City of Hollywood Fire Rescue Retirement and Pension Guide

You have to understand 2011 to understand your plan

In May 2011 the City declared financial urgency under Florida Statute 447.4095. Firefighter pay was cut 15%, hours increased, overtime pay eliminated. Starting pay fell to $12.83 an hour.

On September 13, 2011, on about 14% turnout, voters approved the pension measure 54.9% to 45.1%. The implementing ordinance froze the benefit structure as of September 30, 2011 and built a lower one for service after. It changed how average final compensation was computed, delayed the normal retirement date, eliminated COLAs going forward, eliminated the DROP, and removed Chapter 175 premium tax money as a future funding source.

Then came years of litigation. In January 2014 the Fourth District Court of Appeal reversed PERC and remanded, holding that the proper standard for financial urgency is the Florida Supreme Court's Chiles test. The pension board sued the City in 2012. The City sued its own pension boards in 2015 and 2017. Retirees sued over the 13th check in Chard and in Kellerman.

In March 2019, after roughly two years of bargaining, a three year contract was reached and the Commission unanimously approved a $2.5 million pension restoration. Starting pay went from $12.83 to $22.27 an hour.

What the restoration did not do was make Tier 2 equal to Tier 1. Fifteen years later, if you were hired on or after July 16, 2009, you still have a lower benefit cap, a five year averaging period instead of three, a lower overtime cap, a higher contribution rate, different COLA mechanics, and no DROP at all.

The two tiers

Tier 1 is hired before July 16, 2009. Tier 2 is hired on or after.

	Tier 1	Tier 2
Multiplier, service before 7/7/2026	3.3%, max 86%	3.2%, max 80%
Multiplier, service on or after 7/7/2026	3.4%	3.4%
Average final compensation	3 highest years	5 highest years, or 5 highest consecutive within the last 10 if hired on or after 10/1/2011
Overtime includable	300 hours	200 hours
Employee contribution	9.85%	11.35%
DROP	Yes	No
COLA	2% per year, starting the later of 3 years after benefits begin or 1 year after DROP ends	2.5% every two years, starting 2 years after retirement

Floor for both: not less than 2.75% per year averaged over your whole service. Vesting for both: 10 years. Benefit paid for life with 120 payments guaranteed, and 50% to a surviving spouse if married at least two years before death. Hired on or before July 3, 2013: 70% of your cash payout of accumulated annual leave counts toward average final compensation.

DROP, Tier 1 only

Age 50 with 10 years, or 23 to 30 years of service. You must elect no later than 30 years of credited service or you forfeit it. Maximum eight years, and DROP plus credited service cannot exceed 33 years. Interest is a fixed 8.0% option if you entered before July 16, 2009, a fixed 6.0% option if on or after, or a variable account at a rate set by the Board. Fixed rate balances keep their rate after separation. No fees.

Whether the 23 year DROP threshold was conformed to the new 21 year normal retirement date in July 2026 is not clear from the ordinance title. Ask the Board directly.

The Planned Retirement Benefit, and the funded ratio trap inside it

Tier 2 members have no DROP, but there is a Reformed Planned Retirement Benefit effective May 2018, maximum eight years, 33 years of combined city service. You cannot draw both DROP and RPRB.

Under the older PRB, earnings credited to your account are reduced based on the plan's funded ratio. Below 80% funded, a slice of earnings above 4% is withheld by the plan. At 80% to under 90% the withheld slice shrinks. At 90% and above the exclusions end. Members share negative year losses. In other words, your personal account performance is tied to how well funded your pension plan is. That is unusual and it is worth understanding before you elect.

The 13th check

Payable each September 30 only when the fund's twelve month return exceeds the 8% assumption, from the excess up to a 10% return, so a two point maximum pool divided into equal shares. Tier 1 members who retired or entered DROP on or after July 16, 2009 are capped at $12,000 a year. And the condition at the center of two lawsuits: no payment at all until the system recovers all aggregate losses from actuarial experience beginning October 1, 2008.

Funded status

Valuation date October 1, 2025
Actuarial accrued liability	$543.5 million
Actuarial value of assets	$379.1 million
Unfunded liability	$164.4 million
Funded ratio, actuarial value	about 69.8%
Required contribution, FY2027	$30.9 million, or 103.9% of payroll

That has improved substantially from about 61.9% at the October 2021 valuation. For perspective on what a two point miss on the return assumption does: at 5.50% the unfunded liability would be $276.7 million and the funded ratio about 57.8%. At 9.50% it would be $86.5 million and about 81.4%. The plan assumes 7.50%.

A 2021 Reason Foundation commentary described Hollywood as carrying over $1 billion in combined pension and retiree health care debt, including roughly $530 million unfunded retiree health care paid as you go rather than prefunded. Reason is a libertarian think tank that advocates closing defined benefit plans, so read it as advocacy. The retiree health care point stands, and it is the one most people miss.

Not every firefighter is in the same plan

Two of these four departments are in the state system and two are in local city plans. Same job, different rules about when you can go and who can change them.