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TALLAHASSEE, Fla.—A Florida law requiring state employees participating in the $114 billion Florida Retirement Systems to contribute 3% of their pay was struck down Tuesday by a state court judge.
Circuit Court Judge Jackie L. Fulford in Tallahassee, Fla., ruled that certain provisions of the bill signed by Florida Gov. Rick Scott in May 2011 are unconstitutional.
According to the ruling, the Florida Legislature created the mandatory pension plan for state employees in 1974 requiring no contribution and “the rights to the members in the non-contributory pension plan were of a ‘contractual nature’ and that ‘such rights shall be legally enforceable as valid contract rights and shall not be abridged in any way.”
Judge Fulford stated in the ruling that the law constitutes “an unconstitutional impairment of plaintiffs’ contract with the State of Florida, an unconstitutional taking of private property.”
The ruling was the result of a challenge by public workers who were members of the system as of June 30, 2011.
“As you would expect, I believe this decision is simply wrong,” Gov. Scott said in a statement. “The trial judge has ignored 30 years of Supreme Court precedent in a decision that refuses to allow Florida to have common-sense pension reform. This is another example of a court substituting its own policy preferences for those of the Legislature.”
In a statement, a group called Floridians for Sustainable Pensions Coalition said: “Today’s ruling on public employee pension contributions was a deep blow to Florida’s long-term economic stability and should be promptly appealed to a higher court.”
Rob Kozlowski is a reporter for Pensions & Investments, a sister publication of Business Insurance.