Rick Scott discusses plan to screw FRS

Posted on Tue, Feb. 01, 2011
Scott: Workers must pay own way for a pension
BY MARY ELLEN KLAS
Herald/Times Tallahassee Bureau

Gov. Rick Scott is proposing to overhaul the state's pension system for tens of thousands of teachers, police officers and other state and county workers by requiring them to contribute to their retirement accounts and by not offering the pension plan to new workers.
The proposal, which must be approved by the Legislature, would save the state $2.8 billion over the next two years. The state is facing a budget shortfall next year that could top $4 billion.

In announcing the plan on Tuesday, Scott said he wants current employees to pay 5 percent of their salaries into their retirement accounts. State employees currently do not pay for their retirement.

New employees would not receive a traditional defined benefit pension plan, but would be eligible for 401(k) retirement accounts typically offered in the private sector.

``We must bring Florida in line with the private sector and nearly every other state in the country by requiring government workers to contribute towards their own retirement,'' Scott said in a statement released by his office.

The governor is also calling for an end to the popular program -- known as the Deferred Retirement Option Program (DROP). It encourages older workers to retire by allowing them to draw a pension check and return to work for the state. He also wants to end cost of living adjustments for retirement accounts.

The announcement was the second in a series of sneak previews Scott is making before he unveils his first budget at a rally of tea party supporters on Feb. 7.

But as with his proposal Monday to save $1 billion by folding the Department of Community Affairs into the Department of Environmental Protection, Scott released few details.

The governor's office would not disclose how it calculated the projected savings of $2.8 billion.

Legislative analysts estimate that requiring employees to contribute 5 percent of their salaries would save closer to $890 million a year -- with $500 million coming from school district personnel, $300 million from county workers and only about $90 million from state workers.

There are 655,000 active employees in the Florida Retirement System, including 91,000 in Miami-Dade County, 62,000 in Broward, and 3,700 in Monroe, 50,000 in Hillsborough, 30,000 in Pinellas and 19,000 in Pasco.

The state currently contributes about 9 percent of workers' salaries to their retirement accounts. But some workers, including sheriffs deputies, firefighters, paramedics and other high-risk officers get a higher percentage.

Scott's budget proposal ``is not a binding document'' and is viewed by legislators as a recommendation, said Sen. Jeremy Ring, D-Margate. But as chairman of the Senate committee that charged with implementing pension reforms, Ring said Scott's proposals are ``heading in the same direction'' as lawmakers.

`NO MAGICAL TREE'

``There's no magical tree growing money,'' Ring said. ``You can lay off a huge amount of workers, or you can adjust pay and benefits. There has to be a belief that we're all in this together and the reality of the situation demands adjustments and reforms.''

Because school districts make up half of the members in the retirement fund, the savings to school districts would be greatest.

Rep. Alan Williams, a Tallahassee Democrat who represents many state workers, called the governor's proposals ``a 5 percent tax on Florida Retirement System participants'' and warned it would hurt morale of employees who haven't had a pay raise since2006.

``Now is not the time to balance a budget on the backs of Florida's public servants,'' he said.

Ring said that Scott's proposal may be more aggressive than legislators are prepared to consider.

Lawmakers, for example, have talked about scaling back DROP, the popular program that encourages older workers to retire with a pension and return to work. Scott wants to eliminate it.

The program was designed to encourage senior workers to retire on time but receive a lump sum to defray the cost of health insurance until they become eligible for Medicare. But abuses by several high-salaried employees who returned to work while drawing a statepension have drawn criticism.

Scott also proposes reducing the accrual rate, the portion of an employee's retirement compensation that is calculated based on years of service. Scott wants most workers to receive an annual service credit of 1.6 percent, while special risk members would get a rate of2 percent.

COLA ELIMINATION?

Scott's plan also calls for eliminating the 3 percent cost of living adjustment for service after July 1 and eliminating the benefit for new hires. Retirees would not be affected.

Doug Martin, director of governmental affairs for the American Federation of State, Local and Municipal Employees said the proposal ``is a catastrophically bad decision.''

It will cause the government to pay more in contributions to keep the pension financially sound because fewer employees will be paying into the system.

``Those contribution rates are going to go up,'' he said.

Mary Ellen Klas can be reached at meklas@Miami Herald.com. Herald/Times reporter Marc Caputo contributed to this report.





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From the Governer's Office:


Governor Rick Scott Announces Budget Proposals
That Will Save $2.8 Billion Over Two Years by
Modernizing the Florida Retirement System

Naples, Fla. – Keeping in line with his 7-7-7 plan and his plan to modernize the Florida Retirement System, Governor Rick Scott announced today that he would send the Legislature a budget proposal that better aligns government workers’ pensions with those in the private sector and saves taxpayers $2.8 billion over two years.

Governor Scott announced that the savings would be realized by requiring government employees to contribute five percent of their salaries to the system and requiring new employees to enroll in investment plans similar to private sector 401(k)s.

“We must bring Florida in line with the private sector and nearly every other state in the country by requiring government workers to contribute towards their own retirement,” said Governor Scott.

The Governor also announced his intention to close the Deferred Retirement Option Program to new participants as of July 1, 2011, and to reduce the annual service credit to 1.6 percent for most members (special risk class members, to two percent).

Governor Scott said the Cost of Living Adjustment on retirement benefits will be eliminated for all service earned after July 1, 2011. Current retirees will be unaffected. Those members retiring after July 1, 2011, will receive a three percent Cost of Living Adjustment on the retirement benefit attributable to the service earned prior to July 1, 2011, and no cost of living adjustment for service earned after July 1, 2011.

“Government workers, like private sector employees, deserve the opportunity to save for the future, but taxpayers shouldn’t be asked to foot that bill alone.”

Governor Scott said that modernizing the Florida Retirement System would help reduce spending and help get government back to its core missions

THESE STATE AND COUNTY WORKERS HAVE HAD NO RAISE AND GET PAID VERY LITTLE FOR RISKING THERE LIVES FOR THE PEOPLE,IS THIS A THANKYOU TO THEM ? SOME STATES MIGHT CONTRIBUTE TO RETIREMENT BUT THEY ALSO GET PAID AT LEAST TWICE AS MUCH AND EVEN MORE! AND YOU CANT EVEN SAY THAT THE COST OF LIVING IS DIFFERENT BECAUSE IF YOU WEIGH IT ALL DOWN IT REALLY IS NOT. INSTEAD OF
MAKING OUR TEACHERS, FIREFIGHTERS AND LAW ENFORCEMENT STRONGER FOR OUR COMMUNITIES WE KNOCK THEM DOWN. I THINK THIS IS JUST HORRIBLE!!! ITS ALWAYS ABOUT MAKING CUTS FOR THE DEFICIT,BUT THIS WILL NEVER END.BECAUSE AFTER THESE CUTS , IN THE FUTURE
YEARS THEY WILL BE BACK TO NEEDING TO MAKE CUTS AGAIN. I BELIEVE THAT WE SHOULD TAKE CARE OF OUR TEACHERS, FIREFIGHTERS, AND LAW ENFORCEMENT WHO RISK THEIR LIVES FOR US EVERY DAY. IM SURE THEY CAN FIND OTHER WAYS TO MAKE MONEY FOR THE DEFICIT.

Well I guess the streets of Florida will not be safe anymore!!!! Why should police officers care or give tickets that generate millions of dollars towards the Florida budget. :devil:

If these proposed changes go through...I will become the poster child for the lazy, government worker.

Instead of being a proactive worker with high moral I will become the money focused, benefit seeking, get-over on the job employee that everyone thinks we are.

The state of Florida will wish they never hired me.

I will be the next citizen on patrol in a police car........wont do a damn thing!!!!!! Can anyone tell me, why should I care?????????????????????????????????????????????? ??????????????????????
Things are going to get really nasty out there if these changes go into effect, It is going to be pure madness!!!

THE STATE IS NOT PAYING FOR OUR PENSIONS!!!!!!!! IT IS EMPLOYER PAID!!!!!

Finally you are going to help pay for something you are not entitled to. If any of you don't like it go work for Obama and Company.

The last "Cat" is either jealous or plain uninformed, in any case he is not paying for anything to keep his skinny butt safe !!!!!!!!!!!!

If these proposed changes go through...I will become the poster child for the lazy, government worker.

Instead of being a proactive worker with high moral I will become the money focused, benefit seeking, get-over on the job employee that everyone thinks we are.

The state of Florida will wish they never hired me.

Same here!!

Did you notice that Scott wants to cut everything big time. However, he was able to free up an add'l 640 million and 190 new positions for his executive staff!?!? Hey he has to hook all his friends up with jobs! :roll: :snicker: