Judging from the amount of media coverage the Florida Retirement System and your benefits are receiving, it isn’t a question of whether there will be changes made this legislative session, but a question of what change and how much.
“Change is inevitable”…
After last weeks run-in with HB 303, we might review the overall challenge to FRS Participants. Judging from the amount of media coverage the Florida Retirement System is receiving, it is not a question of whether there will be changes made, but a question of what change and how much. Our newly inaugurated governor, Rick Scott, has made it very clear that he believes FRS is a “ticking time bomb”. Last year’s legislative session included over 35 bills introduced to make changes at FRS, and we can speculate that those proposals might simply be foreplay for this session’s action. Governor Scott has announced he will make his recommendations known by February 4th.
Why is this such a major issue all of a sudden? As of the FRS Annual Report from June 30, 2008, the Pension Trust was slightly “overfunded”. When Lehman Brothers went bankrupt in September and created a financial panic, the assets in the plan dropped significantly, and the fund became “underfunded” for the first time in 11 years. As of the most recently published annual report, for the period ending June 30, 2009, the fund was only 87.5% “funded”, with some $96.5 billion. According to the MyFRS website, as of December 31, 2010, the FRS pension assets were up to almost $124 billion. That is putting the fund assets back on par with where they were in 2008 when it was fully funded, and is a gain of some $30 billion since the 87,5% funding report . According to the FRS and SBA Annual reports, the amounts are as follows:
The data indicates that public employees, both state and local, are NOT overpaid!
This article is a must read. It is a well presented, and thoroughly researched paper comparing the compensation and education of public vs. private employees by the noted think tank, the Economic Policy Institute.
It is interesting that Speaker Cannon makes the following statement : “Consequently, I believe we need to confine ourselves to issues that can be handled within a single day and to focus our business on remediation of problems or drawing attention to future plans. I don’t believe that it is appropriate to rush through legislation or to create new government programs during this limited time.” That smells to me like the intent is to use the new majority to quickly override the selected items, but those that would draw attention, like the FRS issues, will be put off until the regular session starts this winter.
Non-the-less, All FRS participants need to make their feelings known. We were successful last year, and must fight hard to win the effort to keep the benefits this year also.
As you will recall, Crist’s veto nullified a reduction in the interest rate paid to DROP participants from 6.5% down to 3% in House Bill 5607. It also would have established the basis for employer contributions into the pension plan.
While we don’t know if those line item vetoes will be a target of the special session, we can only imagine the legislators will be keen on overriding anything that Crist Vetoed. You will recall that these are the bills that passed without being discussed in committee where opposing views could be voiced. It is essential that all 685,000 members contact their Representatives and Senators and urge them to NOT override the FRS veto’s, as well as making sure your Legislators know that you do not want them reducing or changing the benefits that were promised to you at the time of employment. Numbers count, encourage your fellow workers and FRS members to call and share this information.