Ruling Pending from Judge Fulford on Employee Pension Contributions
READ RULING HERE...
A decision continues to be anticipated soon from Leon County Circuit Judge Jackie Fulford on Florida’s decision to require state employees to contribute 3 percent of their pay toward the pension program.
House Speaker Dean Cannon, R-Winter Park, said the decision shouldn’t affect budget plans because he expects the case, no matter the verdict, will be challenged.
“No matter how a single circuit court judge rules on a single issue, that presents no reason why we should change any of our existing obligations this year or take any other immediate action,” Cannon said on Friday.
“We haven’t even gotten the first ruling from the trial court judge and there are two appellate layers above that, and months and potentially years of litigation beyond that.”
The Florida Education Association, which filed the lawsuit with a number of public-employee unions, contends legislators violated the state Constitution, which required the changes to be negotiated through collective bargaining.
The state has argued that nobody lost benefits already earned or the right to collectively bargain when it required workers to contribute into the retirement system.
Legislators, seeking to patch a $3.8 billion shortfall in the budget, set contributions at 3 percent for the 700,000 state, county and municipal employees that are covered by the $121.6 billion Florida Retirement System.
The case was heard by Fulford, who has previously ruled against the state’s prison privatization plan, in October.
At the time, Fulford said she wasn’t going to overturn prior Florida Supreme Court rulings, which she said allowed legislators to modify contracts. But she disagreed with the precedent being offered by the state attorneys that the courts had allowed legislators to unilaterally change contracts.
Gov. Rick Scott had recommended legislators make the employee contribution 5 percent.
Government employees covered by the system have been 100 percent covered by the state since July 1, 1974.
The union also contends that when legislators changed the rules during the 2011 session, their retirement benefits were cut.
During the October hearing, Charlette Moore, a certified public account testifying for the teachers' union, said the new retirement package readjusts cost-of-living raises in a manner that cuts long-term benefits.
Moore said the formula used by the state calculates time before and after employees were required to pay 3 percent pension payments starting July 1, 2011. The change, she said, alters the cost-of-living from a fixed 3 percent to less than 3 percent. For some employees, that could mean thousands of dollars in the long term.
Paul Zeisler, an independent actuary hired by the state, disagreed, saying that when cost-of-living adjustments are calculated with accrued benefits, the long-term retirement payments remain equal.