GETF Measures Move Forward
As part of the ongoing negotiations between House and Senate leaders, it is our understanding that the House has agreed to support the Senate’s proposed pay raises for state employees in exchange for the Senate’s support of two measures consistent with recommendations by the constitutionally-mandated Government Efficiency Task Force (GETF).
The first GETF measure (reference HB 7007) will require the Department of Management Services (DMS), beginning in the calendar year 2020, to offer as part of the State Group Insurance Program four health insurance coverage levels with specified actuarial values: (1) Platinum level, which will have an actuarial value of at least 90 percent; (2) Gold level, which will have an actuarial value of at least 80 percent; (3) Silver level, which will have an actuarial value of at least 70 percent; and (4) Bronze level, which will have an actuarial value of at least 60 percent.
The state will make a defined contribution for each employee toward the cost of purchasing one of these health plans. Employee contribution rates will be established in ways that reflect the actuarial benefit differences between the plans, and that bring employee premiums and plan benefits more in line with industry benchmarks.
The second GETF measure (reference SPB 7030) changes the default benefit plan from the pension plan to the investment plan for members of the Florida Retirement System (FRS) who initially enroll after January 1, 2018. If, after the end of the five month initial election period, a new FRS member does not select a pension plan, the new member will automatically default to the defined contribution (investment) pension plan.
New members who elect to participate or default into the defined contribution pension plan will be able to contribute and invest funds over time to save for retirement. The contributions can be invested, at the member's direction, in select mutual funds, money market funds, annuities or stock offered by the plan. This will allows the member to better align their investment risks and rewards.
As is the case with most things at this stage in the legislative process, this understanding is subject to change. Stay tuned…