Retirement Bill Digest:

HB 5701 by Rep. Rivera, (R - Miami) is being widely reported as dead. HB 5701 is a bill that would eliminate the Health Insurance Subsidy (HIS) for FRS retirees. Despite the rumors and newspaper reports declaring the health insurance subsidy (HIS) bill dead, FEA remains vigilant in its opposition to HB 5701. Budget conference meetings are scheduled through the weekend. That means that there are ongoing opportunities for Conferees to change their mind while negotiating and horse trading -- and resurrect 5701.

SB 2022 by Senator J.D. Alexander (R-Lake Wales), the FRS Employee Contribution bill, re-establishes an employee contribution – which has not existed since 1974. SB 2022 is still moving through the Budget Conference process. SB 2022 is the bill that requires employees to begin contributing 0.25% of their gross pay (via payroll deduction) for their FRS retirement benefit. FEA is still hearing that this bill will be passed. Therefore, we must continue calling and emailing Legislators and urging them to oppose SB 2022, to oppose any changes to the FRS system, to oppose balancing the budget on the backs of public employees and retirees.

Bill sponsor, Senator Alexander, argues that the employee contribution is needed in order to make FRS retirement benefit funding actuarially sound. While the FRS system experienced a short-term loss in the recent market down turn, we know that the system is invested for the long term and is a financially sound, expertly run retirement system. The Legislature is focusing on the Florida Retirement System (FRS) and all employee benefits to raise revenues to address the state’s budget shortfall. These bills have been filed to slow or eliminate the long-term costs of employee benefit programs to the state.

If passed by the House and signed into law by the Governor, beginning January 1, 2011 public employees participating in the FRS plan AND the optional retirement plan will be required to contribute at the rate of 0.25% of their gross annual compensation. After that, the contribution rates would be set by law in the annual rate bill.