Retirement warning signs? Pension crisis hits states. Here's the biggest, smallest funding shortfalls
The 24/7 Wall St. reviewed the average pension funding for all 50 states as of 2018. #50 – the best funded state was South Dakota (funded at 100%). The worst funded state was New Jersey – funded at 38.4%. Florida ranked #32: Funded ratio: 79.9%; Total pension shortfall: $40.7 billion shortfall (7th largest); Gov't workers as share of total workforce: 10.9% (4th lowest; and Avg. annual payout per public retiree: $24,013 (23rd highest). Read More
Federal stimulus package leaves Florida’s budget out in the cold
Florida’s state budget could see major cuts to education and health care next year after another stimulus package that doesn’t include money for states and cities to offset revenue losses brought by the coronavirus pandemic. Direct aid to state and local governments didn’t make the cut. Read More
Citigroup Targeted by Lawsuit from Florida City Pension in Revlon Mess
Investors, led by a Florida municipal union’s pension plan, are suing Citigroup for fraudulent accounting due to the bank’s imbroglio over paying Revlon creditors. A class action securities lawsuit, filed against Citi on behalf of Florida-based City of Sunrise Firefighters’ Pension Fund, alleges the bank misled it and other Citi stockholders investors regarding its internal accounting controls, risk management, and regulatory compliance. Read More
The City of Fort Lauderdale is the sponsor of the Fort Lauderdale Police and Firefighters’ Retirement System. All Fort Lauderdale sworn police officers and firefighters are eligible to participate in the plan. A seven-member Board of Trustees, who are either elected by the employees or appointed by the Mayor, administers the pension plan. The plan is a defined benefit plan that promises to pay a guaranteed benefit at retirement.
- 793 – Active members
- 1,167 – Retired members and beneficiaries
- 1,930 – TOTAL PLAN PARTICIPANTS
FUNDING Public safety officers contribute 10% of earnings into the pension plan. Members also pay 7.65% of earnings into Social Security and Medicare. Additional revenue to the pension plan comes from the State of Florida insurance premium tax, the City of Fort Lauderdale, and earnings generated on the invested assets. The plan’s investment returns provide 67% of the plan’s funding. Over the past 28 years, the plan had an average total return of 8.75% – greater than the assumed 7.4% rate of return.
BENEFITS Retirement benefits are based on (1) average final earnings, (2) years of service, and (3) a benefit formula. Public safety officers can retire after 20 years of creditable service (or after 10 years at age 55). Overtime and unused leave do not increase retirement benefits. After 20 years of service, public safety officers are eligible to receive a retirement benefit equaling 60% of their monthly earnings. Retirement benefits are not automatically adjusted annually for cost of living changes. Retirees have not received a COLA since 2001.
DISABILITY Service-related disability benefits provided by the plan cannot exceed 65% of current monthly earnings. Non-service benefits cannot exceed 50% of monthly earnings, with reductions for Social Security benefits, Workers Compensation, or other earned income. The Fort Lauderdale Police and Firefighters’ Retirement System was established by City Ordinance and became effective January 3, 1973. As of 9-30-2019, the pension fund assets totaled $927 million.
For more information, see the Annual Report Newsletter