State Community College System Optional Retirement Program.

Each Florida College System institution may implement an optional retirement program, if such program is established therefor pursuant to s. 1001.64(20), under which annuity or other contracts providing retirement and death benefits may be purchased by, and on behalf of, eligible employees who participate in the program, in accordance with s. 403(b) of the Internal Revenue Code. Except as otherwise provided herein, this retirement program, which shall be known as the State Community College System Optional Retirement Program, may be implemented and administered only by an individual Florida College System institution or by a consortium of Florida College System institutions.

(1) As used in this section, the term:

(a) “Activation” means the date upon which an optional retirement program is first made available by the program administrator to eligible employees.

(b) “College” means Florida College System institutions as defined in s. 1000.21.

(c) “Department” means the Department of Management Services.

(d) “Program administrator” means the individual college or consortium of colleges responsible for implementing and administering an optional retirement program.

(e) “Program participant” means an eligible employee who has elected to participate in an available optional retirement program as authorized by this section.

(2) Participation in the optional retirement program provided by this section is limited to employees who satisfy the criteria set forth in s. 121.051(2)(c).

(3)(a) With respect to any employee who is eligible to participate in the optional retirement program by reason of qualifying employment commencing before the program’s activation:

1. The employee may elect to participate in the optional retirement program in lieu of participation in the Florida Retirement System. To become a program participant, the employee must file with the personnel officer of the college, within 90 days after the program’s activation, a written election on a form provided by the Florida Retirement System and a completed application for an individual contract or certificate.

2. An employee’s participation in the optional retirement program commences on the first day of the next full calendar month following the filing of the election and completed application with the program administrator and receipt of such election by the department. An employee’s membership in the Florida Retirement System terminates on this same date.

3. Any such employee who fails to make an election to participate in the optional retirement program within 60 days after its activation has elected to retain membership in the Florida Retirement System.

(b) With respect to any employee who becomes eligible to participate in an optional retirement program by reason of qualifying employment commencing on or after the program’s activation:

1. The employee may elect to participate in the optional retirement program in lieu of participation in the Florida Retirement System. To become a program participant, the employee must file with the personnel officer of the college, within 90 days after commencing qualifying employment as provided in s. 121.051(2)(c)4., a written election on a form provided by the Florida Retirement System and a completed application for an individual contract or certificate.

2. An employee’s participation in the optional retirement program commences retroactive to the first day of qualifying employment following the filing of the election and completed application with the program administrator and receipt of such election by the department. An employee’s membership in the Florida Retirement System terminates on this same date.

3. Any such employee who fails to make an election to participate in the optional retirement program within 90 days after commencing qualifying employment has elected to retain membership in the Florida Retirement System.

(c) Any employee who, on or after an optional retirement program’s activation, becomes eligible to participate in the program by reason of a change in status due to the subsequent designation of the employee’s position as one of those referenced in subsection (2), or due to the employee’s appointment, promotion, transfer, or reclassification to a position referenced in subsection (2), must be notified by the college of the employee’s eligibility to participate in the optional retirement program in lieu of participation in the Florida Retirement System. These eligible employees are subject to the provisions of paragraph (b) and may elect to participate in the optional retirement program in the same manner as those employees described in paragraph (b), except that the 90-day election period commences upon the date notice of eligibility is received by the employee and participation in the program begins the first day of the first full calendar month that the change in status becomes effective.

(d) Program participants must be fully and immediately vested in the optional retirement program upon issuance of an optional retirement program contract.

(e) The election by an eligible employee to participate in the optional retirement program is irrevocable for so long as the employee continues to meet the eligibility requirements set forth in this section and in s. 121.051(2)(c), except as provided in paragraph (i) or as provided in s. 121.051(2)(c)3.

(f) If a program participant becomes ineligible to continue participating in the optional retirement program pursuant to the criteria referenced in subsection (2), the employee becomes a member of the Florida Retirement System if eligible. The college must notify the department of an employee’s change in eligibility status within 30 days after the event that makes the employee ineligible to continue participation in the optional retirement program.

(g) An eligible employee who is a member of the Florida Retirement System at the time of election to participate in the optional retirement program retains all retirement service credit earned under the Florida Retirement System at the rate earned. Additional service credit in the Florida Retirement System may not be earned while the employee participates in the optional retirement program, nor is the employee eligible for disability retirement under the Florida Retirement System. An eligible employee may transfer from the Florida Retirement System to his or her accounts under the State Community College Optional Retirement Program a sum representing the present value of his or her service credit accrued under the defined benefit program of the Florida Retirement System for the period between his or her first eligible transfer date from the defined benefit plan to the optional retirement program and the actual date of such transfer as provided in s. 121.051(2)(c)7. Upon such transfer, all such service credit previously earned under the defined benefit program of the Florida Retirement System during this period shall be nullified for purposes of entitlement to a future benefit under the defined benefit program of the Florida Retirement System.

(h) A program participant may not simultaneously participate in any other state-administered retirement system, plan, or class.

(i) Except as provided in s. 121.052(6)(d), a program participant who is or who becomes dually employed in two or more positions covered by the Florida Retirement System, one of which is eligible for an optional retirement program pursuant to this section and one of which is not, is subject to the dual employment provisions of chapter 121.

(4)(a)1. Through June 30, 2011, each college must contribute on behalf of each program member an amount equal to 10.43 percent of the employee’s gross monthly compensation.

2. Effective July 1, 2011, through June 30, 2012, each member shall contribute an amount equal to the employee contribution required under s. 121.71(3). The employer shall contribute on behalf of each program member an amount equal to the difference between 10.43 percent of the employee’s gross monthly compensation and the employee’s required contribution based on the employee’s gross monthly compensation.

3. Effective July 1, 2012, each member shall contribute an amount equal to the employee contribution required under s. 121.71(3). The employer shall contribute on behalf of each program member an amount equal to the difference between 8.15 percent of the employee’s gross monthly compensation and the employee’s required contribution based on the employee’s gross monthly compensation.

4. The college shall deduct an amount approved by the district board of trustees of the college to provide for the administration of the optional retirement program. Payment of this contribution must be made directly by the college or through the program administrator to the designated company contracting for payment of benefits to the program member.

(b) Each college must contribute on behalf of each program participant an amount equal to the unfunded actuarial accrued liability portion of the employer contribution which would be required if the program participant were a member of the Regular Class of the Florida Retirement System. Payment of this contribution must be made directly by the college to the department for deposit in the Florida Retirement System Trust Fund.

(c) Each program participant who has been issued an optional retirement program contract may contribute by way of salary reduction or deduction a percentage of the program participant’s gross compensation, but this percentage may not exceed the corresponding percentage contributed by the Florida College System institution to the optional retirement program. Payment of this contribution may be made either directly by the college or through the program administrator to the designated company contracting for payment of benefits to the program participant.

(d) Contributions to an optional retirement program by a college or a program participant are in addition to, and have no effect upon, contributions required now or in future by the federal Social Security Act.

(e) The college may accept for deposit into participant account or accounts contributions in the form of rollovers or direct trustee-to-trustee transfers by or on behalf of participants who are reasonably determined by the college to be eligible for rollover or transfer to the optional retirement program pursuant to the Internal Revenue Code, if such contributions are made in accordance with the applicable requirements of the college. Accounting for such contributions shall be in accordance with any applicable requirements of the Internal Revenue Code and the college.

(5)(a) The benefits to be provided to program participants must be provided through contracts, including individual contracts or individual certificates issued for group annuity or other contracts, which may be fixed, variable, or both, in accordance with s. 403(b) of the Internal Revenue Code. Each individual contract or certificate must state the type of contract on its face page, and must include at least a statement of ownership, the contract benefits, distribution options, limitations, expense charges, and surrender charges, if any.

(b) Benefits are payable under the optional retirement program to program participants or their beneficiaries and paid only by the designated company in accordance with the terms of the contracts applicable to the program participant. Benefits shall accrue in individual accounts that are participant-directed, portable, and funded by employer and employee contributions and the earnings thereon. Benefit payments may not be made until the member has been terminated for 3 calendar months, except the college may authorize a distribution of up to 10 percent of the member’s account after the member is terminated from employment with all Florida Retirement System participating employers for 1 calendar month if the member has reached the normal retirement date as defined in s. 121.021. The board of trustees for the college may adopt rules to implement this paragraph. Benefits funded by employer and employee contributions are payable in accordance with the following terms and conditions:

1. Benefits shall be payable only to a participant, to his or her beneficiaries, or to his or her estate, as designated by the participant.

2. Benefits shall be paid by the provider company or companies in accordance with the law, the provisions of the contract, and any applicable employer rule or policy.

3. In the event of a participant’s death, moneys accumulated by, or on behalf of, the participant, less withholding taxes remitted to the Internal Revenue Service, if any, shall be distributed to the participant’s designated beneficiary or beneficiaries, or to the participant’s estate, as if the participant retired on the date of death as provided in paragraph (d). No other death benefits are available for survivors of participants under the optional retirement program except for such benefits, or coverage for such benefits, as are separately afforded by the employer at the employer’s discretion.

(c) Upon receipt by the provider company of a properly executed application for distribution of benefits, the total accumulated benefits shall be payable to the participant as:

1. A lump-sum distribution to the participant;

2. A lump-sum direct rollover distribution whereby all accrued benefits, plus interest and investment earnings, are paid from the participant’s account directly to an eligible retirement plan as defined in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the participant;

3. Periodic distributions;

4. A partial lump-sum payment whereby a portion of the accrued benefit is paid to the participant and the remaining amount is transferred to an eligible retirement plan, as defined in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the participant; or

5. Such other distribution options as are provided for in the participant’s optional retirement program contract.

(d) Survivor benefits shall be payable as:

1. A lump-sum distribution payable to the beneficiaries or to the deceased participant’s estate;

2. An eligible rollover distribution on behalf of the surviving spouse or beneficiary of a deceased participant whereby all accrued benefits, plus interest and investment earnings, are paid from the deceased participant’s account directly to an eligible retirement plan, as described in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the surviving spouse;

3. Such other distribution options as are provided for in the participant’s optional retirement program contract; or

4. A partial lump-sum payment whereby a portion of the accrued benefits are paid to the deceased participant’s surviving spouse or other designated beneficiaries, less withholding taxes remitted to the Internal Revenue Service, if any, and the remaining amount is transferred directly to an eligible retirement plan, as described in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the surviving spouse. The proportions must be specified by the participant or the surviving beneficiary.

Nothing in this paragraph abrogates other applicable provisions of state or federal law providing payment of death benefits.

(e) The benefits payable to any person under the optional retirement program, and any contribution accumulated under the program, are not subject to assignment, execution, attachment, or to any legal process whatsoever.

(6)(a) The optional retirement program authorized by this section must be implemented and administered by the program administrator under s. 403(b) of the Internal Revenue Code. The program administrator has the express authority to contract with a third party to fulfill any of the program administrator’s duties.

(b) The program administrator shall solicit competitive bids or issue a request for proposal and select no more than four companies from which optional retirement program contracts may be purchased under the optional retirement program. In making these selections, the program administrator shall consider the following factors:

1. The financial soundness of the company.

2. The extent of the company’s experience in providing annuity or other contracts to fund retirement programs.

3. The nature and extent of the rights and benefits provided to program participants in relation to the premiums paid.

4. The suitability of the rights and benefits provided to the needs of eligible employees and the interests of the college in the recruitment and retention of employees.

In lieu of soliciting competitive bids or issuing a request for proposals, the program administrator may authorize the purchase of annuity contracts under the optional retirement program from those companies currently selected by the department to offer such contracts through the State University System Optional Retirement Program, as set forth in s. 121.35.

(c) Optional retirement program annuity contracts must be approved in form and content by the program administrator in order to qualify. The program administrator may use the same annuity contracts currently used within the State University System Optional Retirement Program, as set forth in s. 121.35.

(d) The provision of each annuity contract applicable to a program participant must be contained in a written program description that includes a report of pertinent financial and actuarial information on the solvency and actuarial soundness of the program and the benefits applicable to the program participant. The company must furnish the description annually to the program administrator, and to each program participant upon commencement of participation in the program and annually thereafter.

(e) The program administrator must ensure that each program participant is provided annually with an accounting of the total contributions and the annual contributions made by and on the behalf of the program participant.

(7) Benefits, including employee contributions, are not payable for employee hardships, unforeseeable emergencies, loans, medical expenses, educational expenses, purchase of a principal residence, payments necessary to prevent eviction or foreclosure on an employee’s principal residence, or any other reason except a requested distribution for retirement, a mandatory de minimis distribution authorized by the administrator, or a required minimum distribution provided pursuant to the Internal Revenue Code.