Rick Scott in for a battle over state pension money grab

From The Florida Ledger

By Lloyd Dunkelberger

After a bitter debate this year, state lawmakers mandated that 655,000 state and local government workers contribute 3 percent of their annual salaries to the state pension fund.

The decision — which was part of the overall effort to curb state spending during an economic downturn — marked the first time since the 1970s that public employees, ranging from state workers to school employees to county workers, had to contribute to the fund.

Proponents, including Gov. Rick Scott, pointed out that Florida public employees were alone in the country in not contributing anything to their pension fund. But critics noted that the 3 percent mandate was essentially a pay cut for many workers who haven't had a raise in recent years.

Now, as Florida heads to its next annual session, which begins in January, there are signs that another pension battle may loom.

First, the good news from a group called the Florida Retirement System Actuarial Assumption Conference.

The financial experts met last week and determined that Florida's $126 billion pension plan was funded at an 87.1 percent level. In other words, the fund currently has enough assets to pay roughly $9 for each $10 in future liabilities as workers retire and tap the fund.

It's not 100 percent, but, according to testimony that lawmakers received during their pension debate, any pension plan that has a projected funding level above 80 percent is considered "well funded." In fact, Florida is better off than many states, with about half the states having funding levels below 80 percent.

But there are some troubling signs.

Florida's funding level has slipped from 87.9 percent last year — showing an $18.7 billion unfunded liability up from $16.7 billion last year.

And the pension group also noted it was the third consecutive year that the Florida fund did not show a surplus.

Scott has been watching this closely, and the South Florida Sun-Sentinel, Fort Lauderdale, reported last week that the governor told its editorial board that he would like to reclaim the 3 percent that the local governments were originally allowed to keep. Scott wants to use it to reduce the pension plan's unfunded liability.

And a document from Scott's office, outlining his preliminary legislative agenda, proposed stopping "the windfall that was given to some local governments and apply it" to the unfunded pension liability.

"I would have put the extra money into the pension plan and not given it back to the counties, so that's what I would have done. But that's not what I got," Scott told the Sun-Sentinel. "We're going to make sure everybody understands that their pension fund is not funded."

http://www.theledger.com/article/20111002/COLUMNISTS0302/111009942?p=2&tc=pg