Florida Supreme Court upholds new law on pension contributions, COLA cuts

The Florida Supreme Court on Thursday upheld legislation requiring state employees to contribute 3% of pay to the $127 billion Florida Retirement System defined benefit plan and eliminating a retirement cost-of-living adjustment.

The 4-3 ruling overturned a decision in March by the Florida 2nd Judicial Circuit Court for Leon County, Tallahassee, which struck down as violating the state constitution the provisions that became law effective July 1, 2011, converting the system to employee contributory from non-contributory.

The law would save $861 million annually in state contributions, according to the supreme court ruling.

Andy Ford, president, Florida Education Association, which represents teachers, said in a statement he was “disappointed” by the ruling and will use it as a rallying cry for the 2014 elections to “turn the decision around.”

“We are more determined than ever to change the face of the Florida Legislature,” Mr. Ford said in the statement.

FEA filed suit in the circuit court June 20, 2011, challenging the legislation and winning the decision that was appealed to the Florida Supreme Court by the trustees of the $156.3 billion Florida State Board of Administration, Tallahassee, which oversees the FRS.

“The court's ruling today supports our efforts to lower the cost of living for Florida families.” Gov. Rick Scott, FSBA trustee, said in a separate statement. “This means even more businesses will locate and grow in our state, which creates even more opportunities for Floridians to live their version of the American dream.”

Will Weatherford, Florida House speaker, said in a separate statement, “On the surface, this appears to be a decisive victory for taxpayers. We are pleased the court has upheld our actions on pension reform.”

Comment was unavailable from the other two FSBA trustees — Jeff Atwater, Florida state CFO, overseeing the Department of Financial Services, and Pam Bondi, Florida attorney general. John Lucas, spokesman for Ms. Bondi, referred comment to the governor's office. Anna Alexopoulos, spokeswoman for Mr. Atwater, couldn't be reached for comment.