State Senator Jeff Brandes filed a bill Friday requiring elected officials to participate in the state’s “investment” retirement plan as opposed to the traditional pension system.
According to James L. Rosica of the Tampa Tribune, this investment strategy would be similar to a 401(K), but employers provide a fixed percentage of employees’ salaries to the plan each year. Members would choose investment options as well as be responsible for managing their own retirement accounts.
“Today I filed SB184 because elected officials should be serving for the #FL public not the FL #pension,” Brandes said in a tweet on Friday.
Brandes’ bill would make participation in the investment strategy compulsory for elected officials and some managers who enroll July 1 of 2013 or later.
In the last legislative session, House Speaker Will Weatherford attempted a similar proposal to call for current pension holders to be “grandfathered” in, but with new enrollees going into individual retirement investment accounts. Weatherford’s proposal, over 30 years, would have saved the state $9.8 billion.
Currently, state workers have their choice of a “defined benefit” plan or a traditional 401(K).
Florida’s pension is now valued at $133.7 billion; according to the State Board of Administration it has beat expectations for 2012-13 with a total fund gain of almost 11 percent. However, there is still a $19 billion “unfunded liability,” which Weatherford says will take $500 million a year to close the gap.
Brandes originally supported Weatherford’s House plan, but now expects the legislature to pass a “hybrid” version of the pension proposal next year.
