THE “PALM BEACH GARDENS LETTER” -- FLORIDA DIVISION OF RETIREMENT TAKES ANOTHER 180° TURN: By letter dated August 14, 2013, the Florida Division of Retirement has given guidance on whether the City of Palm Beach Gardens will jeopardize its receipt of future premium tax distributions if it closes its current Chapter 185 Retirement Plan to new members, and places all new hires into the Florida Retirement System. Current plan members would be given the choice of whether to continue to accrue service credit in the city plan or enroll in FRS.
Previously, the Division has taken the position that if cities with a Chapter 185 local law pension plan closed their plans to new members and joined FRS, they would lose eligibility for future premium tax revenues. However, upon receiving the request for guidance and reviewing provisions of Chapter 185, especially Section 185.38(2), Florida Statutes, the Division’s previous position was not supported by a proper reading of multiple governing statutes. Section 185.38(2), Florida Statutes, provides for transfers from Chapter 185 to FRS for any municipality, chapter plan, local law municipality or local law plan under Chapter 185. Additionally, Section 185.38(2), Florida Statutes, provides that if some participants in a pension plan created pursuant to this chapter elect to transfer to another state retirement system and other participants elect to remain in the existing plan created pursuant to this chapter, the plan created pursuant to this chapter shall continue to receive the state premium tax moneys until fully funded. Accordingly, if any members of the Chapter 185 plan elect to remain in the plan, the plan shall continue to receive premium tax revenue until fully funded. These specific provisions control over any more general provisions of Chapter 185.
Therefore, if Palm Beach Gardens elects to enroll all newly hired police officers in FRS, and some of the current plan members elect to remain in the local pension plan created pursuant to chapter 185, Florida Statutes, the plan created pursuant to this chapter will continue to receive the state insurance premiums tax moneys until it is fully funded, in accordance with the provisions of Sections 185.38(2), Florida Statutes.
A copy of the Division's letter dated August 14, 2013 is athttp://goo.gl/wLeU06. There is no reason to believe the Division would take any different view with reference to the corresponding statute for firefighters, Chapter 175, Florida Statutes.