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.
No overtime would be allowed in computing your average compensation.
Representative Grady also proposes to change the normal retirement age for Special Risk from 55 to 60, and minimum years of service to retire from 25 to 30. For Civilians the retirement age would go from 62 to 65, and years of service from 30 to 33.
It also proposes to reduce the annual service credit for Special Risk from the current 3%, to a blended rate over various years from between 2% to 3%. It would average somewhere around 2.6% for long time employees and going forward the credit appears to be 2%. A blended rate is proposed for Civilians also.
All employees would contribute 1% of their gross pay to their retirement.
House Bill 1543 sponsored by Representative Juan Zapata representing parts of Miami-Dade
Would reduce the annual credit for service from 3% to 2% (a 33% cut)
Overtime for AFC would be capped at 4% for your AFC computation
Reduces the FRS classes to two, by eliminating “Special Risk Support”, Senior Management, and Elected Officers Class
House Bill 0413 sponsored by Representative John Wood representing parts of Polk County and Representative Stephen Precourt representing parts of Lake, Orange and Osceola
And Senate Bill 660 sponsored by Senator Mike Fasano Representing Parts of citrus, Hernando, Pasco and Pinellas Counties
All new employees after January 1, 2011 would participate in a defined contribution plan where the employee funds the majority of the plan through payroll deduction. The Pension plan would not exist for new employees.
These bills are intended to cut the government cost of funding the State Retirement System. The design of these cuts is to reduce the benefits to the members (YOU) in the retirement system. In order for your voice to be heard you MUST contact your legislative delegation and the sponsors of these bills and ask that they support your position with regards to the benefits offered by the Florida State Retirement System. Your individual representatives and senators may be found by visiting www.myfloridahouse.gov then click on representatives and www.myflsenate.gov then click on senators.
Take these 3 actions to make your voice heard; Call your representative on the phone, Write them an email, and most importantly WRITE A LETTER AND MAIL IT through the US Postal System and express your thoughts. There are over 650,000 FRS participants. If each does all three, that is almost 2 million pieces of input!
You can find the full text of the bills on the Sunshine web site:
Please send us your comments, so we and our readers know where you stand.