Some Florida lawmakers pushing to restore 3% cost-of-living adjustment for state retirees

By James Call 

Two Republican lawmakers want to restore a 3% cost-of-living adjustment, or COLA, to the Florida Retirement System (FRS), the pension system for more than 600,000 people who work for Florida cities, counties, school districts, and state government.

The bill (HB 945) by Rep. Omar Blanco, R-Miami, and its counterpart by Sen. Ana Maria Rodriguez, R-Miami (SB 1126), would reverse a cut to benefits imposed in 2011 during the financial crisis to balance budgets for Florida's governments.

That move created a two-tier pension system for firefighters, teachers, and other public sector workers. Here's how it works:

• Those who retired before 2011 get a 3% COLA on their entire pension the first of July every year.
• Workers who retired after 2011 get an adjustment only for the time they were employed before it was repealed.
• Those hired after 2011 don’t get any COLA at all.

Neither of this year's bills has been scheduled for a hearing, however, and lawmakers begin their third week of the nine-week legislative session on Monday.

“Firefighters were just in my office telling me how badly needed it is,” state Rep. Allison Tant, D-Tallahassee, said when asked Thursday about the Blanco-Rodriguez proposal. “Floridians are experiencing huge increases in costs. I strongly support COLA increases for our retirees and will fight for it.”

Some 20,400 of Tant’s constituents receive an FRS pension, according to the state. And there are tens of thousands of public sector employees who live in the three counties she represents who currently pay into the system, with 20,000 working in state government alone.

The Blanco-Rodriguez proposal to restore an increase to pension benefits arrives while lawmakers appear to be bracing for spending cuts. House Speaker Daniel Perez, R-Miami, has pledged to be a good steward of tax money and has been critical of how the state spends money; the state budget has increased 25% over the last five years.

Perez declined to comment directly on the proposal but his spokesperson said he emphasizes a member-driven process in which lawmakers form their own opinions: "He is not here to tell them what they think on every issue and that policy discussions should be a conversation," House communications director Amelia Angleton said.

In the meantime, House members have been grilling agency heads in committee meetings about travel expenses, hiring practices, expenses associated with telework, and the renovations of state offices.

It's possible, then, that Tant may not get a chance to fight to restore the COLA. She sits on the Budget Committee, the House bill's second committee stop. It has to be heard and clear the House Government Operations Committee before Tant has a chance to go to bat for Blanco’s bill.

Rep. Linda Chaney, R-St. Petersburg, chairs Government Operations and has yet to schedule it for a hearing. A request for comment was pending with Chaney as of Friday.

State retirement won't 'enable us to maintain our standard of living'

David Jacobsen, president of Chapter 79 of AFSCME Retirees of Florida, a statewide federation of retired public sector workers, said there are more than 151,000 working FRS members and pensioners who either do not get a full COLA or get none at all.

“No COLA means your first pension check will be the same amount as your last pension check: No change, ever,” Jacobsen said. “We had expected our retirement would enable us to maintain our standard of living, but it won’t. It’ll be going down and down with inflation going up and up.”

Jacobsen retired in 2011 and receives a full COLA on his pension after working 23 years for the state. The average FRS pension was $18,625, in 2011, the year of the repeal. Without an annual 3% adjustment, inflation would have gobbled up more than $7,000 of the purchasing power of that $18,000.

That's a loss of income future FRS retirees face, Jacobsen said. He explained that a COLA enables him “to age with dignity.”

Since 2016, advocates for state workers have tried to restore the COLA. Bills addressing the issue have been filed in seven of the last nine sessions.A proposal similar to the Blanco-Rodriguez one sailed through the House without receiving a single 'no' vote last year. House analysts pegged the cost of an annual inflation adjustment for all retirees at $1.9 billion annually. Once it arrived in the Senate, the COLA provision was stripped from the bill.

What was left was a measure that reduced the amount of time someone who had exercised a deferred retirement option had to wait before they could accept a job with an FRS-participating employer.

And yet worker advocates say Florida has the money for a COLA. The overall financial strength of the pension plan increased during the year ended June 20, 2024, with a net increase of revenue of $12.3 billion, or 6.6%, to $198.7 billion, according to FRS.

Benefits paid to retirees had increased 0.9%, or $110 million, for a total of $12.36 billion, which is roughly equal to the amount of money FRS investments reaped for the year.Also, Gov. Ron DeSantis' proposed budget, which lawmakers use as a starting point, sets aside $14.6 billion in reserve, referring to the state’s "rainy-day fund" for unexpected costs. In each of the last five years, Florida's budget surplus has been between $5 billion and $22 billion.

FRS pension 'doesn’t reflect reality'

Sen. Tina Polsky, D-Boca Raton, in a recent discussion of the affordability of the Senate bill, said she always has issues with how the state budgets its money: “We have massive surpluses and apparently do extraordinarily well, and yet we hold on to that money and don’t give it to people.”