A proposal to do away with the Florida's pension plan for new hires is drawing concerns from state employee unions. Florida lawmakers held a workshop during a House Government Operations Subcommittee meeting Thursday on the proposed change to Florida’s Retirement system.
The proposal to close the state's pension plan would mean everyone hired after January 1st, 2014 would automatically go into the state’s other retirement option known as the investment type plan, or the 401K-type plan.
“The takeaway is if you have those benefits now and there are things that you operate under, you will for the rest of your time as an FRS [Florida Retirement System] employee have access and be able to exercise those and be able to keep the plan that you have now," said Republican Representative Jason Brodeur, chair of the House panel.
"What this draft legislation does is only talk about what happens to those who are hired January 1, 2014. I think this is a great opportunity for us to address what could be big problem in the future by making minor changes now.”
Brodeur fears the current system could prove costly to taxpayers in the future, but many employee unions as well as several Democrats on the panel argue there is no problem with the state’s retirement system—calling it “one of the best in the country and around the world.”
And, Matt Puckett with the Florida Police Benevolent Association says with only about 25-percent of state employees opting into the state’s 401-K type plan, lawmakers need to take into account how eliminating the most attractive pension plan to state workers could hurt Florida’s ability to hire new employees.
“Let’s give them something that’s attractive. We want to attract quality, the best and the brightest to come do law enforcement to be firemen, to be school teachers, to do the work that the public asked them to do," said Puckett.
"A 401K with no disability—and I know you want to cover that—is probably not going to have someone stay for 20, 30 years to do that.”
Critics of the plan also question what financial impact this could have on taxpayers. And, committee chair Brodeur says the Florida Legislature has commissioned a study to address that, before the committee move further on the draft legislation.
Other parts of the proposal include eliminating the option for new enrollees to apply for disability benefits. It would also change the current 401K-type plan to include more investment options.
Stay tuned to Friday's Capital Report to hear more on this story. CLICK HERE for the story.
For more news updates, follow Sascha Cordner on twitter @SaschaCordner.
