Union Says Eliminating Pension Will Cut Teachers’ Annual Retirement Income By $8,400

Jordan Michael/StateImpact Florida

The FEA says Florida's pension system is strong, and changing it would result in retirement insecurity for teachers.

While the Easter Bunny is delivering festive eggs this week, the Florida Education Association said lawmakers are trying to take a chunk out of teachers’ nest eggs.

The teacher’s union held a news conference in Tallahassee blasting state leaders for trying to impose “changes to the pension system that guarantee retirement insecurity.”

The Florida Legislature is considering requiring new state workers, including teachers, to enroll in 401(k)-style retirement plans instead of the state pension plan, known as the Florida Retirement System.

“Our members who devote their professional lives to teaching our children and making sure they are safe and well cared for in our schools are already facing financial sacrifice,” said FEA Vice President Joanne McCall said. “Teachers earn less than those with similar levels of college education who enter professions like computer programming, public accountants, and nurses.”

She said the pay gap is even larger in Florida, where teachers earn about $10,000 less than the national average.

House Speaker Will Weatherford later said the assertion that the proposed changes would force teachers to retire into poverty isn’t true.

“Unions are going to use scare tactics,” Weatherford said. “85 to 90 percent of the companies in this country have transferred from defined benefit to defined contribution (plans).”

The change would not impact current state employees. It would go into effect for new hires starting in January 2014.

Weatherford said the idea of a long-term defined benefit plan doesn’t work.

“We’re spending $500 million a year that should go to education and should go to things like healthcare,” Weatherford said, “and we’re putting it into a broken pension plan.”

McCall said the pension system is doing just fine.

“The FRS is funded at 87 percent, which is more than the 80 percent threshold for a healthy retirement system,” McCall said.

“We used to be able to take comfort knowing that we would have security if we did our job well, due process rights if problems arose,” McCall said, “and there would be a modest nest egg when we decided to enjoy our retirement.”

She said the proposed changes will make it more difficult to recruit and keep high quality teachers.

Stats from the FEA:

• 87% — The percentage of FRS liability currently funded (actuaries consider 80% healthy).
• $2.5 billion — business tax breaks over the next three years.
• 6th — Florida’s school performance ranking according to Education Week “2013 Quality Counts” report.
• 45th — National ranking of Florida’s average teacher salary.
• $22,800 — Projected annual retirement for a new teacher choosing the FRS pension plan.
• $14,400 — Projected annual retirement for a new teacher entering the FRS 401(k)-like option (assuming 2% pay raise per year; meeting or beating market expectations).
• $15,282 — Income equal to 133% of the federal poverty level, which qualifies for Medicaid under the federal health care law.

Reporter Jordan Michael contributed to this report.