HB 5701 Dropped. H.I.S. stays!!!

FRSOptions.info has just learned that HB 5701 has been dropped. The Health Insurance Subsidy benefit will not be lost!

FRSOptions.info has just learned that HB 5701 has been dropped.  The Health Insurance Subsidy benefit will not be lost!!!!  This is great news.  It seems your calls and letters have once again worked their magic!  Congratulations!

It is possible it will be re-visited in the future, but for now it is safe.  250,000 retirees will keep this benefit!!  The Health Insurance Subsidy is a benefit for Florida Retirement System members that provides up to $150 per month to offset the cost of health care in retirement. 

While this is a short term victory, PLEASE keep those calls and letters going to your Representitives and Senators.  It is your voices that have made, and will make a difference in whether your benefits are changed.  You have been promised those benefits, and you deserve to keep those benefits!

Continue reading “HB 5701 Dropped. H.I.S. stays!!!”

All FRS Legislation put on HOLD?

Last week Senator Mike Bennett, Chair of the Senate Community Affairs Committee (and sponsor of SB 1902.) mentioned in committee “that all of the retirement bills will be rolled into a study for over the summer.” This would … tentatively put the retirement benefits bills on hold, most likely until the next session of the Florida legislature

Last week Senator Mike Bennett, Chair of the Senate Community Affairs Committee (and sponsor of SB 1902.) mentioned in committee “that all of the retirement bills will be rolled into a study for over the summer.”  This would include the most adverse, HB 1319 and HB 1543, in addition to SB 1902 and SB 2022, and tentatively put the retirement benefits bills on hold, most likely until the next session of the Florida legislature. We will try to get verification on this as soon as possible.

It is my understanding the legislators were so overwhelmed with calls from YOU, and there was such an outpouring of concern, that the decision was made to table all bills relating to retirement benefits until after a special study could be done over the summer to determine the best route to take.  This is not a victory! It most likely means the committee will meet a consensus of what changes to make to your benefits, and it will then be easier to pass the bills in the next session of the legislature.

I would again remind everyone of the 125 page report from the Florida Tax Watch group.  You may recall this group consisted of many powerful members of the Florida Legislature (Previous discussion at FRSOptions).  It would be a mistake to believe that the summer study will not propose cuts to your benefits, and it would not be coincidental if the final version corresponds to the Tax Watch proposal.

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It ain't over, A further call to action for FRS benefits!

this plan is being endorsed by the legislature, and by publicizing it around the state, it becomes propaganda to endorse the bills to cut your benefits. I also thought it was interesting that some of our elected officials were on the task force.

Yesterday there was an interesting “letter to the editor” in the “Sarasota Herald Tribune”, called “State Budget Sense”.  The letter was submitted by the CEO of a Tallahassee organization called Florida Tax Watch, and lists “87 ideas worth $3.25 billion” to reduce spending.  I’m not really sure who the group is, nor  their function, but on their website states that they are “supported by voluntary, tax-deductible memberships and grants” and that “policy makers and government employees have implemented three-fourths of Florida TaxWatch′s cost-saving recommendations, saving the taxpayers of Florida more than $6.2 billion”.  It sounds like a lobbyist group, which would answer the question of, why would the CEO of a Tallahassee Group, write a letter to the Sarasota Herald Tribune?  I was intrigued enough to go to the site, and look at the 125 page report.   Among their suggestions, which have pretty much ALL appeared in recent legislative proposals:  Employee contributions to the plan of 5% (SB2022 is starting the process at a lower number to get in the door),  Reduce the Credit for Special Risk from 3% to 2%, and for Senior Management from 2% to 1.6% (Think HB 1319 and 1543), Re-evaluate and reduce the who is considered Special Risk, Up the vesting schedule from six years to ten years and last-but-not-least, adjust the 3% COLA increases to the actual Consumer Price Index with a maximum of 3%.  Obviously this plan is being endorsed by the legislature, and by publicizing it around the state, it becomes propaganda to endorse the bills to cut your benefits.  I also thought it was interesting that some of our elected officials were on the task force.  They are as follows:

Senator JD Alexander, Chairman of the Senate Policy and Steering Committee on Ways and Means and  Designee of the Senate President to the committee.

Bill McCollum, Attorney General for the State of Florida.

Continue reading “It ain't over, A further call to action for FRS benefits!”

A battle won, but the War is still on to preserve your benefits.

SB 2022 was introduced by Senator J.D. Alexander …. has already passed through the Senate Committee in very rapid manner. It will mandate all employees make a payroll contribution to their retirement benefits.

Please do not think the war is over to protect your benefits. While Representative Grady’s office has indicated HB 1319, which is particularly radical in its changes, is dead, it still appears on the legislative slate.  HB 1543, another really nasty bill, shows up as having been withdrawn on the legislature’s slate.  Senate Bill 2022 is a relative newcomer, and is very much in play.  SB 2022 was introduced by Senator J.D. Alexander, a very powerful figure in Tallahassee and the Chairman of the Ways and Means Committee, and has already passed through the Senate Committee in very rapid manner.   It will mandate all employees make a payroll contribution to their retirement benefits.

It is an interesting coincidence that the two most radical bills were withdrawn concurrent with the introduction and rapid push through committee of SB 2022.  In comparison to HB 1319 and HB 1543, SB 2022 looks like a dream.  I am hoping that wasn’t the plan.  Scare everyone with radical changes, then a seemingly innocuous bill comes up, and it might be more easily pushed through.  I am hoping this isn’t the legislative version of “good cop, bad cop”.  If FRS participants are mandated to pay a portion of their pay, where does it end?  Next year will it be more and more?  The national average for employee contributions to pensions is around 5%.  That is a significant cost to you!

Below is a list of about 30 different bills that have been introduced and are still on the table that could negatively affect your benefits in one way or another.  I would urge you all to keep on your toes, and continue to call your Representatives and Senators and let them know you do not want them to vote in favor on ANY bill or amendment which will take away your benefits. Simply click on the blue link and it will take you to the Florida Legislature site where you may review the status and original version of the bills.

Continue reading “A battle won, but the War is still on to preserve your benefits.”

You are going to LOVE THIS!

HB 1319 The bill will not be heard in any committees

Thank you for contacting us to express your thoughts on House Bill 1319, sponsored by Rep. Grady. The bill will not be heard in any committees this session, and therefore cannot advance any farther in the legislative process. Please let me know if you have any questions regarding other legislation.

Sincerely,

Jesse Allan Adams

Continue reading “You are going to LOVE THIS!”

House Bills 1319 and 1543 Dead?

Congratulations! I can’t help but think your actions, calls and messages played an important part in this huge Victory!!!

Congratulations!  I can’t help but think your actions, calls and messages played an important part in this huge Victory!!!  As soon as I can get official confirmation in writing, I will post it!

Celebrate!!!!!!!!!!!!!!!

There are a few other bills still alive, but none even close to those two.  This is fantastic news to all members of the Florida Retirement System Pension Plan.

A call for ACTION in regard to your pension!

make your AFC the AVERAGE OF ALL YEARS of service. This could effectively cut your pension by as much as 50%.

A call to ACTION,

In the last few weeks I have posted several news releases in regard to the potential for significant change to the Florida Retirement System.  Even though Florida has one of the most financially sound pension systems in the US, it is underfunded by some 10 or 12%. That situation could get even worse in view of the economy, unemployment, and depressed real estate values, which create stress on the state’s tax collection and revenues.   I visited the Florida Legislature’s website to investigate what might be in store, and found no less than 10 bills suggesting changes to the current system.  You will find what I deemed to be the most pertinent considerations summarized below.

House Bill 1319 sponsored by Representative Tom Grady of Collier County

This bill could be far reaching.  Among its provisions is one to eliminate the current basis of your Average Final Compensation (AFC) from the average of your highest five years, and instead make your AFC the AVERAGE OF ALL YEARS of service.  This could effectively cut your pension by as much as 50%. It would average your first year with your last, and every year in between.  This is by far the most drastic change proposed.

Continue reading “A call for ACTION in regard to your pension!”

"Is my FRS Pension Secure"?

Many of those government agencies are going to change from the traditional Pension Plan, whereby a retiree’s “benefit is defined”, to a “Defined Contribution” plan such as a 401k.

Over the years, I have had many FRS members call and ask questions regarding their pensions.  The most common question used to be, “Should I DROP”?  Now however, the single most important question seems to be “Is my Pension secure?”, or “Will I get my pension”.  Most of the conversation was started with the dramatic losses within the FRS investment holdings.  The 2008-2009 financial crisis hacked some 25% off of the total assets in FRS.  Tie that in with the drop in state revenues due to severely declining property taxes, and one of the worst unemployment rates in the country, and the need to cut costs is loud and clear.

In a conversation with a FRS participant the other day, she questioned why government entities were not fulfilling their pension obligations.  FRS is underfunded by some 12%, and many local governments are in much worse shape, some underfunded by almost 50%.  The problem is simple.  Tax bases are down dramatically, so the Gov’t agencies flat out don’t have enough money to cover their costs, let alone the shortfalls created by the financial crisis.  The only way to make up the difference is to either cut costs or increase income.  Increasing income would mean raising taxes.   In this economy, with 14% unemployment, and just about everybody in a financial pinch, raising taxes is probably not feasible.  That leaves cutting costs!

Many of those government agencies are going to change from the traditional Pension Plan, whereby a retiree’s “benefit is defined”, to a “Defined Contribution” plan such as a 401k.  In the Defined Contribution plan, the employee makes the bulk of the contribution into their retirement plan, and the employer makes a matching contribution.  A typical plan calls for the employer to contribute one dollar for every two the employee puts in.  Compare that with FRS’ current program where the employer makes 100% of the contribution, and it is pretty easy to see how it cuts costs dramatically.

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FRS Pension Basics 2010

Your FRS Pension is a “defined benefit plan” which means any contributions made by your employer on your behalf have no real bearing on the amount of your pension benefit.

PENSION Basics

Your FRS Pension is a “defined benefit plan” which means any contributions made by your employer on your behalf have no real bearing on the amount of your pension benefit.  Instead, your pension benefit is determined by a percentage of what you were earning in the last few years prior to retirement. An alternative plan is a “defined contribution plan” such as the FRS Investment Plan, deferred compensation, or a 401K.  In a defined contribution plan your retirement benefit is determined by the value of the accumulated contributions to your account, plus the investment returns the account has achieved. Your income will only determine how much you can contribute!

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