Reviving hopes for one of House Speaker Will Weatherford’s key priorities, a divided House State Affairs Committee on Friday signed off on a scaled-back set of changes to the pension system for public employees.
But the panel’s party-line, 11-6 vote signaled that the more modest approach to overhauling the Florida Retirement System has done little to cool partisan passions about the legislation. At the same time, some GOP supporters said the legislation doesn’t go far enough.
The revised plan (PCB SAC 14-02) would jettison Weatherford’s idea of closing the traditional, “defined benefit” pension plan to most new employees and forcing them into a 401(k)-style investment plan. That approach has proven to be a non-starter in the Senate, where a bloc of moderate Republicans sunk a similar bill last year.
Instead, the bill would impose other changes designed to encourage employees who join the state workforce starting July 1, 2015, to enter the investment plan. The vesting period for the traditional pension would increase from eight years to 10, and workers would be enrolled in the investment plan by default unless they chose to sign up for the pension plan.
Weatherford said earlier this week that he was essentially bowing to the political reality by backing a proposal that even some moderate Republican senators have said they could support. And he noted that the changes are still expected to save almost $28.6 billion over the next 25 years.
“To me, that’s significant improvement,” Weatherford, R-Wesley Chapel, said. “That’s game-changing for our pension system and it puts the state of Florida in a position where it can be solvent long-term.”
While Weatherford and Senate President Don Gaetz, R-Niceville, included the bill on their joint House-Senate “work plan” for this session, pension reform has always been more closely associated with Weatherford.
Supporters say the bill would cut back on the state’s need to contribute in some cases $500 million a year to shore up the pension fund. But critics say the state caused that shortfall by declining to pay the employers’ contributions in past years and instead using the money to fill a budget gap.
Opponents also say pushing more employees into the investment plan would actually destabilize the pension plan by depriving it of those members’ monthly payments. Overall, the FRS is considered relatively healthy when compared to other state pension plans.
“The only real risk to taxpayers … is constricting funds coming into the plan by taking more people out of it and putting more people into the investment plan, which is exactly the point of the legislation in front of you,” said Rich Templin, legislative and political director for the Florida AFL-CIO. “The doom-and-gloom scenarios that people have said publicly they are worried about are more likely with the passage of this bill.”
But Rep. Jason Brodeur, R-Sanford, argued that the pension plan should be completely self-sustaining.
“What is in this bill, I didn’t actually want to support, because it doesn’t do anything, in my opinion. It doesn’t do enough,” Brodeur said. “… It is not right that taxpayers should have to pay extra every single year because we can’t get the structure right.”
It’s not clear where the bill, which received a first vote on Friday, goes next. Weatherford could send the proposal to another committee or send it directly to the floor.