Friday, October 25, 2013

The Facts About Florida's Public Retirement Plans

The Facts About Florida's Public Retirement Plans - Florida AFL-CIOFlorida Retirement Security Coalition The Facts About Florida’s Public Retirement Plans February 2013 Florida Retirement Security Coalition The Facts About Florida’s Public Retirement Plans 2 Introduction Retirement plans for state and local government workers affect millions of Floridians and boost the state economy. These plans directly impact about 1.2 million current or former public employees in Florida and millions of their dependents and other family members. In addition, tens of thousands of Florida businesses benefit each day when retirees spend their retirement checks on goods and services in every community in Florida. These vital benefits are provided through the Florida Retirement System and almost 500 local government retirement plans. The Facts About Florida’s Public Retirement Plans is designed to help

policymakers, business owners, and other Floridians understand how these public retirement plans work for the people and economy of our state. Eight Key Facts About Florida’s Public Retirement Plans 1. The Florida Retirement System is fiscally sound. The Florida Retirement System (FRS) is in sound financial condition and stronger than retirement plans in almost all other states. “Compared to other states, the pension plan is better funded,” concludes the Florida Legislature’s office of policy analysis.1 Florida is “a top performer when it comes Florida Retirement Security Coalition The Facts About Florida’s Public Retirement Plans 3 to managing its long-term pension liability,” one independent study said.2 Another ranked the FRS among the top 10 state pension systems in the U.S. in a 2011 national analysis.3 Some states have overburdened state retirement systems, but Florida is not one of them. 2. Public retirement plans allow Florida workers to take care of themselves after retirement and not rely on other government services. Retired public workers don’t get rich from their retirement plans. In fact, the average annual payment from the Florida Retirement System is only about $18,000.4 But those dollars are crucial income for many Floridians after their work years are done. That money helps retired workers take care of themselves instead of relying on other government programs. Without traditional retirement plans, they run the risk of outliving their retirement savings, at a large cost to the public treasury. 3. State and local retirement plans provide important support to the state and local economies. In 2011 the Florida Retirement System paid out about $6.7 billion in retirement payments.5 Local government retirement systems paid out almost $2 billion more.6 These dollars support retirees and circulate throughout the economy. That money is spent in Florida for food, clothing, housing and other necessities and supports thousands of jobs spread throughout every community in the state. Every dollar paid in public pension benefits creates $1.64 in total economic activity in Florida. And every tax dollar invested in retirement plans supports $4.47 in total economic output (because investment earnings and employee contributions finance the lion’s share of state and local pension plans).7 4. Traditional retirement plans cost taxpayers less and provide greater benefits to retired workers. Closing the FRS pension plan to new workers would cost taxpayers more and deliver less to retirees. Most members of the Florida Retirement System are enrolled in the FRS “defined benefit” (DB)...

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