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Public Employees Lose as Florida Supreme Court Upholds 3% Pension Dip

| January 17, 2013

The justices side with the Florida Legislature on 3 percent contributions from public employees' pensions. (Gregory Moine)

The justices side with the Florida Legislature on 3 percent contributions from public employees’ pensions. (Gregory Moine)

Last Updated: 12:55 p.m.

The Florida Supreme Court, in a much-anticipated but very divided 4-3 ruling, today sided with the Legislature, and against public employees, by upholding a 2011 law that requires all public employees to contribute 3 percent of their pay to the Florida Retirement System, a pension fund.

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In a majority opinion by Justice Labarga, the court ruled that the 2011 law was “facially constitutional,” and that it did not violate the contracts clause, the takings clause or the collective bargaining clause of the Florida Constitution. (See the full decision below.)

Justices Ricky Polston, Barbara Pariente, Charles Canady joined Labarga’s decision. Justices R. Fred Lewis, James E. C. Perry and Peggy Quince dissented.

“In my view,” Perry wrote in a blistering dissent, citing the relevant law, “the challenged provisions of chapter 2011-68, Laws of Florida, amount to an insufferable and unconstitutional ‘bait and switch’ at the expense of public employees who were members of the Florida Retirement System (FRS) prior to July 1, 2011.” Perry criticized the majority for “improperly considering” and misapplying case law it relied on.

The decision is a relief to local governments, particularly school boards, who would have had to find millions of dollars they have already cut or budgeted, based on the 2011 law, essentially making up for the reimbursements the retirement system would have been forced to make to public employees hired before 2011. The Flagler County School Board, for example, would have had to find $3.4 million. “We don’t have the money. The state would have the fund this, because they defunded us that amount,” Tom Tant, Flagler County schools’ finance director, said immediately after the ruling was handed down.

The statewide impact would have been $2 billion. As it is, there will be no budget impact now that the ruling leave matters as they have been since 2011.

“Certainly finance directors of cities that use the FRS as their primary retirement vehicle, it is a relief,” Chris Quinn, Palm Coast’s finance director, said. “It is going to save those entities a significant amount of money, not having to fund that 3 percent.” For Palm Coast, however, the impact would have been minimal either way, because only about a dozen employees of the city are part of the Florida Retirement System.

“Balancing the state budget on the backs of middle-class working families is the wrong approach for legislative leaders and the governor to take,’’ Andy Ford, president of the Florida Education Association, the teachers union that led the court battle, told the Miami Herald. “We’re disappointed that the state’s highest court said this approach was legal.”

In all, the decision affects 623,000 participants of FRS, almost half of whom are teachers. State workers, cops, county employees, college and university employees are also participants.

Today’s decision overturns a ruling by Leon County Circuit Court Judge Jackie Fulford who declared the 2011 law unconstitutional. In a ruling last year, Fulford ruled that the law had broken a contractual covenant with state employees, denied them property without compensation and violated their collective bargaining right, since the law essentially nullified what had been agreed to in collective bargaining.

Four justices disagreed.

“Ultimately,” Pariente wrote in her concurring opinion, “I recognize the frustration of State employees who have in effect experienced a 3% reduction in their net pay as a result of the Legislature’s changes to the retirement plan. Indeed, these 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. Because Florida Sheriffs and the preservation of rights statute necessitate the conclusion that the Legislature is not constitutionally prohibited from making prospective changes to the mandatory state retirement plan, I believe it is clear that the trial court’s judgment must be reversed.”

[This is a developing story. More soon.]

Florida Supreme Court Decision on 3 Percent Pension Contribution

Florida Supreme Court Decision on 3 Percent Pension Contribution

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34 Responses for “Public Employees Lose as Florida Supreme Court Upholds 3% Pension Dip”

  1. Career Firefighter says:

    @ tulip, & J MILER, 3% is not the problem, it’s the fact that many of those affected employee’s took their respective jobs based on a contract with the state of Florida. This was based on a much lower pay scale in exchange for a retirement pension. Rick Scott use’s the excuse that the private sector pays into their retirement so we should too! So you’re saying a contract is not valid? Change because you don’t like something? That’s just outright dirty pool. Private sector makes more money per hour based on position then the public sector. These same employees’s have felt the hard economic times, just as each of us has but at a much lower wage. Some employee’s haven’t been given a raise in 7 years, I ask how’s that fare? But they continue to work, why?? Maybe they love their job! Or need to pay the bills?? So this is fare?? Oh I know your answer “FIND ANOTHER JOB” Get real!!! Dude. Now to read that our school board and other local governments would have had to cut programs or worse maybe lay off or close down places, or make other changes I say shame on them for taking that chance, the smart thing would have been to set aside the additional monies just in case the court ruled against Rick Scott, but they didn’t and got lucky. Will you see a tax decrease this year? Properly not. Public employee’s work hard for their money, a not steal it like Rick Scott did. Today the public sector employee took another blow to an already fragile environment. So I ask you the next time you see a public employee, stop and tell them thank you!!!!!! And mean it!!!!!!


  2. IMO says:

    IMO employee contributions usually assure a pension system’s sustainability.

    Also IMO when employees make contributions their unions should have equal voting rights as to the use of pension money thus assuring legislators cannot “Borrow” money from the pension systems to fund other government programs.

    That is the usual tradeoff for employee contributions. “Legislatures” cannot touch their money.


  3. m&m says:

    The citizens finally won a little. Civil employees should never be allowed to organize and be able to hold city, county or state hostage.


  4. Reality Check says:

    Simple, you do not agree resign your position and look for another, my company was strapped for cash last year and they did not give a COL increase. At this point in the economy a job is more important then any other fact of life right now. The American entitlement attitude has to go, you get what you earn and if you do not earn enough then you must switch careers. I for one am so tired of hearing retired people say “but I am on a fixed income” so am I, I am salary so I get what I get every two weeks. It is not anyone else’s responsibility to provide for you, that is why tax rates are through the roof. The government should provide a percentage of aid to a person, but a complete free ride is out of the question. The real problem is politicians do not worry because there fat pensions and full medical for life clouds their view of what people have to deal with daily. They create these welfare programs and will not change them because that would be political suicide. Until the government gets their spending inline we all going to suffer the ills of out of control spending.


  5. Just a thought says:

    To all the ones who have no problem with the public employees paying 3% into thier retirement fund, I ask you this: If you signed a contract that was changed by the other party and the other party said “sorry, you have no say in this,” what would you do?

    In simple terms: What if you bought a car from GM and recieved the loan from GM that you agreed to and one year later GM said, “Sorry, but you now have to pay 3% more a month for this loan and you don’t get any say in it.” Would you say “well, others are paying more for their loans, I guess it’s OK.” I think not.


  6. tulip says:

    @ Just a Thought I was of the impression that this was done because of the bad economy and it was getting extremely difficult to pay 100% of the pension contributions. According to the article, it saved a lot of money for the county, school board etc. When these people retire, they will have a nice pension in place along with SS and savings to live on, so actually they get back more than they put in and I bet you won’t hear them complain.

    So they might have to cut down on eating out, some non-essentials, etc. We’ve all done it in the past and it pays off in the end.

    These employees are getting a higher amount CONTRIBUTED to their account than what they are paying into it themselves. Try getting that kind of money from a bank account or cd.


  7. eatingdogfood says:

    Democratic Hustler Politicians + Corrupt Greedy Unions = BANKRUPTCY BABY!


  8. tulip says:

    I have never understood why people VOTED OUT Don Fleming over that Hammock Card and yet VOTED IN Scott who committed fraud and robbed Medicare of millions of dollars. We have been paying for it ever since he became governor.

    I did not make the above statement to start a discussion about the former sheriff or who won or lost that race, I just wanted to point out the odd ways people vote.

    In regards to Scott wanting to change back the voting rules, If I had may way I would not do it. I would leave the status quo as it is (thanks to him) and make him go through the same misery the candidates and voters in the recent election had to go through. What gives Scott the right to change the voting rules to suit him? Unfortunately, he will probably get his way. Hopefully, people will remember at the polls.


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