Cypen & Cypen
Stephen H. Cypen, Esq., Editor
Earlier today, Florida Governor Rick Scott presented his Recommendations on Pension Reform to the Florida House of Representatives Government Operations Subcommittee. The proposed bill is 213 pages long. A quick review of the 8-page title indicates that the changes relate only to the Florida Retirement System. (There are some minor conforming changes to Sections 112.0801, 112.363 and 112.65,Florida Statutes.) The Governor’s presentation contains the following summary:
Structural Changes to the Florida Retirement System.
Implement contributory system with employees contributing 5% of gross salary to the Florida Retirement System, effective July 1, 2011.
Implement compulsory enrolment in defined contribution investment plan for all new Florida Retirement System members, effective July 1, 2011.
Changes to Florida Retirement System Pension Plan.
Closes Deferred Retirement Option Program (DROP) to new participation, effective July 1, 2011.
Eliminates cost of living adjustment (COLA) on retirement benefits for all services earned after July 1, 2011.
Reduces minimum disability retirement benefits – special risk minimum in-line-of-duty disability from 65% to 50%; judges retiring as disabled reduced from two-thirds of salary to one-third.
Changes to Florida Retirement System Investment Plan.
Retirement contributions into participant accounts will be 9% for all other members.
Disability retirement plan continues as currently structured (election to move back to pension plan). The state actuary will determine the level of contribution necessary to fund this benefit.
Retiree Health Insurance Subsidy.
No new service may be earned after July 1, 2011. Current retirees are unaffected. Current Florida Retirement System members will no longer earn additional credits after July 1, 2011.
Optional Retirement Plans.
Participants in these plans will become compulsory members of the FRS investment plan (like all other new FRS enrolled).
Here is a link to the bill itself:
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