And they’re off …. HB 525 introduced to cut FRS benefits

And they’re off…

The Florida House of Representatives session does not begin until January, but already Representative Ritch Workman has introduced a bill that will cut benefits to Florida Retirement System members.  While it is too early to give it much attention, it is obviously a harbinger of things to come.  Workman, if you remember introduced a bill last year that was intended to radically cut benefits, has introduced HB 525 months before the session even begins.

Some of the changes include:

The proposal would change the default plan in the Florida Retirement System from the Pension Plan to the Investment Plan.  Currently when a member enrolls in FRS they are automatically in the Pension Plan.  Workman would like to change that to the Investment Plan.  It appears that he would like to limit the ability to enroll in the Pension Plan to the first 12 months of service.  If you don’t (or are unaware of your options) move to the Pension Plan in those first 12 months, you lose your right to ever go into the Pension, and are then limited to participation in the Investment Plan from then on.  We would construe this as an introduction to the elimination of the Pension Plan for new employees in the near future.  (Lines 220 to 243, and 426 to 429).

It would also increase the vesting age to 10 years. (Lines 85-87)

The minimal age for retirement for Special Risk members would be 25 years of service and age 48.  Currently there is no minimum age if you attain 25 years of service.  (Lines 62 – 64)

The other potential change, and we find the language to be confusing, is for those opting to take early retirement.  The penalty appears to be the same (5/12 of a percent for each month, or 5% per year, prior to the normal retirement age, but seems to eliminate the 30 years of service option, and the language may also indicate the payment is the average of the monthly income, and not the typical Average Final Compensation which is the highest 5 year basis.  (Lines 135 to 147)

We would reiterate it is too early to lose sleep over this proposal, but Representative Workman was a sponsor of major FRS reform (2011 HB 1405).  It is not too early to call, write, and email him and your Representatives and Senators and let them know further cuts are unacceptable.  2012 is an election year – use it to your advantage.  Get the word out and DO NOT RE-ELECT those that cut your benefits.

 

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  • Russell1872

    Government workers should be treated as non government workers, when it deals with retirement, capacity of work etc…
    there are way too many state employees that have a free ride and us tax payers are forking the bill.
    Government workers should have the exact same pension as a comparable income non government worker has. There are way to many bogus government positions  that are causing great expenses and those workers are milking our hard earned money.
    The reason that these government workers are up in arms with any cuts, is because it rattles there tax payer guaranteed cush cush  job. They know that the only place were you can be sub-capable and still have a free ride, is working for the State.
    These workers that are complaining are just full of fear and incapable of getting ahead in the free world. Its time we stand up and say… enough, get a real job, go and work hard, have some guts and quit asking for handouts!!!

  • http://www.floridaretirementsystem.info FRS Options

    Wow, Russell you sound like a man scorned. I’m guessing you applied for a government position, and didn’t get the job. Someone more qualified got it instead, and now you are whining about it. We’re also guessing that if you send us a copy of your tax returns, and property taxes – you aren’t sending much of your “hard earned money” to Washington or Tallahassee. There is a lot of anger there, and it most likely isn’t the tax burden you carry.

    In the meantime, consider that the benefits were promised to them, and a condition of accepting that job. And when your house catches on fire, or you are in need of law enforcement, remember your comments when they are there to risk their lives for a very ungrateful person.

  • Kim Titus

    I am a college teacher.  Prior to this year ALL of my compensation counted for the high five.  My Summer work, overload, supplemental.  That’s why I worked all Summer.  Beginning this year, the overtime is limited.  It made a HUGE difference because this year I will make $130,000 and it would have bumped out a year that I made $90,000.  Now, this year less than $90,000 will be counted so I’m stuck with the $90,000 as part of my high five.  I know that sounds like a lot and I shouldn’t be crying BUT it did cut what I will get.

  • Math4U

    Stressed,
    I have done the same.  I gave up my private practice to go into higher education based on the benefits…..mostly the pension plan.  That was one of the recruiting tools the college used to get me to accept the position.

  • Math4U

    But if you are in the process of getting your high five years and you use a lot of overtime to get it, then it IS NOT COUNTED.

  • Math4U

    It’s not the high five that has been changed.  It is the way they calculate the high five if you make a lot of overtime.  I’m a CPA and I figured it out to the penny.  They only count a certain number of overtime hours (or overload pay) when calculating your high five (beginning last July 1.)  This year I will make $130,000 and only $88,000 will be counted toward my high five.  They do not count overload pay (pay for extra classes.)  I also do not pay the 3% in on this extra pay.  You are only allowed a certain number of overtime hours that count toward your yearly gross (which becomes part of your high five if it is one of the five highest earning years.)

  • http://www.floridaretirementsystem.info FRS Options

    Are you sure that the overtime rules changed, and if so, could you steer us to the language. We believe the overtime rules remained the same. Non-recurring bonus pay is not included, and up to 500 sick days. We would appreciate if you could direct us to the language for overtime pay.

  • Nearing the end

    Can a person go into drop for only a few months?  I reach 30 years on June first of this year, and I teach in a college.  The summer term runs from 5/14 – 7/19/.   My “contract” with the college is through July.  Would it be unreasonable to ask folks to handle the drop program to have me in drop for only 2 monts?  This way I could retire before any new legislative actions are in place – but still teach for the summer.    What are your thoughts on this?  (The small cash pay out, even with taxes witheld would be about $3,500 – and would help with insurance costs- at least for the first year.  I understand that “keeping” my insurance is going to run me about $500 a month).

  • http://www.floridaretirementsystem.info FRS Options

    There is nothing to stop you from being in the DROP for only two months. At this point there is no serious legislation that would make negative changes, so you might simply wait until June to make that decision. Since any changes would likely not go into effect until July 1, you can decide once you have attained your 30 years and are elibible for the DROP. You might do the math to see if a lump sum would be more valuable than the monthly increase in pension those 2 months would have, or even consider a lump sum. My guess is, your best option would be to simply bolster your AFC and pension, and not worry about the DROP. You have the luxury of seeing what happens before you are eligible to make any changes, so we’ll see what happens.

  • Normknapp

    @ Russell1872:
    You sir must be playing lip service to the naysayers in Tallahassee. I find it aberrant every time some private sector owner/ employee complains about my ‘CUSH’ job. I work for a Sheriff’s Department here in central Florida, and I love to hear about how I do ‘nothing’. People wake the hell up, the fine teachers, police, corrections, EMS and firefighters working tirelessly 24/7 are underpaid.  Florida ranks among the lowest in pay scale of ANY public sector jobs in the country. We accept this low pay with assumption of a good retirement for our years of low pay, and hellish hours. If we continue to allow the ineptitude of our elected officials to damage the reputation of these fine workers I truly fear for the next generation of public sector workers. What we should be doing to marching on the capital and demanding COMPLETE open talks with said officials. Every time we find said officials corrupting the good names of these fellow brothers and sisters of the public sector we should drag them out of their offices and send them to the unemployment lines. Every year the wealth gap between the ‘elected officials’ and the rest of grows, it is no wonder they want us hating each other and not the REAL ENEMY!!!!   
     
    For the love of ever thing you hold dear, let us hold those responsible, RESPONSIBLE!!!
    Was the retirement system broken YES, does it need repairing YES. Does it need to fall to the public sector to make up the entire difference NO. Thru the use of 5% contribution, longer vestment period, and the drop (kept at 1.6%) we in the public sector should have a chance of not ending up destitute.    

  • Cam
  • http://www.floridaretirementsystem.info FRS Options

    The link probably won’t work unless you are a subscriber.

  • http://profile.yahoo.com/QCQX36IXP6LCKE72R6QUWPOHFI FredrickR

    Perhaps the question should be:  Why isn’t the private sector providing pensions, which they did for many years? 

  • http://www.floridaretirementsystem.info FRS Options

    As they say in law school, never ask a question you don’t know the answer to. Private companies don’t offer pensions for the simple reason they are too expensive. One look at GM will demonstrate that. Consumers are not willing to pay up for products so that the labor can have nice pensions.

  • Kimw

     Private companies don’t have pensions anymore because they want to pay their CEOs more. If you look at the pay for workers vs CEOs, you will see that CEO pay has gone up dramatically since 401ks have replaced pensions.  They don’t want you to realize that. That is why the us vs them has been created to divide the middle class.

  • Firemedic523

    I bet he has an awesome retirement package

  • http://www.floridaretirementsystem.info FRS Options

    We have a little trouble with your theory, especially the conspiracy part.