Florida Administrative Code › 19 - STATE BOARD OF ADMINISTRATION › 19 - Departmental › Chapter 19-11 - PROCEDURES FOR THE PUBLIC EMPLOYEE OPTIONAL RETIREMENT PROGRAM › Section 19-11.001 - Definitions

Current through Reg. 50, No. 138; July 16, 2024
The following words and terms shall have the following
				  meanings for purposes of Chapters 19-11 and 19-13, F.A.C.:
(1) "Accumulated Benefit Obligation," or
				"ABO" means the present value of a member's benefit in the Pension Plan, which
				is the defined benefit program of the Florida Retirement System (FRS), to which
				the member would be entitled if the member retired from the Pension Plan. This
				present value shall be calculated in accordance with the formula set out in
				Section 121.4501(3)(b)1., F.S., by the Division of Retirement (Division) within
				the Department of Management Services. The ABO changes on a monthly basis based
				on the following factors: age, service credit, salary level, and membership
				class.
(2) "Administrator,"
				"Investment Plan Administrator," or "Plan Choice Administrator," means the
				entity hired by the State Board of Administration (SBA), pursuant to Section
				121.4501(8)(a)1., F.S., to provide administrative services to the Investment
				Plan or the entity responsible for processing enrollment forms received from
				employees making a retirement plan choice either by form or
				electronically.
(3) "Aggregate
				amount of $75,000 or more" means the total of the amounts transferred out of a
				fund by a member and into the same fund, in either order (i.e., in/out or
				out/in) during any rolling 30-calendar day period, regardless of the number of
				Round Trips.
(4) "Alternate Payee"
				is the person or persons eligible to receive payments under the Plan in
				accordance with a Qualified Domestic Relations Order (QDRO). A QDRO can only
				name a member's spouse, former spouse, child, or other dependent as an
				Alternate Payee.
(5) "Annual
				addition" means the sum for any limitation year of all employer and employee
				contributions which are treated as annual additions to a defined contribution
				plan for purposes of Section 415(c) of the U.S. Internal Revenue Code, as
				amended ("Code") and forfeitures. Examples of such contributions to a defined
				contribution plan include the following: employer and employee contributions to
				the Investment Plan; contributions to the Senior Management Service Optional
				Annuity Program described in Section
				 121.055(6),
				F.S.; contributions to a Code s. 401(k) plan; employer contributions to an
				individual retirement account; voluntary employee contributions to accounts in
				a defined benefit plan [but not including contributions to a qualified
				cost-of-living arrangement in accordance with Code s. 415(k)]; amounts
				allocated to the separate account of a key employee for post-retirement medical
				benefits described in Code s. 419A(d)(2); and contributions to an individual
				medical benefit account, as described in Code s. 415(l). Examples of
				contributions which are not annual additions for purposes of Section 415(c) of
				the Code as applied to the Investment Plan include the following: rollover
				contributions or transfers from another eligible retirement plan to the
				Investment Plan; contributions to a Code s. 403(b) annuity plan; contributions
				to a Code s. 457 deferred compensation plan; and contributions which are
				additional elective deferrals under Code s. 414(v).
(6) "Benefits" is used in the same sense, and
				has the same meaning, as used in Section
				 121.4501(7),
				F.S.
(7) "Code" means the U.S.
				Internal Revenue Code, as amended. The Code is available free on the Internet
				at the following web site: uscode.house.gov.
(8) "Compensation" means the monthly salary
				paid by an employer to a member for work performed arising from that
				employment, as defined in Section
				 121.021(22),
				F.S.
(9) "Complaint" shall mean a
				member's written or verbal expression of dissatisfaction with an Investment
				Plan provider or one of its representatives.
(10) "Death in line of duty" means a death
				occurring as described in Section
				 121.021(14),
				F.S.
(11) "Default" or "default
				election" arises when a newly-hired employee fails to enroll in the Pension
				Plan or Investment Plan by 4:00 p.m. (Eastern Time) the last business day of
				the 8th month following the employee's month of hire. Such employee is deemed
				to have defaulted into the Investment Plan as his or her initial plan choice or
				first election. If the newly-hired employee is employed in a position included
				in the Special Risk Class, and fails to enroll in the Pension Plan or
				Investment Plan by 4:00 p.m. (Eastern Time) of the last business day of the 8th
				month following the employee's month of hire, the employee is deemed to have
				defaulted into the Pension Plan as his or her initial plan choice or first
				election.
(12) "Defined
				contribution plan" means a plan, such as the Investment Plan, which provides
				for an individual account for each member and for benefits based solely on the
				amount contributed to the member's account, and any income, expenses, gains and
				losses, and any forfeitures of accounts of other members which may be allocated
				to such member's account.
(13) "De
				Minimis Distribution" is an automatic distribution made when an inactive
				member's account balance is $1,000 or less. However, such a distribution will
				not occur until the member has been terminated from all employment with FRS
				employers for a minimum of six (6) calendar months.
(14) "Direct rollover" means a payment by the
				Investment Plan to another eligible retirement plan specified by the
				distributee.
(15) "Distributee"
				means a member or former member who has taken a distribution from the
				Investment Plan. In addition, the member's or former member's surviving spouse
				and the member's or former member's spouse or former spouse who is the
				alternate payee under a qualified domestic relations order, as defined in Code
				s. 414(p), are distributees with regard to the interest of the spouse or former
				spouse. Effective January 1, 2010, a non-spouse beneficiary is also a
				"distributee," but the term "eligible retirement plan" for such individual is
				limited to an individual retirement account described in Code s. 408(a), an
				individual retirement annuity described in Code s. 408(b), or a Roth individual
				retirement account or annuity described in Code s. 408A that is treated as an
				inherited individual retirement account or annuity pursuant to Code s.
				402(c)(11).
(16) "Division" means
				the Division of Retirement within the Department of Management
				Services.
(17) "Domestic Relations
				Order," or "DRO" is any draft DRO, court judgment, decree, or order (including
				an approval of a property settlement agreement) that relates to the provision
				of child support, alimony payments, or marital property rights to a spouse,
				former spouse, child, or other dependent of a member and that is made pursuant
				to a state domestic relations law (including a community property
				law).
(18) "Effective date of
				enrollment," or "effective enrollment in the FRS Investment Plan" means the
				employee completed the enrollment into the Plan by filing the appropriate
				enrollment form, or by electronic means, in the applicable membership class or
				by filing a separate document for the applicable membership class with the
				Administrator; the Administrator has entered the employee into its
				recordkeeping system; and the Administrator has informed the Division of the
				employee's effective date of enrollment in either the FRS Pension Plan or the
				FRS Investment Plan. For purposes of this rule, the term "enrollment form" or
				"form" shall also refer to the separate document described in paragraphs
				 19-11.006(2)(e) 
				and  19-11.007(4)(a),
				F.A.C.
(19) "Electronic Means"
				shall mean an enrollment or other member directive made on the MyFRS.com
				website, by telephone or other technology as specified by the SBA.
(20) "Electronic Signature" is any symbol or
				other data in digital form attached to an electronically transmitted document,
				and 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
				equivalent to a handwritten signature for the purposes of validity,
				enforceability, and admissibility.
(21) "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).
(22) "Eligible retirement plan" means an
				individual retirement account described in Code s. 408(a), an individual
				retirement annuity described in Code s. 408(b), an annuity plan described in
				Code s. 403(a), an annuity contract described in Code s. 403(b), a Roth
				individual retirement account or annuity described in Code s. 408A, an eligible
				deferred compensation plan described in Code s. 457(b) which is maintained by
				an eligible employer described in Code s. 457(e)(1)(A) or a qualified trust
				described in Code s. 401(a), that accepts the distributee's eligible rollover
				distribution.
(23) "Eligible
				rollover distribution" means any distribution of all or any portion of the
				balance of the member's account(s) in the Investment Plan to the credit of the
				distributee. An eligible rollover distribution does not include any
				distribution which is made upon hardship of the employee; any distribution that
				is one of a series of substantially equal periodic payments (not less
				frequently than annually) made for the life (or life expectancy) of the
				distributee or the joint lives (or joint life expectancies) of the distributee
				and the distributee's designated beneficiary, or for a specified period of ten
				years or more; any distribution to the extent such distribution is required
				under Code s. 401(a)(9); or a deemed distribution of a loan under Code s.
				72(p). Any portion of a distribution that consists of after-tax employee
				contributions which are not includible in gross income may be transferred only
				to paragraph (1)(a) a traditional individual retirement account or annuity
				described in Code s. 408(a) (a "traditional IRA"); or (b) a Roth individual
				retirement account or annuity described in Code s. 408A (a "Roth IRA"); or (2)
				to a qualified plan or an annuity contract described in Code s. 401(a) and
				403(b), respectively, that agrees to separate accounting for amounts so
				transferred (and earnings thereon), including separately accounting for the
				portion of such distribution which is includible in gross income and the
				portion of such distribution which is not so includible.
(24) "Employee" means an eligible employee as
				defined in Section  121.4501(2)(e),
				F.S.
(25) "Employer" means an
				employer as defined in Section
				 121.4501(2)(f),
				F.S. For purposes of the Investment Plan, there are three (3) general
				categories of employers: state agencies; school districts; and local
				employers.
(26) "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) herein.
(27) "Exempt transaction" is any transaction
				that is initiated for purposes of: depositing employer and employee
				contributions; a rollover of eligible funds into the plan from an outside
				retirement plan; processing a distribution; processing a Qualified Domestic
				Relations Order; or mapping funds from terminated products. Exempt transactions
				are not included in any calculations for the purposes of Rule
				 19-11.004, F.A.C.
(28) "FRS Investment Plan," "Florida
				Retirement System Investment Plan," or "Investment Plan" means the defined
				contribution retirement program of the Florida Retirement System, established
				in Parts II and III of Chapter 121, F.S. Although the Investment Plan is
				established in Part II (Florida Retirement System Investment Plan) and Part III
				(Florida Retirement System Contribution Rates), certain provisions of Part I
				(General Provisions) of Chapter 121, F.S., also apply to the Investment Plan
				whenever the provisions of Parts II and III fail to address a specific area or
				topic covered by the provisions of Part I. The Investment Plan refers to both
				the FRS Investment Plan and the FRS Investment Plan Hybrid Option, also known
				as the Hybrid Option.
(29) "FRS
				Investment Plan Hybrid Option," or "FRS Hybrid Option" means the plan choice
				option within the Florida Retirement System, established in Parts II and III of
				Chapter 121, F.S., in which a member chooses to retain his or her accrued
				service benefit in the Pension Plan, in accordance with Section
				 121.4501(3)(a),
				F.S., and further chooses that all future employer and employee contributions
				be deposited in his or her Investment Plan account.
(30) "FRS Investment Plan providers" are:
(a) The FRS Investment Plan Administrator or
				Investment Plan Administrator;
(b)
				Companies providing educational services, which include retirement planning,
				financial planning services, and retirement plan choice guidance;
(c) Investment managers providing investment
				services supporting mutual funds or institutional funds offered in the
				Investment Plan;
(d) Marketing
				companies providing marketing and educational support for their investment
				products or providing individual counseling; and,
(e) Any other company or state agency
				providing Investment Plan services (including the State Board of Administration
				of Florida).