SB7024 is making big changes to FRS members retirement benefits starting July 1st of this year. The...
HB-151 and SB-242 were originally filed back in October of 2023 when legislators began the process of deliberations for whether or not to reinstate the FRS Pension Plan's 3% COLA which was frozen back in 2011. In the 2023 legislative session, there was the intent to bring the COLA back but that bill failed, and many unions stated that they would fight hard to bring the COLA back in the following legislative session, but it appears that won't happen. On March 8th 2024, the house and senate have voted a newly written version of HB151 which does not even mention the COLA. This bill has already been enrolled, and will make its way to the governor's office in a few weeks to be signed into law effective July 1 of 2024, the beginning of the FRS's next fiscal year.
There are many factors surrounding why the COLA may not have made its way into the legislation again for this year, but one of the largest is cost. Reinstating the COLA back to 3% would have a cost of over $2.4 billion to the FRS pension fund which has continued to slip in actuarial valuations for years. The Pension plan is currently standing at 81.6% in funded liabilities. The shortage of 18.4% is equal to $42 billion in unfunded liabilities.
Instead of reinstating the COLA, HB151 will be increasing employer contributions to the pension fund again like last year, and others before it, in an effort to control the increasing liabilities to the FRS pension fund.
If you have questions about how this new version of HB151 affects you and your retirement plans, you can use the link below to schedule a call with one of our representatives who will be happy to answer your questions.
Sources:
https://frs.fl.gov/forms/2023_Valuation.pdf
https://www.flsenate.gov/Session/Bill/2024/151
