Senator Ring proposes to eliminate the Pension!

Democratic Senator Jeremy Ring has finally introduced Senate Bill 1130 (SB 1128 for local governments) for the reform of the Florida Retirement.   As we expected, contrary to statements made by Senator Ring prior to the Governors Proposal, this is a watered down proposal in comparison, but still makes substantial changes.

  •  The proposal eliminates the Pension Plan for all employees hired after July 1, 2011 (lines 727-731) and mandates participation in the FRS Investment Plan  for those employees.
  • The other most notable change is the proposal does away with the use of any and all overtime pay, unused leave or “any other form of compensation beyond the base hourly or annual salary” (lines 386-393).
  • Employees will make contributions into their FRS Investment Plan (Lines 3975-3986).  The amounts have not been determined, but our grapevine sources indicate that some legislators are looking for contributions in the range of 2 to 3% of member’s gross compensation instead of Scott’s suggested 5%.  We suspect details of this will be forthcoming.
  • The vesting schedule for employee contributions is immediate, and for employer contributions vesting are on a graduated scale as follows (lines 2565-2574):

Less than 3 complete years of service …………0%

Upon completion of 3 years ………………………..40%

Upon completion of 4 years ……………………….50%

And 100% vested after the completion of 5 years of service.

  • Contributions made by the employer will be set (lines 4058-4061) at rates similar to the current contribution guidelines, but would be less the amount contributed by the employee.  Regular members would get a 9%, and Special Risk Members would get a 20% of compensation as the total contribution into their Investment Plan.  Assuming an employee contribution of 3%, the employer would contribute 6% and 17% respectively.


  • The Normal Retirement Age INCREASES from age 62 to 65 for regular members, and from age 55 to age 60 for special risk, for employees HIRED after July 1, 2011  (lines 2062-2088).   It appears the minimum years-of-service requirement becomes 30 years for both Regular Members and Special Risk members hired after that date.


Section 34 and 35 (lines 4299-4309) at the end of the document is similar to Governor Scott’s proposal with verbiage discussing that the changes are made within the parameters of the Florida Statutes and Constitution, and therefore fulfills an “important state interest”.  We can only guess that this language gives the legislature the right of “eminent domain” over your previously promised benefits, and therefore can change them as they see fit in the name of “state interest”.

There is language in regard to line of duty death and survivor benefits and discussions of local governments paying down unfunded liabilities that will, hopefully, be clarified in the discussions going forward.

The bill does not reduce Special Risk from 3% to 2%, nor eliminate other classes or reduce them. 

Importantly, it does not appear to effect any changes to the Cost of Living Allowance (COLA)!

This bill is a much diluted proposal in comparison to Governor Scott’s recommendations, and for the most part, only affects new members hired after July 1, 2011. That said, FRS members should not accept this without a fight either.  If the legislature determines your jobs are worth less benefits going forward, it could be an open invitation for further changes down the road.  Doing away with your Pension option is dramatic, as is losing credit for overtime pay!  We urge you to contact not only Senator Ring, but your individual Representatives and Senators today.  It looks like there will be a hard fight once the legislative session begins.

  • Moosejohnnieboy

    I still can’t figure out how the new retirement ages effect those hired as of July 1, 2011 since they’ll all be enrolled in the Ivestment plan anyway. Anybody have any ideas?

  • FRS Options

    As I read it, that is the earliest date you can retire and receive your retirement benefit from FRS. You are entitled to all of it in the Investment Plan, but you can not begin to collect your benefit until you reach that age. Similar to the minimum age you need to collect Social Security. If you retire at age 60, you won’t be able to collect your benefits until age 65.

  • Cattiattude

    I’m not sure about this UNINTENDED CONSEQUENCES, I read where Scott made a statement he doesn’t care if it causes people to quit. People are already retiring, that had intended to stay a little longer so the down trend has started. As of those left the public can kiss service good by unless they also are considering seriously cutting work load, case load, or whatever to the bone as well.

  • FRS Options

    I read that statement too. I can only guess that public employment is viewed by Mr. Scott as a one way street. You should be dedicated, loyal, and hardworking, and in return, the highest ranking officer in the state could care less if you work or not???????

  • FRS Options

    Good luck with that.

  • Florida-dude

    Your highest 5 years are averaged so 6 years of overtime means one does not count.

    Does your employer allow you to “cash out” vacation time…mine allowed up to 80 hours per year, also I could convert sick 2 for 1 up to 80 hours per year.

    Lots of comments about sick time payouts being counted as compensation – my employer did not include sick but did include vacation time.up to 960 hours.

  • Frustrated

    Unfortunately, the general public is very misinformed or as in many cases just plain stupid and gullible. With regards to fire depts.. in order to do our jobs effectively and safely there has to be enough people to do it effectively and safely!! It’s a proven fact that inadequate personnel at fire scenes increases the risks of injury or worse as well as increase the risk of property loss. Thus the need for OT to fill positions. It is also a fact that the cost to replace the OT positions with full time personnel ( to eliminate the OT )to ensure effective and safe performance would DOUBLE the cost to the tax payer, of which we are. It seems that the political elite and their cronies and Wall Street succeeded in screwing the country and now need an escape goat as well as a place to fund their next heist!!!
    BUT The fact still remains my fellow tax payers, If we do not let them know we are pissed and I mean let them know LOUD and CLEAR, then we have no one to blame but ourselves. So Write to them, Email them, Call them!!!!! ACT< ACT<ACT

  • Eakpeo

    This spring when a large percent of Special Risk employee with 23 yrs or more go into the Investment Plan will FRS offer annuities at the end of your retirement so, they can still hold onto your funds to help out the current Pension Plan ?

  • Yvonne

    If you retire after July 1, 2011 will you get any of your unused leave time counted in your final compensation?

  • FRS Options

    If you are special risk, please consider waiting until you have 25 years in BEFORE moving to the investment plan. Each of the last 5 years contributes about 20-25% MORE to your plan. Your lump sum is about half at 20 years as it will be at 25!

  • FRS Options

    It is too early to know. One plan takes it away, the other leaves it alone.

  • Yvonne

    Can you tell me which plan takes it away and which one leaves it alone?

  • FRS Options

    Rings proposal takes away vacation pay, unused leave, or any other form of compensation beyond the base hourly or annual salary” (lines 386-393). The governor can not introduce his recommendations as a bill, so only Ring’s is truly on the table.

  • Yvonne

    Are there going to be any changes to the four options you can select to collect your pension. We plan on taking option number 3 which allows your survivor to collect the same pension (at a reduced rate) as the retiree. Will this still be an option should we decide to retire after July 1, 2011?

  • FRS Options

    Most likely, we have not seen any proposals to change the pension collections options.

  • Yvonne

    I would like to express my thanks for this place to go to ask questions and make comments on these important topics. You have been an enormous help and I really appreciate it!

  • FRS Options

    We’re glad we can help! Thanks for reading and contributing!

  • Ron Patrick

    John Curtis, you can’t count on making a return in the investment plan. Losses are more common. Wall Street being unregulated, another crash will occur and wipe out everyone’s investments again. It is a fool’s game to play the stock market with your retirement. The managers of the pension plan do quite well with their managing the investments in the plan. We should not try to fool ourselves and others by thinking we can manage investments as well as they do. If we could, then we would be making big bucks on Wall Street, now wouldn’t we, John Curtis.

  • FRS Options

    Ron, while I can respect your opinion, there are plenty of people who do really well in “investment plans”. As long was one diversifies and has a little discipline, what the market takes away, the market generally returns. Look at FRS, it is back to where it was before the financial panic, in less than 18 months. One could argue that investing in a good, diversified portfolio of stocks, is really a good way to build wealth over time.

  • Fastpitch

    After researching this on Google, these are the facts. Of the 12 southeast states, Florida will be the the only one that will not have a state defined pension plan after July 1, 2011. The annual service credit for Florida teachers is 1.6 percent, pathetic. The lowest in the southeast. Yes, the other states require state employees to contribute towards their pensions, but their average final compensation is much higher for their teachers. For example, annual service credit for Georgia teaches is 2.0 percent, Alabama 2.0125 percent, and for South Carolina 1.82 percent. Yes, their teachers contribute 5 percent to their pensions, but after 30 years of service their teacher retirements puts ours to shame. Why would a new teacher or a teacher with a few years of experience want to stay or start a teaching career here if SB 1130 becomes law? I wouldn’t. Where’s the incentive to stay? If I’m going to have to contribute two, three, or five percent of my income to my retirement plan, I’m going to go where it will benefit me the most. Florida, get ready for the teacher exodus.

  • Looking for answers

    I thought the spouse got the same rate but the rate was reduced at the time you made your option to go with 3. Did I miss something will my wife recieve the same payout we will be getting as long as I am alive or will they reduce that rate after I die?

  • FRS Options

    It depends which option you choose. The default option is 1, highest benefit, no survivor benefit. Here are the four options:

    Members must select one of the following four benefit options at retirement:
    Option 1 — Member receives a benefit for life with no continuing survivor benefit at death.
    Option 2 — Member receives a reduced benefit for life. If member dies anytime within 10 years after
    retiring, the beneficiary will receive the benefit for the remainder of the 10-year period from
    the member’s retirement date or DROP begin date. No survivor benefits are paid if the
    member dies 10 or more years after his/her effective retirement date.
    Option 3 — Member receives a reduced benefit for life. Upon the member’s death, the joint annuitant, if
    living, will receive the same benefit for the remainder of his or her life. A joint annuitant
    who is under age 25 and is the member’s child or other dependent for whom the member
    has guardianship will receive the member’s option one benefit, but only until age 25, or, if
    disabled, until he or she is no longer disabled.
    Option 4 — Member receives a reduced benefit for life. Upon the death of either the member or the
    joint annuitant, the survivor will receive a lifetime benefit equal to two-thirds of the benefit
    the member was receiving when both were living. A joint annuitant who is under age 25
    and is the member’s child or other dependent for whom the member has guardianship will
    receive the member’s option one benefit, but only until age 25, or, if disabled, until he or
    she is no longer disabled.

  • FRS Options

    As it stands, Rings bill ONLY changes the dates and years for those hired after June 30, there has been no amendment to the bill – he wrote it that way from the start. Everyone in FRS as of June 30 gets grandfathered in with no changes except employee contributions.

  • FLff

    Due to the legal wording, could you answer or explain the following from SB1128:
    – Does Section 1 of the bill regarding ending DB plans include municipal Fire & Police local law plans plans that are part of 175/185?
    – If so, does the municipality have any choice as to keeping their pension plan or not?
    – Could you also explain or summarize Section 5, subsection 4, part (a)?

  • FRS Options

    Section 1 has to do with eliminating the Pension (Defined Benefit) Plan for all new employees hired after July 1. All new employees would be in a Defined Contribution plan. I don’t believe the municipality would have a choice if the proposal were to pass both houses. Section 5.4.(a) has to do with the elimination of overtime and unused leave time in calculating the average final compensation, and any salary reductions like deferred comp. or allowable annuities are still considered compensation going forward.

    There has been a “Strike-all” amendment filed on 1128, so the bill will be thrown to the committee, possibly for radical changes, so don’t get to involved in it until we see the final outcome.

  • FLff

    Thank you!

    Any further explanation on the deferred comp. part? Are they proposing that whatever I’ve saved on my own in deferred comp would be part of my overall compensation, or are they refering to another type of deffered comp?

    What “s a “strike all” amendment?

  • FRS Options

    I believe it means there are NO CHANGES to the status of deferred comp.

    A “strike-all” means the bill is referred back to the committee to be re-worked. They could change nothing, a part, or all of it. In the meantime, it is like the bill never existed. We will have to wait and see how the committee re-works it.

  • Yvonne

    Can you tell us what lines on the bill we can find this?

  • FRS Options

    I’m sorry, lines for which? 1128 or 1130. The lines for 1130 are in the test of the post on this page?

  • Yvonne

    I am specifically asking about SB 1130. In the text starting THE NORMAL RETIREMENT AGE…I do not see any line numbers. I am specifically asking for the line numbers for ‘regular member’.

  • FRS Options

    I apologize for not including the line numbers. I will go back and amend that. The specific lines are 2062-2074. Underlined items are additions, strike-throughs are deletions. You will not line 2067. “Age 62, or for persons enrolled on or after July 1, 2011, age 65”. The above language describes normal retirment date, and the lines following 2067 to on to discuss Special risk members.

  • FRS Options

    The vesting for the Investment Plan is only 1 year, and that is for employer contributions. If there are employee contributions, they are vested immediately. You can roll your benefit to an IRA 90 days after leaving FRS employment. If you choose to leave the money with the FRS Investment Plan after you stop service, you can not get a retirement benefit until you meet the minimum retirement age or years of service.

  • going under

    The other most notable change is the proposal does away with the use of any and all overtime pay, unused leave or “any other form of compensation beyond the base hourly or annual salary” (lines 386-393).

    If teachers salaries pre the “Race to the Top” grant are performance based, will the performance pay fall under the “base” salary. Not likely based upon the language I’m reading.

    BTW, I have yet to hear a single news source characterize the “contributions” as a cut in pay. We have got to get the word out to the public that we haven’t gotten a raise (or even a step increase in my district) in FOUR years. Now, you want to cut my pay 5% to boot.

    This is simply a broken promise and my advise to anyone with less than 8 years in the system is to go find a private sector job. Ask your school secretary for a free lunch form, if you have 3 kids and typically less than 15 years of service, your kids most likely qualify for a free/reduced lunch. How pathetic.

  • FRS Options

    I suspect you will find that performance based bonuses are a part of the base pay. One could argue the contribution, while cutting the amount of your take home check, goes into an account that is yours, and therefor not a cut, but a reallocation of pay.

    That said, it seems hard for anyone to argue that “overtime” is compensation that is earned, so is hard to understand why it would not be used in calculating AFC

  • FRS Options

    First off, the amount that your employer pays into FRS is based on your income, but it is NOT paid into an account on your behalf. It is paid in to a general FRS Pension fund. At retirement you receive a benefit that is based on your last 5, but has nothing to do with the contributions paid in. That is the difference between a “defined benefit plan” and a “defined contribution plan”. In the Investment Plan, which is a defined contribution plan, your retirement benefit is wholly determined by what goes INTO the plan in the form of contributions, and what those monies earn on YOUR investments. That is a long way of saying all of those contributions on your overtime have little or nothing to do with anything, as they go into the general fund and contributions aren’t a factor in your benefit in a Pension. That would change in an Investment Plan, and then you question has a whole different perspective. Then ALL monies in go to YOUR plan, and you get credit for 100% of the contributions that go into YOUR plan.

  • FRS Options

    That is how I read it, but even then it ends after July 1.

  • tchr2

    Is there anymore comment about removing the 3% COLA retirees receive?

  • FRS Options


  • tchr2Cahnanne

    Thanks for providing this service! I’m planning to retire next June under the pension plan… that said, will I be required to enter the investment option July 1 and what will happen to my current pension plan? Will it be frozen at current calculations? And with the language in 1130 it looks like I won’t be eligible to get back my money I put into the investment plan for 12 months. What say you? Thanks!

  • FRS Options

    As things are now, you can stay in the Pension plan, so your contributions would go to fund your pension – NOT the Investment plan unless you choose to move to it.

  • FRS Options

    At this point, the 3% Cola is still in. Scott can not propose a bill, but approve or veto. The session starts next week, so we shall see.