Retirement bills starting to move

As the 2010 Legislative Session begins to hit its full pace, we're starting to see only a few of the 29 filed retirement related bills – plus a few more committee bills – pick up traction. The really bad bill HB 1319 has fallen by the wayside – although we have to be on the lookout for any of its provisions popping up in other bills through the amendment process.

These changes to FRS are prompted by the legislature's burning desire to find more ways to balance the state budget without raising taxes. As you well know, to balance the budget over the past 3 years they have been making huge cuts to state funding for education, public safety and human services … the one thing they haven't touched is – you guessed it – the Florida Retirement System (FRS). So get ready for another promise to be broken by our elected leaders. Here's a quick rundown on one moving through the process:

SB 2022 by Sen. J.D. Alexander (R-Lake Wales) was voted out of the Senate Ways & Means Committee Thursday. FEA opposes this bill. The bill changes the FRS from a non-contributory system to a contributory system by requiring each active member of the FRS to contribute 0.25% of gross salary to fund retirement benefits, effective January 1, 2011.

This bill impacts every active member of the FRS, the Senior Management Service Optional Annuity Program, the State University Optional Retirement Program and the Community College Optional Retirement Program.

Senators voting in opposition to the bill were: Gelber, Hill, Justice, Lawson, Lynn, Sobel, Wilson, and Deutch.

This contribution rate applies to both FRS defined benefit plan participants and investment plan participants. Public testimony in opposition to the bill emphasized the points that the 0.25% contribution rate is merely the camel's nose under the tent, and the employee contribution will, in effect, be a tax free loan to the state.

After Sen. Evelyn Lynn (R-Daytona Beach) asked the bill sponsor "what does this bill do for teachers?" Alexander responded: "It requires them to make a 0.25% of gross pay towards their FRS retirement plan which means that if they make $45,000 per year, their annual contribution would total $112; and if they make $75,000 per year, their annual contribution would total $187.50."

Senator Gaetz (R-Niceville) insisted that this was the only way to raise funds to make FRS actuarially sound. Senator Alexander replied that he wished they didn't have to make these tough decisions — but the Legislature has to balance the budget.