Florida House Speaker Will Weatherford thinks he finally has the evidence that proves it’s time to reform the state’s $136 billion pension system.
He’s made it one of his chief priorities to prevent new employees from enrolling in the guaranteed benefit plan starting Jan. 1, 2014.
He says that other states, such as Illinois, New York and California, have proven that pension systems are unsustainable. Until now, however, he couldn’t show projections on how much it would save Florida, or how much it would cost to switch to 401(k)-style plans.
He had hoped to find out on Feb. 15 from a study by Milliman, a Vienna, VA actuarial firm, but it was deemed incomplete. On Friday, the firm turned in a second study, this one including what it would cost if nothing was done to the existing pension system and its 145,000 accounts. According to Weatherford’s office, it’s all good.
* An estimated $9.8 billion in savings to taxpayers in 2042-43.
* An estimated $2.1 billion in savings to taxpayers in 2023-24.
* No cost in the first fiscal year of the implementation and a modest $2.7 million cost in FY 2014-15
* First savings realized in 2015-16 ($12.9 million).
* Reduction in taxpayer risk as taxpayer savings increases.
Now that's an interpretation of the report from Weatherford’s office, which has been pushing for the changes. Other groups representing state and local government workers who are enrolled in the pension, are reviewing the Milliman study as well. Some have already observed that the study makes bold assumptions and leaves out important costs. We’ll be hearing from them in the coming days. In the meantime, the Milliman report, and Weatherford’s interpretation of it, only builds momentum for HB 7011.