DROP Rate Dropped!

the document states the interest rate paid on DROP will be reduced from the current 6.5% to a new rate of 3% for all participants who enter the DROP on or after July 1, of 2010. W

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The fears we voiced on Monday have come true on Wednesday.   In a document we secured today, which was introduced this morning at 10:00 am, titled “State Budget Conference Chairs bump issues Senate offer Conforming and Implementing Language” (click on the title to be directed to the link) has some last minute introductions that were claimed to be tabled.

Line 1 of page 7 of the document states the interest rate paid on DROP will be reduced from the current 6.5% to a new rate of 3% for all participants who enter the DROP on or after July 1, of 2010. We have further confirmed that this is already in the budget, so it appears to be a done deal.  At 3% the Deferred Retirement Option Program loses its attractiveness as a viable retirement option.  We will address this in detail in a later post.

The following lines of the document spells out that the door will be open for EMPLOYEE contributions beginning in 2011!  This would indicate that your contributions are already in process, and it is simply a matter of how much you are to contribute.

We can thank Senator J.D. Alexander of Lake Wales, and Representative David Rivera of Miami, who led their respective houses in negotiating these changes.  As a taxpayer and a voter, it is very disconcerting to believe that the legislators that WE elect to represent us and our best interests, would sneak this in at the final hours of the legislative session.   I hope you will all remember them come election day.  In the mean time, we should all inundate them with calls and letters expressing our disappointment in allowing this to happen.

  • agoodriend

    Teachers work so hard and have to put up with lower pay then most professionals.Where would these legisltures be if it weren't for teachers?

  • The watcher

    Yeah baby…….lets screw us over some more! Love the politicians

  • jenni

    what will this mean to the people who are already in the drop program and have 2-4 years left in it?

  • http://www.floridaretirementsystem.info Mark Davy

    As is written, you will be fine. It only affects those entering th DROP after July!

  • bigdog

    Well, all I can say is that the names of the people who write every bill that takes something from us, cost us more, threatens our livelihoods and reduces our ability to retire all end in R.

  • TonyR

    Why it has to be this way? The economy is going thru a rough time but it is not only for the Goverment !! We the workers are suffering also and more than the Goverment! But whenever there is a “cut” it has to be against the Employees!! Cost of living keeps on rising, salaries are frozen, benefits are cut and on top of all that, now the polititians want to reduce the interest on the DROP program, besides other “cuts” like employee contribution, elimination of the health insurance subsidies, etc, etc… I'm going to give you an idea: Why don't you, Polititians elected by us, don't propose that we work all our life for $5.00 and hour and at the end of our career give us a good kick in our buds and send us home?

  • http://www.floridaretirementsystem.info Mark Davy

    ApprovÉ

  • mrsding

    Is there a way to find out who voted for it? Can the governor veto this change?

  • http://www.floridaretirementsystem.info Mark Davy

    After the final vote I will post how the vote went. I honestly don't know if the Governor can veto the budget!

  • juliannesquivel

    Thank you for voting to lower the interest on the DROP program. I am surly going to remember you senator JD Alexander and Representative David Rivera. I am going to tell all of my friends and family the of the little surprise you sneeked in at the last minute. We trusted you both to look out for our interests I see exactly what you two are all about.

  • S.Modica

    I am curious! …
    Q – Do all the politicians proposing and voting to pass all these bills against government employees and teachers' salaries are getting a GOOD salary and retirement benefit CUT themselves?
    Q – Will they be living only and exclusively on their earned Social Security benefit?
    A – …I don't think so!!! – Well, who are we voting for then????

  • Kent Cartwright

    You politicians disgust me! how about you guys having to work a back breaking job for 25+ years to earn a pension.

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  • asd_mom

    I am not at all happy with this. I was looking forward to entering DROP in 4 years and being able to stay home with my 4 disabled children. Taking them to much needed therapies so that they could become productive citizens, voters, and tax payers when they become adults. I guess that they will end up becoming a burden on society since I will not be able to take them to therapies and will not be able to afford it as well.

  • PATTY

    How much of their retirement are they going to donate?..I go into the DROP august 1st after 27 yrs and miss this by 1 month!….when I complete my last 5 yrs, I am considering getting involved and cutting our leaders benefits, that way we will get people up there for the right reasons!….we need examples….not corporate Rulers up there!

  • doggette

    Is it really fair to reduce DROP to less than 1/2 of the interest rate with 2 months notice! I was scheduled to sign my DROP papers in May because I will have 30 years in July 2010. I am eligible to DROP August 1. But now I am suppose to totally change my long term plans that were finally being reached?
    I recommend you wait at least a year to change DROP so that people affected have time to get used to the idea and make adjustments to their investments and plans. Although it really should not be adjusted for anyone within 5 years of DROP.

  • Readytoretire

    If these policiticians are for the people, then they need to be under the same benefits as we are. We should be voting on their benefits and their raises. I can't believe that they have different benefits and their benefits are for life!

  • 1abcde

    It's not just that Rivera and Alexander proposed this reduction in DROP, it's also how they covertly pushed it through on the back of another bill. Very sneaky.

    What is the point of doing the DROP now at that rate? By reducing the rate that much, in essence, they took away the DROP. Now I have to decide whether to stay FRS or go investment.

  • Anonymous

    Mark,

    I heard some disturbing news. According to a friend of mine who is close with a high up PBA executive, the legislators attempted to slip in another change to the FRS in addition to the DROP reduction. The change was to average ALL years of service together, instead of top 5.

    Somebody caught this nonesense and it was removed. I could just imagine waking up and realizing after more than 23 yrs my pension would be cut more than half.

    When my friend asked how they could just make changes to the FRS with no recourse, the PBA exec said because FRS is non-contributory. That being the case the legislators can make changes without accountability. If FRS was contributory the legislators could not make changes without it being heard.

    Can anyone verify if this is accurate? If so, we need to contribute to stop these legislators from pushing through any bills they like.

  • Cassandra

    Will the contribution to retirement effect everyone starting July 1, 2010 and 2011, or is it new employees only. Are employees in the drop before July 1 exempt? Information not stated clearly. Thamks

  • http://www.floridaretirementsystem.info Mark Davy

    At this point, the contributions are still employer only.  I suspect that will change at the next legislative session!
     Mark A. Davy

    SouthBay Investment Group, llc
    665 S. Orange Avenue, Suite 4
    Sarasota, Florida  34236

    941-951-1977
    941-952-1937 (fax)

    ________________________________

  • Mahogang

    No one should be suprise all these greedy baster want is to gain more money in their pay check they dont care anything about us nor our family. All they want is more money for themselves look at the banks how they made all that money and would not help people who was lossing their all they had to do was lower the payment for the home owner but didn't. They are so greedy it makes you sick for thirty years i've been working on my job now who want to get in drop at 3% not me.

  • Fannie E. Arnold

    How dare you think of doing something at this critical time as we Americans are under such financial pressure. Families are suffering more than ever before losing their jobs and college kids being affected. Let's keep the 6.5% right where it is………Imagine working 30 years and that's the thanks we get!

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  • VELSORD

    GOOD QUESTION !