Florida House Poised To Vote On Newly Merged Pension Reform Proposal

Apr 24, 2014

Florida Retirement System

The Florida House is now poised to vote on a newly merged pension reform proposal—a huge priority of House Speaker Will Weatherford. The bill that passed its only committee earlier this week was taken up on the floor Thursday over the objections of Democrats who oppose the measure.

Almost every day this week, both chambers of the Florida Legislature have taken up pension reform in one form or another. Over in the Senate, there are two separate proposals: one overhauling the Florida Retirement System and another aiming to fix a troubled local pension system.

But, over in the House, under the direction of Bradenton Republican Representative Jim Boyd, the proposal now merges both efforts.

The fix to the local pension system—which affects firefighters and police officers—has been largely a non-controversial issue. But, for changes to the state’s pension system—which affects government workers, first responders, and teachers--it’s been exactly the opposite.

And, given that, Thursday’s discussion centered around Boyd fending off questions from several Democrats, including Rep. Michelle Rehwinkel-Vasilinda (D-Tallahassee), regarding that issue.

“Why has there been a decision to merge these two bills that do very different things,” asked Rehwinkel-Vasilinda.

“The common thread here is public pension, whether it be local, municipal, or state, and it all regards public pensions so we felt the best course of action was to combine the two bills into one,” Boyd replied.

The Florida Retirement System portion of the bill has several parts, including eliminating the traditional pension plan for Elected Officers and Senior Management officials. New employees hired after July 1st, 2015 would also automatically default into the 401K style investment plan—the less popular retirement option among current employees. The current default is the pension plan. And, the bill extends the amount of time an employee under the pension plan can receive their benefits from eight to 10 years. Boyd says it’s a money saver as well.

“This narrow approach to pension reform will save taxpayers about $28 billion over 30 years,” said Boyd.

To back those numbers, Boyd is using a study done last year by the Millman firm, which some lawmakers, like  Rep. Dwayne Taylor (D-Daytona Beach), take issue with.

“That study assumed that you were going to use the language the very year you were going to implement the changes, which was last year. So, you can’t use last year’s study for this year. So, I’m trying to understand, in the study, where did it show that you can use it this year,” asked Taylor.

But, Boyd maintains that the Millman firm itself certified those numbers would likewise hold true for this year.

“I’m not the expert, and I would suggest that you’re not the expert. Millman is our expert. They have said April 2014, we can use the study for the first year of impact for our plan that we presented today because it covers the three elements that I outlined in our plan,” said Boyd.

Over the course of months, the pension reform proposal has gone through a series of changes. The initial plan was to eliminate the traditional pension plan for new employees and shift them into a newly created retirement option under the bill called the “cash balance” plan—a hybrid of the pension plan and the investment plan. And, it also exempted first responders, like police and fire fighters, from the change.

The Florida Department of Management Services was initially tasked with analyzing the fiscal feasibility of those changes. It was later confirmed by several top Republican lawmakers that the Governor’s staff had tried to delay that study—which put one of House Speaker Will Weatherford’s biggest priorities in jeopardy.

So, things got a bit contentious when Rep. Irv Slosberg (D-Boca Raton) questioned Boyd about why the Legislature is even considering pension reform, given that situation.

“Is it possible that the Governor’s staff told the state Department of Management Services to slow down on the analysis of this,” asked Slosberg.

Boyd called the question unfair, and questioning by Slosberg was later cut off by Marianna Representative Marti Coley in her capacity as Speaker for the moment.

Thursday’s discussion only teed the bill up for a vote, which could happen Friday. Meanwhile, not only are the Senate companions two separate proposals, there are still a couple of other differences between the House and Senate measure.

For more news updates, follow Sascha Cordner on Twitter: @SaschaCordner.