Pensions, Sick Leave & Vacation Days Bankrupting FL

Slade O’Brien, Director of Americans for Prosperity – Florida, was in Sarasota to present the “Five For Florida” plan to over 200 activists. According to their website, “Five For Florida is a policy plan that outlines five key issues that elected officials can address that will make Florida more economically competitive and government more transparent and accountable.”

Five For Florida is a policy platform that offers real solutions for a better Florida. The plan outlines five key issues that elected officials can address now to encourage free market principles and government accountability, in order to make Florida number one for families, businesses and entrepreneurs. The five key issues are:

ONE: Reform Taxes & End Corporate Welfare

TWO: Don’t Make Financial Promises Taxpayers Can’t Keep

THREE: Be Steward of Good, Transparent Government

FOUR: Empower Kids With the Best Education

FIVE: Free Entreprenuers to Pursue the American Dream

Issue TWO requires that all new state and local government employees be enrolled in 401(k)-style, defined contribution retirement plans. According to the Five For Florida website, “Our politicians must stop making promises that taxpayers can’t afford. We must force them to be honest with us, and make decisions that will protect us now and in the future. We need an honest, transparent retirement plan that works for both hardworking taxpayers and government workers, and we need a property insurance system that will protect our homes without jeopardizing our future financial security.”

Five For Florida presents the following facts:

  • Florida’s Retirement System (FRS) serves more than 1 million government employees, making it the fourth largest public pension program in the country. Source: James Madison Institute
  • The FRS is 88% funded, assuming a 7.75% return on investment. Over the last 12 years, the fund has received an average return of 3.3%. Source: James Madison Institute
  • Florida currently has an optional defined contribution plan, however only 16% of employees elect to be enrolled in it, versus the 84% in the pension plan. Source: James Madison Institute
  • Public sector pension programs guarantee a rate of return that is 3 to 4 times higher than what private sector workers are able to earn. Source: The Heritage Foundation
  • The State of Florida currently contributes $5.5 billion per year to the FRS, but would need to double that contribution to $11 billion a year for the fund to remain solvent. Source: James Madison Institute

Adding to the promises that add to the taxpayers burden is allowing public employees to roll over sick leave and vacation days. According to Brittany Alana Davis’s Tampa Bay Times article “Unused sick days make a nice parting gift for state workers” reports:

“In the budget year that ended June 30 [2012], the state paid out $51.7 million in sick and annual leave to state workers, even as it slashed funds for higher education and public school maintenance. About 28,000 employees left the state during that period.

The figure — which does not include state university and college employees — is only expected to climb as boomers retire. Critics say the system is out of line with the private sector, where few businesses allow employees to roll over their sick days or obtain cash payouts. Most private businesses will not pay employees for more than a few weeks of leave time, and will not pay for unused sick days.”

Davis noted in her article, “Another problem: The state can rarely revoke accrued time, even for those who leave in disgrace.”

Slade O’Brien will be interviewed on Watchdog Wire Radio WWPR AM 1490 Monday, July 16, 2012 from 11:00 to Noon EST. To listen to the live stream over the internet go to this link.