Florida Educators Union Sues Over 3 Percent State Pension Requirement
June 20, 2011
Likening the change to an income tax, the Florida Education Association on Monday challenged the constitutionality of a new law that will force government workers to pay into the state pension system.
The FEA, backed by other labor groups, said the Legislature’s decision last month to require workers to chip in 3 percent of their pay violates contractual and collective-bargaining rights.
The case, filed in Leon County Circuit Court, is a class-action lawsuit filed on behalf of 556,296 people, including state employees, teachers and police officers. The Florida Police Benevolent Association, which represents police and correctional officers, quickly sought to formally intervene in the case.
FEA President Andy Ford said the state “should abide by the promises it makes” to employees, who have not been required to contribute to the retirement system since the 1970s. The case has 11 named plaintiffs from across the state.
“It is essentially an income tax levied only on the workers belonging to the Florida Retirement System,” Ford said during a conference call with reporters.
But Gov. Rick Scott, who signed the changes into law May 26, issued a statement saying he is “confident this law is good for the people of Florida and will stand up in court.”
“Asking state employees to pay a small percentage into their pensions is common sense,” Scott said. “Floridians who don’t work in government are required to pay into their own retirement. This is about fairness for those who don’t have government jobs. Plus, we are ensuring a pension will be there for state employees when they retire.”
State Rep. Will Weatherford, R-Wesley Chapel, and Sen. Don Gaetz, R-Niceville, also contrasted Florida with other states that already require employee contributions.
“I think it’s legal, I think it’s practical and, frankly, I think it’s realistic given the times we live in today,” said Weatherford, who is expected to become House speaker after the 2012 elections. Gaetz is expected to become Senate president.
The contribution requirement is slated to take effect July 1. FEA attorney Ron Meyer said the lawsuit seeks to require the state to set aside the money collected and return it with interest to workers if the challenge is successful.
That means, however, employees will see at least temporary reductions in their paychecks in the coming weeks.
In a letter released when he signed the changes into law (SB 2100), Scott said the 3 percent contributions would save public employers $769 million a year. The lawsuit also challenges another part of the law that eliminates automatic 3 percent cost-of-living increases for retirees, a change Scott said would save $775 million a year.
If the constitutional challenge is successful, Ford said lawmakers could find other ways to make up the money, such as closing tax loopholes and more fully collecting taxes on goods sold over the Internet. But lawmakers have flatly rejected such ideas in the past.
Proposals to change the pension system touched off a political fight during the legislative session, with workers contending they should not face additional costs when many have gone years without raises. Supporters of the changes, however, said the state system should more closely resemble private-sector retirement plans.
FEA officials made clear during a call with reporters they also expect to challenge other measures passed by the Republican-dominated Legislature. That likely will include a lawsuit against SB 736, which ties teacher pay to student test scores.
The pension lawsuit centers, in part, on a 1974 law that halted employee contributions to the retirement system. That law says the rights of retirement system members are “contractual in nature” and “shall not be abridged in any way.”
Meyer said lawmakers could make changes to the retirement system for future employees. But he said requiring contributions and changing the cost-of-living adjustments for people already enrolled in the system violates their rights.
The lawsuit alleges that the changes are an unconstitutional “impairment of contract” and an unconstitutional “taking” of property. It also alleges the changes violate the state constitution’s collective bargaining requirements.
By Jim Saunders
The News Service of Florida