Source: http://archive.flsenate.gov/cgi-bin/view_page.pl?Tab=session&Submenu=1&FT=D&File=hb130701c1.html&Directory=session/2010/House/bills/billtext/html/
Timestamp: 2019-04-25 15:42:42
Document Index: 155648761

Matched Legal Cases: ['art\n88', 'art.\n119', 'arty\n264', 'arty\n299', 'arty\n311', 'arty\n373', 'arty\n433', 'arty\n505', 'arty\n507']

_h1307c1
CS/HB 1307
23 providing reporting requirements for the state board;
24 amending s. 215.441, F.S.; providing minimum
25 qualifications for the executive director of the state
26 board; amending s. 215.444, F.S.; increasing membership of
27 the Investment Advisory Council; revising membership
28 requirements; providing council meeting and reporting
29 requirements; providing certain immunity from liability
30 with respect to authorized actions for members of the
31 council; amending s. 215.47, F.S.; expanding the types of
32 investments that the state board is authorized to make;
33 authorizing moneys available for investment by the state
34 board to be invested in certain federally tax-exempt
35 bonds, notes, or obligations not subject to the federal
36 alternative minimum tax; increasing the fund amount that
37 may be invested in a foreign entity; amending s. 215.52,
38 F.S.; providing requirements for rules made by the state
39 board with respect to certain fiduciary duties; amending
40 s. 218.409, F.S.; providing for extending a moratorium on
41 contributions to or withdrawals from the Local Government
42 Surplus Funds Trust Fund under certain circumstances;
43 authorizing the state board to develop work products that
44 are subject to trademark, copyright, or patent; providing
45 an effective date.
49 Section 1. Subsection (2), paragraph (e) of subsection
50 (4), subsection (6), and paragraphs (a) and (g) of subsection
51 (8) of section 121.4501, Florida Statutes, are amended to read:
52 121.4501 Public Employee Optional Retirement Program.-
53 (2) DEFINITIONS.-As used in this part, the term:
54 (a) "Approved provider" or "provider" means a private
55 sector company that is selected and approved by the state board
56 to offer one or more investment products or services to the
57 Public Employee optional retirement program. The term includes a
58 bundled provider that offers participants a range of
59 individually allocated or unallocated investment products and
60 may offer a range of administrative and customer services, which
61 may include accounting and administration of individual
62 participant benefits and contributions; individual participant
63 recordkeeping; asset purchase, control, and safekeeping; direct
64 execution of the participant's instructions as to asset and
65 contribution allocation; calculation of daily net asset values;
66 direct access to participant account information; periodic
67 reporting to participants, at least quarterly, on account
68 balances and transactions; guidance, advice, and allocation
69 services directly relating to the provider's its own investment
70 options or products, but only if the bundled provider complies
71 with the standard of care of s. 404(a)(1)(A-B) of the Employee
72 Retirement Income Security Act of 1974 (ERISA) and if providing
73 such guidance, advice, or allocation services does not
74 constitute a prohibited transaction under s. 4975(c)(1) of the
75 Internal Revenue Code or s. 406 of ERISA, notwithstanding that
76 such prohibited transaction provisions do not apply to the
77 optional retirement program; a broad array of distribution
78 options; asset allocation; and retirement counseling and
79 education. Private sector companies include investment
80 management companies, insurance companies, depositories, and
81 mutual fund companies.
82 (b) "Average monthly compensation" means one-twelfth of
83 average final compensation as defined in s. 121.021(24).
84 (c) "Covered employment" means employment in a regularly
85 established position as defined in s. 121.021(52).
86 (d) "Defined benefit program" means the defined benefit
87 program of the Florida Retirement System administered under part
88 I of this chapter "Department" means the Department of
89 Management Services.
90 (e) "Division" means the Division of Retirement within the
91 department of Management Services.
92 (f) "Electronic means" means by telephone, if the required
93 information is received on a recorded line, or through Internet
94 access, if the required information is captured online.
95 (g)(f) "Eligible employee" means an officer or employee,
96 as defined in s. 121.021, who:
97 1. Is a member of, or is eligible for membership in, the
98 Florida Retirement System, including any renewed member of the
99 Florida Retirement System initially enrolled before July 1,
100 2010; or
101 2. Participates in, or is eligible to participate in, the
102 Senior Management Service Optional Annuity Program as
103 established under s. 121.055(6), the State Community College
104 System Optional Retirement Program as established under s.
105 121.051(2)(c), or the State University System Optional
106 Retirement Program established under s. 121.35.
108 The term does not include any member participating in the
109 Deferred Retirement Option Program established under s.
110 121.091(13), a retiree of a state-administered retirement system
111 initially reemployed on or after July 1, 2010, or a mandatory
112 participant of the State University System Optional Retirement
113 Program established under s. 121.35.
114 (h)(g) "Employer" means an employer, as defined in s.
115 121.021(10), of an eligible employee.
116 (i) "Optional retirement program" or "optional program"
117 means the Public Employee Optional Retirement Program
118 established under this part.
119 (j)(h) "Participant" means an eligible employee who elects
120 to participate in the Public Employee Optional Retirement
121 Program and enrolls in the such optional program as provided in
122 subsection (4) or a terminated Deferred Retirement Option
123 Program participant as described in subsection (21).
124 (i) "Public Employee Optional Retirement Program,"
125 "optional program," or "optional retirement program" means the
126 alternative defined contribution retirement program established
127 under this section.
128 (k)(j) "Retiree" means a former participant of the Florida
129 Retirement System Public Employee optional retirement program
130 who has terminated employment and has taken a distribution as
131 provided in s. 121.591, except for a mandatory distribution of a
132 de minimis account authorized by the state board.
133 (k) "State board" or "board" means the State Board of
134 Administration.
135 (l) "Trustees" means Trustees of the State Board of
136 Administration.
137 (l)(m) "Vested" or "vesting" means the guarantee that a
138 participant is eligible to receive a retirement benefit upon
139 completion of the required years of service under the Public
140 Employee optional retirement program.
141 (4) PARTICIPATION; ENROLLMENT.-
142 (e) After the period during which an eligible employee had
143 the choice to elect the defined benefit program or the Public
144 Employee optional retirement program, or the month following the
145 receipt of the eligible employee's plan election, if sooner, the
146 employee shall have one opportunity, at the employee's
147 discretion, to choose to move from the defined benefit program
148 to the Public Employee optional retirement program or from the
149 Public Employee optional retirement program to the defined
150 benefit program. Eligible employees may elect to move between
151 Florida Retirement System programs only if they are earning
152 service credit in an employer-employee relationship consistent
153 with the requirements under s. 121.021(17)(b), excluding leaves
154 of absence without pay. Effective July 1, 2005, such elections
155 are shall be effective on the first day of the month following
156 the receipt of the election by the third-party administrator and
157 are not subject to the requirements regarding an employer-
158 employee relationship or receipt of contributions for the
159 eligible employee in the effective month, except that the
160 employee must meet the conditions of the previous sentence when
161 the election is received by the third-party administrator. This
162 paragraph is shall be contingent upon approval from the Internal
163 Revenue Service for including the choice described herein within
164 the programs offered by the Florida Retirement System.
165 1. If the employee chooses to move to the Public Employee
166 optional retirement program, the applicable provisions of this
167 section shall govern the transfer.
168 2. If the employee chooses to move to the defined benefit
169 program, the employee must transfer from his or her Public
170 Employee optional retirement program account, and from other
171 employee moneys as necessary, a sum representing the present
172 value of that employee's accumulated benefit obligation
173 immediately following the time of such movement, determined
174 assuming that attained service equals the sum of service in the
175 defined benefit program and service in the Public Employee
176 optional retirement program. Benefit commencement occurs on the
177 first date the employee is would become eligible for unreduced
178 benefits, using the discount rate and other relevant actuarial
179 assumptions that were used to value the Florida Retirement
180 System defined benefit plan liabilities in the most recent
181 actuarial valuation. For any employee who, at the time of the
182 second election, already maintains an accrued benefit amount in
183 the defined benefit program plan, the then-present value of the
184 such accrued benefit shall be deemed part of the required
185 transfer amount described in this subparagraph. The division
186 shall ensure that the transfer sum is prepared using a formula
187 and methodology certified by an enrolled actuary.
188 3. Notwithstanding subparagraph 2., an employee who
189 chooses to move to the defined benefit program and who became
190 eligible to participate in the Public Employee optional
191 retirement program by reason of employment in a regularly
192 established position with a state employer after June 1, 2002; a
193 district school board employer after September 1, 2002; or a
194 local employer after December 1, 2002, must transfer from his or
195 her Public Employee optional retirement program account, and,
196 from other employee moneys as necessary, a sum representing the
197 that employee's actuarial accrued liability.
198 4. An employee's Employees' ability to transfer from the
199 Florida Retirement System defined benefit program to the Public
200 Employee optional retirement program pursuant to paragraphs (a)-
201 (d), and the ability of a for current employee employees to have
202 an option to later transfer back into the defined benefit
203 program under subparagraph 2., shall be deemed a significant
204 system amendment. Pursuant to s. 121.031(4), any such resulting
205 unfunded liability arising from actual original transfers from
206 the defined benefit program to the optional program must shall
207 be amortized within 30 plan years as a separate unfunded
208 actuarial base independent of the reserve stabilization
209 mechanism defined in s. 121.031(3)(f). For the first 25 years, a
210 no direct amortization payment may not shall be calculated for
211 this base. During this 25-year period, the such separate base
212 shall be used to offset the impact of employees exercising their
213 second program election under this paragraph. It is the
214 legislative intent of the Legislature that the actuarial funded
215 status of the Florida Retirement System defined benefit program
216 not be affected plan is neither beneficially nor adversely
217 impacted by such second program elections in any significant
218 manner, after due recognition of the separate unfunded actuarial
219 base. Following the this initial 25-year period, any remaining
220 balance of the original separate base shall be amortized over
221 the remaining 5 years of the required 30-year amortization
222 period.
223 5. If the employee chooses to transfer from the optional
224 retirement program to the defined benefit program and retains an
225 excess account balance in the optional program after satisfying
226 the buy-in requirements under this paragraph, the excess may not
227 be distributed until the member retires from the defined benefit
228 program. The excess account balance may be rolled over to the
229 defined benefit program and used to purchase service credit or
230 upgrade creditable service in that program.
231 (6) VESTING REQUIREMENTS.-
232 (a)1. With respect to employer contributions paid on
233 behalf of the participant to the Public Employee optional
234 retirement program, plus interest and earnings thereon and less
235 investment fees and administrative charges, a participant is
236 shall be vested after completing 1 work year, as defined in s.
237 121.021(54), with an employer, including any service while the
238 participant was a member of the defined benefit retirement
239 program or an optional retirement program authorized under s.
240 121.051(2)(c) or s. 121.055(6).
241 2. If the participant terminates employment before prior
242 to satisfying the vesting requirements, the nonvested
243 accumulation must shall be transferred from the participant's
244 accounts to the state board for deposit and investment by the
245 state board in the suspense account created within of the Public
246 Employee Optional Retirement Program Trust Fund of the board. If
247 the terminated participant is reemployed as an eligible employee
248 within 5 years, the state board shall transfer to the
249 participant's account any amount of the moneys previously
250 transferred from the participant's accounts to the suspense
251 account of the Public Employee Optional Retirement Program Trust
252 Fund, plus the actual earnings on such amount while in the
253 suspense account.
254 (b)1. With respect to amounts transferred from the defined
255 benefit program to the investment program, plus interest and
256 earnings, and less investment fees and administrative charges, a
257 participant shall be vested in the amount transferred from the
258 defined benefit program, plus interest and earnings thereon and
259 less administrative charges and investment fees, upon meeting
260 the service requirements for the participant's membership class
261 as set forth in s. 121.021(29). The third-party administrator
262 shall account for such amounts for each participant. The
263 division shall notify the participant and the third-party
264 administrator when the participant has satisfied the vesting
265 period for Florida Retirement System purposes.
266 2. If the participant terminates employment before prior
267 to satisfying the vesting requirements, the nonvested
268 accumulation must shall be transferred from the participant's
269 accounts to the state board for deposit and investment by the
270 state board in the suspense account created within of the Public
271 Employee Optional Retirement Program Trust Fund of the board. If
272 the terminated participant is reemployed as an eligible employee
273 within 5 years, the state board shall transfer to the
274 participant's account any amount of the moneys previously
275 transferred from the participant's accounts to the suspense
276 account of the Public Employee Optional Retirement Program Trust
277 Fund, plus the actual earnings on such amount while in the
278 suspense account.
279 (c) Any nonvested accumulations transferred from a
280 participant's account to the suspense account shall be forfeited
281 by the participant if the participant is not reemployed as an
282 eligible employee within 5 years after termination.
283 (8) ADMINISTRATION OF PROGRAM.-
284 (a) The Public Employee optional retirement program shall
285 be administered by the state board and affected employers. The
286 board may is authorized to require oaths, by affidavit or
287 otherwise, and acknowledgments from persons in connection with
288 the administration of its statutory duties and responsibilities
289 for this program under this chapter. An No oath, by affidavit or
290 otherwise, may not shall be required of an employee participant
291 at the time of enrollment election. Acknowledgment of an
292 employee's election to participate in the program shall be no
293 greater than necessary to confirm the employee's election. The
294 state board shall adopt rules to carry out its statutory duties
295 with respect to administering the optional retirement program,
296 including establishing the roles role and responsibilities of
297 affected state, local government, and education-related
298 employers, the state board, the department, and third-party
299 contractors in administering the Public Employee optional
300 retirement program. The department shall adopt rules necessary
301 to administer implement the optional program in coordination
302 with the defined benefit retirement program and the disability
303 benefits available under the optional program.
304 (g) The state board shall receive and resolve participant
305 complaints against the program, the third-party administrator,
306 or any program vendor or provider; shall resolve any conflict
307 between the third-party administrator and an approved provider
308 if when such conflict threatens the implementation or
309 administration of the program or the quality of services to
310 employees; and may resolve any other conflicts. The third-party
311 administrator shall retain all participant records for at least
312 5 years for use in resolving any participant conflicts. The
313 state board, the third-party administrator, or a provider is not
314 required to produce documentation or an audio recording to
315 justify action taken with regard to a participant if the action
316 occurred 5 or more years before the complaint is submitted to
317 the state board. It is presumed that all action taken 5 or more
318 years before the complaint is submitted was taken at the request
319 of the participant and with the participant's full knowledge and
320 consent. To overcome this presumption, the participant must
321 present documentary evidence or an audio recording demonstrating
322 otherwise.
323 Section 2. Subsection (3) is added to section 121.4502,
324 Florida Statutes, to read:
325 121.4502 Public Employee Optional Retirement Program Trust
326 Fund.-
327 (3) A forfeiture account shall be created within the
328 Public Employee Optional Retirement Program Trust Fund to hold
329 the assets derived from the forfeiture of benefits by
330 participants. Pursuant to a private letter ruling from the
331 Internal Revenue Service, the forfeiture account may be used
332 only for paying expenses of the Public Employee Optional
333 Retirement Program and reducing future employer contributions to
334 the program. Consistent with Rulings 80-155 and 74-340 of the
335 Internal Revenue Service, unallocated reserves within the
336 forfeiture account must be used as quickly and as prudently as
337 possible considering the state board's fiduciary duty. Expected
338 withdrawals from the account must endeavor to reduce the account
339 to zero each fiscal year.
340 Section 3. Paragraphs (a) and (b) of subsection (1) of
341 section 121.591, Florida Statutes, are amended to read:
342 121.591 Benefits payable under the Public Employee
343 Optional Retirement Program of the Florida Retirement System.-
344 Benefits may not be paid under this section unless the member
345 has terminated employment as provided in s. 121.021(39)(a) or is
346 deceased and a proper application has been filed in the manner
347 prescribed by the state board or the department. The state board
348 or department, as appropriate, may cancel an application for
349 retirement benefits when the member or beneficiary fails to
350 timely provide the information and documents required by this
351 chapter and the rules of the state board and department. In
352 accordance with their respective responsibilities as provided
353 herein, the State Board of Administration and the Department of
354 Management Services shall adopt rules establishing procedures
355 for application for retirement benefits and for the cancellation
356 of such application when the required information or documents
357 are not received. The State Board of Administration and the
358 Department of Management Services, as appropriate, are
359 authorized to cash out a de minimis account of a participant who
360 has been terminated from Florida Retirement System covered
361 employment for a minimum of 6 calendar months. A de minimis
362 account is an account containing employer contributions and
363 accumulated earnings of not more than $5,000 made under the
364 provisions of this chapter. Such cash-out must either be a
365 complete lump-sum liquidation of the account balance, subject to
366 the provisions of the Internal Revenue Code, or a lump-sum
367 direct rollover distribution paid directly to the custodian of
368 an eligible retirement plan, as defined by the Internal Revenue
369 Code, on behalf of the participant. If any financial instrument
370 issued for the payment of retirement benefits under this section
371 is not presented for payment within 180 days after the last day
372 of the month in which it was originally issued, the third-party
373 administrator or other duly authorized agent of the State Board
374 of Administration shall cancel the instrument and credit the
375 amount of the instrument to the suspense account of the Public
376 Employee Optional Retirement Program Trust Fund authorized under
377 s. 121.4501(6). Any such amounts transferred to the suspense
378 account are payable upon a proper application, not to include
379 earnings thereon, as provided in this section, within 10 years
380 after the last day of the month in which the instrument was
381 originally issued, after which time such amounts and any
382 earnings thereon shall be forfeited. Any such forfeited amounts
383 are assets of the Public Employee Optional Retirement Program
384 Trust Fund and are not subject to the provisions of chapter 717.
385 (1) NORMAL BENEFITS.-Under the Public Employee Optional
386 Retirement Program:
387 (a) Benefits in the form of vested accumulations as
388 described in s. 121.4501(6) are payable under this subsection in
389 accordance with the following terms and conditions:
390 1. To the extent vested, benefits are payable only to a
391 participant.
392 2. Benefits shall be paid by the third-party administrator
393 or designated approved providers in accordance with the law, the
394 contracts, and any applicable board rule or policy.
395 3. To receive benefits, the participant must be terminated
396 from all employment with all Florida Retirement System
397 employers, as provided in s. 121.021(39).
398 4. Benefit payments may not be made until the participant
399 has been terminated for 3 calendar months, except that the board
400 may authorize by rule for the distribution of up to 10 percent
401 of the participant's account after being terminated for 1
402 calendar month if the participant has reached the normal
403 retirement date as defined in s. 121.021 of the defined benefit
404 plan.
405 5. If a member or former member of the Florida Retirement
406 System receives an invalid distribution from the Public Employee
407 Optional Retirement Program Trust Fund, such person must repay
408 the full invalid distribution to the trust fund within 90 days
409 after receipt of final notification by the state board or the
410 third-party administrator that the distribution was invalid. If
411 such person fails to repay the full invalid distribution within
412 90 days after receipt of final notification, the person may be
413 deemed retired from the optional retirement program by the state
414 board, as provided pursuant to s. 121.4501(2)(k)(j), and is
415 subject to s. 121.122. If such person is deemed retired by the
416 state board, any joint and several liability set out in s.
417 121.091(9)(d)2. becomes null and void, and the state board, the
418 department, or the employing agency is not liable for gains on
419 payroll contributions that have not been deposited to the
420 person's account in the retirement program, pending resolution
421 of the invalid distribution. The member or former member who has
422 been deemed retired or who has been determined by the board to
423 have taken an invalid distribution may appeal the agency
424 decision through the complaint process as provided under s.
425 121.4501(9)(g)3. As used in this subparagraph, the term "invalid
426 distribution" means any distribution from an account in the
427 optional retirement program which is taken in violation of this
428 section, s. 121.091(9), or s. 121.4501.
429 (b) If a participant elects to receive his or her benefits
430 upon termination of employment as defined in s. 121.021, the
431 participant must submit a written application or an application
432 by electronic means an equivalent form to the third-party
433 administrator indicating his or her preferred distribution date
434 and selecting an authorized method of distribution as provided
435 in paragraph (c). The participant may defer receipt of benefits
436 until he or she chooses to make such application, subject to
437 federal requirements.
438 Section 4. Section 121.74, Florida Statutes, is amended to
440 121.74 Administrative and educational expenses.-In
441 addition to contributions required under s. 121.71, effective
442 July 1, 2010, through June 30, 2014, employers participating in
443 the Florida Retirement System shall contribute an amount equal
444 to 0.03 0.05 percent of the payroll reported for each class or
445 subclass of Florida Retirement System membership; effective July
446 1, 2014, the contribution rate shall be 0.04 percent of the
447 payroll reported for each class or subclass of membership. The,
448 which amount contributed shall be transferred by the Division of
449 Retirement from the Florida Retirement System Contributions
450 Clearing Trust Fund to the State Board of Administration's
451 Administrative Trust Fund to offset the costs of administering
452 the optional retirement program and the costs of providing
453 educational services to participants in the defined benefit
454 program and the optional retirement program. Approval of the
455 trustees of the State Board of Administration is required before
456 prior to the expenditure of these funds. Payments for third-
457 party administrative or educational expenses shall be made only
458 pursuant to the terms of the approved contracts for such
459 services.
460 Section 5. Subsection (3) of section 121.78, Florida
462 121.78 Payment and distribution of contributions.-
463 (3)(a) Employer contributions and accompanying payroll
464 data received after the 5th working day of the month are shall
465 be considered late. The employer shall be assessed by the
466 Division of Retirement a penalty of 1 percent of the
467 contributions due for each calendar month or part thereof that
468 the contributions or accompanying payroll data are late.
469 Proceeds from the 1-percent assessment against contributions
470 made on behalf of participants of the defined benefit program
471 shall be deposited in the Florida Retirement System Trust Fund,
472 and proceeds from the 1-percent assessment against contributions
473 made on behalf of participants of the optional retirement
474 program shall be transferred to the third-party administrator
475 for deposit into participant accounts, as provided in paragraph
476 (b).
477 (b) If contributions made by an employer on behalf of
478 participants of the optional retirement program or accompanying
479 payroll data are not received within the calendar month they are
480 due, including, but not limited to, contribution adjustments as
481 a result of employer errors or corrections, and if that
482 delinquency results in market losses to participants, the
483 employer shall reimburse each participant's account for market
484 losses resulting from the late contributions. If a participant
485 has terminated employment and taken a distribution, the
486 participant is responsible for returning any excess
487 contributions erroneously provided by employers, adjusted for
488 any investment gain or loss incurred during the period such
489 excess contributions were in the participant's Public Employee
490 Optional Retirement Program account. The state board of
491 Administration or its designated agent shall communicate to
492 terminated participants any obligation to repay such excess
493 contribution amounts. However, the state board of
494 Administration, its designated agents, the Public Employee
495 Optional Retirement Program Trust Fund, the department of
496 Management Services, or the Florida Retirement System Trust Fund
497 may shall not incur any loss or gain as a result of an
498 employer's correction of such excess contributions. The third-
499 party administrator, hired by the state board pursuant to s.
500 121.4501(8), shall calculate the market losses for each affected
501 participant. If When contributions made on behalf of
502 participants of the optional retirement program or accompanying
503 payroll data are not received within the calendar month due, the
504 employer shall also pay the cost of the third-party
505 administrator's calculation and reconciliation adjustments
506 resulting from the late contributions. The third-party
507 administrator shall notify the employer of the results of the
508 calculations and the total amount due from the employer for such
509 losses and the costs of calculation and reconciliation. The
510 employer shall remit to the Division of Retirement the amount
511 due within 30 10 working days after the date of the penalty
512 notice sent by the division. The division shall transfer that
513 said amount to the third-party administrator, which who shall
514 deposit proceeds from the 1-percent assessment and from
515 individual market losses into participant accounts, as
516 appropriate. The state board may is authorized to adopt rules to
517 administer implement the provisions regarding late
518 contributions, late submission of payroll data, the process for
519 reimbursing participant accounts for resultant market losses,
520 and the penalties charged to the employers.
521 (c) Delinquency fees may be waived by the Division of
522 Retirement, with regard to defined benefit program
523 contributions, and by the state board of Administration, with
524 regard to optional retirement program contributions, only if
525 when, in the opinion of the division or the board, as
526 appropriate, exceptional circumstances beyond the employer's
527 control prevented remittance by the prescribed due date
528 notwithstanding the employer's good faith efforts to effect
529 delivery. Such a waiver of delinquency may be granted an
530 employer only once one time each state fiscal year.
531 (d) If contributions made by an employer on behalf of
532 participants in the optional retirement program are delayed in
533 posting to participant accounts due to acts of God beyond the
534 control of the Division of Retirement, the state board, or the
535 third-party administrator, as applicable, market losses
536 resulting from the late contributions are not payable to the
537 participants.
538 Section 6. Subsections (1) and (2) of section 215.44,
539 Florida Statutes, are amended to read:
540 215.44 Board of Administration; powers and duties in
541 relation to investment of trust funds.-
542 (1) Except when otherwise specifically provided by the
543 State Constitution and subject to any limitations of the trust
544 agreement relating to a trust fund, the Board of Administration,
545 hereinafter sometimes referred to in this chapter as "board," or
546 "Trustees of the State Board of Administration," composed of the
547 Governor as chair, the Chief Financial Officer, and the Attorney
548 General, shall invest all the funds in the System Trust Fund, as
549 defined in s. 121.021(36), and all other funds specifically
550 required by law to be invested by the board pursuant to ss.
551 215.44-215.53 to the fullest extent that is consistent with the
552 cash requirements, trust agreement, and investment objectives of
553 the fund. Notwithstanding any other law to the contrary, the
554 State Board of Administration may invest any funds of any state
555 agency or any unit of local government pursuant to the terms of
556 a trust agreement with the head of the state agency or the
557 governing body of the unit of local government, which trust
558 agreement shall govern the investment of such funds, provided
559 that the board shall approve the undertaking of such investment
560 before execution of the trust agreement by the State Board of
561 Administration. The funds and the earnings therefrom are exempt
562 from the service charge imposed by s. 215.20. As used in this
563 subsection, the term "state agency" has the same meaning as that
564 provided in s. 216.001, and the terms "governing body" and "unit
565 of local government" have the same meaning as that provided in
566 s. 218.403.
567 (2)(a) The board shall have the power to make purchases,
568 sales, exchanges, investments, and reinvestments for and on
569 behalf of the funds referred to in subsection (1), and it shall
570 be the duty of the board to see that moneys invested under the
571 provisions of ss. 215.44-215.53 are at all times handled in the
572 best interests of the state.
573 (b) In exercising investment authority pursuant to s.
574 215.47, the board may retain investment advisers or managers, or
575 both, external to in-house staff, to assist the board in
576 carrying out the power specified in paragraph (a).
577 (c) The board shall produce a set of financial statements
578 for the Florida Retirement System on an annual basis which shall
579 be reported to the Legislature and audited by a commercial
580 independent third-party audit firm.
581 Section 7. Section 215.441, Florida Statutes, is amended
582 to read:
583 215.441 Board of Administration; appointment of executive
584 director.-The appointment of the executive director of the State
585 Board of Administration shall be subject to the approval by a
586 majority vote of the Board of Trustees of the State Board of
587 Administration, and the Governor must vote on the prevailing
588 side. Such appointment must be reaffirmed in the same manner by
589 the board of trustees on an annual basis. The executive director
590 shall, at a minimum, possess substantial experience, knowledge,
591 and expertise in the oversight of investment portfolios and must
592 meet any other requirements determined by the board to be
593 necessary to the overall management and investment of funds.
594 Section 8. Section 215.444, Florida Statutes, is amended
595 to read:
596 215.444 Investment Advisory Council.-
597 (1) There is created a nine-member six-member Investment
598 Advisory Council to review the investments made by the staff of
599 the Board of Administration and to make recommendations to the
600 board regarding investment policy, strategy, and procedures. The
601 council shall meet with staff of the board no less than
602 quarterly and shall provide a quarterly report directly to the
603 Trustees of the State Board of Administration at a meeting of
604 the board.
605 (2) The members of the council shall be appointed by the
606 board as a resource to the Trustees of the State Board of
607 Administration and shall be subject to confirmation by the
608 Senate. These individuals shall possess special knowledge,
609 experience, and familiarity with financial investments and
610 portfolio management, institutional investments, and fiduciary
611 responsibilities. Members shall be appointed for 4-year terms. A
612 vacancy shall be filled for the remainder of the unexpired term.
613 The council shall annually elect a chair and a vice chair from
614 its membership. A member may not be elected to consecutive terms
615 as chair or vice chair.
616 (3) In carrying out the provisions of this chapter,
617 members of the Investment Advisory Council shall be officers,
618 employees, or agents of the state for the purposes of s. 768.28.
619 Section 9. Paragraphs (b) and (c) of subsection (1),
620 paragraph (a) of subsection (2), and subsection (5) of section
621 215.47, Florida Statutes, are amended, and paragraph (o) is
622 added to subsection (1) of that section, to read:
623 215.47 Investments; authorized securities; loan of
624 securities.-Subject to the limitations and conditions of the
625 State Constitution or of the trust agreement relating to a trust
626 fund, moneys available for investments under ss. 215.44-215.53
627 may be invested as follows:
628 (1) Without limitation in:
629 (b) State Bonds, notes, or obligations of any state or
630 organized territory of the United States or the District of
631 Columbia that pledge pledging the full faith and credit of the
632 state, territory, or district; and revenue bonds, notes, or
633 obligations of any state or organized territory of the United
634 States or the District of Columbia additionally secured by the
635 full faith and credit of the state, territory, or district.
636 (c) Bonds, notes, or obligations of the several counties
637 or districts in any the state or organized territory of the
638 United States or the District of Columbia containing a pledge of
639 the full faith and credit of the county or district involved.
640 (o) Bonds, notes, or obligations described in 26 U.S.C. s.
641 149(g)(3)(B), if investment in such bonds, notes, or obligations
642 is necessary in order to comply with covenants in documents or
643 proceedings relating to bonds issued pursuant to s. 215.555(6).
644 Investments made pursuant to this paragraph may be purchased
645 only from the proceeds of bonds issued pursuant to s. 215.555(6)
646 and must be authorized under documents or proceedings relating
647 to such bonds.
648 (2) With no more than 25 percent of any fund in:
649 (a) Bonds, notes, or obligations of any state or organized
650 territory of the United States or the District of Columbia; of
651 any municipality or political subdivision or any agency,
652 district, or authority thereof; or of any agency or authority of
653 this state, if the obligations are rated investment grade by at
654 least one nationally recognized statistical rating organization.
655 (5) With no more than 35 25 percent of any fund in
656 corporate obligations and securities of any kind of a foreign
657 corporation or a foreign commercial entity having its principal
658 office located in any country other than the United States of
659 America or its possessions or territories, not including United
660 States dollar-denominated securities listed and traded on a
661 United States exchange which are a part of the ordinary
662 investment strategy of the board.
663 Section 10. Section 215.52, Florida Statutes, is amended
665 215.52 Rules and regulations.-The board shall have the
666 power and authority to make reasonable rules and regulations
667 necessary to carry out the provisions of ss. 215.44-215.53. The
668 rules shall provide for full transparency and accountability in
669 fulfillment of the board's fiduciary duties in the areas of
670 compliance, ethics, training, audit procedures, service
671 providers, vendors, and third parties doing business with the
672 board.
673 Section 11. Paragraph (a) of subsection (8) of section
674 218.409, Florida Statutes, is amended to read:
675 218.409 Administration of the trust fund; creation of
676 advisory council.-
677 (8)(a) The principal, and any part thereof, of each and
678 every account constituting the trust fund is shall be subject to
679 payment at any time from the moneys in the trust fund. However,
680 the executive director may, in good faith, on the occurrence of
681 an event that has a material impact on liquidity or operations
682 of the trust fund, for 48 hours limit contributions to or
683 withdrawals from the trust fund to ensure that the board can
684 invest moneys entrusted to it in exercising its fiduciary
685 responsibility. Such action must shall be immediately disclosed
686 to all participants, the trustees, the Joint Legislative
687 Auditing Committee, the Investment Advisory Council, and the
688 Participant Local Government Advisory Council. The trustees
689 shall convene an emergency meeting as soon as practicable from
690 the time the executive director has instituted such measures and
691 review the necessity of those measures. If the trustees are
692 unable to convene an emergency meeting before the expiration of
693 the 48-hour moratorium on contributions and withdrawals, the
694 moratorium may be extended by the executive director until the
695 trustees are able to meet to review the necessity for the
696 moratorium. If the trustees agree with such measures, the
697 trustees shall vote to continue the measures for up to an
698 additional 15 days. The trustees must convene and vote to
699 continue any such measures before prior to the expiration of the
700 time limit set, but in no case may the time limit set by the
701 trustees exceed 15 days.
702 Section 12. Trademarks, copyrights, or patents.-The State
703 Board of Administration, on behalf of the Florida Retirement
704 System or any other trust fund under its jurisdiction, may
705 develop work products that are subject to trademark, copyright,
706 or patent statutes. The board may, in its own name or through
707 the growth initiative program created pursuant to s. 215.47(7),
708 Florida Statutes, or any other program developed with or for the
709 board:
710 (1) Perform all things necessary to secure letters of
711 patent, copyrights, or trademarks on any work products and
712 enforce its rights therein.
713 (2) License, lease, assign, or otherwise give written
714 consent to any person for the manufacture or use of its work
715 products on a royalty basis or for such other consideration as
716 the board deems proper.
717 (3) Take any action necessary, including legal action, to
718 protect its work products against improper or unlawful use or
719 infringement.
720 (4) Enforce the collection of any sums due the board for
721 the manufacture or use of its work products by any other party.
722 (5) Sell any of its work products and execute all
723 instruments necessary to consummate any such sale.
724 (6) Do all other acts necessary and proper for the
725 execution of powers and duties provided under this section.
726 Section 13. This act shall take effect July 1, 2010.