Learning Center Policy Institute
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Florida is gambling away a secure retirement for teachers
Demand the legislature fix its $15 billion teacher pension mistake

Recent reforms to the Florida Retirement System ignored root causes of underfunding — nearly doubling the shortfall for teacher pensions in only eight years.

What is funded status and why does it matter to Florida teachers?

A funding shortfall of $15 billion threatens secure retirement for tens of thousands of educators.

So what’s wrong with teacher retirement in Florida?

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Low funded status threatens retirement security

Teacher pensions in FRS are only 84% funded with a $14.7B shortfall.1 More of today’s pension contributions go toward filling the shortfall than actually funding the pensions teachers are earning. Current funding is too low to stop the growth of the shortfall — let alone fix the problem.

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Market miscalculations shortchange pensions even in record-breaking markets

For years, market expectations for pensions have been overly optimistic — leading to a massive miscalculation. FRS predicted even higher returns than what the record-breaking market brought in, leaving an $8 billion hole in pension funding. FRS needs to set a realistic assumed rate of return it expects to earn from financial markets.

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Contributions are too far below what they should be

In the FRS Investment Plan, the 6.3% contribution rate is well below the 10% to 15% recommended.2 With teachers contributing 3% and employers adding only 3.3% more, teachers will struggle to achieve retirement security. Contributions need to increase now so teachers have secure retirements later.

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Working teachers haven’t had a COLA in almost a decade

The legislature eliminated the cost of living adjustment for working teachers in 2011. That means their future pensions will stay the same while inflation makes things more expensive — and teachers are living longer with less and less to rely on in retirement. If future inflation is like the past decade, then pension checks could lose 20% of their value within 10 years after retirement.

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Fixes leave teachers footing the bill

Other states are coming back from retirement deficits by better funding their pensions and adjusting market expectations (called the assumed rate of return) for their pensions. While Florida has made changes, the burden of the reform efforts have fallen largely on the backs of workers and have done very little to stop the growing shortfall. The state should respect its workers and do more to help secure their retirements.

Today teachers receive stagnant pay and get a fraction of what they need for their Investment Plans while a huge shortfall must be overcome to fully fund their pensions. The Florida legislature has a big responsibility — and opportunity — to honor the promises made to educators.

Demand action

Contact your legislators

Tell them Florida should stop gambling with teacher retirement and fully fund FRS.

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Join the effort to create real retirement plan sustainability.

1The Florida Retirement System’s overall pension funding shortfall is around $30 billion as of the end of 2019. K-12 employers are 49.2% of FRS, so the $14.7 billion figure is an estimation of the educator portion of the overall FRS pension funding shortfall.

2Money.CNN.com, “Ultimate Guide to Retirement: How Much Should I Save?”