Cape Coral Keeps DROP Pension Bonus Data Hidden as Millions in Tax Dollars Flow to Top-Earning Employees

Concerned Citizen
7 days ago
2 min read

Cape Coral’s Pension Windfall Comes at the Public’s Expense

Cape Coral taxpayers are being asked to fund one of the most expensive pension systems in Florida, while being denied basic transparency about who benefits and by how much.

Unlike most Florida cities, Cape Coral operates a stand-alone pension system instead of participating in the Florida Retirement System (FRS). This decision alone costs taxpayers millions each year in unnecessary administrative overhead. But in 2024, the City went further, dramatically expanding pension bonuses through a major change to its Deferred Retirement Option Program (DROP).

According to a May 2, 2024 actuarial letter from Foster & Foster, the City expanded DROP from 5 years to 8 years, a 60% increase. This change created million-dollar cash bonuses for senior employees and permanently increased long-term pension liabilities, without voter approval and with little public discussion.

All of this is happening while most taxpayers have no pension at all.

Nationally, only 15% of private-sector workers receive a traditional pension, and fewer than half receive any employer 401(k) match. Yet these same workers are now being asked to fund expanded pension bonuses for government employees, many of whom also stop contributing to the pension system entirely once they enter DROP.

That’s where the problem deepens.

When employees enter DROP, they:

Receive a large lump-sum pension bonus
Lock in a higher lifetime pension
Stop contributing their normal share of salary to the pension system
Cash out unused vacation and sick time at their final, highest salary, inflating pension calculations

Across approximately 1,800 employees, missing contributions alone shift $1.2 to $1.8 million per year onto taxpayers.

Because Cape Coral refuses to join FRS, it must also maintain a full pension bureaucracy:

Internal staff cost: $550,000–$900,000 annually
External vendors (actuaries, attorneys, auditors, consultants): $1.3–$1.7 million annually

That’s $1.8–$2.6 million per year just to run the pension system, costs that would be largely eliminated under FRS.

Compared to FRS, Cape Coral’s pension system costs taxpayers:

$6–$9 million more every year
$400,000–$700,000 more per top employees over a lifetime
$120–$180 million in added liability over 20 years

Despite repeated public records requests, the City has not released detailed DROP accrual and payout records. Taxpayers are being asked to trust the system while being denied the data needed to evaluate it.

The question Cape Coral leaders must answer is simple:

How does the City justify increasing pension bonuses by 60% when most taxpayers funding them have no guaranteed retirement income themselves?

Until transparency is restored and costs are brought in line with reality, Cape Coral’s pension system will remain less about retirement security, and more about unfairness.

You can find out more info at tripledippers.org & Lee County Tax Payers Association Feacebook Page