James Call
House Democrats say the push to change the pension system for government workers is based on flawed and unlikely assumptions.
Speaker Steve Crisafulli wants to overhaul the Florida Retirement System. The goal is to move new workers out of the traditional defined-benefits plan to a 401(K) type defined-contribution plan that would be more portable for when workers leave government jobs.
Reform efforts in the past stalled in the Senate where members note that with the ability to pay 86.6% of its obligation the FRS system is one of the healthiest pensions in the world.
House Republicans argue the 13% gap between cash on hand and what is owed is a financial catastrophe waiting to happen: The system is about $21 billion underfunded.
Rep. Dwayne Taylor, who has a master’s degree in public administration, scoffs at the suggestion. He explained that the gap has a potential to evaporate — FRS has been 100% funded in the past and swings in the market could close the gap again. And at the very least it is nothing for anyone to lose any sleep over.
“The flaw in that theory is that every employee in FRS is going to retire at the same time on the same day,” said Taylor, noting that some of the hypothetical retirees would not be vested or entitled to benefits.
“It’s like a mortgage and you sign a 30-year mortgage and in five years the bank demands you pay the full amount of the mortgage. How likely is the bank going to do that if you are making your payments? It’s not,” Taylor said.
The $160 billion FRS serves state and local government employees including teachers and first responders such as firefighters and police. Opponents fear workers will come out on the short end of any reform effort, forced to pay more for benefits that are not guaranteed.
House Democratic Leader Mark Pafford said it is an important issue to discuss because changes in state policy can ripple through society with other governments and private businesses following the state’s example.
“The state sets a baseline of standards and this is apple pie — you got to bring a quality of life to people and this is one component of that,” Pafford said. “This is critically important to the fabric we weave in Florida in terms of having a place that is friendly to workers — people who are actually making an economy vibrant.”
