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Politics

Pension Reform Debate a Fight Over Facts

January 11, 2011 - 6:00pm

Sen. Jeremy Ring, D-Margate, said Wednesday he is waiting for facts before he begins crafting legislation on pension reform -- but in the debate so far, both sides claim they have "facts" on their side.

Officials from the AFL-CIO stated earlier this week that the Florida Retirement System was financially sound and not in need of reform, but Ring disputes that. He said the FRS should be fully funded, not at its current 87 percent rate.

To say that theres not a crisis here is inaccurate, said Ring, who chairs the Governmental Oversight and Accountability Committee in the Senate which deals with the retirement system.

Unions have rebuffed reform efforts, pointing to reports showing that state and local retirement plans made up 2.37 percent of expenditures in 2008, while some municipalities throughout Florida contend retirement benefits exceed 50 percent of their payrolls.

Ring said that unions are looking at it the wrong way, and that retirement benefits take up an average of 20 to 25 percent of local government payrolls statewide.

Legislators have discussed a number of options for cutting retirement expenditures, including requirements for employee contributions and removing the option of a defined benefit plan to new hires, but Ring said a formal bill is at least a month away. Actuarial studies that will be released in three weeks will give him and his committee a better, unbiased view.

Unions, however, are miffed about any possible reduction in benefits, and note that state employees have not received a pay raise in the past five years. Gary Rainey, president of Florida Professional Firefighters, said he is willing to look at some changes, like reworking the DROP program that allows employees to double dip -- to receive retirement benefits and a salary at the same time -- but is against any comprehensive overhaul of the retirement system.

I think the system is actuarily sound, Rainey said.

Any changes should not come as a one-size-fits-all approach, Rainey argued, because requiring a defined contribution, or 401k retirement plan, would not be ideal for high-risk employees like police officers and firefighters.

Sen. Jim Norman, R-Tampa, took umbrage at cities and counties looking for what he called a bailout from the state for retirement-benefit contracts to which they agreed.

They can go back to their own firefighters and police and renegotiate, Norman said.

While Ring said he doesnt take that view, he does see comprehensive reform, not just the minimal changes preferred by the unions, as inevitable.

Reform is coming, he said.

Even though there is no specific bill, employee contributions could be a part of the final reform bill.

Were one of the last states in the nation that doesnt have an employee contribution, Ring said.

But Ring wants to wait to build a bill from solid numbers and statistics.

Reach Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859.


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