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Supreme Court Upholds State Employee 3-Percent Pension Law
January 18, 2013
In a victory for Gov. Rick Scott and Republican legislative leaders, a deeply divided Florida Supreme Court on Thursday upheld a 2011 law that requires government workers to chip in 3 percent of their salaries to the state pension system.
Justices, in a 4-3 decision, overturned a Leon County circuit judge who found that the law violated the constitutional rights of government workers hired before July 1, 2011. Legislative leaders had feared that a loss at the Supreme Court would blow a hole in the state budget.
Senate Appropriations Chairman Joe Negron, R-Stuart, said he thinks the state could have been required to repay more than $1 billion to workers if it had lost the case. He and other supporters of the 2011 law say government employees should help pay for their retirement packages, as private-sector workers do.
“I think the ruling reaffirms the wisdom of having all state employees, including legislators and judges, contribute something toward their retirement benefits,” Negron said. “People in the private sector do that. I think that our constituents want us to live by the same rules that exist in their workplace. We can now move forward with crafting our budget.”
But opponents described the required contributions as a tax on hundreds of thousands of public employees, ranging from prison guards to teachers. Ron Meyer, an attorney who argued the case for the Florida Education Association, said the law was passed to balance a cash-strapped state budget “on the backs” of government workers, and he dismissed arguments that it was needed to keep the retirement system financially sound.
“That argument is bogus,” Meyer told reporters at the teachers union headquarters. “It was bogus from the day it was first uttered.”
The case primarily centered on whether a 1974 retirement law created contractual rights that shielded public employees from having to contribute money into the pension system. The FEA said the law prevented the state from collecting money from workers hired before July 1, 2011, the date that the 3 percent requirement took effect. The union acknowledged that people hired after that date could be subject to the contributions.
But a majority of the court rejected the union’s interpretation of the 1974 law and also turned back an argument that such changes to the pension system needed to be subject to collective bargaining. In a concurring opinion, Justice Barbara Pariente said nothing in the 1974 law indicates that the Legislature intended to “bind itself for all time to preclude future legislatures from ever altering the future benefits” in the retirement system.
“Ultimately, I recognize the frustration of state employees who have in effect experienced a 3 percent reduction in their net pay as a result of the Legislature’s changes to the retirement plan,” Pariente wrote. “Indeed, those changes affect judges and all judicial branch employees as well. However, this case is not a referendum on the Legislature’s policy decision. It is not this court’s role to express any position on that issue. Instead, as the majority has ably done, it is this court’s task to carefully analyze and determine whether the Legislature has acted within its constitutional limits.”
But Justice R. Fred Lewis, in a dissenting opinion, wrote that the court could not ignore the contractual rights given to workers in 1974 and go along with the conflicting 2011 law.
“This conflict impacts a significantly important category of Florida workers, our first responders, those who provide safety and security for all citizens, those who provide education and safety for our children, and thousands of other Floridians who provide essential services for all Floridians each and every day,” Lewis wrote. “These governmental employees are not second-class citizens but are entitled to the full protection of the law just as all other Floridians enjoy.”
Justice Jorge Labarga wrote the majority opinion and was joined by Pariente, Justice Charles Canady and Chief Justice Ricky Polston. Along with Lewis, the dissenters were justices James E.C. Perry and Peggy Quince.
Leon County Circuit Judge Jackie Fulford struck down the law in March 2012, and the state’s appeal was fast-tracked to the Supreme Court. Though Fulford ruled against the state, it was able to continue collecting the pension contributions during the appeal.
The 2011 law, which also involved revamping a cost-of-living adjustment in the retirement system, touched off a political battle in the Legislature. Critics argued that government workers should not see their paychecks shrink by 3 percent when many also have not received raises in recent years.
But after Thursday’s ruling, Scott issued a statement saying it “supports our efforts to lower the cost of living for Florida families. This means even more businesses will locate and grow in our state, which creates even more opportunities for Floridians to live their version of the American dream.”
Scott’s statement drew a sharp response from FEA President Andy Ford, who said the multimillionaire governor does not understand what it is like to live on a salary of $50,000 or less — as Ford said most of his members do. Ford also vowed to try to unseat Scott and other supporters of the pension law during next year’s elections.
“The 2014 campaign begins today,” Ford said. “We’re going to have to have a focus on changing the politicians in Tallahassee who don’t care about working Floridians and making sure the people who come back here in January of (2015) actually care about the working men and women of this state.”
By The News Service of Florida
Comments
38 Responses to “Supreme Court Upholds State Employee 3-Percent Pension Law”
Dear Private sector employee,
You commented…..”I can’t afford to pay your pensions without your help.” Well could you atleast give us a raise? We have been passed over for the past eight years. Other entities get raises but, not us!!!!!!! And then you have the nerve to take pay from us. What a SLAP in the face.
@private sector employee I’m sure your husband really appreciates you paying his way all these years, with your heat on i can just imagine how cold it must be on the inside of your house. You also will get back when he gets his if your still married. Its funny to me that nobody wants to do what the state workers do but then they can tell them what to or how to do it.
REGARDING:
“Why should we have to pay for all of your retirement plans? ”
You shouldn’t.
There is no law of nature which specifies what an employee’s pay will be but if the contract states the retirement will be part of the payment for working, that contract should be honored — not arbitrarily changed by one party because other people weren‘t under the same contract, didn‘t do it the same way.
That’s why they said it would be fine to have a new contract for new hires but it is stealing to promise payment and then decide to withhold it just because that payment is expensive or other people do it differently.
David for honest government
and the Easter Bunny
I feel your pain state workers. My husband works for the state of FL but I am a private sector worker. Unfortunately changing from the old style defined benefit pension plan to deferred payment plans is a national trend. Governor Scott did not come up with this idea. The changes being implemented are accepted business practices/models across the country. I hear many comments across this forum about “the people of the state” well, private sector workers are also people of the state. Why should we have to pay for all of your retirement plans? How would you like to have your tax dollars deposited into and eaten up by my (the private sector) retirement fund? I am just saying we all are having to pay for our own retirement funds. And by the way, I have worked for my company for 21 years and yes we started out with a defined benefit pension plan but the rules changed and now we have to share the cost & risk with our employer just like the state of FL is now requiring from State workers. Change is a fact of life and the economy will no longer support the old system. I can’t afford to pay your pensions without your help. At least you will eventually get some of the money. I will never recoup what I have to pay toward your pension.
Same thing basically happened to the military..In the 60’s during Vietnam guys were promised free medical etc if they stayed and made the military a career but a few years back it was…oops…we screwed up and you have to pay for medical insurance now..Government is a pack of 2 faced liars.
@zelda
say when you started your current job, your boss stated he would place 15 percent of your monthly pay into an investment accout for you if you stayed with him for 25 years. you and him signed a contract stating that. If at 24 years he said, no I was just joking, you would be in court screaming breach of contract. Get real and step off the short bus.
Wife of state employee: whether you realize this or not it affects all employees with the FRS including your husband because my husband became employed& signed the old contract & they take it out of his paycheck. I will say that if Scott wanted to do this he should have started with new hires on a certain date.
i guess the private sector has to honor contracts but the goverment doesn’t.
Here is an idea, all of the elected officials should have to pay 3% into the pension fund for all the perks that they get from lobbyists. Just imagine how much could be afdded to the fund from all the junkets that they go on.
The People who say I don’t have it or I lost mine, and who want to see people that do have a pension lose theirs, is exactly the reason we are all going to lose them eventually… 401ks are a bad joke for retirement plans that really just benefit Wall St. and Investment firms. Ask the people who were retired at the time during the recession and stock market crash how their 401 ks fared.. Defined Pensions might be a thing of the past for some,But instead taking glee at the sight of others losing theirs too, we should all be standing together to get them back and keeping the ones we still have !
REGARDING:
“it could be worse. be thankful for what you do have.”
True it could be worse and may become worse, but wouldn’t you be irritated if someone went into your home and stole even as little as 3% of what you owned? You wouldn’t just rejoice they didn’t steal all of it.
If a government will steal a little, what other crimes will they commit?
David for trustworthy governments
and the tooth fairy
Apparently contracts aren’t worth the paper they are printed on anymore. Private companies have been going back on their word for a long time too and now the State is joining them. It’s a shame.
just saying. i haven’t had a raise in years either. then two years ago had to take a paycut, not money going for later, but money gone. all our empkoyees had to take it. we have families and expenses to. pay more for our insurance and larger copays. it could be worse. be thankful for what you do have.
When you were hired in under different terms on your contract years ago then that should NOT effect you. What happen to the grandfather approach Scott was suppose to uphold? To all new employees who come on a NEW contract should have to pay the 3%. I bet Rick Scott isn’t paying an additional 3% towards his retirement!
So, if you are one of those people that didn’t sign a contract with terms included then it has no affect on you. Therefore, you have a right to your opinion, but nothing else.
Ok Folks hear us state workers out. PLEASE we sign a contract when all started working for the State( you people) that the state would pay ALL of our retirment with the State and now half way threw the game or our career with the state the Goverment want to make us pay it . and that was not what we signed we have already went for so long with nothing that now the state wants us to do with out more.
Another important fact — since this ruling allows the state to break this contract that was legally negotiated and signed, what makes you think they won’t break any others. A lot of businesses hold state contracts, guess those aren’t worth the paper they’re written on either.
REGARDING:
“I paid out much more than 3% to my retirement fund. Why shouldn’t government workers pay their way too?”
You are right. They SHOULD all pay for the privilege of working for the government, yet — sadly — most can’t afford to do so.
Nonetheless, please consider what happened by considering ice cream. What if you were offered a job and told, “It doesn’t pay as well as some other job, but we will give you free butter pecan ice cream as part of the job.” They even wrote it into your contract.
For whatever reason, let us say you decided to take the job. And then your employer told you, “Wait a minute, the private sector doesn’t give free butter pecan ice cream. You will have to pay for butter pecan ice cream and we will take it out of your pay, you cheap free-loader.”
Wouldn’t you feel cheated? Now substitute any other perquisite for butter pecan ice cream and ask yourself if you would feel cheated then.
David for butter pecan ice cream
if it were promised with the job
I have worked several jobs that offered 401K. In all of them I had a CHOICE in how much I contributed to them, usually with up to 6% company matched. In this, we had NO choice in how much or if we wanted to contribute to it. When this matter was contested the money was SUPPOSE to be put into an account until this was resolved. Apparently it wasn’t. If the money was put into our retirement then when would there be a $2 billion deficit. I don’t know about anyone else but I would have agreed to leave the $ in the retirement account and the state not take anymore out from this point forward (it’s already in retirement) and then give us a CHOICE in if we contribute.
If the FRS was insolvent, that $ should be going into the worker’s retirement accounts but the initial PNJ article states all of this $ has been diverted into the General Fund. So, the elite in Tallahassee are going to balance Florida’s budget on the backs of it’s employees. What about the rest of Floridians and Tourists there Gov?
When you think 3% its not much but but as a fire fighter for the state when u bring home 19,287 a year after taxs and then take away 3% for doing a good job and puting your life on the line for the people that supot this. It really makes you just want to do 3% less.
at sliding with the state workers…. WOW I haven’t thought about it like that, you are right if the money was already in an retirement account than why would it throw the state into a hole. hmm makes you think where is this money being spent and why I guess they need more money to replace the money spent so that is why we are being mandated to pay 3 percent into the retirement plan. Unlike our private sector who are given choices on this subject.
It does not matter how you “feel” about a public worker having to pay 3% into their retirement. The fact is this is not what was contracted to when they were hired. Florida state employees are the lowest payed in the nation. Yeah it is easy to say…well if they don’t like it they can go get private sector job. If your 10-20 years into your career you can’t just up and leave. The fact is the justices did not vote to give it back because instead of going to the FRS system the state has already spent the money. Rick Scott no has his foot in the door and he will only take more now that the crooks…I meant courts are supporting it.
The kicker for me is that, when this issue came up the legislature said it couldnt afford to have the 3% reversed and return to state workers the money already taken out. They said it amounted to nearly $2 billion, and that it woild “blow a hole in the budget”. If the money was earmarked for the retirement of the state workers why wasnt it a separate retirement account? That’s right, you guessed it. The legislature spent it on other things.
This is truly a slap in the face! Waiting til retirement (as some forestated) is not benefiting our families now. EVERYTHING is going up in cost with the exception of our pay. But we are expected to do more work! Crime is on the rise and as a P.O. it’s supposed to be our job to help keep the community safe. What a joke…also we haven’t had a raise in almost a decade. Rick Scott promised us all these screw ups and one thing I can say is he kept his promise (jerk)
Plus then have someone to say that @ least you are able to work a 2nd job, on Your days off & that person hasn’t worked a day in their life outside their house. I say they have some kinda nerve.
If I remember correctly, in the private sector, you choose if you are going to contribute to your retirement and how much you will be contributing. I am one of those employees that has no say in how much or if I would like to contribute to the Florida Retirement system. I have no problem with them cutting the percentage of their contribution to my retirement by 3%. My problem is with them just taking 3% of my income without asking me if I would like to contribute this to the Florida Retirement System and if so, what percentage would I like to contribute. I would like to opportunity to invest the 3% as I choose and not have it mandated where my money will be going. If the purpose is truly for my retirement, I should decide how much and where it will be going.
Not only are we paying the total of 5% some people like my husband has additional monies taken out like supplemental retirement programs plus they are being jerked around for just say their special comp. alot of people also used that as a reretirement bonus but not anymore. their not allowed to i guess they’d rather have people that calls in & will use theirs instead of having dependable workers. i would much rather pay someone their built up hours instead of running my workplace short putting them that work into a more hazardous environmentthan having unreliable peoplebut the state don’t or will not see that until something bad happens & they get sued. I’ve got kids let something happen to my husband i would be the first one to go there& possibly after the one that called in. There are people that have to call in every once in a while but there are those that abuses the system & knows just how many before they get wrote up to me that’s just a job to them that& they’re just too sorry to work.
I contribute 14% to mine.
for those of you who think this is good news….these same workers have not had a raise in over 9 yrs…none at all . and this was promised to them when they were hired on.
Great decision! It’s time the govt workers start pulling their own weight. The days of defined benefit pensions are gone!
You want to make more money –get a job in the private sector. Most govt workers do the least amount of work possible and haven’t the “value added” skillsets necessary to succeed in the private sector.
Public servants shouldn’t expect more than their employers — the tax paying workers in the private sector who actually produce something!
My fellow employees and I contributed 7% to our retirement fund, and these whiners scream about 3%?
its a pay cut for us now, my retirement later is not going to help my children right now.
I will have to take a 7 percent cut by the time its all over, I too have a family to support and my pay isn’t all that great to start off with. However I am thankful to have a job and something is always better than nothing this is really going to affect my family. We don’t live above our means, don’t have a big fancy house or drive expensive cars. I am just one of thousands that this will affect.
It is not really a pay cut!! You will reap the reward when you retire!! I put away 15% toward my retirement, because I want to be able to do things when I retire. Look at this way it is “MONEY IN THE BANK”!!
I paid out much more than 3% to my retirement fund. Why shouldn’t government workers pay their way too?
Most state employees are only making 26,000 annual pay. And with the 3% pay cut and 2% federal pay cut those employees are making less than when they started. Those who say state employees make more than people in the private industry are dead wrong. The facts are public record.
good
OUR elected officials upheld the 3% paycut to bail out the poor business practices of OUR Legislators who WE voted into office.
“Dear Leader” Scott summed up his feelings about not only the public sector employees but the rest of the state, ” Scott issued a statement saying it “supports our efforts to lower the cost of living for Florida families”. How did he lower the “Cost of Living” by lowering the income?
Well, I’d say he managed to LOWER the STANDARD of Living for tens of thousands of Florida families with the 3% pay cut for many who were already on the financial fence. Some who work cannot afford the cost of health insurance.
Scott and the Florida legislature are completely out of touch with the PEOPLE of the state who are not in their financial clique. He and others think nothing of jumping on their private jets at Pensacola “International” Airpotr while many wonder if the family car will crank in the morning so they can get to work in their public service jobs. Gulf of a gap in caring how many live.
The same is true of many local and city politicians who feel renaming things will make them better.
Sad state of affairs.
Election days are not far away for mid-term……Rick Scott is among those.