No Bull, No Fluff, No Smudges
Your news source for
Flagler, Florida and Beyond

Public Employees Retire in Droves as Florida Pension System Narrows Incentives to Work

| July 31, 2011

about schmidt florida retirement system

About time.

In the three months since the legislative session ended, the Florida Retirement System has seen a substantial uptick in the number of new retirees.

Likely at least in part in response to a new law that dramatically changed the state’s retirement plan, requiring employee contributions for the first time in three decades, about 10,100 people chose to enter retirement or exited the state’s deferred retirement plan in May, June and July, an increase of more than 900 people from the same time last year.

The Florida Retirement System serves employees of state and local governments, including all public school teachers, county governments, and the state’s universities and community colleges. There are nearly 1 million participants in the program, making it one of the largest public retirement systems in the country.

Most of the FRS participants are enrolled in the pension plan, which gives employees a set amount of money each month upon retirement, with the amount depending on years in service. The retirement system also offers a 401(k)-style investment plan.

The new law requires employees to contribute 3 percent of their paychecks to their retirement, raised the retirement age for employees and reduced cost of living adjustments. Supporters of the changes, including Gov. Rick Scott, argue that public employees were receiving better benefits than private sector workers and that requiring contributions was the right thing to do to protect taxpayer dollars.

But unions that represent FRS members say pension benefits are one of the few perks of the job, with many workers going years without pay increases and earning salaries lower than private sector counterparts.

The increased number of retirees did not surprise critics of the new law.

“They are creating a lot of incentives not to work for the state,” said Doug Martin, a lobbyist for a union that represents state and local employees.

Because some of the changes under the new law go into effect on July 1, some Florida Retirement System members were incentivized to retire or exit the Deferred Retirement Option Plan (DROP) before that date.

Florida Education Association spokesman Mark Pudlow said some teachers chose retirement this year because of many changes with their profession, including the new teacher merit pay law that ties salaries to test scores.

“Some folks said it’s just not worth it,” Pudlow said. “There are a number of people who probably would have stuck around for a few more years and the constant volatility in their jobs made them decide to go ahead and leave.”

Martin, who works for the Florida chapter of the American Federation of State, County and Municipal Employees, said FRS members are concerned about changes to the popular deferred retirement plan.


Information on how many FRS members enrolled in the deferred retirement plan during the same post-legislative session time period won’t be available until early August, a Department of Management Services spokesman said.

The deferred retirement program is designed to promote early retirement. DROP participants can start drawing their pensions while still continuing to work for up to five years. The pensions sit in an interest-bearing account until the actual date of retirement, when the employee receives a lump sum payout.

But the new law changes how much interest a DROP account earns, from 6.5 percent 1.3 percent.

“For the folks that we represent, the average pay out would have been something like $72,000,” Martin said. “That is going to go down to less than $60,000. That is obviously a very significant decrease.”

Martin also said the more experienced employees are incentivized to leave.

“If you have worked 30 years for the state, you would essentially get no additional retirement benefit for staying and you would be working for less,” Martin said.

Martin said there has also been uneven implementation of the new law, with some FRS entities incorrectly taking money out of employee paychecks in June, a month before the new law went into effect.

The Florida Education Association and several other union groups have filed a lawsuit challenging the required new contributions as unconstitutional. A court date is set this fall to consider the merits of the challenge, but both sides say they expect the final arbiter to be the Florida Supreme Court.

The changes made this year by lawmakers were the most significant to the pension system since the 401(k)-style investment plan was added more than 10 years ago, and many union groups representing teachers, police officers and firefighters, and other state and county employees vehemently opposed the changes.

While Scott has hinted he is interested in more pension changes, calling this year’s law a “first step,” Martin said he doubts the Legislature is interested in making additional changes next legislative session.

“What we’ve been hearing is the Legislature is going to be primarily concerned with redistricting,” Martin said. “With the improved financial position of the state and of the retirement system and the amount of time and grief this brought to the legislators, going back and ripping that scab off that wound isn’t their first priority.”

–Lilly Rockwell, News Service of Florida

Print Friendly, PDF & Email

28 Responses for “Public Employees Retire in Droves as Florida Pension System Narrows Incentives to Work”

  1. Liana G says:

    “But unions that represent FRS members say pension benefits are one of the few perks of the job, with many workers going years without pay increases and earning salaries lower than private sector counterparts.”

    Actually, teachers in the private sector make less and they do have to contribute to their 401K.

    “The deferred retirement program is designed to promote early retirement. DROP participants can start drawing their pensions while still continuing to work for up to five years. The pensions sit in an interest-bearing account until the actual date of retirement, when the employee receives a lump sum payout.”

    Does the employee receive the lump sum payout in addition to receiving a monthly pension thereafter or, is it just the lump sum payout only?

  2. Bob Z. says:

    What people make in the private or public sector has nothing to do with this issue. When a person accepted a job with the State, Public Schools, or any other agency that participated in the Florida Retirement System (FRS) they were promised a retirement without contributions, as documented in 1974. But now they have to contribute, which is what people are not happy with. Yes, they can quit and go elsewhere and someone else will fill their position; however, that also has nothing to do with this issue. And what is next…reduced health benefits, less earned sick leave, etc.? Finally, before someone says that they are a tax payer and they pay State workers, teachers, etc. keep in mind that those people also pay taxes.

  3. lawabidingcitizen says:

    Bob Z – you will be not asked, but required, to contribute to your own health care, retirement, sick pay, etc. , and the answer to your question of why is, it will become a condition of your continued employment and unless you’re of independent means, you’ll be happy to do it.

    The gravy train crashed Ask your union rep how that happened.

  4. Liana G says:

    @ Bob Z

    Citing and holding to a promise that was made decades ago to still support a policy that the general public, mostly made up of private sector employees and the real tax payers, no longer support is not going to hold today.

    Private sector employees aka the real tax payers see this as yet another burden that they are being unfairly saddled with, since it takes away valuable dollars from real work that is instead being diverted to fully fund the retirement of those whose salaries and other benefits they are already paying for.

    Tax dollars originate from employees who work in the private sector. If it weren’t for these employees, where would these tax dollars come from? How would gov’t employees get paid? So technically, since gov’t employees are paid with the tax dollars collected from private sector employees, the taxes they pay are also paid by private sector employees. Whereas gov’t employees receive their benefits via tax dollars paid by their counterparts in the private sector, the pendulum does not swing back to benefit employees in the private sector.

    Employees in the private sector pay into a 401K retirement that many employers no longer match and health insurance for a family is around $600 a month. And folks with the same degrees from a similar grade academic institution make less in the private sector. It’s all about status and ranking out there. Just think what will happen if we privatize gov’t. Fair is fair, pay your share.

  5. Jojo says:

    lawabidingcitizen Do you ever stop complaining about Civil Servants or were you born a malcontent?

  6. Lucine says:

    Liana: Are you claiming, somehow, that public sector employees are not “real tax payers”? And are you further claiming that public employees do not perform “real work”?
    And…for the trifecta ladies and gentlemen…Liana is also suggesting that only private employees pay taxes.
    This is what happens when people stay out in the sun too long.

  7. palmcoaster says:

    LAC I can see that you worked all your life for private corporations. I did for most of my life, until I got sick and tired and started my own businesses. Now being a small business owner sure I am not greedy and fully appreciate the hard work of our public employees specially teachers, fire fighters and law enforcement .I may not be happy with their administrators the ones with the outrageous salaries, but give my full support to the workers.
    They sure beat in performance and their output any of the awful performance of Wall Street Elite Crooks, Bankers and Hedge Funds leaches and many of these elected representatives and senators in Washington. Do you like more of these workers leaving Florida? Are you ready to see your taxes increasing to pay for these no longer generated incomes, after they leave?
    Are you aware that lately banks are demolishing the homes they stripped Americans off in foreclosure in order to get a tax loss deduction, pay taxes just on the vacant land and avoid maintenance cost? http://www.bloomberg.com/news/2011-07-27/bank-of-america-donates-then-demolishes-houses-to-get-rid-of-foreclosures.html
    Is this the “Amerika” you like to live in? The above link does not turn your stomach?
    Get ready LAC to fund from your pocket more budget revenue short falls when these former revenue tax contributing homes will become, vacant lands in Flagler County too.

  8. lawabidingcitizen says:

    Jojo, I don’t like someone’s hand in my pocket. Do you?

  9. Kevin says:

    Liana G: How it works is they elect a date (while they are working) and say I want to continue working for the next three years but will be quiting at that time. However they can begin drawing on their pension now and those payments get put into a “savings” type account where it earns above market rates that you or I could get on such short-term deposits. Then when they actually leave their post they get handed that check and the stream of their payments are no longer accruing but are payed directly to them. Isn’t that an interesting and sweet deal.

    They bitch and gripe about how little they all get payed , or many do, but in actuality they often times are handsomely compensated when one looks at the whole thing. You would choke if you saw the lump sums payouts to some of the administrators and top brass for fire and rescue or law enforcement. Its almost unimaginable. Then consider many of these peope get hired back into the system to begin the job again with their huge salaries and earning their pension too. The system is broken when this is what happens and the way it is manipulated.

  10. Liana G says:

    @Lucine –

    Where does the money come from to pay public sector employees? Can the public school system pay itself without tax payer dollars? What do you suppose would happen to public schools when Gov Scott starts handing out those school vouchers?

    Here’s what will happen:

    1. More private schools will open to meet the demands of parents and students clamoring for this outlet

    2. More public schools employees will be let go because of lesser staff need. They in turn will now be hired by these private schools to fill their growing need for more employees.

    3. Private schools will now become part of the private sector and will expect employees to contribute to their retirement and benefit funds

    4. Private schools will thus be able to spend less money on overhead employee costs and benefits and more money to spend on actual resources that benefit the students – more teachers/smaller classrooms, books, equipment, stationary etc.

    5.These private school employees now part of the general pool of private sector employees will be required to contribute to their own retirement and benefits if they so choose. Repeat of #3

    Hope this helps you see why there is a strong and growing public support for school vouchers.
    The gravy train is going to crash and guess whose responsible? Fair is fair, pay your share!

    I like being in the sun, you however should lay off the kool aid. Scott is listening to the will of the general populace and not a select few protecting their own self interest to the detriment of the children they have no qualms about exploiting.

  11. Jojo says:

    lawabidingcitizen Neither did the private sector employed by Enron.

  12. lawabidingcitizen says:

    Jojo, ya gotta stop getting your info from leftwing media.

  13. Jojo says:

    lawabidingcitizen What’s so left wing about having your 401 disappear on you by thieves. Everybody thinks working for the State is a great jub, if you can survive on no raises for 5 years that is. Your boy Scott don’t have those problems. Tea baggers, always crying their pockets are empty because of civil servants.

  14. palmcoaster says:

    @Liana too bad that charter schools performance lately is less than desirable.
    None of my tax dollars to failing charters.

    @LAC no left wing media on Enron metioning by Jojo. Is just conservative engineering at its best.

  15. MaryJane says:

    Teachers who work for private schools do so because they couldn’t get jobs with the public schools, more than likely because they are just not qualified to teach. That’s who will be getting the vouchers (taxpayer dollars) instead of the educated and professional teachers in the public schools. This will further exacerbate the problem, it will not improve anything. Judging from the spelling and grammar used in the above posts, it appears that many of you may have been taught by the private sector “teachers.”

  16. Liana G says:

    @ MaryJane

    This is a post from one of Flagler’s finest – since you’re using spelling and grammer as the basis for your argument. Notice its length measured against the number typos, But the real kicker is . . . .

    . . . A Disgruntled English Teacher says:

    July 20, 2011 at 9:20 pm

    As an English Educator, I would like to say the typos and grammar in this posting demonstrates the reason why educators, whether an administrator or a teacher, needs to have a pay increase. Most of our public schools earned an “A”, in which reflects in OUR “A” status as a district.

    https://flaglerlive.com/25478/flagler-school-administrators/comment-page-1

    You said – “Teachers who work for private schools do so because they couldn’t get jobs with the public schools, more than likely because they are just not qualified to teach.”

    I would dearly love to send my children to Bolles in Jacksonville. If it’s good enough for our politicians and the rich, I’ll risk those unqualified teachers teaching my kids too.

    If our public schools were that great, why is there overwhelming public support from the middle class for charter schools and school vouchers? And why the increase in homeschooled kids?

    Also, there are public school teachers here in Flagler who send their kids to private and charter schools. Interesting.

  17. Binkey says:

    Liana,

    I believe that the overwhelming majority of people are happy with their home school, but many are unhappy with the education system.

  18. Liana G says:

    John Gatto is the former New York State Teacher of the Year who renounced the government school system in his landmark book DUMBING US DOWN

    A SHORT ANGRY HISTORY OF AMERICAN FORCED SCHOOLING

    Between 1967 and 1974 teacher training in the US was covertly revamped through the coordinated efforts of a small number of private foundations, certain universities, global corporations and several other interests working through the U.S. Department of Education and through key state education departments, one of which is the state of Vermont.

    Three critical documents in this transformation are Benjamin Bloom’s multi-volume TAXONOMY OF EDUCATIONAL OBJECTIVES. That was the first. The second was a many-state project begun in 1967 called DESIGNING EDUCATION FOR THE FUTURE, and it was set forth in an enormous manual of nearly 1000 pages and finally the BEHAVIORAL TEACHER EDUCATIONAL PROJECT which came in a manual of over 1000 pages. These were inserted into every state education department in the country and moneys were inserted there to pay faculty salaries a certain range of bribes for the school districts that would pioneer the use of these things.

    Let me start with the DESIGNING EDUCATION FOR THE FUTURE papers. They were the collusion with the federal education department and the presumably independent state agencies. They redefined education after the 19th century Germanic fashion as (quoting now from the document) “as a means to achieve important economic and social goals for the national character” — and I would hasten to add that none of those goals included the maximum development of your son or daughter. State agencies would henceforth “act as Federal enforcers insuring compliance of local schools with Federal directives”. The document proclaimed that ( I’m quoting again), “each state education department must be an agent of change”, proclaimed further “change must be institutionalized”. I doubt if an account of this appeared in any newspaper in the state of Vermont or for that matter any newspaper in the country (U.S.). Education departments were (I am quoting a third time) “to lose their identity as well as their authority in order to form a partnership with the Federal Government”.

    The BEHAVIORAL TEACHER EDUCATIONAL PROJECT outlines specific teaching reforms to be forced on the country, unwillingly of course, after 1967. It also sets out, in clear language, the outlook and intent of its invisible creators. Nothing less than quoting again “the impersonal manipulation through schooling of a future America in which few will be able to maintain control over their own opinions”, an America in which (quoting again) “each individual receives at birth, a multipurpose identification number which enables employers and other controllers to keep track of their [underlings]”, (underlings is my interpretation, everything else came out of the document), “and to expose them to the directors subliminal influence of the state education department and the federal department acting through those whenever necessary”.

    Readers learned in 1967, of course you and I were not among those readers, that chemical experimentation on minors would be normal procedure in the post 1967 world. That is a pointed foreshadowing of the massive Ritalin interventions which would accompany the student body of the future. Teachers were expected to function as government change agents and their trainers, (this the first time reading this document that I realized that the expression “teacher trainer”, like animal trainer, is an odd locution) the teacher trainers, were notified that behavioral science would henceforth replace academic curriculum in schools. The project identified the future as one (again I’m quoting) “in which a small league would control all important matters, one in which participatory democracy would largely disappear”. Children would be made to see that their classmates, and indeed the average man or woman were so inadequate, were so irresponsible that they had to be controlled and regulated. The tremendous rise in school violence and general chaos in the late 1960’s, a period when teachers and schools across the land were stripped of their ability to discipline children, might be seen as a convenient public justification for sharp constrictions of traditional liberty. Each outburst resonated through the press like a billboard for emergency measures.

    According to the BEHAVIORAL TEACHER EDUCATIONAL PROJECT, post modern schooling would focus, (I quote directly from the document), “on pleasure cultivation and interpersonal relationships and other attitudes and skills compatible with a non-work world”. It makes sense of course, doesn’t it? That irresponsible semi-illiterate people could not be trusted with much responsibility so in the new change agentry schooling, which is called for by this national teacher training document, the teacher is a therapist, translating the prescriptions of the social psychologists into practical action research in the classroom.
    The third critical gospel signaling a great transformation at hand, to those in the know, was Bloom’s TAXONOMY OF EDUCATIONAL OBJECTIVES, which has, since its publication, spawned a number of descendant forms, like “mastery learning”, “outcome based education” and “school to work” business-government-economic projects. Dr. Bloom’s compilation was a tool, (I’m quoting from Dr. Bloom), “a tool to classify the ways individuals are to act, think or feel as the result of participating in some unit of instruction”. I would be dubious if any parent in the U.S. would send their children to schools under these auspices if they were thinking people. In this fashion, children would learn proper attitudes and have their improper attitudes (brought from home) remediated. In all stages of the school manipulations testing would be essential to locate the child’s mind on an official continuum.

    for the full article http://4brevard.com/choice/Public_Education.htm

  19. Liana G says:

    @ Binkey

    The home school is part of the education system

    Who supports Choice? we do!

    • Good teachers overburdened by bureaucracy and a few incompetent colleagues.
    • Parents tired of being brushed aside by the school bureaucracy.
    • Students who want to focus on art, writing, science, trades, farming, technology, or football.
    • Economists who learned that monopolies never produce the best product at the lowest cost.
    • Humanists who believe that diversity is America’s strength.
    • Citizens who know our future depends on good education for informed citizens.
    • Religious believers who want their children to grow up with strong Christian, Jewish, Hindu,etc. values.
    • Businesspeople who cater to the positive influence of more choices and customer satisfaction..
    • Libertarians who believe that government who governs least, governs best.
    • Political leaders frustrated with the worst test results among developed countries.
    • Taxpayers tired of paying twice the price of a private education.
    • Minorities who know the ticket to a bright future for their children is a good education.
    • Constitutional scholars who say the federal government is outside its bounds and should stay out of education.
    • Colleges who complain that their first burden is remedial education for government school students.
    • Everyone who understands parents should participate in governing schools and in assignment of tax dollars.

    “First God created idiots. That was for practice. Then he created school boards”
    Mark Twain

  20. Binkey says:

    Liana,

    Yes, I know. I wasn’t clear. The overwhelming majority of parents feel that the school (private or public) their child goes to is good. Yet, when asked about the education system, about half the parents said it is poor.

    Palmcoaster,

    I agree no money for failing charter schools.

  21. Liana G says:

    @ Binky

    I understand what you’re trying to say. In a sense it’s like a marriage; suddenly you find yourself married but it’s not all that it is cut out to be. And here are your choices: you leave – it was the worst decision you’ve ever made and you don’t know if things will work/change and so you move on. Or you stay – especially if there are kids involved because while the marriage is not humpty dory, your responsibility now is the welfare of the kids because you realize that life is no longer about you and only you.

    So what do you do? You invest in working and improving the marriage, providing it is worth the effort since sometimes staying married can actually be harmful to the kids involved. Overtime things can improve and get better when both parties make a concentrated effort or, they can get worse and fall apart because only one person is truly trying – and that is usually the person committed to making things better for the sake of the kids.

    When parents move into a community based on the schools – most involved parents do – they are going by the information provided on the schools. Some purchase homes, a big investment, and settle into their new life only to gradually realize that the schools, the main reason they choose to move to that specific community, are not as they expected. When encountered with this ‘buyer’s remorse’ and stuck with their big purchase some do the predictable, they find reasons to justify their decision by accepting that it’s really not that bad. The human race does not like to accept that they’ve been duped. But some parents are not as accepting especially when things seem to be getting from bad to worse or has the potential to (shorten school days for students, less teachers, greater pay for some, maintaining no cost benefits for all, etc.), even when it means upsetting some good people in the process.

    There should be no funding for failing schools. And expecting school districts and administrators to police their schools for cheating when grades are tied to funding is not smart.

  22. Bob Z. says:

    Most people do not know that many State employees do not have access to a union.

    Personally, I worked in the private sector for many years, after I served in the US Navy and earned my degree. I know a lot of people that often complain about what benefits public sector employees get and when I ask them about “total compensation” they need help understanding what exactly that means. Additionally, it seems that most of the complainers have just a high school education and/or very little experience in the work place, as compared to those with degrees and/or many years of experience. Basically, most of the people who object to the benefits State and other public sector employees earn get less themselves – does that make their complaints legitimate?

  23. Liana G says:

    “Basically, most of the people who object to the benefits State and other public sector employees earn get less themselves – does that make their complaints legitimate?”

    Yes, Yes, Yes! That is exactly the point that is being made here. Money/taxes are being taken out of their income to fully pay for the guaranteed benefits of state and public sector workers, and on top of that any benefits they, private sector employees, want for themselves cost them an additional portion of their income. Is that fair? Should the private sector employees be saddled with it all?

    As for the rest of your post, might I bring it to your attention that these complainers are taxpayers, qualifications and experiences aside, who contribute to your salary and benefits and therefore have a legitimate right to complain, more so than you!

  24. Nadine Voelz says:

    Liana G – “Tax dollars originate from employees who work in the private sector. If it weren’t for these employees, where would these tax dollars come from? How would gov’t employees get paid? So technically, since gov’t employees are paid with the tax dollars collected from private sector employees, the taxes they pay are also paid by private sector employees. Whereas gov’t employees receive their benefits via tax dollars paid by their counterparts in the private sector, the pendulum does not swing back to benefit employees in the private sector.” I find this laughable. You are saying people who work for the state do NOT pay taxes. What a sweet darling you are for pointing that out. You better not tell your representative that. Will you please return all the taxes I have paid in all the years i have worked for the citizens of Florida?

  25. Nadine Voelz says:

    Liana G – “Money/taxes are being taken out of their income to fully pay for the guaranteed benefits of state and public sector workers, and on top of that any benefits they, private sector employees, want for themselves cost them an additional portion of their income.” The private sector employee IS NOT paying a portion of their salary for the benefits of State employees and then an additional portion for their own benefits. That would be leading to double taxation. Please get your facts straight.

  26. Nadine Voelz says:

    Kevin – “You would choke if you saw the lump sums payouts to some of the administrators and top brass for fire and rescue or law enforcement. Its almost unimaginable. Then consider many of these peope get hired back into the system to begin the job again with their huge salaries and earning their pension too.” You said it yourself – THE ADMINISTRATORS AND TOP BRASS. They get the big bucks – not the majority of the rank and file peons who are the ones primarily faced with the cuts and changes to the contract that was agreed to in 1974. In any company, the higher you get by whatever means, the more you get at the end. It is totally unfair and stupid to base your opinion of an entire system on the top 1 or 2 %. And, not that many people get rehired after they retire – I used to work in that system.

Leave a Reply

Read FlaglerLive's Comment Policy | Subscribe to the Comment Feed rss flaglerlive comment feed rss

More stories on FlaglerLive
Loading

ADVERTISEMENTS

support flaglerlive palm coast flagler county news pierre tristam
fcir florida center for investigative reporting

Subscribe to FlaglerLive

Get immediate notification of new stories.

Advertisement
Log in
| FlaglerLive, P.O. Box 354263, Palm Coast, FL 32135-4263 | 386/586-0257

FlaglerLive.com