FRS Change Ahead

Judging from the amount of media coverage the Florida Retirement System and your benefits are receiving, it isn’t a question of whether there will be changes made this legislative session, but a question of what change and how much.

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“Change is inevitable”…

After last weeks run-in with HB 303, we might review the overall challenge to FRS Participants.  Judging from the amount of media coverage the Florida Retirement System is receiving, it is not a question of whether there will be changes made, but a question of what change and how much.  Our newly inaugurated governor, Rick Scott, has made it very clear that he believes FRS is a “ticking time bomb”. Last year’s legislative session included over 35 bills introduced to make changes at FRS, and we can speculate that those proposals might simply be foreplay for this session’s action.  Governor Scott has announced he will make his recommendations known by February 4th.

The Florida League of Cities has waged a full scale war against your Pension.  Representatives and Senators from both parties, from Senate President Mike Haridopolis, a Republican,  to Senator Jeremy Ring,  a Democrat  and chairman of the Senate panel that is considering the changes, are out to change the Florida Retirement System.  Senator Mike Bennett announced his intention to introduce legislation to make sweeping changes months ago (See Is Florida Paying Former Employees too much).   Florida Tax Watch has recommended far-reaching changes of the Florida Retirement System

Why  is this such a major issue all of a sudden?  As of the FRS Annual Report from June 30, 2008, the Pension Trust was slightly “overfunded”.  When Lehman Brothers went bankrupt in September and created a financial panic, the assets in the plan dropped significantly, and the fund became “underfunded” for the first time in 11 years.  As of the most recently published annual report, for the period ending June 30, 2009, the fund was only 87.5% “funded”, with some $96.5 billion.  According to the MyFRS website, as of December 31, 2010, the FRS pension assets were up to almost $124 billion.  That is putting the fund assets back on par with where they were in 2008 when it was fully funded, and is a gain of some $30 billion since the 87,5% funding report .  According to the FRS and SBA Annual reports, the amounts are as follows:

2006    $116 billion         overfunded

2007    $134 billion         overfunded

2008   $124.8 billion      overfunded

2009    $96.5 billion       87.5% funded.

2010     $123.9 billion      ???

Obviously the financial markets  rebound has had a positive impact on the fund.  Lawmakers, particularly those claiming the fund is a ticking time bomb, should disclose what constitutes a fully funded FRS and be able to support the logic behind the number, because it is this number that will drive any change being considered.  If the fund is close to being fully funded why not just let the markets continue to improve the fund without drastic cuts to those who relied on this benefit.

In order to influence decision making, it is essential FRS participants understand the various proposals, as well as the potential outcomes of those changes.  The following is our best effort to outline the history, changes, and what it all might mean to you.

During the early 2000’s, the FRS Trust funds regularly had positive investment returns which exceeded the actuarial targets and the Pension Plan had surplus funding (over funded).  During those years, the legislature kept contribution rates into the plan below the actuarially determined rates deemed necessary.  Unfortunately, the decision to underfund the FRS Trust Fund by the legislature during better economic times has resulted in the need for more taxpayer dollars to be invested into the plan during this period of recession and hard economic times.  In addition to a conscious decision by legislators to underfund the plan, they also expanded the eligibility in the “Special Risk” categories to job descriptions above and beyond the original jobs of Law Enforcement, Firefighters, and Correctional officers,  further adding to the funding requirements  (FRS Pension Summary Plan Description, pp 1-2).

In 2008, when the financial markets bordered on a meltdown, the assets in the FRS Trust funds took an extraordinary hit, losing almost 20% in one year.  That downfall led to the plan being underfunded for the first time in many years.  Now, two years later, much of that shortfall has been regained (See the SBA 2010 Investment Report), but it appears the legislature is using that underfunding as the catalyst to cut benefits to FRS participants.

Governor Scott has indicated in a recent interview that he believes the earnings assumptions the SBA uses are unrealistically high.    FRS uses an expected return on its investments of 7.75%, which is down from 8%.  We can track the returns FRS has achieved as far back as 1975 from the SBA Annual Investment Report.  You will notice that in the 36 years shown, there have been 28 up years (a +14.25% avg.), of which 22 (or 79% of all up years, and 62% of ALL years) have exceeded the 7.75% target return (exceeded by an average of some 6.5%) , and only 8 years have had negative results (avg. -5.79%).    28 up years at 14.25% and only 6 down years at a -5.79% average.   Thats batting  .777, which looks pretty good to me!  Is the newly elected Governor suggesting we change a long term, highly successful investment strategy because of one bad year.

FRS returns have averaged over 9% per year.    That would seem to indicate the SBA is doing a darn good job of managing the assets for the FRS.  It would also indicate that 7.75% is realistic, and contrary to Governor Scott’s opinion.  The SBA reduced the actuarial return target to the current 7.75% last year from 8% to reflect the lackluster performance in the last decade.  While the result of that move should make FRS investment returns achievable, it had the dubious effect of increasing the amount of underfunded liabilities in the short term.

The benefit to further reducing the actuarial target is difficult to understand.  By reducing the actuarial target of expected returns FRS is able to achieve, as the Governor suggests, it would increase the amount of money that must be put into FRS, and the underfunding issue becomes more real.  Funding of the Pension plan comes from employer contributions and investment returns.  If actuarial targets for investment returns are reduced, the only way to keep funding inline would be to cut benefits, or increase contributions.  In this environment, the legislature doesn’t want to increase contributions, so they are looking to benefit cuts.  It is also important to consider that “funding” is a 30 year process.  Perhaps the legislature should consider using longer term results for setting a realistic return rather than be arbitrary about setting a number too low and impacting the fund negatively.  Decreasing the actuarial target will not solve anything.  The chaos of the short term financial panic of 2008 doesn’t seem to be the best benchmark.

A bigger question that comes to mind is just why the legislators feel FRS is a ticking time bomb.  Yes, after the financial crash of 2008, the previously overfunded plan became underfunded, at least for the time being.  Much of that underfunding has been made up over the last 2 years.  According to accepted criteria for a well funded pension plan, FRS is still in great shape, and is heralded as one of the best Pensions in the nation.  Why is the legislature using short term issues to make long term remedies?

With that in mind, let’s take a look at some of the other proposals being tossed around:

Employees contributions of up to 5% of their paychecks into their FRS pensions. Contributing to your own retirement is not in and of itself a bad thing.  Employee contributions may also have the added benefit of making your pension more of a contractual plan, a plan that might not be as easy to change from a unilateral position on the side of the legislators.  Unfortunately an employee contribution is the same as a pay cut.  Since there has been a lack of pay increases over the last several years, and the likelihood that there will be no pay raises in the foreseeable future,  it is a change that will hurt.  Furthermore, the contribution into FRS is by legal statute at 9% (regular 22% special risk).  If the state reduces the amount of the employer contribution by an equal amount, it will provide some relief to the municipalities’ and state budget problems.  It will not, however, despite the comments of some legislators, help any pension funding shortfalls at the state level.  Employee contributions will simply transfer pension costs from the employer to the employee, and the net amount going to the FRS will remain the same.

“Smoothing” the calculation of Average Final Compensation (AFC). Currently, AFC is determined by the highest five years compensation, including overtime and sick pay.  Last year a bill was proposed that would make the AFC calculation the average of all years of compensation instead of the high five years.  Smoothing will reduce the average pension to every participant significantly, literally almost cutting your pension in half.  Obviously this would have a significant impact on taxpayers and FRS participants.   We have been unable to find any plans that use more than five years for AFC calculations, many use only three, so five years would appear to be a fair basis for the calculation.  A change of this magnitude would be a direct conflict with the benefit package that you were promised when you went to work for the government.

Eliminating Overtime and Sick Pay from the AFC calculation. It allows an employee to boost their final compensation by concentrating OT in the last 5 years of employment.  Eliminating the use of overtime and unused sick and overtime pay could have a dramatic impact on your Average Final Compensation.  It might be a better practice if FRS were to “smooth” the overtime over a longer period of years.  That way, credit would be given for overtime, but it would be calculated on a more realistic basis, by using the average overtime worked for every year, and then applied to the last five.  It is confusing to me as to how compensation earned by working overtime should not be used in determining your Average Final Compensation, as it IS compensation.  Again, this is a departure from the promises made upon employment.

Raising the retirement age from 60 to 63 (from 55 to 60 for special risk).  In conjunction with this proposal, the years of service needed to retire could go from 30 years to 33, and 25 years to 30 for special risk. Obviously, this is not something FRS participants want to see happen, especially if you are on the waning part of your career.  I suspect the legislative logic has to do with what has occurred with Social Security.  When Social Security was started, you had to be 65 to collect, and the average life expectancy in the US was about 67.  Now, it is still 65 (or 66), and the average life expectancy in the US is over 78.  What was designed as a two year benefit has swelled to a 13 plus year benefit.  Obviously the math won’t work.  It is a similar situation for FRS.  The average life expectancy is growing, but the number of years worked is not.  If the legislators are going to raise the retirement age, it should be done on a long term, graduated scale, so that those of you who are looking forward to retiring in the near future, don’t have those plans crushed.

Drop the DROP (Deferred Retirement Option Program). This will not be a popular decision, but might be one of the few proposals that actually could make some sense.  DROP was created to keep experienced employees from retiring when they hit their 30 years (25 for special risk).  By offering the DROP, employees were incentivized to put in up to an additional five years.  In the current environment, where downsizing is prevalent, it is an expensive option for FRS to offer.  A sister proposal would be to reduce the interest rate paid on the DROP account.  As you know, this proposal was snuck in at the last minute for last season’s legislative session.  The proposal may have been fair, but the way it was slipped in wasn’t, and for that reason, and due to public (you) outcry, Governor Crist vetoed the bill.  With interest rates substantially lower than they were when the DROP was started, it makes sense to make it better reflect current rates.  For additional info please visit (FRSOptions discussion of a rate DROP).  If you started you employment with the government after 1997, the DROP was an option you were promised, and if they eliminate it, it is just another broken promise by the state.

Indexing the COLA (Cost of Living Adjustment).  This will hurt, but also might make sense.  Since (at least by government measure) inflation hasn’t been averaging 3% for quite some time, it is logical to index COLA to an index reflective of inflation, like the Consumer Price Index (CPI).  The automatic 3% is one of the nicest perq’s in FRS.  A $30,000 per year pension grows to over $50,000 per year after 20 years.  While indexing will (theoretically) allow you to keep up with inflation, it could have a real negative impact on your pension over time.  Indexing COLA will also have a negative impact on how your actuarial Lump Sum Present Value would be calculated, as currently the 3% per year ads considerably to what is actuarially paid out over your life time.

Eliminate Double Dipping.  Once again, it is hard to argue the legitimacy of being able to retire, collect a benefit and then go back to work at the same or similar job and get paid.  While FRS has cut back on re-hire time periods, it may well be tightened up even more.  It might be tough to eliminate double dipping altogether, as many people may well need to work, and legislating away one’s ability to make a living in the best manner possible would be hard.  Eliminating the DROP would go a long way to doing away with this problem, so you might see that proposed this session.

Narrow the definitions of service classes, and the service credit given.  As mentioned earlier, the special risk category has been expanded considerably over the years.  Originally, it was specifically Cops, Fireman, and Corrections officers.  It now comprises a myriad of additional job descriptions.  While it is not my place to make a judgment of who does or doesn’t deserve the credit, it was designed for those who “put their lives in harm’s way” and had a real threat of death.  You might well see it revert back to those definitions.  There has also been proposals that would reduce the special risk credit to 2% from 3%.  Since special risk still only comprises 10 or 12% of FRS participants, the saving here would not be great, and the moral issues it might create would be great.  As a tax payer,  I would prefer special risk positions to be given a priority in order to continue to attract good people.  Senator Mike Fasano has already proposed bill SB 290 that would reduce the credit for judges and elected officers to 2%.  While it will make for good sound bites to say he cut his own pension first, it would be a safe presumption that the average legislator is not counting on his FRS pension to the same extent as you are.

Raise vesting requirement back to 10 years.  There is not much to say about this one.  The original plan called for 10 years vesting (when you have earned a benefit), and it was reduced to 6% about 10 years ago.  It is one of the less painful changes called for, but also will save a smaller amount of money.

And the biggie, Eliminate the Pension (Defined Benefit, or DB) and replace it with a Defined Contribution Plan (DC) similar to a 401-K plan.  This would be huge.  It might not immediately save municipalities on the cost aspect up front, but it would totally eliminate any “under-funded” issues forever.  Actuarial calculations would go away.  Your retirement would be based on how much money was contributed over your career, and the investment returns that money earned over the years.  It places all of the risk on you, and takes all of it away from FRS.  In my experience working with FRS participants, it is fair to say that many of you took the job in large part because of the generous pension.  The private sector has already embraced this change.  15 years ago, 78% of corporations offered a pension; that number is down to 21% today.  After seeing the pension issues of large and old companies like GM, it is an easy change for a private company to make.  Pensions in the private sector are a benefit, while most public employees view it more as an entitlement they earn in exchange for lower pay.  Less pay, better benefits has been a public service mantra forever.  Eliminate the benefits, and one can guess the quality of employee will suffer.  Another Con is a defined contribution plan is primarily funded by the employee (read that as a smaller paycheck), with a partial matching contribution from the employer.  Again, this shifts the primary costs and the responsibility for your retirement to you.

In summary, are all of the proposed changes being driven by fact or political pandering.  I believe it is safe to say changes will be made, and your input and views will help shape how the change is legislated.  It is questionable whether there is a need for any changes, but that might not matter.  The legislators have some very tough budget issues to solve, and the Florida Retirement System is the low hanging fruit for their easy picking of money to fund other areas.  Many of our readers question how these changes can be legal, and hint at lawsuits if the state changes their benefits.  Florida statutes 121.011, paragraph 3, part a states

PRESERVATION OF RIGHTS.—(a) the rights of members of the retirement systems established by chapters 122, 238, and 321 shall not be impaired, nor shall their benefits be reduced by virtue of any part of this chapter,

I am not an attorney, so I can’t say for sure what that means, but it looks to me like the benefits were meant to be secure.  A problem I foresee; the statutes are created, deleted, and changed by the Florida Legislature, so I suspect if the language prevents change, they will simply change the language.  ERISA, established by Congress to protect pension plan participants, does not cover the Florida Retirement System.

Nationally, many states have significant problems – Florida is not one of those.  Unfortunately, the media propaganda has worked overtime to paint a picture of public pensions leading to those financial problems.  Public employees, particularly special risk, have been stamped public enemies for their high salaries, and “exorbitant” pension plans.  The “millionaire Cop next door” is on everybody’s lips.  Accuracy has never been the strong point of our media, nor our legislators (see FRSOptions posts “Is Florida paying former employees too much”, and “Fact or Fiction?”), but the reality is, if people hear it enough, they will believe it.  The reality is, had the various state legislatures appropriately legislated and funded their spending, as well as funding pensions as needed, these actions would not be necessary.  Governor Scott plans to run the state like a business (corporate raider??), which could be good for all of us as citizens and taxpayers.  It may not be easy, as he will not have the autonomy he enjoyed as a corporate CEO.  It most likely will not be good for FRS participants.

Last year you demonstrated, if you join together and bury the legislators with calls, letters, and emails, you will make a difference.  You are 650,000 plus strong, and can be heard.  Educate yourself, and don’t fall victim to rhetoric.  Let your legislators know what you know and that you know, and TELL them how you want them to act to best represent you, after all, that is their job.

  • Question if the fund is really “underfunded”
  • Reducing the employer contribution and shifting it to the employee does nothing to make the fund more fiscally strong.
  • Changing benefits for those already in the system is wrong, unfair and unnecessary.
  • Whether you are willing to accept reasonable changes to such things as guaranteed rates of return when the market doesn’t support those conditions.
  • And most important of all, you want your legislator to address real problems not ones made up to support a political agenda.  There is plenty of pork in the budget that could/should be eliminated before you start cutting earned pensions!

The information and opinions in this post are presumed to be accurate.  FRSOptions is not affiliated with the Florida Retirement System, and our opinions are not endorsed nor supported by FRS.    FRSOptions does not provide tax , legal, nor investment advice.  Please check with a financial advisor in regard to your personal situation before taking action based on information contained herein.

  • Shirley Aguiarxxxxx

    My only comment is that I took my job at about one-half of the amount I would have been paid because of the benefits. Now I’m not getting any cola from the federal government and I can possibly lose my pension. I will have to go on Welfare pretty soon.

  • Philo Beddoe

    The Legislative Session begins March 8th but the bills are being written AS WE SPEAK. Don’t wait to send your email and/or letter and/or phone call.

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

    Absolutely!!!!!!!!!!!!!!
    Mark A. Davy

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

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

    ________________________________

  • Robo61

    My wife performed the one time swap to the pension plan and the vesting is 6 years now, if changed to 10 years (along with the other big proposed changes) then there should be an option to swap again. Not just the one time swap.

  • Linda

    I think the legislature and Rick Scott ought to wait one more year before making a move. No drastic moves need to be taken. The employees vested in FHS are voters and we will be watching VERY careful who votes to diminish our benefits. Watch out, Rick Scott and tread very carefully. You may have a windfall of money but the rest of us don’t. Some of us retired knowing the COLA would keep us afloat. Don’t take that away from us.

  • Fred Egli

    I agree with the 10 year vesting. I believe all pensions should be at the same rate. Why should judges, elected officials make a higher rate. I agree with high risk people being vested at 25 years. Those on term limits can get their retiement at age 60. They make a large enough salary that their retirement will be above average, and they usually will have a job in the private sector after theyare out of office.

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

    Hi Fred. I suppose the theory is the same as all pensions. In order to attempt
    to attract a better quality of worker, in this case judges and elected
    officials, the better pension is a lure. Based on their education, experience,
    and comparable plans in the private sector, it might be prudent. I have spoken
    to several Judges that signed on as much for the benefits and pension as
    everyone else, so I’m thinking it is as essential to them as all. As to
    legislators, I don’t know. Elected officials like Sheriff, Clerks of Court, and
    such are similar. Part of the appeal of giving up private sector jobs was the
    benefits and stability of public service. I suggest that cuts at any level for
    any position will have an impact on the quality of applicants for the job,
    regardless of what it is.
    Mark A. Davy

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

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

    ________________________________

  • FLACRACKER6

    The higher up goverment do not care about the real people who work hard for their pensions. I am truly sorry you may have to go on welfare because you could lose your home and everything you worked so hard for this may sound mean but the UNITED STATES does not need to jump every time storms, floods,etc hit another country we have children here that need for and shelter the goverment needs to start taking care of the U.S. families first I pray Obama is out in 2012.
    GOD BLESS THE UNITED STATES

  • Jackieblue

    I am extremely worried. I have 18 months before my retirement of 30 years. I cannot afford to retire then so hopeing to god that there is still a drop-program as I can’t afford the health insurance for the next 3 years after I retire at 62 y.o.a. I don’t know what to do. If there is something I could do I would, just not sure where to start. I haven’t had a raise for nearly 6 years, no cost-of-living, overtime none existent, no meri or bonus, absolutely nothing……..

  • Julie

    You hit the nail on the head when you talk about broken promises! I moved over three thousand miles away from my family and friends to work here based mainly on the retirement I was promised and now I am being told “sorry, it isn’t for sure.” the people who have already started with there career here should not have to worry about what will happen to their retirement. They should get what was offered to them when they walked in the door! To not keep the retirement the way that it is doesn’t just hurt the FRS receiptents…people need to consider when you lower the benefits, the caliber of people that you will get to fill positions like firefighters, police officers, and other vital personel that you may depend on to save your life one day, will go down.
    Given yesterdays incidents, it obvious that the people who work in these positions risk their lives everyday and to offer them a comfortable retirement is a small price to pay for keeping you safe. We have some great people who work for this state and we need to keep them here.

  • Abledanger1

    I have a question, just what does Tallahassee think I will do with my pension benefits, pile the money in a corner in a spare bathroom ooorrr..ah…. make house payments buy cars, food, gas etc and ohhhhh yeah pay taxes! They don’t seem to have any problem giving benefits to people who want to sit around and do nothing for two years but are panting to screw firefighters and cops who have offered them protection for 30 years. By the way I’m a 29 year veteran Deputy Sheriff who for years listened to my private sector friends sneer at my little government job and brag about how much money they were making. Now that this isn’t happening any more they cant wait to break the promises they made to me over the years. The media has so distorted this issue no one knows the truth anymore. A little disingenuous if you ask me. Also you can tell me all you want that DROP was created to keep veterans on the job longer but the truth is there was a much more self serving reason. By getting these folks to go into DROP at 25 it reduced the AFC for most people by getting benefits frozen before what would undoubtedly be their highest five years. This would save FRS money in the long run. I don’t trust anyone anymore; the average illegal immigrant gets more consideration in this state then these public servants. Have you seen the number of cops killed last year, the highest in decades? The streets are getting meaner out there; the next time you need a cop I guess you better call a dentist from Ormond Beach. The society that makes war on its cops had better make friends with it’s criminals. I find as I get older that EVERYTHING I’ve been told over the years is LIES! If I had known this was coming I would have taken the lump sum at 25 and moved to Costa Rica! This is NOT the country I once knew!

  • DD512

    I wish that someone will piont out to the Legislature and Governor that DROP saves the employer a bundle for each individual. The State, County or municipality pays anywhere from roughly 13% to 27% (high risk) of salary to the FRS for each employee. When one goes into DROP they effectively retire in place and those additional costs are no longer required. The argument might be that if an employee were to outright retire a replacement would be hired for less salary, but if there was no drop most people would work the additional years in order to build up their percentage. Also, everyone seems to focus on members of “Special Risk” but even more costly are Judges and certain elected officials whose annual multiplier is 3.3% meaning that with 30 years of service they get 99% of their average final compensation! Any discussion of solutions should include all of the issues not just the ones that are convient for State leaders to make their point.

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

    Which A__ho__?  Seems to be a plethora of them.
     Mark A. Davy

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

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

    ________________________________

  • Insulted Retiree

    Retired after 33 years…and unfortunately, State of FL does not include health benefits..after paying this, my retirement check is $473/Month. My mother retired from AL and her health ins. for life was provided without charge to her, so her $650Mo in retirement reached $823/Mo before she passed away…but it was consistent and she had peace of mind about health coverage…and more to take home to depend on than I do retiring 25 years later than she did. Who gets a fat retirement?? Political figures?

  • 30 and out

    First off I really appreciate this even, factual and detailed analysis of the issue. Thank you! I would echo the suggestion that we all pay close attention to our legislature and governor. In my opinion Scott has a revenge fantasy going that has so distorted his thinking that he will say and do anything to further weaken state government. Our legislature is recognized nationally as one of the worst in the country, partisan, ignorant, (see the bill to allow guns on college campuses), and beholden to lobbyists. This will be a long and rough battle. “They” often win these disputes by simply outlasting the opposition. Floridians and many Americans are terrified by the near collapse of our economy. While very few, if any of us bear responsibility for that, as the analysis noted, we, retired government workers, are an easy scapegoat. We will be demonized. I would suggest doing your homework–determine who your representative is, and make an appointment to meet with them. Bring your facts, make it clear how violating the trust agreement with state employees will impact you and your family. MAKE IT CLEAR THAT YOU ARE A REGISTERED VOTER! (If you’re not, please become one immediately). Do not exaggerate, or threaten, and please do not blame people who rely on welfare to live, or immigrants–this will expose you as a hater, instead of the informed voter you need to convince them you are. Thank them for their time and let them know you will be following this issue carefully–and then do so!

  • 30 and out

    First off I really appreciate this even, factual and detailed analysis of the issue. Thank you! I would echo the suggestion that we all pay close attention to our legislature and governor. In my opinion Scott has a revenge fantasy going that has so distorted his thinking that he will say and do anything to further weaken state government. Our legislature is recognized nationally as one of the worst in the country, partisan, ignorant, (see the bill to allow guns on college campuses), and beholden to lobbyists. This will be a long and rough battle. “They” often win these disputes by simply outlasting the opposition. Floridians and many Americans are terrified by the near collapse of our economy. While very few, if any of us bear responsibility for that, as the analysis noted, we, retired government workers, are an easy scapegoat. We will be demonized. I would suggest doing your homework–determine who your representative is, and make an appointment to meet with them. Bring your facts, make it clear how violating the trust agreement with state employees will impact you and your family. MAKE IT CLEAR THAT YOU ARE A REGISTERED VOTER! (If you’re not, please become one immediately). Do not exaggerate, or threaten, and please do not blame people who rely on welfare to live, or immigrants–this will expose you as a hater, instead of the informed voter you need to convince them you are. Thank them for their time and let them know you will be following this issue carefully–and then do so!

  • City Cop

    How will these changes affect city pensions where we already pay about 8% into our pension, we are not in the State pension fund ?

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

    Changes to FRS will only affect those who participate in FRS. Any changes to your plan would be done in seperate action.

  • Florence7077

    i will be 62 come July of this year. I was going to go into the drop but doesn’t look like it now. I will not be able to retire not even in 5 years now. I left the State and came back only to work on my retirement. I had 16 years when I left. On the outside I was making over $50,000.00 a year. I was with an engineering firm and the job I was on finished. I was on unemployment for 2 maybe 3 months when the job at the State came along. No one on the outside would hire me because I made to much before and they didn’t have to say it but my age (56). I had to take a low level job and trying to work my way back to the top won’t happen. They don’t (and they can say what they want) someone of my age. Maybe if some people (Sink) hadn’t taken some of the retirement money and made a bad investment they would be singing a different tune. The sad thing about all of this is that they make the mistakes and once again we the little man/women have to pay for their mistakes. They forget that we may a State worker but we also are VOTERS and WE CAN VOTE them out. They may get what they want be we will too. We will be heard.

  • seethruthebs

    First medicaid and medicrae! Now, Rick Scott is after the FRS. This who Floridians wanted as their governor, and you can bet he doesn’t give a damn about anyone but Rick Scott and the tea party. As a retired probation officer who spent 23 years dealing with the worse of the worst, my pension was earned and well deserved. The same people who made bad investments with the retirement trust fund are the one who Scott must depend on to go through with this over advertised slight of hand. Those rich retirees who relocated to Florida for a cheaper lifestyle don’t have to be concerned with this travesty. However, they will willingly support this injustice being put upon those of us who are Florida State retirees. I wonder what the state legislature is going to give up in their retirement agreement to help offset the losses of 2008? They caused it! Even though the fund is presently sound and gaining, they are distroting the facts expecting retirees to humbly accept their miscrfeant behavbior. People should take to the streets in protest! Tunisia/Egypt…

  • Alanpeight

    Why are teacher’s always the TARGET of a BUDGET PROBLEM ??

  • jmclean

    With regard to DROP, are there specific proposals under consideration? Fo example, for those already in DROP, would they be allowed to complete their 5 years or would the HB 303/Rep. Costello proposal of payout and eliminate be more popular?

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

    At this time, until the next bill is proposed, every thing is up in the air.

  • Caheath

    Twenty-five years as an EMT and making $14 per hour even with Very Good and Outstanding reviews – now they want to do away with my high risk percentages, recalculate how my retirement is figured and make me work another five years after being exposed to every imagineable disease there is. Let the private citizens who think the FRS should be eliminated go do the job of our police officers, fire fighters and emergency personnel – they won’t. They have enjoyed the perks of private industry for years and now they want to deprive us of what we have worked for and remained in the system for. Where do we sign up for the legal battle to come?

  • Florida-dude

    The FRS was contributory a long time ago but was switched to non-contributory so that it did not need to be in compliance with federal pension law changes known as ERISA. The plan to revert back to contributory is not doable (IMO) because the contributions would be need to be reported under IRS rules, the FRS would need to be made ERISA compliant and participants would have rights to their contributions over and above those “defined benefits” of the plan.

    In the frs-change-ahead news item it says accrued sick leave payouts are included in AFC. Not true. Accrued vacation/leave payouts are included, but not sick…at least that is the way it was for my FRS participating employer (Broward County).

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

    I believe State Pension plans are exempt from ERISA laws regardless of contributions by employers. It is also my understanding if you cash out unused sick pay at retirement, it can be counted toward your last years compensation. I may be wrong, so if someone could verify that, it would be good to know.

  • Florida-dude

    What I was trying to point out is the governors plan to make employees contribute 5% because the contributions would need to be reported to the IRS and listed as a deduction on w-2’s.

    At retirement I received 50% of my accrued sick with a cap of 960 hours and was not counted in my last years compensation.
    Accrued vacation was paid out at 100%, cap of 960 hours and counted in last year compensation.
    It may differ by employer. I know the Broward School district pays 100% of accrued sick with no cap.
    At Broward County you could “sell” up to 80 hours of vacation per year. I did that in the first 4 of my last 5 years to boost my AFC. The state DMS gave training classes on how to maximize your AFC.

  • justmy2cents

    Call me Crazy but you are going to create greater costs. How you ask. Simple, At the end of my service I will be paid at a Higher rate. The 20 year olds looking for a Job can just move on cause the field will not have any openings. If this (and your own word here) goes through I wont be leaving the Job till about 70ish. So when you call upon me, I hope my 70 year old but will be fast enough to help you.

  • Lynbyd

    So the plan is to make long time FRS employees so needy that they cant retire and if they do they will need to draw public assistance like food stamps to survive. WIth the cost of insurance increases and the no raised for several years it sure seems to me like those employees have been paying into their retirements already.
    It must be illegal to change a statute and change the game plan mid stream. I think of it as a contract that those employees have had with the state and now good old Scott wants to screw you

  • Epqcsinc

    epqcsinc@aol.com
    For the life of me ( which I put at Risk everyday as a Probation Officer), dealing with Harden Criminals in the name of reentry. Why is it that Our Live is worth less than those we reenter into society? We have families, and everyday we leave for work and we don’t know that we will return home saftely. But yet , we are treated like “THE RED HEADED STEPCHILD.” we are shamefully underpaid for what we are required to do… and now you want to take away what little we do have. We know the history of Mr. Scott and how he made his money and the plans for the privatization of state government and putting more money in the pocket of his FRIENDS!! If it is your goal to destroy the FRS and rob us of what he have faithfully earned? I hope you can live with your decisions and only plan to be in office one term. Please in the name of GOD, do not make a decicsion that will take away what we have earned and what rightfully belongs to US!!!

  • DT

    Sir, I agree that they should leave fire fighters, police and corrections officers alone, as they really do risk their lives, however as stated, there area bunch of folks drawing special risks and they’re mostly in danger of paper cuts or slamming their finger in the door of a state vehicle that they drive to and from work everyday. Also, the drop is not necessary. Hasn’t been for a while.