Be Forewarned!

The legislature may reduce future benefits to lessen plan liabilities, or may raise employee contributions to increase funding.


2012 is a major election year.  Due to the 2010 Census results, Florida will undergo redistricting for legislative purposes.  As a result, ALL Representatives and Senators will be up for re-election next year.  The legislature is already in preliminary committee meetings, and the regular session will begin in January.  It will be a big year, and we would highly urge all FRS members to anticipate another session of potential cuts to their benefits.  The writing is on the wall, and in very large letters. 

You only need to look at the homepage where you will find a special notice box with the headline “Volatile Financial Markets”, there is a second headline – “Funding of the FRS Pension Planunder which you will see the following;

BE FOREWARNED: The FRS Pension Plan is less than 100 percent funded. The legislature may reduce future benefits to lessen plan liabilities, or may raise employee contributions to increase funding. The legislature may make changes to FRS at any time”.

We at FRS Options can only agree that all members should take this as the “Forewarning” it is meant to be.  The Florida Retirement System is certainly aware of the potential for change, and so should you!  In addition to the warning, FRS goes so far as to seemingly endorse a switch to the FRS Investment Plan. 

The legislature will most certainly revisit making changes to the FRS Pension Plan.  Governor Scott was recently a guest on “Squawk Box where  he made it clear that it is his intention to see to it the FRS Pension Plan is fully funded (despite all evidence that it is extremely well funded and it great financial condition), and to see the pension plan ultimately disappear entirely – to be replaced by a “401-k” type plan. We wonder if the additional statements by FRS in support of the Investment Plan would be indicative of their apprehensions about the future of the Pension Plan, and a fairly blatant plug for the FRS Investment Plan.  In addition to his constant laments about “making the plan sustainable”, and his quest to bring the plan in line with the private sector (which we find to be an interesting bit of rhetoric, since it is NOT the private sector.  We would ask what is the “private sector” equivalent of firefighter or law enforcement officer, or of service jobs designed purely to benefit the taxpaying citizens of the state – and how and to what would one compare their pay or benefits?), we should all prepare.

2012 is an important election year, with both Senators and Representatives up for re-election.  All FRS members should take an active role in their choices of representation, and work diligently to make both the legislators, and the general public, understand why you deserve to keep your benefits.

  • Murgado A

    One can only hope change will come during the elections and that Scott is a one term governor. Pushing an investment plan in light of the economic crisis of the past couple of years is insane. All I hear from my friends soon to retire, who are already in it,  is much money they have lost…

  • FRS Options

    The Governor is in office until 2014. It is interesting timing to push for an investment plan in the midst of the chaos (most of which we feel is government induced).

  • SJB127

    I can’t do this anymore.

  • FRS Options

    Wow, we don’t know how to respond to that.


    The governor can’t do a flippen thing to the FRS without help from the legislators.  VOTE IN YOUR BEST INTEREST!!!!!!  Not because someone is R or D (See:  Jeremy Ring).  Look at their records before doing so.  RESEARCH!

  • SJB127

    No response required. I’ve put in 12 years service in good faith and all our “bosses” want to do is beat us down and take away what we’ve earned honestly.  I’m exhausted. The writing on the wall says there will be nothing left of any retirement plan by the time I’m eligible to retire and I’m far too close to retirement age to start over elsewhere.

  • Robert Worcester

    Well go figure….Last year they voted in that we have to contribute our own money and took away part of my COLA…. They took a little and now they plan to take more. i was active in the last fight we had with them and will be active again. I have 23 years in FRS Special Risk and have absolutely no intention of letting some chair warming bureaucrats strip me of what I have earned.

  • Moose

    I’m beginning to get the impression that once the Governor and the Legislature raises the contribution rate to 5%, discontinues DROP, and closes the Defined Benefit Plan to all new hires, if the fund is still not 100% funded they will begin to take the legal steps neccessary to attempt to actually reduce the benefits we’ve already accrued, even those who are already retired. I have 24 years in Special Risk and I’m due to retire Aug. 1, 2012, a month after this next round of reforms will probably take effect. The Investment Plan and a premature exit is beginning to look like the more “stable” option even in this economy and market. What do you think?

  • FRS Options

    We doubt he will be able to cut benefits already accrued, or to those already retired, but otherwise we suspect he will attempt your other stated concerns.

  • Trevyrox

    I think we all realize that King Rick is not finished with FRS.  And it’s a given that neither he nor the legislature have any interest in “really” listening to we the people who have made our career of public service.  So that leave one option…..we must unite and vote all of these so called representatives of the public out  of office.  It can be done!

  • Ms Art

    With all the hurdles we deal with in the classroom, from children that are being raised by grandparents and parents that are children, themselves, dealing with this whole new generation that doesn’t understand, when we turn out the lights, they need to be quiet. Children not comprehending consequences of their behaviors, acting like school is not a place to learn, but play.  The one thing that has kept me going, has been my annual FRS statement.  I have twenty years in, as an elementary art teacher.  I love art and I do love teaching it, but it has major challenges.  I had a first grade class pile into the art room yesterday afternoon, while I was at the cabinet in the front of the room, getting their artwork out, like a stampede, with the first child falling flat on his face.  Kids are treating eachother with disrespect and don’t stop, even after being taken out into the hall and talked to about it.  My entire afternoon, was one class after another, behaving very much in that same manner.  One teacher blamed “Sponge Bob” on it.  Another, the upcoming full moon.  I was so exhausted by the end of the day, that there was no way I could go out and enjoy myself with my friends.  I teach six classes a day.  All different grade levels.  Each has their own set-up.  I travel to a second school, to teach two classes.  I work my heart out, trying to teach these kids about artists and different cultures.  I write the concepts I’m teaching, and post them.  I repeat the concepts repeatedly, to ensure that I’m actually teaching them, as I’m told to do.  I post their artwork, on my own time, on an international virtual art gallery and have posted over 6,000 pictures just since February of 2009.  Rick Scott should be ashamed of himself for bashing teachers and saying we’re hiding behind the Union, so we can continue to be “bad” teachers.  He’s a rich man, from his own underhanded ways.  He should take a look at the mirror, when deciding to go after the bad guys.  Enough is enough!

  • FRS Options

    We agree. Not only do you deserve it for the job you do, you deserve it because they told you that’s what you were going to get.

  • Biagio

    All I can say is I’m lucky I can enter DROP in March and avoid this nonsense. I was weighing my options on whether to stay in the FRS to add to my percentage but forget it now. I’m not putting myself through another 4 months of legislators rolling out of bed and decided to cut this or that.

    My COLA will be 2.9 as opposed to 3%. I can live with that. I’ll lose about 12% off my DROP because of the interest rate being at 1.3% down from 6.5% but once in the DROP I don’t have to be subject to their garbage and propaganda.

  • 30yearsinJune

    I am trying to decide if I should enter drop  when I hit my 30 years, which is (from what I can tell) June 1st 2012.  Is there any hope at all of the legislative session easing up on education?  Last year they put a restriction on retiree’s working part time for 12 months after retirement.  There was talk of them passing rules that would keep retiree’s from ever working part time for the state.  I guess this is my greatest concern.  Should I go into drop and know I can work as an adjunt instructor after a year, or risk them passing even more restrictive legislation? 

  • FRS Options

    We would suspect, relative to all the area’s they could be less restrictive, double dipping will not be one of them. By definition, a pension is to be collected in retirement, i.e. AFTER you are done working, so we don’t believe they will reverse the direction of anything to do with collecting a pension and a paycheck at the same time. At least not until the state can’t find qualified employees, and once again need to made concessions and inducements to prevent people from retiring.

  • Carol_randy

    Don’t you think they will have to cut some benefits to those already retired? It’s not fair to cut only the employed workers benefits. All should share equally in the cuts. Then the cuts wont be so deep. We where promised these benefits and earned them too. What law states they cannot be changed.

  • FRS Options

    Taking away benefits from those retired is a pretty tough thing to do. The courts have been pretty clear in rulings to that regard. The benefits that have been cut, and those changes proposed ONLY affect FUTURE benefits, and not those that you have already earned. That is why the COLA will still be paid for the years prior to the changes, and not eliminated altogether. Since the employed workers aren’t collecting yet, the Governor and Legislators are free to cut your future benefits.

  • Baffled Retiree

    Wow, so if you can’t have yours then nobody should be able to keep what they completed working for? 

    Everybody knew and/or knows that future benefits could/can be cut at any time. For you to now cry and want to take away from those who completed their service really speaks volumes about your own selfishness. 

    While I disagree with cutting benefits at all, it is completely unfair to attack the benefits of those already retired and now depend on their retirements to survive. 

  • FRS Options

    Easy now, let’s not attack each other. It is somewhat logical to feel that is benefits are to be cut, they should be cut for all and not just some. If current workers face lesser benefits, then why not everyone. The reality is, there is little reason to cut them for any!

  • Biagio

    Wow! I have to agree with you in regards to Carol’s comment. I can’t retire until this March and would never have dreamed of saying, “It’s not fair to cut only the employed workers benefits. All should share equally in the cuts”. That is in my humble opinion an obscene statement! The Gov and state are being sued now for cuts to future benefits for current workers. The lawyers representing the public servants feel confident they will win. Scott, on the other hand, not so confident as he’d like to present. He has no confidence in his “state employed lawyers” to win the case to he obtained outside counsel to take the case over.

    I could only imagine trying to take/cut benefits from those already retired that have earned those benefits.

    FRS Options, I’m sure you can make the distinction between cutting future benefits not earned yet versus cutting benefits for those already earned. Yes, we can agree nobody should have benefits cut that were promised and cuts should be for new hires only. Sorry, but what Carol said was out of pure envy and jealousy.

  • FRS Options

    We certainly see the distinction and agree. Our perspective is simple, rather than conclude someone is being envious, jealous, or any other derogatory judgements, we would prefer to believe that their opinion may not have been entirely thought through, and can see the logic for it. To your point, I agree that benefits should only be cut for new hires. To our thinking, retired or not, promises should not be broken for the convenience of the politicians.

  • Bbernard2000

    Why is there no anger towards the real culprits? Christ , McCollum & most especially Alex Sink. She is the one that lost 9 billion dollars of our retirement money investing where she was told she couldn’t, multiple times mind you.

    I mean, I am bummed about the state of our retirement but what do you suggest the Governor do?

    I personally want them to do what ever necessary to be sure that the program becomes solvent, stable and 100% funded.

    Ms. Art, all of our jobs have challenges, including the governors. All I hear is the selfish me, me , me, whine, whine and whine.

    Someone even commented that you should vote for your own best interest not the R or D. While I somewhat agree, I would argue that at this point we need to vote for the best interest of our children and grandchildren.

  • FRS Options

    While those three are the trustees for the SBA, and FRS, they have little or no control over the actual investments. It is a tough argument to blame Sink in particular, as she had no more control than Crist or McCollum, and Governor Scott’s accusations against her where pretty much pure political rhetoric, and distant from any real facts. He is now a trustee, and has not changed the way the money is managed, or had any input into the Investments – that lies within the SBA and FRS, but we can presume he will accept credit for the rebound. Those that manage the investments have done a marvelous job, and you really need to blame the economic environment for any losses, not the investment managers. They are among the best (if not the best) in the country.

    You ask what the Governor should do? Leave FRS alone. It is extremely well funded and actuarialy sound. There is no reason to touch it. Of all the places to cut costs, that should be among the last places, simply because it is in such great shape – and those benefits were a condition of employment.

    It is not necessary for the fund to be 100% funded today for obligations that will not occur for 30 years, any more than the average American should have enough money in the bank today to make their mortgage payments in 2041.

    While we can’t argue with your concerns for your children or grandchildren, history has demonstrated very clearly that politicians and voters can’t see much past the next election, let alone any farther into the future. A candidate who wants to make the cost or program cuts that look past the next election stands very little chance of getting elected, no matter how good it would be for the future of the country. Social Security is a prime example of that. We would concur that ALL voters should vote for the candidate that shares the same values, fiscal and government beliefs, and would have a hard time justifying a vote simply due to political affiliation. That may be a part of the problem. The candidates must take the party line for funding, and lose their own identity.

  • Carol

    Envy, jealousy !!! I don’t think so. Do you realize in about 10 years there will be about two workers for every one retired person. Do you really think they will give up at lest half their paycheck for your retirement check and health care costs.  Greedy come to mind. 

  • FRS Options

    Actually, there are about 650,000 active members of FRS today, and about 350,000 members retired and receiving benefits, so there are already 2 workers for each recipient. Unlike Social Security, though, that has pretty much always been the case, and as a well funded pension, it isn’t necessarily an issue. Social Security is designed so that those working now, fund those currently recieving, so it is important to its health to have sufficient workers to cover the costs. FRS is a “funded” plan, and is not reliant on current workers for current recipients.

  • Noway

    So do you think the intent of the Governor is to  require the local governments to go back and contribute the full amount to FRS like they did before Jul-1-2011? Or, do you think that he might ask the employees to contribute an additional 2% (5% total)? When will the Governor “officially” makes his desires known? I assume the next step is to see what House bills get introduced in the coming months. The best news I see is making no changes, but the reality is likely to be more bad news. I’m DROP-eligible but not retirement-ready!

  • FRS Options

    That would seem to be his intent, but we believe his “official” agenda is not due out until December. While that may be his desire, it might be a difficult task. The contributions are determined (by law) by the annual actuarial analysis. This year, the total contributions were lowered, which we presume to be a sign of the soundness of the FRS plan. We question whether he has the ability to simply assess an extra 3% contribution to FRS and put that burden on the local gov’ts. If he were to be successful in increasing the employee contribution, we would surmise that the legislature would have to lower the employer contribution. It is arguable whether his desire is legal – but that might not stop him from trying.

  • Biagio

    I was going to reply to you but FRS Options beat me to it. Actually, I couldn’t have explained it any better.

    See, now you don’t have to be so “bummed” about the pension since FRS Options enlightened you.

    Now all you have to do is go back to your friends in Gov Scott’s office and the legislators and rely the facts that you were informed of. Then no one will be “bummed” and all of you can go out for an ice cream cone after.

  • Sstewart

    I wish they would do away with the drop as it stalls promotional opportunities.

  • Math4You

    We all need to stick together and educate one another as we move toward the next election.  Too many in FRS actually voted for Rick Scott.  Many of my colleagues at the college did!  Now, they regret their choice.  Look at the voting records and don’t get fooled by the empty promises of “more jobs, more accountability, etc.” 

  • Math4You

    Alex Sink is not responsible for the market taking a nose dive.  Her investments were relatively conservative AND we have recovered most of the loss.  Our pension is one of the strongest in the country and WE were promised it as part of our benefit package.  It’s a war worth fighting.

  • FRS Options

    Alex Sink wasn’t responsible because she had little or nothing to do with the investments! She was simply one of three trustees, the investments are made by the SBA.

  • Randy

    Too many people out of work and need that job

  • Carol_randy

    With unemployment like it is I find it hard to believe the state can’t find qualified employees

  • Tracker549

    What’s wrong with this picture? In 1969 NASA put Neal Armstrong on the moon, with slide rules, computers the size of a bus that took a team of 20 or more people to operate, calculators the size of small grabage can, countless engineers and scientist and thousands of support personal.  Today a smart phone has more computer power than all the computers of 1969, micro-chips are so small you have to have a microscope to see some of them, high school students know more about space, science and engineering than ever before, my computer talks with your computer thru servers they exchange cookies recognizing the user.  BUT here is rest of the picture.  Why can’t the FRS, all the States programmers, the talking heads with Ernst & Young come up with an algorithm in determining the legislative changes of 2011, so the onlne tools are accessible.  Do you think we might need to go to our sheds and dig out some slide rules and send to the FRS. 

  • FRS Options

    Fascinating isn’t it. A few simple changes, and they’re out for over 6 months!

  • Can545

    What happens if I retire and the money runs out? If and when the checks do not come in, am I then  not retired and allowed to come back into the system with no penalty, at the same pay I left it?

    While this may seem a little preposterous, I can actually imagine such a scenario.

    Any ideas?

  • FRS Options

    If that happens, the state is bankrupt, and there is no system.

  • Normknapp

    “Governor Scott’s accusations against her where pretty much pure political rhetoric, and distant from any real facts.”
    And yet he stays in office! This is the fundamental problem with the system, when the outright lies are proven false they should be expelled from office. When will we start holding these people responsible for the lies.