florida’s municipal pensions (and opebs): research from the leroy collins institute carol s....
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Florida’s Municipal Pensions (and OPEBs): Research from the
LeRoy Collins InstituteCarol S. Weissert
Director of InstituteProfessor of Political Science
Florida State UniversityOctober 9, 2013
LeRoy Collins Institute
The mission of the LeRoy Collins Institute is to perpetuate the leadership of Governor LeRoy Collins by developing and promoting bold, visionary public policy that will empower and uplift Floridians for generations to come.
Pension Reports
• Trouble Ahead: Florida Local Governments and Retirement Benefits 2/11
• Report Card: Florida Municipal pension Plans 11/11
• Years in the Making: Florida’s Underfunded Municipal Pensions 9/12
• Looking at Florida’s Municipal Pensions 2/13• Doing It Right: Recognizing Best Practices in
Florida’s Municipal Pensions 8/13
OPEB(s)
• Beyond Pensions: Florida Local Governments and Retiree Health Benefits 12/13
Scope of Problem
• Many, but by all means not all, municipal pensions in Florida are underfunded
• Recent trends are toward more underfunding• Health benefits are the below-the-radar issue
Average annual retirement contributions for cities is 5.5 percent of their total expenditures
Typical municipal pension plan in Florida is 70 percent funded
One-third of municipal plans had failing grades
• Looked at funding levels—assets/liabilities• Grades based on % funded; <70 failing
Police and Fire Plans More Likely to be Underfunded
Also looked at costs of plan by grade
median cost per participant• A Plan $5,784• B Plan $12,666• C Plan $12,410• D Plan $18,886• F Plan $26,305
Costs of Plans by Participant
• Police and Fire $21,738• Fire only $17,819• Police only $15,245• General only $9,297
Increasing Pension Problems Cannot Be Blamed on the Economy
Local Governments Picking Up Most of the Costs
Retirees Payroll Growing
In 2010 for the first time, the typical municipality paid out more money to retirement benefits than it
contributed in benefits earned that year.
Doing It Right
• Funding ARCs• Requiring employees to share in costs• Limiting the size of COLAs• Limiting pension spiking• Setting realistic actuarial assumptions
Our Recommendations
• Raise retirement benefit recipient age• Provide minimum contribution rate in good
times to cushion needs in fiscal stress• Exclude overtime and bonuses in pension
benefit calculation• Remove statutory restriction on premium tax
dollars• Encourage transparency
Beyond Pensions
Funded Levels
Percent Contribution Actually Paid
Increase Necessary for Full Contribution
OPEB Recommendations
• Consider repeal of law requiring implicit benefits
• Provide state oversight of local retiree health plans
More Work?
• Elected officials• Disability benefits• Defined contribution health plan?• FRS health subsidy available for local
governments
