How Changes in the Florida Retirement System will Affect Your Divorce

In May, Governor Rick Scott signed into law changes to the Florida Retirement System (FRS), which will take effect July 1, 2011. The changes will affect state and county employees who are divorcing in two ways:

  1. Florida’s child support calculations allow you to deduct from your gross income mandatory contributions to retirement plans. Participants in FRS are now required to contribute 3%; therefore, their net income should be lowered in the child support calculations.
  2. A retirement plan, including FRS, is an asset that needs to be divided in a divorce. FRS participants used to receive an annual 3% cost of living adjustment based on their years of service for their benefits, which increased the overall value of the retirement plan. The new law changes how the formula incorporates a participant’s years of service, which decreases the percentage below 3% and makes the percentage specific to each participant. The effect is a lower overall value.

     Posted on June 23, 2011 at 12:21 pm | No comment

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