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Judge to Decide if Pension Cash will be Held or Invested

June 30th, 2011 by flanews

A Leon County Judge will spend the night trying to decide if the state should set aside the pension contributions it will begin collecting from government workers tomorrow. Teacher and police unions are asking a judge to force the state to hold the money instead of investing it. As Whitney Ray tells us, holding the cash could cost the retirement system tens of million of dollars in earned interest.

Starting Friday, the state and some city and county governments will begin holding back three percent of their employees’ paychecks. A court case challenging the legality of the deduction has been scheduled for October.

Lawyers representing teachers and police officers were in court Thursday asking a circuit judge to force the state to put the money aside until a final ruling is issued.

“Without the intervention of your honor there will not be a pathway to get the money back,” said Ron Meyer, FEA attorney.

An attorney for the state told the judge holding the money instead of investing it would cost the state retirement fund millions of dollars.

“Tens of millions of dollars would be lost in terms of investment opportunity,” said Blaine Winship an attorney for the state.

But once both sides finished making their case, the bigger issue still remained.

That issue likely won’t be decided until it reaches the Florida Supreme Court. In the meantime both sides will be debating the constitutionality of forcing state workers to contribute to their retirement.

The unions argue the forced contribution violates Florida statutes because a pension, fully funded by the state, is part of their contract.

Ron Meyer, the attorney representing the Florida Education Association, says both sides are committed to moving the issue through the courts quickly.

“By the time it gets to the supreme court I would think we might be looking at a year’s litigation,” said Meyer.

But until then the 655-thousand government employees in the Florida Retirement System will continue to see smaller paychecks.
The judge ended the hearing just before four this afternoon and is expected to make a ruling on the injunction, by email, before midnight.

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