Rick Scotts takes on Florida's retirement system
02/01/2011
Something tells us that Florida's government employees are gonna be cranky with Gov. Rick Scott.
He wants government workers to start paying 5 percent of their income into the state retirement system. Scott also wants to ditch the existing retirement plan for a 401k style plan and end the popular but revenue draining (and often abused) DROP plan.
Scott estimates that his changes would save Florida taxpayers $2.8 billion over two years.
Expect the state and local government employees unions (this includes teachers) to raise hell.
Also don't be surprised if the average Florida worker - both Democrats and Republicans -side with Scott.
Of course, the larger question is whether the Legislature will go along with Scott's plan. Whatever change they make will also affect them. Which again begs the question - why are elected officials - especially those who oppose "career politicians" eligible to receive government pensions.
But we digress.
Here is Scott's press release:
Keeping in line with his 7-7-7 plan and his plan to modernize the Florida Retirement System, Governor Rick Scott announced today that he would send the Legislature a budget proposal that better aligns government workers’ pensions with those in the private sector and saves taxpayers $2.8 billion over two years.
Governor Scott announced that the savings would be realized by requiring government employees to contribute five percent of their salaries to the system and requiring new employees to enroll in investment plans similar to private sector 401(k)s.
“We must bring Florida in line with the private sector and nearly every other state in the country by requiring government workers to contribute towards their own retirement,” said Governor Scott.
The Governor also announced his intention to close the Deferred Retirement Option Program to new participants as of July 1, 2011, and to reduce the annual service credit to 1.6 percent for most members (special risk class members, to two percent).
Governor Scott said the Cost of Living Adjustment on retirement benefits will be eliminated for all service earned after July 1, 2011. Current retirees will be unaffected. Those members retiring after July 1, 2011, will receive a three percent Cost of Living Adjustment on the retirement benefit attributable to the service earned prior to July 1, 2011, and no cost of living adjustment for service earned after July 1, 2011.
“Government workers, like private sector employees, deserve the opportunity to save for the future, but taxpayers shouldn’t be asked to foot that bill alone.”
Governor Scott said that modernizing the Florida Retirement System would help reduce spending and help get government back to its core missions
Governor Scott will send his full budget proposals to the Legislature on Monday, February 7th.
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