The Florida Retirement System (FRS) offers two plans for members to select as a primary benefit: FRS Pension Plan (defined benefit) and FRS Investment Plan (defined contribution). Since 2000, new employees can choose between the two plans to select as a primary benefit. The Department of Management Services, Division of Retirement (division), administers most pension and retirement benefits in the state of Florida, including a defined contribution plan for the State University System. The FRS covers general employees, public safety employees, and teachers. A separate state agency, the State Board of Administration, administers the FRS Investment Plan and manages all FRS assets.
Chapter 121 of the Florida Administrative Code deals with retirement. The laws covered in Chapter 121 set forth those positions for which participation in the FRS is mandatory. Also covered are retirement eligibility and benefit calculations. Chapter 60 of the Florida Administrative Code covers rules that deal with retirement issues including membership and administrative procedures.
The division maintains the service history, vesting, membership status, and retiree payment records of more than 2.9 million active, retired, and terminated vested and non-vested members in the FRS Pension Plan and Investment Plan. The division pays out $11 billion a year in pension plan retiree benefits.
The Florida legislature created section 121.35, F.S., to allow instructors, administrative and professional personnel, and executive service personnel of the State University System to participate in the State University System Optional Retirement Program instead of the FRS. Section 121.051, F.S., is also amended to allow instructors of state community colleges or charter technical career centers sponsored by state community colleges to enroll in the State Community College System Optional Retirement Program instead of the FRS, if provided by the employing agency.
Per the U.S. Census, in FY 2015, employer contributions to Florida state and local government pension plans were 2.92 percent of all state and local government direct general spending.
Article I, Section 10 of the Florida Constitution provides that no law impairing the obligation of contracts shall be passed. This constitutional provision has been interpreted by the courts to protect vested pension benefits. Once an individual attains eligibility for a retirement benefit, the benefit is afforded constitutional protection. Case law interprets the impairment of contract protections in Art. I, §10 to permit only prospective adjustments to pension benefits. Florida Sheriff's Association v. Department of Administration, 408 So.2d 1033 (Fla. 1981); State ex rei. Stringer v. Lee, 2 So.2d 127 (1941); Anders v. Nicholson, 150 So. 639(Fla. 1933); O'Connell v. State Dept. of Admin, 557 So.2d 609 (Fla. App. 3 Dist. Feb. 2006)(holding that benefits vested upon attainment of normal retirement eligibility). In 2012, a state court trial judge in Williams v. Scott (Case No. 2011CA1584) struck down amendments to the state retirement system that increased the employee contribution and eliminated the COLA for future years of service. (FL CONST., Article I, §10) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits
Article X, Section 14 of the Florida Constitution requires all benefit improvements to be concurrently funded in an actuarially sound manner.