TALLAHASSEE (CBSMiami/NSF) – The debate over the future of state and local pensions pivoted to the Senate on Friday after the House approved a sweeping retirement bill over the objections of Democrats.
The measure (HB 7181) passed on a 74-44 vote. Rep. Gwyndolen Clarke-Reed of Deerfield Beach, the only Democrat to vote for the bill, later changed her vote to no.
Under the House bill, the Florida Retirement System, which serves state and many local workers, would undergo a series of changes meant to encourage employees to choose a 401(k)-style investment plan instead of the traditional pension plan.
Meanwhile, local governments could ignore state rules on how to spend insurance-premium tax dollars to fund firefighter and police pensions so long as the unions for those workers agree.
The local pension change, the result of years of negotiations, is not controversial. But labor strongly opposed the proposed changes to the FRS, which include a longer vesting period and changing the default option for employees who don’t select a plan. Those employees would default into the 401(k)-style plan.
But House Speaker Will Weatherford, R-Wesley Chapel, suggested late Thursday the two issues were inseparable.
“I think if the members of the Senate and the House want a local pension bill to pass, they should want a state FRS pension bill to pass, because they’re probably tied together,” Weatherford said.
The Senate has not yet combined its two measures. Senators passed a few amendments to their local pension bill (SB 246) on Friday and set it up for a vote next week. A statewide FRS plan (SB 1114) is also ready to be debated next week.
But Senate President Don Gaetz, R-Niceville, said Friday his chamber might move closer to the House version of the pension bills.
“I think it’s entirely appropriate that the House would link them, and I hope that we can have a bill that can pass the floor of the Senate and can address the substantive issues associated both with our local pensions and also with the FRS system,” Gaetz said. “So, my hope is we’ll be able to pass a combined bill.”
Supporters say the changes are necessary to make the retirement plans sustainable. The state currently budgets about $500 million a year toward shoring up the FRS pension fund, and many local plans are perilously short on funding.
“The most compassionate, caring thing we can do for our state, for our dedicated public employees, for our families, for our country is to be fiscally responsible. … This proposal is about the future,” said Rep. Dennis Baxley, R-Ocala, during the House debate on the measure.
But while they agree about the need for action on the local front, opponents counter that the FRS is still among the best-funded pension plans in the nation, and that the nightmare scenarios about the state system are overblown.
“I can’t understand why we’re focusing on a problem that really doesn’t exist,” said Rep. Irv Slosberg, D-Boca Raton. “We have bigger problems to deal with in the state than fixing something that isn’t broken.”
This report is by Brandon Larrabee with The News Service of Florida.