The company hired by the state to project the cost of closing the state's traditional pension plan to new employees released its updated report late Friday and waived its $70,000 fee for failing to use complete data the first time.
"We recognize this was a significant mistake, resulting in confusion and a delay in your ability to accurately evaluate this important issue,'' wrote Stephen A. White, president and CEO of the Virginia-based actuarial company hired by the state. "We apologize for this error. It is inexcusable, and should not have occurred." Download Milliman Follow-up Letter (1)
The new report includes 136 pages of analysis, including two different scenarios that give the state a ballpark estimate of the costs it can expect to incur when it closes the Florida Retirement System to new employees and sends them into 401k-style defined contribution plans. Here's the report: Download Close DB prospectively with baseline
House Speaker Will Weatherford, R-Wesley Chapel, is hoping to use the results to determine how much it will cost the state to pay out benefits to employees in the current $136 billion system when there are no new hires to replenish the fund. He has made closing the fund to new employees a top priority this session because, he argues, the current system is unsustainable given the state's current budget structure, and will require a taxpayer bailout years into the future.
For the last decade, Florida lawmakers have increasingly relied on fewer state workers to do state jobs and used the budget to steer state work to private and non-profilt companies, reducing the number of employees paying into the retirement account.
Unions oppose closing the defined benefit plan, arguing that it will eliminate one of the reasons people choose government work over similar jobs in the private sector. They also argue that the shift to a 401k -style pension plan will shift the risk of retirement planning from the state to employees.