Florida Lawmaker Files DB to DC Bill
November 16, 2009 (PLANSPONSOR.com) – A Florida state senator has filed a bill (S.B. 660) that renames the Sunshine State’s defined contribution offering and forces all new employees into the DC plan after January 1, 2011.
The 91-page bill from Senator Mike Fasano calls for the Public Employee Optional Retirement Program (PEORP) to now be called the “Retirement Investment Program.” The DC program offers 20 investment options.
A Tallahassee Democrat news report said all current members of the Florida Retirement System (FRS), the defined benefit offering, would still be guaranteed their regular pension benefits. About 123,000 public employees at all levels of government – roughly 14% of the FRS membership – are now in the optional plan and membership continues to grow.
Fasano told the newspaper that his bill is intended to allow state, counties, school boards, and other public employers to cut their contribution rates, eventually, and the state will have some cushion on its necessary investment earnings rates. “It will save, in the short run, not much money,” Fasano told the newspaper. “But in the long run, it will save literally hundreds of millions of dollars for the taxpayers.”
Fasano also filed the bill during the last legislative session but didn’t actively pursue it. He said he wants an actuarial study of what it would mean, which will be completed before the 2010 session in March.
The text of the proposed bill is available here. More information about Florida’s retirement offerings is available here.
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