Fla. Admin. Code Ann. R. 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 before vesting in the Investment Plan or any
transferred Pension Plan service credit, 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 Bond Fund, where it will accrue actual
investment earnings or losses.
(b)
If the member returns to work for an FRS employer in an FRS-covered position
within the five (5) years from the date of termination, the member's unvested
account balance 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. The balance will reflect any earnings
or losses while invested in the FRS Core Plus Bond Fund.
(c) If the member never returns to work for
an FRS 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) If the member leaves FRS-covered
employment after vesting in the Investment Plan, but before the member vests in
any transferred Pension Plan service credit, the member will be entitled to
receive a distribution of any employee contributions contributed during their
FRS employment, plus any vested Investment Plan employer contributions.
However, if the member takes any self-initiated distribution from the
Investment Plan, the member will be considered retired and the unvested Pension
Plan portion of the benefit transferred into the Investment Plan, plus any
earnings on those funds will be forfeited along with the associated service
credit. This includes a distribution of any employee contributions the member
contributed during their FRS employment.
(e) If the member does not take a
self-initiated distribution after terminating from all FRS 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 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 unvested Pension Plan service, reflecting any
earnings or losses while invested in the FRS Core Plus 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, but before vesting in the Pension Plan, the
member will only be entitled to receive a distribution of any employee
contributions contributed during their FRS employment, plus any vested
Investment Plan employer contributions. However, if the member takes any
self-initiated distribution from the Investment Plan, the member will be
considered retired, and the unvested Pension Plan service credit will be
forfeited. If the member does not take a distribution from the Investment Plan
and later returns to work for an FRS employer in an FRS-covered position, the
member will be returned to the Investment Plan and enrolled in 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 unvested Pension Plan service credit,
will not be forfeited.
(h) If a
member's benefit and service credit are forfeited because the member did not
return to FRS-covered employment within five (5) years, but the member later
returns to FRS-covered employment after the forfeiture has occurred, the member
will be returned to the plan in which he or she was participating at the time
of the forfeiture. If the member's benefit and service credit in the Pension
Plan are forfeited because the member took a self-initiated distribution from
the Investment Plan, the member is considered retired. If the member later
returns to FRS-covered employment, the member will be considered a renewed
member and will be entitled to renewed membership, if applicable.
(2) Forfeitures of Investment Plan
accounts Due to Criminal Activity.
(a) Any
member who has been found guilty by a verdict of a jury or by the court trying
the case without a jury, or who has entered a plea of guilty or a plea of nolo
contendere to certain specified offenses committed prior to retirement; or any
member whose employment is terminated because the member admitted committing,
aiding, or abetting any such offenses; or any elected official who is convicted
by the Senate of an impeachable offense, shall forfeit all rights and benefits
under the FRS except for return of any accumulated employee contributions.
Specified offenses are the committing, aiding, or abetting any embezzlement or
theft from the member's employer; bribery in connection with employment; any
other felony specified in Chapter 838, F.S., except for commercial bribery as
provided in Section 838.15 or
838.16, F.S.; committing an
impeachable offense; willfully committing any felony with intent to defraud the
public or the public agency which employs the member or for which the member
acts, of the right to receive the faithful performance of the member's duties
while realizing or attempting to realize a profit, gain or advantage for the
member or for someone else through the powers, rights, privileges and duties of
the member's office or position; committing any felony described in Section
800.04, F.S., against a victim
younger than 16 years of age, or any felony described in Chapter 794, F.S.,
against a victim younger than 18 years of age while using or attempting to use
the power, rights, privileges, or duties of the member's office or employment
position.
(b) When the State Board
of Administration (SBA), becomes aware of any accusation of criminal wrong
doing against any member of the Investment Plan, the SBA will place a hold on
the member's account to preclude the member from removing any money from the
account, until a determination is made on whether charges have
been filed and whether the charges are for a forfeitable offense.
(c) If the charges against the member are not
pursued the hold on the member's account will be released.
(d) If the member is indicted and convicted
or pleads guilty, or pleads nolo contendere, the SBA will acquire a certified
copy of the judgment and will contact the member to advise the member that the
Investment Plan benefit is forfeited and that the member has the right to a
hearing to contest the forfeiture. The hold on the member's account will remain
in place until:
1. The time to request a
hearing has passed and no request for a hearing is made, or
2. The conclusion of the hearing and any
appeal of the final order issued after the conclusion of the hearing.
(e) At the conclusion of either
subparagraph (d)1., above, or subparagraph (d)2. above, if the member's hearing
and/or appeal are unsuccessful, the SBA will direct the Investment Plan
Administrator to transfer the member's account balance to the Investment Plan
Forfeiture Account. If such member is subsequently reemployed, the member shall
be eligible for benefits based on creditable service earned subsequent to the
reemployment. The member is not eligible to claim any period of employment
which was forfeited.
(f) If a
member has requested a self-initiated distribution of all or part of any
benefit, the member shall be required to repay the benefit, if it is determined
that the member forfeited all rights and benefits under the FRS. Any such
member may contest the forfeiture as stated in paragraph (d), above. If the
member fails to repay the benefit, the SBA may pursue all legal
options.
(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
Bond Fund.
(3) Forfeiture
of Beneficiary's Rights Due to Criminal Activity.
(a) 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 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 such beneficiary had
predeceased the deceased member.
(b) No benefits will be paid until there is a
final resolution of such charges against the beneficiary, including any
appeals.
(4) Authorized
uses of the Investment Plan Trust Fund Forfeiture Account.
(a) The Investment Plan Forfeiture Account is
funded with unvested account balances forfeited by members or with account
balances forfeited due to criminal activity as described herein.
(b) Section
121.4501(13),
F.S., requires that the Investment Plan be administered so as to comply with
the requirements of the Internal Revenue Code in order to maintain a
tax-qualified status.
(c) Pursuant
to a private letter ruling from the Internal Revenue Service, the Forfeiture
Account may be used for two purposes:
1.
Payment of Investment Plan Administrative expenses, such as fees related to the
activities of the Investment Plan Administrator and the custodian, investment
and administrative consulting fees, and services rendered for the benefit of
members of the Investment Plan where costs can reasonably be allocated to the
plan; and,
2. Reduction of future
employer contributions to the Investment Plan.
(d) Consistent with Internal Revenue Service
Rulings 80-155 and 74-340, unallocated reserves within the Forfeiture Account
will be used as quickly and as prudently as possible considering fiduciary
duty. The expected withdrawals from the Account should endeavor to reduce the
Account to zero each fiscal year end.
Notes
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.
New 11-26-07, Amended 12-8-08, 7-12-12, 8-18-14, 12-30-15, 4-12-17, 2-12-18, 5-11-22, 7-26-23, 4-22-24.
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