A bill placing all new state employees in a 401(k)-style retirement plan passed a House subcommittee on a party-line vote Thursday, setting up a major showdown between legislative Republicans and public workers’ unions.
But even as they supported the bill — a key priority of House Speaker Will Weatherford, R-Wesley Chapel — some GOP members warned that they wanted to know more before it comes to the floor.
The measure (PCB GVOPS 13-01) passed the House Government Operations Subcommittee after a contentious and at times emotional three-and-a-half-hour meeting. The bill would require all employees who begin working for the state on or after Jan. 1 to join a “defined contribution” plan.
Supporters of the proposal say it will stabilize future retirement costs at a time that the current pension plan is relatively sound and can support current employees and retirees.
“Because we’re addressing this early enough, we don’t have to make any changes for them,” said Rep. Jason Brodeur, R-Sanford, who chairs the subcommittee.
But opponents argued that the proposal could destabilize the pension plan by removing the flow of funding that would come from new members. And they said the strength of the fund was a reason not to change it.
“It’s not just before we have a problem,” said Rich Templin of the AFL-CIO. “There is no modeling that shows there will ever be a problem.”
In some ways, the fight over whether to force new employees into a defined contribution retirement plan is a remnant of the battle two years ago over whether to require employees to contribute 3 percent of their income toward their retirement. While lawmakers approved that change, they balked at the idea of closing the “defined benefit” plan to new workers.
“It seems like every time the Florida Retirement System is trying to do better, we do something to try to tear it apart,” said Rowan Taylor, president of Metro Dade Firefighters.
Opponents of the change also complained that the committee went forward before receiving a study showing how the proposal might affect the pension plan — and whether it might cost current employees more in the long run if the fund falters.
“We’re not fools,” said Rep. Irv Slosberg, D-Boca Raton, in a speech that drew applause from bill opponents. “This is just a cost-shift. And my advice is, find someone else’s pocket to pick. Leave our workers alone.”
Weatherford has made it clear that the bill is one of his major initiatives this year. It comes at the same time that the Senate is considering legislation that would give cities more flexibility in how they use the insurance premium taxes that fund local police and firefighters’ pensions.
But some Republicans on the panel said their support was contingent at least in part on the results of the study by the Department of Management Services, due Feb. 15. Rep. Frank Artiles, R-Miami, was among those saying he was voting for the bill with a caveat.
“The caveat is that I want answers to these very important questions,” he said.
401K,s are a great way to invest in your retirement as opposed to pensions..
If you only thought the state hired knuckle draggers before wait until you see what low wages and poor benefits gets you.
As a 15 year member of the FRS special risk class let me say this. I WILL stay in the pension plan. Remember they cannot force current vested members to switch. My hope is that by the Conservative thiefs in the Florida Legislature raiding the FRS and leaving it under funded they will have to pay dearly. Either they can buy me out at a very healthy lump sum, or every year come up with money to pay my yearly retirement benifits. BTW the lump sum payout would be right at 1 million. I WILL not switch to the investment plan. That will be my revenge to conservatives.
Just by freezing the COLA and requiring 3% they have taken billions out of the pockets of the middle class public servants of Florida…
All this will do is create a “brain drain” on hiring the best and most qualified candidates for State and County jobs. It will eventually show in education down the road toward our most important asset – children. The Florida Retirement System is one of the best managed retirement funds in the nation. Why would Tea Party Republicans want to change that other than to raid the funds for own agendas. It’s all hype and markings of Koch brothers http://en.wikipedia.org/wiki/Koch_Industries
I wonder with all of these cuts, who is going to come to the aid of the public, when they scare all of the public workers out of the state! They already work for peanuts and now even worse benefits.
Cash cow says
So when one works than the fewer years needed to be vested then those funds they paid in would just be gone for the current retirement system? I would think it would be pretty substantial for the current system to loose such funds. If the current system is sound and isn’t broke, why do some want to break it?
Public sector workers can’t be a protected class in our capitalist economy.
Bob Z. says
Hang in there everyone…our next Democratic Gov. will do his or her best to right the wrongs that have, and will be done.
Sherry Epley says
Any push to change retirement plans into higher risk 401K plans has as its motive the desire to have even LESS responsibility/loyality to employees. . . and of course to bolster Wall Street. This is clearly yet another symptom of the degradation of the foundations of the work place in the USA:
– Union Busting
– “Right to Work” laws= right to fire without cause (often to avoid paying benefits/decent wages)
– Outsourcing= movingAmerican jobs to indentured servitude in 3rd world countries(for increased profits)
– Cost cutting= less training, pressure to produce/sell, focus on quantity not quality
– Less Department of Labor resources/protections
– Fewer in-house human resource departments
Ect., ect., etc.
How are we to create meaningful, life sustaining jobs in our country when there is very little interest in making our work place, economy and country better. . . JUST on maximizing profits. . . regardless of what that does to the future of our nation???Our economy isCONSUMER BASED. If we continue to have downward pressure on wages, where does the money come from to continue CONSUMING to keep our economy healthy? Where there is no concern for employees from the employer, then there is to loyalty by the employees to the employer. And the economic divide just gets bigger, and the rich get richer! Consider the possibility that MONEY is becoming the new GOD of our species.