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Unions try to protect money ahead of pending Florida pension changes

TALLAHASSEE — Unions challenging a law that requires government workers to contribute to their state pension starting today have asked a judge to sequester the money in a separate fund until the lawsuit is resolved.

Ron Meyer, an attorney for the Florida Education Association, told Leon County Circuit Judge Jackie Fulford in arguments Thursday that holding the employee contributions in a type of escrow account would protect the 550,000 people participating in the state retirement system.

A lawyer representing the state said that the contribution — 3 percent of an employee's salary — is better off in the state retirement fund, where it could earn returns of up to 20 percent.

Fulford did not immediately issue a decision, though one is expected quickly since the law goes into effect Friday.

The education association filed suit June 20, charging that the pension reform violates Florida statutes and the state Constitution. The Florida Police Benevolent Association and the SEIU Florida Public Service Union joined the teachers in the lawsuit.

Defendants are Gov. Rick Scott, Chief Financial Officer Jeff Atwater and Attorney General Pam Bondi, who serve as trustees of the State Board of Administration, which oversees Florida's $134 billion retirement fund.

Their attorney, Blaine Winship, said that the retirement fund could lose $45 million in returns if the employee contributions are held out.

"We are suggesting that the least damage will be done by letting that money go to the SBA," Winship said. "At least the money will have been garnering a good investment return in the meantime."

That money, he said, is necessary to maintain the health of the system and make continuing payouts to retirees.

Florida's pension is about 85 percent funded, making it relatively sound by actuarial standards. But Winship warned that could change if the employee contributions are diverted.

Meyer countered that the $45 million represents only a minuscule fraction of the fund's total assets, so the lost revenue should not affect the state's ability to make payments to retirees.

Winship said that if Fulford has any doubts about the outcome of the suit, she should not allow the "extraordinary remedy" of a temporary injunction.

Case law, he said, shows the Legislature clearly has the right to alter a contract going forward even for current employees.

During three hours of discussion, Fulford repeatedly and forcefully questioned Winship on how the state would pay back employees if the unions prevail.

"Aren't we just guessing that we'll have the money to put in there? What's the source?" she asked.

Winship replied it will be "the state's issue" to determine how to pay back the money if required.

Janet Zink can be reached at or (850) 224-7263.

Unions try to protect money ahead of pending Florida pension changes 06/30/11 [Last modified: Thursday, June 30, 2011 11:01pm]
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