FRS re-enrollment in 2017February 2nd, 2017 by Thomas Oates
The Florida Retirement System (FRS) has a major flaw which disincentives reemployment by individuals who were employed by the state prior to July 1, 2010 and have “received a benefit” (i.e. rolledover or withdrew funds) from FRS and then became reemployed by the State. In 2010, the Florida legislature enacted what it referred to as the “double dipping legislation” which prohibited “retirees” from the FRS system, either on the pension side or the investment plan side, from re-enrolling after July 1, 2010. Perhaps the legislature thought this made sense for pensioners who were receiving a benefit and coming back to state employment in an attempt to earn a second retirement, but the statutory definition of retiree is anyone exiting the system or receiving a benefit payment (s. 121.021(60)). Unfortunately, this includes anyone who terminated their participation in the FRS Investment Plan by rolling their money into their own IRA. As defined by Statute, any retiree who thereafter comes back to state employment is prohibited from re-enrollment pursuant to Florida Statute 121.122.
According to a Bill Analysis and Fiscal Impact Statement relating to 2015 Senate Bill 7014 (SB 7014) there are “approximately 5,703 employees who have retired by June 30, 2010, and subsequently return to FRS covered employment, but are not permitted to be renewed members of the FRS.” Approximately 2,918 of that figure are retirees of the pension plan and 2,616 were retirees of the investment plant. These facts are according to the Department of Management Services.
The most recent information available from the Florida Retirement System Pension and other State Administered Systems Comprehensive Annual Financial Report for fiscal year ended June 30, 2016, states that there are 9,568 retires from the FRS who have been reemployed and are not eligible for renewed membership. Remarkably telling is the average length of employment by these individuals which is just 2.34 years. Among this group, almost 56% are less than 59 years of age and the average salary for the group is $33,805. In the six years represented by the two sources cited, the number of reemployed retirees who are not eligible for renewed membership has increased 67%.
Prior to July 1, 2010, there was an exception for elected or appointed officials which was subsequently removed by the 2010 legislation.
Since that time there have been a number of bills introduced to the Florida Legislature to make various attempts at repairing this unjust result. However, for all those state employees including school teachers and other relatively low compensation positions, it appears that the 2017 legislative session will not provide any relief. In previous years, representative Dan Raulerson (Plant City), had offered various bills to help fix this problem. The 2016 bill was HB881/SB7014. In a recent conversation with Representative Raulerson’s office, it appears that the same legislation is not widely supported by other members of the legislature and therefore there are no plans at this time to refile that bill for this 2017 legislative session.
Although extremely disappointing, it is important that those affected by this issue organize their efforts to contact their local legislators and make it known that this issue deeply affects a large population of current and former state employees. Perhaps even more detrimental is the effect that this has on qualified candidates for state employment who refuse reemployment by the state because of this problem or as illustrated below, fail to maintain their employment for any length of time because of their inability to renew their membership in FRS.
If you or someone you know have been affected by the 2010 legislative change prohibiting re-enrollment in the FRS system please contact the author. If you are a media outlet looking for information in support of an article publishing this issue please contact the author.
Together we can make this issue widely known across the state and hopefully change the legislation to eliminate this unjust result.
Florida Statute 121.122; Florida Statute 121.21(60); Florida Statute 121.053
updated: February 9, 2017.