The Florida Legislature is poised to pass additional reforms to the Florida Retirement System, a public pension plan benefitting more than 40 percent of Baker County’s workforce.
Three week’s into the 2013 session, bills are making their way through both the house and senate to move the Florida Retirement System away from a “defined-benefit” plan to a more risky “defined-contribution” plan for new hires.
The existing defined-benefit system guarantees pension benefits based on a worker’s top annual earnings and years of service. The defined-contribution plan functions as a 401K-style investment plan that’s subject to the ups and downs of market forces.
The house bill (7011) filed in February by Rep. Jason T. Brodeur (R-Sanford) and pushed by House Speaker Rep. Will Weatherford (R-Wesley Chapel, FL), would automatically enroll government employees hired after January 1, 2014 into the investment plan.
The senate bill (1392) filed by Sen. Wilton Simpson (R-New Port Richey) takes a more flexible approach.
It would give new hires the option of enrolling into the investment, or defined-contribution, plan or the traditional plan. If they fail to make a choice, they’ll default into the investment plan, not the defined-benefit plan as they do today.
Sen. Simpson’s proposal would require elected officials and senior management employees to enroll in the investment plan, however.
The senate bill also includes incentives to attract workers to the defined-contribution plan.