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From 5% to 2%: Retreat from Extra Pension Contributions; All Salaries Below $40K Exempt

| March 11, 2011

jasper johns fives twos 5 and 2

Jasper Johns's numbers.

A Senate panel backed off considerably from a proposal to require state workers to make contributions to their pension fund, exempting many state workers, and cutting back the amount others would have to chip in.

On a 12-1 vote, the Senate Government Oversight and Accountability Committee on Thursday evening approved a bill that exempted members of the Florida Retirement System making less than $40,000 – a huge segment of those in the system – from having to contribute anything toward their retirement plan.

Under the amended bill (SB 1130), those state workers making under $75,000 would keep the option of remaining in the state pension fund, while those making more than that would be forced to take a 401 (k) style proposal without a defined benefit.

In addition to exempting everyone making less than $40,000 from having to contribute to their pension, the measure would cap the contribution rate for those making between $40,000 and $75,000 at 2 percent.

Regular class pension fund members making more than that would have to contribute 2 percent of their first $75,000 in salary and 4 percent of what they make above that. Senior administrators and elected officials would simply pay 4 percent of their full salary if they make more than $75,000.

The proposal is dramatically softer on state workers than the 5 percent contribution requirement initially sought by the committee and still being proposed by Gov. Rick Scott.

“This committee does not believe that the state worker is the enemy,” said the bill’s sponsor, Sen. Jeremy Ring, D-Margate. “We’re not demonizing the state workers.”

Ring reminded a committee room full of firefighters, police and emergency workers, though, that the measure has another committee stop, and in the Senate Budget Committee, it’s likely some of the panel’s effort to make the bill easier on state workers might be undone.

“I’m hopeful we can hold onto a lot of it,” Ring said afterward. “We’re going to try to.”

Pressed, Ring acknowledged that keeping workers who make less than $40,000 from having to contribute anything toward their pension was going to be difficult.

“The budget committee is going to look at that,” Ring said. “I’m not sure that ultimately that stays in.”

That exemption was put into the bill by an amendment by Sen. Charlie Dean, R-Inverness, a former sheriff. Sheriffs around the state have urged lawmakers – and did again in the committee on Thursday – to consider that many police and other government workers accept lower pay for the trade of a good pension that they don’t have to pay into.

Ring said he didn’t know how many pension fund members made under $40,000, but figured it was most. State workforce statistics show that nearly 75 percent of all state employees earn less than that, and 65 percent of workers are in the Florida Retirement System.

Another change made in the committee would make the employee contributions required only when the pension fund has less money than it would need to pay out all benefits.

The lone “no” vote on the committee for the bill came from Sen. Gary Siplin, D-Orlando.

While acknowledging that the new approach may not have full support as the bill goes through the process, Ring did note that 12 senators voted for the bill Thursday, and could probably be counted on to vote for the bill in its current form on the floor. That’s more than half way to a majority of 21 that would be needed to pass a bill and it’s a bipartisan group, Ring pointed out.

Doug Martin, a spokesman for AFSCME, a union that represents a large number of state workers, stopped short of saying the union would support the new version of the measure.

“It’s better than it was,” Martin said. “Much better.” Still, he too, noted that it may not stay as is.

Scott and Republicans in the House have said they want FRS members to put 5 percent of their salaries toward their pension as a way of showing $1.3 billion in savings as lawmakers try to close a budget gap.

–David Royce, News Service of Florida

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2 Responses for “From 5% to 2%: Retreat from Extra Pension Contributions; All Salaries Below $40K Exempt”

  1. Bob Z. says:

    If the proposal makes it through the House and is eventually signed by Scott I think the end result will be fair; however, the next thing to consider is the health benefit contribution changes. Those two issues affect their overall compensation so they should be looked together. While one can never make everyone happy when this is all over hopefully our teachers, police, firefighters, and State employees will be satisfied.

  2. PC MAN says:

    Still a middle class tax no matter how much perfume you spray on it.

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