Once again, the Florida legislature is hard at work trying to dismantle one of the last solid middle-class pension systems to be found. Despite a wealth of real problems it seems determined to ignore, it has quickly found time to once more take up the issue of trying to scrap a successful anti-poverty tool, in favor of a system that would transfer princely sums to Wall Street, while hanging hard working teachers, law enforcement officers and state and municipal workers out to dry.
Having failed to include the measure two years ago when they passed the 3 percent employee contribution, a new proposal (PCB GVOP 13-01) passed the House Government Operations Subcommittee after a heated debate last week. The bill would require employees who begin working for the state on or after January 1 to join a "defined contribution" plan, rather than a “defined benefit plan.” The change would equate to private sector swings from pensions to 401(k)’s, where employees' future benefits depend on the performance of the market through a certain basket of funds they are allowed to invest their contributions into.
Proponents of the bill (House Speaker Will Weatherford is among the most vocal) claim that it is a preemptive measure to "stabilize" future liabilities before there is a problem. However, there’s no evidence that there is, or ever will be a problem. In fact, there’s reason to believe that such a change could actually have the opposite effect, as the sudden halt in contributions from new employees destabilizes an otherwise healthy fund.
Such run-before-we-walk approaches have become a trademark of this state’s legislature and does not bode well for the new leadership. Whether it is prison privatization, Medicaid expansion or the pension of state employees, there never seems to be an absence of will among Florida lawmakers to rush forward initiatives favored by the American Legislative Exchange Council (ALEC) on the basis of flawed rhetoric, backed by virtually no evidence and often even evidence to the contrary.
The average FRS recipient earns a mere $1,554.25 each month in retirement. Are there egregious examples of high-paid public-sector executives earning far more than taxpayers would deem fair? Of course there are. If lawmakers are serious about saving money, how about looking at the top end of the system? Maybe we should consider implementing a ceiling on FRS’s monthly benefit, which currently can be as much as 100 percent of the average final compensation, measured over their highest five years of salary.
Perhaps monthly benefits, which pay off handsomely for people like our own county administrator who was already scheduled to receive over $7,000 a month, but will now have his benefit based on five more years at more than $30,000 in additional base salary in each, should be capped at something like $5,000. Maybe we should look at the DROP program and study how much money is being lost to employees who “retire” only to reapply for their old job after six months when they can double dip state pay and retirement benefits, even after getting a giant lump sum payment upon their "retirement."
No, instead of addressing actual problems, we ideologically attack the idea of a pension because it doesn’t coincide with the modern mission of the Republican party, which seems to be to return us to some sort of industrialist paradise -- a new gilded age. In a state like Florida, whose economy depends so heavily on disposable retirement income, it should be clear that such measures are counterproductive. But then again, this is Florida, where the people who decide such things are too busy carving out their own spot at the trough to consider things like data.
The FRS already took an enormous hit when legislators made sure that no new employee will ever again earn a cost of living adjustment in retirement, and when it stretched the timespan on the benefit formula to ensure lower amounts. Lawmakers should remember that not everyone gets to go work as a lobbyist for the industries they shilled for on Capitol Hill, or take home six-figure salaries with legislative staff or RPOF jobs after they’ve termed out and been good, reliable votes along the way. Some people work hard everyday and hope only to keep the meager benefit they’ve earned throgh their labors by sacrificing compensation today, so that it may be put away for tomorrow – and not in some Wall Street crap shoot.
The FRS is a successful program that has helped many Floridians enjoy at least some modicum of dignity and well-being in retirement. It is a healthy, self-sustaining system that should be a model for other retirement plans as this nation prepares to see a tripling of its elderly population, not something we toss into the dust bin so that our elderly can spend their last years working as greeters at the local Walmart. Prove there’s an actual problem or else leave it alone.
Dennis Maley's column appears every Thursday and Sunday in The Bradenton Times. He can be reached at email@example.com. Click here to visit his column archive. You can also follow Dennis on Facebook. Sign up for a free email subscription and get The Bradenton Times' Thursday Weekly Recap and Sunday Edition delivered to your email box each week at no cost.