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Weatherford's pension overhaul faces steep climb in Senate, despite Gaetz support

From the News Service of Florida:

Hopes seemed to evaporate Tuesday that exempting law-enforcement officials and emergency personnel would make changes to the state retirement system an easier sell this year, as a key senator signaled he had deep reservations about the measure.

The Senate Community Affairs Committee voted to introduce the bill (SPB 7046) by a 5-4 margin after Sen. Jack Latvala, R-Clearwater, joined the panel's three Democrats in voting against the measure. Latvala was one of a handful of renegade GOP senators who sank a more-sweeping pension overhaul last year.

"I've got more convincing to do," said Senate Community Affairs Chairman Wilton Simpson, R-Trilby, who sponsored the bill.



This year's Senate proposal would close the Florida Retirement System's traditional pension plan to new employees afterJuly 1, 2015, though those employees already in the system would remain. New hires would be required to choose between a 401(k)-style investment plan and a "cash balance" plan, which in some ways acts like a 401(k) but guarantees a minimum benefit.

Employees would have de facto accounts set up and would be guaranteed a return of at least 2 percent a year on the money in their accounts. If the plan's investments made more than 2 percent, then three-quarters of the extra money would go to employees.

Law enforcement officers and emergency personnel who qualify for the "special risk" category could still sign up for the traditional pension plan, a concession that appeared to be aimed at winning over at least some of last year's critics. But Latvala said that some law enforcement employees wouldn't qualify, and he questioned carving out certain groups.

He also criticized the decision to move forward with the bill before an accounting study on the effect of the changes was complete.

"I really am taken aback by how you would want us to start voting on a bill where -- although you may understand, and you may believe in your heart, and I know you believe in your heart that this is the right thing for our future -- when we don't have any numbers, any actuarial study to show us that," Latvala said.

Simpson said he could not guarantee that the study would be available in time for every committee that considers the measure, but suggested it would be available at least once.

"What I will say is that it would not be appropriate for the Appropriations Committee to hear this bill before we have that study back," Simpson said.

Supporters say an overhaul is necessary to help preserve the pension plan without bankrupting the state. Lawmakers already set aside $500 million a year to try to cover costs of the "unfunded actuarial liability" in the plan. If the plan were to fail, Simpson said, retirees who rely on the fund could be wiped out.

"I would just say that anyone that's opposed to these current shifts (is) jeopardizing everyone in this pension plan's livelihood," he said.

House leaders still have not spelled out their plan for revamping the retirement plan, long a top priority of Speaker Will Weatherford, R-Wesley Chapel. The House is considering either a cash balance system or a proposal that would divide an employee's retirement between the traditional pension plan and the investment plan.

"There's a glaring problem with $500 million a year that we're putting towards the pension fund as opposed to education," Weatherford said Tuesday. "It's too soon to say what exactly what it's going to look like."


Comments

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Smeeveo

There is no need to mess with the current pension system, which is one of the most solvent and well-run of all 50 states. This bill should not see the light of day.

Ed Jenkins

The citizens agree with this direction although they are disappointed that it has taken this long for their government to enter the modern era since businesses wisely disposed of their pension schemes decades ago and those that kept them became insolvent such as the automobile manufacturers. The taxpayers cannot afford to have more money confiscated from them to pay people who are no longer working and it becomes impossible to pay for basic government functions when 3 people have to be paid for each job because 1 is working while the other 2 are retired from the position but collect payments for the rest of their life.

Think about it

The best way to kill the existing Florida Retirement System is to deny it new members. That is the one and only goal of this proposal. Who cares if the salaries remain low and ultimate retirement benefits evaporate for low level workers? Government work -- which still is needed and should be at a quality level -- will be less attractive to the best employees, and public services will decline further.

Think about it more

The legislature has ignored the items that would fix the problems everyone complains about - the very few who get large pensions (typically elected constitutional officers and univeristy presidents), and large DROP payouts.

In addressing these two items, they could easily keep both existing plans, switch the default election to the defined contribution plan (but keep the option of both open to everyone - maybe even incentivize people with a larger employer contribution for staying in the defined contribution plan), eliminate DROP, base pension payments on base salaries (no spiking - i.e. cannot include overtime and other stipends), make vesting 10 years again if they haven't already done that, and reign in special risk class (administrative etc - if you are not in harm's way, you do not get special risk).

These changes alone would be hailed around the country a model for everyone else to follow given the base Florida has in place (since the 1970's).

But let's see if leadership is more interested in killing a great program just because, instead of looking at what makes it great.

Mrs. Ed Jenkins

The citizens of Florida are tired of hearing my deranged husband ranting every morning. Sorry - I don't think he is swallowing his meds. I am talking with his doctor about giving them to him by injection.

D

Shut the hell up pablo you immature prick, no one is amused by you using these fake names, now making fun of this jenkins guy and mocking other posters raft boy so get back on your raft and head home you loser.

Robert J

Well that does it for me. A politician saying trust me on this one.

Tired of the Tallahassee Crooks

Once again what they fail to mention is that the elites in Tallahassee are the ones that are draining the pension system with their huge pensions and special DROP schemes. They give themselves the same higher preferential accrued credit percentage that is given to law enforcement employees. If you look at which classes are getting the huge payouts, you will find the problem that needs fixing. The rank and file state employees receive a rather modest pension.

Tired of the Tallahassee Crookeds

"Lawmakers already set aside $500 million a year to try to cover costs of the "unfunded actuarial liability" in the plan. If the plan were to fail, Simpson said, retirees who rely on the fund could be wiped out."

What Senator Simpson fails to mention is that even with the $500 million a year, the payments made into the FRS are still lower than they were four or five years ago. And with increasing revenues, the problem with the FRS is???

Dave

These guys simply want to turn the money over to private concerns so they can make money. Just as they are trying to privatize every thing else in the world.

Robert Fuerst

A Firefighter or Police officers pension is not a "free gift" as Scott, Weatherford and their cronies would have you believe. It is an integral part of the compensation they are paid for risking their lives every day. If the pension was not there, the rate of pay for these employees would need to increase dramatically to compensate them adequately. Pension funding is a fraction of a percent of the states funding. The real problem with the current system is the tax subsidiaries that are given to huge corporations like Wal-Mart, who pay negligible taxes in the communities they "serve." These are some of the richest companies in the world, who receive huge tax cuts. These same companies pay their employees minimum wage and little or no benefits who then need to rely on government aid to support their families. This system creates a double drain on the tax system. Politicians need to stop these sweetheart deals with these companies, reign in their frivolous spending, and look at reducing or eliminating the "golden parachutes" and lifelong stipends they receive for the rest of their lives for serving one ineffectual term in the senate or congress, before they come looking to raid the modest retirement of a man or woman who has laid their life on the line for the community they serve. Ending the defined benefit pension only allows these same crooked politicians to dip their hands, yet again, into a new resource pool of service fees. THIS is the ONLY reason they want to dismantle the FRS and defined benefit compensation.

Mike Tesh

A lot of good points and ideas here about the need and way to preserve the pension system. But all of this will be for nothing if we don't find a way to get these people out of office!

Mrs. Ed Jenkins

A pension isn't a free gift for ANYONE. The cronies want people not to have retirement benefits, they want to get rid of social security, they would get rid of Medicare if they could. So, what would happen to people -- they would never retire, unless they were born wealthy,of course.

Ray La France

I work for the FDOT and I've had one $0.40 per hour raise (this year) in 7 years. And it's not going to be any better for the new hires so I refuse to throw them under the bus. Our pension plan is already minimal and rated the best funded in the 50 states. And btw when there's a hurricane we're automatically volunteered at no extra pay. Weatherford is just trying to score points/votes with his mostly retired from up north constituents where they actually were paid a decent living wage. But now they want everything for nothing .

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