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

THE CAPITAL, TALLAHASSEE, May 27, 2011 -

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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