Closing Pensions For Public Workers Has Proven A Mistake
A measure to close North Dakota's public pension plan was signed Governor Doug Burgum. The state’s chief executive would be wise to look at the experience of other states that have made such a drastic move. State leaders have learned the hard way that ending pension benefits comes with little to be gained and a big price to pay. More specifically, states that shifted new employees from defined benefit pensions to defined contribution or cash balance plans experienced increased costs for taxpayers without significant funding improvements. Read More
How do you feel about bringing back pensions for new police officers and firefighters in Jacksonville?
Six years ago, Jacksonville passed pension reform, raising the sales tax by one cent to pay off pension debt which now over $2 billion. The city started using 401a which is similar to 401k for new hires. But new hires are going elsewhere according to unions where pension are used. Read More
Milliman: U.S. public pension funding rises in March
The overall estimated funding ratio of the 100 largest U.S. public pension plans improved to 74.5% as of March 31 from 73.6% a month. During the month of March, Milliman estimated that public pension plans had an aggregate investment return of 1.8%, with an estimated range of 0.7% to 2.8%. 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, administer the pension plan. The plan is a defined benefit plan that promises to pay a guaranteed benefit at retirement.
- 708 – Active members
- 1,237 – Retired members and beneficiaries
- 1,945 – 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 84% of the plan’s funding. Over the past 31 years, the plan had an average total return of 8.8% – greater than the assumed 7.3% 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 9-30-2021, the pension fund assets totaled $1.1 billion.
For more information, see the Annual Report Newsletter