The fate of state employee salary contributions to their pensions remained up in the air late Thursday afternoon as a Leon County Circuit Court judge weighed whether to put the funds into the states retirement system or into a separate account.
State employees and local government workers who make up the 655,000 members of the Florida Retirement System, are poised to begin contributing 3 percent of their salaries into the state pension fund Friday. Only 562,000 of those members, however, are fully vested in the fund and would be affected by the new contribution.
The Florida Education Association, the states largest teachers union, along with other public-sector unions, is suing Gov. Rick Scott and the Legislature to prevent the contributions, alleging that it is a breach of contract with existing employees and infringes on their right to collectively bargain. Nearly half of the members in the FRS are school district employees.
The group asked Judge Jackie Fulford to issue a temporary injunction Thursday, putting the contributions, thought to add up to $807 million per year, into an alternative account instead of in the pension fund. Should the FEA win the case, the employees could be refunded the money owed to them.
Here they (lawmakers) didnt say you couldnt collectively bargain, they made it impossible to collectively bargain. They (state workers) have nothing to bargain over -- the decisions been made unilaterally, FEA general counsel Ron Meyer said.
Judge Fulford delayed a final ruling on the matter until midnight Thursday.
State lawyers argued that the Legislature is within its rights to ask for a contribution from state workers, since it applies to work that will be done in the future. Moreover, they claim the cost of placing the contributions into a low-yielding account instead of the pension fund while the matter works its way through the courts would be roughly $45 million over two years. The fund is controlled by the State Board of Administration and yields a better-than-average return.
You cant go back and say we invested it to begin with, said Blaine Winship, special counsel for state programs' litigation for the attorney generals office.
But Meyer and other lawyers for the plaintiffs were skeptical that the money would be there if it wasnt placed into a special account, even though Winship claimed the money would be given back to the FRS members from the SBA or from the Legislature if they proved successful in their lawsuit.
Theyre going to say, Theres no statutory authority to liquidate assets. Thats what were going to get, your honor, I can hear it now, Meyer told Judge Fulford.
Lawmakers wanted to help boost the pension fund, which as of March 31 was funded at $127.8 billion, by asking state workers to contribute in the fund. Florida is the only state in the nation that does not require contributions to the state pension fund, as it did prior to 1975. The FRS fund can currently cover about 87 percent of its liabilities.
Reach Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859.
