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News Section: Opinion



Attack on FRS Pensions Unfounded and Ideological

Published Sunday, February 17, 2013 12:10 am
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Once again, the Florida legislature is hard at work trying to dismantle one of the last solid middle-class pension systems to be found. Despite a wealth of real problems it seems determined to ignore, it has quickly found time to once more take up the issue of trying to scrap a successful anti-poverty tool, in favor of a system that would transfer princely sums to Wall Street, while hanging hard working teachers, law enforcement officers and state and municipal workers out to dry.


Having failed to include the measure two years ago when they passed the 3 percent employee contribution, a new proposal (PCB GVOP 13-01) passed the House Government Operations Subcommittee after a heated debate last week. The bill would require employees who begin working for the state on or after January 1 to join a "defined contribution" plan, rather than a “defined benefit plan.” The change would equate to private sector swings from pensions to 401(k)’s, where employees' future benefits depend on the performance of the market through a certain basket of funds they are allowed to invest their contributions into.

Proponents of the bill (House Speaker Will Weatherford is among the most vocal) claim that it is a preemptive measure to "stabilize" future liabilities before there is a problem. However, there’s no evidence that there is, or ever will be a problem. In fact, there’s reason to believe that such a change could actually have the opposite effect, as the sudden halt in contributions from new employees destabilizes an otherwise healthy fund.

Such run-before-we-walk approaches have become a trademark of this state’s legislature and does not bode well for the new leadership. Whether it is prison privatization, Medicaid expansion or the pension of state employees, there never seems to be an absence of will among Florida lawmakers to rush forward initiatives favored by the American Legislative Exchange Council (ALEC) on the basis of flawed rhetoric, backed by virtually no evidence and often even evidence to the contrary.

The average FRS recipient earns a mere $1,554.25 each month in retirement. Are there egregious examples of high-paid public-sector executives earning far more than taxpayers would deem fair? Of course there are. If lawmakers are serious about saving money, how about looking at the top end of the system? Maybe we should consider implementing a ceiling on FRS’s monthly benefit, which currently can be as much as 100 percent of the average final compensation, measured over their highest five years of salary.

Perhaps monthly benefits, which pay off handsomely for people like our own county administrator who was already scheduled to receive over $7,000 a month, but will now have his benefit based on five more years at more than $30,000 in additional base salary in each, should be capped at something like $5,000. Maybe we should look at the DROP program and study how much money is being lost to employees who “retire” only to reapply for their old job after six months when they can double dip state pay and retirement benefits, even after getting a giant lump sum payment upon their "retirement."

No, instead of addressing actual problems, we ideologically attack the idea of a pension because it doesn’t coincide with the modern mission of the Republican party, which seems to be to return us to some sort of industrialist paradise -- a new gilded age. In a state like Florida, whose economy depends so heavily on disposable retirement income, it should be clear that such measures are counterproductive. But then again, this is Florida, where the people who decide such things are too busy carving out their own spot at the trough to consider things like data.

The FRS already took an enormous hit when legislators made sure that no new employee will ever again earn a cost of living adjustment in retirement, and when it stretched the timespan on the benefit formula to ensure lower amounts. Lawmakers should remember that not everyone gets to go work as a lobbyist for the industries they shilled for on Capitol Hill, or take home six-figure salaries with legislative staff or RPOF jobs after they’ve termed out and been good, reliable votes along the way. Some people work hard everyday and hope only to keep the meager benefit they’ve earned throgh their labors by sacrificing compensation today, so that it may be put away for tomorrow – and not in some Wall Street crap shoot.

The FRS is a successful program that has helped many Floridians enjoy at least some modicum of dignity and well-being in retirement. It is a healthy, self-sustaining system that should be a model for other retirement plans as this nation prepares to see a tripling of its elderly population, not something we toss into the dust bin so that our elderly can spend their last years working as greeters at the local Walmart. Prove there’s an actual problem or else leave it alone.

 

Dennis Maley's column appears every Thursday and Sunday in The Bradenton Times. He can be reached at dennis.maley@thebradentontimes.com. Click here to visit his column archive. You can also follow Dennis on Facebook. Sign up for a free email subscription and get The Bradenton Times' Thursday Weekly Recap and Sunday Edition delivered to your email box each week at no cost.

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The DROP program is NOT double dipping, and it saves taxpayers money. Once an employee enters DROP, he no longer recieves pension contribution, rather salary only. His DROP account is renerated by his own earned pension.
Posted by James Mahan on February 22, 2013
 

Thank you for another excellent article Dennis!
1. The privitization of social security
2. This attack on State Pensions.
3. The Obamacare use of commercial insurance instead of single payor or public option
4. The privatization of prisons.
5. The privitization of war in contractors exploiting those who have served in Iraq and Afghanistan and tempting them to return for exorbitantly higher pay....

All of these are attempts for the brokerage class to live and live luxuriously off of the sweat of the common worker.

We need "A Second New Deal for America" which corrects the corporate lean of the economy. The current direction is a dead end street.
Posted by Dr. Joseph J Amato on February 19, 2013
 

Look at the states that are dealing with severe shortages regarding future pensions. NY, California, Illinois. The names are numerous.Politicians in the past just gave raises and increases in pensions in return for votes. They were not worried abbout the long term impact. Now they are having to pay the piper and cut services. The Florida legislature is trying to get out ahead of this issue by limiting the future state liabilities. Finally some foresight with taxpayer money.
Posted by Bob Spencer on February 19, 2013
 

Great column, and great points. To be sure, pensions are the key to Florida's tens of millions of retirees, and attacking them here while attracting them from elsewhere makes no sense. Good work!
Posted by Joe Shea on February 18, 2013
 

Government employees do not get benefits free. They work at relatively lower income compare to private sector or small business owners for security, benefits or job safety. Government employees including teachers and professors do not try to make an easy buck. Do you think professors of the state university's have lower IQ's than the average millioner? Many state emplyees selected that profession to give something to the society instead of trying to be rich. If you hire someone for 40K with FRS, you will need to pay the same person 45K without FRS. The republicans are pushing the government employees to open their small businesses. Do you want to be stopped by an angry high school dropout or a secure middle age person when you miss red light? Do you want your kid's professors come to class after reviewing recent research work or after thinking about best retirement investments?
Posted by Ibrahim Tansel on February 18, 2013
 

All we can do about Florida's many government problems is remember which political party's members have caused them, and *never* vote for anyone in that party ever again. There are a few RINOs, including Joe McClash, New Jersey's Chris Christie, and -- somewhat surprisingly -- Robin DiSabatino, who shouldn't be lumped in with the mass of craven, ALEC-following, rich-bought Republicans, but even when voting for Republicans who seem to be non-evil at first glance, you need to be careful. The party of Lincoln and even the party of Reagan is gone. Its successor is not working to better the United States or Florida but rather to create an American Aristocracy at the expense of all other Americans.
Posted by Robin Miller on February 17, 2013
 

That's what happens when you have plutocrats in charge of the legislature & governors mansion,no fairness for middle class workers but an abundance of goodies for their corporate buddies .When will the voters learn to vote for the person not the party.
Posted by Wiliam E.Moore on February 17, 2013
 

Union benefits far exceed the benefits in the private sector. Reforms need to be made and every time attempts are made unions and their sympathizers try to act as if this is an assault on the "working man". The truth is government employees have benefits that far exceed what the taxpayers (their employers) have. It's time to bring them in line with what other "working" people get. The idea that you receive retirement benefits without having to put anything into the system is unheard of in the private sector. This is really as much about the power of unions as it is about retirement benefits.

Mr. Maley attacks Republicans when these benefits are being revisited in all states as the contracts made when times were booming do not fit these more austere times.
Posted by Millie Oberheu on February 17, 2013
 

Thank you Dennis! This column should be shared across our state.
Posted by Adam Tebrugge on February 17, 2013
 

Would like to say thank you for someone posting something positive for a change. It is good to know that not everyone hates us OVERPAID state, county, and city FRS workers!!!!! I wish we had the power and budget to get our messages out like our wonderful Gov. Tricky Ricky!!!!!!
Posted by Norm Knapp on February 17, 2013
 

Excellent article and very important for all community members to understand how the elected legislators decide to carry out their duties often adhering to The ALEC proposals. Thank you for bringing this important fact to Manatee County Residents.
Posted by Christine Sket on February 17, 2013
 

I don't understand why its unreasonable for employees to contribute to their own future. I have to and have all my working life. By having these pensions which are paid by current working employees it perpetuates the need for more and more government employees and taxes to pay for the ever increasing payments that must be made.

As for you mention of the double dipping issue, why is there no accountability for this? Both the double-dipper and the department hiring that person should be charged with fraud and breach of public trust. That goes for police, teachers, ambulance drivers, and what-ever else.

Entitlements have got to end. Public service has to go back to just that, subservient to the public. The only reason most people go into public service is to make an easy buck.

Thanks for bringing light to how the public officials are expecting more and more of our tax dollars. It has to stop and stop soon.
Posted by James Goodin on February 17, 2013
 

Dennis Maley: You said it, brother.
Posted by Jane Smith on February 17, 2013
 

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