the Florida Supreme Court has ruled in favor of Governor Rick Scott in the “Scott vs. Williams” lawsuit filed on behalf of Florida Retirement System members
As we have feared from the outset, the Florida Supreme Court has ruled in favor of Governor Rick Scott in the “Scott vs. Williams” lawsuit filed on behalf of Florida Retirement System members and the three percent contributions taken out of employee paychecks since July 1 of 2010. The FSC ruling reverses the lower court ruling made by Judge Jackie Fulford in early 2012 indicating the employee contributions and changes were unconstitutional. As details are more clear, we will continue to provide information for members. It would appear there will be no repayment of contributions, and the elimination future COLA benefits will remain in effect.
The court ruling can be obtained by clicking on this link: Supreme Court Decision
Oral Arguments for Governor Rick Scott vs. George Williams et al (FRS members) are on the Florida Supreme Court Calendar for Friday, September 7,
Oral Arguments for Case number SC12-50, Governor Rick Scott, Attorney General Pam Biondi and Florida Chief Financial Officer Jeff Atwater vs. George Williams et al. are on the Florida Supreme Court Calendar for Friday, September 7, 2012 at 9:00AM. At stake is the controversial law enacted by the Florida Legislature in the 2011 session requiring employees to contribute three percent of their pay into their retirement plans, and the discontinuation of the annual three percent Cost of Living Adjustment on FRS members pension benefits.
FRSOptions perused the Documents and Filings on the Florida Supreme Court website (something one should only do if they are extremely bored or have insomnia) and, in spite of a great deal of paperwork, documents, and filings, have simplified (we are certainly not experts at legal issues, so this might be an oversimplification) the case as follows;
The Plaintiff believes the law changes are a violation of the Florida Constitution as indicated in the Initial Brief. “Plaintiffs, public employees and members of the FRS, challenge the provisions of the law requiring FRS members to contribute 3% of their gross compensation toward retirement and reducing a cost-of-living adjustment for benefits earned on and after July 1, 2011. The circuit court found that the changes impaired FRS members’ contractual rights, took private property without full compensation, and impaired the right of public employees to collectively bargain.” This opinion is based on the following ruling from 1974.
Continue reading “FRS Case goes to Florida Supreme Court”
The actuaries want to lower the contributions into the Florida Retirement System
FRS Options has received many requests in regard to the posting on the MyFRS.com site concerning SB 5005. We hope this will help. SB 5005 was simply a proposal by the legislature to match the contributions into the Florida Retirement System to the amounts required by the actuaries. SB 5005 was not passed, and was sent to the Conference Committee for final resolution. The results of the committee are not yet known to us.
We have provided a copy of the Legal Analysis done by the Senate. It contains some interesting language, which we have highlighted below.
Continue reading “A few words about SB 5005”
Judge Jackie L. Fulford handed down a ruling today that would reverse the actions of the 2011 Legislature in assessing a mandatory 3% contribution from members of the Florida Retirement System.
Circuit Court Judge Jackie L. Fulford handed down a ruling today that would reverse the actions of the 2011 Legislature in assessing a mandatory 3% contribution from members of the Florida Retirement System. You may read the Official Ruling Here.
The following is an excerpt from the ruling, which is the gist of Judge Fulford’s ruling”
Continue reading “Judge Hands Down Ruling, but “It ain’t over … until it is over!””
Finally, the 2nd Choice Calculator is back on the MyFRS website for Florida Retirement System members
Finally, the 2nd Choice Calculator is back on the MyFRS website for Florida Retirement System members. It has incorporated the legislative changes mandated last session, and once again members can calculate their lump sum amounts.
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).
Continue reading “And they’re off …. HB 525 introduced to cut FRS benefits”
there is no magic to DROP, the bulk of the DROP benefit is simply your own pension being returned to you after the 5 years.
For those of you that were interested in entering the DROP, you might not want to give up so quickly because of the decrease in interest rates. The rate reduction from 6.5% to 1.3% initiated by the Florida Legislature as of July 1 does not necessarily make the Deferred Retirement Option Program obsolete. Certainly, it lowers the earnings, but, the biggest part of the DROP sum is not interest, but simply your pension payments accruing each month in the DROP account. There seems to be some misunderstanding about these numbers. It appears that those of you choosing to enter the DROP on or after July 1 will earn the lower 1.3% interest rate on your pension payments. If you are already in the DROP, and once you begin the DROP, you will NOT have to make the 3% employee contributions!
Your DROP amount will not decrease by 70%, only the interest earned will. As we discussed on our web page FRSOptions.info , there is no magic to DROP, the bulk of the DROP benefit is simply your own pension being returned to you after the 5 years.
When you enter the DROP, you technically retire and begin to receive your pension. Since you are going to continue to work, instead of the pension checks coming to you each month, those checks are deposited in your “DROP account”, and interest is then added to it. The monthly amount going into your DROP is determined by the same calculation as your pension, which is: Years of service, multiplied by service credit (3% for special risk, or 1.6% for regular members. The result is then multiplied by your Average Final Compensation, which is the 5 years of your highest earnings. For example, you have worked 30 years, and average of your highest five years of compensation (your AFC) is $50,000. Your calculation is 30 times 1.6%, times $50,000, or a pension of 48% of $50,000, or $24,000 per year – so you would receive $2,000 per month into your DROP account. Each year, on July 1, you will receive an annual increase by whatever your Cost of Living Adjustment (COLA) is.
Continue reading “The “New” FRS DROP”
The official Conference Committee Agreement has been posted on the Senate Web site.
The Conference Committee members are in line to decide the fate of Pension Reform for the Florida Retirement System
It appears the Conference Committee members are in line to decide the fate of Pension Reform for the Florida Retirement System. As discussed previously, since the House and Senate could not agree on the proposals put forth, the House and Senate have appointed conferees to determine what course the legislature will take as to the reduction or elimination of your retirement benefits. It can be presumed that whatever agreement the Committee comes up with, will be presented to the Governor for his signature.
In the Senate, Senate President Mike Haridopolos named J.D. Alexander, R-Lake Wales, as the chairman of the Senate Conference with Joe Negron, R-Palm City, as vice-chairman. At large conferees will be republicans Andy Gardiner of Orlando (Majority Leader), Don Gaetz of Destin and John Thrasher of Jacksonville. Democratics named arer Nan Rich of Sunrise and Gary Siplin, D-Orlando.
In the House of Representatives, Speaker Dean Cannon tapped Representative Denise Grimsley as the House Leader of the conferees. Representing the house as republicans will be GOP Leader Carlos Lopez-Cantera of Miami, Gary Aubuchon of Cape Coral, Dorothy Hukill of Port Orange, Paige Kreegel of Punta Gorda, Speaker Pro Tempore John Legg of Port Richey, Seth McKeel of Lakeland, William Proctor of St. Augustine, Rob Schenck of Spring Hill, William Snyder of Stuart and Incoming House Speaker Will Weatherford of Wesley Chapel. On the Democratic side will be Democratic Leader Ron Saunders of Key West, Chuck Chestnut of Gainesville, Darryl Rouson of St. Petersburg and Franklin Sands of Weston.
Continue reading “FRS Conference Committee Named”
SB 2100 has passed its 2nd reading and is heading to the third and final reading.
As best as we can decipher the myriad amendments, amendments to the amendments, and replacements to the amendments, SB 2100 has passed its 2nd reading and is heading to the third and final reading. The changes would seem to indicate the following:
- Employee contributions would be a graduated scale; 2% on the first $25,000, 4% for compensation between $25,000 and $50,000, and 6% for compensation over %50,000.
- AFC will include up to 300 hours of overtime, and 500 hours of accumulated leave time.
- The DROP will continue through July 1, 2016. No new enrollees after that date.
- The interest rate for DROP members entering after July 1, 2011 will be reduced to 2%, it will stay at 6.5% for those enrolling before July 1.
- Vesting for the Pension goes to 10 years for those hired after July 1. Only those hired in Special Risk may participate in the Pension Plan after July, all other new hires must participate in the Investment Plan.
- Special Risk members retain the normal retirement date of age 55 or 25 years of service.
- Accrual rates remain the same.
Continue reading “SB 2100 passes 2nd reading with amendments!”