On Wednesday, the
"Right now, the
A cash balance plan is a defined-benefit retirement plan that provides employees with set contributions to a retirement account and a guaranteed rate of return. Employees also have the advantage of participating in market returns above the guaranteed amount. Like the current Florida Retirement System Pension Plan, a cash balance plan provides employees with a benefit that is guaranteed, but provides more portability for employees that leave government service for other career opportunities.
Under SPB 7046, most employees hired for the first time after
Special risk employees hired after
The defined benefit Cash Balance Plan has a five year vesting period. The current Pension Plan has an eight year vesting period. The 3 percent employee contribution remains unchanged.
Under this defined benefit plan, the State guarantees employees at least a 2 percent rate of return. If the employee's retirement fund portfolio, managed by the
Guaranteeing a specific contribution toward retirement and a guaranteed level of return gives employees the stability they need to plan for retirement. Shifting a portion of the investment risk off the taxpayers will result in a healthy, sustainable Florida Retirement System for years to come.
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