New Pension Measure Introduced In State Senate
A state Senate measure dramatically overhauling the pension plans for many future public employees has been introduced, setting off a highly anticipated election-year fight between unions and Republican legislative leaders.
The bill (SPB 7046), which was filed Monday, would close the Florida Retirement System to most new public employees, instead shifting them to either the state's existing 401(k)-style investment plan or a new "cash balance plan." Law-enforcement officials and firefighters would still be allowed to join the traditional pension plan.
Exempting those "special risk" employees appears to be an effort to attract support from renegade Senate Republicans who last year killed an effort to move all new employees into the investment plan. Many of those senators had strong ties to the law-enforcement community.
Overhauling the pension plan is one of the elements of a joint agenda that House Speaker Will Weatherford, R-Wesley Chapel, and Senate President Don Gaetz, R-Niceville, introduced to reporters last month.
"The proposed committee bills relating to Florida's retirement system are a common sense approach to ensure that we are able to fully deliver on the benefits that we?ve promised our hard-working state employees for years to come," said Senate Community Affairs Chairman Wilton Simpson, R-Trilby, whose committee sponsored the bill and is scheduled to take it up next Tuesday.
Under a "cash balance plan," employees would have accounts that can be withdrawn when they retire as either a lump sum or an annuity.
Employees hired by the state on or after July 1, 2015, would be automatically enrolled in the cash balance plan to start. However, if employees didn't tell the state that they wanted to remain in that plan within eight months, they would be transferred to the investment plan. Special-risk employees would be able to elect to join the pension plan, but would also be moved to the investment plan if they didn't tell the state about their choice of plans.
Speaking before Florida Chamber of Commerce members on Tuesday, Weatherford said changing the pension system would help the state avoid hundreds of millions of dollars in payments a year to the fund and allow that money to flow elsewhere.
"If you look at the states that are raising taxes," Weatherford said in reference to New York, Illinois and California, "they're not raising taxes to put more money into education, they're not raising taxes to pay for health care, they are raising taxes to bail out a broken pension fund."
Gaetz, speaking before the same group, indicated he believed the new push would be successful.