Public Employee Pensions
Fri January 18, 2013
Florida Public Empoyees Lose Pension Fight
Florida teachers and other public employees are shocked and angry today, now that the state Supreme Court has upheld a two-year-old state law that requires them for the first time to contribute to their own retirement plans.
Under the law, passed by the 2011 Legislature, three percent of most pension-eligible paychecks are deducted for the state pension system, which the state alone has funded since 1974. Most state employees have received no pay raises since 2006.
The teachers' union had argued and won a lower court decision that the rule violated their collective bargaining rights but the Supreme Court overturned that decision Thursday, ruling that the state had not created any new rights for its workforce when it decided in 1974 not to require employee contributions to the pension system.
As Justice Barbara Pariente put it, nothing in the 1974 law indicates that the Legislature intended to "bind itself for all time to preclude future legislatures from ever altering the future benefits" in the retirement system.
In its coverage of the decision, The News Service of Florida traced the law's background:
The 2011 law, which also involved revamping a cost-of-living adjustment in the retirement system, touched off a political battle in the Legislature. Critics argued that government workers should not see their paychecks shrink by 3 percent when many also have not received raises in recent years.
But after Thursday's ruling, (Gov. Rick) Scott issued a statement saying it "supports our efforts to lower the cost of living for Florida families. This means even more businesses will locate and grow in our state, which creates even more opportunities for Floridians to live their version of the American dream."
Scott's statement drew a sharp response from teachers union president Andy Ford, who said the multimillionaire governor does not understand what it is like to live on a salary of $50,000 or less --- as Ford said most of his members do.
Here's the video of the teachers' union threatening to unseat Gov. Scott and legislative supporters of the pension law in 2014.
And there was also an early reaction from the editorial board of the Palm Beach Post. It said the high court had reached a letter-of-the-law decision that had nothing to do with fairness or motivation:
As we have said, if the case had been about fairness, state workers protesting the changed pension rules would have won unanimously. The legislature and Gov. Rick Scott cared more about sticking it to teachers unions than shoring up the Florida Retirement System. Legislators and the counties, cities and school districts that benefited from the new law, which reduced employers’ mandatory contributions to the pension funds, in most cases used their windfall to plug unrelated budget holes.
The Supreme Court split 4-3 in the decision, with dissenters accepting the view that the 1974 law excusing workers from making pension plan contributions had indeed created a legal right for pension plan members.