February 10, 2011. “Gov. Rick Scott’s proposal to change the FRS for current state employees is the same as defaulting on those obligations to the employees.”
(February 08, 2011)
By Stanley Smith
As people discuss the Florida Retirement System, they should differentiate between current employees and future employees.
Gov. Rick Scott’s proposal to change the FRS for current state employees is the same as defaulting on those obligations to the employees. Investopedia describes default as follows: “Default occurs when a debtor is unable to meet the legal obligation of debt repayment. Borrowers may default when they are unable to make the required payment or are unwilling to honor the debt.”
The state employees accepted, as part of their compensation, a financial obligation from the state identifying what payments the retirees would receive if they put part of their compensation with the FRS instead of in a defined-contribution plan with different investment companies.
Those employees who chose the FRS did not expect the state to default on its financial obligations to the employees when they were counting on those payments to have some dignity in their retirement years.
Read more at orlandosentinel.com.