Proposal to change Florida state pensions to 401(k) plan moves forward

Published Feb. 8, 2013

TALLAHASSEE — A bill placing all new state employees in a 401(k)-style retirement plan passed a House subcommittee on a party-line vote Thursday, setting up a major showdown between legislative Republicans and public workers' unions.

But even as they supported the bill — a key priority of House Speaker Will Weatherford, R-Wesley Chapel — some GOP members warned that they wanted to know more before it comes to the floor.

The measure (PCB GVOPS 13-01) passed the House Government Operations Subcommittee after a contentious and at times emotional 3½-hour meeting. The bill would require all employees who begin working for the state on or after Jan. 1 to join a "defined contribution" plan.

Supporters of the proposal say it will stabilize future retirement costs at a time that the current pension plan is relatively sound and can support current employees and retirees.

But opponents argued that the proposal could destabilize the pension plan by removing the flow of funding from new members. And they said the strength of the fund was a reason not to change it.

"It's not just before we have a problem," said Rich Templin of the AFL-CIO. "There is no modeling that shows there will ever be a problem."

In some ways, the fight over whether to force new employees into a defined-contribution retirement plan is a remnant of the battle two years ago over whether to require employees to contribute 3 percent of their income toward their retirement. While lawmakers approved that change, they balked at the idea of closing the "defined benefit" plan to new workers.

"It seems like every time the Florida Retirement System is trying to do better, we do something to try to tear it apart," said Rowan Taylor, president of Metro Dade Firefighters.

Opponents of the change also complained that the committee went forward before receiving a study showing how the proposal might affect the pension plan — and if it might cost current employees more in the long run if the fund falters.

"We're not fools," said Rep. Irv Slosberg, D-Boca Raton, in a speech that drew applause from bill opponents. "This is just a cost-shift. And my advice is, find someone else's pocket to pick. Leave our workers alone."

Weatherford has made it clear that the bill is one of his major initiatives this year. It comes at the same time that the Senate is considering legislation that would give cities more flexibility in how they use the insurance premium taxes that fund local police and firefighters' pensions.

But some Republicans on the panel said their support was contingent at least in part on the results of the study by the Department of Management Services, due Feb. 15.