Houses Pushes Scaled-Back Pension Reform

January 8, 2016

House leaders are gearing up to take another run at overhauling the pension system for state and county employees in the coming legislative session, potentially by tying the controversial changes to limited tweaks sought by the Senate.

The approach mirrors a previous effort by the House to combine changes to the Florida Retirement System, or FRS, with local pension reform supported by a bipartisan group of lawmakers. When House Speaker Steve Crisafulli dropped demands that the local changes be paired with a revamp of state retirement benefits, the local bill was approved during last year’s session.

But Crisafulli, R-Merritt Island, recently told reporters that House Republicans are interested in trying to tackle the retirement system again in 2016. The major thrust of the legislation would be changing the default choice for new state employees who don’t select a plan. The default would go from the traditional “defined benefit” pension system to 401(k)-style accounts.

That could dramatically increase the number of workers in the 401(k)-style “defined contribution” plan. The House has in recent years backed away from legislation that would require new state employees to enter the defined contribution plan, eventually leading to the defined benefit plan being closed down — something fiercely opposed by labor groups and a bipartisan collection of senators.

“Obviously, the House has a position, we’ve had a position on this,” Crisafulli said. “But for us, it’s about finding where we can work with the Senate to find a common ground. And the default is a good place for us to start.”

Supporters have eased away from pitching the plan as a way to help shore up the FRS, which is not fully funded. Opponents have countered that the retirement system is still financially sturdy and is in far better shape than beleaguered pension systems across the country.

Now, those pushing for a change are focusing on the need to allow state employees more flexibility. They point out that many workers change jobs before vesting in the pension plan — essentially losing the money that they’ve paid into the system for years.

“It’s about making sure that the majority of state employees walk away with something when they leave,” said House State Affairs Chairman Matt Caldwell, a North Fort Myers Republican who is working on the proposal.

Caldwell said he expected the bill to be released sometime in the next couple of weeks, after the House finishes up work on some environmental issues that his committee also handles. The annual legislative session starts Tuesday.

Crisafulli said he hoped the new plan would prompt a change in the Senate, which has long resisted House attempts to dramatically overhaul the program.

“I think there is some potential movement,” he said. “I think in the past we’ve taken big bites at the apple. I think this is an opportunity to maybe find some things that we can find common ground on.”

Even with a reduced scope, though, there could be challenges for the legislation in the Senate. A similar effort to change the default option for the FRS died in the Senate in 2014, when opponents used a procedural move to scuttle the proposal.

“I don’t think there’s a lot of appetite in the Senate to do FRS reform,” said Sen. Jeremy Ring, a Margate Democrat who chairs the committee dealing with pensions and has worked with Republicans on the issue.

The Senate has instead focused on a couple of smaller changes to the FRS. One bill (SB 7012) would double the survivor benefits offered to the families of certain state employees, like firefighters and law enforcement officers, who are killed in the line of the duty. Another proposal (SB 7014) would fix unintended consequences of legislation passed several years ago to cut down on “double dipping” by members of the FRS.

Ring said he was uncomfortable with discussions about tying either of those ideas with the House’s more sweeping goals on the pension plan.

“If they want to change the default, then there should be a bill to change the default,” he said.

Caldwell countered that the two issues are in the “same wheelhouse,” and there’s nothing wrong with blending both chambers’ priorities on the pension plan.

“I think it is prudent for us to negotiate those issues in concert,” he said.

by Brandon Larrabee, The News Service of Florida


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Written by William Reynolds · Filed Under News