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


Effective on Monday, February 12, 2018
  • 1(1)(a) An Investment Plan member may designate a beneficiary to receive the benefits which may be payable in the event of the member’s death. If the member does not designate a beneficiary(ies), 33or if no designated beneficiary survives the member, 41then the member’s beneficiary(ies) will be those specified by Section 51121.4501(20), F.S. 53which are: 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 member’s father or mother, if living; otherwise the deceased member’s estate.

    102(b) An Investment Plan member who dies in the line of duty shall have survivor benefits paid in accordance with Section 123121.591(4), F.S., 125and Rule 19-11.014, F.A.C.

    129(c) Monthly survivor benefits for the spouse and child(ren) of members provided by Section 143121.591(4), F.S., 145are payable in lieu of benefits otherwise payable under Section 155121.591(1), F.S., 157or survivor benefits payable under Section 163121.591(3), F.S., 165and shall supersede any other distribution that may have been provided by the member’s designation of beneficiary.

    182(2) Any such beneficiary designation may be made on Form IPBEN-1, FRS Investment Plan Beneficiary Designation, rev. 04-16, 200http://www.flrules.org/Gateway/reference.asp?No=Ref-07364, 202which 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 Investment Plan Administrator before it becomes effective. Alternatively, a beneficiary may be designated electronically by logging on to MyFRS.com, 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).

    313(3) A beneficiary designation shall only be effective once it is received by the Investment Plan Administrator. The most recent beneficiary designation filed with the Investment Plan Administrator shall replace any previous designation whether made before or after the member’s termination of employment or retirement. 358After submitting the designation, the member is responsible for confirming whether the designation has been received by the Investment Plan Administrator. The beneficiary designation is printed every quarter on the member’s quarterly statement.

    391(4)(a) If the member enrolls in the 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. 08-16, the General Retirement Plan Enrollment Form for Regular Special Risk and Special Risk Administrative Support Class Employees, Form ELE-1, rev. 07-17, which are adopted and incorporated by reference in subsection 45219-11.006(2), 453F.A.C., 454or the 2nd Election EZ Retirement Plan Enrollment Form, Form ELE-2-EZ, rev. 46607-17, 467or the 2nd Election Retirement Plan Enrollment Form, Form ELE-2, rev 47807-17, 479which are adopted and incorporated by reference in subsection 48819-11.007(3), 489F.A.C., 490the member agrees to the beneficiary designation contained in Section 500121.4501(20), F.S., 502unless the member submits a beneficiary designation as provided in subsection (2), herein.

    515(b) If the member marries 520after designating a beneficiary, the member must file an updated beneficiary designation 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, the member’s spouse will be the beneficiary of the member’s account. The spouse must provide a copy of the marriage certificate verifying that the marriage occurred after the most recent beneficiary designation. 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.

    626(c) Once a member is enrolled in the Investment Plan, the member may designate a beneficiary at any time, as follows:

    6471. A member may name a beneficiary or beneficiaries to receive the assets of the member’s Investment Plan account, either sequentially or jointly.

    6702. A member may name as beneficiary any person, organization, trust, or the member’s estate.

    685(d) 686A primary beneficiary is someone who will receive the member’s funds from the Investment Plan account, if that person is living at the death of the member. If more than one primary beneficiary is designated with specified percentages of the funds, each will receive their member-specified 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.

    779(e) A contingent beneficiary is one or more person(s) 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 and the person designated cannot also be a named primary beneficiary. If a member submits a beneficiary designation listing the same person(s) or entity as both primary and contingent beneficiaries, the person(s) or entity will only be accepted as the primary beneficiary designation. All other persons or entities will be accepted as contingent beneficiaries.

    868(f) If a member inadvertently uses an incorrect beneficiary designation form, the Investment Plan Administrator will notify the member and request that the member complete and submit the correct form, Beneficiary Designation Form IPBEN-1, rev. 04-16. If the member should die prior to completing and submitting the IPBEN-1 form, the 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.

    943(g) If the member submits a beneficiary form that is incomplete, it will not be processed. An incomplete form is a form which is missing the name of the member, the last four numbers of the member’s social security number, or the member’s signature, or a form indicating that the shares assigned to joint primary or contingent beneficiaries are greater to, or less than, 100%.

    1008(5)(a) 1009If a member is married and the 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.

    1048(b) If 1050a 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 is not a primary beneficiary of the proceeds of the member’s Investment Plan account(s). The spouse must acknowledge that the spouse understands that the spouse is not a primary beneficiary of the member’s Investment Plan account(s) by signing the beneficiary designation form, Form IPBEN-1, rev. 04-16, in the appropriate place.

    1132(c) If a married member fails to obtain the spouse’s acknowledgment on the beneficiary designation form, then the 1150Investment Plan Administrator will send to the 1157member an Acknowledgement of Beneficiary Designation, reminding the member of the necessity of obtaining spousal ackowledgement. The member can return this Acknowledgement of Beneficiary Designation with the spouse’s signature which will provide acknowledgement that the spouse is not the primary beneficiary of the member’s Investment Plan account(s). Alternatively, the member may provide the Investment Plan Administrator with a notarized statement reflecting the spouse’s understanding that the spouse is not the beneficiary of the member’s Investment Plan account(s).

    1234(d) If the member fails to obtain the 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 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.

    1298(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 subsection (2) and paragraphs (5)(a) through (f) above, once the Alternate Payee’s account has been established by the Investment Plan Administrator.

    1349(b) If the Alternate Payee does not name a beneficiary(ies), then the Alternate Payee’s beneficiary(ies) will be those as described in subsection (1).

    1372(7) Per Florida Law Beneficiary Designation.

    1378(a) If a member fails to designate a beneficiary as outlined in subsection (2) above, the member’s designation of beneficiary will automatically be assigned a designation of “Per Florida Law” as outlined in Section 1412121.4501(20), F.S. 1414To establish entitlement to the member’s account, the benficary(ies) may be required to provide the following, as applicable: a copy of the marriage certificate, copy of the member’s birth certificate, copy of the birth certificate(s) of the beneficiary(ies), legal guardianship documents issued by a court of competent jurisdiction, a notarized written statement confirming the identity of all surviving family members, tax identification number of the member’s estate, or a notarized written document stating that the deceased is not survived by a spouse, child(ren) or parent(s).

    1499(b) If, upon the death of a member, a beneficiary(ies) can be identified in accordance with Florida statute, but no social security number or address of the beneficiary or beneficiaries is available, the Investment Plan Administrator will, with the assistance of the SBA, make a reasonable effort to obtain each beneficiary’s Social Security Number or Taxpayer Identification Number, using available search tools, including the internet, LexisNexis Accurint, or another third party vendor providing such services. If a beneficiary can be identified and the social security number is provided, the transfer of benefits will be executed by the Investment Plan Administrator.

    1599(c) If, upon the death of a member, a beneficiary cannot be identified, the provisions of paragraph (d) below, will be followed.

    1621(d) 1622After one year from the date of the member’s death, if the beneficiary cannot be located or if a beneficiary cannot be identified, the account will be transferred to the Suspense Account. 1654By calendar year-end of each year following the transfer to the Suspense Account, the Investment Plan Administrator will attempt to locate and obtain the Social Security Number or the Taxpayer Identification Number of the beneficiary. 1689The transferred funds shall be invested in the FRS Intermediate Bond Fund. The amount will be held in the 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 Investment Plan Forfeiture Account, where it is held indicating the name of the deceased member and the name of the beneficiary, if known.

    1773(e) Should the beneficiary be located who then is willing to provide a social security number, a check will be issued to that beneficiary. The check will include actual earnings that have accrued on the funds from the date of transfer from the member’s account to the Suspense Account and/or Forfeiture Account. Such payment will be subject to applicable income tax withholding, which shall be paid to the tax authorities at the time of the issuance of the check to the beneficiary.

    1855(8) Distributions to beneficiaries on the death of a member.

    1865(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.

    1931(b) Upon notification of the member’s death, the Investment Plan Administrator will contact the designated beneficiary or the family of the deceased member and provide instructions on how to claim any benefits.

    1963(9) Distributions to designated or per Florida law spousal beneficiaries.

    1973(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.

    2022(b) Spousal beneficiaries may request the following distributions:

    20301. 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 Investment Plan.

    20622. 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.

    21203. 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.

    22364. 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.

    23435. 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.

    23666. Annuity, using the entire or partial account balance.

    2375(10) Distributions to designated non-spousal individual beneficiaries and look-through trusts or beneficiaries determined by Florida law.

    2391(a) In accordance with Internal Revenue Service (IRS) rules, non-spousal beneficiary accounts cannot be held indefinitely in the Investment Plan. The “required minimum distribution” is required by the Internal Revenue Service and spelled out in IRS Code s. 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.

    2459(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:

    24861. 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.

    25352. 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:

    2568a. 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,

    2603b. Such distributions begin no later than 1 year after the member’s death.

    2616(c) The non-spousal beneficiary must decide within 1 year of the date of death to take lifetime installment or annuity payouts.

    2637(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.

    2668(e) Non-spousal individual beneficiaries and look-through trusts may request the following distributions:

    26801. 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 Investment Plan.

    27122. Partial Distribution, which provides for a partial lump sum payment of the account balance. The remainder may be paid out through regular periodic payments, 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.

    27663. 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).

    29204. 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.

    29535. Annuity, using the entire or partial account balance.

    2962(11) Distributions to the member’s designated estate or to a designated non look-through trust.

    2976(a) A beneficiary which is either the member’s estate or a non look-through trust is considered as a non-person. Pursuant to Code s. 401(a)(9), the entire interest of the member must be distributed to such beneficiary within 5 years after the death of the member.

    3021(b) The estate or non look-through trust beneficiary has two options for receiving the benefit payment:

    30371. 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 Investment Plan.

    30682. Deferrals of up to 5 years, however the benefit must be distributed within 5 years after the death of the member.

    3090(12) Distributions to beneficiaries who are minors.

    3097(a) A minor is a child under the age of 18.

    3108(b) When a minor child or children are the designated beneficiaries 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.

    3179(c) Section 3181744.301, F.S., 3183allows 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. The birth certificate provides proof as to identity of the natural guardian(s) of the children, so that appropriate payment arrangements may be made.

    3234(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 $15,000.00 and advise the SBA.

    3323(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.

    3382(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.

    3433(13) 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.

    3531(14)(a) If the deceased member has designated a beneficiary but has not provided the designated beneficiary’s social security number or address, or has provided an incorrect social security number, then, after at least three unsuccessful attempts by the SBA or the Investment Plan Administrator to locate the beneficiary, the Investment Plan Administrator will advise the SBA accordingly and the account will not be distributed.

    3595(b) The 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, or another third party vendor providing such services.

    3646(c) 3647After 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. 3672No later than calendar year-end, of each year following the transfer to the Suspense Account, the Investment Plan Administrator will attempt to locate and obtain the Social Security Number or the Taxpayer Identification Number of the beneficiary. 3709The transferred funds shall be invested in the FRS Intermediate Bond Fund. The amount will be held in the FRS Investment Plan Suspense Account until (1) the beneficiary contacts the 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 Investment Plan Forfeiture Account, and the Administrator will maintain a record of the name of the deceased member and the name of the beneficiary, if known.

    3796(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 and/or Forfeiture Account subject to applicable income tax withholding, which shall be paid to the tax authorities at the time of such payment to the beneficiary.

    3858(15)(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 the Estate Identification Number is received. In the event that no Estate Identification Number is provided 3909within one year from the date of notification to the Investment Plan Administrator of the member’s death, 3926the Investment Plan Administrator will transfer the deceased member’s account to the Suspense Account indicating the name of the deceased member. If after 10 years after the date of death, the Investment Plan Administrator has not received an Estate Identification Number, the deceased member’s account will be transferred to the Investment Plan Forfeiture Account and the Administrator will maintain a record of the name of the deceased member. The transferrred funds shall be invested in the 4002FRS Intermediate Bond Fund4006.

    4007(b) The 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 Investment Plan Administrator will attempt to locate and obtain the Estate Identification Number.

    4061(c) The amount will be held in the Investment Plan Suspense Account until (1) the member’s estate representative contacts the 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 Investment Plan Forfeiture Account, and the Administrator will maintain a record of the name of the deceased member.

    4130(d) Should the estate’s representative subsequently provide an Estate Identification Number, a check will be issued to the estate, with actual earnings while invested in the 4156FRS Intermediate Bond Fund, 4160from the date of transfer from the member’s account to the Suspense Account and/or Forfeiture Account. Any applicable income tax withholding shall be paid to the appropriate tax authorities at the time of the benefit payment to the estate.

    4199(16) If the social security number and date of birth of a beneficiary are known, an account will be established in the beneficiary’s name and funds will be transferred thereto. 4229If 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. 4260However, 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.

    4319(17)(a) A designated beneficiary may disclaim any monetary interest as provided in Chapter 739, F.S., and Internal Revenue Code s. 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.

    4387(b) The general requirements for a valid disclaimer are that:

    43971. The beneficiary must provide an irrevocable and unqualified refusal to accept the assets.

    44112. The refusal must be in writing.

    44183. The written disclaimer must be submitted to the Investment Plan Administrator at the later of the following times:

    4437a. Nine months after the retirement account owner dies.

    4446b. Nine months after the beneficiary attains age 21, or if the beneficiary is 21 when the retirement account owner dies.

    4467c. The beneficiary must not have accepted any of the inherited assets prior to the disclaimer.

    4483d. The assets must pass to the successor beneficiary without any direction on the part of the person making the disclaimer.

    4504(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).

    4539Rulemaking Authority 4541121.4501(8) FS. 4543Law Implemented 4545121.091(5)(j), 4546(8), 4547121.4501(20), 4548121.591(3), 4549732.802 FS. 4551History–New 10-21-04, Amended 3-9-06, 11-26-07, 12-8-08, 1-7-10, 8-7-11, 7-12-12, 12-16-12, 10-15-13, 1-28-14, 12-30-15, 2-9-17, 2-12-18.

     

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