Rule 19-11.001 is being amended to update the definition of an exempt transaction to include rollovers of eligible funds; to update the age by which plan members must take Required Minimum Distributions once they terminate ....

 

STATE BOARD OF ADMINISTRATION

RULE NOS.:RULE TITLES:

19-11.001Definitions

19-11.002Beneficiary Designations and Distributions for FRS Investment Plan

19-11.003Distributions from FRS Investment Plan Accounts

19-11.004Excessive Trading in the FRS Investment Plan

19-11.006Enrollment Procedures for New Hires

19-11.007Second Election Enrollment Procedures for the Florida Retirement System Retirement Programs

19-11.008Forfeitures

19-11.009Reemployment with an FRS-Participating Employer after Retirement

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

19-11.014Benefits Payable for Investment Plan Disability and In-Line-Of-Duty Death Benefits

PURPOSE AND EFFECT: Rule 19-11.001 is being amended to update the definition of an exempt transaction to include rollovers of eligible funds; to update the age by which plan members must take Required Minimum Distributions once they terminate employment; to add a definition for “volunteer services;” and to make some editorial revisions. Rule 19-11.002 is being amended to adopt the latest version of the FRS Investment Plan Beneficiary Designation Form; to set forth the most recent versions of the General Retirement Plan Enrollment Form and the 2nd Election Enrollment Form; and to provide that if a member’s spouse either cannot be located or refuses to sign the acknowledgement of beneficiary designation form, then the member may request that the requirement of the acknowledgement be waived by providing an affidavit setting forth the particular facts and circumstances. Rule 19-11.003 is being amended to update instructions as to how a copy of Internal Revenue Code Section 401(a)(9) may be obtained from the Internal Revenue Service website; to update the age by which plan members must take Required Minimum Distributions once they terminate employment; and to update examples showing how certain distributions to members could be invalid. Rule 19-11.004 is being amended to update how to obtain copies of the SEC regulations on excessive trading; and to update the examples for market timing trades and roundtrip trades. Rule 19-11.006 is being amended to adopt the latest versions of the various enrollment forms. Rule 19-11.007 is being amended to adopt the latest versions of the 2nd election enrollment forms. Rule 19-11.008 is being amended to state that if a member, who transferred from the Pension Plan to the Investment Plan before vesting in the Pension Plan benefit leaves FRS employment, the member will be entitled to employee contributions plus any vested Investment Plan benefit. However, if the member takes a distribution of any Investment Plan funds, the member will immediately be considered “retired” and will forfeit any unvested Pension Plan funds, as well as any earnings on such funds and any service credit related thereto. Rule 19-11.009 is being amended to provide that a member who participates in an FRS-participating employer’s volunteer programs within the first 12-month period following termination still will be eligible to receive retirement benefits; and to adopt the latest version of the Certification Form that is used to prevent the hiring of ineligible retirees. Rule 19-11.012 is being amended to adopt the latest versions of the Employee Rollover Deposit Instructions and Form, and the DROP member rollover forms. Rule 19-11.014 is being amended to update a statutory cite.

SUMMARY: To adopt updated forms; to clarify/correct certain information; to add a definition for “volunteer services.” 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 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) FS

LAW IMPLEMENTED: 112.3173, 119.07(4)(d), 121.021(29), (39), 121.051, 121.055, 121.73, 121.78, 121.091(5)(j), (8), 121.35, 121.4501(1), (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12), (13), (14), (15), 121.591(3), 121.77, 121.78. 732.802 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: Friday, March 15, 2024, 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 hours before the workshop/meeting by contacting: Maria LaRue, Paralegal, Office of the General Counsel, State Board of Administration, 1801 Hermitage Blvd., Tallahassee, FL 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, 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 (12) No change.

(13) “De Minimis Distribution” is an automatic distribution made when an inactive member’s account balance is $1,000 or less. However, such a distribution will not occur until the member has been terminated from all employment with FRS FRS-participating employers for a minimum of six (6) calendar months.

(14) through (17) No change.

(18) “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 paragraphs 19-11.006(2)(e) and 19-11.007(4)(a) 19-11.006(2)(d) and 19-11.007(3)(a), F.A.C.

(19) through (23) No change.

(24) “Electronic Signature” is any symbols or other data in digital form attached to an electronically transmitted document, which includes a systematic digital authentication such as a date or time stamp, as verification of the sender’s intent to sign the document. By submitting an electronic signature, a member acknowledges that the electronic signature is the same as a handwritten signature for the purposes of validity, enforceability, and admissibility.

(25) through (27) are renumbered to (24) through (26) No change.

(27) (28) “Exempt transaction” is any transaction that is initiated for purposes of: depositing employer payroll and employee contributions; a rollover of eligible funds into the plan from an outside retirement plan; processing a distribution; processing a Qualified Domestic Relations Order; or mapping funds from terminated products. Exempt transactions are not included in any calculations for the purposes of Rule 19-11.004, F.A.C.

(29) through (33) is renumbered to (28) through (32) No change.

(33) (34) “Grace period” means that procedure described in subsections 19-11.006(3) and 19-11.007(5) 19-11.007(4), F.A.C., which permit, under certain circumstances, the voiding of a retirement plan choice election.

(34) (35) “In-service distribution” is an invalid distribution made to a member who is actively employed with an FRS FRS-participating employer at the time of taking a distribution.

(36) through (40) are renumbered to (35) through (39) No change.

(40) (41) “Member,” “FRS Investment Plan Member,” or “Investment Plan Member” means an employee who elected to participate, defaulted, or is considered a renewed member pursuant to Section 121.122, F.S., and has an account established, in the Investment Plan as a result of current or previous employment with an FRS FRS-participating employer; a person who has been designated as an alternate payee due to a qualified domestic relations order (“QDRO”); a terminated Deferred Retirement Option Program (DROP) member who has elected to roll over proceeds from their DROP account; or a designated beneficiary when a member is deceased.

(42) through (45) are renumbered to (41) through (44) No change.

(45) (46) “Required Minimum Distributions,” (“RMD”) are the annual minimum distributions that, pursuant to the Internal Revenue Code, must be taken by members who are age 72 or older (age 73 or older if the member reaches age 72 after December 31, 2022) from their qualified retirement plan accounts, including 401(k), 457, 403(b) plans and IRA accounts, when they terminate employment. The amount of an RMD in any year is based on account balances as of December 31st of the prior year. The member must have terminated all FRS covered employment in order for an RMD to be processed. Once the RMD has been calculated, the RMD will be paid to the member, even if the member returns to active FRS employment during the calendar year.

(47) through (54) are renumbered to (46) through (53) No change.

(54) “Volunteer services” means services provided in accordance with Section 121.091(15), F.S.

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, 12-30-15, 4-12-17, 2-12-18, 2-19-19, 5-11-22, 7-26-23, _________.

 

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, FRS Investment Plan Beneficiary Designation, rev. 07-23 04-16, http://www.flrules.org/Gateway/reference.asp?No=Ref-16161 http://www.flrules.org/Gateway/reference.asp?No=Ref-07364, or through the MyFRS.com online version of the FRS Investment Plan Beneficiary Designation form, rev. 03/20, http://www.flrules.org/Gateway/reference.asp?No=Ref-14006, which are both hereby adopted and incorporated by reference. These forms are 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, 8:00 a.m. to 6:00 p.m., by accessing the MyFRS.com website and clicking on “Forms”, or by accessing the online version beneficiary form. Alternatively, a beneficiary may also be designated electronically by logging on to MyFRS.com, clicking on “Investment Plan,” and then clicking on “personal info,” or by calling the Investment Plan Administrator at 1(866)446-9377, Option 4 (TRS 711). The beneficiary designation form must be completed and received by the Investment Plan Administrator before it becomes effective.

(3) No change.

(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. 07-21, the General Retirement Plan Enrollment Form for Regular Special Risk and Special Risk Administrative Support Class Employees, Form ELE-1, rev. 07-23 07-22, 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. 07-21, or the 2nd Election Retirement Plan Enrollment Form, Form ELE-2, rev. 07-23 07-22, which are adopted and incorporated by reference in subsection 19-11.007(4), 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 (e) No change

(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. 07-23 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.

(g) through (h) No change

(5) (a) No change.

(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 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. 07-23 04-16, in the appropriate place or submitting the FRS Investment Plan Acknowledgement of Beneficiary Designation Form, Form IPBENACK-1, rev. 07-23 03-20, http://www.flrules.org/Gateway/reference.asp?No=Ref-16162 http://www.flrules.org/Gateway/reference.asp?No=Ref-14007, which is hereby adopted and incorporated by reference.

(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 acknowledgement. The member must 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).

(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, or if the spouse cannot be located, 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.  If the spouse cannot be located or refuses to sign the acknowledgement, the member may request that the acknowledgement requirement be waived by submitting an affidavit setting forth facts and circumstances.

(6) through (12) No change

(13) Distributions to Eligible Designated Beneficiaries.

(a). Surviving spouse as sole beneficiary.

1. through 3. No change.

4. If an election is made to maintain the account in the deceased member’s name and to take required minimum distributions under the life expectancy payout option, the surviving spouse must begin receiving distributions by the later of: December 31 of the year after the member’s death; or December 31 of the year the deceased member would have reached age 72 (age 73 if the member reaches age 72 after December 31, 2022) (age 70 ½ for members whose 70th birthday occurred prior to July 1, 2019).

5. No change

(b) through (e) No change.

(14) through (19) 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, 12-30-15, 2-9-17, 2-12-18, 4-8-20, 5-11-22, 7-26-23, ______.

 

19-11.003 Distributions from FRS Investment Plan Accounts.

(1) Distributions from Investment Plan accounts are made after the member terminates all employment from all Florida Retirement System (FRS) (FRS)-participating employers and meets distribution eligibility requirements as set out below in subsection (2), or after the member’s death. Monies that are rolled over from the Pension Plan Deferred Retirement Option Program (DROP) are available for immediate distribution.

(2) Distributions are available after the member terminates all employment with all FRS FRS-participating employers.

(a) An Investment Plan member is not shall not be entitled to an account distribution until the member has terminated and no longer is providing services, in paid or unpaid arrangements, with all FRS FRS-participating employers for three (3) full calendar months following the month of termination, except as provided in paragraph (d), below. This includes but not limited to, employment in any regularly established position, full-time or part-time employment, temporary employment, employment through third-parties providing services to an FRS employer, Other Personal Services (OPS), election poll employment, or substitute or adjunct teaching. Example: If a member terminates on May 15, the three full calendar months are June, July, and August. Therefore, the member cannot request a distribution until September.

(b) If the member’s termination date has not been submitted by the employer on the monthly retirement report within the three (3) calendar months, the employer can complete and return the “Employment Termination Form,” Form ETF-2, rev. 06-19, http://www.flrules.org/Gateway/reference.asp?No=Ref-14010, which is hereby adopted and incorporated by this reference. The termination form can be obtained by accessing the website MyFRS.com and then clicking 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 FRS Online for Employer Services Online Retirement Reporting and submit the termination date electronically.

(c) No change.

(d) A member who has reached his or her normal retirement date, as provided in Section 121.021(29), F.S., and has terminated all employment from all FRS FRS-participating employers for one (1) calendar month may request a one-time distribution of up to 10 percent (10%) of the vested account balance. For example, if such a member terminates on May 15, the one calendar month is June. The member can request a one-time distribution of up to 10 percent (10%) in July.

(e) No Change.

(3) All distributions of benefits from a member’s account(s) in the Investment Plan shall begin and be made no later than as prescribed by Code s. 401(a)(9) and the regulations issued thereunder, including any proposed regulations, and shall be subject to the incidental death benefit rules of Code s. 401(a)(9)(G). A copy of the Code section can be obtained by accessing the IRS website at irs.gov. and clicking on the Tax Professionals section, and then clicking on the Code, Regs. & Guidance section.

(a) Distribution of benefits to a member shall be made or commence not later than April 1 following the close of the calendar year during which the member attains age 73 72 and has terminated all employment from all FRS FRS-participating employers.

(b) No Change.

(4) through (6) No Change

(7) De Minimis Distributions.

(a) through (b) No Change.

(c) If such member returns to work for an FRS FRS-participating employer after receiving this automatic distribution, the member is not considered a reemployed retiree and will not be subject to any limitation applicable to such employees.

(8) Required Minimum Distributions (“RMD”).

(a) Members, age 73 72 or older, must begin taking an annual minimum distribution from their Investment Plan accounts if they have terminated all employment with FRS FRS-participating employers.

(b) The amount of an RMD in any year is based on account balances as of December 31st of the prior year. Once the RMD has been calculated, the RMD will be paid to the member, even if the member returns to active FRS employment with an FRS employer during the calendar year.

(c) No change.

(d) If such member returns to work with an FRS FRS-participating employer after receiving this automatic distribution, the member is not considered a reemployed retiree and will not be subject to any limitations applicable to such employees.

(9) Pending Distributions.

(a) through (b) No change.

(c) A member who returns to employment with an FRS FRS-participating employer in any capacity during the pending distribution period must notify the Investment Plan Administrator to cancel the distribution.

(d) through (e) No change.

(10) Invalid distributions.

(a) No change.

(b) The following are examples of scenarios that could result in invalid distributions. These are only examples and are not inclusive of all possible situations. Members and employers are encouraged to contact the Investment Plan Administrator to discuss the particular situation.

1. Example 1: A member joined the Investment Plan effective September 1, 2002. The member terminated all employment from his FRS FRS-participating employer on August 24, 2023 2015. On December 15, 2023 2015, the member takes a partial distribution from the Investment Plan account. However, the member returned to employment with an FRS FRS-participating employer on December 1, 2023 2015. The member took an invalid distribution because the member was working for an FRS FRS-participating employer at the time the member received the distribution.

2. Example 2: A member joined the Investment Plan effective April 1, 2004. The member terminates employment with an FRS FRS-participating employer on November 12, 2023 2015. On March 1, 2024 2016, the member takes a total distribution from his Investment Plan account. The member returns to employment as a substitute teacher with an FRS FRS-participating on April 15, 2024 2016. The March 1, 2024 2016 distribution is invalid since the member returned to work within six (6) full calendar months of the retirement date.

3. Example 3: A member joined the Investment Plan effective May 1, 2005. The member terminates employment with the member’s FRS FRS-participating employer on November 12, 2023 2015. The member has reached the normal retirement date. On January 5, 2024 2016, the member receives the one-time distribution of up to 10 percent from the Investment Plan account. The member returns employment with an FRS FRS-participating employer on May 15, 2024 2016. The January 5, 2024 2016, distribution is invalid since the member returned to work within six (6) calendar months of the member’s retirement date.

4. Example 4: A member joined the Investment Plan effective December 1, 2010. The member is terminated by his FRS FRS-participating employer on April 3, 2022 2014, for violating standards of employee conduct. The member files a grievance against the employer and requests to be reinstated with full back pay. On February 15, 2023 2015, the member requests a total distribution from their Investment Plan account. On September 22, 2023 2015, the member’s grievance is granted, the member’s termination is negated and the member is reinstated to employment as of April 3, 2022 2014 with full back pay through September 22, 2023 2015. The member’s employment records are corrected to show the member had an employee/employer relationship from April 3, 2022 2014 through September 22, 2023 2015. The member’s February 15, 2023 2015, distribution is invalid since the member was not terminated from employment with an FRS FRS-participating employer at the time the member received the distribution.

(11) No change.

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, 12-30-15, 4-12-17, 2-12-18, 5-11-22, ______.

 

19-11.004 Excessive Trading in the FRS Investment Plan

(1) Excessive trading by Investment Plan members is prohibited. The United States Securities and Exchange Commission (SEC) has adopted Rule 22c-2. (17 CFR §270.22c-2.), regarding excessive trading for open-end mutual funds. Rule 22c-2 can be obtained by accessing the SEC website at sec.gov and clicking on the Regulation Laws and Regulations section. If the mutual funds determine that the member has engaged in excessive trading under the mutual funds’ policies, the mutual funds are entitled to impose redemption fees or prevent trading that violates the mutual funds’ excessive trading policies. It is the responsibility of the member to comply with the trading restrictions permitted by the SEC. Any applicable fees will be deducted directly from the members’ accounts. Funds within the Self-Directed Brokerage Account (“SDBA”) may have excessive trading rules that are applicable. However, these fund rules are separate and apart from the Investment Plan’s Excessive Fund Trading Guidelines excessive trading policy.

(2) No change.

(3) This subsection contains examples only. This subsection does not contain an exhaustive list of all possible transactions. Members avoiding these examples will not necessarily avoid the impact of this rule since other transactions will meet the definitions of Market Timing Trades or Excessive Trading.

(a) through (e) No change.

(f) A member has $250,000 in his Investment Plan account and that is subject to a QDRO. The member’s spouse becomes entitled to half of the member’s Investment Plan account. On December 5, the member’s spouse rolls over their entire balance into an IRA. This is neither a Roundtrip Trade nor a Market Timing Trade because the transfer is an exempt transaction, as described in subsection 3.b., above.  Member A transfers $250,000.00 in his Investment Plan account that is the subject of a QDRO with the result that the member’s spouse becomes entitled to half of the member’s Investment Plan account. A total of $125,000.00 is transferred from the member’s account to a newly-established account for the member’s spouse and the funds are put into a foreign stock fund on December 1. On December 5, the member’s spouse rolls over the entire $125,000.00 into an IRA. This is neither a Roundtrip Trade nor a Market Timing Trade because the transfer is an exempt transaction, as defined in Rule 19-11.001, F.A.C.

(g) through (i)  No change.

(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, 12-30-15, 4-12-17, 2-12-18, 2-19-19, 5-11-22, _______.

 

19-11.006 Enrollment Procedures for New Hires.

    (1) No change.

(2) Specific Enrollment Procedures.

(a) through (d). No change.

(e) The State Board of Administration (SBA) has designed the forms set forth below for ease of use for employees in the several membership classes of the FRS. 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. 07-21, http://www.flrules.org/Gateway/reference.asp?No=Ref-14014, which is only for regular, special risk, and special risk administrative support class employees; a General Retirement Plan Enrollment Form, Form ELE-1, rev. 07-23 07-22, http://www.flrules.org/Gateway/reference.asp?No=Ref-16163 http://www.flrules.org/Gateway/reference.asp?No=Ref-15457 for regular, special risk, and special risk administrative support class employees; an Elected Officers’ Class Retirement Plan Form, Form EOC-1, rev. 07-23 07-22, http://www.flrules.org/Gateway/reference.asp?No=Ref-16164   http://www.flrules.org/Gateway/reference.asp?No=Ref-15458; a State Community College System Optional Retirement Program (SCCSORP) Enrollment Form, Form OCC-1, rev. 07-23 07-22, http://www.flrules.org/Gateway/reference.asp?No=Ref-16165http://www.flrules.org/Gateway/reference.asp?No=Ref-15459; and a Local Senior Management Service Employees Retirement Plan Enrollment Form, Form SMS-3, rev. 07-23 07-22, http://www.flrules.org/Gateway/reference.asp?No=Ref-16166 http://www.flrules.org/Gateway/reference.asp?No=Ref-15460. All of the preceding forms are hereby adopted and incorporated by reference.

1. through 2. No change.

(f) through (j) No change.

(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, 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, 12-30-15, 4-12-17, 2-12-18, 2-19-19, 4-8-20, 5-11-22, 7-26-23, _________.

 

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

(1) through (3)  No change.

(4) General Procedures.

(a) All members who wish to change their FRS retirement plan using their 2nd election, or a SCCSORP member who wants to switch to the FRS, must submit an election to the Plan Choice Administrator.

1. A second 2nd election can be made by accessing the online Second Election Choice Service or online by completing the “2nd Election Retirement Plan Enrollment Form.” There are two types of enrollment forms. The “2nd Election Retirement Plan Enrollment Form,” Form ELE-2, rev. 07-23 07-22,

http://www.flrules.org/Gateway/reference.asp?No=Ref-16167 http://www.flrules.org/Gateway/reference.asp?No=Ref-15461, 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 Pension Plan to either the Investment Plan or the Investment Plan Hybrid Option. Alternatively, the member can complete the “2nd Election EZ Retirement Plan Enrollment Form,” Form ELE-2EZ, rev. 07-21, http://www.flrules.org/Gateway/reference.asp?No=Ref-14019, 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 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 Investment Plan or the Investment Plan Hybrid Option account is activated. Activation occurs when contributions are deposited to the member’s Investment Plan account.

2. Members who want to exercise their one-time opportunity to transfer from SCCSORP to the FRS Pension Plan or participate prospectively in the FRS Investment Plan must complete the State Community College Optional Retirement Program (SCCSORP) Retirement Plan Conversion form, Form OCC-2, rev. 07-23 07-22, http://www.flrules.org/Gateway/reference.asp?No=Ref-16172 http://www.flrules.org/Gateway/reference.asp?No=Ref-15462, which is hereby adopted and incorporated by reference.

(b) through (k). No change.

(5). 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, 12-30-15, 4-12-17, 2-12-18, 2-19-19, 4-8-20, 5-11-22, 7-26-23, ______.

 

19-11.008 Forfeitures.

(1) Forfeitures after Separation or Retirement from Florida Retirement System (FRS) Investment Plan.

(a) If a member terminates or is no longer working in an FRS-covered position before vesting in the an Investment Plan benefit or any transferred Pension Plan service credit 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 or the effective date of non-FRS eligibility. The suspense account shall be invested in the FRS Core Plus Bond Fund, where it will accrue actual investment earnings or losses.

(b) If the member returns to work for an FRS FRS-participating employer in an FRS-covered position within the five (5) years from the date of termination, the member’s unvested account balance will be returned to the member’s account, together with the associated service credit. Any additional service credit earned will be applied towards vesting of the member’s benefit. The balance will reflect any earnings or losses while invested in the FRS Core Plus Bond Fund.

(c) If the member never returns to work for an FRS FRS-participating employer in an FRS-covered position or if the member returns to FRS covered employment five (5) or more years after the date of termination or the effective date of non-FRS eligibility, the member will forfeit the unvested account balance and the associated service credit.

(d) If the member leaves FRS-covered employment after vesting in the an Investment Plan benefit, but before the member vests in any transferred Pension Plan service credit benefit, the member will shall only be entitled to receive a distribution of any employee contributions contributed during their FRS employment, plus any the vested Investment Plan employer contributions benefit. However, if the member takes any self-initiated distribution from the vested Investment Plan benefit, the member will be considered retired and the unvested Pension Plan portion of the benefit transferred into the Investment Plan, plus any earnings on those funds will be forfeited along with the associated service credit. This includes a distribution of any employee contributions the member contributed during their FRS employment.

(e) If the member does not take a self-initiated distribution of any vested Investment Plan benefit after terminating from all FRS FRS-participating employers or the effective date of non-FRS eligibility, the unvested Pension Plan benefit will be transferred six (6) months following the termination or the effective date of non-FRS eligibility to a suspense account. The suspense account is invested in the FRS Core Plus Bond Fund, where it will accrue actual investment earnings or losses. If the member returns to FRS-covered employment within five (5) years from the date of termination or the effective date of non-FRS eligibility, the member’s unvested Pension Plan service, benefit reflecting any earnings or losses while invested in the FRS Core Plus Bond Fund, will be returned to the member’s account, together with the associated service credit. Any additional service credit earned will be applied towards the vesting of the member’s benefit.

(f) If an Investment Plan Hybrid Option member leaves FRS-covered employment after vesting in the Investment Plan benefit, but before vesting in the Pension Plan benefit, the member will only be entitled to receive a distribution of any employee contributions contributed during their FRS employment, plus any the vested Investment Plan employer contributions benefit. However, if the member takes any self-initiated distribution from the of the vested Investment Plan benefit, the member will be considered retired, and the unvested Pension Plan service credit portion of the benefit will be forfeited along with the associated service credit. If the member does not take a distribution from the Investment Plan and later returns to work for an FRS FRS-participating employer in an FRS-covered position, the member will be returned to the Investment Plan and enrolled in the Investment Plan Hybrid Option and the service credit for the existing Pension Plan and Investment Plan service, combined with any future service credit, will be applied towards vesting of the member’s account.

(g) If a member is required to receive a required minimum distribution (RMD), any unvested Pension Plan benefit and the associated service credit, will not be forfeited.

(h) If a member’s benefit and service credit are forfeited because the member did not return to FRS-covered employment within five (5) years, but the member later returns to FRS-covered employment after the forfeiture has occurred, the member will be returned to the plan in which he or she was participating at the time of the forfeiture. If the member’s benefit and service credit in the Pension Plan are forfeited because the member took a self-initiated distribution from the of the vested Investment Plan benefit, the member is considered retired. If the member later returns to FRS-covered employment, the member will be considered a renewed member and will be entitled to renewed membership, if applicable.

(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, 12-30-15, 4-12-17, 2-12-18, 5-11-22, 7-26-23,________________.

 

19-11.009 Reemployment with an Florida Retirement System (FRS) FRS-Participating Employer after Retirement.

(1) Reemployment.

(a) If reemployed prior to July 1, 2010, a member may return to work with an FRS FRS-participating employer after being retired for six (6) calendar months. Six calendar months means six full calendar months following the month the member retired. For example, if a member retires in January, the six calendar months are February, March, April, May, June and July. The retiree may return to employment in August. The retiree may return to employment in one of the excepted positions identified in Section 121.091(9)(b), F.S., and continue to take distributions from prior career benefits. If the retiree returns to work in a position that is not one of the exceptions allowed by law, the receipt of any remaining retirement benefits is suspended until either employment is terminated or the completion of 12 calendar months of retirement.

(b) If reemployed on or after July 1, 2010, a member may return to work in any position with an FRS FRS-participating employer after being retired for six (6) calendar months. Six calendar months means six full calendar months following the month the member retired. For example, if a member retires in January, the six full calendar months are February, March, April, May, June, and July. The retiree may return to employment in August. The member must suspend receipt of any remaining retirement benefits until either employment is terminated or the completion of 12 calendar months of retirement. However, a retired law enforcement officer may be reemployed as a school resource officer by an FRS FRS-participating employer and receive both a salary and retirement benefits once six calendar months have elapsed immediately after the officer’s date of retirement. Also, a member who volunteers in an FRS employer-provided volunteer program during the first 12 calendar months can continue to receive retirement benefits.

(c) To prevent hiring an ineligible retiree, the employer should obtain a written statement from each prospective employee as to the employee’s retirement status. The written statement can be set forth on the “Certification Form,” Form CERT, rev. 07-23 08-22  http://www.flrules.org/Gateway/reference.asp?No=Ref-16168         http://www.flrules.org/Gateway/reference.asp?No=Ref-15463, which is hereby adopted and incorporated by reference. The form can be found on the MyFRS.com website. This form should be retained in the employee’s personnel file.

(d) A retiree who returns to work with an FRS FRS-participating employer prior to being retired for six (6) calendar months and an employer that employs or appoints such retiree are jointly and severally liable for repaying retirement benefits paid from the Investment Plan. In lieu of repayment, the member may terminate all employment from all FRS FRS-participating employers.

(2)  Renewed Membership.

(a) A retiree of the Investment Plan who is reemployed with an FRS FRS-participating employer in a covered position on or after July 1, 2010 through June 30, 2017, is not eligible for renewed membership.

(b) No change.

Rulemaking Authority 121.4501(8) FS. Law Implemented 121.021(29), (39), 121.091(9)(b), (c), 121.4501(2)(j), 121.591(1)(a)4. FS. History–New 11-26-07, Amended 12-8-08, 8-7-11, 7-12-12, 4-12-17, 2-12-18, 2-19-19, 4-8-20, 5-11-22, 7-26-23,_________.

 

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

(1) through (7). No change.

(8)(a). No change.

(b) Current members shall use Form IPRO-1, rev. 07-23 01-22, “Employee Rollover Deposit Instructions and Form,” http://www.flrules.org/Gateway/reference.asp?No=Ref-16169 http://www.flrules.org/Gateway/reference.asp?No=Ref-15464, 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, “FRS Investment Plan DROP Accumulation Direct Rollover Form for Current DROP Members,” rev. 07-23 07-21, http://www.flrules.org/Gateway/reference.asp?No=Ref-16170

http://www.flrules.org/Gateway/reference.asp?No=Ref-14023, 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. 07-23 07-21, http://www.flrules.org/Gateway/reference.asp?No=Ref-16171 http://www.flrules.org/Gateway/reference.asp?No=Ref-14024, which hereby is adopted and incorporated by reference, to effect rollovers described in this rule.

(e). No change.

(9) through (10). No change.

(11) Once an active Investment Plan member rolls over monies into the Investment Plan, the member cannot receive a distribution of the rolled over deposit, or the member’s account balance, until the member has terminated and is no longer providing services to an FRS employer, in paid or unpaid arrangements, with all FRS-participating employers for three (3) full calendar months following the month of termination.  A member who has reached the normal retirement date as provided in Section 121.021(29), F.S., and who has terminated employment from all FRS-covered employment for one calendar month may request a one-time distribution of up to 10 percent (10%) of the vested account balance.

(12) No change.

(13)(a) through (13)(c) No change.

(d) The Investment Plan Administrator will request authorization to liquidate the requested amount from the SBA. The SBA shall provide a letter of direction to complete effect the member’s request. Upon receipt of the letter, the Investment Plan Administrator will liquidate the funds from the member’s account. Upon liquidation, the amount will be received by the Investment 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 Investment 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)  No change.

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, 12-30-15, 4-12-17, 2-12-18, 2-19-19, 4-8-20, 5-11-22, ______.

 

19-11.014 Benefits Payable for Investment Plan Disability and In-Line-Of-Duty Death Benefits.

(1) An Investment Plan member shall be eligible to apply for a disability benefit in accordance with Section 121.591(2), F.S., and in Rule 60S-4.007, F.A.C.

(a)  No change.

(b) Upon approval for Investment Plan disability retirement, the member’s entire Investment Plan account balance, consisting of vested and non-vested monies, plus earnings, shall be transferred to the Division of Retirement (Division) for deposit in the disability account of the Florida Retirement System (FRS) Trust Fund.

1. The Investment Plan member will become a member of the Pension Plan effective upon his or her disability retirement effective date. If the member has a second election remaining, this transfer shall not constitute a second election as provided in Section 121.4501(4)(f), F.S. 121.4501(4)(g), F.S.

2. No change.

(c) No change.

(d) If a member recovers sufficiently to return to employment from disability, the member shall be returned as an active member to the Investment Plan.

1. through 2. No change.

3. If the member does not return to FRS-covered employment with an FRS-participating employer, he or she may elect to receive the remaining account balance as provided under Section 121.591(1), F.S. Any non-vested amounts will be forfeited.

4. No change

(2) No change.

Rulemaking Authority 121.4501(8), (5)(e), 121.5912 FS. Law Implemented 121.4501(8), (9), (10), (11), (12), (13), (14), (15), 121.591(4) FS. History–New 2-9-17, Amended 2-12-18,_____________.

 

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 19, 2023

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: November 16, 2023, Vol. 49/223.