This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h1189c.GOS
DATE: 2/3/2022
HOUSE OF REPRESENTATIVES LOCAL BILL STAFF ANALYSIS
BILL #: HB 1189 Firefighters' Relief and Pension Fund of the City of Pensacola, Escambia County
SPONSOR(S): Andrade and Salzman
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Local Administration & Veterans Affairs
Subcommittee
15 Y, 0 N Darden Miller
2) Government Operations Subcommittee 17 Y, 0 N Roth Toliver
3) State Affairs Committee
SUMMARY ANALYSIS
The Firefighters’ Relief and Pension Fund of the City of Pensacola (Fund) was established by the Legislature
in 1941. Each firefighter employed by the City of Pensacola is a Fund participant. As of September 30, 2021,
the Fund has 110 active members, 178 retired members, and 12 members in the Deferred Retirement Option
Plan (DROP).
The bill makes the following changes to the Fund:
Removes separate alternative benefit options for firefighters hired on or after June 10, 2015, giving all
firefighters the same alternative benefits options;
Removes the requirement that a surviving spouse must remain unmarried to receive death benefits
under the Fund; and
Revises the definition of “compensation,” “salary,” and “earnings” to include a maximum of 300 hours of
annual overtime pay, basic life support pay, station or watch captain pay, special duty pay, in-service
sick leave redemption pay, bonuses, lump-sum payments not paid at termination, and any other
payments required by law to be included in pension calculations.
The Economic Impact Statement filed with the bill states the revisions to the Fund made by the bill will increase
costs by $32,674. STORAGE NAME: h1189c.GOS PAGE: 2
DATE: 2/3/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Firefighter Pensions: Marvin B. Clayton Firefighters Pension Trust Fund Act
Local firefighter pension plans are governed by ch. 175, F.S., the Marvin B. Clayton Firefighters
Pension Trust Fund Act (Clayton Firefighters Pension Act).
1
Originally enacted in 1939, the Clayton
Firefighters Pension Act encouraged cities to create firefighter pension plans by providing access to
premium tax revenues. The Clayton Firefighters Pension Act sets forth minimum benefits and
standards for municipal firefighter pensions, which cannot be reduced by municipalities; however, the
benefits provided by a local law plan may vary from the provisions in the Clayton Firefighters Pension
Act so long as the minimum standards are met.
Local firefighter pension plans created pursuant to the Clayton Firefighters Pension Act are funded by
four sources:
Net proceeds from an excise tax levied by a city upon property and casualty insurance
companies (known as the premium tax);
2
Employee contributions;
3
Other revenue sources;
4
and
Mandatory payments by the city of the normal cost of the plan.
5
The premium tax is an excise tax of 1.85 percent imposed on the gross premiums of property insurance
covering property within boundaries of the municipality or special fire control district.
6
Insurers pay the
tax to the Department of Revenue and the net proceeds are transferred to the appropriate fund at the
Department of Management Services, Division of Retirement (Division). In 2019, premium tax
distributions to municipalities and special fire control districts from the Firefighters’ Pension Trust Fund
amounted to $98.1 million.
7
To qualify for insurance premium tax dollars, plans must meet requirements found in the Clayton
Firefighters Pension Act. Responsibility for overseeing and monitoring these plans is assigned to the
Division; however, the day-to-day operational control rests with the local boards of trustees.
8
The board
of trustees must invest and reinvest the assets of the fund according to statute
9
unless specifically
authorized to vary from the law. If the Division deems that a firefighter pension plan created pursuant to
the Clayton Firefighters Pension Act is not in compliance, the sponsoring municipality could be denied
its insurance premium tax revenues.
10
The default employee contribution under the Clayton Firefighters Pension Act is five percent of salary,
but the percentage may be adjusted.
11
A municipality or special fire control district may elect to make
an employee’s contributions, but the employee must still contribute at least 0.5 percent of his or her
1
S. 175.025, F.S.
2
S. 175.091(1)(a), F.S.
3
S. 175.091(1)(b), F.S.
4
S. 175.091(1)(c), (e)-(g), F.S.
5
S. 175.091(1)(d), F.S.
6
S. 175.101, F.S.
7
Department of Management Services, Firefighters' 2019 Premium Tax Distribution Calculation, available at
https://employer.frs.fl.gov/forms/Fire_2019.pdf (last visited Jan. 28, 2022).
8
See s. 175.071, F.S.
9
S. 175.071, F.S.
10
See s. 175.341(1), F.S.
11
S. 175.091(1)(b), F.S. STORAGE NAME: h1189c.GOS PAGE: 3
DATE: 2/3/2022
salary.
12
Rates may also be increased above five percent, subject to the consent of members’ collective
bargaining representative or, if none, by a majority consent of the firefighter members of the fund.
13
Florida Protection of Public Employee Retirement Benefits Act
The Florida Constitution prohibits any increase in retirement or pension benefits for a publicly funded
plan, unless the plan has made or concurrently makes provision for funding the increase on an
actuarially sound basis.
14
The Florida Protection of Public Employee Retirement Benefits Act (Benefits
Act)
15
implements the provisions of art. X, s. 14 of the Florida Constitution.
16
The Benefits Act applies to
all retirement or pension plans for public employees that are funded in whole or in part by public
funds.
17
Local governments are prohibited from agreeing to a proposed change in retirement benefits if the plan
administrator did not issue a statement of actuarial impact of the proposed change before both the
adoption of the change by the governing body of the local government and the last public hearing about
the proposed change.
18
This statement must also be furnished to the Division before the local
government can agree to the change.
19
The statement must indicate whether the proposed change
complies with art. X, s. 14 of the Florida Constitution and with s. 112.64, F.S. (concerning the
administration of pension funds and the amortization of any unfunded actuarial liability).
20
Firefighters’ Relief and Pension Fund of the City of Pensacola
The Firefighters’ Relief and Pension Fund of the City of Pensacola (Fund) was established by the
Legislature in 1941.
21
The act governing the Fund was most recently amended in 2015.
22
As of
September 30, 2021, the Fund has 110 active members, 178 retired members, and 12 members in the
Deferred Retirement Option Plan (DROP).
23
As of September 30, 2021, the Fund had $126.7 million in
total assets and $8.9 million in unfunded actuarial accrued liability.
24
Normal retirement age is 52 years
of age for those with at least ten years of service and any age for those with at least twenty-five years
of service.
25
The Fund currently assumes 7.75 percent annual growth of its assets.
26
During the 2020-21 fiscal year,
the Fund saw an 8.61 percent growth in the actuarial value of its assets and an 11.12 percent growth in
the market value of its assets.
Alternative Retirement Options
Firefighters may select from a menu of alternative retirement income streams or benefits of equivalent
actuarial value to the standard retirement, including:
A larger monthly payment, payable only for the firefighter’s lifetime;
A smaller monthly payment payable for the joint lifetime of the firefighter and a joint beneficiary;
or
12
S. 175.091(2)(a), F.S.
13
S. 175.091(2)(b), F.S.
14
Art. X, s. 14, Fla. Const.
15
Part VII of ch. 112, F.S.
16
S. 112.61, F.S.
17
S. 112.62, F.S.
18
S. 112.63(3), F.S.
19
Id.
20
Id.
21
Ch. 21482, Laws of Fla. (1941).
22
Ch. 2015-206, Laws of Fla.
23
Department of Management Services, Florida Local Government Retirement Systems 2021 Annual Report, p. 13 of Appendix F,
available at
http://www.dms.myflorida.com/workforce_operations/retirement/local_retirement_plans/local_retirement_section/local_government_ann
ual_reports (last visited Jan. 28, 2022) (herein DMS Local Government Reports).
24
DMS Local Government Reports, p. 17 of Appendix A.
25
DMS Local Government Reports, p. 44 of Appendix B1.
26
DMS Local Government Reports, p. 16 of Appendix E. STORAGE NAME: h1189c.GOS PAGE: 4
DATE: 2/3/2022
Any other amount or form that the Board of Trustees of the Fund (Fund Board) sees as best
meeting the circumstances of the retired firefighter.
27
A firefighter may change the selected joint beneficiary but only with approval from the Fund Board. If
the payment of benefits to the firefighter and the joint beneficiary have already commenced, the joint
beneficiary must still be alive at the time of the change.
28
The firefighter does not need the consent of
the joint beneficiary to make the change, but the Fund Board may request evidence of the joint
beneficiary’s health status. After the selection of a new joint beneficiary, the Fund Board will recalculate
benefits payments to provide actuarial equivalence. If no designated beneficiary survives the firefighter,
the death benefit shall be paid to the estate of the firefighter as an actuarial equivalent lump sum.
The spousal benefits for any firefighter hired on or after June 10, 2015, are equal to the benefit
payment options provided under the Florida Retirement System for Special Risk Class, elected as
follows:
A monthly benefit payment to the firefighter for the firefighter’s lifetime only;
A decreased monthly benefit payment for the firefighter’s lifetime or ten years (if the firefighter
dies before 10 years, the Fund pays the benefit to beneficiary for the remainder of the 10
years);
A decreased monthly benefit payment during the joint lifetime of a firefighter and a joint
annuitant, continuing for the lifetime of both parties in the same amount; or
A decreased monthly benefit payment during the joint lifetime of a firefighter and a joint
annuitant, continuing for the lifetime of both parties, but paying the surviving party an amount
equal to 66 and two-thirds percent the amount payable during the joint lifetime.
The bill provides that if a firefighter dies before his or her normal retirement date, no retirement benefit
will be paid, but beneficiaries will be entitled to the death benefits provided by ss. 13 or 14 of the act
governing the Fund.
29
If a designated beneficiary or joint pensioner dies before the firefighter’s
retirement date, benefits will revert to the default plan, as if the previous election had not been made,
unless the firefighter makes a new beneficiary selection within 90 days of the death of the previous
beneficiary.
Benefits to Surviving Spouses
Upon the death of a retired firefighter, his or her surviving spouse is entitled to a pension benefit equal
to 75 percent of what the pensioner would have been entitled to if he or she had retired as of the date
of death, considering the retired firefighter’s years of service and amount of compensation, but without
regard to his or her age.
30
A surviving spouse who married the firefighter after retirement and less than
three years before the pensioner’s death is not entitled to benefits.
31
Any benefits provided by the Fund to a surviving spouse terminate upon the recipient’s death.
32
The
benefits provided also terminate upon remarriage, unless the deceased firefighter is preceded by one
or more legitimate children, who may then be entitled to 10 dollars per month for each child, in no event
to exceed 40 dollars a month for support as a family.
33
Pension benefits terminated by remarriage may
be restored by the Fund Board if the marriage ends due to death or divorce.
34
Definitions
“Compensation,” “salary,” and “earnings” are defined as the wages paid to a firefighter, including:
Up to 300 hours per year of annual overtime pay for firefighters with ten or more years of
service as of June 10, 2015;
27
Ch. 21483, s. 5(n)(1), Laws of Fla. (1941), as amended.
28
Ch. 21483, s. 5(n)(2), Laws of Fla. (1941), as amended.
29
Ch. 21483, s. 5(n)(3), Laws of Fla. (1941), as amended
30
Ch. 21483, s. 13(a), Laws of Fla. (1941), as amended.
31
Ch. 21483, s. 13(b), Laws of Fla. (1941), as amended.
32
Ch. 21483, s. 15, Laws of Fla. (1941), as amended.
33
Id.
34
Ch. 41-21483, s. 13(a), Laws of Fla., as amended. STORAGE NAME: h1189c.GOS PAGE: 5
DATE: 2/3/2022
Up to 200 hours per year of annual overtime pay for firefighters with less than ten years of
service as of June 10, 2015; and
No annual overtime pay for firefighters hired on or after June 10, 2015.
Effect of Proposed Changes
The bill removes separate alternative benefit options for firefighters hired on or after June 10, 2015,
giving all firefighters the same alternative benefits options.
The bill removes the requirement that a surviving spouse must remain unmarried to receive death
benefits under the Fund.
The bill revises the definition of “compensation,” “salary,” and “earnings” to include a maximum of 300
hours of annual overtime pay, basic life support pay, station or watch captain pay, special duty pay, in-
service sick leave redemption pay, bonuses, lump-sum payments not paid at termination, and any other
payments required by law to be included in pension calculations.
The Economic Impact Statement filed with the bill states the revisions to the Fund made by the bill will
increase costs by $32,674.
B. SECTION DIRECTORY:
Section 1: Amends ch. 21483, Laws of Fla. (1941), as amended, revising provisions of the
Firefighters' Relief and Pension Fund of the City of Pensacola, Escambia County.
Section 2 Provides an effective date of upon becoming a law.
II. NOTICE/REFERENDUM AND OTHER REQUIREMENTS
A. NOTICE PUBLISHED? Yes [x] No []
IF YES, WHEN? December 5, 2021
WHERE? The Pensacola News-Journal, a daily newspaper of general circulation published
in Escambia County, Florida.
B. REFERENDUM(S) REQUIRED? Yes [] No [x]
IF YES, WHEN?
C. LOCAL BILL CERTIFICATION FILED? Yes [x] No []
D. ECONOMIC IMPACT STATEMENT FILED? Yes [x] No []
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
None.
B. RULE-MAKING AUTHORITY:
The bill does not provide rulemaking authority or require executive branch rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
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DATE: 2/3/2022
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
None.