The stakes were raised Monday in the debate over reforming Floridas public pension system, as one union official decried the proposed radical changes and the myths public officials expound whenever they talk about the system.
Legislators have targeted the Florida Retirement System for reforms as a way to cut spending. No legislation has been written or filed so far, but some have looked at requiring an employee contribution, because the system is fully funded by the state.
By now we all know there are those in the Legislature dedicated to making radical changes to Floridas pension system, AFL-CIO communications director Rich Templin said during a press conference the union called at the Florida Press Center.
Templin also attacked as myths the notions that public pensions in Florida are underfunded and unsustainable and that revenues used for pensions are eating up local government budgets.
Weve been dismayed over the fact that the vast amount of information thats been circulated out there has been faulty. We cant find verifiable information to indicate that those claims are true, Templin said.
To back his claims, Templin brought along two independent actuaries, Chad Little, a partner with Freiman and Little Actuaries, a Merritt Island-based firm, and Ray Edmonsdon, the CEO of the Florida Public Pension Trustees Association.
Little pointed to a report from the National Association of State Retirement Administrators showing that retirement plans made up 2.37 percent of state and local government spending in Florida in 2008, and the fact that the FRS reported that it was funded at 87 percent as of July 2009, as evidence that public pensions do not need to be changed.
However, during a presentation last month to the Senate Committee on Governmental Oversight and Accountability, which oversees the FRS, Kraig Conn, legislative counsel for the Florida League of Cities, complained that many large cities throughout the state are using more than 50 percent of their payroll for pension benefits. According to state documents, Florida spent nearly $27 billion in pension benefits during the 2010 fiscal year.
Meanwhile, the James Madison Institute, a Florida-based conservative think tank, fought back, issuing a press release Monday in conjunction with a report urging legislators to push employees into defined contribution plans, rather than defined benefit plans.
The FRS currently offers employees the option of a defined benefit plan, which is based on the last five years of service and pays a lifetime monthly payment, or a defined contribution plan, which is vested after one year and employees can determine how they receive their benefits.
Underfunded public pension liabilities are economic sinkholes waiting to collapse. Florida has an opportunity to halt further fiscal erosion and potentially reverse some of the damage, but we must act now, before municipal budgets begin to significantly disintegrate, said JMI president and CEO Dr. Robert McClure III.
But Edmonsdon insisted that the states public pension system was sound and not in need of reform, citing the economic impact of public pensions. He stated thatevery $1 spent on public pensions spurs $1.41 in economic activity.
Theres nothing wrong with the pension system in the state of Florida. Its one of the shining stars of pension systems through the United States, Edmonsdon said.
The escalation of rhetoric comes two days before the next meeting of the Senate Committee on Governmental Oversight and Accountability, where three public employee unions -- Florida Professional Firefighters, Florida Police Benevolent Association and the Florida Education Association -- will give presentations to legislators.
Reach Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859.
