History–New 3-9-06, Amended 11-26-07, ________.
19-11.005 FRS Investment Plan Complaint Procedures.
(1) through (2) No change.
(3) Procedures.
(a) 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:
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
b. By e-mail: DefinedContributionPrograms@sbafla.com; or
c. By fax: (850)413-1489.
2. The Member shall use “FRS Investment Plan Request for Intervention,” Form SBA-RFI 01/2009 08/2007, which is hereby adopted and incorporated by reference. The form may be obtained by using the toll free number at 1(866)446-9377 and requesting that 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.
3. The Member must provide all information. If all information is not provided, the form shall be returned to the Member so that the missing information can be added.
4. Upon receipt of the complete Request for Intervention, an acknowledgment will be sent by regular US mail or emailed to the Member.
5. The SBA will conduct an investigation and prepare and send to the Member an agency action letter detailing the SBA’s findings; any proposed resolution; and information on the next steps in the dispute resolution process.
(b) Second Step: Hearing Request.
1. If the Member is not satisfied with the proposed resolution as set out in the agency action letter, the Member may file a Petition for Hearing, “FRS Investment Plan Petition for Hearing,” Form SBA-PFH 01/2009 08/2007, which is hereby adopted and incorporated by reference, with the SBA. The Petition for Hearing is routinely attached to the agency action letter and may also be obtained by calling the toll free number at 1(866)446-9377 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 agency action letter or it will be rejected as untimely and the Member will have waived his right to a hearing.
2. The Member shall use “FRS Investment Plan Petition for Hearing,” Form SBA-PFH 01/2009 SBA-PFH 08/2006. 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.
3. Upon receipt of the Petition for Hearing, the SBA has 15 days to respond to the petition, in accordance with Section 120.569(2)(a), F.S.
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 so notify the Member.
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.
6. The balance of the hearing process shall conform to the requirements of Chapter 120, F.S.
Rulemaking Specific 121.4501(8)(a) FS. Law Implemented 120.569, 120.57, 120.573, 121.4501(9)(f)3. FS. History–New 10-21-04, Amended 3-9-06, 11-26-07,________.
19-11.006 Enrollment Procedures for New Hires.
(1) Purpose. No change.
(2) Definitions.
(a) through (d) No change.
(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)(e) “Employee” means an eligible employee as defined in Section 121.4501(2)(d), F.S.
(g)(f) “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)(g) “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)(h) “FRS Pension Plan” means the defined benefit retirement program of the Florida Retirement System, established in Part I of Chapter 121, F.S.
(j)(i) “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)(j) “Grace Period” means that procedure described in subsection (6), below, which permits, under certain circumstances, the voiding of a retirement plan election.
(l)(k) “Member” means an employee who elects to join the FRS Investment Plan or the FRS Investment Plan Hybrid Option.
(m)(l) “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)(m) “SBA” means the State Board of Administration of Florida.
(o)(n) “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) 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 enrolled in the Elected Officers’ Class or Senior Management Service Class may only enroll in the FRS Investment Plan by submitting an enrollment form.
(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.
(e)(b) 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 1(888)429-2160.
(4) Specific Enrollment Procedures.
(a) through (c) No change.
(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 form is received by the Administrator by 4:00 p.m. Eastern Time. The form shall be transmitted via the U.S. mail.
2. The Administrator shall determine that the employee’s enrollment in the FRS Investment Plan is within the prescribed time period, the form in toto 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 form shall be returned to the employee and resubmitted when complete. An incomplete enrollment by form is a form which is missing the name and address and phone numbers of the member, social security numbers, plan selection, signatures, 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 transfer has been made. An incomplete enrollment by electronic means is one in which the Administrator has no record of receipt and processing of the electronic enrollment.
(e) through (f) No change.
(5) through (9) No change.
Rulemaking Specific 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,________.
19-11.007 Second Election Enrollment Procedures for the FRS Retirement Programs.
(1) through (3) No change.
(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) through (k) No change.
(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 7-08, is hereby adopted and incorporated by reference.
(6) No change.
Rulemaking Specific 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, _______________.