The 2013 session of the Florida Legislature has ended with no changes to the Florida Retirement System
The 2013 session of the Florida Legislature has ended with no changes to the Florida Retirement System. The proposals were all allowed to die without support. At least for this year, the pension is intact, and there will be no changes to benefits for members. Great News for all!
Closes the Pension Pan to those hired after January 1, 2014.
According to the Calendar for the Florida House of Representatives, the Government Operations subcommittee is scheduled to have a Workshop on Thursday morning, January 24, to discuss potential changes to chapter 121 of the Florida Statutes, which is the statute pertaining to the Florida Retirement System.
The agenda includes potential legislation to close the Pension Plan, and force all new employees into the Investment Plan. While this is not a surprise, it comes prior to the official start of the legislative session . You can read the meeting synopsis at this link: Retirement Changes Agenda, as well as the proposed legislation.
We expect further changes to the Florida Retirement System to be offered up for discussion and action by the legislature. We will try and keep you up to date with the proposals.
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
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!””
ruled the mandantory employee contributions to the Florida Retirement System and the members’ retirement plans to be unconstitutional
Judge Jackie Fulford has ruled the mandantory employee contributions to the Florida Retirement System and the members’ retirement plans to be unconstitutional. In recognizing the legislature made the law in respect to the budget crisis, Judge Fulford said “This court cannot set aside its constitutional obligations because a budget crisis exists in the State of Florida.”
More to come as we investigate what is in store! Stay tuned.
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.
As of July 1, 2011 there will be some changes made…you will receive no further credit for COLA for the five years after July 1, 2011.
As you are aware, one of the better benefits within the Florida Retirement System has been the automatic 3% Cost of Living Adjustment that FRS adds to your Pension checks each year. Over the course of a 24 year retirement, the COLA would almost double your annual pension, which would hopefully allow your standard of living to keep up with rising prices and inflation.
COLA is a simple process. Each year, beginning on July 1, your pension check is increased by 3% more than what it had been for the previous 12 months. That 3% compounds each year, meaning next year’s 3% pension increase will be added to last year’s pension increase, which was added to last year’s pension hike, and so on. To illustrate, let’s assume you Pension check is $2500 at retirement. Next year, it will be $2500, plus 3% ($75), so your pension check will be $2,575. Year three FRS will add 3% to the Second year amount which is $82.50, so the third year checks will be $2,657.50, and so forth. If you retire at 62, by the time you reach age 85 your monthly pension check will be almost $4,900!
As of July 1, 2011 there will be some changes made.
Continue reading “The “New” FRS COLA”
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 changes are substantial, but not nearly as dire as Governor Scott wanted. Employees to contribute 3%, DROP stays at 1.3%
It appears we have a Final Agreement between the House and Senate on changes to the Florida Retirement System. The changes are substantial, but not nearly as dire as Governor Scott wanted. There will be NO changes for those already retired, or those already in the DROP, your benefits remain the same. Many of the more radical changes only affect those hired after July 1, 2011. Changes for new hires only are:
For members after July 1, AFC become the highest 8 fiscal years.
Increases retirement age for all new hires after July 1:
Continue reading “Florida House and Senate Agree on FRS Reform!”