House Passes Florida Pension Changes, But Challenges Remain

March 23, 2013

A controversial plan to close off the Florida Retirement System’s traditional pension plan to future public employees passed the House on a nearly party-line vote Friday, setting up a battle with the Senate over the retirement system.

The measure (HB 7011) passed 74-42, but Rep. Richard Stark of Weston, the only Democrat to vote for the bill, later said he meant to vote against it. The proposal is a top priority for House Speaker Will Weatherford, R-Wesley Chapel.

House Republicans say the measure will keep the FRS from consuming an ever-larger share of the state budget, crowding out education and other priorities. They also said it would create stability and keep the state from having to take more drastic steps in the future.

“We will know exactly what our obligations are rather than a constant sense of uncertainty,” said Rep. Ritch Workman, R-Melbourne.

But Democrats hammered the transition from a “defined benefit” plan, like a traditional pension, to a 401(k)-style “defined contribution” plan. They said workers might not get the same return on their own investments, and would lose the security that comes from a defined benefit plan- often cited as a key recruitment tool for getting people to take otherwise low paying government jobs.

“Rewarding our state employees should not be a game of chance,” said Rep. Joe Gibbons, D-Hallandale Beach. “It should be a sure bet.”

Labor groups also blasted the House for making the changes.

“They’ve addressed an imaginary crisis of their own making with a radical change that disrespects school employees, first responders, and other public workers who enhance the quality of life in Florida,” said Alan Stonecipher, director of the Florida Retirement Security Coalition, a group tied to unions.

The measure faces an uphill climb in the Senate, where lawmakers are backing a more limited change to the retirement system. The upper chamber’s bill (SB 1392) would encourage employees to enter the defined contribution plan by making that the default plan for workers — unless they opt in to the traditional plan — and giving workers a discount on their contributions if they choose the investment option.

House leaders say they would rather the Senate accept their measure.

“I’d like to see the Senate take up the bill as it is, because I don’t think anything in there should give them heartburn,” said Rep. Jason Brodeur, R-Sanford, the House sponsor.

But Weatherford also wouldn’t rule out compromising on the measure, or even accepting the bill from Sen. Wilton Simpson, R-Trilby.

“If we weren’t eliminating defined benefit for new employees going forward, I would say his bill is better than nothing,” Weatherford said. “It’s certainly better than the status quo. But our question would be, why would we go halfway when we can go all the way?”

By The News Service of Florida

Comments

6 Responses to “House Passes Florida Pension Changes, But Challenges Remain”

  1. Don't Fix What Isn't Broken on March 25th, 2013 11:28 am

    They also said it would create stability and keep the state from having to take more drastic steps in the future.

    Stability and drastic steps like finding money to pay retirees going into the system now that no one is paying in? No mention of raising salaries. Where’s the balance? Guess that mess will be left for the new administration to clean up in 2014. Pitiful and pathetic that the GOP is trying to score points with the tea baggers at the expense of state employees.

  2. David Huie Green on March 24th, 2013 4:00 pm

    REGARDING:
    “You got to love it, screw the employees and lets give more to big business,”

    Anyone who chooses to become an employee with this change is doing so with eyes wide open. It isn’t like they stole from existing employees this time. Either the reward will be enough that people continue to go to work for them and stay with them, or they will not be able to fill job openings. (I suspect the latter, but we shall see. I DO know of some openings already going unfilled despite signs saying “BUS DRIVERS NEEDED training available”.

    I’m not sure how this is supposed to give more to big business, in fact it reminds me of the old idea, “Screw big business, they don’t vote anyway.” and how they kept making it harder and harder to do business in Florida and earn a profit. It was fun watching them scratch their heads and try to figure out why businesses were not coming to Florida, moving to other states or even escaping to other countries.

    David for equal treatment under the law
    and wise choices — for a change

  3. Victor on March 24th, 2013 6:51 am

    This should be the direction for all public employees.

  4. Kathy@frontier.net on March 23rd, 2013 4:00 pm

    You got to love it, screw the employees and lets give more to big business, they are who pays for re-elections, line our pockets who gives dang about employees they just all the dirty work.

  5. greylady on March 23rd, 2013 8:03 am

    Wanna bet the elected officals made sure “their” pension plans are going to be undchanged. Probably those of their staffers also won’t be affected.

  6. MicheleG on March 23rd, 2013 12:40 am

    They also need to fix that if you leave the system you should be able to take your savings and roll into something else. When my husband left the school district he had a nice amount in his plan. He can not touch it until he is 67 years old. There are no options for rolling it into a plan of our own choosing. Thát isn’t right!! Just my opinion

Written by William Reynolds · Filed Under News