Frs 3%

I heard that the Supreme Court ruled in favor of the state employees, and that we will be getting our 3% contibutions back. However I can not find any 43 on this topic. Does anyone know the details and when this may occur.

[BODUA]

It is my understanding that FRS or the governor doesn't want to payback the 3% that they collected from FRS members. Instead they want to give you 1 1/2 years credit towards your retirement. Therefore; if you have 23 and 1/2 years under high risk, they are supposed to add the 1 and 1/2 years, this will give a total of 25 years. My wife works for the school board and this is what she understood from an email. This is not for sure.

[Matt Puckett]

It is my understanding that FRS or the governor doesn't want to payback the 3% that they collected from FRS members. Instead they want to give you 1 1/2 years credit towards your retirement. Therefore; if you have 23 and 1/2 years under high risk, they are supposed to add the 1 and 1/2 years, this will give a total of 25 years. My wife works for the school board and this is what she understood from an email. This is not for sure.

Maybe I can help answer these two questions. The Supreme Court has not ruled on the FRS case yet. They typically issue decisions on Thursdays around 11 am. The service credit you are discussing deals with restoring the COLA. It was suspended so if it is overturned you will receive service credit for the time it was suspended. That way when you retire you will receive the full 3% COLA instead of a lesser percentage due to the suspension. I hope that helps.

[BODUA]

To Matt,

I wasn't talking about 3% for the cost of living. I was talking about the 3% that the FRS members are paying into their retirement.

[Matt Puckett]

To Matt,

I wasn't talking about 3% for the cost of living. I was talking about the 3% that the FRS members are paying into their retirement.

I understand. I didn't see the email, but I have heard about it and I think the two issues are being confused. The 3% contribution is a request for reimbursement. As far as your retirement fund is concerned the contributions have continued, you just offset 3% of the employers costs. Basically, there is nothing to credit to the actual fund. However, in terms of the COLA, it has been suspended so reinstating it requires a service credit. I believe the solution to COLA issue is being applied to the repayment of the employee contribution.

Hi Matt,

We heard the same rumor in Broward, that the State wanted to give us a service credit, instead of reimburseing the 3% total they owed the individual if it was overturned. I was kind of thrilled to hear that, thinking i could retire early if that was the case instead of getting a 20k refund, from the last two years.

However, after reading this, your indicating that this is a service credit related to the cola ? I thaught the cola percentage had nothing to do with the 3% high risk service credit we get.

You are the PBA guru Matt, right ? If you could clarify I would appreciate it. Because you are the expert on this matter and we are hearing alot of pba rumors at this time.

thanks

There has been no ruling yet. Also the 3% is not all the state will have to cover, before we started paying 3% the department was paying 21%. So after we starting contributing 3%, the total being placed into our retirement account was only 14%. This is were all the rumors are coming from if the Florida Supreme Court rule in favor of workers then they will have to make up nearley 10% for high risk plus what ever the money would have gained/ interest. That's big MONEY .

[Matt Puckett]

There has been no ruling yet. Also the 3% is not all the state will have to cover, before we started paying 3% the department was paying 21%. So after we starting contributing 3%, the total being placed into our retirement account was only 14%. This is were all the rumors are coming from if the Florida Supreme Court rule in favor of workers then they will have to make up nearley 10% for high risk plus what ever the money would have gained/ interest. That's big MONEY .

Well, yes and no. You're right that the percentage has dropped for the employers. First year, it was a 3% offset covered by the employees. Your retirement account still received the total rate required to fund your pension. In year two, the fund recalculated the costs to provide benefits to all employees under the new changes and that lowered the rate further to the 14%. If both the contribution and the COLA are ruled in favor of the employees the state will have to refund to the employees the 3% contribution and restore funding to cover the suspended COLA. However, the fund may never require rates for special risk back to the level of 21%. There are still changes from 2011 that are not subject to the lawsuit and all the changes apply to new hires (hired after July 1, 2011) no matter the outcome. We will have to see the recalculated costs to operate the system in order to determine what the new rates will be.

That's the point I was trying to make about service credit. In terms of the contributions to the system for normal costs (rates to the cover the pension fund's UAL not included), your pension has not been short funded. You have just contribution 3% of the total rate into the system.

The Legislature estimates the nonrecurring general revenue impact is approximately $1.114 Billion to make the repayments and restore COLA funding. The recurring costs to resume normal operations is $861.2 million ( employers paying 3% employee contribution is $456.4 million, restoring the accrual for the 3% COLA is $404.8 million).

[Matt Puckett]

Hi Matt,

We heard the same rumor in Broward, that the State wanted to give us a service credit, instead of reimburseing the 3% total they owed the individual if it was overturned. I was kind of thrilled to hear that, thinking i could retire early if that was the case instead of getting a 20k refund, from the last two years.

However, after reading this, your indicating that this is a service credit related to the cola ? I thaught the cola percentage had nothing to do with the 3% high risk service credit we get.

You are the PBA guru Matt, right ? If you could clarify I would appreciate it. Because you are the expert on this matter and we are hearing alot of pba rumors at this time.

thanks

Hi Broward S.O., Yes I am the Matt Puckett with the PBA. I appreciate the guru status... that's funny. We have a forum on here called PBA LEO News that you can visit to get more information.

I was just scanning the latest posts the other night and saw the original question. I felt the urge to respond.

[Matt Puckett]

We just posted a video discussion on the FRS lawsuit and local pensions. You can view it on the PBA LEO News forum on Leoaffairs or follow this link http://www.flpba.org/