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Latvala rains on Weatherford's pension reform parade

Pension reform showed its first visible signs of life in the House on Friday, as a compromise bill that would steer new hires away from the state’s guaranteed benefit system cleared its first committee, State Affairs, by a 11-6 vote.

While this should have been good news for Florida House Speaker Will Weatherford, who has made overhauling the state’s retirement system one of his top priorities, his prospects for passing the bill actually dimmed.

One reason why is that Sen. Jack Latvala, R-Clearwater, who announced his support for the compromise last week, backed off and downgraded its chances for success.

“It’s still in a state of flux,” Latvala said Friday. “Even if I support it, I’m not sure it has the 21 votes it needs. It’s going to be an uphill battle.”

That’s far different than what Latvala said last week, when he said he would support a bill that Sen. Wilton Simpson, R-Trilby, sponsored last year that would encourage, but not require, new employees to enroll in private investment plans rather than the state’s $135 billion pension system.

“It would not surprise me if I become a co-sponsor,” Latvala said last week.

Now?

“I’m not 100 percent certain I’m supporting the Simpson bill,” Latvala said.

It’s a setback for Weatherford, who ditched his own version of pension reform, which would have prohibited most new employees from enrolling in the state pension system, to pick up much of the language in Simpson’s compromise bill.

On Thursday, Weatherford told reporters he was changing course with no regrets.

“I’m extremely grateful to Sen. Simpson, Sen. Latvala and other members of the Senate who are working on a compromise package similar to what was filed in the Senate last year,” Weatherford said then. “I’m cognizant that the bill I tried to pass last year is not going to pass the Senate this year, so we’re working on a middle ground. And Sen. Latvala has engaged in that process, and I believe we can get a pension deal done this year that can save tens of billions of dollars for Floridians.”

Weatherford couldn’t be reached Friday, but House leaders were clearly promoting Friday’s passage of the compromise.

“The bill represents a fair compromise to pension reform that will encourage new employees to enter the retirement plan that best fits their needs,” stated a news release from Florida House spokeswoman Kristen McDonald after the bill passed.

But even without Latvala’s wavering, the bill’s path ahead looked uncertain. On Friday, it drew such heavy fire from union leaders and Democrats that even its bill sponsor, Rep. Jim Boyd, R-Bradenton, acknowledged that a key doomsday scenario used by Republicans to justify pension reform is unlikely.

Weatherford and other House Republicans repeatedly highlight that the fund has a $20 billion liability. But the pension is 87 percent funded, meaning if all state employees and teachers and county officials in the pension system quit, 87 percent of them would be covered.

“What is the reality of all employees retiring at the same time?” Rep. Ricardo Rangel, D-Kissimmee, asked Boyd.

“That would never happen,” Boyd said. “But if they did, we’d be $20 billion in the hole.”

“The only way that $20 billion comes up, and I think it’s used to scare people, is if every person retires on the same day and we have to write a check,” said Rich Templin, the legislative and political director for Florida AFL-CIO.

Rep. Kevin Rader, D-Delray Beach, reminded Republicans that even Gov. Rick Scott has vouched for the fiscal soundness of the pension system.

If that’s the case, Rader said, “What are we doing here?”

Comments

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FLMom

Are these elected officials giving up their own pensions? Hell no, they won't. They'll just keep taking away from hard working public servants so they can transfer more wealth to their corporate masters. http://y.ourfuture.org/wp-content/uploads/2013/09/Plot-Against-Pensions-final.pdf

Bill Thompson

Not only are the elected officials not giving up their own pensions, they are not giving up the higher pension credit accrual rate they give themselves & judges that's higher than rank and file state employees. It's the huge payouts that legislators and judges receive that is draining the pension system. At least judges are full-time employees; part-time employees like legislators shouldn't even be receiving a pension.

Ed Jenkins

The citizens are greatly upset by this development as they want an end to this practice of never ending payments to people who are no longer working for them which is a practice that has bankrupted several municipal governments and will do so to many more to come.

Reality

Maybe they finaly realized that in spite of their very vocal proclaiming, they will still be on the hook for the $500 in annual contributions to the pension fund for the deficit they artificially created by intentionally underfunding the plan for so many years.

tired of the  Koch brothers propaganda

Ed Jenkins..then worry about the ones that are in
trouble, not the FRS. Fact; if the money being deducted from PE paychecks were being deposited into the fund, there woudn't be a deficit. You may have an idealogical stance against the pension or an interest in seeing the funds handed over to Wall st., don't presume to speak for anyone else aside from yourself. It just sounds like sour grapes.

Judy Doelfel

Mr. Jenkins and Tired of Koch:
Most of the money being generated into the pension fund has been by investment and not by the employers and employees. The municipalities that got into trouble was caused because of poor management of the plans. FRS is in very good shape. The State Board of Administration who handles FRS is extremely cost efficient and makes good investments. If left alone, the plan has and will gain in the percentage funded. The IP, Cash-Balance Plan, and any other ideas coming out of Koch, Florida Tax Watch, and others would only benefit private industry financial planners. The 3% DOES go into either the pension fund or the investmet plan according to the plan in whcih the employee is enrolled. Read the FRS or SBA websites for more information.

Anti-Tallahassee

The fact that the 3% employee contribution does NOT go into the FRS tells you everything you need to know. The Republicans are NOT interested in maintaining a healthy FRS, and they ARE willing to apply a SPECIAL TAX on a particular class of citizens. REPUGNISCUM!

Anti-Tallahassee

Well, the 3% going into FRS is a matter of semantics. Republicans have lowered the EMPLOYER contribution MORE than the 3% employee contribution - in other words, they under fund the FRS on purpose. This is their same tactic in education. My characterization of Republicans as REPUGNISCUM stands.

FLMom

If one looks at the laundry list of public institutions underfunded, belittled, and derided by the Tea Party and the Republicans, from our postal service to our courts, our pensions and our public schools, then it is clear that their ideology mandates a return to a period of time that allowed white men to rule, and their cronies to profit. States rights with Posse Comitatus in place. Rather unsettling.

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