FEA Frontline Report
Interim Committee Edition
January 21, 2011
Costello files Retirement Bill
Last night, HB 303 filed by freshman Rep. Fredrick Costello, R-Deland popped up on our radar. This 57 page bill is being analyzed as this report is being written by FEA staffer Pat Dix. It is very important that you keep in mind as you read her initial findings how this Tallahassee sausage factory works — and that this bill may never leave the file drawer once the 2011 Session gets rolling. If HB 303 does find its way into committee hearings, the end product could be far different than what we see today. Currently, there is no Senate companion filed.
Over two-thirds of the bill deals with fire and police retirement – but there are some sections dealing with the regular class, which includes education employees.
So– take a deep relaxing breath before you read Pat’s initial analysis; when you feel your blood pressure rise, repeat the following: “this may not go anywhere… this may not go anywhere.”
The bill would place:
Limitations on retirement age
• Minimum age of 55 required for public employees to qualify for normal retirement under a public employer’s retirement system (unless the plan calls for a higher minimum age).
Limitations on credit rate
• Beginning 7/01/2011, a public employer’s defined benefit plan may not use a retirement rate multiplier greater than 1.6% for future years of service for both current and new plan participants.
• Current plan participants who have accrued retirement rate multipliers greater than 1.6% per year for past service shall receive such greater multiplier for the respective past service.
• A public employer may offer a defined contribution retirement plan to its defined benefit plan participants, BUT, plan participant contributions to the defined contribution plan must equal or exceed the public employer’s contributions to the defined contribution plan.
Limitations on employer contributions
• A public employer would not be required to make a contribution to a public retirement plan that exceeds 15% of the collective payroll for the plan participants. If an actuarial valuation indicates that the public employer’s contribution to the plan would exceed this 15% limitation,
o The employer must provide the plan participants 30 days within which to agree, by majority vote, that the plan participants will increase their participant contributions to the plan to pay for any costs in excess of the limitation.
o After 30 day period expires, or in the event that plan participants vote not to pay for excess costs, the public employer would decrease benefits in the plan to the extent necessary to bring the public employer’s contribution back within the 15% limitation.
Termination of DROP
• DROP would be eliminated, effective 12/31/2012.
• All current DROP participants who remain in the DROP program, would receive their proper distribution on or before December 31, 2012.
Compensation would be redefined to exclude:
• Overtime payments
• Accumulated annual leave payments
• Payments in addition to an employee’s base rate of pay
• Payments made in lieu of a permanent increase in base pay (i.e., bonuses)
- Next week the legislature will return to Tallahassee for another week of interim committee meetings! Andy Ford is scheduled to be on two panels for discussions of teacher quality and other public education issues. Stay tuned!
Questions? Call FEA Public Policy Advocacy at 850.224.2078
Thanks to Pat Dix for contributions to this report.