Special Risk COLA floor

HB 5205E (2026 Special Session E) establishes an alternative cost-of-living adjustment for eligible Special Risk Class retirees in the FRS Pension Plan. It adds a new subsection (5) to s. 121.101, Florida Statutes (present subsections (5) through (9) are redesignated (6) through (10)). Beginning July 1, 2026, in lieu of the annual adjustment under s. 121.101(4)(b) occurring after the fifth anniversary of retirement, the adjusted monthly benefit is the prior benefit plus the greater of the existing prorated COLA factor or 1.5% of the benefit. It is a floor layered on top of existing law, not a replacement: retirees whose prorated COLA already meets or exceeds 1.5% are unaffected.

Eligibility is limited to the Special Risk Class, for members whose effective retirement date is on or after July 1, 2011. The new s. 121.101(5)(b) defines an "eligible Special Risk Class retiree" as one initially enrolled in the FRS before July 1, 2011 with at least 72 calendar months (6 years) of Special Risk creditable service, or initially enrolled on or after July 1, 2011 with at least 96 calendar months (8 years).

Legislative history: The provision originated as CS/SB 7028 in the 2026 Regular Session, where it traveled with two related measures — a provision allowing certain elected officers to receive accumulated DROP proceeds while remaining in office (with recoupment) and revised investment-plan allocations. On February 20, 2026 CS/SB 7028 was laid on the table and its contents were substituted into HB 5205 via Senate delete-all amendment 183726 (Mayfield); HB 5205 passed both chambers but died in the budget conference committee on March 13, 2026 when the regular-session budget was not resolved. In the 2026 Special Session E the package was carried in HB 5205E: the Senate adopted Mayfield delete-all amendment 123090, and the final text is conference committee amendment 688691 (approved for filing May 26, 2026). Both versions add the COLA floor as new s. 121.101(5). HB 5205E passed both chambers — initial passage on May 12, 2026 (House 106–0; Senate 32–0 as amended) and adoption of the conference report on May 29, 2026 (Senate 34–0; House 101–3, per the legislative record) — and was enrolled. The same bill also revises FRS employer contribution rates in s. 121.71 (with Special Risk rates raised to help fund the COLA) and addresses elected-officer DROP (s. 121.053), recoupment (s. 121.091), and investment-plan allocations (ss. 121.73 and 121.735). PensionForge models only the COLA floor from this act; it does not model the elected-officer DROP-in-office provision (s. 121.053(7)), DROP recoupment (s. 121.091), the revised employer contribution rates (s. 121.71), or the investment-plan disability and line-of-duty-death allocations (ss. 121.73 and 121.735). See the "HB 5205E — 2026–27 FRS employer contribution rates" entry.

Status: HB 5205E passed both chambers and was enrolled on May 29, 2026, when the 2026 Special Session E adjourned sine die. It was signed by the Governor on June 29, 2026 and takes effect July 1, 2026. Its Laws of Florida chapter number (Ch. 2026-___) is pending assignment by the Secretary of State.

Effective date: July 1, 2026, and each July 1 thereafter.

What this would change in PensionForge's projections: For eligible Special Risk Class retirees whose prorated COLA under current law would fall below 1.5%, the engine would apply 1.5% as the minimum, beginning with the July 1, 2026 adjustment. Members whose prorated COLA already meets or exceeds 1.5% would see no change. Members initially enrolled in the FRS on or after July 1, 2011 with fewer than 96 months of Special Risk service would remain ineligible for the floor and continue under the current-law formula.

Current engine behavior: The new s. 121.101(5) is law and takes effect July 1, 2026. PensionForge's projections incorporate the 1.5% floor for eligible Special Risk Class retirees beginning with the July 1, 2026 adjustment cycle; members whose prorated COLA already meets or exceeds 1.5% are unaffected.