State workers opposed to tweaking defined benefit retirement system
Scrapping the state's retirement system isn't on the table, but defaulting workers into an investment plan is gaining support. Many are worried change could push the current system into collapse.
Law enforcement, teachers and other public workers came out in full force -- the state workers were strongly opposed to tweaking their defined benefit retirement system.
State pension strategist Ash Williams said the 87 percent funded current system is one of the nation's strongest because of three main reasons.
"First of all it has to have reasonable benefits, it has to have responsible funding and it has to have prudent investment," said Williams.
But some lawmakers said it costs too much. They want an individual investment plan. A Senate proposal would give new workers the option of either plan or default them into the investment plan after a certain amount of time.
That doesn't sit well with the Florida AFL-CIO.
"By hook or by crook a little bit by trickery, get people into the riskier investment plan, 401k-type plan, as opposed to the defined benefit pension plan," said Rich Templin, of Florida AFL-CIO.
The state workers' main concern was that tweaking the plan would ultimately lead to the defined system collapsing.
Former State Sen. Ron Silver said the math is simple.
"If you have less money coming in, that destabilizes the plan," said Silver.
But Sen. Rob Bradley voted for the plan. He said that the collapse is overstated and comparisons to a Ponzi scheme are extreme.
"It's not as dependent on new people coming in as is sometimes characterized because as you know, the definition of a Ponzi scheme is full dependent on new money that is coming in to pay the people who are already there," said Bradley, R-Orange Park.
Supporters of the investment plan option said it could save the state $60 billion over 30 years. State workers said they will earn less in the end because of the state contributing less.
Last year, the Florida House passed a bill that would have closed the current plan -- that proposal died in the Senate.
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