In Tallahassee on Wednesday, Democratic Senator Jeremy Ring released SB 1130, a bill that will make substantial changes to the Florida Retirement System; an issue being followed closely for Historic City News readers.
The proposal eliminates the Pension Plan for all employees hired after July 1, 2011 and mandates participation in the FRS Investment Plan for those employees. The vesting period under Ring’s bill will increase participation requirements from one to five years with a phased in retirement amount.
The switch to a “defined contribution” plan as opposed to a “defined benefit” plan is essential for the long-term viability of the Florida Retirement System according to Governor Scott and county budget personnel reeling over the staggering price tag association with employee pensions.
Another major bone of contention among those who are lobbying heavily to defeat any reform to pension benefits for municipal and state government employees, has been the consideration of overtime pay, unused leave and other forms of compensation beyond the base hourly or annual salary for the purpose of calculating retirement benefits — such consideration is done away with under the Senate Bill.
The proposal requires employees to contribute to their own retirement, but does not establish how much those FRS members will be required to give. Sources close to the Historic City grapevine indicate that some legislators are looking for contributions in the range of 2% to 3% of member’s gross compensation instead of Governor Scott’s suggested 5%.
Under SB 1130, for employees hired after July 1, 2011, the normal retirement age increases from age 62 to 65 for regular members, and from age 55 to age 60 for special risk. It appears the minimum years-of-service requirement becomes 30 years for both Regular Members and Special Risk members hired after that date.