FL Supreme Court Decision: State Employee Pension Contributions

GRFLSupreme-CourtIn a 4-3 ruling, the Supreme Court ruled in favor of the Florida State Legislature on pension case. State employees will contribute 3%  toward their retirement. Associated Press reporter/blogger Gary Fineout (@Fineout) tweeted the three dissenting justices were Justices Lewis, Quince (of course!)  and Perry. Local democrat activists expressed shock on social media that Justice Barbara Pariente (known as a liberal) sided with the legislature writing a separate opinion telling state workers “this is not about the wisdom or fairness” of the legislature’s action.

Issuing the following statement, the James Madison Institute calls for the next necessary steps needed in public pension reform.

Thursday, 17 January 2013

visit jamesmadison.org

Statement Regarding Jan. 17, 2013 Florida Supreme Court Ruling on Public Employee Pension Contributions by Dr. J. Robert McClure, JMI President and CEO:

“The long delay of this Florida Supreme Court ruling on pensions had state officials on edge, wondering if an adverse ruling would cause a budget crisis. Fortunately, by a slim 4-3 margin, the Court has allowed Florida to move forward without this particular cloud hanging overhead. Like government employees across the nation, those in the Florida Retirement System will now contribute toward their pensions. That’s good news, but the pension reforms must not stop there.

While the state’s pension system is in relatively good shape, many of Florida’s major cities have their own plans apart from the state retirement system, and many of those cities face daunting problems. Therefore, the Legislature now needs to follow up this ruling by taking two important steps.

First, for state employees, lawmakers should place all new hires in a 401k-style plan — and should establish incentives that encourage current state employees to make the same choice. Next, to restore the fiscal health of those Florida cities facing severe cutbacks in public services because of unfunded pension liabilities, lawmakers should alter the 1999 law that limits how local officials may use the revenue from the insurance premium tax.

Although some may perceive this Supreme Court ruling and these proposed legislative actions as a setback, all would be better served to take the long view. Unless we take prudent steps now, future public pensions could meet the fate of those in a growing list of cities where government retirees ruefully discovered that their municipalities could no longer afford to keep pension promises.”

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