Florida Supreme Court: State workers can be made to pay into retirement

By Al Everson
BEACON STAFF WRITER

posted Jan 23, 2013 - 7:42:54am

Ending more than a year of uncertainty in state and local government circles, the Florida Supreme Court has ruled the state may require public employees to contribute to their retirement funding.

The high court handed down a 4-3 decision in a lawsuit brought by opponents of the 2011 change in funding for the Florida Retirement System. Two years ago, the Florida Legislature mandated employees of state and local government agencies to pay 3 percent of their wages into the FRS, in addition to shares paid by the employers.

Opponents of the mandate said it violated the contracts many state employees had been hired under. As state employees, teachers were among those hit by the 3-percent requirement.

“That’s the end. It doesn’t mean it’s right,” said Andrew Spar, president of the Volusia Teachers Organization. “We now turn our attention to lawmakers and their violation of the public trust. It’s unfortunate.”

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“You’ve got people who were grossly underpaid, and they have to contribute,” he said.

The prospect of having to refund money paid to teachers had weighed on the Volusia County School Board, as school officials prepared budgets in a time of continuing declines in revenues.

Had the court ruled in favor of opponents of the 3-percent contribution, the school district would have been forced to pay back millions of dollars withheld from the pay of teachers and other workers.

Volusia County, meanwhile, also has a little less budget pressure in the wake of the ruling.

“It impacts county employees, but it doesn’t impact the county,” Community Services Director Dave Byron said. “The county is a participant in FRS [the Florida Retirement System]. When the change was made by the Legislature, the employees had to pay. ... We did budget money in case the pension-contribution decision was overturned. We anticipated the state was not in any position to pay this money back.”

The court’s action upholding the 3-percent retirement contributions for public employees comes as workers in both the public and private sectors throughout the country are still trying to adjust to smaller paychecks because of the end of the payroll-tax holiday.

Beginning Jan. 1, workers had to pay 2 percent more of their wages or salaries for Social Security, after two years of reduced payments (from 6.2 percent to 4.2 percent) ended without an extension by Congress. As a way to stimulate the economy, Congress had reduced the Social Security tax withholding for employees — but not for employers — beginning in 2011.

— al@beacononlinenews.com

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