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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
A bill to be entitled 1
An act relating to employment after retirement of 2
school district personnel; amending s. 121.021, F.S.; 3
revising the definition of "termination" to conform to 4
changes made by the act; amending s. 121.091, F.S.; 5
establishing an exception to reemployment after 6
retirement limitations to authorize certain retired 7
staff to be employed in specified positions before 8
meeting the definition of termination; prohibiting th e 9
accrual of additional retirement service credit and 10
renewed membership during such period of reemployment; 11
amending ss. 121.122 and 121.591, F.S.; conforming 12
provisions and a cross -reference to changes made by 13
the act; requiring the State Board of Admini stration 14
and the Department of Management Services to request a 15
determination letter and private letter ruling from 16
the United States Internal Revenue Service; providing 17
for nonapplicability of the act, or portions thereof, 18
under specified circumstances; p roviding effective 19
dates. 20
21
Be It Enacted by the Legislature of the State of Florida: 22
23
Section 1. Subsection (39) of section 121.021, Florida 24
Statutes, is amended to read: 25
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
121.021 Definitions. —The following words and phrases as 26
used in this chapter have the respective meanings set forth 27
unless a different meaning is plainly required by the context: 28
(39)(a) "Termination" occurs, except as provided in 29
paragraphs (b) and (c), when a member ceases all employment, 30
which term includes the provision o f services, with all 31
employers, however: 32
1. For retirements effective before July 1, 2010, if a 33
member is employed by any employer within the next calendar 34
month, termination shall be deemed not to have occurred. A leave 35
of absence constitutes a continua tion of the employment 36
relationship, except that a leave of absence without pay due to 37
disability may constitute termination if such member makes 38
application for and is approved for disability retirement in 39
accordance with s. 121.091(4). 40
2. For retirements effective on or after July 1, 2010, if 41
a member is employed by any employer within the next 6 calendar 42
months, termination shall be deemed not to have occurred unless 43
the member is employed following retirement in accordance with 44
s. 121.091(9)(g). A leave of absence constitutes a continuation 45
of the employment relationship, except that a leave of absence 46
without pay due to disability may constitute termination if such 47
member makes application for and is approved for disability 48
retirement in accordance wi th s. 121.091(4). 49
(b) "Termination" for a member ending participation in the 50
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
Deferred Retirement Option Program occurs when the program 51
participant ceases all employment, which term includes the 52
provision of services, with all employers in accordance wit h s. 53
121.091(13), however: 54
1. For termination dates occurring before July 1, 2010, if 55
a member is employed by any employer within the next calendar 56
month, termination shall be deemed not to have occurred, except 57
as provided in s. 121.091(13)(b)4.c. A lea ve of absence 58
constitutes a continuation of the employment relationship. 59
2. For termination dates occurring on or after July 1, 60
2010, if a member becomes employed by any employer within the 61
next 6 calendar months, termination shall be deemed not to have 62
occurred, except as provided in s. 121.091(13)(b)4.c. or s. 63
121.091(9)(g). A leave of absence constitutes a continuation of 64
the employment relationship. 65
(c) Effective July 1, 2011, "termination" for a member 66
receiving a refund of employee contributions o ccurs when a 67
member ceases all employment, which term includes the provision 68
of services, with all employers for 3 calendar months. A leave 69
of absence constitutes a continuation of the employment 70
relationship. 71
72
All terminations must be a termination of emp loyment consistent 73
with 26 C.F.R. s. 1.409A -1(h)(1)(ii). After July 1, 2023, 74
volunteer services do not constitute employment by, or provision 75
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
of services to, an employer. The department or state board may 76
require any evidence of termination necessary to de termine 77
compliance with this chapter or the rules adopted thereunder. 78
Section 2. Paragraphs (c) and (d) of subsection (9) of 79
section 121.091, Florida Statutes, are amended, and paragraph 80
(g) is added to that subsection, to read: 81
121.091 Benefits paya ble under the system. —Benefits may 82
not be paid under this section unless the member has terminated 83
employment as provided in s. 121.021(39)(a) or begun 84
participation in the Deferred Retirement Option Program as 85
provided in subsection (13), and a proper app lication has been 86
filed in the manner prescribed by the department. The department 87
may cancel an application for retirement benefits when the 88
member or beneficiary fails to timely provide the information 89
and documents required by this chapter and the depar tment's 90
rules. The department shall adopt rules establishing procedures 91
for application for retirement benefits and for the cancellation 92
of such application when the required information or documents 93
are not received. 94
(9) EMPLOYMENT AFTER RETIREMENT; LIMITATION.— 95
(c) Any person whose retirement is effective on or after 96
July 1, 2010, or whose participation in the Deferred Retirement 97
Option Program terminates on or after July 1, 2010, who is 98
retired under this chapter, except under the disability 99
retirement provisions of subsection (4) or as provided in s. 100
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121.053, may be reemployed by an employer that participates in a 101
state-administered retirement system and receive retirement 102
benefits and compensation from that employer. However, a person 103
may not be reemployed by an employer participating in the 104
Florida Retirement System before meeting the definition of 105
termination in s. 121.021 and may not receive both a salary from 106
the employer and retirement benefits for 6 calendar months after 107
meeting the definiti on of termination, except as provided in 108
paragraph (f) or paragraph (g). However, a DROP participant 109
shall continue employment and receive a salary during the period 110
of participation in the Deferred Retirement Option Program, as 111
provided in subsection (13) . 112
1. The reemployed retiree may not renew membership in the 113
Florida Retirement System, except as provided in s. 121.122. 114
2. The employer shall pay retirement contributions in an 115
amount equal to the unfunded actuarial liability portion of the 116
employer contribution that would be required for active members 117
of the Florida Retirement System in addition to the 118
contributions required by s. 121.76. 119
3. A retiree initially reemployed in violation of this 120
paragraph and an employer that employs or appoints such person 121
are jointly and severally liable for reimbursement of any 122
retirement benefits paid to the retirement trust fund from which 123
the benefits were paid, including the Florida Retirement System 124
Trust Fund and the Florida Retirement System Investment Plan 125
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
Trust Fund, as appropriate. The employer must have a written 126
statement from the employee that he or she is not retired from a 127
state-administered retirement system. Retirement benefits shall 128
remain suspended until repayment is made. Benefits suspended 129
beyond the end of the retiree's 6 -month reemployment limitation 130
period shall apply toward the repayment of benefits received in 131
violation of this paragraph. 132
(d) This subsection applies to retirees, as defined in s. 133
121.4501(2), of the Florida Retirement System Investment Plan, 134
subject to the following conditions: 135
1. Except as provided in subparagraph 2., a retiree may 136
not be reemployed with an employer participating in the Florida 137
Retirement System until such person has been retired for 6 138
calendar months. 139
2. A retiree may be reemployed as a substitute teacher 140
following retirement in accordance with the requirements of 141
paragraph (g). 142
3. A retiree employed in violation of this subsection and 143
an employer that employs or appoints such person are jointly and 144
severally liable for reimbursement of any benefits paid to the 145
retirement trust fund from which the benefits were paid. The 146
employer must have a written statement from the retiree that he 147
or she is not retired from a state -administered retirement 148
system. 149
(g) A district school board may reemploy a retiree to work 150
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as a substitute teacher or an hourly teacher or an education 151
paraprofessional as a nonemployee of the school system 1 152
calendar month following retirement or DROP termination. The 153
retiree may receive compensation from the employer and 154
retirement benefits before meeting the definition of termination 155
in s. 121.021(39). Reemployed instructional staff may not 156
receive additional retirement service credit for such employment 157
and may not renew membership in the Florida Retirement System 158
during such period of employment. 159
Section 3. Subsection (6) is added to section 121.122, 160
Florida Statutes, to read: 161
121.122 Renewed membership in system. — 162
(6) If a retiree otherwise eligible for renewed membership 163
in accordance with subsections (3), (4), and (5) is reemployed 164
pursuant to s. 121.091(9)(g) before meeting the definition of 165
termination in s. 121.021(39), such retiree must cease all 166
employment relationships, including service as a substitute 167
teacher, with participating employers for 6 calendar months in 168
order to be enrolled as a renewed member if subsequently 169
reemployed in a regularly established position. 170
Section 4. Paragraph (a) of subsection (1) of section 171
121.591, Florida Statutes, is amended to read: 172
121.591 Payment of benefits. —Benefits may not be paid 173
under the Florida Retirement System Investment Plan unless the 174
member has terminated employment as provided in s. 175
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121.021(39)(a) or is deceased and a proper application has been 176
filed as prescribed b y the state board or the department. 177
Benefits, including employee contributions, are not payable 178
under the investment plan for employee hardships, unforeseeable 179
emergencies, loans, medical expenses, educational expenses, 180
purchase of a principal residence, payments necessary to prevent 181
eviction or foreclosure on an employee's principal residence, or 182
any other reason except a requested distribution for retirement, 183
a mandatory de minimis distribution authorized by the 184
administrator, or a required minimum distr ibution provided 185
pursuant to the Internal Revenue Code. The state board or 186
department, as appropriate, may cancel an application for 187
retirement benefits if the member or beneficiary fails to timely 188
provide the information and documents required by this cha pter 189
and the rules of the state board and department. In accordance 190
with their respective responsibilities, the state board and the 191
department shall adopt rules establishing procedures for 192
application for retirement benefits and for the cancellation of 193
such application if the required information or documents are 194
not received. The state board and the department, as 195
appropriate, are authorized to cash out a de minimis account of 196
a member who has been terminated from Florida Retirement System 197
covered employment for a minimum of 6 calendar months. A de 198
minimis account is an account containing employer and employee 199
contributions and accumulated earnings of not more than $5,000 200
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made under the provisions of this chapter. Such cash -out must be 201
a complete lump-sum liquidation of the account balance, subject 202
to the provisions of the Internal Revenue Code, or a lump -sum 203
direct rollover distribution paid directly to the custodian of 204
an eligible retirement plan, as defined by the Internal Revenue 205
Code, on behalf of the m ember. Any nonvested accumulations and 206
associated service credit, including amounts transferred to the 207
suspense account of the Florida Retirement System Investment 208
Plan Trust Fund authorized under s. 121.4501(6), shall be 209
forfeited upon payment of any vest ed benefit to a member or 210
beneficiary, except for de minimis distributions or minimum 211
required distributions as provided under this section. If any 212
financial instrument issued for the payment of retirement 213
benefits under this section is not presented for p ayment within 214
180 days after the last day of the month in which it was 215
originally issued, the third -party administrator or other duly 216
authorized agent of the state board shall cancel the instrument 217
and credit the amount of the instrument to the suspense ac count 218
of the Florida Retirement System Investment Plan Trust Fund 219
authorized under s. 121.4501(6). Any amounts transferred to the 220
suspense account are payable upon a proper application, not to 221
include earnings thereon, as provided in this section, within 1 0 222
years after the last day of the month in which the instrument 223
was originally issued, after which time such amounts and any 224
earnings attributable to employer contributions shall be 225
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
forfeited. Any forfeited amounts are assets of the trust fund 226
and are not subject to chapter 717. 227
(1) NORMAL BENEFITS. —Under the investment plan: 228
(a) Benefits in the form of vested accumulations as 229
described in s. 121.4501(6) are payable under this subsection in 230
accordance with the following terms and conditions: 231
1. Benefits are payable only to a member, an alternate 232
payee of a qualified domestic relations order, or a beneficiary. 233
2. Benefits shall be paid by the third -party administrator 234
or designated approved providers in accordance with the law, the 235
contracts, and any applicable board rule or policy. 236
3. The member must be terminated from all employment with 237
all Florida Retirement System employers, as provided in s. 238
121.021(39). 239
4. Benefit payments may not be made until the member has 240
been terminated for 3 calendar m onths, except that the state 241
board may authorize by rule for the distribution of up to 10 242
percent of the member's account after being terminated for 1 243
calendar month if the member has reached the normal retirement 244
date as defined in s. 121.021. 245
5. If a member or former member of the Florida Retirement 246
System receives an invalid distribution, such person must either 247
repay the full amount within 90 days after receipt of final 248
notification by the state board or the third -party administrator 249
that the distribution was invalid, or, in lieu of repayment, the 250
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member must terminate employment from all participating 251
employers. If such person fails to repay the full invalid 252
distribution within 90 days after receipt of final notification, 253
the person may be deemed reti red from the investment plan by the 254
state board and is subject to s. 121.122. If such person is 255
deemed retired, any joint and several liability set out in s. 256
121.091(9)(d)3. s. 121.091(9)(d)2. is void, and the state board, 257
the department, or the employing agency is not liable for gains 258
on payroll contributions that have not been deposited to the 259
person's account in the investment plan, pending resolution of 260
the invalid distribution. The member or former member who has 261
been deemed retired or who has been det ermined by the state 262
board to have taken an invalid distribution may appeal the 263
agency decision through the complaint process as provided under 264
s. 121.4501(9)(g)3. As used in this subparagraph, the term 265
"invalid distribution" means any distribution from an account in 266
the investment plan which is taken in violation of this section, 267
s. 121.091(9), or s. 121.4501. 268
Section 5. (1) Effective upon this act becoming a law, 269
the State Board of Administration and the Department of 270
Management Services shall reques t, as soon as practicable, a 271
determination letter and private letter ruling from the United 272
States Internal Revenue Service. If the United States Internal 273
Revenue Service refuses to act upon a request for a private 274
letter ruling, a legal opinion from a qua lified tax attorney or 275
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firm may be substituted for the private letter ruling. 276
(2) If the State Board of Administration or the Department 277
of Management Services receives notification from the United 278
States Internal Revenue Service that this act or any por tion of 279
this act will cause the Florida Retirement System, or a portion 280
thereof, to be disqualified for tax purposes under the Internal 281
Revenue Code, the act or any portion thereof which will cause 282
the disqualification does not apply. Upon receipt of such 283
notice, the state board and the department shall notify the 284
presiding officers of the Legislature. 285
Section 6. Except as otherwise expressly provided in this 286
act and except for this section, which shall take effect upon 287
becoming a law, this act shall ta ke effect January 1, 2025. 288