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Florida Pension Plan improvements
TALLAHASSEE -- The Leroy Collins Institute report, "Tough Choices, Doing It Right" assigns letter grades without pointing fingers at local pension plans. A fourth of the plans get an "A" or "B."
Another 25 percent are a "C". The remaining 50 percent are either a "D" or an "F."
The goal of the report is to offer best practices.
"In these five best practices, no municipality, and Florida was doing everything right," said Carol Weisert, Collins Institute Director.
Many pension plans in trouble allow police and fire to "spike" their earnings with over time during the last two years of work. The report suggests the plans copy the state and average payouts based on five years. Local governments are also prone to boosting cost of living increases during election years. The report also says employees should contribute something, but not too much.
Information about local pension plans is often difficult for citizens to find and analyze. That will soon change. Legislation signed into law this year will require every local pension plan to start reporting their basic health using the same facts and figures. The reporting begins in June 2014. The report's conclusion?
"The one's in trouble didn't get in trouble over night, and they're not going to get out of it over night," said Weisert.
The 2013 legislation also makes it clear that local taxpayers, not the state, are responsible for any financial shortfalls of the local plans.