Jan 18 (Reuters) - Standard & Poor’s Ratings Services on Friday said a court ruling upholding a law requiring a 3 percent employee contribution and other state pension changes were a credit positive for AAA-rated Florida.
“While the decision is still subject to a rehearing motion, if final, the ruling should bring the state and participating governments long-term budget relief and enhance the retirement system’s funding over time,” S&P said in a news release.
Thursday’s ruling by the Florida Supreme Court in Tallahassee upheld a 2011 law and eliminates a risk of big paybacks, S&P said.
“The state had estimated that if the Circuit Court’s decision had been upheld, it would have had to pay an estimated $530 million to reimburse employees for fiscal 2012 contributions and could also increase Florida’s actuarial liability by an estimated $473 million for fiscal 2012 due to the reinstatement of the cost-of-living adjustment.”
The Florida Supreme Court order becomes final on Jan. 25, if no motion for a rehearing is filed by then, S&P said.