FRS Update #10 (4/6/2011)

FRS Update #10 (4/6/2011)

April 6th, 2011 // 1:48 pm @

Greetings All,            

Yesterday the Florida Legislator proposed many different Amendments to SB2100, one of them even included extending DROP for 5 more years.  Now lets not get too excited yet, nothing has been voted on or passed yet.  Below I have listed the proposed Amendments:  

– Closure of DROP program to NEW participants effective 7/1/2016.  If this passes people would have until 7/1/2016 to enter DROP, this is exactly what I proposed they should do, because it give people time to prepare if they know they will not be DROP eligible by 2016.  Remember for regular class participants who are non-instructional you must enter within the first 12 months after you first reach your normal retirement date unless you are eligible to defer by any of the following reasons:                                          

– If you complete 30 years of service before age 57, you may defer DROP and elect to begin participation at any time between completing 30 years and reaching age 57.                                                     

 – For Special Risk members who complete 25 years of Special Risk service before age 52 may defer to age 52.   

– FRS Pension and Investment Plan contribution rate at 3% of gross compensation.  Similar Amendments below with different contribution rates.  

– FRS Pension and Investment Plan contribution rate at 2% of gross compensation for Regular Class and 4% for Elected Officials.  Similar to the one above and the one below.  

– FRS Pension and Investment Plan contribution rate on a step up basis.  From 1% – 4% based on gross compensation.  As you can see all 3 of these Amendments can not pass.  

– Lower the DROP interest rate to 3% for NEW members effective 7/1/11.  This would only matter if they pass the proposed extension of DROP to 7/1/2016.  

– Employee’s can take a lump sum payment from sick leave upon entering DROP, it will be included in AFC.  This could be a good thing.    

My advice is that if you think that these proposed changes could impact your decision on when to retire or when to enter DROP, PLEASE email me ASAP to schedule a time to meet and discuss.  We want to make EDUCATED decisions to make sure you have the best retirement possible. 

 If you know anyone who would benefit from my FRS updates please forward my email to them OR send me their name and email address and I will add them to my email list.

 Thanks, 

  Gary Cucchi

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