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Senate Asked to Cut Overtime from Police, Firefighter Pension Calculations

January 16, 2013 - 6:00pm

Legislators have been asked to increase the age local police and firefighters can begin to qualify for pension payouts and, more importantly, that overtime and base salary -- without overtime and bonus pay -- should be the determining factor to calculate pension payouts.

While some of the changes are expected to be welcomed by local government leaders, union representatives are not in favor of wholesale rewriting of the pension rules, which include restrictions on how local government can use the insurance premium tax revenue they now collect

The LeRoy Collins Institute at Florida State University suggested the state Legislature alter the pension rules for local governments that have been in place since 1999 in part because about one-third of the states largest cities currently can cover about 70 percent or less of their firefighter, police and general employee pension obligations --the limit considered fiscally sound.

I dont think you want your biggest cities to have these fiscal problems, and that will look bad on the state, Carol Weissert, director of the LeRoy Collins Institute at Florida State University told member of the Senate Governmental Oversight and Accountability Committee on Thursday.

The concern is that once one, two, three or four cities start asking for fiscal help from the state, as California has seen, the general view from national rating agencies is that the bad cities are the norm.

Were a long way from San Bernandino in Florida, Weissert said. However, the goal is not to get near what California has experienced.

Last July, San Bernandino officials filed for bankruptcy while reporting $56 million in indebtedness payable from its general fund, the main budget, including payments on a $50 million pension bond.

The city, the third in California to file for bankruptcy in 2012, also reported $195 million in unfunded pension obligations, $61 million in unfunded retiree health care, and $40 million of workers' compensation, compensated absences and general liabilities.

Officials from the FSU institute declined to name which Florida cities are facing the tightest pension budgets, saying it would be unfair because not all of the pensions are of a size that could fiscally damage the municipality if they went into default.

Cocoa Beach Mayor Dave Netterstrom, where pension plans for police and firefighters are at a 50 percent to 60 percent funded level, said he supports pension reform but the restrictions proposed by the state on how the insurance premium tax revenue is used may be too binding.

To be an attractive employer to our police and fire professionals, the city must be able to offer a competitive pay and benefits package, said Netterstrom, who appeared before the committee representing members of the Florida League of Cities. But this competitive package is defined at a local level and sometimes changes as the environment changes.

The Senate committee discussion came as the Florida Supreme Court, in a 4-3 decision, upheld the sweeping changes to the public employee retirement system --including the requirement that public employees contribute 3 percent of their salaries to the pension --that the state made in 2011.

Committee Chairman Sen. Jeremy Ring, D-Margate, who supported the 3 percent contributions when it came before the committee in 2011, said the court ruling wont have any impact on the current pension review, which is focused more on cities' funding abilities.

It would have had an impact had the decision been reversed, but I dont think it has any impact for this committee, Ring said. I think its a sign of relief for the Budget Committee.

Ring, who did call the situation on insurance premium money a near crisis mode, was joined by a number of senators in asking for more detail on how Florida cities are addressing their pensions, particularly from any that have received D and F grades in recent years.

He added there are no proposals to take away anyones pension.

Weissert said the pension underfunding situation in Florida has been growing for a decade.

With a growth in people retiring, while fewer are contributing, the underfunding is not new or caused by the drop in the stock market, as the funding levels started to decline in 2002/2003, as Florida was flush with housing money.

The committee will continue to discuss the pension reform next week.

Reach Jim Turner at or at (772) 215-9889.

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