To amend Rule 19-11.001, F.A.C. to clarify some definitions. To amend Rule 19-11.002, F.A.C. to incorporate the latest version of the beneficiary designation form and to reference the latest versions of the enrollment forms; to indicate what ...

 

STATE BOARD OF ADMINISTRATION

RULE NOS.:RULE TITLES:

19-11.001 Definitions

19-11.002Beneficiary Designations and Distributions for FRS Investment Plan

19-11.003 Distributions from FRS Investment Plan Accounts

19-11.004 Excessive Trading in the FRS Investment Plan

19-11.005 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

19-11.008 Forfeitures

19-11.011 Employer and Employee Contributions and ABO or Present Value Transfer Procedures

19-11.012 Rollovers or Plan to Plan Transfers to or from the FRS Investment Plan

19-11.013FRS Investment Plan Self-Directed Brokerage Account

PURPOSE AND EFFECT: To amend Rule 19-11.001, F.A.C. to clarify some definitions. To amend Rule 19-11.002, F.A.C. to incorporate the latest version of the beneficiary designation form and to reference the latest versions of the enrollment forms; to indicate what documents must be supplied by a beneficiary who receives account proceeds per Florida law; and to indicate the name of the fund to which account proceeds are held until a beneficiary can be located. To amend Rule 19-11.003, F.A.C. to indicate that monies from a DROP rollover are available for immediate distribution; to adopt the latest version of the Employment Termination Form; and to indicate that if a member or beneficiary requests documentation of a distribution made prior to January 1, 2010, there will be a special service charge imposed due the extensive resources required. To amend Rule 19-11.004, F.A.C. to indicate what constitutes an incomplete transfer request form. Rule 19-11.005, F.A.C., is being amended to make an editorial revision. To amend Rule 19-11.006 to adopt the latest versions of the applicable enrollment forms; to indicate that a member has the responsibility for ensuring the appropriate enrollment form is timely received; and to indicate that if a member terminates before making a plan choice, the member will have another opportunity to make a plan choice if rehired by an FRS-participating employer. To amend Rule 19-11.007, F.A.C. to adopt the latest versions of the Second Election enrollment forms; to indicate that a member has the responsibility for ensuring the Second Election enrollment form is timely received; and to indicate the default fund if the member fails to make an investment selection. To amend Rule 19-11.008, F.A.C. to state that if a member terminates employment before vesting, the member will be entitled only to a return of the member's own required contributions. To amend Rule 19-11.011, F.A.C. to state that market loss calculations will be applied to benefit transfers that re late due to employer errors or corrections; and to indicate that an age-appropriate retirement date fund will be the default fund if a member fails to select an investment option when the member's ABO or present value of the member's FRS Pension Plan benefits are transferred to the member's FRS Investment Plan account. Rule 19-11.012, F.A.C. is amended to adopt the latest version of the rollover forms. Rule 19-11.013, F.A.C. is amended to set forth how the Self-Directed Brokerage Account enrollment form can be accessed on line.

SUMMARY: To adopt updated forms; to clarify certain information; and to update the names of the default investment vehicles where no funds are selected by the members. 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: 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: 121.78(3)(c); 121.4501(8 ) FS.

LAW IMPLEMENTED: 120.569, 120.57, 120.573, 121.021, 121.051, 121.055, 121.091, 121.35, 121.4501(1), (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12), (13), (14), (15), 121.591, 121.71, 121.72, 121.74, 121.77, 121.78, 215.44(8), 732.802, 744.301, 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 (IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: Monday, October 5, 2015, 9:00 a.m. – 11:00 a.m.

PLACE: Hermitage Room, the Hermitage Centre, 1801 Hermitage Blvd., Tallahassee, Florida 32308

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:

 

19-11.001 Definitions.

The following words and terms shall have the following meanings for purposes of Chapters 19-11 and 19-13, F.A.C.:

(1) through (15) No change.

(16) “Effective date of enrollment” or “effective enrollment in the FRS Investment Plan” means the employee completed the enrollment into the Plan by filing the appropriate enrollment form, or by electronic means, in the applicable membership class or by filing a separate document for the applicable membership class with the Administrator; the Administrator has entered the employee into its recordkeeping system; and the Administrator has informed the Division of the employee’s effective date of enrollment in either the FRS Pension Plan or the FRS Investment Plan. For purposes of this rule, the term “enrollment form” or “form” shall also refer to the separate document described in paragraph 19-11.006(2)(b) and 19-11.007(3)(a), F.A.C.

(17) “Electronic Means” shall mean an enrollment or other member directive made on the MyFRS.com website, by telephone or other technology as specified by the SBA.

(18) through (26) No change.

(27) “FRS Pension Plan”, “Florida Retirement System Pension Plan” or “Pension Plan” means the defined benefit retirement program of the Florida Retirement System, established in Part I of Chapter 121, F.S.

(28) through (47) No change.

Rulemaking Authority 121.78(3)(c), 121.4501(8) FS. Law Implemented 121.78, 121.4501 FS. History–New 12-8-02, Amended 3-9-06, 7-12-12, 12-16-12, 6-5-14, 8-18-14, _________.

 

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

(1) No change.

(2) Any such beneficiary designation may be made on Form IPBEN-1, rev. 01/15 03-11, http://www.flrules.org/Gateway/reference.asp?No=Ref-05797 http://www.flrules.org/Gateway/reference.asp?No=Ref-00255, 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, 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 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”, or by calling the Investment Plan Administrator at 1(866) 446-9377, Option 4 (TRS 711).

(3) No change.

(4)(a) 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. 06/14 10/13, the General Retirement Plan Enrollment Form for Regular Special Risk and Special Risk Administrative Support Class Employees, Form ELE-1, rev. 07/15 10/13, which are adopted and incorporated by reference in subsection 19-11.006(2), F.A.C., or the 2nd Election EZ Retirement Plan Enrollment Form, Form ELE-2-EZ, rev. 07/15 10-13, or the 2nd Election Retirement Plan Enrollment Form, Form ELE-2, rev 07/15 10-13, which are adopted and incorporated by reference in subsection 19-11.007(3), F.A.C., the member agrees to the beneficiary designation contained in Section 121.4501(20), F.S., unless the member submits a beneficiary designation as provided in subsection (2) herein.

(b) through (f) No change.

(g) If a member inadvertently uses an incorrect beneficiary designation form, the FRS Investment Plan Administrator will notify the member and request that the member complete and submit the correct form, Beneficiary Designation Form IPBEN-1, rev. 01/15 03-11. If the member should die prior to completing and submitting the IPBEN-1 form, the FRS 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.

(5)(a) If 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.

(b) 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 the spouse is not a primary beneficiary of the proceeds of the member’s FRS Investment Plan account(s). The spouse must acknowledge that the spouse understands that the spouse is not a primary beneficiary of the member’s FRS Investment Plan account(s) by signing the beneficiary designation form, Form IPBEN-1, rev. 01/15 03-11, in the appropriate place.

(c) If a married member fails to obtain the spouse’s acknowledgment on the beneficiary designation form, then the Investment Plan Administrator will send to the member 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 FRS Investment Plan account(s). Alternatively, the member 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).

(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 FRS 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.

(6) No change.

(7) Per Florida Law Beneficiary Designation.

(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 121.4501(20), F.S. To 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).

(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 FRS 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.

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

(d) After 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. By calendar year-end of each year following the transfer to the Suspense Account, the FRS Investment Plan Administrator will attempt to locate and obtain the Social Security Number or the Taxpayer Identification Number of the beneficiary. The transferred funds shall be invested in the Pyramis Intermediate Duration Pool Fund FRS Select U.S. Treasury Inflation-Protected Securities Index Fund. The amount will be held in the FRS 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 FRS Investment Plan Forfeiture Account, where it is held indicating the name of the deceased member and the name of the beneficiary, if known.

(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.

(8) through (13)  No change.

(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 FRS Investment Plan Administrator to locate the beneficiary, the FRS Investment Plan Administrator will advise the SBA accordingly and the account will not be distributed.

(b) The FRS 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, the Social Security Administration, or another third party vendor providing such services.

(c) After 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. By calendar year-end, of each year following the transfer to the Suspense Account, the FRS Investment Plan Administrator will attempt to locate and obtain the Social Security Number or the Taxpayer Identification Number of the beneficiary. The transferred funds shall be invested in the Pyramis Intermediate Duration Pool Fund FRS Select U.S. Treasury Inflation-Protected Securities Index Fund. The amount will be held in the FRS 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 FRS Investment Plan Forfeiture Account, where it is held indicating the name of the deceased member and the name of the beneficiary, if known.

(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 subject to applicable income tax withholding, which shall be paid to the tax authorities at the time of such payment to the beneficiary.

(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 within one year from the date of notification to the FRS Investment Plan Administrator of the member’s death, the FRS 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 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 transferrred funds shall be invested in the Pyramis Intermediate Duration Pool Fund FRS Select U.S. Treasury Inflation-Protected Securities Index Fund.

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

(c) The amount will be held in the FRS Investment Plan Suspense 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 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 check will be issued to the estate, with actual earnings while invested in the Pyramis Intermediate Duration Pool Fund FRS Select U.S. Treasury Inflation-Protected Securities Index Fund, from the date of transfer from the member’s account to the Suspense Account and/or Forfeiture Account. Any subject to applicable income tax withholding, which shall be paid to the appropriate tax authorities at the time of the benefit payment to the estate.

(16) through (17) No change.

Rulemaking Authority 121.4501(8) FS. Law Implemented 121.091(5)(j), (8), 121.4501(20), 121.591(3), 732.802 FS. History–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, _________.

 

19-11.003 Distributions from FRS Investment Plan Accounts.

(1) Distributions from FRS Investment Plan accounts are made either after the member terminates employment from all FRS-participating employers or after the member’s death. Monies from a DROP rollover are available for immediate distribution.

(2) Distributions available after the member terminates FRS-covered employment.

(a) No change.

(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 employer can complete and return the “Employment Termination Form,” Form ETF-2, rev. 05/13 8/10, http://www.flrules.org/Gateway/reference.asp?No=Ref-05798 http://www.flrules.org/Gateway/reference.asp?No=Ref-01105, which is hereby adopted and incorporated by this reference. The termination form can be obtained by accessing the MyFRS website at www.MyFRS.com, clicking on Resources, and then on Forms or by calling the MyFRS Financial Guidance Line at 1(866) 446-9377, Option 4 or, for members who are deaf, hard of hearing, or speech impaired, TRS 711. This form has instructions and a section for the employer to provide the member’s date of termination. Alternatively, the employer can log onto the employer page at MyFRS.com and go to Online Payroll and submit the termination date electronically.

(c) through (e) No change.

(3) through (5) No change.

(6) 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 amount of the member’s Investment Plan assets specified by the QDRO will be transferred to the named alternate payee. The alternate payee may leave the transferred assets in the Investment 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 a Personal Identification Number (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, going to “Manage My Benefits,” “Manage Investments,” accessing their personal account information, and then requesting the distribution through the online services.

(7) through (9) No change.

(10) Documentation of a distribution made prior to January 1, 2010 August 30, 2007.

A member or beneficiary who requests documentation of a distribution made prior to January 1, 2010  August 30, 2007, will incur a special service charge due to the extensive resources required to retrieve and produce such documentation, if such retrieval is possible. The requestor will be advised of the amount of such charge at the time the request is made. Upon payment of the charge by the requestor, the request will be promptly processed. If the document cannot be retrieved, the payment will be reimbursed to the requestor.

Rulemaking Authority 121.4501(8) FS. Law implemented 119.07(4)(d), 121.021(29), (39), 121.091(5)(j), 121.4501(20), 121.591, 121.77, 732.802 FS. History-New 3-9-06, Amended 11-26-07, 5-19-09, 1-7-10, 8-7-11, 7-12-12, 12-16-12, ______________.

 

19-11.004 Excessive Trading in the FRS Investment Plan.

(1) through (2)(b)6. No change.

7. If the member submits a transfer request form that is incomplete, the form will not be processed. A form is considered as “incomplete” if it does not contain the name of the member; does not set forth the social security number of the member; is not notarized; is sent by facsimile, email or regular U.S. mail; does not specify what fund(s), dollar amount(s) or percentages(s) are to be transferred; or does not indicate the fund(s) into which the amounts are to be transferred The form also will be iconsidered “incomplete” if there are insufficent assets to execute the transfer(s), or if the requested transfer does not comply with the FRS Investment Plan Excessive Fund Trading Policy. Deficiencies are corrected through the resubmission of a transfer request form that is deemed to be complete.

8.7. Members who received direction letters and who were placed on restricted trading within their primary funds, as provided in subparagraphs 2., 3., 4., 5. and 6. of paragraph (2)(b), shall be allowed to make automated trades in, out and within the SDBA. The member must meet the requirements of the SDBA as provided in Rule 19-11.013, F.A.C. The member’s activity within the SDBA is not subject to this policy, but will be subject to the applicable excessive trading rules and purchase restrictions of the funds in the SDBA.

(3) through (4) No change.

Rulemaking 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, 1-7-10, 7-12-12, 6-5-14, 8-18-14,______________.

 

19-11.005 FRS Investment Plan Complaint Procedures.

(1) No change.

(2)(a) through (d)  No change.

(e) 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 the Respondent or Respondent’s counsel.

(f) through (g)  No change.

Rulemaking Authority 121.4501(8) FS. Law Implemented 120.569, 120.57, 120.573, 121.4501(8)(g) FS. History–New 10-21-04, Amended 3-9-06, 11-26-07, 5-19-09, 7-12-12, 12-16-12, 6-5-14,__________________.

 

19-11.006 Enrollment Procedures for New Hires.

(1) No change.

(2) Specific Enrollment Procedures.

(a) All newly-hired employees may enroll in the FRS Investment Plan no later than 4:00 p.m. (Eastern Time) the last business day of the 5th month following the employee’s month of hire or may elect to remain in the FRS Pension Plan. Example: If an employee is hired on January 15, the employee must complete a plan choice no later than 4:00 p.m. (Eastern Time) the last business day of June. If no plan choice is filed, the employee will default to the FRS Pension Plan.

(b) The employee must be actively employed, earning salary and service credit when the plan choice is processed by the FRS Plan Choice Administrator.

(c) The SBA has designed the forms set forth below for ease of use for employees in the several membership classes of the Florida Retirement System. As an alternative, an employee not wishing to use the forms may provide the same information requested by the forms available for use for the appropriate membership class in a separate document. Employees may determine their membership class by contacting the agency’s human resources office. The forms available are: an EZ Retirement Plan Enrollment Form, Form ELE-1-EZ, rev. 06/14, http://www.flrules.org/Gateway/reference.asp?No=Ref-04388, which is only for regular, special risk, and special risk administrative support class employees; a General Retirement Plan Enrollment Form, Form ELE-1, rev. 07/15, http://www.flrules.org/Gateway/reference.asp?No=Ref-05800 06/14, http://www.flrules.org/Gateway/reference.asp?No=Ref-04389 for regular, special risk, and special risk administrative support class employees; an Elected Officers’ Class Retirement Plan Form, Form EOC-1, rev. 07/15 06/14, http://www.flrules.org/Gateway/reference.asp?No=Ref-05801 http://www.flrules.org/Gateway/reference.asp?No=Ref-04390; a Community College Optional Retirement Program (CCORP) Enrollment Form, Form OCC-1, rev. 07/15 06/14, http://www.flrules.org/Gateway/reference.asp?No=Ref-05802 http://www.flrules.org/Gateway/reference.asp?No=Ref-04391; a State Senior Management Service Employees Retirement Plan Enrollment Form, Form SMS-1, Rev. 07/15 06/14, http://www.flrules.org/Gateway/reference.asp?No=Ref-05803 http://www.flrules.org/Gateway/reference.asp?No=Ref-04392; and a Local Senior Management Service Employees Retirement Plan Enrollment Form, Form SMS-3, rev. 07/15 06/14, http://www.flrules.org/Gateway/reference.asp?No=Ref-05804 http://www.flrules.org/Gateway/reference.asp?No=Ref-04393. All of the preceding forms are hereby adopted and incorporated by this reference.

1. All enrollment forms can be obtained at the sources listed in paragraph (1)(g), above.

2. Only members of the regular, special risk, and special risk administrative support classes of employees may use the EZ form, “EZ Retirement Plan Enrollment Form for Regular, Special Risk and Special Risk Administrative Support Class Employees,” Form ELE-1-EZ. If an employee chooses to use the EZ form, only limited information (i.e., name, plan choice, social security number, date of birth and signature) is required. An age appropriate retirement date fund as provided under the Plan provisions is the initial investment option (although that investment option may be changed by the member once the account is funded). A member’s initial beneficiary designation will be per Florida law, as provided in Section 121.4501(20), F.S. However, a beneficiary designation may be made as set forth in Rule 19-11.002, F.A.C.

(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 is received by the FRS Plan Choice Administrator by 4:00 p.m. (Eastern Time) on the last business day of the 5th month following the date of hire. The form shall be transmitted via mail, courier, or by fax, as provided on the form. It is the responsibility of the member to ensure that the enrollment form is received by the Plan Choice Administrator no later than 4:00 p.m. (Eastern Time) on the last business day that the member is earning salary and service credit, or the last business day of the 5th month following the date of hire, whichever first occurs to 1(888) 310-5559.

2. The FRS Plan Choice Administrator shall determine that the employee’s enrollment in the FRS Investment Plan 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. An incomplete enrollment by form is a form which is missing the name of the member, social security number, plan selection, or signature, or one on which the investment elections total greater than or less than 100%. 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 an age appropriate retirement date fund as provided under the Plan provisions for investing any accumulated benefit obligation and all future contributions. Note that this default selection may be changed by the member at any time once the account is activated. An incomplete enrollment by electronic means is one in which the FRS Plan Choice Administrator has no record of receipt and/or processing of the electronic enrollment.

(e) Upon receipt of the completed enrollment form by the FRS Plan Choice Administrator, the FRS Plan Choice Administrator shall enroll the employee in the indicated FRS retirement plan. Upon completion of the enrollment, but no later than two working days after enrollment, the FRS Plan Choice Administrator shall send confirmation of the effective enrollment to the employee at the employee’s address of record and to the Division to inform the Division of the employee’s retirement plan choice. The employer shall change its employee records to reflect the employee’s plan choice, if applicable.

(f) If an employee terminates employment prior to making a plan choice, the employee willl be considered a newly-hired employee if he or she returns to FRS-covered employment, and will be given another opportunity to make a plan choice. Any previous service will be considered as being FRS Pension Plan service.

(g)(f) Employers shall remit retirement contributions monthly for their employees and those contributions are due to the Division by the 5th working day of the month following the month for which the contributions are made.

(3) No change.

Rulemaking Authority 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, 5-19-09, 2-4-10, 7-12-12, 12-16-12, 1-28-14, 8-18-14, _____________.

 

19-11.007 Second Election Enrollment Procedures for the FRS Retirement Programs.

(1) through (2) No change.

(3) General Procedures.

(a) All members who wish to change their FRS retirement plan using their 2nd election must use a 2nd election enrollment form or, if moving from the FRS Pension Plan to the FRS Investment Plan or FRS Investment Plan Hybrid Option, may do so online by accessing the Second Choice Service at MyFRS.com. There are two types of enrollment forms. The “2nd Election Retirement Plan Enrollment Form” Form ELE-2, rev. 07/15 06/14, http://www.flrules.org/Gateway/reference.asp?No=Ref-05805 http://www.flrules.org/Gateway/reference.asp?No=Ref-04394, which is hereby adopted and incorporated by reference. This form allows the member to select different investment fund options if the member is changing from the FRS Pension Plan to either the FRS Investment Plan or the FRS Investment Plan Hybrid Option. Alternatively, the member can complete the “2nd Election EZ Retirement Plan Enrollment Form,” Form ELE-2EZ, rev. 07/15 06/14, http://www.flrules.org/Gateway/reference.asp?No=Ref-05806 http://www.flrules.org/Gateway/reference.asp?No=Ref-04397, which is hereby adopted and incorporated by reference. By completing this form, the member is choosing to have the employer and employee contributions and any transfers from the FRS Pension Plan invested in an age appropriate retirement date fund as provided under the Plan provisions. The member may change the investment selection at any time after the FRS Investment Plan or the FRS Investment Plan Hybrid Option account is activated. Activation occurs when contributions are deposited to the member’s FRS Investment Plan account.

(b) Both forms are available by calling the toll-free number for the MyFRS Financial Guidance Line: 1(866) 446-9377, Option 4 or for members who are deaf, hard of hearing, or speech-impaired: TRS 711; or by using the MyFRS.com website and clicking on Resources and then on Forms.

(c) Elections made by form must be mailed to the FRS Plan Choice Administrator, P. O. Box 785027, Orlando, Florida 32878-5027; or faxed toll-free to the number provided on the form. It is the responsibility of the member to ensure that the 2nd Election Form is received by the Plan Choice Administrator 1(888) 310-5559.

(d) For members transferring to the FRS Pension Plan, if the member’s Investment Plan account balance was less than the calculated amount required to buy back into the FRS Pension Plan, the election will require a personal payment. The member will receive notification and proper instructions from the Division detailing where and in what form to send any personal payments. Such payment, if necessary, must be received by the date determined by the Division. If the required amount is not received by the Division by the date due, the election will be voided.

(e) A confirmation statement will be mailed to the member’s address of record once the completed form is received and processed.

(f) The member should carefully review the form and be sure that it is signed, dated, and sets forth the member’s second election plan choice. A copy of the form should be retained for the member’s records.

(g) 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 of the member, social security number, plan selection, or signature, or one on which the total investment elections are greater or less than 100%. The member will be required to resubmit a completed second election enrollment form. 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 an age appropriate retirement date fund as provided under the Plan provisions the FRS Select Moderate Balanced Fund for investing the member’s accumulated benefit obligation and all future contributions. Note that this default selection may be changed by the member at any time once the account is activated.

(h) The second election will become final at 4:00 p.m. (Eastern Time) on the day it is received by the Plan Choice Administrator. Elections received after 4:00 p.m. (Eastern Time) will be considered as being received on the next business day. Elections received on a Saturday, Sunday or holiday will be considered as being received on the next business day.

(4) No change.

Rulemaking Authority 121.4501(8) FS. Law Implemented 121.4501(3), (4), (8), (15)(b), (20) FS. History–New 10-21-04, Amended 3-9-06, 10-25-07, 12-8-08, 5-19-09, 1-7-10, 7-12-12, 12-16-12, 12-28-14, 8-18-14, _______________.

 

19-11.008 Forfeitures.

(1) Forfeitures after Separation or Retirement from FRS Employment.

(a) If a member terminates FRS-covered employment before vesting in an Investment Plan benefit or any transferred Pension Plan benefit, the member will not be entitled to any benefit, other than employee contributions, which are immediately vested. In such case, the unvested account balance will be placed in a suspense account for a period not to exceed five (5) years from the date of the member’s termination. The suspense account shall be invested in the Pyramis Intermediate Duration Pool Fund, where it will accrue actual investment earnings or losses.

(b) through (h) No change.

(2) through (4) No change.

Rulemaking Authority 121.4501(8) FS. Law implemented 112.3173, 121.021(29), (39), 121.091(5), 121.4501(6), (13), 121.591, 732.802 FS. History–New 11-26-07, Amended 12-8-08, 7-12-12, 8-18-14, ___________.

 

19-11.011 Employer and Employee Contributions and ABO or Present Value Transfer Procedures.

(1) through (6) No change.

(7) Employer errors or corrections.

(a) Market loss calculations will be applied to contributions and benefit transfers that are late due to an employer error or correction. An employer error or correction is deemed to have occurred if the employer changes previously reported information that causes contribution and benefit transfer to be posted retroactively.

(8)(7) Contribution Rates.

(a) The employer and employee contributions received by a member of the FRS Investment Plan prior to effective enrollment in the FRS Investment Plan will be at the rate established pursuant to Section 121.71, F.S. The amount will be transferred into the employee’s FRS Investment Plan account as the opening account balance.

(b) After effective enrollment in the FRS Investment Plan, the member shall receive the employer and employee contribution at the rate established by Sections 121.71 and 121.72, F.S. appropriate to that member’s class of membership.

(9)(8) Asset Transfer and True-Up Procedures for Newly-hired Employees with Previous FRS Service.

(a) For members with previous FRS service who elect to enroll in the FRS Investment Plan who have prior FRS credible service, the Division shall calculate the amount of the member’s ABO or present value of the FRS Pension Plan benefit. This amount shall be transferred to the member’s FRS Investment Plan account and shall be allocated to each investment product selected by the member.

(b) The Division shall determine the member’s ABO or present value as of the last day of the month prior to the employee’s effective date of enrollment in the FRS Investment Plan. For example, if the Division receives the enrollment during the month of June, the effective date of enrollment for the employee in the FRS Investment Plan is July 1 and the Division shall calculate the member’s ABO or present value, if any, through June 30.

(c) By the 25th day of the effective month of enrollment, the Division shall notify the FRS Investment Plan Administrator of the ABO or present value for each Investment Plan member whose effective date of enrollment is the first day of the month. The Administrator shall notify the SBA of the aggregate ABO or present value of members whose effective date of enrollment is the first day of the month.

(d) On the last business day of the effective month of enrollment in the FRS Investment Plan, the SBA shall effectuate the transfer of the aggregate ABO or present value amount to the FRS Investment Plan Administrator for allocation to the applicable FRS Investment Plan member accounts based on the investment option designated by the member, and if no allocations were provided by the member, then to an age-appropriate retirement date fund the Moderate Balance Fund.

(e) The total amount initially credited to each FRS Investment Plan member’s account who elected to transfer the ABO or present value from the FRS Pension Plan was an estimate of the member’s ABO or present value. Pursuant to Section 121.4501(3)(b)2., F.S., the Division shall re-compute the ABO or present value not later than 60 days after the initial transfer of funds. If the re-computed amount differs from the estimated ABO amount by plus or minus $10 or more, the Division shall provide the aggregate adjustment amount to be transferred to or from the FRS Investment Plan Administrator for the affected member(s).

(f) The Division shall notify the Administrator of the true-up amounts plus interest by member account within 50 days of the initial transfer. The true-up transfer shall include the true-up amount determined by the Division plus interest at the rates specified in Section 121.4501(3)(b)2., F.S., from the date of the initial transfer to the date of the true-up transfer. The transfer of the true-up amount plus interest shall occur on the 60th day following the initial transfer. In the event the 60th day following the initial transfer falls on a Saturday, Sunday, or a legal holiday, the true-up transfer shall occur on the last business day of the month preceding the Saturday, Sunday, or legal holiday.

(g) The Division shall calculate the interest owed on true-up amounts. If the re-computed ABO is greater than the original amount transferred by plus or minus $10 or more, the member will be owed a true-up amount plus interest. Interest will be calculated pursuant to Section 121.4501(3)(b)2., F.S. If the re-computed ABO is less than the original amount transferred by plus or minus $10 or more, the member will owe a true-up amount plus interest and the amount will be deducted from the member’s Investment Plan account. Interest will be calculated pursuant to Section 121.4501(3)(b)2., F.S.

(h) The Administrator shall notify the SBA of the aggregate true-up value for those members determined to have a true-up adjustment. On the last business day of the month in which the true-up amount is due, the SBA shall effectuate the transfer of the aggregate true-up amount to the FRS Investment Plan Administrator for allocation to the applicable member accounts based on the investment fund allocations designated by the member(s).

Rulemaking Authority 121.78(3)(c), 121.4501(8) FS. Law Implemented 121.71, 121.72, 121.78, 121.4501 FS. History–New 7-12-12, Amended 12-16-12, ______________.

 

19-11.012 Rollovers or Plan to Plan Transfers to or from the FRS Investment Plan.

(1) through (7) No change.

(8)(a) Instructions regarding check delivery and other information relating to the processing of rollovers, including all applicable forms, may be obtained by calling the MyFRS Financial Guidance Line, which is a toll free line: 1(866) 446-9377, Option 4, or, for members who are deaf, hard of hearing, or speech impaired, TRS 711, or by accessing the website at www.MyFRS.com.

(b) Current members shall use Form IPRO-1, rev. 10/14 06/14, “Employee Rollover Deposit Instructions and Form,” http://www.flrules.org/Gateway/reference.asp?No=Ref-05807 http://www.flrules.org/Gateway/reference.asp?No=Ref-04398, which is hereby adopted and incorporated by reference, to effect rollovers described in this rule.

(c) Current DROP members planning to roll over their DROP accumulation shall use Form IP-DROP-AD-1, “DROP Accumulation Direct Rollover Form for Current DROP Members,” rev. 07/15 06/14, http://www.flrules.org/Gateway/reference.asp?No=Ref-05808 http://www.flrules.org/Gateway/reference.asp?No=Ref-04399, which hereby is adopted and incorporated by reference, to effect rollovers described in this rule.

(d) Former DROP members shall use Form IP-DROP-RO-1, “DROP Direct Rollover Form for Former DROP Members,” rev. 07/15 06/14, http://www.flrules.org/Gateway/reference.asp?No=Ref-05809 http://www.flrules.org/Gateway/reference.asp?No=Ref-04400, which hereby is adopted and incorporated by reference, to effect rollovers described in this rule.

(9) through (11) No change.

(12) Monies from a DROP rollover are available for immediate distribution.

(13)(12)(a) An Investment Plan member electing to transfer to the Pension Plan and who has an excess balance remaining in the Investment Plan account after satisfying any required Pension Plan buy-in amounts, may elect to use all or part of that remaining balance to purchase service credit in the Pension Plan. The member will need to complete Form PRO-2, “Pre-tax Direct Rollover/Transfer Form,” rev. 10-10, http://www.flrules.org/Gateway/reference.asp?No=Ref-01184, which hereby is adopted and incorporated by reference, to effect this purchase. 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. (Eastern time) or by accessing the MyFRS.com website and clicking on “Resources” and then “Forms.”

(b) The member must call the Investment Plan Administrator and request that funds be transferred from the Investment Plan to the Pension Plan to effect the purchase of service. The member must confirm that an invoice has been received from the Division of Retirement. The amount to be transferred must be equal to or less than the invoiced amount. If the balance of the member’s account is less than the invoice amount, the member may request the total account balance be transferred.

(c) The member must complete the form referenced in paragraph (a) above. The completed form is to be sent to the Investment Plan Administrator.

(d) The Plan Administrator will request authorization to liquidate the requested amount from the SBA. The SBA shall provide a letter of direction to effect the member’s request. Upon receipt of the letter, the Plan Administrator will liquidate the funds from the member’s account. Upon liquidation, the amount will be received by the Plan Administrator from the Custodian in the form of a check payable to the “Florida Retirement System” and reference the member’s name. Upon receipt of the check, the Plan Administrator will send the check and the form by regular U.S. mail to the Division of Retirement as soon as administratively possible. A confirmation of the transaction and the date the check and form were mailed to the Division of Retirement will be sent to the member.

(e) It is the responsibility of the member to confirm receipt of the funds by the Division of Retirement.

Rulemaking Authority 121.4501(8), (5)(e) FS. Law Implemented 121.4501(4)(g)5., (5)(e), (21), 121.591 FS. History–New 7-12-12, Amended 12-16-12, 10-15-13, 1-28-14, 8-18-14, ______________.

 

19-11.013 FRS Investment Plan Self-Directed Brokerage Account.

(1) An FRS Investment Plan member meeting certain criteria may transfer assets from the member’s Investment Plan primary investment account to a self-directed brokerage account (“SDBA”) in order to be able to access additional investment opportunities beyond the primary investment funds offered under the Investment Plan.

(a) In order to participate in the SDBA the member must:

1. Maintain a minimum balance of $5,000 in the Investment Plan’s primary investment funds. This minimum amount may be changed at any time.

2. Make initial and subsequent transfers into the SDBA of at least $1,000. Transfer requests must be in whole dollars. Percentages are not permitted. This minimum amount is subject to change.

3. Pay all trading fees, commissions, administrative fees, and any other expenses associated with participating in the SDBA.

(b) The member must open an account with the SDBA service provider in one of two ways:

1. By accessing and completing the enrollment form online by logging on to MyFRS.com, then choosing Manage My Benefits> Manage Investments>Open Brokerage Account. The enrollment form includes both a Member Service Agreement and Memorandum of Understanding which the member must acknowledge having received and read.

2. By printing and completing a hard copy of the enrollment form, Member Service Agreement and Memorandum of Understanding. The member must return the completed enrollment form to the service provider via fax or mail. The member must acknowledge the Member Service Agreement and Memorandum of Understanding were received and read. A hard copy of the enrollment form can be printed from the Open Brokerage Account link on MyFRS.com or can be obtained from the Investment Plan Administrator.

3. The SDBA account will be established within two days of receipt of either the online or hardcopy enrollment form. Once the account is established, the member will receive a package from the SDBA service provider containing information on how to access and use the SDBA.

The SDBA account will be automatically closed if there is a zero balance for 18 consecutive months. To participate in the SDBA in the future, the member will have to open a new SDBA account.

(c) The member is subject to the following fees, transaction changes, expenses:

1. An annual administrative fee of $25.00 ($6.25 quarterly) for participating in the SDBA. This fee will be deducted from the member’s primary investment account for each quarter the member maintains a balance in the SDBA. This fee is in addition to all applicable commissions, sales charges and transaction fees. This fee is deducted pro rata across the member’s Investment Plan primary funds.

2. Any and all commissions, sales charges and transaction fees applicable to transactions executed by the member through the SDBA. The member may review all SDBA commissions and fees by accessing the FRS Investment Plan Self-Directed Brokerage Account Commission and Fee Schedule in the “Investment Funds” section on MyFRS.com.

3. Depending on the investments chosen, transaction fees, commissions or sales charges may be charged to the member’s SDBA. These fees are automatically deducted from transaction proceeds or added to the purchases as they are incurred. In addition, investment management fees, 12b-1 fees, or other fees and expenses specific to individual funds may be charged to the member’s SDBA. It is the member’s sole responsibility to be aware of and understand the commissions and fees as described in the Commission and Fee Schedule and in the prospectus of any mutual fund.

(2) through (6) No change.

Rulemaking Authority 121.4501(8), (5)(e) FS. Law Implemented 121.4501(8), (9), (10), (11), (12), (13), (14), (15) FS. History–New 6-5-14. Amended _____________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Joan Haseman, Office 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: September 01, 2015

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: August 5, 2015.