FLORIDA PENSION NEWS STORIES ON POLICE AND FIREFIGHTERS

Prepared by Fred Nesbitt, Director of Public Information This e-mail address is being protected from spam bots, you need JavaScript enabled to view it   April 2012

MUNICIPAL POLICE OFFICER AND FIREFIGHTER PENSION PLANS

Florida League of Cities Legislative Issue Briefs, April 2, 2012

The Florida League of Cities will support legislation that provides comprehensive municipal

firefighter and police officer pension  reform.  Any comprehensive pension reform package

should:

 modify the use of the insurance premium tax revenues by repealing the mandate for cities

to perpetually provide new, "extra" pension benefits for police/fire;

 allow cities the ability to adjust pension benefits;

 provide for accountability by police/fire pension boards of trustees; and

 reform current statutory disability presumptions for firefighters, law enforcement

officers and correctional officers relating to heart disease, hypertension or tuberculosis.

Police, Firefighter Pension Costs Pose Challenge for City

By Alex Tiegen, New Port Richey Patch, April 18, 2012

Add rising costs of police and fire fighter pensions to the list of persistent financial burdens plaguing the New Port Richey city government.  In 2008, the pension fund's assets were valued higher than its liabilities. At the end of fiscal year 2010, the most recent year for which data was available in the audit, liabilities totaled $11.3 million, dwarfing assets by $1.5 million.  The police officers' pension fund isn't any healthier. The fund's liabilities totaled $20 million at the end of 2010, about $4.5 million more than its assets. That continued a trend of costs tallying higher than assets over the years.  Combined, pension costs of fire fighters, police and general city employees on the state retirement system could equal 24.2 percent of all the city's expenses in fiscal year 2017.They cost 12.7 percent in the current year.  According to a memo from Haag, if the city doesn't reach certain financial goals within about 24 months, the auditor is required by state law to notify the state authorities that the city has met at least one of the conditions qualifying for filing of a "Statement of Determination of Financial Emergency."

Seminole gets good news on pension

By BOB McClure, Tampa Bay News Weekly, April 17, 2012

Seminole City Councilors received news that the city's projected payment to the Municipal Firefighters' Pension Trust Fund in Fiscal 2013 wouldn't be as high as previously anticipated.  Due to the fact that fund investments are performing better, a recent review by an actuary has dropped the city's estimated percentage of contribution from 34 percent to 26.43 percent, which is 1.62 percent less than the current budget year.  That figure, combined with an 8 percent contribution from firefighters and a 7.24 percent contribution by the state of Florida, drops the total figure from 49.24 percent to 41.67 percent.  The city's Pension Trust Fund Board has dropped the necessary annual return to keep the fund on schedule from the previous 8 percent to 7.75 percent.

New pension ordinance adopted in Palmetto

By Miriam Valverde, Bradenton Herald, April 4, 2012

 The meaning of salary, as it applies to city employees, was amended this week by the Palmetto city commission for retirement compensation purposes.  A new ordinance modified the salary definition by adding a limit to pension eligible overtime hours to 300 per year and prohibiting claims of accrued sick and vacation time earned after July 1, 2011.  Pension benefits are calculated based on the average salary for the last five years an employee worked for the city.

Town Council gives final reading to pension cuts

By William Kelly, Palm Beach Daily News, April 24, 2012

Palm Beach Council quietly voted 4-0 to approve a final reading of ordinances that will enact deep cuts to all employee retirement benefits, effective May 1.  A decade earlier, pensions consumed only 4 percent of the town's tax revenue. By 2009, they were absorbing 24 percent, or about $9 million a year.

Several reasons were cited for the spiraling costs: Council-approved increases to benefit levels - especially for public safety officers in the post-9/11 era; annual employee raises averaging about 5 percent; and a steep drop in returns on the town's market investments.  The town was able to drive down its costs largely by lowering the multiplier, freezing employee pay for three years and reducing average pay increases going forward.  Overtime and special duty pay will no longer be counted when calculating final average pay. Automatic survivor benefits and cost-of-living increases have been eliminated. Public safety employees, who have been able to draw their pensions upon retirement (after as few as 20 years of employment) will have to wait until age 65 to collect them.  Mark Floyd, an attorney for the firefighters' union, has said the new benefits package is the poorest in the state.  Beginning May 1, the lowered defined benefit will be supplemented with mandatory individual retirement investment accounts, with the town matching employee contributions, dollar for dollar, up to 4 percent. Under IRS rules, public-safety employees can draw on the accounts at age 50, and general employees at 55.

DROP a good deal for city employees, but adds to Jacksonville's pension woes
By Timothy J. Gibbons, Florida Times-Union, April 4, 2012

The way it's set up, the program's lump sum payments will create difficulties for the city later, critics say.  Widely seen as one of the most lucrative perks Jacksonville offers its workers, the program is open only to public safety employees and allows them to decide to retire up to five years before they actually separate from the work force. During those years, the pension payments they would have otherwise received are saved on their behalf.  When they actually stop working, they receive a lump-sum payment that includes the saved pension payments plus guaranteed investment returns.  As a group, the DROP workers will cost the Police and Fire Pension Fund millions of dollars when they get their lump-sum payments, money the city is committed to providing.  The guaranteed 8.4 percent annual return on investment, unusual among large Florida cities, makes the program particularly lucrative in light of the stock market performance in recent years. For the fiscal year that ended in September 2011, the fund earned just over 1 percent from its investments, although that number fluctuates widely depending on the exact time frame used. The difference between what is paid out to the DROP retirees and what the fund actually earns is made up for by the rest of the fund, which draws upon contributions from employees and from tax revenues.  Police officers and firefighters are the only Jacksonville employees with the guaranteed investment return. Corrections officers have a DROP program, but the investment returns they are given are whatever the fund earns, with a minimum of nothing.  The city is more generous than many of its counterparts, however, when it comes to the rate of return. The programs offered in Tampa, Miami and St. Petersburg, for example, peg the rate of return to whatever the fund's assets are actually earning.  Fort Lauderdale does have a guaranteed rate of return: 7.75 percent.

State employees to see more retirement cuts on July 1

By Sascha Cordner, WFSU, April 24, 2012

The retirement plans of about 100,000 Florida employees are about to change, after Governor Rick Scott signed a bill into law that allows employers to reduce the amount they pay into a 401-K type retirement plan. The move could spur employees to start looking at other options.  Within the Florida Retirement System, there are two types of retirement plans: the pension plan and the investment plan.  In the pension plan, employees receive a fixed benefit level. But, in the investment plan, employees could see losses or gains, depending on the fluctuation of the financial market.  All public employees, regardless of their retirement plan, had to start contributing 3-percent of their pay toward their plans.  Governor Rick Scott has signed a bill that would further affect employees in the 401K-type investment plan, which could save the state millions of dollars. The employees in the investment plan are facing an overall reduction of 30-percent in total employer contributions.  Law Enforcement Officers will also see a cut in state contributions from about 18 to 12-percent. And, University and State College employees, who are part of the optional retirement system, will also see a reduction from 7.4 to 5.1-percent.

Pension dispute headed to court

By Wayne Ayers, Tampa Bay News, April 18, 2012

Belleair Bluff's dispute with its fire pension board over pension payouts to former Bluffs firefighters will go before a judge at the state level.  The city had initially asked the state to settle the pension issue after failing to resolve the matter with its fire pension board. When the state Department of Management Services ordered the city to purchase the retirement annuities requested by the firefighters, the city decided to petition for a formal judicial hearing.  The city's fire pension board has claimed current law requires the city pay annuities for firefighters requesting them. The city has resisted, offering pension trusts, which are backed by the city rather than insurance companies. The trusts would cost the city about half as much as annuities.