To update certain information regarding the duties and responsibilities of the State Board of Administration ("SBA"), the Division of Retirement ("Division"), participating employers and the SBA's third party vendors concerning the FRS Investment ...

 

STATE BOARD OF ADMINISTRATION

RULE NOS.:RULE TITLES:

19-13.001Roles and Responsibilities of the State Board of Administration of Florida

19-13.002Roles and Responsibilities of Division of Retirement within the Department of Management Services

19-13.003Role and Responsibilities of State, School District, and Local Employers Participating in the Florida Retirement System

19-13.004Role and Responsibilities of Third Party Vendors

PURPOSE AND EFFECT: To update certain information regarding the duties and responsibilities of the State Board of Administration ("SBA"), the Division of Retirement ("Division"), participating employers and the SBA's third party vendors concerning the FRS Investment Plan. Special mention is made of the fact that the Division will administer in-line of duty death benefits for Investment Plan members.

SUMMARY: To update and clarify information for the benefit of the public. There are no other rules incorporating these proposed amended rules. The proposed amendments do not have an impact on any other rules. Legislative ratification of the rule amendments is not required.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION: The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: Based on its analysis of the rule amendments and the fact that it is not a regulatory agency, the State Board of Administration has determined that there will be no impact on economic growth, job creation or employment, private-sector investment, or business competitiveness, and no increase in regulatory costs caused by the proposed amendments to these rules.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 121.4501(8) FS.

LAW IMPLEMENTED: 121.4501(4), (8) (9), (10), (14), (15), (19); 121.591(4) 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: December 15, 2016, 9:00 a.m. until conclusion of hearing

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: Eddie McEwen, [phone], [e-mail]. 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: THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Ruth A. Smith, Assistant General Counsel, Office of the General Counsel, State Board of Administration, 1801 Hermitage Blvd., Tallahassee, FL 32308, [phone], [e-mail]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

19-13.001 Roles and Responsibilities of the State Board of Administration of Florida.

(1) The State Board of Administration of Florida (“SBA”) is responsible for establishing, implementing, and administering the defined contribution program, known referred to as the “Florida Retirement System Investment Plan” or “Investment Plan”, in accordance with Section 121.4501(1), F.S. The SBA is the Plan Sponsor. The plan documents consist of the Florida Statutes and Administrative Rules rules adopted thereunder. and the The Summary Plan Description (SPD). The SPD is a summary of the plan documents for the convenience of members and . The SPD can be changed by the SBA at any time without prior notice to Florida Retirement System (FRS) members. The SBA’s primary responsibilities are set out in paragraphs (1)(a) through (1)(n), below. Each of these major responsibilities involves additional decisions which then in turn need to be implemented. Those decisions, to the extent they are not solely on a case-by-case basis, are adopted by rule. The SBA must ensure that all of the following individual responsibilities are carried out:

(a) through (f) No change.

(g) Directing and monitoring the activities of all service providers to the providing various services to the operation of the Investment Plan. These service providers include, but are not limited to, the third party administrator, the education service providers, and the investment product providers.

(h) Directing and monitoring the services provided by the Division with which the SBA has an interagency agreement.

(i) Movement of assets from the FRS Pension Plan to the FRS Investment Plan upon the election of a member to transfer and making such adjustments to plan accounts and member accounts as are necessary to process election reversals and prior period corrections to contributions and accompanying payroll data.

(j) through (n)  No change

Rulemaking Authority 121.4501(8) FS. Law Implemented 121.4501(1), (4), (8), (9), (10), (14), (15), (19) FS. History–New 10-21-04, Amended 7-12-12, 12-16-12, 12-30-15, ___________.

 

19-13.002 Roles and Responsibilities of the Division of Retirement within the Department of Management Services.

(1) The Division of Retirement (Division) within the Department of Management Services provides the following administrative services, in accordance with Section 121.4501(8)(a)1., F.S., which:

(a) Determine membership eligibility and employer participation eligibility;

(b) Collect and process employer and employee payroll contributions and payroll-related data, including monitoring salary limits imposed by the Internal Revenue Service;

(c) Forward employer and employee payroll contributions and payroll-related data to the Investment Plan Administrator, including date of termination and leave of absence indicators, if available;

(d) Calculate members’ Pension Plan benefit, calculate the accumulated benefit obligation and calculate any buy-back amount for those members who elected the Investment Plan but subsequently elect to return to the Pension Plan;

(e) Maintain and provide access to the Florida Retirement System (FRS) database;

(f) Provide telephone support regarding employee or employer questions on the Pension Plan and contribution processing, but transfer general retirement plan choice, enrollment and financial planning telephone calls to other education and administration providers;

(g) Administer the disability benefits for the FRS Florida Retirement System;

(h) Administer the in line of duty death benefits for Investment Plan members enrolled in the special risk service class;

(i)(h) Administer the health insurance subsidy for the FRS Florida Retirement System;

(j)(i) Determine employee vesting requirements in the FRS Florida Retirement System, as required by law; and

(k)(j) Notify the State Board of Administration (SBA) of any employees who may be subject to forfeiture of benefits, in accordance with Sections 112.3173 and 121.091(5), F.S.

Rulemaking Authority 121.4501(8) FS. Law Implemented 112.3173, 121.091(5), 121.4501(8), (10) FS. History–New 10-21-04, Amended 10-25-07, 7-12-12, 12-16-12,____________

 

19-13.003 Role and Responsibilities of State, School District, and Local Employers Participating in the Florida Retirement System.

All state, school district, and local employers (employers) who participate in the Florida Retirement System (FRS) have the following duties and responsibilities:

(1) Remitting all the employer and employee contributions required by Parts II and III of Chapter 121, F.S. These include the contributions for the benefit of members in the Investment Plan, in accordance with Section 121.4501(5) and with Part III of Chapter 121, F.S., and also include the contributions for administrative and educational expenses, disability benefits, survivor benefits, the health insurance subsidy, and social security.

(2) Education of all employees which shall occur at least annually. This shall consist, at a minimum, of a communication indicating that the FRS is composed of two retirement plans; that employees have the option to decide in which FRS plan to participate; that employees have multi-media educational resources from the FRS to educate them concerning their FRS plan choice; and that employees have statutory deadlines by which enrollments must be made. Employers shall use educational materials supplied by the SBA and the Division to communicate such information, but not to the exclusion of any educational materials they may independently develop. Employers are solely responsible for the accuracy and completeness of any educational materials they develop. Printed educational materials and videos may be requested from both the SBA and from the Division or from their agents. Under no circumstances shall employers be deemed to be agents of the SBA, the FRS, or both.

Rulemaking Authority 121.4501(8) FS. Law Implemented 121.4501(5), (10)(h), 121.71, 121.72, 121.73, 121.74, 121.76, 121.77, 121.78 FS. History–New 10-21-04, Amended 7-12-12, 12-16-12,______________.

 

19-13.004 Role and Responsibilities of Third Party Vendors.

(1) The Investment Plan Administrator (Administrator) provides administrative services in the operation of the Florida Retirement System (FRS) Investment Plan other than those provided by the Division of Retirement within the Department of Management Services (Division) as set forth in Rule 19-13.002, F.A.C. The Administrator also provides enrollment processing for the FRS Florida Retirement System (FRS). Other administrative services are provided by the Division of Retirement within the Department of Management Services (Division). Those services are described in Rule 19-13.002, F.A.C. The Administrator’s primary duties and responsibilities are to:

(a) Maintain the Investment Plan database;

(b) Process new employee enrollments into the FRS Pension Plan or and Investment Plan and to process existing employee enrollments, via the exercise of the employees’ one-time 2nd  Second Election, pursuant to Section 121.4501(4)(e), F.S., into either FRS plan;

(c) Transmit election information to the Division;

(d) Maintain a database of Investment Plan beneficiary designations;

(e) Transfer Investment Plan employer and employee contributions to the investment product providers, after contributions have been received from the Division;

(f) Provide aggregate accumulated benefit obligation data segregated by investment product provider to the State Board of Administration (SBA);

(g) Maintain Investment Plan member account data and such data as is sufficient to process 2nd  Second Elections by existing members employees ;

(h) Implement account transfers at the request of members;

(i) Implement withdrawals from account by electronic means;

(j) Implement distribution of Investment Plan benefits to Investment Plan members or beneficiaries;

(k) Provide quarterly statements to Investment Plan members;

(l) Distribute written material;

(m) Provide phone response service on a toll-free line to assist members and employers to accomplish any required responsibility;

(n) Provide recordkeeping for all Investment Plan data within its responsibilities, including monitoring of monetary limits imposed by the federal Internal Revenue Code; and

(o) Administer Qqualified Ddomestic Rrelations Oorders (QDROs).

(p) Provide a Self-Directed Brokerage Account (“SDBVA”) to eligible FRS Investment Plan members.

(2) through (6) No changes.

Rulemaking Authority 121.4501(8) FS. Law Implemented 121.4501(4), (8)(b), (e)1., (9)(a), (10) FS. History–New 10-21-04, Amended 7-12-12, 12-16-12, 12-30-15, _____________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Joan Haseman, Chief of Defined Contribution Programs

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Trustees of the State Board of Administration

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: October 25, 2016

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: October 6, 2016, Vol. 42/195