Amid Budget Talks, Florida House Pension Reform Package Appears In Senate
Amid budget negotiations, the House and Senate may be using the revival of a controversial pension reform package as a means to get on the same page.
For the past few years, many Republican House Speakers—including current Speaker Richard Corcoran—have made making changes to the Florida Retirement System a priority.
In particular, it’s making changes to the default retirement option, if a new employee doesn’t make a choice.
The current default is the more popular retirement option known as the traditional pension plan. So, House sponsor, Rep. Matt Caldwell (R-North Fort Myers) wants to change that to the 401K style investment plan.
“And, so, all we’re doing is changing the default, the choice we make for them when they decline to make a choice after given multiple opportunities,” said Caldwell. “And, they still retain the option to switch. If at some point in the future they realize, you the state has defaulted me into the investment plan, but I really do want to be in the pension plan, they have the option to make that switch at any point.”
Still, Rich Templin with the AFL-CIO say while that’s true that a person can switch from the investment plan to the pension plan, there’s a caveat.
“They have the option to go back into the pension plan, but it will cost them thousands of dollars out of pocket,” said Templin. “This is so important. There is no choice when you’re telling someone who is making $40,000 a year that they have to come up with thousands of dollars out of pocket to buy back into the pension plan.”
Many Democrats and unions groups like Templin’s have opposed the default provision, saying the investment plan is more risky and changing the default could destabilize the pension fund—which is seen as one of the best in the country as it’s 84 percent funded.
Still, the House last week passed a bill along party lines with Democrats opposed. The Senate, meanwhile, never had a measure that included that provision…that is, until this week.
In the past, the Senate has never had the votes. But, Sen. Jack Latvala (R-Clearwater)—the Senate’s budget chairman—indicated it could be part of the ongoing negotiations with the House.
“That’s part of what’s under consideration now,” he said, speaking to reporters Friday. “We’re working on that issue…you know, they have their priorities and we our priorities, and this is the time of year where we try to sync ‘em.”
So, the bill had its first hearing in the Senate Governmental Oversight and Accountability Committee Monday. As the panel chair, Sen. Dennis Baxley (R-Ocala) is the bill’s sponsor.
Along with the controversial default change, his bill includes a benefit for firefighters who contract certain types of cancers due to their job.
And Baxley says with less than two weeks left in session, he just wants to get this over the finish line.
“I mainly want to get this over to Appropriations so it can be part of that discussion,” he said. “This is a template. We may have some different tires and wheels on it before it gets out onto the floor. But, I really feel responsibility from this committee to move this into the process.”
And, the measure narrowly passed Baxley’s committee 4-3 with Democrats opposed.
It nearly became a casualty of Former Sen. Frank Artiles’ (R-Miami) resignation. Because he was no longer on the seven-member panel, the measure could have died on a tie vote. But, Senate President Joe Negron appointed his Majority Leader Wilton Simpson to fill that slot, so the bill still had a chance.
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