The Florida House today passed priority pension reform legislation.
“The time has come for pension reform. I am proud of the House’s passage of this reasonable proposal that will provide savings for Florida’s taxpayers and financial certainty for our state, while most importantly offering future employees a meaningful retirement benefit they control,” said House Speaker Will Weatherford. “By being proactive and addressing this issue now, we have been able to develop a thoughtful solution without affecting any of the benefits our current employees and retirees have been promised and deserve.”
CS/CS/HB 7011 closes the defined benefit pension plan to new employees enrolled on or after January 1, 2014, and would require them to participate in the defined contribution investment plan. Employees currently enrolled in the defined benefit plan of the Florida Retirement System will not be affected. The legislation also provides a new death benefit to future members of the Special Risk Class, which would require that the employer must purchase a life insurance policy equal to 10 times the employee’s salary. It also maintains the disability benefit offered under current law to all FRS employees.
“Today the House took an important step to enact meaningful reforms to Florida’s public employee pension system. These sensible reforms will protect current employees and offer a sound investment plan to future employees, while being realistic about the commitments our state government can continue to make,” said bill sponsor Rep. Jason Brodeur. “By making small changes now, we can replace an antiquated, unsustainable pension system with something more certain and avoid making drastic changes in the future.”
In January, Speaker Weatherford identified pension reform as a priority in the House and Senate’s “Work Plan Florida.” According to a study commissioned for CS/CS/HB 7011, the reform plan will result in increased savings for taxpayers beginning in Fiscal Year 2016-17. The bill previously passed the House Appropriations and State Affairs Committees.