Tallahassee, FL - The Senate rolled out its push to revamp city and state pension plans, drawing an immediate push back from the state’s largest law enforcement union.
New employees in both systems would be required to join 401(k)-style investment plans with the legislation clearly aimed at phasing-out traditional pension plans.
Base salary – no overtime or other compensation – would be used to determine an employee’s pension benefits, under both city and state plans, according to the two bills (SB 1128, 1130) filed late Tuesday by Sen. Jeremy Ring, D-Margate, chairman of the Governmental Oversight and Accountability Committee, which has been holding hearings on the pension overhaul.
The legislation is expected to be reviewed Friday during a workshop by Ring’s committee slated to span four hours.
Ring’s bill affecting the huge Florida Retirement System (FRS), would require still-to-be-determined contributions from the plan’s 655,000 government employees, mostly county school district members.
State analysts have said 5-percent employee contributions would save $1.3 billion, helping lawmakers patch a budget shortfall topping $3.6 billion. The level of funding also would come close to the $1.4 billion property-tax cut Gov. Rick Scott has promised over the next two years.
Scott has offered his own proposal to revamp the Florida Retirement System, including at least some of the provisions outlined by Ring. In another cost cutting measure, both Scott and Ring would bar employees hired after July 1 from joining the state’s lucrative Deferred Retirement Option Plan (DROP).
The House hasn’t unveiled legislation yet, although House Speaker Dean Cannon, R-Winter Park, and other leaders have called for overhauling public pensions to reduce the growing financial liability faced by the cash-strapped state and cities.
Matt Puckett, of the Florida Police Benevolent Association, which campaigned against Scott last fall, said a 5 percent contribution is “way too high for workers who haven’t seen any pay raise” since 2006.
Further, he said proposed changes to city police and fire pension funds are unnecessary. “These are local problems that can be fixed locally,” Puckett said.
The legislation eases requirements on municipalities that dollars accumulated under the insurance premium tax be used solely to cover enhanced pension benefits, a provision sought by the Florida League of Cities. Instead, the municipal pension bill (SB 1128) would allow cities to deploy this money to ease liabilities in city pension plans.
The legislation also would create a task force that could result in stricter standards for police and fire officers seeking disability payments as part of their pensions.
Kraig Conn, lobbyist for the Florida League of Cities, said the league “supports the direction” of Ring’s municipal pension bill. He predicted, though, there would be resistance from cities to the requirement that new hires go into 401(k) plans and not be covered by traditional pensions.