Tallahassee, FL - Prompted by a flurry of opposition from police, fire and other public employees, a Senate panel on Tuesday discussed some proposed changes to a cost-cutting public pension overhaul that would be more employee friendly then a proposal championed by Gov. Rick Scott.
Following a contentious four-hour marathon workshop on Friday, the Senate Government Oversight and Accountability Committee on Tuesday introduced some changes that give local governments flexibility in determining pension types while making retirement benefits more attractive for employees by, for example, increasing the salary base upon which pensions are calculated.
The committee took another 90 minutes of testimony on that issue before calling it quits without a vote on SB 1130, a proposal by committee chairman Sen. Jeremy Ring, D-Margate, that makes the most significant changes to local plans since 1999, when state lawmakers last acted to prop up pension plans in the wake of major fiscal crisis in Miami.
Local pension reform has come under particular fire from local law enforcement groups whose members are covered by such plans, instead of the larger Florida Retirement System. City and county officials, meanwhile, say generous retirement packages are, in some cases, breaking the bank.
Ring’s original proposal would have tied new pensions to base salary only, but in a nod to police and fire unions, an amendment offered Tuesday by Sen., Jack Latvala, R-St. Petersburg, would allow up to 300 hours of overtime to be calculated into their pension benefits.
Another Latvala amendment included provisions to provide specific disability benefits for employees hired after July 1, 2011. Ring said he wants to panel to vote on the bill when members return in two weeks.
The panel is also considering another measure (SB 1128) dealing with the FRS, which covers the pensions of 655,000 state, county and school district employees.
Under the legislation, new employees in the FRS plan would be required to join 401(k)-style investment plans. Though originally constrained in the same manner, local governments could continue to offer traditional pension plans that, unlike 401(k)s, provide employees a definitive payout not tied to the performance of the fund in the marketplace.
Union representatives say local pension funds aren’t broken.
“This is a terrible bill,” said Ron Silver, a former state senator who now represents city of Miami workers. “The only acceptable amendment for this bill is to strike everything after the enacting clause….The concept of trying to regulate local pension plans is wrong.”
Following the hearing, Ring said the bill likely will change more before it comes back to the committee during the first week of the 2011 session.
“This bill is a reform because we’ve got a major budget crisis,” Ring said. “It’s a reform because we have unfunded liability.”
He also dismissed allegations that the pension reforms are political attempts to weaken the unions, which fought hard against Scott’s election and that of many Republican leaders.
“Look at the governor’s bill, look at our bill two weeks ago and then look at it today,” Ring said. “It would seem to me that
there has been a lot of union influence thus far.”