(The Center Square) — Florida public retirees will get some improvements in their benefits, but larger, structural improvements to the state’s defined benefit pension system were not pursued by lawmakers this session.
The Florida Retirement System’s 629,073 members will receive a cost of living adjustment that they last received in 2011 and first responders will have their retirement age lowered.
Pensions took a backseat this session as the Legislature focused primarily on abortion, affordable housing, the budget, the death penalty, election integrity, lawsuit limits, immigration, firearms, education expansion, and LGBTQ issues, with many pension bills dying in committee.
Senate Bill 7024, a substitute for House Bill 239 sponsored by Rep. Demi Busatta Cabrera, R-Coral Gables, revised the retirement age of eligible retirees who are part of the Florida Retirement System Pension Plan. First responders, including law enforcement officers, firefighters, emergency medical technicians, and correctional officers, will have their respective retirement age lowered from 60 years to 55 years, while full benefits will be received after 25 years of service. The previous requirement was 30 years of service.
The FRS is the fourth largest retirement program in the U.S. and is the primary retirement program for state and county employees, district school boards, and state colleges and universities. The program also serves as a retirement plan for employees of the cities, special districts, and independent hospitals that have elected to join the system.
Eligible retirees under SB 7024 will receive a monthly health insurance subsidy payment that will come into effect on July 1. The bill will also restore the original 3% cost-of-living-adjustment for all state employees, nixed in 2011 after lawmakers were forced to cut spending.
The bill allows state workers to more easily enter the Deferred Retirement Option Program — a program that allows benefits to be deferred while workers continue to work for the state or a local entity that is participating in the program. The bill also increases the maximum amount of time allowed to be in the DROP program from five years to eight years, and interest applied to a DROP benefit will increase from 1.3% to 4%.
According to bill sponsor Cabrera, Florida has a 16% vacancy rate in its workforce, and the changes in the bill will help retain experienced staff for longer periods of time.
Pension policy analyst at Reason Foundation Zachary Christensen told The Center Square in March when the legislation was first introduced in committee that the changes will add additional costs to the FRS.
“The pension reform rollback would add additional costs to the pension promises that the state hasn’t even fully funded to date, and this action could generate significant unexpected costs in the event of another market downturn,” Christensen said.
HB 3, sponsored by state Rep. Bob Rommel, R- Naples, and Rep. Tyler Sirois, R- Merritt Island, passed this legislative session and prohibits state pension funds from being invested into companies that use environmental, social, and governance policies into financial decision making.
This applies to all funds of the state Treasury, all local government retirement plans, investment of local government surplus funds, and funds raised by citizen support or direct-support organizations. Any person or entity responsible for making investment decisions is prohibited from undermining the interests of the beneficiaries to other objectives.
This article First appeared in the center square