Pension Proposals Weeks Away

By: Michael Peltier, The News Service of Florida
By: Michael Peltier, The News Service of Florida


Saying the upcoming battle over the state’s pension fund will be based on facts not emotion, a key senator said Tuesday it will be at least a month before a reform package is available for debate.

Sen. Jeremy Ring, D-Margate, and chairman of the Senate Government Oversight and Accountability Committee, told members it will be at least three weeks before actuarial studies become available regarding the $120 billion Florida Retirement System and other local governmental pension plans, many of which are becoming prohibitively expensive.

Until those numbers are analyzed, Ring said it’s premature to float any proposed legislation, which is likely to include an increase in employee contribution obligations and a possible transition from a traditional pension plan to a defined contribution, 401-K-style plan for new hires.

“We’re one of the last states in the country that doesn’t have a contribution,” Ring said. “While I think everything is on the table, I can pretty much feel confident that a core part of this discussion will be employee contributions.”

In addition to state employee contributions, the committee is also considering whether to assist cities and counties that have seen pension costs become up to 70 percent of payroll costs. Officials from Pensacola, Pembroke Pines, Jacksonville and St. Petersburg, for example, have said contracts negotiated with local employee unions by previous boards are breaking the bank.

Such financial straits have prompted a debate over whether the state should bail out local governments, which are now paying the price for generous contracts negotiated with police, firefighters and other municipal employees.

“They created the problem,” said Sen. Jim Norman, R-Tampa, a committee member who said he’d oppose any bailout measure. “They cut bad deals.”

On the statewide front, Florida is among a handful of states that does not require employees to contribute to their own retirement accounts. Backers of reform say state employees should mirror those in the private sector, where most employees fund portions of their pensions.

The upcoming fight pits cities and counties against the unions that represent employees. Earlier in the week, the AFL-CIO released its own study saying that pension benefits are not extravagant and account for a relatively small portion of most cities’ overall budgets.

“Our retirement system remains one of the strongest in the nation,” said Rich Templin a lobbyist for the Florida AFL-CIO. “There may be some isolated problems in municipalities, but there is certainly no systemic problem statewide… How do you reform something that is working quite well?”

Other groups, however, say a crisis is looming, not only in Florida but across the nation, as city governments find themselves strapped with lucrative pension systems approved by their predecessors they say they can no longer afford.

“While one might cite multiple underlying factors for underfunded pension liabilities, the bottom line is that these underfunded liabilities push the present cost of government employees into the future,” said a recent report by the Tallahassee-based James Madison Institute, a fiscally conservative think. “Any solution to the problem, therefore, must keep the cost of government employees contemporaneous with the time of their employment.”

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  • by Teacher Location: Mayo on Jan 13, 2011 at 03:43 PM
    We voted these guys in. We will now see the effects. I wish I got paid the average salary of teachers in other states, because if I did I would not mind putting 5-8% into my pension every month. I make 37k a year with a master's degree. And this isn't the private sector. I can't send a kid home because he doesn't do his homework. I can't fire a kid because his parents are sorry and don't care about him (which is the biggest problem is schools today, not the teachers) to teach him work ethic and manners.
  • by Anonymous on Jan 13, 2011 at 12:46 PM
    What does this "it will be at least three weeks before actuarial studies become available regarding the $120 billion Florida Retirement System and other local governmental pension plans, many of which are becoming prohibitively expensive." mean. Is the FRS prohibitively expensive or is it many of the other plans? I haven't heard anything bad about the FRS system, so why does it need to be changed? What is bad with the FRS the way it is?
  • by Anonymous on Jan 13, 2011 at 12:19 PM
    Katie Mae, I would bet they want to reform where there would be "a new plan" and you would start over with 0. When they succeed at this then everyone will know that the existing plan with $9millon has been distributed and reallocated to "other state expenses".
  • by just another one Location: TLH on Jan 13, 2011 at 11:31 AM
    as a lot of you are saying, wouldnt mind pitching in for my retirement IF it didnt amount to a pay cut, which it would be, I would be putting money in and not got a raise, therefore pay cut
  • by Katie Mae Location: Tallahassee on Jan 13, 2011 at 10:50 AM
    if they reform the pension system, and we employees have to pay into the system, what happens to the funds I have already earned towards retirement? Does it continue to sit in the account, or do they plan on making us all start from $0? I wouldn't put it past them to do that, either. I don't have a problem with contributing to the pension fund, as long as they can pay me wages comparable to other states' employee wages.
  • by Anonymous on Jan 13, 2011 at 09:46 AM
    SHOW ME THE MONEY. I want to know how much every year the state actually pays into the FRS and how much it will pay after any reform.
  • by Another State Employee Location: Tallahassee on Jan 13, 2011 at 09:39 AM
    I'll be happy to chip in the average percentage towards the pension plan, as soon as I am paid the average salary of workers in other states.
  • by Badger Location: Just Roaming on Jan 13, 2011 at 07:41 AM
    It’s Easy to look into some other type of Retirement System when Your not one of the one’s on it. The 401K System has shown us in the past that it is more of a Loosing System then one that will Truly Build you a Comfortable Retirement. After Loosing Thousands in a 401K somewhere back in the 90’s. I took a bigger loss and closed the 401k out. Put those monies into a Scottrade Account. Now this type of move is not for everyone. Yet what I did learn. Is the 401K system isn’t what it’s made out to be. And if You were able to move your monies Freely each day as the Market Moves. And Not When Some Once or Twice a Year Date Comes Around. Like a 401K. You would be able to save your investment. Believe me there are a lot of other Retirement Ideas out there other than a 401K style system, and Without having to Deal with Financial Brokers. It’s really disappointing to see the Florida Retirement Pension Fund up for Reform. It is one of the Few Government Retirement Pensions that actually did well in 2009/2010 with the economy like it is. It should be left alone.
  • by dogtired on Jan 13, 2011 at 07:09 AM
    I have no issue with contributing towards my retirement. I would have been doing just that if it had been possible, but FRS does not let you do that. It used to back before 1975, but not since.
  • by Badger Location: Just Roaming on Jan 13, 2011 at 06:48 AM
    It’s so easy to Sit on an Oversight & Accountability Committee when it does not affect your Retirement!! How about these same State Employees Sit as a Senate Oversight Committee the next time the Senate Decides to give themselves a Raise!! Or Better Yet, as The Oversight & Accountability Committee for the Senates Retirement System. Now That Would Be Interesting. Praise The Lord I’m Retired and This Doesn’t Affect My Retirement. YET! But Give the Senate and Congress enough time. They’ll find some way to Screw it Up.
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