Pension reform is slated to come up during the 2015 legislative session. So, could this be the year local pension reform actually comes to pass? What about overhauling Florida’s Retirement System that opponents say is already sound? We'll take a look at what stakeholders are hoping for in the New Year.
Robert Weissert is the Chief Research Officer for Florida TaxWatch, a government watchdog group, which recently released its annual cost savings report. One area Weissert says state government could save some money is by overhauling the Florida Retirement System.
The report’s recommendation is similar to the 2014 proposal that failed, steering newly hired employees into a 401K style pension plan—thus phasing out the more popular option: the traditional pension plan. While proponents to the overhaul say it will help avoid billions of dollars in future liabilities, opponents say the legislature shouldn’t be a tinkering with the FRS system that’s widely seen as financially sound.
Still, Weissert says the state should be matching its retirement plans to look like the private sector.
“Clearly, the Legislature has looked at this over a few years,” said Weissert, at a recent press conference. “There’s a number of issues that need to be considered, but the two major issues here from the Government Efficiency Task Force standpoint are the financial stability that this will ensure…with more than a $20 billion unfunded liability, even with fantastic asset management at the state level, this is a system that simply needs to be looked at again, and modernizing the system to match what the taxpayers who funded the system have available to them.”
The controversial 2014 state pension reform effort also included a widely-supported bipartisan local pension reform measure. It was intended to help troubled pension programs mainly affecting police and firefighters. Many of those pensions are underfunded. The two were tied together in the House in an effort to get state pension reform passed, but both efforts ended up dying in the last days of session.
So far, the local pension bill has been filed again, and Fleming Island Republican Senator Rob Bradley says he and Margate Democrat Jeremy Ring share one hope for 2015:
“The FRS [Florida Retirement System] issue and the local pension issue…I think it’s very important that those two issues are separate,” said Bradley.
And, for now, House Speaker Steve Crisafulli confirms the two issues are separate.
“They can definitely move separately,” said Crisafulli, speaking to reporters in November. “I mean they have been tied together in the past, but as far as the conversations that are being had right now, they are separate.”
That’s good news to Florida League of Cities Legislative Director Scott Dudley. After years grappling with this issue, he says he’s hopeful local pension reform will get passed during the 2015 session—whether it’s in another bill or a stand-alone measure.
“We’ll take it in what form it comes as long as it gets done, but the idea that he’s willing to separate them shows that he’s committed to getting either or both done, and we appreciate that so that we can make the pension systems more sustainable into the future so we can follow up on the promises that we made to the police and firefighters,” said Dudley.
And, as for state pension reform, House Speaker Crisafulli says the House is not ruling out bringing back that issue next year.
“If there’s not an appetite for it in the Senate, then it certainly won’t happen,” said Crisafulli. “But, certainly in the House, we have members that are talking about it.”
Senate President Andy Gardiner recently told reporters he sees the two pension efforts as separate. He also pointed to how the local pension reform effort has unanimous support in the Senate, but the votes for overhauling the Florida Retirement System, or FRS, are pretty divided with some Republicans siding with Democrats against that effort.
“You know, the votes haven’t changed in the Senate, and we have to be mindful of that,” said Gardiner, speaking recently to reporters. “And, I did see where the Speaker commented that they would be separated in the House and not put together. So, it may give you the opportunity to do the local fix and then you just kind of wait and see what happens on the overall FRS [Florida Retirement System] reform.”
And, how does Matt Puckett feel about Gardiner’s remarks? He’s the Executive Director of the Florida Police Benevolent Association, who’s been very involved with the local pension reform bill in years past.
“Oh, very encouraged,” said Puckett. “We worked very hard over the last few years to try to get a product that everybody could agree was a very good compromise, and we feel like we’re there with the legislation that was produced last year. So, it’s very encouraging that the Senate President recognizes that and is supporting it moving forward.”
Puckett says he likes the idea of a stand-alone local pension reform bill. But, he adds for the issues to be tied together, the two pension efforts would both have to be something that the police union could support.
Of course, he says if it were to look anything like last year’s state pension reform effort,“we’d really prefer in that scenario to have them run separately.”
For more news updates, follow Sascha Cordner on Twitter: @SaschaCordner.