TALLAHASSEE, RFla. A plan to overhaul Florida’s retirement system ended with lawmakers making no changes this year. But politics got in the way of a needed fix to a broken local pension system, and tried to repair the state pension system many say doesn’t need fixing.
Lawmakers spent most of the 2014 legislative session going back and forth on a state pension overhaul. But it was a needed municipal pension bill that got caught up in the mix.
Senator Jeremy Ring of Margate says, “I’m not sure there’s a financial expert in the world that would sound the alarms on the FRS. Everyone would sound the alarms on the local pensions.”
The Florida Retirement System for teachers, firefighters and state workers is about 87 percent funded. It is considered one of the strongest in the country. But some local pension plans covering police and fire departments are in bad shape. Some are 60 to 70 percent short. “As I’ve said all along, the real crisis in the state is the municipal crisis. Look at cities like Detroit, you can’t compare that to the FRS because that’s a municipal plan,” says Sen. Ring.
The city of Detroit filed for bankruptcy in large part due getting behind on local pension payouts. Cities in Florida aren’t there…yet. A municipal bill would have freed up cash for local governments to continue paying retirees.
The House Speaker combined the state pension overhaul with the local one. That’s when both bills died.
Scott Dudley says Florida’s League of Cities was disappointed. “What happened? Well politics happened. It basically just got caught up in the process.”
Senate Don Gaetz of Niceville told us, lawmakers will keep pushing for a statewide overhaul. “There was absolutely nothing that failed to pass that was a priority of Speaker Weatherford’s or mine other than the pension issue, and we’ll come back to that next year.”
Part of the reasons state pensions are fully funded: lawmakers borrowing from it in good years and not contributing during the bad ones
Florida TaxWatch says the municipal pension system is more than 10 billion dollars in debt. The group says the growing problem puts both local taxpayers and retirees at risk.