To indicate that the Division of Retirement will handle the collection and processing of employee retirement contributions and data, instead of payroll contributions and data; to indicate third party vendors will rebalance ....

 

STATE BOARD OF ADMINISTRATION

RULE NOS.:RULE TITLES:

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

19-13.004Role and Responsibilities of Third Party Vendors

PURPOSE AND EFFECT: To indicate that the Division of Retirement will handle the collection and processing of employee retirement contributions and data, instead of payroll contributions and data; to indicate third party vendors will rebalance retirement date funds and multi-manager funds; to indicate that third party vendors also will provide a read-only website so that Investment Plan members can access check advices and print copies of their IRS Forms 1099-R; and to state that third party vendors will provide data breach response

SUMMARY: To make editorial revisions for clarification; to update the services provided by the Division of Management Services and Third Party Vendors. There are no other rules incorporating this amended rule. The proposed amendment does not have an impact on any other rules. Legislative ratification of the rule amendment 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 incorporated materials, as well as the fact that it is not a regulatory agency, the State Board of Administration has determined that the rules do not meet the statutory threshold for ratification by the legislature. There will be no impact on economic growth, job creation or employment, private-sector investment, or business competitiveness, and no increase in regulatory costs resulting from the proposed rule amendments.

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), 215.52 FS.

LAW IMPLEMENTED: 112.3173, 121.091(5), 121.4501(4), (8), (9), (10) 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, February 14, 2022, 9:00 a.m. - 11:00 a.m.

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: Tina Joanos, Agency Clerk, Office of the General Counsel, State Board of Administration, 1801 Hermitage Blvd., Tallahassee, Florida 32308, [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: Ruth A. Smith, Assistant General Counsel, State Board of Administration, 1801 Hermitage Blvd., Tallahassee, Florida 32308, [phone], [e-mail].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

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.:

(a) No change.

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

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

(d) Calculate members’ Pension Plan benefits 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) through (j). No change.

(2) This rule is in effect for five years from its effective date.

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, 1-18-17, 2-12-18_______.

 

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. Other administrative services are provided by the Division. Those services are described in Rule 19-13.002, F.A.C. The Administrator’s primary duties and responsibilities are to:

(a) No change.

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

(c) through (j). No change.

(k) Provide quarterly or annual statements to Investment Plan members;

(l) through (p). No change.

(2) Multiple providers furnish educational services.

(a) Financial information and guidance will be provided by a vendor via internet. One internet will furnish providers will furnishes internet financial information and guidance. More specifically, this provider posts technical education content and provide the following services digitally on the internet:

(1) through (4). No change.

(b) An Another education provider will furnish furnishes one-on-one employee and employer education and counseling. More specifically, the provider:

(1) through (3). No change

(c) No change.

(d) An Another education provider will focus focuses on the MyFRS.com MyFRS website. This provider coordinates software application integration and the design and content of the MyFRS.com MyFRS website among the other educational service providers, the Administrator, the Division, and the SBA.

(3) Multiple providers hired by the SBA furnish the investment options for Investment Plan members. Section 121.4501, F.S., is generally constructed as an unbundled architecture, meaning that neither the Administrator nor the education providers are permitted to offer investment products, and as a consequence, the SBA has hired multiple institutional investment managers and providers of mutual funds. Some of the providers are unbundled institutional investment managers, which manage assets in a particular asset class and in a particular style, and which are responsible solely for money management, either as a separate account or collective trusts. Other providers are bundled providers which provide mutual funds or investment options in collective trusts which are their own funds or funds contracted for or from another money management group. Each investment manager:

(a) through (c). No change.

(4) No Change.

(5) The custodian, hired by the SBA pursuant to Section 121.4501(8), F.S., is required to do the following:

(a) through (g). No change.

(h) Determine the value of assets; and,

(i) Calculate rates of return of investment products;,

(j) Automatically re-balance the retirement date funds and multi-manager funds as directed by the SBA; and

(k) Provide a read-only website for Investment Plan members to access check advices and print copies of their 1099R forms.

(6) Miscellaneous consultants have been hired by the SBA to assist the SBA in the operations of the Investment Plan. Their responsibilities may include, but are not limited to, the following:

(a) through (f). No Change.

(g) Assisting in developing and implementing investment product manager monitoring guidelines; and,

(h) Making recommendations for retention and termination of investment product providers; and

(i) Provide breach response services to the Investment Plan.

(7) This rule is in effect for five years from its effective date.

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, 1-18-17,________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Daniel Beard, 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: December 20, 2021

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: November 19, 2021, Vol. 47/225.