Is Florida Paying Former Employees Too Much?

Bennett has announced that he will be introducing a bill this fall that will cut and eliminate benefits to FRS members.

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In a recent new article titled “Is Florida Paying Former Employees Too Much”, Senator Mike Bennett was quoted as saying the current Florida Retirement System Pension System is “out of control”.  Bennett has announced that he will be introducing a bill this fall that will cut and eliminate benefits to FRS members.  We decided to check into the data he used to support his opinion and we could not find credible data to support his conclusion.

The article statesthe state paid out $5.6 billion to retired workers; that’s almost 10 percent of the state budget”.  According to the Annual Report (page 53) The Florida Retirement System Trust paid out $4.8 billion in total pension benefits (we could not validate the $5.5 billion number from the annual report).  The article stipulates this is almost 10% of the state’s total annual budget.  Again the math is fuzzy; as the budget was closer to $66 billion, of which 5.5 is only 8.3%, but I guess rounding up makes the story more sensational.

Page 19 of the Annual Report, reflects $4.8 billion payout to retirees (who worked hard for the benefits the state promised them), employer contributions accounted for $3.73 billion, and of that only $679 million are labeled state contributions.  The real number – only 1% of the real dollars came from the State budget.

Bennett statesYou have a firefighter who could retire at 45 and live until 90. They only worked 25 years, but are going to collect for 45 years. That’s not what it was designed for!”  Again, it makes for wonderful political rhetoric!  It is possible someone retires at 45 with 25 years of service, and lives to be 90. We looked at the annual report to see what the real data suggests.

According to the states own numbers (Page 56) bottom of page   “Average duration of benefit payments in years is 9.53 years” not 45 as used in the Senator’s example.  The real numbers, according to the Annual Report (page 57), reflect the average age of retirement is between the ages of 60 and 64, and there are 97 employees over age 85!

WFTV found, “even now, the state’s pension program is in the red. As of last year, Florida had a total of $15 billion in unfunded pension liabilities”.  The statistic chosen for use was for the year immediately after the Financial Panic of late 2008, when assets were at their lowest values.

The accurate numbers could be found by the press release posted on the MyFRS.com web page under the title Florida Retirement System Rebounds in FY 2009-2010

Even when the system was temporarily underfunded by less than $15 billion, it was still well within Pension Actuarial thresholds (80% funded) of being a sound and solid plan.  With the latest year’s performance, the $15 billion shortfall has been mostly made up, and the FRS System is well within the parameters of an outstanding Pension Plan. For the previous 11 years the fund has been over funded and the last 18 month has been an aberration to the plan.   FRS is a well funded and self sustaining pension plan, which does not reach into the general budget for shortfalls.  We believe the legislators should not use its efficiency as a scapegoat for other budget shortfalls.

The articles final point of propaganda says that according to a “2009 study by the Bureau of Labor Statistics, average state and local government workers earned $26.24 per hour while private sector earnings were $19.45 an hour”.  We would like to point out this study was done for ONE year, in the middle of the worst recession most of us have lived through, at a time when the civilian unemployment rate was over 13%!  This is hardly a statistic legislative changes should be based on.  How did government workers fare in the statistics for the prior 25 years?

There are many states facing severe funding gaps in their pension plans that may need to be addressed, Florida is probably not one of them.  So that brings us back to if it isn’t broken why fix it!

We believe that while “Bennett is still crunching numbers with the state budget office before filing his bill”, he should be honest with those numbers, and not misconstrue statistics for good sound bites and political rhetoric.  If the budget needs to be reduced, and the financial system needs to be reformed, we would like to encourage the legislators to knuckle down and cut wastes where waste exists, and not arbitrarily break promises and cut benefits to those who have worked for the benefits they were promised, and earned.

It’s never too early to garner support for protecting your benefits, please share this information with your fellow workers, friends and voters in general.

  • http://www.floridaretirementsystem.info Mark Davy

    Based on the data available to date, both candidates have their eyes on reducing
    FRS benefits to free up those dollars for other area’s. While Crist was
    sympathetic to breaking pension promises, Scott and Sink don’t appear to be at
    this point. Hopefully, clarification will come closer to election day. In the
    meantime, everyone needs to bombard their Representatives and Senators with
    their views.

    Mark A. Davy

    SouthBay Investment Group, llc
    665 S. Orange Avenue, Suite 4
    Sarasota, Florida 34236

    941-951-1977
    941-952-1937 (fax)

    ________________________________

  • http://www.floridaretirementsystem.info Mark Davy

    I suspect you will find it to be pure political rhetoric. As the politicians
    and press harp on the so-called “millionaire cop next door”, the average tax
    payer may think it is true, and not be too upset if those salaries and benefits
    are cut.
    Mark A. Davy

    SouthBay Investment Group, llc
    665 S. Orange Avenue, Suite 4
    Sarasota, Florida 34236

    941-951-1977
    941-952-1937 (fax)

    ________________________________

  • http://www.floridaretirementsystem.info Mark Davy

    I suspect you will find it to be pure political rhetoric. As the politicians
    and press harp on the so-called “millionaire cop next door”, the average tax
    payer may think it is true, and not be too upset if those salaries and benefits
    are cut.
    Mark A. Davy

    SouthBay Investment Group, llc
    665 S. Orange Avenue, Suite 4
    Sarasota, Florida 34236

    941-951-1977
    941-952-1937 (fax)

    ________________________________

  • Jamba

    Bennett and some others seem to think that pensions are money the state just gives to pensioners. My FRS pension is funded by contributions made by my employer to the FRS plan. These contributions are set by the state. Any attempt to cut these pensions will be challenged as an unlawful confiscation of a legally owned asset.

    Further, the state plan will be drastically weakened as various agencies use other plans for their employees.

  • Anonymous

    Stupid remark? Show me where I stated “new hires” shouldn’t receive the same benefits?

    What I wrote was in response to some of the long time employees worried about losing their benefits. If you read the article, Sen Bennett stated the reduced benefits would be for “new hires” not those already in the system.

    In addition, if they do change the pension, which is happening across the country, the fair thing would be to let those already in the system finish out their careers and make changes for new hires. This way new hires can make an educated decision in regards to taking the job or not and current employee benefits would be left alone.

  • Rtmjlallement

    And will he be voting to reduce the elected official benefits as well?, surely not. That yearly calculation is more than our Special Risk. They want to pick on us and our pensions we spent the best years of our lives trying just to survive to achieve. Keep messing with the pensions and see what quality of Police Officer, Deputy Sheriff, Corrections Officer and Firefighter the State can attract. Dick Batchelor sold the legislature a series of lies back in 79/80, which threw us back into a mess with our pensions then. What it take, 20 years for us to fix that mess?

  • Rick

    More than likely tried to get hired either as a Firefighter or a Police Officer and could not get past the boards due to some issue with his personality.

  • http://www.floridaretirementsystem.info Mark Davy

    The reality is, Elected officials are members of FRS, and any changes in
    benefits will affect them also. Most of our elected officials, however, are
    probably not in the same situation in regard to their pensions as the rank and
    file. The other reality is, the pension plan is sound and efficient, and the
    politicians are looking to move the funds to other area’s of the budget.
    Mark A. Davy

    SouthBay Investment Group, llc
    665 S. Orange Avenue, Suite 4
    Sarasota, Florida 34236

    941-951-1977
    941-952-1937 (fax)

    ________________________________

  • Anonymous

    I have worked in government for 20+ years, committed to the state of Florida. One reason I chose to stay and work was the retirement benefits. I believe I have paid for this with my excellent work record and years of service. If you want to change the program change it going forward with new people coming into the system. I have based decisions on pending benefits. What you are proposing to change is not ethically and morally right for anyone approaching retirement in the next 5 years. Perhaps FRS members need to present a united front at election time…I encourage everyone to contact their representatives now.

  • Hunterii357

    just remember Mr Bennett we voted you in and we will vote you out, why don’t you work on cutting some of the fat in your own profession down. i’m sure you got a raise for the last 5 years well department of corrections has not got a raise in 5 years so leave us alone

  • Udokwan

    This is about one thing. Taking a public asset, privatizing it, rewarding your croonies, and stealing from the fund. All of the people that propose the new funds want to “invest” in derivitaves, hedge funds, development bonding boondoogles, and a whole host of other nut bag things. They tout books written by Stephen Greenhut, a man who cannot even do simple math. A man who has trumpted and created this “crisis”. His books are written about economics and yet Greenhut has not even taken a basic college economics class. Most of the problems in retirement funds are created so that money managers on the outside of the funds can steal money in the funds. Follow the money and look at the types of contacts that these politicos have. They aren’t talking about cutting their benefits, retirement, and health care.., just yours.

  • Billyberk461

    finally someone who shined a honest light on this political nonsense which is nothing more then turning people against people instead of putting the blame where it really belongs. In the laps of all the political crooks who year after year get fatter and fatter on taxpayer money. I worked as a Police Officer in Florida for 34 years for a municipalityand retired in the FRS this last June . My monthly retirement check after taxes is 3200 a month out of that i pay 600 dollars a month for health insurance subtract a whopping 150 a month in FRS Insurance subsidy which the Republican Party will do away with it comes to 450 dollars a month. And like the rest of the people who invested their savings in the market i lost 1/3 of mine . I started working in Law Enforcement making 9000 a year 34 years ago my wife and i brought up 4 children her working a full time job and at times i worked 3 jobs to make ends meet. Oh bye the way i also substained a on the job injury and had all the cervical disks in my neck fused and no i don’t collect a nickle from work comp (another Republican Scam) I chose my pension based on a contract agreement on the figures given to me at the time and once i picked that option i couldn’t go back and change it neither should greedy politicians be able to. And just remember people this is America not a third world country we expect our Government to honor there word. Just remember there was a country in Europe years ago in which people were turned against people because they also supposively had more or made more then others this ploy has been used for centuries lets not become ignorant to the truth its not cops firefighters or teachers who caused this problem we are not part of the 1% who control the wealth in this country . Be smart. Bill

  • Irma

    Apparently , Senator Bennett feels that after working 33 years we teachers don’t deserve the pension we get. Florida teachers are underpaid ,overworked ,our health insurance is not the best.But now he wants to destroy the only good benefit teachers have our retirement and be able to participate in the Drop program. Lets start calling to demand hands off on FRS.As a retiree if my retirement check is reduced I’ll send my mortgage bill to Senator Bennett and Governor Scott for them to pay it.

  • Tammi

    I have been following Governor Scott and the legislator’s intent to go after the Florida Retirement Fund and I would like to understand why all the hype for reform?
    In a recent report by Joshua D. Rauh, an associate professor at the Kellogg School of Management at Northwestern University in Evanston, IL., it shows Florida no where even close to the top states that are rated for insolvency. Actually, the State of Florida is rated in the report as in the NEVER category.

    Below is Mr. Rauh’s article on the states and their solvency ratings.

    My fear is that Mr. Scott wants employee contribution to enlarge the pot of money sitting in the pension fund, so that he can then turn around and justify using it for economic development to fund his “friends” business ventures.
    And Now, Here’s The First 11 State Pension Funds That Will Run Out Of Money Here’s a shocker:
    The most immediate state pension crises aren’t in New York or California. They’re in Middle America. Illinois is just 8 years away from exhausting its pension fund and creating a yearly $14 billion hole, according to data from Kellogg professor Joshua Rauh.
    That’s a projected 32 percent of the state’s revenue going to fill a pension hole. Every year.
    Indiana, Louisiana, Oklahoma and Colorado are among the next pension funds to fall. The rest of the union is just around the corner.
    http://www.businessinsider.com/the-state-pension-funds-in-the-most-trouble-2010-10#11-new-hampshire-1
    Pension Funds That Will Run Out Of Money
    2018: Illinois
    2019: Connecticut & Indiana, New Jersey,

    2020; Hawaii, Louisiana, Oklahoma

    2022: Colorado, Kansas, Kentucky, New Hampshire

    2023: Alabama, Michigan, Minnesota and Mississippi

    2024: Maryland, Pennsylvania, South Carolina and West Virginia

    2025: Missouri

    2026: Maine, Massachusetts and New Mexico

    2027: Montana and Rhode Island

    2028: Vermont

    2029: Arizona

    2030: Arkansas, California, Ohio, Wyoming

    2031: South Dakota

    2032: Nebraska

    2033: Virginia, Washington

    2035: Delaware, Iowa, Tennessee

    2036: Utah

    2037: Texas

    2038: Wisconsin

    2039: Oregon

    2041: North Dakota

    2043: Idaho

    2047: Georgia

    Never: Alaska, Florida, Nevada, North Carolina and New York

    Projections include 8% y-o-y growth in benefits and 3% y-o-y growth in revenue, from Kellogg professor Joshua Rauh [PDF].

  • a real citizen

    Bennet has always been a moron and now it looks like he’s just living up to his own expectations of being a bigger one. Florida’s retirement system is and will continue to be one of the most sound retirement systems in the nation. But, most of us knew this was coming when, during the last election cycle, they all beat up on Alex Sink for simply being in office during a low period on wall street. Lets face it, Bennet is just another alarmist with no facts. Call them ultra-con’s or ultra-liberals. It doesn’t matter. It’s just words to inflame and not to educate. He’s what someone of his own calibre would call, “a dumb ass”.

  • http://www.floridaretirementsystem.info FRS Options

    Please do not think we agree with the proposed bill HB 303, but it would do us
    all a lot of good to not presume we have a “legal contract”.  DROP participants
    were given an opportunity to retire and continue to work for “up to a maximum”
    of 60 months.  You, as a DROP employee, have the right to terminate your
    employment any time you want, so it might be a good idea not to presume your
    employer doesn’t have equal rights.  In reality, you retired the day you went
    into DROP, and may not have any rights

    .   Mark A. Davy

    SouthBay Investment Group, llc
    665 S. Orange Avenue, Suite 4
    Sarasota, Florida  34236

    941-951-1977
    941-952-1937 (fax)

    ________________________________