Jul 24, 2015 at 4:34 PM
Former Jacksonville Mayor Alvin Brown says he will reimburse city taxpayers for their thousands of dollars in contributions to a state 401(k)-style plan Brown enrolled in when he took office in 2011.
After enrolling in that plan – recently valued at nearly $70,000 – and subsequently learning it included a substantial city contribution, Brown’s administration promised he would reimburse the city when he left the state system, even at the risk of incurring tax penalties.
After the Times-Union began looking into the issue of repayment this week and reaching out to Brown for comment, his former chief of staff sent an email to city officials Thursday saying Brown had spoken with Florida Retirement System administrators and was ready to authorize the city to electronically debit its previous contributions directly from his account.
“As I promised while I was Mayor, I will be reimbursing the City of Jacksonville for the contributions it made to a Florida Retirement System (FRS) investment account,” Brown said in a written statement provided to the Times-Union. “Having spoken at length with FRS about the proper process for that reimbursement, I am working with the City to make it happen as quickly as possible.”
A specific breakdown of the city’s contribution to his plan was not available.
The state does not provide information on individual accounts, including its value or the status of the plan or whether money has been taken out, according to a spokesman for the state Board of Administration, which oversees the investment plans.
But Brown’s 2014 financial disclosure valued the account at $69,428; the actual value could be different based on the performance of the fund’s investments. The majority of the fund’s value comes from the city contributions.
By state law, Brown contributed 3 percent of his $139,000 salary each year – about $4,100 per year. The amount the city contributed to that plan fluctuated – this year, for example, the city’s contribution for Brown’s investment plan was about 8 percent, while it was as high as 13.2 percent in 2012.
Brown promised four years ago that taxpayers would not pay for him to have a pension, a vow that has taken a few twists and turns in the last four years and which caused him headaches during his unsuccessful re-election bid against Mayor Lenny Curry this year.
Upon taking office in 2011, Brown had the option of enrolling in the Florida Retirement System Pension Plan – a defined-benefit plan that vests after eight years – or the FRS Investment Plan, which mirrors a 401 (k)-style plan often seen in the private sector and vests after one year. He also could have opted out of any retirement plan, with the exception of Social Security.
He chose the investment plan.
Although the state investment plan is not a pension, it is similar in one way: The employer makes the majority of the plan’s contribution.
But Brown’s office said he enrolled in the investment plan without realizing city taxpayers would be kicking in thousands of dollars each year, and in the time since he had promised to return the city money when he exited the plan. Under state law, the soonest he could exit the plan was at the end of his term June 30.
Curry, like Brown, promised during the election taxpayers wouldn’t finance his retirement, and he’s opted out of any state-run plans, according to spokesman Bill Spann.
“He’s not taking any retirement,” Spann said.
Nate Monroe: (904) 359-4289