This morning we learned that on the question of Social Security, various parties are mobilizing to do… nothing!
The idea is to delay as long as possible the vitally necessary changes to the decades-old retirement scheme.
But at lower levels of government, where the power of the printing press is not in existence, such delay tactics aren’t an option.
Over at TickerForums, there’s a discussion of a new bill in Florida to change the public pension system:
Retirement compensation will be computed based on the average salary over ALL years of service. The average of the “highest five years” rule will be repealed. There is no grandparenting clause, so this will apply to existing employees participating in the FRS system who continue to work after July 1, 2010.
All new hires as of July 1, 2011, and all with DROP participation dates beginning on or after July 1, 2011, would pay a 1% contribution of gross income into the FRS system.
Reduction in annual multiplier from 1.6% to 1.44% for regular class; reduced from 2% to 1.8% for senior management class; and reduced from 3% to 2.7% for special risk class (cops, firefighters, etc). There is no grandparenting clause, so this would apply going forward to existing employees participating in the FRS system who continue to work in qualified positions beyond the effective dates.
Normal retirement service years and DROP ages increased to 33 years/age 65 (currently: 30 years/age 62), and by +3 years for all special risk categories. There is no grandparenting clause, so this will apply to existing employees participating in the FRS system who continue to work in qualified positions beyond the effective dates. This would not impact those who enter DROP before the July 1, 2010, effective date.
Average full compensation would no longer include accumulated annual leave paid out of the end. Accumulated sick leave paid out at the end will also not be counted towards calculating FRS compensation benefits.
Maximum benefit reduced to 80% of average final compensation. Existing 90% cap would remain for FRS participating employees who vested (at least 6 years of qualified FRS service) before July 1, 2010.
Now of course, in all these states where public pension guarantees are gobbling up budgets, the battle is going to be with the uber-powerful state unions, whose job will be to, yes, gum up any reform. Welcome to Greece.
The text of the bill can be downloaded as a PDF here.
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