BOCC Releases Legal Opinion That 401(a) Annuity Plan Is In Fact Legal

August 6, 2021

The Escambia County Commission voted Thursday night to release an outside legal opinion that states the county’s 401(a) annuity plan is in fact legal for elected officials and senior management.

The item was brought to the agenda by Commissioner Jeff Bergosh, who does not participate in the plan but still holds an Florida Retirement System pension plan from his time on the Escambia County School Board. It passed 4-0, with Commissioner Doug Underhill off the dais and not participating in the discussion.

In late July, Escambia County Clerk Pam Childers asserted that state has told her that the county’s 401(a) annuity plan is illegal. Thursday night, she sat silently on the dais as commissioners carried on their conversation.

The board obtained an outside legal opinion from Michael Mattimore of Allen Norton & Blue, which Bergosh described as a “very expensive, high end government firm out of Tallahassee”.

“It is my opinion that the Local 401(a) Annuity Program is legal,” Mattimore wrote of that plan. To read the complete opinion (pdf), click or tap here.

Commissioners Stephen Barry, Robert Bender and Lumon May all opted for the plan.

Barry said there was additional documentation in Internal Revenue Service code and from Westlaw, an online legal research service and proprietary database for lawyers and legal professionals, that references the legality plan type. The commissioner’s vote also allowed the release of that information.

“Once we share (the legal opinion), I want to share everything,” Barry said in response to releasing the legal opinion.

“It’s been alleged that it is illegal because it is not a local annuity. That’s not true,” Barry added.

“To think that I did something illegal be completing a piece of paperwork that HR gave me when I started this position,” Bender said. “I didn’t have vote in it. I didn’t do anything with it. They (HR) said here are your three options, and I chose one.”

“No one could fault you for that,” Bergosh replied.

“The plan goes back to 1997, 25 years give or take, and we’ve had 25 audits that have never pointed to any issues to the plan,” Barry remarked.

“We should certainly not only get an opinion, but we should get a court order,” May said. “It should be brought forth because it deserves to be decided whether by commission or omission is this legal, is it ethical, or is it right. I do believe that it is.”

The board also voted 4-0 Thursday night to instruct Rogers “procure some outside help” on the matter, “without defining exactly it is”.

401(a) Annuity Program

It’s called a 401(a) annuity program, and under state statute was offered only to senior management service employees and commissioners that opt out of the Florida Retirement System (FRS). It’s available statewide, not just in Escambia County.

The plan does not cost Escambia County taxpayers anything extra when contributions are made in a timely fashion; the employee contributions are exactly the same whether or not the money goes into FRS or the annuity program. FRS has significant administrative overhead and fund liability that is funded from employee contributions. The 401(a) annuity plan participant costs are lower, so participants can earn significantly more retirement dollars.

Escambia County has offered a 401(a) annuity program to senior management employees and elected officials since 1997.


20 Responses to “BOCC Releases Legal Opinion That 401(a) Annuity Plan Is In Fact Legal”

  1. on August 8th, 2021 8:39 am

    This is nothing. Behind the scenes the county is pushing to be able to rehire retired employees with no grace period as it now stands at 1 year before you can be rehired.
    Nice gig,retire and come back the next day,stay for 8 years and get another pension.
    There needs to be a state AG audit of every department.

  2. Oh, Pam on August 7th, 2021 5:32 pm

    So when confronted with facts and left holding emails to herself Pam Childers goes mushroom.

    Lol, she stuck that neck out based on fabrications and now she’s exposed as a political hit woman for Janice Gilley and Doug Underwood.

    Good times in Escambia County just keep on rolling…

  3. Steve on August 7th, 2021 8:09 am

    I agree with waste on this one.

    In 21 years of living at the same address, I’ve seen little done to improve the community north of Nine Mile Rd. We’re told there’s “long range” planning, yet residential lots get rezoned to commercial in odd places, run down buildings sit idle while new ones are built, high density neighborhoods get developed right next to higher priced homes and on and on.

    What ever happened to trying to lure employers to the industrial park off of US 29? It seems everyone is content with Navy Federal being THE employer of North Escambia County. Don’t we want high paying jobs for as many of these residents as possible?

    Please quit the political sqabbling and SERVE!

  4. waste on August 6th, 2021 8:09 pm

    Every time I read an article about our EC commission, it never seems to be about fixing issues in our county. Just working on issues within the commission itself. I understand sunshine laws require that we get to hear all the dirty laundry, but geez get something done for those who voted for you, or get out the way.

  5. Dewayne on August 6th, 2021 7:55 pm

    Escambia county needs an audit..if you know Escambia Counties history with the BOCC ,let’s just say money hides a lots of things.
    And I might add, not an audit by the BOCC like this “legal opinion” with legal ramifications coming shortly. But. The whole world is corrupt..we are out of luck

  6. William 2 on August 6th, 2021 5:36 pm

    I’m not going to pretend to understand this but something sounds fishy. The part I’m having trouble with, is the part concerning elected officials. How long does an elected official have to serve in order to benefit from this retirement plan, is it a single term, 20 years? I have always had a problem with elected officials setting their pay schedule and deciding on their pay raises, we the people should have a say in the matter. Not all elected officials deserve such compensation!!!!

  7. CJ Lewis on August 6th, 2021 5:13 pm

    “Once we share (the legal opinion), I want to share everything,” Barry said in response to releasing the legal opinion.” Above is a link to a legal opinion dated July 21. The first sentence mentions a legal opinion dated July 2. The BOCC needs to release the July 2 legal opinion too. Chapter 121 Florida Retirement System, Florida Statues, mentions the words “annuity” and “annuities” 166 times. However, if you “read” the July 21 legal opinion, you find that the author never exactly explains which provision in state law authorizes what has been done and how it has been done. The legal opinion does assert that Section 121.182 “explicitly” authorizes what has been done but if you actually read that specific law, it does not explicitly authorize what has been done. At best, reading the entire July 21 legal opinion in its entirely, absent having a full copy of the July 2 legal opinion to review, the best you can say is that the lawyer who drafted the legal opinion asserts that nothing expressly prohibits what has been done and once even uses the phrase “and not otherwise prohibited.” The law firm Allen Norton & Blue works for Escambia County so it’s legal opinions are hardly independent. Someone should find out if the law firm has expertise in the Florida Retirement System in general and annuities in particular. I would have thought that to be a very arcane area of state law. The person who signed the legal opinion, and someone else might have written it for his signature, is experienced in negotiating collective bargaining agreements. How that expertise translates to this issue is not explained. The best thing to get this over with is for the BOCC to vote to direct the County Attorney to request an Advisory Legal Opinion from the Florida Attorney General. Attorney General Moody’s opinion is just that her opinion but it would be the best thing we have seen to date independently describing the state government’s position on this issue. What has been done may be legal even if the BOCC has not done a good job explaining it. Or it may not be legal perhaps because county staff gave them bad advice. Or the Attorney General may advise that the issue is murky and write something like, “I am of the opinion that, until this matter is legislatively or judicially clarified, it is reasonable to conclude….” Then, maybe, the BOCC will ask the Court to weigh-in. Or maybe the Florida Legislature needs to amend Chapter 121 to clarify what is authorized to include retroactively.

  8. Well on August 6th, 2021 4:39 pm

    So this has been in place and being paid for the last 23 or 24 years.
    So Ms. Childers and previous Clerks of the Court have been illegally paying this?
    Where is the outrage for that if she was the oversight person.

    Ethical ? Legal….. Probably

  9. MR REALITY on August 6th, 2021 4:15 pm

    I agree, they didnt invest in a plan that would of reward with more risk, NOW they want to get that plan…..THESE PEOPLE ARE WORKING FOR THEMSELVES ON OUR DIME…..If this isnt criminal then it certainly warrents not reelecting them. Too bad people dont realize that worthless May is hanging on until the last second until he runs ofr Mayor of pcola so he can keep voting with Barry and Bergosh to keep our county where THEY want it.

  10. MR REALITY on August 6th, 2021 4:12 pm

    So who paid for this legal opinion? Are these people discussing public affairs, in private….WHY dont they get to work for THE PEOPLE, instead of for themselves over a PARTIME JOB…..

  11. Melissa Pino on August 6th, 2021 10:44 am

    Clearly the majority,, if not all, of the commenters on this story didn’t actually watch the discussions on this item. And that’s too bad, as it’s exactly how the Clerk of Court’s ridiculous fabrications and outlandish politicking against the BOCC was such a smash hit–while it lasted.

    In fact, I’m willing to bet that the greater percentage of online commentators on this issue haven’t seen a lick of the actual meetings discussions, and have instead taken their spoon-fed disinformation doses from the PNJ, Studio 850, and/or ECW feeling self-righteous vindication that “somebody finally did something about all this,” being titillated by Marlette’s twisted head-scape spilling out on to the page, and feeling the false comfort of a local, unbiased, grassroots media source that isn’t, isn’t, and isn’t.

    I was not in favor of the retroactive payments when that was a consideration, and spoke against it at the meeting. I’m looking forward to seeing a cost analysis of the various benefits and how they have actually played out, in dollar amounts (tax payer side; benefit side) before I weigh the merits of the programs from a taxpayer standpoint, per the context that the local plan stops paying out at the end of service, while the FRS version is on the taxpayers forever.

    What was actually discussed and decided upon last night, in two separate votes, was (1) to release legal opinion and explanatory language making it abundantly obvious there was nothing illegal/criminal about elected officials opting for the local plan; and (2) to have a look into ALL the retirements benefits, across the County, including those of constitutional officers such as the Clerk of Court, along with an expert financial analysis of returns and efficiencies. Moreover, Commissioner May took it further and said he would like to see a court weigh in on the legal question. This was not a lighthearted discussion.

    In all the meetings I have sat through or watched, I don’t think I’ve ever seen an Escambia official make a more dunderheaded move than Ms. Childers backing herself into a lose-lose corner on this in exchange for some fleeting folk hero celebrity. And that’s saying something, given Doug Underhill sits the same dais. A more savvy politician would have instantly realized the moment of checkmate and recognized there was one way out, and one way only: apologize for her error, and commit to working with the County Attorney and the BOCC towards the best combined solution for the taxpayers and the benefits holders. Instead, she was as silent and motionless as a gargoyle.

    It’s never too late for an apology, however. And she’s not alone in those who should be offering one. The editorial team of the PNJ literally slandered commissioners and the County Attorney, with seeming intent. Studio 850 carelessly reported the illegality as a fact, even though a careful reading of Ms. Childers’ bizarre emails showed no evidence whatsoever of that. ECW…oh, never mind.

    Any open-minded, rational person interested in this topic who hasn’t yet viewed the discussion can do so at about the 3:21:30 mark here:

  12. Legal but not ethical on August 6th, 2021 10:01 am

    Regardless of whether or not it is legal, it is certainly not ethical for an elected official to get 50% of compensation in a retirement plan. The comment that “it doesn’t cost the county any more money” is only partially true. IF contributions are the same for 401a and the FRS then that is true. But lets dig a little deeper. Where does the FRS money go if not to the employee? Much of the “cost” of the FRS contribution is to help fund the Unfunded Actuarial Liability in the FRS system. Put plainly, this makes sure the plan is solvent for all participants. Secondly, the 401a contribution rate is chosen by the county SO it doesn’t HAVE to be the same at the FRS contribution rate. If it were adjusted down to equal the actual contribution made to the FRS employee then it ABSOLUTELY would save the taxpayers money! Tell the whole story

  13. Frankly on August 6th, 2021 8:33 am

    Do you know what a Legal Opinion is… Exactly that “An OPINION”. There has been a LOT of that, and heads rolled if you disagreed with their opinion (BCC) Also, just because it is Legal doesn’t make it right. 49% contribution?…Tax deferred? …We Owe them 250K?



  14. Joe Culbertson on August 6th, 2021 8:13 am

    Just because something is legal does not mean it is ethical. I am in support of our County Employees being able to opt into a different retirement plan, however it should apply to all county employees and not just an “elite class.” If it is good for the goose it should be good for the gander. Most people I know would say that the contribution rate to this 401a is too high and should be adjusted, regardless of what the FRS plan contribution is. Public policy should be judged like chicken breasts, if it stinks throw it out, and this stinks bad..

  15. James leigh on August 6th, 2021 8:06 am

    After watching the online meeting last night it was apparent the commissioners like to hear themselves talk and have no idea what they are talking about. No doubt this is a money grab by greedy politicians, ELECTED!! Attorney General Moody needs to investigate this group for sunshine law violations. They are wrong about their definition of the retirement program and people need to vote them out.

  16. Frankly on August 6th, 2021 7:52 am

    Their Lawyer says???? Well the scripture says “it may be legal, but that doesn’t make it right”. And who paid for that high priced legal opinion? I want to know what the Governor’s office has to say or better yet the Attorney general has to say, not a lawyer the BCC hired that they paid to get their opinion vilified.

  17. Derek W on August 6th, 2021 7:31 am

    Ok so these politicians took the easy route with the defined retirement plan. Now the realize they could have made 25% more money had they chose a plan based on stock market returns. Now they want the money without the RISK and they are paying their attorney friends to say that is ok. Look people, PLEASE VOTE THESE PEOPLE OUT FIRST SHOT YOU HAVE. These politicians are putting their welfare ahead of the peoples business. They are spending our time and our money so they can profit. It is time to send them home to a real job. LETS START A RECALL PETITION NOW!

  18. Oversight on August 6th, 2021 7:21 am

    Well what would you expect from the BOCC? This is their own self-serving and paid for “opinion” to get their pockets lined at our expense. The better questions are is it ethical, and is this the right thing to do for the taxpayers of Escambia County, since it is only for the privileged few.

  19. JTV on August 6th, 2021 6:12 am

    Hopefully, this high end government firm cost comes out of Barry and company’s pocket, not the tax payers. But we know better than that.

  20. One4All on August 6th, 2021 3:59 am

    If the FRS is such an expensive system to administer and the potential for savings and growth is so much better for the 401(a) participants, why isn’t the 401(a) offered to all employees rather than only senior management and elected officials?

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