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Pension reform is back, and so is the opposition

As promised, Sen. Wilton Simpson, R-Trilby, filed legislation this week that will overhaul Florida’s $132 billion pension system.

And already, the obstacles ahead are mounting.

Filed as a bill by the Senate’s Community Affairs Committee, which he chairs, SPB  7046 prohibits most state workers from enrolling in the state’s pension plan after July 1, 2015, forcing them instead to enroll in 401 (k)-style investment, which doesn't have a guaranteed return, or cash balance plans, which have lower guaranteed returns.

Yet the same bill allows “special risk” employees -- firefighters, police, deputies -- to continue to have the option of enrolling in the state’s pension plan, of which more than 600,000 current state, county and local employees contribute to for their retirements.

That “carving out” of special risk employees is a sop to the Senate, which last year defeated Florida House Speaker Will Weatherford’s effort to close out the pension to all future employees by a 22-18 vote. The theory goes that without the opposition from police and fire unions, at least two senators who voted against it last time, Greg Evers and Charlie Dean, might be swayed this time.

Weatherford told the Times/Herald last week that this carving out provision is intended to make it more palatable for senators.

But it’s not clear if that will be enough, at least for all of the pension reform legislation Simpson filed Monday. One of his bills, SPB 7040, which creates a trust fund to finance the cash balance plan, needs 24 of 40 votes to pass. Without it, can Simpson actually accomplish the pension reform simply by getting his SPB 7046 approved?

Yes, according to Simpson’s office. Simpson’s chief legislative assistant, Rachel Perrin, said that if the new trust fund isn’t approved, payments to those enrolled in the cash balance plan will be simply paid from the existing pension fund.

“It just means that, administratively, it will be more difficult (without the cash balance trust fund),” Perrin said.

Already, Simpson’s plan is drawing opposition from the Florida Education Association. On Tuesday, its vice president, Joanne McCall, said the move to exempt police and fire from the proposed pension reform smacks of gender bias.

“If it’s good for one set of employees, it should be good for all employees,” McCall told reporters. “I hate to say that 70 percent of those that are in (Florida’s) retirement system are female, so I’m kind of concerned about why we’re carving out police and firefighters. Is there a gender equity gap there?”

McCall pointed to a survey of 800 registered voters between Dec. 16 and Dec. 22 that showed 68 percent of respondents said they agreed with the following (and leading) statement: “We need to keep the state funded retirement system for teachers because they have such low salaries in the state.” Only 16 percent agreed with the statement: “We need to eliminate the state funded retirement system for teachers because it costs taxpayers $500 million per year.”



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