This is very good information about the pension liability and unfunded liabilities faces by Florida taxpayers. It is reason enough to vote out every incumbent elected official in Florida. A similar problem exists in the OTHER Orange County, in California where the 3% unfunded pension just for Sheriff deputies is about to force the County to declare bankruptcy. I moved here in 2006 from that "OC" and get frequent emails from one County official on the issue.
vj
This is from an email sent out by Matt Falconer, who is running for Mayor in Orange County, FL:
Most taxpayers are not aware that virtually every public employee and
elected official is part of the Florida Retirement System.
Every year taxpayers pay up to 23% of the employee's salary into the FRS fund.
The FRS is a "defined
benefit" system which means the members are guaranteed
levels of income regardless of the performance of the retirement fund. If the
fund loses money, the taxpayers make up the losses. It is a great system,
unless you are a taxpayer.
Pensions were designed to keep older people from having to work late in life
and starving. But in Florida, I have seen a public employee retire at 42, with an
annual pension starting at $85,000. The top annual pension payment in the State
of Florida is $285,268.32
a year, for not working. The defined pension benefit increases
3% every year for public safety (1.6% for others). In 30 years this retired
civil servant will be making $692,421.09.
At that point our public employee has not worked in 30 years.
So you are thinking this is just an odd example. Of the top 100 retirees in
Florida the "average" pension is $155,870 a year. In 30 years those
100 people will be costing the taxpayer $37,833,903 a year, or an average of
$378,339. So you are thinking these people all must work in Dade County. Sorry,
in Orange County the top
retiree pulls in $186,471 and there are 16 (soon to be 20)
retirees making $100,000 or more a year without working.
Here is a startling fact. There are 1,000,000 state and local government
workers in Florida. What happens when they all hit retirement? In 30 years we
will have two retirees collecting pensions for each government job. But the
real problem is the hidden fact that pension plan is not actuarially sound or
self funding. The fund lost
$31.1 billion last year, or 25% of its value. The taxpayer is
liable for the fund making a 7.75% return each and every year, so the gap in
value is now $40 billion and the taxpayer has to pay again.
Assuming a 7.75% return is not achievable, which I think it a good bet in the
future economy, what is the taxpayer's liability? I ran an analysis using the
current fund value and a 3% annual return over 40 years. I compared that figure
to a 7.75% return on the current targeted fund value (the fund value we should
be at now). If I am correct and our annualized return is only 3%, we will be $2.3 TRILLION short in the
pension fund in 40 years. If the yield is 4% we will be $2.2
TRILLION underfunded. And if someone invents a pill making people live ten
years longer these numbers will double. What
this means to you is your taxes will increase dramatically over the next two
decades.
Our local government pension time bomb reviles the social security problem at a
federal level. But we can do something about it. We can simply shift to a defined contribution system
where we put the retirement funds into the employees 401k account like the
private sector does. But in order to make this simply shift we need political
leaders with the courage to reform the system. My first vote as Orange County
Mayor will be to convert
all future employees to a defined contribution plan. I will
stop public pensions from being a threat to our children's future. For myself, I will never, ever accept a public
pension for public service.
Do you think it is fair the
taxpayers are working into their 70s so their civil servants can retire in
their 40s?
Do you think government workers
deserve a better pension plan than the taxpayers who pay their salaries?
Do you want to leave your grandchildren with
a $2 trillion liability?
Have any Mayoral candidates ever mentioned this
problem?
Are you ready to elect a leader
with the courage and convictions to make things right?
Folks, I can and will fix our broken government
but I need your help. I need you to send this message to everyone on your email
list. Please visit my web site and donate so I can compete with the well funded
special interest groups.
Matthew Falconer
www.MatthewFalconer.com
[email protected]
