You may have read the paper recently about the Florida legislature’s goal of closing the door on the FRS pension plan to new hires starting in 2014.
House Bill 7011 would prohibit government employees, police and firefighters, and teachers across the state hired after January 4th, 2014, from enrolling in the state of Florida’s pension fund.
The state of Florida currently has a defined benefit pension plan, which is a promised benefit to you, the FRS member, if you so choose to utilize this when you retire. You are automatically enrolled in this plan when you become a member of the Florida Retirement System.
House Speaker Will Weatherford has had it in his crosshairs to eliminate this pension plan and make the plan more like a 401(k)/style investment plan that shifts the financial risk from the state of Florida to you, the individual member. In other words, the cost to fund this plan would be taken away from the taxpayer and be shifted to you. Personally, I don’t see how this is going will help to hire new people to work for the state of Florida. It is the objective of most companies’ to do away with defined benefit pension plans for one reason and one reason only. You guessed it: It is too expensive for the companies including the state of Florida to fund this benefit, therefore, they want to get rid of the benefit. By getting rid of the pension plan, this will force people into the investment plan where the investment risk will be transferred to you and away from the state of Florida. You will be able to select the funds that you wish to invest in and assume the risk.
To check this article out further, please visit this link.
Additionally, you will be able to review what appeared in the Miami Herald on Sunday, March 24th. To see the Miami Herald article, please visit this link.
Should you wish to discuss this article or anything further, please don’t hesitate to give us a call at Silverman Financial at 1-888-223-1922.