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
19-11.007: Second Election Enrollment Procedures for the FRS Retirement Programs
19-11.009: Reemployment with an FRS-covered Employer after Retirement
PURPOSE AND EFFECT: To adopt revised forms; to adopt one definition; to clarify certain procedures; and to reflect recent legislative changes pertaining to employment after retirement.
SUMMARY: To adopt revised forms; to adopt one definition; to clarify procedures pertaining to beneficiary designations, distributions from Investment Plan Accounts, and Second Election Enrollment forms; and to reflect recent legislative changes pertaining to reemployment after retirement.
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: 121.021(29), (39), 121.091(8), (9), 121.4501(2), (3), (4), (8), (13), (14), (15), (20), 121.591, 121.77 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, November 16, 2009, 9:00 a.m. – 11:00 am.
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: Cindy Morea, Office of Defined Contributions, SBA, 1801 Hermitage Blvd., Tallahassee, Florida 32308; (850)413-1491; cindy.moread@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; telephone (850)413-1182; ruth.smith@sbafla.com.
THE FULL TEXT OF THE PROPOSED RULE IS:
19-11.002 Beneficiary Designation for FRS Investment Plan.
(1) An FRS Investment Plan member may name a beneficiary to receive the benefits which may be payable in the event of the member’s death. If the member does not name a beneficiary(ies) then the member’s beneficiary(ies) will be those as described in Section 121.4501(20), 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 member’s estate.
(2) A designation of beneficiary shall only be effective after it has been received by the FRS Investment Plan Administrator. The most recent designation of beneficiary 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. The member 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. Beneficiary information can be reviewed every quarter on the member’s quarterly statement.
(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. 06/06, the General Retirement Plan Enrollment Form for Regular Special Risk and Special Risk Administrative Support Class Employees, Form ELE-1, rev. 10/06, which are adopted and incorporated by reference in subsection 19-11.006(4), F.A.C., or the 2nd Election EZ Retirement Plan Enrollment Form, Form ELE-2-EZ, rev. 12/06, or the 2nd Election Retirement Plan Enrollment Form, Form ELE-2, rev 12/06, which are adopted and incorporated by reference in Rule 19-11.007, F.A.C., the member has chosen the beneficiary designation contained in Section 121.4501(20), F.S. (See subsection (1), above.) Note that the statutory section provides that 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, if the member marries after designating a beneficiary again, the member he or she must file an updated another beneficiary designation form to ensure that the person he or she wants to be the beneficiary is named 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), once the member is enrolled in the FRS Investment Plan, the member may change his beneficiary designation at any time.
(4) A member may name a beneficiary or beneficiaries at any time, as follows:
(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.
(b) A member may name as beneficiary any person, organization, trust, or his estate.
(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, named with percentages of the funds, they will each receive their member-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.
(d) A contingent beneficiary is one or more persons who are named, in case all primary beneficiaries die before the member. Naming a contingent beneficiary is optional. The member does not have to name anyone as a contingent beneficiary.
(e) Any such beneficiary designation may shall be made on Form IPBEN-1, rev. 09-0903, 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.”
(f) 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) If a member is married and names his spouse 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. 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 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 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. 09-0903, in the appropriate place. If a married member fails to obtain the spouse’s acknowledgment on the beneficiary designation form, then the member will be sent an Acknowledgement of Beneficiary Designation, reminding the member of the necessity of obtaining the spousal ackowledgement. 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 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).
(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 (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 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 paragraph are still living, the account balance will be paid to the Alternate Payee’s estate.
(7)(a) If the deceased member has named a beneficiary but has not provided the beneficiary’s social security number or address, or if the social security number is incorrect, then, after at least three unsuccessful attempts by the SBA or the FRS Investment Plan Administrator to contact the beneficiary, the FRS Investment Plan Administrator will advise the SBA and the account will not be distributed issue a check payable to the beneficiary and hold the check for 180 days, at which time the check will be considered stale-dated.
(b) The FRS Investment Plan Administrator will, with the assistance of the SBA, at the time of notification of death distribution, 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. Additionally, by calendar year-end of each, in the year following the transfer to the Suspense Account, distribution occurred, the FRS Investment Plan Administrator will attempt to locate and obtain the Social Security Number or the Taxpayer Identification Number of the beneficiary, and, at least one time in the calendar year following the distribution death, to locate the beneficiary. The Investment Plan Administrator will document for the Internal Revenue Service the efforts taken to locate the beneficiary’s Social Security Number or Taxpayer Identification Number.
(c) If after one year from date of death no information is available to identify the beneficiary, the FRS Investment Plan Administrator will Once 180 days have elapsed from the date the check was issued, transfer the funds shall be transferred to the FRS Investment Plan Suspense Stale-dated Check Account, indicating the name of the deceased member and the name 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 Stale-dated Check 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 Stale-dated Check 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.
(d) Should the beneficiary be located and provides a social security number, a the check will be reissued, without actual interest or earnings due to the delay in payment, 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.
(8)(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. In the event that no Estate Identification Number is provided, this circumstance, and in accordance with federal guidelines, 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. issue a check payable to the estate of the member and hold the check for 180 days, at which time the check will be considered stale-dated.
(b) The FRS Investment Plan Administrator will, at the time of the transfer to the Suspense Account distribution, make a reasonable effort to obtain the Estate Identification Number. Additionally, by calendar year-end, in the of each year following the transfer to the Suspense Account distribution occurred, the FRS Investment Plan Administrator will attempt to locate and obtain the Estate Identification Number, and, at least one time in the calendar year following the distribution, to locate the Estate Identification Number. The Investment Plan Administrator will document for the Internal Revenue Service the efforts taken to obtain an Estate Identification Number.
(c) Once 180 days have elapsed from the date the check was issued, the funds shall be transferred to the Stale-dated Check Account, indicating the name of the deceased member and the name of the estate. The amount will be held in the FRS Investment Plan Suspense Stale-dated Check 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 Stale-dated Check 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 the check will be reissued, without actual interest or 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 due to the delay in payment subject to applicable income tax withholding, which shall be paid to the tax authorities at the time of such payment to the estate.
Rulemaking Specific Authority 121.4501(8) FS. Law Implemented 121.091(8), 121.4501(20), 121.591(3) FS. History–New 10-21-04, Amended 3-9-06, 11-26-07, 12-8-08,________.
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.
(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 employee can complete and return the “Employment Termination Form,” Form ETF-2, rev. 01/09. The termination form is called Employment Termination Form,” Form ETF-2, rev. 01/09 and can be found on the MyFRS.com website. This form has instructions and a section for employer 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)(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, 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)(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.
(e)(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) through (b) No change.
(c) On the death of a member, the beneficiary must file Form IP-DBF, “Death Benefit Information and Distribution Claim Form,” rev. 019-09, which is hereby adopted and incorporated by reference, with the FRS Investment Plan Administrator, to receive benefits.
(5) 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 named alternate payee may leave their account in the 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 Alternate Payee has received their 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.
(6) 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 $1,000.00 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.
(7) Required Minimum Distributions (“RMD”)
(a) Members, age 70½ 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.
(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 met the RMD requirements, the FRS Investment Plan Administrator will initiate an automatic RMD to meet the mandatory required distribution amount. The member must have terminated all FRS covered employment in order for an RMD to be processed. 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 by November 30.
(8)(5) Distributions to non-spousal beneficiaries who are not spouses.
(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 if he or she wants 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.
(9)(6) 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.
(10)(7) Invalid distributions.
(a) An “invalid distribution” is a distribution given to a member to which the member is not entitled.
(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 shall repay the entire invalid distribution within 90 days of the member’s receipt of a final notification from the SBA. If the member fails to repay the invalid distribution, 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 his FRS Investment Plan account; he will be returned to the Investment Plan; and all future employer contributions will be deposited in the funds 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, the SBA will declare the member a “retiree” and will pursue the repayment of the invalid distribution pursuant to paragraph (b) above. As a “retiree,” the member is subject to the restrictions of Section 121.122, F.S., which means that if the member is reemployed in the future with an FRS-covered employer, 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.
(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 2006. On December 15, 2009 2006, he takes took a partial distribution from his Investment Plan account. However, he returned to FRS-covered employment on December 1, 2009 2006. The member took an invalid distribution because he was working for an FRS-covered employer at the time he received the distribution. His payroll record reflected the August 24, 2009 2006, 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 terminatesd all FRS-covered employment on November 12, 2009 2006. The member has not reached his normal retirement date. On March 1, 2010 2007, the member takes took a total distribution from his Investment Plan account. The member returnesd to FRS-covered employment on April 15, 2007. The March 1, 2010 2007 distribution is invalid since the member returned to work within 36 calendar months of his retirement date.
3. Example 3: A member joined the FRS Investment Plan effective May 1, 2005. He terminatesd all FRS-covered employment on November 12, 2009 2006. The member has reached his normal retirement date. On January 5, 2010 2007, the member receivesd his one-time distribution of up to 10 percent from his Investment Plan account. The member returnsed to FRS-covered employment on May February 15, 2010 2007. The January 5, 2010 2007 distribution is invalid since the member returned to work within 6 1 calendar months of his retirement date.
Rulemaking 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, 5-19-09,________.
19-11.004 Excessive Trading in the FRS Investment Plan.
(1) through (2) No change.
(3) Limitations.
(a) Regarding authorized foreign or global stock 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 all authorized funds, except for money market funds:
1. Members who engage in Market Timing Trades 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 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 Plan Administrator for at least one full calendar month.
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 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. 3/09, 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.
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. 3/09, 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. 3/09, 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.
(4) through (5) No change.
Rulemaking Specific 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,________.
19-11.007 Second Election Enrollment Procedures for the FRS Retirement Programs.
(1) No change.
(2) Definitions
(a) through (e) No change.
(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) No change.
(4) Specific Procedures for the “2nd Election Retirement Plan Enrollment Form.”
(a) through (j) No change.
(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 and address and phone number of the member, social security numbers, plan selection, or signatures, or dates. The member will be required to resubmit a completed enrollment form incomplete form will be returned to the member to add any missing information. 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) through (h) No change.
(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 and address and phone number of the member, social security numbers, plan selection, or signatures, or dates. The member will be required to resubmit a completed enrollment form incomplete form will be returned to the member to add any missing information.
(6) No change.
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,________.
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)(b) 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. If reemployed prior to July 1, 2010, the following will apply:
a.1. 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 one calendar months. Six One calendar months means six the 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, he/she must suspend receipt of any remaining retirement benefits for the remainder of the 12 months after retirement.
b.2. A member who has not reached his normal retirement date, in accordance with Section 121.021(29), F.S., can return to work in one of the excepted positions identified in Section 121.091(9)(b), F.S., FRS-covered employment after being retired for six three calendar months. Six “Three calendar months” means six three full calendar months following the month in which the member retired. For example, if a member retires in January, the six three calendar months are February, March, and April, May, June, and July. The retiree may return to employment in August May 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, he/she must suspend receipt of any remaining retirement benefits for the remainder of the 12 months after retirement.
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 for the remainder of the 12 calendar months after 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.
(4)(a) Any retiree employed in violation of the FRS Investment Plan reemployment limitations and an employer any employing agency which knowingly that employs or appoints such person are jointly and severally liable to the retirement trust fund for reimbursement of any benefits paid. To avoid liability, such employing agency must have a written statement from the retiree that he or she is not retired from a state-administered retirement system.
(b) Liability will be imposed on the employer if such reimbursement is not received from the retiree, unless there is conclusive evidence to show the employer should not be liable.
(c) To assist the employer, a written statement should be obtained from a prospective employee. The written statement can be set forth on the “Certification Form,” Form CERT, rev. 08/2009 and can be found on the MyFRS website. This form should be retained in the employee’s personnel file.
(d) 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 Specific 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,________.