Florida House Speaker Will Weatherford wants the state to modernize its retirement plan by closing its pension to future public workers and offering them only a 401(k)-style plan. That has been the trend for more than two decades in the private sector as employers look to shift investment risks onto workers. Weatherford also notes that several states, unlike Florida, are facing budget crises because their public employee pension plans are so underfunded.
But Florida's pension system is in much better shape, and there is no reason to rush to radically change decades of public policy in this state. Weatherford, R-Wesley Chapel, has triggered a worthwhile debate, but a quick decision could produce unintended consequences that could harm tens of thousands of public employees. Weatherford should take his full two-year term as speaker to make sure any pension reform is the right one for both workers and taxpayers.
The plan, formally unveiled last week before a House subcommittee, would halt new enrollments in the state pension in 2014. New employees hired by the state or at hundreds of local government agencies, including school boards and counties, would be put into a new defined contribution account, similar to a 401(k) account, where workers will decide how to invest their money. Pension plan members hired before 2014 — who number nearly 1 million, including 623,011 current employees of state and local agencies — would not be affected.
The idea was met Thursday with predictable hostility from unions and other workers' representatives. There remains a valid argument that at least some public sector jobs — particularly for teachers and public safety workers — deserve different considerations than private sector ones. The committee vote for approval fell along party lines, with Republicans backing Weatherford. More concerning was the lack of detail about the consequences of such a fundamental change. Not until later this month will the Legislature learn from an actuarial study what the fiscal impact of closing the pension fund will be on government agencies, from the state to counties to school districts.
There remain valid concerns that the proposal has no provisions for providing disability or survivor benefits for employees who are injured or killed in the line of duty. The Legislature has ordered studies to estimate the cost of several options, such as moving those employees' accounts back to a traditional pension-style benefit after the incident. But those studies aren't expected to be completed until March and April. The session is scheduled to end May 3.
Legislators should be aware of the dangers of rushing important legislation without fully understanding its impact. Many of the biggest issues facing the Legislature are the result of poorly drafted laws with unintended consequences: a deeply flawed teacher evaluation scheme, a faulty nuclear cost recovery fee that allows power companies to profit from customers even when they fail, and a "stand your ground'' gun law that benefits criminals as well as law-abiding citizens.
If pension reform is the best plan for Florida taxpayers and its workers, more scrutiny, not less, is the wiser course. The state pension plan is not in any imminent danger, contrary to rhetoric from Gov. Rick Scott and others. In fact, it's one of the best-funded public pension plans in the nation. Good public policy takes time. Florida has time, and Weatherford should use it.