Scott Signs Law, State Workers to Start Paying Into FRS

By: Michael Peltier, The News Service of Florida
By: Michael Peltier, The News Service of Florida


Members of the Florida Retirement System will begin paying into their pension plans and face less generous payouts under a measure signed into law Thursday by Gov. Rick Scott.

The bill (SB 2100) will require employees to contribute 3 percent of their salaries to help fund their retirement accounts, which have been paid for entirely by the state for nearly three decades. Further, the law raises the retirement age for employees hired after July 1 and eliminates cost of living increases for service performed after that date; cuts in benefits that union representatives say will be remembered by voters at the polls in 2012.

Tucked in among a flurry of bills signed into law Thursday, including the state $69 billion spending plan, the bill became a lightning rod for unions and teachers, many of whom have not received raises in several years.

“The reforms in this bill begin to bring the public sector retirement system in line with the benefits of workers in the private sector,” Scott wrote in a letter accompanying the signed bill. “More importantly, however, this action will restructure cost drivers of the system in a manner that builds greater confidence that FRS will meet its future financial obligations without new taxpayer contributions.”

Backers of the measure say the changes are necessary to curb future costs by more than $1 billion a year by eliminating cost of living increases for some future work and requiring elected officials and senior managers hired after July 1 to enroll in 401(k) type benefit plans.

The original bill called on all new hires to be enrolled in these so-called defined benefit plans. The requirement fell largely by the wayside under pressure from trade unions and teachers who flocked to the Capitol to protest the shift.

The final version was less dramatic, but still redefines employment for retirement purposes and limits the amount of overtime used to calculate retirement benefits. The law retains the popular DROP early retirement program but reduces the accrual rate of benefits.

For rank and file employees, the bill raises the retirement age from 62 to 65 or 33 years of service. The retirement age for law enforcement and other high risk employees increases from 55 to 60 (or 57 years of age with 30 years of service.)

Though it came as little surprise, Scott‘s action drew fire from teachers and unions that argued unsuccessfully that public employees should not be called on to fill a budget deficit when many haven’t received raises in years.

“They extracted more than $1 billion out of public employees to balance the budget,” said Doug Martin, spokesman for AFSCME Local 79, which represents public sector employees.

Coming atop cuts in education funding and other austerity measures included in the $69 billion spending plan approved by Scott Thursday, Martin predicted the statewide union’s 800,000 members would return the favor when they go to the polls in 2012.

“(Scott) calls this a ‘jobs budget. That’s an almost Orwellian statement,” Martin said. “A lot of people will lose their jobs because of this.

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  • by Kevin Folta Location: Gainesville on Jun 10, 2011 at 04:30 AM
    It is a tax on public sector employees. The tax breaks for big corporations are balanced on the backs of teachers, cops, firefighters, etc, those that can least afford it. Look at what teachers are paid in FL. To take 3% of that is insane.
  • by d on May 29, 2011 at 08:21 AM
    people who are happy about this are evil 3 percent from 20000 makes a big difference
  • by Why can I not opt out.... Location: Florida on May 28, 2011 at 04:06 PM
    My problem with this is I contribute 15% of my $29,000 gross income to my own retirement via my 403b, 457, and Roth IRA. Now I am forced to contribute to the FRS which I now will not exist in exactly 40 years when I reach age 65. I am saying this because FRS is turning into the newest Social Security, which I know will not exist in 40 years. How will I get the 3 percent back that I put in? The quick answer in I will not. For me that 3 percent would have been better invested by me into either my 403b, 457 or Roth IRA. Which is why I say for people in my generation it would have been better to give us the option to Opt Out. However to keep FRS afloat they are going to need the 9 percent (3% from the employee & 6% from taxpayers which also includes public employees) from each of the 650,000 public employees so no one can Opt Out.
  • by panhandlesue Location: Tally on May 28, 2011 at 02:47 PM
    Voters who voted Mr. Scott into office knew he was a businessman but they elected him anyway....without a majority vote. He's running Florida like a business, just as shady as the health care "business" he was involved in. IMO, waiting 3 yrs to vote him out is a little too much. Leopards don't change their spots and neither will he. The previous comments are hinting at nefarious activities. Are they on to something?
  • by There is so much more wrong on May 28, 2011 at 10:41 AM
    The lousy part is that a contracted worker in our program is making over $120K per year. He is not a state employee, but has a contract to do work for the state. His area of work is specialized, but there are 1000s of people that the state could contract with to do the same work for $35K and get the same amount of work. There was never any competitive bidding for the work. This one person makes more money than anyone within the state division, even the director. More money in state budgets goes directly to the private industry than actually stays in the public domain. So many businesses depend on overcharging the state for work. They would never survive if they had to accept market value for their work.
  • by jes on May 28, 2011 at 04:48 AM
    The 3% pay cut on low paid state workers is a 3% tax to work for the state and no cost of living increases. What we will have in the near future is a state government that will not function. If you treat state employees like unskilled workers then we will have a unskilled government. We already have that in the governors office.
  • by justme Location: Florida on May 28, 2011 at 02:27 AM
    I lost my state job due to Governor Scott's cuts to education. It's a way my school could cut an older worker and get away with it. You can bet none of the many marginally-qualified relatives on the payroll there will suffer one bit, in fact they received raises when no one else did and the brass has always received their fat bonuses year after year. They also continue to receive annual raises through job reclassification when no one below does (except their kin of course, gotta take care of family). These are FACTS! I believe there may be two sets of books there. I'm getting unemployment and will be in line for every entitlement available down the line. This is really an intelligent solution to Florida's budget problems. The only "reform" needed is recalling Governor Scott! Vote with your feet, people!
  • by Deputy Sheriff on May 27, 2011 at 07:56 PM
    I work for a small rural county Sheriff's Office. We haven't had a raise in going on 4 years. We make apprx 31K per year. Trust me, 3% is a big deal when you make that low of a salary. No overtime, 3% pay cut, less retirement benefits, NO appreciation at all. Why in the world would any young man or woman want to go into law enforcement or any other public service field. This is scary for our future. I wouldn't vote for Scott for a parking attendant, much less Gov. or Lord forbid, President. Let's hear from some LEO's and CO's!!!
    • reply
      by Tyrone on May 28, 2011 at 06:33 AM in reply to Deputy Sheriff
      If you don't like what you're getting - then quit
  • by Anonymous on May 27, 2011 at 05:16 PM
    The 3% is not even going to go to the retirement fund but will be used for the benefit of the legislature wish list.
    • reply
      by Perry LEO on May 27, 2011 at 07:57 PM in reply to
      I can't wait for the 2012 election.
  • by Anonymous on May 27, 2011 at 04:36 PM
    How is this not the same as what Bernie Madoff did? Take people's money, promise them a specific retirement pension package, and when they go to collect it tell them they have to wait longer and contribute more... Is any of it going to even be there when we go to collect after 33 years of contributing?
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