Escambia's senior-level managers may get $45K+ annually thru taxpayer funded retirement plan

Escambia County’s board of commissioners voted to give the county’s senior-level managers a hefty increase in their pension contributions, to the tune of 34.52%. They are the only Escambia County employees to qualify for such a large increase and the decision means taxpayers will be footing the bill for hundreds of thousands of dollars in pension payments.

There are 27 senior-level managers working for Escambia County, ranging in pay from $107,000 a year to more than $200,000 a year. Most are making between $130,000 to $150,000 a year.

With the new pension rate approval, a senior-level manager making around $130,000 a year will get close $45,000 a year in a taxpayer funded retirement plan.

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Escambia County Commissioner Mike Kohler was the only board member to vote “no” to the increase.

“I want everyone in the county to feel valued and have the best retirement program,” Kohler explained, “but the fight is to have people get the best wage and then everyone get the fair retirement that they can and since this isn’t open to everybody in the county, I can’t support this rate.”

This is the same retirement plan at the center of a lawsuit between Escambia County Clerk of Court and Comptroller Pam Childers and Escambia County.

The local retirement plan, called a 401(a) plan, is offered by Escambia County to senior-level managers and elected officials who want to opt out of the Florida Retirement System plan, and it allows them to get a special rate not offered to other county employees.

Under this latest vote, county commissioners removed themselves from receiving the contribution with litigation pending.

Commissioner Jeff Bergosh argued with Kohler that the pension plan rates are set by the state, not Escambia County.

“These rates are statewide, every county, every city is subject to these rates,” said Bergosh. “These rates are set by the state, we have no control of them. If you want the highest retirement benefit, you have to go work in those fields that the state allows a higher benefit, but to say it’s not fair, I just completely, 100% disagree with that. If you want to get the highest rate, go be a firefighter, go be a sheriff, but to demonize the entire system is wrong, it’s a good system.”

However, Childers said county leaders can decide the rate.

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The contract calls for contribution rates to be "per Florida Retirement System" but offers no more detail and there are many different rate options under different FRS plans.

The county has interpreted the contract to mean the "blended" FRS rate, but it has created a situation that makes the county's 401(a) much more lucrative than anything offered by FRS and according to Kohler and Childers, may be more lucrative than most pension plans offered by other counties in the state.

“I’m not demonizing,” Kohler told Bergosh. “I think it’s great that we have pensions, it’s just that not everyone is offered those rates. That’s the problem under the SMS, we only offer it to a small group of people … I just don’t think it’s fair.”

Commissioner Robert Bender asked county attorney Allison Rogers if the plan could be extended to other employees, but she said it could not.

“The plan is intended as a replacement for the very narrow group of people that the FRS statutes and rules allowed to be either exempted out, opted out or unqualified to participate in FRS,” Rogers said.

What is the lawsuit about?

Contribution rates for county commissioners under the plan are the center of a lawsuit between Childers and Escambia County. The lawsuit arose after Childers refused to authorize payments to three county commissioners’ accounts, arguing the contributions constituted an illegal pay raise for commissioners.

In 2018, Commissioner Robert Bender enrolled in the 401(a) plan, and after the 2020 election, commissioners Steven Barry and Lumon May switched from the state retirement plan to the 401(a) plan.

Controversy arose around the plan when Barry sought to seek back pay for all the officials who, he said, were not properly informed of the plan, which included him and May, when they joined the county.

The back pay idea was scrapped after public outcry and opposition from Childers.

Childers argued the plan violated state law prohibiting extra pay for elected county officials and began blocking payments into commissioners' accounts on Jan. 1, 2022.

Escambia County filed a lawsuit arguing the program was legal and Childers refusing the payments was beyond her authority as her role was “ministerial” and not “discretionary.”

Childers said the program was illegal for elected officials and, therefore, the three commissioners had to repay all of their contributions received under the program.

While the same cost to the county, the local retirement plan is much more personally lucrative for commissioners than the state plan, with contributions amounting to 58% of their salary going into their retirement account.

For a county commissioner whose salary is set at $92,738 by the state, that translates to almost $54,000 a year also contributed directly into their retirement account, with the state retirement system losing out on that funding.

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The first round of the legal battle was decided last year when Childers tried and failed to get the county's lawsuit thrown out and the court to accept her countersuit intended to force commissioners to repay the retirement contributions.

Childers then asked the judge to interpret a key Florida law that allows counties to set up annuity retirement plans and asked the judge to rule that retirement contributions are compensation under Florida law.

The county argues that both motions are procedurally invalid and should be dismissed on that account alone before the judge dives into the merits of the arguments. If the judge decides to move forward, the county also presented arguments about why both motions should be dismissed.

Where does the lawsuit stand?

Final arguments were made last December before Judge William Stone in Okaloosa County. He has since asked for additional clarification but no decision has been made.

Kohler said he wanted to wait to vote on the issue until there was a ruling to give them more direction.

“If it (the ruling) goes against us, I think it'd be a good time for the commissioners to come back and look at this rate,” said Kohler. “If the Commission thinks 34% is right, then we should pay it because I think that's legal, but I think the rates excessive. I just don't think it's fair to the other employees in the county. It's not a fair benefit package for all the other 2,000 employees.”

This article originally appeared on Pensacola News Journal: Escambia County retirement plan extended to senior managers