State employees who choose a 401(k)-style retirement plan instead of one with a guaranteed benefit would get a discount on how much the state deducts from their paychecks under a bill filed Friday. Under the measure (SB 1392), filed by Sen. Wilton Simpson, employees who join the investment plan would contribute just 2 percent of their income to their retirement, while those in the more traditional pension plan would still contribute 3 percent.
“By creating incentives for employees to opt into the investment plan, the choice to have more control over individual retirement savings remains in the hands of the employee,” said Simpson in a statement issued by his office. “This will ultimately help us to increase the pension fund’s long-term sustainability and give more of our state employees the option of having control of their own financial future just as their peers do in the private sector.”
The plan would also automatically put new employees into the investment plan unless they choose the traditional pension plan in a certain time period, and increase the vesting period for new employees by two years, to 10. It is less sweeping than a House plan to close the traditional pension program to new members and put them in the investment plan, a key priority for Speaker Weatherford.
Via The News Service of Florida.