Pension battle resumes in Florida
Andy Ford is the president of the Florida Education Association.
A fight over the future of Florida’s state pension program is back and groups are already lining up to fight some proposed changes. The bill if enacted into law would force state workers hired after July of 2015 into so-called cash-benefit plans. According to the U.S. Department of Labor, “benefits that are received are defined in terms of an account balance.”
The Florida Retirement System (FRS) is one of the best funded in the US, but certain lawmakers want to reduce the state’s contributions as a pre-emptive measure.
For now police and firefighters are exempted and could still participate in the traditional pension plan. But that has not set well with Florida’s other public sector unions. The state’s largest teachers union, the Florida Education Association, says exempting some groups but not others is unfair. The teachers association has been outspoken that the changes could put the retirement benefits of current state employees in jeopardy.
The main difference between a traditional plan and the cash-balance system is that a pension is guaranteed for life based off of an employees earnings at the time of retirement; the cash-balance system bases those payments off of how much money is in the employees’ account at the time of their retirement.
Last year’s pension reform bill died amid opposition from police and firefighter unions– which were not exempt under the former proposal. House Speaker Will Weatherford and Senate President Don Gaetz are promising the exemption for police and firefighters, as well as current employees and retirees. But groups opposed to the plan fear that steering new employees away from the pension will destabilize it financially–affecting those already in the system.
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