Brothers and Sisters of Local 4321,
Last night we had our first union meeting for the year, and what a great turn out! There were many topics covered, but there is one topic I feel I must present further and elaborate on. As you may be aware, FRS is refusing to enroll DROP members in FRS as long as they are receiving DROP benefits from their municipality. After a phone conference with pension attorney Bob Klausner, Labor attorney Bob Sugarman, FPF 5th District Vice President Powell, IAFF 12th District Vice President Dix, Jim Bunce, and myself. The pension attorney, Mr. Klausner believes this is problematic on a number of legal grounds. The greatest concern is that if FRS refuses membership and the members continue in DROP, while on the job with BSO-Fire, they are not FRS members and have no line of duty disability or death pension benefits. The FRS action does not impact workers’ compensation or the other state and federal benefits for public safety officers. The Department of Management Services (DMS) Rule 60S-1.0075 (hereinafter “the FRS DROP Amendment” or “Rule 60S-1.0075”) was amended effective 6/28/2018. The FRS DROP Amendment denies FRS membership for local retirement plan DROP participants until they complete their DROP participation.
Highlighted in "yellow" is pension attorney Klausners view:
The FRS DROP Amendment is problematic since it treats local government DROP participants as “temporary employees,” even though they are working full time in regularly established positions. While the FRS statutes (under Chapter 121) and FRS rules (in the Florida Administrative Code) define the terms “temporary position” and “regularly established position,” there is no statutory or other definition for the newly created concept of a “temporary employee” who is working in “regularly established position.”
It appears that DMS adopted this construction from whole cloth, in an effort to deny FRS participation to local retirement plan DROP participants. In fact, when DMS amended FRS Rule 60S-1.0075(3)(b)1a to treat DROP participants as “temporary employees,” DMS neglected to amend the definition of the terms “temporary position” or “regularly established position.” In other words, FRS’ rules and definitions are arbitrary and internally inconsistent with respect to the treatment of local retirement plan DROP participants. Section 112.0515, Fla. Stat., recognizes the state’s longstanding policy that in any consolidation or merger of governments or the transfer of functions “the rights of all public employees in any retirement or pension fund shall be fully protected.” This policy flows from the fact that government is prohibited from impairing contract rights under Article I, Section 10 of the Florida Constitution. For nearly seventy years, Florida caselaw has recognized constitutional protections for accrued benefits in a governmental pension plan.
The recent FRS DROP rule amendment arguably violates Section 112.0515 to the extent that it diminishes or impairs rights “which existed at the date of such consolidation or merger.” While Rule 60S-1.0075 may be valid for employees who elect to remain in a local plan after 6/28/2018, DMS’s construction of the FRS DROP Amendment to apply to local government DROP participants who elected to remain in their local plan (and not join FRS) prior to the 6/28/2018 Amendment is arguably unconstitutional. Apart from the constitutional infirmities of the FRS DROP Amendment, a construction by FRS to apply Rule 60S-1.0075 to “grandfathered” employees who elected to remain in the local retirement plan prior to 6/28/2018 would arguably be clearly erroneous, and not subject to the traditional deference previously given to state agencies.
Indeed, the Florida Constitution was recently revised by Amendment 6 to require de novo construction of an administrative agency’s interpretation of a statute. It is thus not clear that the FRS DROP Amendment would survive a challenge, under the prior deferential standard, or the new de novo standard. Our office is still studying the most advantageous procedure to use to challenge Rule 60S-1.0075 under the Administrative Procedures Act or as a class action in state court. We are considering the following options and we recommend a face to face discussion as to the potential consequences and costs of each:
- a rule challenge under § 120.56, Fla. Stat.,
- a petition for declaratory statement under 120.56, Fla. Stat.,
- an appeal from DMS final agency action should an employee be denied FRS membership while in the DROP; or a class action lawsuit raising constitutional claims in circuit court in Leon County.
In light of the above, it is our recommendation at present for all DROP participants to apply for FRS membership. This preserves their claims for prior service in the event we successfully challenge the Rule.
I can speak for the eboard as YOUR President, we are not taking any of this lightly. I have and will be engaged throughout this process to bring all of you the most updated information and steps needed to take. Please continue to monitor our emails and reach out to your board for further needs.