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.
The biggest change as we see it would indicate the amended version will allow for up to 500 hours of overtime to be used in the computation of the Average Final Compensation
Today the Florida Senate returned a “Strike-All” Amendment to Senate Bill 1130 which is meant to reform the Florida Retirement System. The purpose of the “Strike-All” was to amend the language and stipulations of the original bill, filed by Senator Jeremy Ring. There were also 5 additional amendments proposed changing other aspects of the proposal.
The biggest change, as we read it, would indicate the amended version will allow for up to 500 hours of accumulated leave payments to be used in the computation of the Average Final Compensation. (lines 208-248, and 274-308). And further appears that for service prior to July 1, 2011 overtime is included.
This seems to be a significant compromise to the original proposal, but excludes overtime after July 1. It does not mitigate the fact that overtime is time worked for compensation earned, and therefore, as compensation, should be used for the AFC calculation. Continue reading “Amendments to SB 1130 FRS Reform”
NEVER come across as negative, conflict oriented, or otherwise play into the hands of the politicians, who want pictures of workers with pitchforks massing as the gates.
We received this letter from the following individual, and felt it was such a well rounded and wonderful perspective, that with the author’s permission, we have copied it verbatim. I urge you ALL to read it, absorb it, and take action accordingly! Thank you Paul!
Subject: Concern over Legislative Season
By way of introduction, I am a retired Martin County deputy. Politically I am libertarian…
As I read the various posts on Facebook and elsewhere by public sector employees, I am struck with a fear that the attitude being conveyed by far too many public employees is playing directly into the aims of the political structure and their media supporters. The actions in Wisconsin are especially troubling. The political power structure wants to be able to paint the public employees as merely union followers using a pink brush, recognizing that the American voter, suffering under the current economic situation, can be easily led to consider public employees as the problem.
Rick Scott has released his proposal for reform of the Florida Retirement System. As expected, the changes are far reaching and dramatic.
Newly elected Governor Rick Scott has released his proposal for reform of the Florida Retirement System. As expected, the changes are far reaching and dramatic. The Governor’s Bill on Pension Reform (beginning of page 610) proposal is 213 pages long, so we have attempted to hit the highlights, as the details will unfold ad infinitum over the next several weeks.
“Floridians shouldn’t have to send more of their MONEY to Tallahassee to pay for non-essential government programs or solely fund the retirement programs of government employees.”
This quote from Governor Governor Scott’s speech today in Eustis seems to sum his position on the Florida Retirement System up neatly, by lumping you in with “non-essential government programs”. Along with cutting your benefits, and taxing you to pay for future benefits, Governor Scott kicked off his self-proclaimed “job’s budget” by eliminating almost 9000 jobs in the state!
It might be be premature to make any decisions until the details are known.
As you are no doubt aware, Governor Scott is slipping tidbits about his plan for FRS into the news. Unfortunately, those tidbits are sparse in detail and his full plan is not scheduled to be released until February 7, so it is very difficult to get a grasp of how they will ultimately affect Florida Retirement System workers and retirees. It is obvious the changes, IF ENACTED, will be significant. It might be be premature to make any decisions until the details are known. In the meantime, 1,000,000 strong FRS participants and retirees should be contacting their legislators and directing those representatives as to how they want to be represented in Tallahassee.
House Bill 303 was introduced by Representative Fredrick Costello (click for contact information)of Ormond Beach. It is a far reaching and devastating proposal.
THIS BILL WAS WITHDRAWN AT 4:28 THURSDAY, JANUARY 27, 2011. ONE WEEK AFTER IT WAS PROPOSED!!!!
House Bill 303 was introduced by Representative Fredrick Costello (click name for contact information)of Ormond Beach. It is a far reaching and devastating proposal for Florida Retirement System members, particularly FRS Special Risk members. The bill was filed just today, so we have had very limited time to study it. Please note also, that we are not lawyers, so some of the language is somewhat subject to interpretation, but as we read it, the bill includes the following changes:
Service credit would be reduced from 3% to a maximum of 1.6% for ALL employees for future service after June 30, 2011. Higher credits for previous years will be honored, but all future years for ALL employees will be reduced to 1.6% per year. (HB 303, lines 112-125)
Effective December 31, 2012 the Deferred Retirement Option Program (DROP program) is terminated for ALL members. Those already in the DROP will be paid out and terminated. (HB 303, lines 147-152)
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.
“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.
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:
The data indicates that public employees, both state and local, are NOT overpaid!
This article is a must read. It is a well presented, and thoroughly researched paper comparing the compensation and education of public vs. private employees by the noted think tank, the Economic Policy Institute.
Bennett has announced that he will be introducing a bill this fall that will cut and eliminate benefits to FRS members.
In a recent new article titled “Is Florida Paying Former Employees Too Much”, Senator Mike Bennett was quoted as saying the current Florida Retirement System Pension System is “out of control”. Bennett has announced that he will be introducing a bill this fall that will cut and eliminate benefits to FRS members. We decided to check into the data he used to support his opinion and we could not find credible data to support his conclusion.
The article states “the state paid out $5.6 billion to retired workers; that’s almost 10 percent of the state budget”. According to the Annual Report (page 53) The Florida Retirement System Trust paid out $4.8 billion in total pension benefits (we could not validate the $5.5 billion number from the annual report). The article stipulates this is almost 10% of the state’s total annual budget. Again the math is fuzzy; as the budget was closer to $66 billion, of which 5.5 is only 8.3%, but I guess rounding up makes the story more sensational.
Page 19 of the Annual Report, reflects $4.8 billion payout to retirees (who worked hard for the benefits the state promised them), employer contributions accounted for $3.73 billion, and of that only $679 million are labeled state contributions. The real number – only 1% of the real dollars came from the State budget.
The sales piece presents the information on the basis that you could be making a “costly mistake” and giving up “valuable benefits available to you only in the Investment Plan”. Which benefit can FRS offer that no one else can? Let’s review the claims one by one.
We have received several calls over the last week or so in regard to a new “alert” that appears on the MyFRS.com website, under the “alerts and hot topics” banner. The piece is titled “THINK TWICE BEFORE ROLLING OUT OF THE INVESTMENT PLAN”. Some of the calls were questioning a few of the points made in the “alert”, and several were more interested in why FRS would post such an “alert” in the first place.
Let’s start with the last question first. Why? Why would the Florida Retirement System post such a letter on their Pension website? We can only imagine it is a sales piece produced by the administrators of the Investment Plan for the purpose of “selling” participants on the idea of maintaining their Investment Plan with FRS as opposed to participants rolling their lump sum out of FRS and into a “rollover IRA” with an independent investment firm. It is likely the administrators of the assets are paid based on the total sum of the assets they administer, so keeping more money in FRS is beneficial for them. While it is understandable, it does bring up a few other questions that are interesting.
The sales piece presents the information on the basis that you could be making a “costly mistake” and giving up “valuable benefits available to you only in the FRS Investment Plan”. This point was the impetus of many of our calls. Which benefit can FRS offer that no one else can? Let’s review the claims one by one.