FL House Approves Controversial State Retirement Changes
Posted April 14, 2017 12:30 am | Public News Service
TALLAHASSEE, FL – Public employees planning to spend
their careers in Florida could see big changes to their
retirement plans, the result of a controversial move by
the Florida House.
House
Republicans pushed
through a bill on Thursday that would default new
hires into a 401(k)-style savings plan, rather than a
traditional pension.
Rich Templin, legislative and political director of the
Florida AFLCIO, says the major policy change, which
passed along party lines, places workers' savings in
riskier investments, rather than a plan with defined
benefits. He says similar moves have proven costly and
unsustainable in other states, including West Virginia
and Michigan.
"This is damaging not only for the individual - it hurts
the system and, by extension, is really threatening what
has become a pillar of Florida's overall economy," he
explained.
Supporters of the measure say it will allow workers to
keep their contributions if they leave public employment
before the eight-year vesting period required by the
pension plan. But Democrats say the pension system is
financially healthy and shouldn't be changed.
The plan now goes to the Senate, where it could very
well end up being one of the bargaining chips during
House and Senate budget negotiations.
The Florida Retirement System currently has about
630,000 active members and 400,000 retirees, and more
than half of them are educators.
Lynda Russell, public policy advocate with the Florida
Education Association, fears this bill would be the nail
in the coffin for teaching in a state that already
struggles to retain qualified educators.
"Do we want to encourage them to stay, or do we simply
want to help them pack?" she asked. "I mean, we don't
want to give them any pay, we don't want them to have
job security, and now we are saying we want them to have
no hope of even a reasonable retirement."
Under the current system, a teacher hired today who
works 35 years in Florida would retire with a modest
pension of roughly $24,000 a year, but under the 401(k)
plan, that drops to just $9,600.
The proposal is wrapped in an appropriations bill that
lawmakers must pass in order to keep the Florida
Retirement System solvent in the long run.
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