Benefits February 24, 2011

Scott Pension Reform Presented to FL Legislative Panel

February 24, 2011 (PLANSPONSOR.com) – Lawmakers in the Florida House of Representatives grilled the policy chief for Governor Rick Scott at a hearing about Scott’s proposal to require all new employees to enroll in a defined contribution plan and move out of the state's DB plan.
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An Orlando Sentinel news report said Joe McVaney laid out the governor’s pension reform proposal during a House Government Operations Subcommittee. In addition to moving government workers to a DC plan and freezing the state’s current DB program, employees would contribute 5% of their salary to their pensions. Scott would also eliminate the annual 3% adjustments for new retirees and reduce the annual service credit.

The Governor’s plan would also close the Deferred Retirement Option Program (DROP) to new participation, effective July 1, 2011. The State University Optional Retirement Plan (SUSORP), the Community College Optional Retirement Plan (CCORP), and the Senior Management Optional Annuity Plan (SMSOAP) would also be closed as of July 1, 2011. Participants in these plans would become compulsory members of the defined contribution plan.

McVaney conceded that, with assets totaling nearly 88% of its liabilities, the Florida Retirement System is considered “healthy,” according to the news account.

“I think we have a budget issue and not a pension issue here in the state of Florida,” said Representative Alan Williams, according to the Sentinel. “Hopefully through this process we can educate our governor in that regard.”

The Scott proposal is here.  

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