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Florida House Passes Its Pension Bill; Now, The Question Is: What Will The Senate Do?

A bill that would eliminate the state’s pension plan retirement option for new employees is now headed to the Florida Senate, after the House approved the bill Friday. But, even though the Republicans won the battle against the Democrats in the Florida House Chamber, the Senate Republicans seems opposed to agree to the terms of the House pension reform plan.

Today, state employees have two retirement options. But, a favorable vote Friday in the Florida House moves a bill one step closer to leaving new employees hired after January 1st of next year with only one option: a 401 K style plan, called the defined contribution plan, or the investment plan.

House Bill 7011 essentially eliminates what’s known as the defined benefit option, or the state pension plan, for new employees, but those now in the Florida Retirement System can keep that option if they chose, according to House Speaker Will Weatherford, who’s made this a priority this year. Opponents say he’s trying to fix a system that’s not broken, but Weatherford disagrees.

“Well, if anyone is defending the status quo, you’re defending taking $500 million out of our education system and put into the pension system. You’re defending a $19 billion shortfall in our actuarial unfunded liability. What we should be scared of is the status quo, if we do nothing, the state of Florida will continue to spend money that should be going to education and health care and it will be spent on things, like a broken pension system,” said Weatherford.

But, the House pension reform bill has competition. It’s a pension bill sponsored by Republican Senator Wilton Simpson.

Simpson says his plan is vastly different from the House plan in that his offers a choice, leaving both retirement options available for new hires—only making the investment plan a default if a new employee doesn’t make a choice.

Simpson was asked at the bill’s most recent committee stop about how firm he would stand if asked to compromise on the Senate version.

“Reagan said when hell freezes over, and then him and Tip O’Neill went into a room and he said ‘You hear that sound?’ And, so I would say I would think it would be a cold day before we changed our position on this bill,” Simpson responded.

Weatherford hopes the House and Senate can come to a meeting of the minds, adding that the Senate plan has some good points.

“I wouldn’t say it’s a bad bill. It’s got a lot of great components to it. Compared to the status quo, it’s a good bill, but we think ours is better. We think ours addresses the problem long term, but we certainly want to show deference to the Senate. We’re willing to talk with them. I’m sure there’ll be some negotiations that will ensue," said Weatherford.

For now, Weatherford and other House Republicans are claiming victory, after the bill passed Friday in the Florida House. But, tensions were high during the two-hour bill debate.

Some, like Democratic Representative Lori Berman, issued a challenge to her fellow colleagues. House records show about 70 of its members are currently in the state pension plan. And, a little over 30 are in the 401 K style plan. She says she’s fairly certain most in the pension plan are Republicans. She adds if they really want to show their support for the 401 K style option, all backers of the bill should opt into the plan that they’re forcing new hires into.

“Anyone who votes yes on this bill should transfer to the defined contribution system. Otherwise, it becomes a do as I say, not as I do situation,” remarked Berman.

But, Republican Representative James Grant says he strongly disagrees with the notion that they’re forcing employees into one retirement option, saying they’re getting a better choice that has a much better vesting period of 1 year than the current pension system of 6 to 8 years. He later likened state’s pension plan to the “Titanic.”

“We’ve heard the notion that this pension is 87-percent funded, that it’s the 5th or the 9th, depending on the study, that it’s the best pension in the country and the world. Members, at one point, the front page of the New York Times advertised the greatest ship in the world. It was more than 87-percent afloat and it never ended its voyage,” said Grant.

Others, like Representative Joe Gibbons drew another comparison, likening the bill to the internet café ban debate.

“We’ve been talking a lot about electronic gambling devices. Well, forcing new employees into the defined contribution plan is the biggest form of gambling, especially when this would be gambling of the well-being of Florida’s middle class. Essentially, we’re asking employees to work with no end or reward in sight,” said Gibbons.

But, the bill’s House sponsor Representative Jason Brodeur disagrees.

“The most loving and caring thing we can do for our state workers and our taxpayers is to vote for this bill," said Brodeur to the applause of his Republican colleagues.

The bill passed along party lines 74-42. It’s now waiting on the Senate’s approval.

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