FRS Update #11 (4/7/11)

FRS Update #11 (4/7/11)

April 12th, 2011 // 12:33 pm @

Greetings all,                

SB2100 has passed it’s second look, one more to go.  Below is a look at what Amendments are still in:  

  • Employee contributions would be a graduated scale; 2% on the first $25,000, 4% for compensation between $25,000 and $50,000, and 6% for compensation over %50,000.
  • AFC will include up to 300 hours of overtime, and 500 hours of accumulated leave time.
  • The DROP will continue through 7/1/2016.  No new enrollees after that date.  What this means is you would have until 7/1/2016 to enter.
  • The interest rate for DROP members entering after July 1, 2011 will be reduced to 2%, it will stay at 6.5% for those enrolling before July 1. This is a big decrease, however for people who are not yet DROP eligible or who were not ready to go in yet, at least they would be able to participate in DROP.  This will cost the average DROP participant about $21,000 (aprox). in interest.
  • Vesting for the Pension goes to 10 years for those hired after 7/1/2011.  Only those hired in Special Risk may participate in the Pension Plan after 7/1/2011, all other new hires must participate in the Investment Plan.
  • Special Risk members retain the normal retirement date of age 55 or 25 years of service.
  • Accrual rates remain the same. 

 If it passes I will list all the changes to the FRS.  Remember don’t get too excited until after the Governor has signed it….  

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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