Taxpayers don’t foot the bill for most of the funding for pensions for public employees. Investment earnings do most of the work in funding retirement for teachers and other school employees, law enforcement officers, firefighters and other workers in the Florida Retirement System. Contributions made by workers and employers are invested, and the earnings are compounded over time — funding over two-thirds of retirement benefits.
Retired public workers don’t get rich from their retirement plans. In fact, the average annual benefit payment from the Florida Retirement System is only about $18,000. For the almost 90 percent of rank-and-file public employees in the FRS “regular class,” the average retirement benefit is only about $16,000. But those dollars are crucial income for many Floridians after their work years are done. Without the current FRS structure, retired public employees — teachers, firefighters, law enforcement officers, nurses, and many others — might outlive their assets, something that cannot happen with the current pension plan. They would be much more likely to become dependent on public services like food stamps and Medicaid, at a much greater cost to taxpayers.
The Florida Retirement System provides important support to the state and local economies. Pension benefits generate a significant amount of economic activity in Florida. In 2011 the Florida Retirement System paid out nearly $7 billion in retirement payments. These dollars support retirees but also circulate throughout the Florida economy, paying for food, clothing, housing and other necessities and supporting thousands of jobs spread throughout every community in the state.
The National Institute on Retirement Security estimates that every dollar ‘invested’ by Florida taxpayers in retirement plans supports $4.47 in total economic output.
Pensions for public workers cost a very small amount of the state budget. Retirement benefits for public employees represent less than 2 1/2% of state and local budgets in Florida.
- The Florida Retirement System is not only financially sound, it is one of the best in the country. The FRS is stronger than retirement plans in almost all other states. In fact, it has been ranked among the top 10 state pension systems in the U.S.