Volume 5: Issue 4
Issue Date: August 1, 2005

Legislative Update

Action during the 2005 Legislative session resulted in the passage of Senate Bill 1446 (Chapter 2005-253, Laws of Florida), which became effective on July 1, 2005. While this legislation was mostly housekeeping in nature, there are five provisions that might impact you and your employees. Those are:

2nd Election
Active FRS members who are earning salary and retirement service credit can now use their one-time 2nd Election at anytime prior to termination, so long as the 2nd Election Retirement Plan Enrollment Form is received by the Plan Choice Administrator, CitiStreet, prior to termination. Employment in the month following an election is no longer required. Note that employees who work 9, 10, or 11 month contract or school years may not use their 2nd Election during the summer months when they are not actively employed receiving salary and retirement service credit. They must file before their contract school year ends or wait until they return to active employment.

Stale-dated Checks
Investment Plan distribution checks not cashed or deposited within 180 days of distribution are considered stale-dated. They will be cancelled and the associated funds will be moved into a suspense account where they will be held for up to 10 years while the Investment Plan Administrator, CitiStreet, tries to locate the payee. If the payee is found timely, the check will be reissued at the original face value. If the payee is not found within 10 years, the amount of the check will be forfeited and become part of the Investment Plan Trust Fund, where the funds will be used to offset the administrative costs and employer contributions of the Investment Plan.

DROP Rollovers
Former, current and future Pension Plan members can roll over eligible DROP accumulations into the FRS Investment Plan and have immediate access to these funds even if they return to FRS-covered employment. This option allows DROP participants to take advantage of the 20 investment options offered under the Investment Plan. A Special FRS Employer Newsletter was sent to you in July with a series of questions and answers on this subject. Additionally, all DROP participants will continue to receive a DROP flyer as part of their DROP termination kit informing them of their ability to use the MyFRS Financial Guidance Program, as well as this option when they reach the end of their DROP period.

Investment Plan Distribution Requirements
Investment Plan benefits cannot be paid until a member has been terminated from FRS-covered employment for 3 calendar months. However, if the member meets the normal retirement requirements applicable under the Pension Plan (i.e., retires at age 62 with 6 years of service or with 30 years of service at any age, or, if Special Risk at age 55 with 6 years of Special Risk service or with 25 years of Special Risk service at any age), he/she is eligible for one payment of up to 10% of their account balance after 1 calendar month and the remainder of their account after 2 additional months, unless the member returns to FRS-covered employment in a non-excepted position (see Reemployment Restrictions below) and the benefit is suspended.

Reemployment-after-Retirement Requirements
After taking a distribution, Investment Plan members cannot return to FRS-covered employment for 3 calendar months (i.e., a minimum of 6 months from termination) unless they meet the normal retirement requirements of the Pension Plan. If the normal retirement requirements of the Pension Plan are met, the member may return to work in one of the statutorily excepted positions (i.e., substitute teacher, adjunct instructor, firefighter, etc.) after 1 calendar month. The employer and employee are held jointly and severally liable for reimbursement of an illegal distribution, unless the retiree has signed a form stating that he/she is not retired, or has been retired for over 1 year. Attached for further information on this subject is a more detailed summary of the reemployment restrictions for both the Pension Plan and Investment Plan, as well as the updated New Employee Certification Form. You should consider having all new employees complete this form in order to avoid joint liability for invalid distributions. You can also find this form under the "Forms" tab at MyFRS.com.
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2nd Election Resource for You and Your Employees

After initial retirement plan selection, every FRS-covered employee has a one-time option to switch retirement plans. This is called a "2nd Election." This option to switch is very valuable, but may not be right for everybody. Employees should carefully and objectively consider their individual circumstances before making a permanent plan change.

In our last issue of this publication we told you about a new informational flyer to help you and your employees learn more about the 2nd Election option. The 2nd Election Flyer has now been updated with the legislative changes from the 2005 session and is available from CitiStreet upon request. A copy of this flyer is attached to this newsletter so you can easily forward it to your employees. (2nd Election Flyer) You can also order copies online or download the flyer from www.MyFRS.com.
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Updated Summary Plan Descriptions Available

The Summary Plan Descriptions (SPDs) for both the Pension Plan and Investment Plan have been updated to incorporate legislative and other changes. Investment Plan SPDs are available in electronic form at MyFRS.com under the "Publications" tab, or by telephone request through the MyFRS Financial Guidance Line. Retirement Guides for Pension Plan members have been printed and mailed to all FRS employers for distribution to Pension Plan members, and are also available at MyFRS.com under the "Publications" tab.
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Schedule Your Employee Workshops

Now that Fall is approaching it might be time to beat the rush and set up your employee orientation and benefit fair workshops so that your employees can take advantage of the latest retirement and financial planning services offered by the Florida Retirement System. These workshops are free and available to FRS employers upon request. The only requirement is that you must have at least 25 people in attendance (we do make limited exceptions on occasion). If you do not have 25 employees in your agency maybe you can team up with another agency in your area. Call the toll-free FRS Employer Assistance Line today at 1-866-377-2121, Option 1 to schedule your workshops.
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Employee Benefit Fairs

This Fall, staff from the State Board of Administration and Ernst & Young will be participating in Employee Benefit Fairs for state employees and some local government agencies. If you have employees with retirement questions who wish to talk to a person face-to-face, these fairs might be a good place to send them. If you are interested in having someone attend your agency benefit fair, call the toll-free Employer Assistance Line to determine if someone is available.
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Important Enrollment Deadlines!

All enrollment forms must be mailed directly to the FRS Plan Choice Administrator, CitiStreet. To be considered timely filed, CitiStreet must receive all forms by 4pm ET on the last business day of an employee's deadline month.

The table below lists FRS new employee retirement plan enrollment deadlines for the next 12 months.