FRS Pension Reform Options and their Possible Savings
The Office of Program Policy Analysis and Government Accountability (oppaga) published a report a year ago, laying out options and their savings for reforming FRS. In light of possible legislative action in this area, it is a good primer on the system, its history, and how it could be changed.
CLICK HERE for the report.
The Florida Retirement System has evolved since its creation, which has increased state and local government costs. The Legislature could consider several options for modifying the system’s retirement class structure to reduce system costs, including consolidating employee retirement classes, restricting class membership, modifying benefits for some classes, and requiring employees to contribute to the retirement system. These options would generally shift FRS back to the model that existed when the system was established in 1970, move the system closer to the model used by most other states, and recognize the longer life expectancy of current employees. By doing so, the options would reduce benefits for affected employees. Therefore, when considering these options, the Legislature should consider the overall system of employee compensation and how changing the Pension Plan and the Investment Plan would affect that system.
A related report on a Defined Contribution Plan option and the enhanced predictability of such a plan is HERE