Everyone has a vested interest in public pension systems. If you’re not a public sector employee like a teacher or police officer, it’s probably not top of mind to you but it impacts your wallet just the same. From local taxes for municipal pension plans to state taxes which account for state pension plans, everyone is best served by having responsibility managed pension programs.
In Florida, we’ve traditionally had well managed pension plans. Just as our state is among the most fiscally responsible in the country, aided by a balanced budget amendment in our state’s constitution, we’ve not faced the prospects of collapsing systems a la states like Illinois and New York or even cities like Chicago and Detroit. The pandemic took its toll on almost all state pension plans last year as investment gains were generally more than offset by revenue shortfalls.
Still, based on data from Equable, Florida was well above average in managing its pension programs last year. According to their findings, the average state pension plans were underfunded by 5.3% in 2020. Also, Florida’s was 4.1% underfunded in 2020 and Florida’s pension performance ranked 22nd in 2020. So, Florida’s pension performance was better than average across the board, which is good news for all Floridians.
When you take a look at where our pension program stands overall, Florida’s public pensions are 78.6% funded. Not great, but manageable coming out of the pandemic. Florida’s pensions have the 13th highest solvency in the country. States like Kentucky and Illinois are now under 50%! As it turns out that’s also important to us. Take for example the largest state in the country, California, only has a 69% funded pension plan. The current plan being advanced by Democrats in Congress under the guise of COVID relief would also debt spend your future tax dollars to help bail out pension plans in other states, like Illinois and California which aren’t sustainable due to mismanagement. Ditto cities like Chicago and Detroit’s plans. It’s just plain wrong to punish more responsible states like ours, to reward those who’ve mismanaged their plans elsewhere. Besides, we’ve got work to do to regain our lost ground from the pandemic as well.
Photo by: Getty Images