Scott announces pension plan cuts: News. Politics. Media

In another hint at what’s coming in his budget proposal, Gov. Rick Scott’s team announced today that he would slash cost-of-living adjustments, end the “DROP” deferred retirement plan, eliminate the defined-benefit plan for state employees, and require them to contribute 5 percent of their income to their pensions. #

The changes would take effect in July. Current retirees would not be affected by the measures, which he said could save $2.8 billion over two years, according to a release sent out by the governor’s press office. #

Scott has been hinting at plans to turn to state employee retirements as a source of budget savings since his campaign. #

Here’s the full release: #

Keeping in line with his 7-7-7 plan and his plan to modernize the Florida Retirement System, Governor Rick Scott announced today that he would send the Legislature a budget proposal that better aligns government workers’ pensions with those in the private sector and saves taxpayers $2.8 billion over two years. #

Governor Scott announced that the savings would be realized by requiring government employees to contribute five percent of their salaries to the system and requiring new employees to enroll in investment plans similar to private sector 401(k)s. #

“We must bring Florida in line with the private sector and nearly every other state in the country by requiring government workers to contribute towards their own retirement,” said Governor Scott. #

The Governor also announced his intention to close the Deferred Retirement Option Program to new participants as of July 1, 2011, and to reduce the annual service credit to 1.6 percent for most members (special risk class members, to two percent). #

Governor Scott said the Cost of Living Adjustment on retirement benefits will be eliminated for all service earned after July 1, 2011.  Current retirees will be unaffected.  Those members retiring after July 1, 2011, will receive a three percent Cost of Living Adjustment on the retirement benefit attributable to the service earned prior to July 1, 2011, and no cost of living adjustment for service earned after July 1, 2011. #

“Government workers, like private sector employees, deserve the opportunity to save for the future, but taxpayers shouldn’t be asked to foot that bill alone.” #

Governor Scott said that modernizing the Florida Retirement System would help reduce spending and help get government back to its core missions #

Governor Scott will send his full budget proposals to the Legislature on Monday, February 7th. #

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