Changes to the Florida Retirement System on Horizon
Legislators are currently eyeing changes to the Florida Retirement System (FRS) which will affect community college employees and other state workers. The Association of Florida Colleges (AFC) recently held a conference call with members of the Florida College System to discuss the current issues and update members on possible outcomes for this legislative session.
Currently, Florida is looking at a budget deficit of $3.6 billion, with a possible increase to $4 billion this year. An emphasis is being placed on areas the state can save money for this session. Multiple bills will be filed concerning FRS issues, and the subject should be resolved fairly early in the Florida Legislature’s session because it affects budget planning. AFC has employed lobbyists to focus on this topic on behalf of community and state college employees.
Glenn Little, vice president, Administrative Services discussed this topic at a recent SFCC AFC meeting. “The Florida Retirement System is actuarially sound regardless of any comments that you have read or heard in the news,” he said. “Ninety-seven percent of all money that is owed to retirees and will be owed to those that are vested in FRS are on hand and locked down. We have one of the strongest the retirement systems in the nation.” Currently, 655,000 employees are in the Florida Retirement System, of which 19,000 employees from the Florida College System.
One proposed solution for FRS is to move from a defined benefit plan to a defined contribution plan. A defined benefit plan is one in which a vested employee gets a certain amount for retirement regardless of how the stock market is performing. In defined contribution plans, the employee either funds the entire plan or matches the employer’s contributions and future benefits fluctuate on the basis of investment earnings. The state could possibly require employees to contribute to a defined contribution plan, resulting in a pay reduction. By doing this, the state could free up $1.5 billion to help balance the budget deficit.
What should SFCC employees do? “The action plan according to AFC is to not panic and make sure our local legislators are aware of the issues and why FRS is important to SFCC, said Little. “Keep in mind that no college resources can be used in this legislative effort. Only resources on a personal level can be used. Also, don’t represent that you are employed with the college at all.”
Updated information on this topic can be found on the AFC website at www.myafchome.org.