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Senate Pension Reform Bill Now Heads To Floor, Still Differs From Merged House Bill

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The Senate’s pension reform proposal is now heading to the floor, after it passed its last committee Tuesday. But, tension surrounding the pension issue is mounting as those opposed say they’re tired of the legislature’s continual attacks on state workers.

Beverly Ledbetter is a longtime resident of Pasco County. She’s a former teacher who taught for 36 years, and she’s now receiving benefits under the Florida Retirement System’s defined benefit plan known as the traditional pension plan. But, she says it wasn’t always that way.

“When I became teaching at my school back 36 years ago, I started in an investment program on my own—a 401K. I lost over $50,000 in the last Wall Street meltdown,” said Ledbetter. “I think that Wall Street is too volatile, and the defined benefit plan we have now is stable. So, I oppose this bill. Thank you.”

Ledbetter is one of many who spoke before members of the Senate Appropriations Committee Tuesday to oppose a measure aimed at overhauling the Florida Retirement System.

The measure by Sen. Wilton Simpson (R-Trilby) is his second-go around. His bill reflects a similar effort that failed in the Senate last year.

“This plan is very simple, changing a default system. There’s not a person in this room, except us that are elected that will be affected by this pension bill,” said Simpson. “Everyone that’s a teacher, police, firefighter today or tomorrow will still be able to choose the defined the benefit if they choose to have it.”

So, Simpson’s bill automatically defaults newly hired public employees into the 401K style investment plan that haven’t made up their minds within nine months—the current default is the traditional pension plan. It also extends the vesting period for those in the pension plan from eight to 10 years.

Simpson later changed the measure in the Senate Budget Committee Tuesday to take out a provision aimed at incentivizing new hires to pick the investment plan option by changing the contribution rate for those only in that plan from 3-percent to two-percent.

“We had not gotten a ruling from the IRS that it was okay to do the two-percent instead of the three-percent, so we’re taking it back to the three-percent,” added Simpson.

The bill also eliminated the pension plan retirement option for Senior Management and Elected Officers, but the measure now excludes Judges and employees covered by the Senior Management Service Class, which includes state attorneys.

It’s a plan supported by the Florida Chamber of Commerce and Americans for Prosperity. But, at Tuesday’s meeting, more than 40 people expressed their opposition to the bill.

AFL-CIO’s Rich Templin says he’s opposed to the measure that he says keeps on changing just so pension reform becomes a reality this year.

“There’s a lot of things floating around right now,” said Templin. “We’ve got a cash balance plan, a hybrid plan; this has really become political darts,  where we’re throwing things at a dart board trying to hit something without the required studies, without the actuarial analysis about what this is actually going to do.”

Other lawmakers, including Sen. Jack Latvala (R-Clearwater), weighed in as well. Latvala, who was instrumental in getting pension reform to fail last year, says he’s tired of the continual attacks on state workers.

“There’s many of our state employees who work basically for their pension because they don’t make much money. They do not make what private enterprise makes. And, so, I’m tired of scaring them, and hammering on ‘em every year, and threatening the one thing that they have. And, when we can start giving them some raises and moving in a positive direction, maybe I’d feel better about voting to change the system.”

But, Simpson says looking at the facts, the measure will save the state billions of dollars, and if lawmakers move forward on this year’s pension reform effort, they could do pay raises.

“All of these workers that we say we’re so fond of, we say ‘we want to give them raises. We have $3 billion in reserves, why don’t we give a raise?’  When you give a raise, you don’t just give a raise for this year. You add to the UAL of the pension in the back years. So, if you have real pension reform that can start bringing down the Unfunded Actuarial Liability, you can then give more raises. Now, how about that,” Simpson replied.

The measure passed the committee 10-8 with bipartisan opposition and Sen. Jeremy Ring (D-Margate) voting alongside Republicans in supporting the measure.

Meanwhile, the House measure was just recently combined into two separate pension proposals: one aiming to overhaul the Florida Retirement System, and another to fix a troubled local pension system. So, does Simpson expect his measure to go through that change?

“I don’t like the idea of merging them. One can go without the other, but the ideal is if they come merged, that’s okay…but, I would rather both be vetted separately, even though they are both pension issues and can be together. I’m not opposed to them being together, but the parts have to look substantially like what we’re doing in the Senate,” said Simpson, following the vote.

But, Simpson says if his bill undergoes what he calls a “substantial change,” he will oppose the measure. Simpson’s bill now heads to the Senate floor.

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

Sascha Cordner has more than ten years of public radio experience. It includes working at NPR member station WUFT-FM in Gainesville for several years. She's worked in both radio and TV, serving in various capacities as a reporter, producer and anchor. She's also a graduate of the University of Florida with a bachelor's degree in telecommunications. She is the recipient of 15 awards from the Associated Press, Society of Professional Journalists (SPJ), and Edward R. Murrow. Her award-winning stories include her coverage on the infamous “Dozier School for Boys” and a feature titled "Male Breast Cancer: Lost in the Sea of Pink." Currently, Sascha serves as the host and producer of local and state news content for the afternoon news program "All Things Considered" at WFSU. Sascha primarily covers criminal justice and social services issues. When she's not reporting, Sascha likes catching up on her favorite TV shows, singing and reading. Follow Sascha Cordner on Twitter:@SaschaCordner.