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Miami

Cypen & Cypen
SPECIAL SUPPLEMENT

for
FEBRUARY 23, 2011

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.
  
            Revises the service accrual rates for service earned after July 1, 2011 – 2.0%for Special Risk Class members and 1.6% for all other classes. 

            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 11.25% for special risk class members.

            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.
  
            The State University Optional Retirement Plan, the Community College Optional Retirement Plan, and the Senior Management Optional Annuity Plan, will be closed as of July 1, 2011. 

 

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: 
 http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?PublicationType=Committees&CommitteeId=2622&Session=2011&DocumentType=Meeting Packets&FileName=GovOps_Mtg_2-23-11_ONLINE.pdf
  
Illegitimi Non Carborundum Est.


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Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


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