The Florida Retired Educators Association (FREA) says that legislation passed by the Senate aimed at ending retirement plan choice and pensions for certain new state employees – except for police and firefighters – is a big mistake.
“The legislation is fiscally irresponsible, would damage the education workforce, and plays favorites among sectors of the public workforce, ” says FREA in a statement.
“Passing retirement legislation without an analysis of the costs is beyond irresponsible,” said Nancy Hosie, a retired St. Lucie County science teacher and president of FREA. “We have yet to see an analysis that examines the cost of the legislation on the existing pension plan. The benefits of the current plan will have to be paid for decades into the future, and the changes enacted likely will increase liabilities and taxpayer costs just like what happened in Michigan.”
In Michigan, the State Employees’ Retirement System (SERS) pension plan was closed to new-hires when the plan was overfunded with 109 percent of assets on hand. As a result of the changes, the plan funding plummeted to 66.5 percent while the unfunded liability skyrocketed to $6 billion as of September 30, 2017.
“Florida has a serious problem recruiting and retaining teachers here in Florida – these are the people who prepare our future workforce. This bill further lowers teacher compensation via benefit cuts. It is short-sighted, dangerous and fiscally irresponsible,” Hosie said. “We hope House lawmakers will reverse course, examine the costs, and listen to Floridians who support providing competitive benefits to our teachers.”
“Other states that have replaced pensions with 401(k)-style accounts have seen taxpayer costs escalate while weakening public employers’ ability to recruit and retain experienced employees and undermining retirement security.”
The FREA says that S.B. 84 flies in the of face fiscal responsibility and public sentiment. Florida lawmakers are wise to carefully examine failed and costly pension experiments in other states and in Palm Beach. The Florida Retirement System (FRS) has a long history as one of the best-managed retirement systems in the country.
Rather than enacting flawed legislation, FREA is interested in working with policymakers to ensure the retirement system is financially strong and provides a modest retirement benefit for all Florida public employees who deliver essential taxpayer services.