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Highlands Today

Council Approves Firemen Pension Amendments

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By JOE SEELIG

Highlands Today

Published: November 6, 2008

SEBRING - City of Sebring Fire Rescue members will be able to Share and "P.L.O.P." regarding their pension plans once the ordinance amending the plan is adopted on second reading.

The Sebring City Council unanimously voted Tuesday on first reading in favor of two ordinances amending its firefighter pension plan, establishing Share accounts and a Partial Lump sum Option Plan (PLOP).

On June 12 the council held a workshop with members of the Firefighter's Pension Board, their attorney Scott Christiansen and their actuarial consultant, Doug Lozen, to discuss proposals concerning allocation of insurance premium tax dollars.

The share plan measure establishes an additional supplemental retirement, termination, death and disability benefit to be in addition to the benefits provided for in the previous sections of the city's firefighter pension plan ordinance.

Mayor George Hensley addressed the council explaining some of the intricacies of the ordinances before them.

"The firemen voted to adopt the Share plan," said Hensley, adding it was at no cost to the city.

The benefit is to be solely and entirely funded by amounts exceeding the current "frozen" state premium tax amount of $55,623, which the city received in 2007 from the state premium tax monies as a base amount to fund the plan, Hensley told the council.
Florida statute provides the money as an extra benefit for firemen and policemen to their pension plans, Hensley said Wednesday.

"The money (for the firemen) comes from a tax on insurance premiums for property insurance within the municipalities," Hensley said.

The state collects 1.85 percent tax on those property insurance premiums and from those total dollars it keeps 7.3 percent possibly for administrative costs.

The state then dispenses the excess, Hensley said.

What that means is any state tax money the city receives from those in excess premium tax dollars will be contributed to the firefighters' pension plan using a prescribed formula, much like a 401k plan.

The money will be distributed using the "Sum of Years" method, Hensley told the council. There is a formula based upon the number of years of service a firefighter has served.

"The bottom line is it ain't gonna cost the city of Sebring nothin," said Council President Bud Whitlock.

Councilman Dan Andrews commended the mayor on his hard work.

"I think we should double his salary to $2 a year," Whitlock joked.

Actually, the mayor gets $1 plus $300 per month as a non-verifiable expense, which he pays taxes on and council members get the same.
Hensley is also a former owner of Heacock Insurance, which is now owned by family members and currently is a corporate officer there as vice president.

In regard to the Partial Lump sum Option Plan (P.L.O.P.), firefighters not participating in the D.R.O.P. plan individually may elect to take a portion, 10 percent, 15 percent, 20 percent or 25 percent, of their pension money as a lump sum and invest it wherever they want.

This plan is an alternative to the Deferred Retirement Option Plan (D.R.O.P.).

Members may not DROP and PLOP since it "would result in a large cash payment from the plan and would dramatically reduce the monthly lifetime benefit payment to the retiree," according to Christiansen.

Joe Seelig can be reached at (863) 386-5834 or jseelig@highlandstoday.com .

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