By Michael Peltier
TALLAHASSEE (Reuters) - Florida's top court heard an appeal on Friday by state officials seeking to overturn a lower-court ruling that voided their plan to make government employees pay 3 percent of their wages toward pensions.
The battle pits the state's largest unions against the Republican-run Florida Legislature, which last year changed the Florida Retirement System by requiring employee contributions, limiting inflation increases and lengthening vesting periods.
Backers said the changes were needed to cut costs for the state on the pension system, which is one of the nation's largest, with estimated assets of $125.8 billion.
The state, along with local governments and school districts that participate in the state retirement system, may have to repay an estimated $1 billion in worker contributions and interest if the lower court decision is upheld. No timetable for a ruling by the Florida Supreme Court was set.
Led by the Florida Education Association (FEA), which represents 140,000 teachers, attorneys for employees said on Friday that the new requirements represent a breach in a contract going back to the 1970s, when the state eliminated the employee contribution requirement.
The core issue is whether the state can change terms of the public pension plan for an estimated 560,000 active participants who were hired under the old rules.
Opponents also say the changes came without agreements from the unions representing teachers, firefighters, police officers and other affected government workers.
"Basically, we're saying you can't change the rules in the middle of the game," Ron Meyer, an attorney representing the FEA, told Reuters on Friday after the hearing.
Earlier this year, Leon County Circuit Judge Jackie Fulford struck down the contribution requirement, saying it illegally circumvented collective bargaining agreements.
A ruling for the state "would mean that a contract with our state government has no meaning, and that the citizens of our state can place no trust in the work of our Legislature," Fulford said.
Florida's Republican governor, Rick Scott, on Friday reiterated support for the legislative action, saying it was prudent to protect the long-term integrity of the fund.
"The Legislature relied on and carefully followed a 30-year-old Florida Supreme Court case, which held that the Legislature can change the public pension system on a going-forward basis," Scott said in a statement. "We therefore expect the Supreme Court to follow its own prior decision."
(Additional reporting By Michael Connor in Miami; editing by Carol Bishopric)