To amend Rule 19-11.001, F.A.C. to correct some typographical errors and to add definitions that are used for federal SECURE Act purposes as applied to after-death distributions of members’ FRS Investment Plan accounts, ....

 

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

19-11.005Florida Retirement Systme (FRS) State Board of Administration Complaint Procedures

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

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

19-11.012Rollovers 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 correct some typographical errors and to add definitions that are used for federal SECURE Act purposes as applied to after-death distributions of members’ FRS Investment Plan accounts, as discussed in Rule 19-11.002, F.A.C.. To amend Rule 19-11.002, F.A.C. to incorporate the latest version of the on-line beneficiary designation form; to specify when a beneficiary designation form is considered “incomplete;” and to indicate how distributions of account assets will be made to beneficiaries of members dying after January 1, 2022, the effective date of the federal SECURE Act for governmental retirement plans. To amend Rule 19-11.003, F.A.C. to clarify when a member has terminated all employment for purposes of distributions of benefits; and to adopt the latest version of the Employment Termination form. To amend Rule 19-11.004, F.A.C. to adopt the latest version of the transfer request form that must be filed by excessive fund trading violators. Rule 19-11.005, F.A.C., is being amended to clarify how a member can obtain a blank petition for hearing form. To amend Rule 19-11.006 to adopt the latest versions of the applicable enrollment forms and to make some editorial revisions. To amend Rule 19-11.007, F.A.C. to adopt the latest versions of the Second Election enrollment forms. To amend Rule 19-11.008, F.A.C. to indicate that funds placed in a suspense account will be invested in the FRS Core Plus Bond Fund. To amend Rule 19-11.009 to adopt the latest version of the Certification Form. To amend Rule 19-11.011, F.A.C. to clarify that FRS participating employers are required to file monthly retirement reports instead of monthly payroll files with the Division of Retirement. Rule 19-11.012, F.A.C., is being amended to adopt the latest versions of the rollover forms. Rule 19-11.013, F.A.C. is amended to eliminate the annual administrative fee for FRS members participating in the Self-Directed Brokerage Account

SUMMARY: To adopt updated forms; to clarify/correct certain information; to update definitions and provisions that are applicable to the federal SECURE Act as applied to after-death distributions to beneficiaries of FRS Investment Plan members dying on or after January 1, 2022; to remove the reference to an annual administrative fee that no longer applies to participants of the Self-Directed Brokerage Account. There are no other rules incorporating these proposed amended rules. The proposed amendments do not have an impact on any other rules.

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: 119.071, 120.569, 120.57, 120.573, 121.021(29), (39), 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), (19), 121.591, 121.5912; 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, February 14, 2022, 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 (8). No change.

(9) “Complaint” ”Complaint” shall mean a member’s written or verbal expression of dissatisfaction with an Investment Plan provider or one of its representatives.

(10) through (11) No change.

(12) “De Minimis Minimus 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-participating employers for a minimum of six (6) calendar months.

(13) through (18) No change.

(19) “Eligible Designated Beneficiary” is either the member’s surviving spouse, the member’s minor child (who is a child younger than 18 years of age), a disabled individual, a chronically ill individual or a person not more than 10 years younger than the member (and would include parents, siblings and unmarried partners of the deceased member if they are not more than 10 years younger than the member).

(19) through (20) are renumbered (20) through (21). No change.

(22)(21) “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.

(22) through (23) are renumbered (23) through (24).  No change.

(25)(24) “Excessive trading” means multiple occurrences of Market Timing Trades by a member. The definition of a Market Timing Trade is set forth in subsection (38) (36) herein.

(25) through (39) are renumbered (26) through (40). No change.

(41) “Non-Eligible Designated Beneficiary” is a designated beneficiary that does not fit into one of the five categories of beneficiaries that are considered to be Eligible Designated Beneficiaries, and includes look-through trusts that are compliant with IRS regulations.

(40) through (41) are renumbered (42) through (43). No change.

(44)(42) “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 70 1/2 or older 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.

(43) through (50) are renumbered (45) through (52).  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, 12-30-15, 4-12-17, 2-12-18, 2-19-19,______.

 

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. 04-16, 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 is hereby adopted and incorporated by reference. These forms are 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, 8:00 a.m. to 6:00 p.m., 9:00 a.m. to 8:00 p.m., or by accessing the MyFRS.com website and clicking on “Forms”, or by accessing the online version beneficiary form.  “Resources” and then “Forms.” The beneficiary designation form must be completed and received by the Investment Plan Administrator before it becomes effective. Alternatively, a beneficiary may also be designated electronically by logging on to MyFRS.com, clicking on “Investment Plan” “manage investments,” 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) A beneficiary designation shall only be effective once it is received by the Investment Plan Administrator. The most recent beneficiary designation filed with the Investment Plan Administrator shall replace any previous designation whether made before or after the member’s termination of employment or retirement. Upon receipt of the beneficiary designation, the Investment Plan Administrator will send confirmation that designation was updated. After submitting the designation, Tthe member is responsible for confirming whether the designation has been received by the Investment Plan Administrator. The beneficiary designation is printed every quarter on the member’s quarterly statement.

(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 04-19, the General Retirement Plan Enrollment Form for Regular Special Risk and Special Risk Administrative Support Class Employees, Form ELE-1, rev.07-21 07-19, 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 07-19, or the 2nd Election Retirement Plan Enrollment Form, Form ELE-2, rev. 07-21 07-19, which are adopted and incorporated by reference in subsection 19-11.007(4)(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 the member submits a beneficiary form that is incomplete, it will not be processed. An incomplete form is a form which is missing the name of the member, the last four numbers of the member’s social security number, or the member’s signature, or a form indicating that the shares assigned to joint primary or contingent beneficiaries are greater than to, or less than, 100%. The form will is incomplete if the member selected married for the marital status, but did not include the spouse’s name, last four numbers of the social security number, address and/or the Investment Plan Administrator does not already have the information listed.  The Plan Administrator will notify the member and request that the member complete and submit a corrected form.

(h) If a beneficiary form is received without a marrital status and a spouse has not been listed as a primary or contignent beneficiary, the member will be considered single.  If a member should die, and it is later determined the member is married, the account will be updated accordingly and benefits will be paid based on the member being married.

(5)(a) No change.

(b) If a member is married and names a primary beneficiary(ies) and the person(s) named is (are) not the spouse of the member, then the member is required to notify the spouse that the spouse is not a primary beneficiary of the proceeds of the member’s Investment Plan account(s). The spouse must acknowledge that the spouse understands that the spouse is not a primary beneficiary of the member’s Investment Plan account(s) by signing the beneficiary designation form, Form IPBEN-1, rev. 04-16, in the appropriate place or submitting the FRS Investment Plan Acknowlegement of Beneficiary Desination Form, Form IPBENACK-1, rev. 03-20 , http://www.flrules.org/Gateway/reference.asp?No=Ref-14007, which is hereby adopted and incorporated by reference.

(c) through (d). No change.

(6) No change.

(7) Per Florida Law Beneficiary Designation

(a) No change.

(b) If, upon the death of a member, a beneficiary(ies) can be identified in accordance with Florida statute, but no social security number or address of the beneficiary or beneficiaries is available, the Investment Plan Administrator will, with the assistance of the State Board of Administration (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) No change.

(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 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 FRS Core Plus Bond Fund FRS Intermediate Bond Fund. The amount will be held in the Investment Plan Suspense Account until (1) the beneficiary contacts the FRS Investment Plan; or (2) another beneficiary requests consideration as the deceased’s proper beneficiary; or, (3) at the end of 10 years in the Suspense Account, the amount is transferred to the Investment Plan Forfeiture Account, where it is held indicating the name of the deceased member and the name of the beneficiary, if known.

(e) No change.

(8) Distributions to beneficiaries on the death of a member occurring before January 1, 2022.

(a) through (b). No change.

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

(a) No change.

(b) Spousal beneficiaries may request the following distributions:

1. through 3. No change.

4. Deferrals until a certain age, which allows the spouse to defer the receipt of benefits until a later date. However, the spouse must begin receiving the benefit payout no later than April 1 in the calendar year after the member would have attained age 72 70 1/2. The spouse may elect a full distribution, partial distribution or periodic payment. However, the total annual benefit payment must equal or exceed the federal Required Minimum Distribution (RMD). An additional benefit payment will be sent to the spouse in December of any year in which the total periodic payments for that year do not equal or exceed the spouse’s RMD.

5. through 6. No change.

(10) through (11). No change.

(12) Distributions to Beneficiaries for members dying on or after January 1, 2022.

(a) The form and timing of distributions to a beneficiary will depend on whether the beneficiary is defined under Federal law as an Eligible Designated Beneficiary, a Non-Eligible Designated Beneficiary or a Non-Designated Beneficiary.

(b) An “Eligible Designated Beneficiary” is either the member’s surviving spouse, the member’s minor child (who is a child younger than 18 years of age), a disabled individual, a chronically ill individual or a person not more than 10 years younger than the member (and would include parents, siblings and unmarried partners of the deceased member if they are not more than 10 years younger than the member).

(c) Minor children enjoy Eligible Designated Beneficiary Status only until they reach the age of majority. Once they reach majority, they become Non-Eligible Designated Beneficiaries.

(d) A “Non-Eligible Designated Beneficiary” is a designated beneficiary that does not fit into one of the five categories of beneficiaries that are considered to be Eligible Designated Beneficiaries, and includes look-through trusts that are compliant with IRS regulations.

(e) A Non-Designated Beneficiary is a non-person entity, such as an estate, charity or a non-qualifying (non-look-through) trust.

(13) Distributions to Eligible Designated Beneficiaries.

(a) Surviving spouse as sole beneficiary.

1. Whether the member dies before or after his or her required beginning date for required minimum distributions (or April 1 of the year after the later of the year the member reaches age 72 or the year the member retires), a surviving spouse who is the sole eligible designated beneficiary, must decide whether to retain the account in the deceased member’s name as an inherited retirement account or whether to rollover the funds to the surviving spouse’s own retirement account.

2.  If an election is made to do a spousal rollover, the surviving spouse may name a new beneficiary and take distributions on the surviving spouse’s own required beginning date for required minimum distributions. Once the account is in the surviving spouse’s name, any distributions taken before the surviving spouse reaches age 59 ½ may trigger the 10% early distribution penalty.

3. Before the spousal rollover may be made, any required minimum distributions due as of the year of rollover first must be made, as required minimum distributions can never be rolled over. If it is the year of the deceased member’s death, and deceased member had not received his or her required minimum distribution before death, that distribution must be made before the rollover. If it is any year after the year of death, the required minimum distribution due to the beneficiary must be made before a rollover can occur.

3. 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 70 ½ for members whose 70th birthday occurred prior to July 1, 2019).

4. If an election is made to maintain the account in the deceased member’s name but the surviving spouse fails to make an election to take a life expectancy payout option 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, then the surviving spouse will be required to receive a lump-sum distribution by December 31 of the year after the year of death or to take distributions under one of the following rules:

a. If the member dies before his or her required beginning date, then distributions must be made within 10 years.

b. If the member dies on or after his or her required beginning date, then the remaining life expectancy of the member is used as the required payout period.

(b) Eligible Designated Beneficiary Other than a Surviving Spouse.

1. Whether the member died before or after his or her required beginning date, the Eligible Designated Beneficiary may make a life expectancy payout election.

2. The non-spouse Eligible Designated Beneficiary may wish to directly rollover the inherited retirement plan account of a direct trustee-to-trustee transfer to a new retirement plan account not already owned by the beneficiary and that is titled in the name of the deceased member for the benefit of the beneficiary.

3.  The life expectancy election must be made by December 31 of the year after the year of the member’s death.

4. If the election is not timely made, the non-spouse Eligible Designated Beneficiary will be required to receive a lump-sum distribution by December 31 of the year after the year of the member’s death or to take distributions under one of the following rules:

a. If the member dies before his or her required beginning date, then distribution must be made within 10 years.

b. If the member died on or after his or her required beginning date, then the remaining life expectancy of the member is used as the required payout period.

c. If the plan account is payable to multiple eligible designated beneficiaries, payouts to all beneficiaries must be made using the life expectancy of the oldest beneficiary.

d. In the case of multiple beneficiaries, unless all of the beneficiaries are individuals as of the determination date (i.e., September 30th of the year after the member’s year of death, none of the individuals are designated beneficiaries.)

(c) Non-Eligible Designated Beneficiaries.

1. Whether the member dies before or after his or her required beginning date, the deceased member’s account must be distributed by December 31 of the 10th year following the member’s death.

2. A Non-Eligible Designated Beneficiary may elect to take distributions ratably throughout the 10 year period or take the total account at the deadline, or elect some distribution combination in between.

(d) No Designated Beneficiary.

1. If the member died before his or her required beginning date, the member’s entire account must be paid by the end of the fifth calendar following the member’s death.

2. If the member died on or after his or her required beginning date, distributions must be made over the remaining life expectancy of the deceased member. 

(14) (12) Procedures for dDistributions to beneficiaries who are minors.

(a) No change.

(b) When a minor child or children is/are the designated beneficiaries of the member, whether the member is the minor’s or minor’s minors’ parent, grandparent, sibling, other relative or any other person, a copy of the birth certificate of each minor child and the social security number for each minor child must be provided to the FRS Investment Plan Administrator, and must be received prior to any payout, regardless of the amount.

(c) through (f). No change.

(15)(13) A beneficiary, whether designated or pursuant to Florida law, of a deceased member who, by a verdict of a jury or by a court trying the case without a jury, is found guilty, or who has entered a plea of guilty or nolo contendere, of unlawfully and intentionally killing or procuring the death of such member shall forfeit all rights to the deceased member’s retirement benefits. Any benefits will be paid as if such beneficiary had predeceased the deceased member. No benefits will be paid until there is a final resolution of such charges against the beneficiary.

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

(b) No change.

(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. No later than calendar year-end, of each year following the transfer to the Suspense Account, the Investment Plan Administrator will attempt to locate and obtain the Social Security Number or the Taxpayer Identification Number of the beneficiary. The transferred funds shall be invested in the FRS Core Plus Intermediate Bond Fund. The amount will be held in the FRS Investment Plan Suspense Account until (1) the beneficiary contacts the Investment Plan; or (2) another beneficiary requests consideration as the deceased’s proper beneficiary; or, (3) at the end of 10 years in the Suspense Account, the amount is transferred to the Investment Plan Forfeiture Account, and the Administrator will maintain a record of the name of the deceased member and the name of the beneficiary, if known.

(d) No change.

(17)(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 Investment Plan Administrator of the member’s death, the Investment Plan Administrator will transfer the deceased member’s account to the Suspense Account indicating the name of the deceased member. If after 10 years after the date of death, the Investment Plan Administrator has not received an Estate Identification Number, the deceased member’s account will be transferred to the Investment Plan Forfeiture Account and the Administrator will maintain a record of the name of the deceased member. The transferrred funds shall be invested in the FRS Core Plus Intermediate Bond Fund.

(b) through (c). No change.

(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 FRS Core Plus Intermediate Bond Fund, from the date of transfer from the member’s account to the Suspense Account and/or Forfeiture Account. Any applicable income tax withholding shall be paid to the appropriate tax authorities at the time of the benefit payment to the estate.

(18)(16) If the social security number and date of birth of a beneficiary are known, an account will be established in the beneficiary’s name and funds will be transferred thereto. If any other beneficiaries are named, accounts also will be established in their names, provided their social security numbers and dates of birth are made known to the Investment Plan Administrator. However, no distribution will be made to any beneficiary until a certified copy of the member’s death certificate has been received. In the meantime, the beneficiary will have control over any investment elections/allocations for the account. The beneficiary will be notified of the establishment of the account and will receive a PIN to access information pertaining to the account.

(19)(17)(a) A designated beneficiary may disclaim any monetary interest as provided in chapter 739, F.S., and Internal Revenue Code s. 2518. A beneficiary can make a partial disclaimer or disclaim the entire interest. When a beneficiary makes a disclaimer, the beneficiary is considered to have predeceased the member, and the other beneficiaries designated by the member may then accept or disclaim any interest to which they are entitled.

(b) through (c). 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,_______.

 

19-11.003 Distributions from FRS Investment Plan Accounts.

(1) No change.

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

(a) An Investment Plan member shall not be entitled to an account distribution until the member has terminated and no longer providing services, in paid or unpaid arrangements, with all 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 pole employment, or substitute or adjunct teaching. An Investment Plan member shall not be entitled to an account distribution until the member has terminated employment from all FRS-participating employers, temporary, part-time, Other Personal Services (OPS), and any regularly established position with an FRS-participating employer, for three (3) full calendar months following the month of termination, except as provided in paragraph (d), below. 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 via the monthly payroll file within the three (3) calendar months, the employer can complete and return the “Employment Termination Form,” Form ETF-2, rev. 06-19 04/17, 0, http://www.flrules.org/Gateway/reference.asp?No=Ref-14010, http://www.flrules.org/Gateway/reference.asp?No=Ref-08687, which is hereby adopted and incorporated by this reference. The termination form can be obtained by accessing the MyFRS website at MyFRS.com, clicking on Resources, 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 Online Retirement Reporting Payroll and submit the termination date electronically.

(c) Upon the expiration of the three (3) calendar months after termination of all employment from all FRS-participating employment, the member may request a distribution from the Investment Plan Administrator, by calling the toll free MyFRS Financial Guidance Line at 1(866)446-9377, Option 4 (TRS 711), or by logging on to the MyFRS.com website, accessing his or her personal account information, and then requesting the distribution through the online services.

(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-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) A member who transfers to the Pension Plan from the Investment Plan and leaves a balance in the member’s Investment Plan account is a member of the Pension Plan and, as such, the member cannot take a distribution of the surplus Investment Plan funds until the member begins receiving their monthly Pension Plan benefit s.

(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 72 70 1/2 and has terminated employment from all FRS-participating employers.

(b) No change.

(4) through (5). No change.

(6) Distributions to Alternate Payees as a result of a Qualified Domestic Relations Order (QDRO).

(a) No change.

(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 “Investment Plan” Manage Investments,” accessing his or her personal account information, and then requesting the distribution through the online services.

(7) De Minimis Minimus Distributions.

(a) through (c). No change.

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

(a) Members, age 72 70 1/2 or older, must begin taking an annual minimum distribution from their Investment Plan accounts if they have terminated all employment with FRS-participating employers.

(b) through (d). No change.

(9) Pending Distributions.

(a) through (b). No change.

(c) A member who returns to employment with an 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) If a member or a former member of the Investment Plan receives an invalid distribution, the member or former member is required to repay the entire invalid distribution within ninety (90) days of the member’s receipt of a final notification from the SBA, or in lieu of repayment, the member must terminate all employment from all FRS-participating employers. If the member fails to repay the invalid distribution, or terminate employment, the employer is liable for the repayment of the invalid distribution even if the member signed a statement at the time the member was hired that no benefit had been received from the Plan.

1. through 3. 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. through 3. No change.

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

 

19-11.004 Excessive Trading in the FRS Investment Plan.

 

(1) No change.

(2) Limitations.

(a) No change.

(b) All authorized investment funds, except for money market funds, stable value funds, and funds within the SDBA, are subject to the following controls:

1. Members who engage in Market Timing Trades (as defined in rule 19-11.001, F.A.C.) in authorized primary funds will receive a warning letter sent by U.S. mail. The warning letter shall notify the member that excessive trades have been identified in the member’s accounts and any additional violations will result in a direction letter and restrictions.

2. Members who engage in Market Timing Trades in authorized primary funds and who have previously received a warning letter described in subparagraph 1., above, will be sent a direction letter delivered by courier. The direction letter shall require that the member shall not have access to automated online trade instructions for at least one full calendar month following the date of the direction letter for all trades involving the primary funds. The member shall be required to conduct trades involving primary funds via telephone by contacting the Investment Plan Administrator for at least one full calendar month. “One full calendar month,” in this context, means the full calendar month following the month in the member engaged in a market timing trade which the direction letter is received.

3. No change.

4. Members who engage in Market Timing Trades and who have previously received a direction letter as described in subparagraph 3., above, will be sent another direction letter, delivered by courier. The direction letter will advise the member that the member will only be permitted to conduct trades involving primary funds via paper trading forms for at least three full calendar months following the date of the direction letter. The form to be used by the member in conducting the trades is the “Transfer Request Form, Excessive Fund Trading Violators,” Form EFTPV-1, rev. 06-18 08-17, http://www.flrules.org/Gateway/reference.asp?No=Ref-14012, http://www.flrules.org/Gateway/reference.asp?No=Ref-08700, which hereby is adopted and incorporated by this reference. The form will be sent to the member by the Plan Administrator with the direction letter. This form must be notarized and returned to the Office of Defined Contribution Programs, via U.S. mail, certified\return receipt requested. This form cannot be used to trade in, out or within the SDBA.

5. Members who engage in Market Timing Trades and who have previously received a direction letter as described in subparagraph 4., above, will be sent another direction letter, delivered by courier. The direction letter shall require that the member shall only be permitted to conduct trades involving primary funds via paper trading forms for at least twelve full calendar months following the date of the direction letter. The form to be used by the member in conducting the trades is the “Transfer Request Form, Excessive Fund Trading Violators,” Form EFTPV-1, rev. 06-18 08-17. This form must be notarized and returned to the Office of Defined Contribution Programs, via U.S. mail, certified\return receipt requested.

6.  Members who engage in Market Timing Trades and who have previously received a direction letter as described in subparagraph 5., above, will be sent another direction letter, delivered by courier. The direction letter will advise the member that the member will only be permitted to conduct trades involving primary funds via paper trading forms for the remainder of any time that any balance exists in the member’s Investment Plan account following the date of the direction letter. The form to be used by the member in conducting the trades is the “Transfer Request Form, Excessive Fund Trading Violators,” Form EFTPV-1, rev. 06-18 08-17. This form must be notarized and returned to the Office of Defined Contribution Programs, via U.S. mail, certified/return receipt requested.

7. through 8.  No change.

(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, 12-30-15, 4-12-17, 2-12-18, 2-19-19,______.

 

19-11.005 Florida Retirement System (FRS) State Board of Administration Complaint Procedures.

(1) Request for Intervention.

(a) No change

(b) The member may use “Florida Retirement System Investment Plan Request for Intervention,” Form SBA-RFI 01/2019, contained in the FRS Investment Plan Complaint Procedures package, http://www.flrules.org/Gateway/reference.asp?No=Ref-10206, which is hereby adopted and incorporated by reference. The form may be obtained by calling the toll free number at 1(866)446-9377, Option 4, (TRS 711), and requesting that the form be mailed to the member or by accessing the MyFRS.com website and, clicking Resources, and then clicking on Forms. By using this form or any other written request, the member grants permission to the SBA to obtain any personally identifiable information shared with or generated by any services provider to the FRS, including the MyFRS Financial Guidance Program. The member must provide all information requested by the form.

(c) No change.

(d) Upon receipt of the completed Request for Intervention, an acknowledgment will be sent to the address provided on the form by either regular U.S. mail or emailed to the member.

(e) through (f). No change.

(2) Request for Hearing.

(a) If the member is not satisfied with the proposed resolution as set out in the final agency action letter and the member wishes to protest the determination, the member may file a fully-completed Petition for Hearing, “Investment Plan Petition for Hearing,” Form SBA-PFH 01/2019, contained in the Florida Retirement System Investment Plan Complaint Procedures package, http://www.flrules.org/Gateway/reference.asp?No=Ref-10207, which is hereby adopted and incorporated by reference, with the SBA. The Petition for Hearing is routinely attached to the final agency action letter and may also be obtained by calling the toll free number at  1(866)446-9377, Option 4, (TRS 711), and requesting that it be sent to the member or by accessing the MyFRS.com website,and clicking on Resources then clicking on Forms. The Petition for Hearing must be received within 21 days of the member’s receipt of the agency action letter or it will be rejected as untimely and the member will have waived the right to a hearing.

(b) through (e). No change.

(f) The balance of the hearing process shall conform to the requirements of Chapter chapter 120, F.S.

(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, 12-30-15, 4-12-17, 2-19-19,_____.

 

19-11.006 Enrollment Procedures for New Hires.

(1) General Enrollment Procedures.

(a) through (c). No change.

(d) Eligible newly-hired employees enrolled in the Elected Officers’ Class (EOC) or Senior Management Service Class (SMSC) may only enroll in the Investment Plan by submitting an enrollment form.

(e) No change.

(f) Enrollment forms for eligible newly-hired employees enrolled in the Regular, Special Risk and Special Risk Administrative Support classes are available by accessing MyFRS.com, and clicking on Resources and then on Forms; or by calling toll-free 1(866)446-9377, Option 2, or for the hearing impaired TRS 711. Enrollment forms for newly hired employees in the EOC, SMSC and newly-hired employees eligible to enroll in the SCCSORP are available by accessing MyFRS.com, and then clicking on Resources and then on Forms; or by calling toll-free 1(866)446-9377, Option 2, or, for the hearing impaired, TRS 711.

(2) Specific Enrollment Procedures.

(a) All newly-hired employees enrolled in the Regular, Special Risk Administrative Support, EOC or SMSC classes may enroll in the Investment Plan no later than 4:00 p.m. (Eastern Time) the last business day of the 8th month following the employee’s month of hire or may elect to remain in the 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 September. If no plan choice is filed by 4:00 p.m. (Eastern Time) on the last business day of September, the employee will default to the Investment Plan and will be considered the employee’s initial plan choice or first election. The amount of the employee and employer contributions paid through the date of default to the Investment Plan will be transferred to the Investment Plan and placed in an age appropriate retirement date fund. The investment option may be changed by the employee once the account is funded.

(b) All newly-hired employees enrolled in the Special Risk class may enroll in the Investment Plan no later than 4:00 p.m. (Eastern Time) the last business day of the 8th month following the employee’s month of hire or may elect to remain in the 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 September. If no plan choice is filed by 4:00 p.m. (Eastern Time) on the last business day of September, the employee will default to the Pension Plan and will be considered the employee’s initial plan choice or first election.

(c) 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 04-19, http://www.flrules.org/Gateway/reference.asp?No=Ref-14014 http://www.flrules.org/Gateway/reference.asp?No=Ref-11602, which is only for regular, special risk, and special risk administrative support class employees; a General Retirement Plan Enrollment Form, Form ELE-1, rev. 07-21 07-19, http://www.flrules.org/Gateway/reference.asp?No=Ref-14013, http://www.flrules.org/Gateway/reference.asp?No=Ref-11603 for regular, special risk, and special risk administrative support class employees; an Elected Officers’ Class Retirement Plan Form, Form EOC-1, rev. 07-21 07-19, http://www.flrules.org/Gateway/reference.asp?No=Ref-14015 http://www.flrules.org/Gateway/reference.asp?No=Ref-11604; a State Community College System Optional Retirement Program (SCCSORP) Enrollment Form, Form OCC-1, rev. 07-21 07-19, http://www.flrules.org/Gateway/reference.asp?No=Ref-14016 http://www.flrules.org/Gateway/reference.asp?No=Ref-11605; and a Local Senior Management Service Employees Retirement Plan Enrollment Form, Form SMS-3, rev. 07-21 07-19, http://www.flrules.org/Gateway/reference.asp?No=Ref-14017 http://www.flrules.org/Gateway/reference.asp?No=Ref-11606. All of the preceding forms are hereby adopted and incorporated by reference.

1. through 2. No change.

(f) No change.

(g) Upon receipt of the completed enrollment form by the Plan Choice Administrator, the 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 Plan Choice Administrator shall send confirmation of the effective enrollment to the employee at the employee’s address of record or electronically if the member has consented to electronic delivery of documents through the MyFRS.com website. The Administrator will also inform the Divison of Retirement (Division) 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.

(3) Grace Period.

(a) No change.

(b) If the request to reverse the election is made timely and the SBA finds that the election was made in error or grants the request for reconsideration, the member will be required to sign a release and return it to the SBA by the designated due date no later than 4:00 p.m. (Eastern Time). Failure to return a signed release by the requested due date will result in the member remaining in the elected retirement plan. on the last business day of the election effective month prior to the election’s being officially reversed. The member will acknowledge that failure to return a signed release by the requested due date will result in the original election being reinstated.

(c) through (d). 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,_____.

 

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

(1) This rule includes procedures for members who used their first or initial election enroll in initially chose the Florida Retirement System (FRS) Investment Plan, Investment Plan Hybrid Option or defaulted into the Investment Plan to use their 2nd election to transfer to the Pension Plan; and for members who used their first or initial election to enroll in the Pension Plan chose or defaulted into the Pension Plan to use their 2nd election to transfer to the Investment Plan or the Investment Plan Hybrid Option. This rule also includes procedures for members who elected to participate in the State Community College System Optional Retirement Program (SCCSORP), in lieu of  the FRS membership and want to transfer to the FRS Pension Plan or participate prospectively in the FRS Investment Plan.

(2) A member may make a valid 2nd election only if the 2nd election is made and processed by the Plan Choice Administrator during the month in which the member is actively employed and earning salary and service credit in an employer-employee relationship consistent with the requirements of Section 121.021(17)(b), F.S. Members on an unpaid leave of absence or terminated members cannot use their 2nd election until they return to FRS-covered employment. Employees of an educational institution on summer break cannot use their 2nd election during the full calendar months of their summer break. For example, if the last day of the school term is May 21st and the first day of the new school term is August 17th, the employee may not file a 2nd election in the calendar months of June or July. The beginning of the school term is determined by the employer. In general terms, this means that the 2nd election can only be made and processed during the month in which the member is actively working and being paid for that work. An election received after a member’s date of death will be considered invalid, even if the member signed the election form prior to their date of death. It is the responsibility of the member to assure that the 2nd election is received by the Plan Choice Administrator no later than 4:00 p.m. (Eastern Time) on the last business day of the month the member is actively employed and earning salary and service credit.

(a) The following are examples of scenarios that could result in an invalid 2nd election. These They are only examples and are not inclusive of all possible situations. Members and employers are encouraged to contact the MyFRS Financial Guidance Line to discuss their particular situation.

1. through 3. No Change.

(3) An active SCCSORP participant can, at his or her discretion within the terms of his or her SCCSORP contract, exercise a one-time opportunity to transfer to the FRS Pension Plan or participate prospectively in the FRS Investment Plan.

(4) (3) 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 2nd election can be made This can be done by form, or on MyFRS.com by accessing the online Second Election Choice Service or online by completing the “2nd Election EZ Retirement Plan Enrollment Form.” There are two types of enrollment forms. The “2nd Election Retirement Plan Enrollment Form,” Form ELE-2, rev. 07-21 07-19, http://www.flrules.org/Gateway/reference.asp?No=Ref-14018 http://www.flrules.org/Gateway/reference.asp?No=Ref-11607, 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 04-19, http://www.flrules.org/Gateway/reference.asp?No=Ref-14019, http://www.flrules.org/Gateway/reference.asp?No=Ref-11608 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. 07/2021, http://www.flrules.org/Gateway/reference.asp?No=Ref-14020 ,which is hereby adopted and incorporated by reference. 

(b) Election 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 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.

(d) No Change.

(e) For members transferring to the Pension Plan, if the member’s Investment Plan or SCCSORP account balance was less than the calculated amount required to buy back into the Pension Plan, the election will require a personal payment. The member will receive notification and proper instructions from the Division of Retirement (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.

(f) No Change.

(g) 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.

(h) The Plan Choice Administrator shall determine that the employee’s enrollment in the Investment Plan is complete and the employee’s election is clearly indicated. If the Plan Choice Administrator determines that the enrollment is incomplete, the employee will be required to resubmit a completed enrollment. An incomplete enrollment is an enrollment which is missing the name of the member, sets forth a spelling of the member’s name or reflects a date of birth that does not match the information present in the Plan Choice Administrator’s database, or is missing the last four digits of the member’s social security number, plan selection, signature, or one on which the investment elections total greater than or less than 100%. The member will be required to resubmit a completed 2nd 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 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.

(i) 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.

(5)(4) Grace Period.

(a) No Change.

(b) If the request to reverse the election is made timely and the SBA finds the election was made in error or grants the request for reconsideration, the member will be required to sign a release and return it to the SBA by the designated due date no later than 4:00 p.m. (Eastern Time). Failure to return a signed release by the requested due date will result in the member remaining in the elected retirement plan., on the last business day of the election effective month prior to the election’s being officially reversed. Upon receipt of the release, the Division and the Plan Choice Administrator will be directed to take the necessary steps to reverse the election and to correct the member’s records to reflect the election reversal.

(c) through (d). 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,______.

 

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 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 or the effective date of non-FRS eligibility. The suspense account shall be invested in the FRS Core Plus Intermediate Bond Fund, where it will accrue actual investment earnings or losses.

(b) If the member returns to work for an FRS-participating employer in an FRS-covered position within the five (5) years from the date of termination, the member will be returned to the Investment Plan and the unvested account balance, reflecting any earnings or losses while invested in the FRS Core Plus Intermediate 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 vesting of the member’s benefit.

(c) If the member never returns to work for an 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) No change.

(e) If the member does not take a self-initiated distribution of any vested Investment Plan benefit after terminating from all 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 Intermediate 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 benefit, reflecting any earnings or losses while invested in the FRS Core Plus Intermediate 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 shall only be entitled to receive the vested Investment Plan benefit. However, if the member takes any self-initiated distribution of the vested Investment Plan benefit, the unvested Pension Plan 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 a FRS-participating employer in an FRS-covered position covered employer, the member will be returned to 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 the unvested Pension Plan benefit and the associated service credit, will not be forfeited.

(h) No change.

(2) Forfeitures of Investment Plan accounts Due to Criminal Activity.

(a) through (b). No change.

(c) If the charges against the member are not pursued and are dropped by law enforcement officials, the hold on the member’s account will be released upon receipt of notification from the proper law enforcement agency.

(d) through (f). No change.

(g) If a member receives a pardon for any crime applicable to any FRS employment, the member shall have all benefits previously forfeited returned to his or her Investment Plan account reflecting any earnings or losses while invested in the FRS Core Plus Intermediate Bond Fund.

(3) 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,_______.

 

19-11009 Reemployment with an FRS-Participating Employer after Retirement.

(1) Reemployment.

(a) through (b). No change.

(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. 06-21 01-19 http://www.flrules.org/Gateway/reference.asp?No=Ref-14021 http://www.flrules.org/Gateway/reference.asp?No=Ref-08695, 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) No change.

(2) 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,_________.

 

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

(1) Employer and Employee contributions.

(a) No change.

(b) Employers shall submit, to the Division of Retirement (Division), a monthly retirement payroll report and accompanying employer and employee contributions by the fifth (5th) business day following the month in which the salary was paid. For example, if the salary is paid in March, the monthly retirement payroll report and contributions are due to the Division by the 5th business day of April.

(2) One Percent Penalty for Late Payroll Reporting.

(a) A one percent penalty will be applied to contributions that are late pursuant to section 121.78(3), F.S. The portion of the one percent penalty assessed on late contributions and accompanying payroll data attributable to contributions for the Investment Plan members shall be proportionally divided and deposited into affected member accounts, using the member’s members’ Investment Plan investment allocation in effect at the time of the deposit.

(b) No change.

(3) Market loss calculation for late payroll reporting.

(a) Market loss calculations will be applied to contributions and benefit transfers that are late pursuant to section 121.78(3), F.S. A market loss occurs when an employer fails to timely remit the monthly retirement report payroll file and accompanying employer and employee contributions to the Division by the 5th business day of the next month the retirement report payroll file and associated employer and employee contributions are due as described in subsection (1), above, and the receipt of monthly retirement report payroll file and/or the employer and employee contributions are received in the month following the due date or after.

(b) No change.

(c) The Administrator will perform the market value calculation using a period certain which is the 15th of the month in which the retirement report payroll is due, or the next succeeding business day if the day falls on a weekend or legal holiday, in which contributions would have been processed, and ending on the date the contributions are payroll is received by the Administrator.

(d) If contributions and accompanying retirement report payroll data are not received within the calendar month they are due, but that lateness does not result in market losses to members, only the one percent late assessment will apply to the employer.

(e) The Administrator will not perform the market loss calculation until a covered retirement report payroll and accompanying payroll data is received and processed by the Administrator.

(4) Prior Period Adjustments.

(a) No change.

(b) When an employer requests an adjustment to retirement contributions or accompanying retirement report payroll data for prior periods for Investment Plan members, the adjustment will be processed to the extent administratively possible. Under no circumstance shall the SBA, the FRS Investment Plan Trust Fund, or the Florida Retirement System Trust Fund incur any loss or gain as a result of an employer’s adjustments for an Investment Plan member or a former member.

(5) No change.

(6) If an agency fails to pay the required retirement contributions timely, the SBA or Division may be begin collection actions as provided in s. 121.061, F.S. total amount due within 120 calendar days from the date of the Division’s invoice, the procedures outlined in the Division’s subsection 60S-3.011(5), F.A.C., shall be applicable.

(7) Federally Mandated Monitoring of Contributions and Annual Salary.

(a) The Investment Plan Administrator will be responsible for monitoring federally mandated contribution limits pursuant to Internal Revenue Code s. 415(c) (“Section 415(c) limitation”). The monitoring of federally mandated contribution limits will only be conducted if the employer has properly reported the applicable annual salary and contributions on the retirement payroll reports submitted each month. The Investment Plan Administrator, the Division or SBA will not be held responsible for a failure to monitor the limits due to the employers’ inability or failure to report the necessary data.

(b) through (e). No change.

(f) Employers shall be responsible for providing all financial and retirement payroll data which the Investment Plan Administrator or its agent must use to determine whether or not the 415(c) limitation has been exceeded.

(g) through (k). No change.

(8) through (9). No change.

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

(a) For members 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 Pension Plan benefit. This amount shall be transferred to the member’s Investment Plan account and shall be allocated to each investment product selected by the member or and if no allocations were provided by the member, then to an age-appropriate retirement date fund.

(b) through (h). No change.

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, 12-30-15, 4-12-17, 2-19-19,_______.

 

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

(1) No change.

(2) A member may not rollover assets into the Investment Plan from the following:

(a) through (b). No change.

(c) Required Minimum Distributions required to be paid to a member who has reached age 72 70 1/2;

(d) through (e). No change.

(3) through (7). No change.

(8)(a). No change.

(b) Current members shall use Form IPRO-1, rev. 07/21 07-19, “Employee Rollover Deposit Instructions and Form,” http://www.flrules.org/Gateway/reference.asp?No=Ref-14022  http://www.flrules.org/Gateway/reference.asp?No=Ref-08698, 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. 07/21 07-19, http://www.flrules.org/Gateway/reference.asp?No=Ref-14023 http://www.flrules.org/Gateway/reference.asp?No=Ref-08696, 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. 07/21 07-19, http://www.flrules.org/Gateway/reference.asp?No=Ref-14024,  http://www.flrules.org/Gateway/reference.asp?No=Ref-08697, which hereby is adopted and incorporated by reference, to effect rollovers described in this rule.

(e) No change.

(9) through (12). No change.

(13)(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, 8:00 9:00 a.m. to 6:00 8:00 p.m. (Eastern Time), except holidays.

(b) through (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,_______.

 

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

(1) An 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) through (d). No change.

(e) 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. through 3. are renumbered. 1. through 2. No change.

(2)(a) The investment options offered through the SDBA have not been reviewed by the State Board of Administration (SBA) for suitability for the member. The member is solely responsible for determining the appropriateness of any investments in the SDBA.

(b) through (f). No Change.

(g) Investment options not permitted within the SDBA include the following:

1. through 7. No Change.

8. Master Limited Partnerships (MLPs)

9. Commodity ETFs (subject to UBIT)

8. through 11. are renumbered. 10. through 12. No Change.

(3) 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, 12-30-15, 4-12-17, 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 20, 2021

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