Fla. State Workers DC Plan Still a Tough Sell

April 19, 2004 (PLANSPONSOR.com) - Trying to get state of Florida employees to switch out of a defined benefit program to a defined contribution plan continues to be a tremendously tough sell.

Even though state officials had expected 25% to 30% of employees to make the move, enrollment in the investment plan when the Legislature adopted it, a scant 4% of employees in the Florida Retirement System (FRS) had made the switch through the end of February, according to a Tallahassee Democrat report.

Also, not only did 96% stay in the defined-benefits plan, seven out of 10 didn’t even make a choice, but “defaulted” to stay put by ignoring the whole thing, according to a recent presentation to the members of the Florida Cabinet including Governor Jeb Bush.

The situation was a bit different among new hires. With that group, the investment plan was three times as popular as it was with the FRS membership at large. The investment plan drew 12% of new workers. The state started offering a DC plan almost two years ago.

Those who opt into defined contributions can invest their state-paid retirement money in a range of pension options, including stocks offered by Prudential, Fidelity, Nationwide, VALIC and ING Aetna.