Pension Overhaul In Florida Officially Dead This Year
The Florida Senate has essentially killed a House pension proposal favored by Speaker Will Weatherford. A bipartisan group of Senators voted down an amendment that does away with the state’s pension plan for future state employees.
It’s been a matter of contention between the House and Senate with two dueling plans. The House plan favored by House Speaker Will Weatherford leaves new employees with one retirement option.
It does away with the defined contribution plan also known as the pension plan for new people hired after January 1st, 2014. They would then automatically be placed in a 401K-style plan called the defined contribution plan, or the investment plan. That’s the less popular retirement option for current employees.
The big difference in the two plans is the Senate’s keeps both retirement options available for new employees. But, Tuesday, the bill’s Senate sponsor, Wilton Simpson, agreed to take up the House bill with two changes.
“It’s the House bill amended to extend the date from January 2015, and to also do a study so that we can look at other options, such as cash balance, or other options that would be maybe more appropriate to be able to plug into future dates,” said Simpson.
Later, when he was defending the proposal, Simpson repeated the House rationale that pension reform will save taxpayers money overtime.
“The more that we have to put into a defined benefit plan or any other retirement plan—it doesn’t matter what we put it into—the less we can do with it and what our priorities are, which have been very well represented this year I think in the education field. And, if we didn’t put $500 million in the retirement system this year, we could have put $500 million more dollars into education, in the environment, law enforcement; we could have done a lot of things with that 500 million. This bill will allow future legislators to differently prioritize that we have to," Simpson added.
But, Democrats, like Jeff Clemens, weren’t buying that argument. He says House Republicans were basing the numbers on studies that were done by a questionable company.
“Now we talked a little bit about the Milliman study, and I don’t know if anyone knows this, but they were sued by $73 million and they lost over actuarial studies. So, we’re putting our faith and our future into their hands and frankly, I don’t feel comfortable,” said Clemens.
And, there's also Jack Latvala, one of the few Senate Republicans who’s against the House proposal.
“Well, this is a bill, and the first that we’ve seen this in this Senate is today. A major bill involving 623,000 lives of our fellow Floridians, we don’t have a staff summary. We don’t have our own actuarial study, here in the Senate on this bill, like we have on Senator Simpson’s original bill. Second reason I’m against this amendment because this forces everyone to go into the defined contribution plan, and I don’t think it is for everyone. And, I think if we want to continue having the quality employees that we have, we need to continue offering that pension,” said Latvala.
“And, I just do not understand why we want to experiment around and we want to take these people...and put them in a system, just because it works in private business.”
Simpson’s amendment was defeated 18-22 with a few Republicans voting with Democrats to oppose the change. A spokeswoman for Simpson says this effectively killed the bill and the measure will not be up for a vote for the rest of the Session.
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