Findings from TUA’s pension project on Orlando, Florida, are featured in this article from the West Orlando Online News.
A just-released study by the Taxpayers United of America (TUA) finds that some Orlando government employees and Orange County government teachers are on track to collect huge pension payouts, and if Florida’s current government pension systems continue, they will have devastating consequences for its middle class.
Florida refuses to release actual government pensions, ignoring citizens’ right to review all payments funded by taxes. TUA calculated estimated pensions for government employees based on actual salaries of current government employees to shed light on the largest of the tightly guarded secret payouts.
“Florida lawmakers have been trying to undo the damage of administrations past, that have made crushing deals with union bosses who only concern is their own job security,” stated Rae Ann McNeilly, Director of Outreach for TUA.”
“But despite efforts to reform the pension system, it seems that government officials are still willing to protect the system by keeping it hidden from review. the costs of shielding the system from review, and ultimately, reform, are devastatingly high as cities around the country are buckling under the weight of their unfunded liabilities. Pension funds are the number one budgetary problem in the county and Florida is no different.”
“While residents across Florida face crushing taxes, falling home values, high unemployment, and, at least according to some, another recession, government employees continue to receive stunning pensions entirely funded by taxpayers who will never collect more than about $22,000 a year from Social Security.”
“As long as Florida shields its pension payments from taxpayer review and uses grossly overstated actuarial calculations, the Florida pension system remains a ticking time bomb. The purpose of our study is to put some perspective around individual pensions, to put them in terms to which the average taxpayer can relate.”
McNeilly continued, “For example, Timothy P. Ackert, a community venues project director, stands to collect an estimated annual pension of $115,292* based on his actual annual gross of $205,879. His estimated lifetime pension payout should be very lucrative $3,741,229.*”
“Rebecca W. Sutton, chief financial officer, has an estimated annual pension of $100,792*, based on her actual annual gross of $179,986, with an estimated lifetime payout of $3,270,713.*”
“Orlando’s fire assistant chief, James M. Hill, has a lifetime estimated payout of $5,345,943* with an estimated annual pension of $164,744*, based on his annual gross of $164,744*.”
“Florida’s government pension systems are crushing middle class Floridians. Replacing defined benefit pensions for all new government hires with social security and 401(k)s would eventually eliminate unfunded government pensions. Current government employees must consider a voluntary pension contribution of up to 10% to preserve their pension benefits. Additionally, all members should pay for 50% of their healthcare premiums. We need a stable system that is fair to both taxpayers and beneficiaries or pension checks will stop coming,” added McNeilly.
A recent study by the LeRoy Collins Institute, a political think tank connected to Florida State University, found that nearly one in three municipal pension plans in Florida are severely underfunded while another 30 percent received high praise. That report graded 208 pension plans offered by the state’s 100 largest cities.
*TUA submits FOIA requests for current employee salaries and estimates pensions based on the current pension laws. COLA average of 3% per year worked, uses 23 years of pension payments based on IRS form 590 LE of 85. Assumes employee worked 35 years and retired at age 62. No personal information is provided so calculations are accurate based on the necessary assumptions.
Findings from TUA’s pension project on Tallahassee, Florida, are featured in this article from TheLedger.com.
Florida’s pension plan for public workers faces a legal showdown in early September before the state’s highest court.
Florida’s pension plan for public workers faces a legal showdown in early September before the state’s highest court.
On the morning of Sept. 7, the Florida Supreme Court will hear oral arguments in a case in which the justices will decide the fate of a 2011 legislative decision that required state workers, school employees, county workers and other public employees who participate in the pension fund of more than $120 billion to pay 3 percent of their salaries toward their retirement costs.
For state officials, it means they will finally have an answer on the legality of the contribution, which was held invalid by a circuit court ruling this year. The Supreme Court will likely issue its opinion before the Legislature convenes next spring to write a new state budget.
If the state loses the appeal, it will complicate the budget-writing process both for state lawmakers as well as county governments — which have built in the savings from the pension contribution since 2011 into their budgets.
For the state, it would represent more than an $860 million recurring annual impact, including $456 million from the 3 percent employee contribution and $404 million from limiting cost-of-living adjustments for future retirees. County governments could face an annual loss of about $600 million.
But regardless of how the court rules, Florida’s pension plan, as well as public pension plans in other states, are going to remain a hot topic in the political world.
Last week, another group came to Tallahassee to criticize Florida’s pension plan.
“Pension funds are the No. 1 budgetary problem in the country, and Florida is no different,” said Rae Ann McNeilly of the Chicago-based Taxpayers United of America, which produced a report highlighting what it says are “stunning” pension payments to public workers.
The group’s report — which is available at www.taxpayersunited.org — showed that some high-level state workers could earn annual retirement payments well in excess of $100,000 each, assuming they worked 35 years for the state and retired after the age of 62.
“The purpose of our study is to put some perspective around individual pensions, to put them in terms to which the average taxpayer can relate,” McNeilly said.
However, to put the report into context, it should be noted that the vast majority of public workers would not earn these highly lucrative pension payments. The report cited the highest-paid workers, but the bulk of state employees fall into the “career service” class, in which last-year workers averaged about $34,000 in annual pay and had a little more than nine years of service.
But McNeilly, whose organization is targeting pension funds throughout the country, said Florida is nearly alone among the states that do not require workers to contribute to their pension plans.
Florida workers stopped paying for their retirement in the mid-1970s. With the backing of Gov. Rick Scott, lawmakers revived the pension contributions in 2011 as a way of dealing with the state’s ongoing budget problems.
McNeilly’s group, which favors replacing the pension plans with Social Security and 401(k)-type plans, says workers should be contributing 10 percent of their pay to the funds. She also criticized a provision in state law that shields the identity of retired workers who receive pension payments and the optimistic financial assumptions built into Florida’s pension fund earnings.
“As long as Florida shields its pension payments from taxpayer review and uses grossly overstated actuarial calculations, the Florida pension system remains a ticking time bomb,” she said.
WINNER OF THE WEEK
Sandy Adams. The Orlando-area congresswoman picked up the endorsement of former Alaska Gov. Sarah Palin in heavily contested Republican primary that is pitting Adams, a favorite of the tea party supporters, against incumbent U.S. Rep. John Mica, an establishment Republican and chairman of the House Transportation Committee.
LOSER OF THE WEEK
Jennifer Carroll. The lieutenant governor says the allegations are baseless, but a former aide has claimed that Carroll’s office was engaged in questionable sexual and ethical activities. The charges were made by an aide now facing criminal charges because of an illegal taping incident in the office.
QUOTE OF THE WEEK
“After considerable thought, introspection and conversations with my family, I have decided to resign from my position as president in order to initiate my retirement on Oct. 11, 2012,” Florida A&M University President James Ammons said in a letter, announcing his resignation.
For state officials, it means they will finally have an answer on the legality of the contribution, which was held invalid by a circuit court ruling this year. The Supreme Court will likely issue its opinion before the Legislature convenes next spring to write a new state budget.
If the state loses the appeal, it will complicate the budget-writing process both for state lawmakers as well as county governments — which have built in the savings from the pension contribution since 2011 into their budgets.
For the state, it would represent more than an $860 million recurring annual impact, including $456 million from the 3 percent employee contribution and $404 million from limiting cost-of-living adjustments for future retirees. County governments could face an annual loss of about $600 million.
But regardless of how the court rules, Florida’s pension plan, as well as public pension plans in other states, are going to remain a hot topic in the political world.
Last week, another group came to Tallahassee to criticize Florida’s pension plan.
“Pension funds are the No. 1 budgetary problem in the country, and Florida is no different,” said Rae Ann McNeilly of the Chicago-based Taxpayers United of America, which produced a report highlighting what it says are “stunning” pension payments to public workers.
The group’s report — which is available at www.taxpayersunited.org — showed that some high-level state workers could earn annual retirement payments well in excess of $100,000 each, assuming they worked 35 years for the state and retired after the age of 62.
“The purpose of our study is to put some perspective around individual pensions, to put them in terms to which the average taxpayer can relate,” McNeilly said.
However, to put the report into context, it should be noted that the vast majority of public workers would not earn these highly lucrative pension payments. The report cited the highest-paid workers, but the bulk of state employees fall into the “career service” class, in which last-year workers averaged about $34,000 in annual pay and had a little more than nine years of service.
But McNeilly, whose organization is targeting pension funds throughout the country, said Florida is nearly alone among the states that do not require workers to contribute to their pension plans.
Florida workers stopped paying for their retirement in the mid-1970s. With the backing of Gov. Rick Scott, lawmakers revived the pension contributions in 2011 as a way of dealing with the state’s ongoing budget problems.
McNeilly’s group, which favors replacing the pension plans with Social Security and 401(k)-type plans, says workers should be contributing 10 percent of their pay to the funds. She also criticized a provision in state law that shields the identity of retired workers who receive pension payments and the optimistic financial assumptions built into Florida’s pension fund earnings.
“As long as Florida shields its pension payments from taxpayer review and uses grossly overstated actuarial calculations, the Florida pension system remains a ticking time bomb,” she said.
WINNER OF THE WEEK
Sandy Adams. The Orlando-area congresswoman picked up the endorsement of former Alaska Gov. Sarah Palin in heavily contested Republican primary that is pitting Adams, a favorite of the tea party supporters, against incumbent U.S. Rep. John Mica, an establishment Republican and chairman of the House Transportation Committee.
LOSER OF THE WEEK
Jennifer Carroll. The lieutenant governor says the allegations are baseless, but a former aide has claimed that Carroll’s office was engaged in questionable sexual and ethical activities. The charges were made by an aide now facing criminal charges because of an illegal taping incident in the office.
QUOTE OF THE WEEK
“After considerable thought, introspection and conversations with my family, I have decided to resign from my position as president in order to initiate my retirement on Oct. 11, 2012,” Florida A&M University President James Ammons said in a letter, announcing his resignation.
Findings from TUA’s pension project on Tallahassee, Florida, are featured in this story from WCTV Eyewitness News. To see video of the story, click on the image below.
