House votes to close down guaranteed pension

TALLAHASSEE, Fla. - New state employees like teachers, cops and firefighters will likely be saying sayonara to the pension plan.

The house passed a bill that would end traditional pension plans for new state employees, including teachers, cops and firefighters.

Here's how it would work: anyone hired after January 1, 2014 would be moved into more of a 401(k) style retirement system, which would subject them to the ups and downs of the market - instead of a guaranteed monthly pension.

According to the Associated Press, HB 7011 was approved 74-42 Friday afternoon. It does away with guaranteed pensions for workers hired as of January 2014. The measure replaces pensions with individual investment accounts similar to 401(k) plans. It's been a priority of House Speaker Will Weatherford.
http://www.fox4now.com/news/local/199570131.html

good move

Yes it is a good move why not do it that way .

It will create a shortage of people deciding to go into those jobs. It's hard enough to get qualified people to begin with in these key cogs of society. People know that they won't be rich by doing these jobs for a career, but they knew that the trade off was a comfortable retirement so they proceeded to go and make it a career. Unless the state comes up with a matching program of "X" percent that a person donates like the Fed system does, the quality of people will decline until we have the lowest common denominator in those spots.

What I want to know is this..... What is the plan for the money that the state saves by not having a retirement system in place for state workers? Remember the lottery? It was supposed to SUPPLEMENT the money provided by the legislature for education. That wasn't what happened and the legislators peed it away on frivolous things. Sure hope the state legislature is a part of this deal as well.

PACEDOG#1 wrote:It will create a shortage of people deciding to go into those jobs. It's hard enough to get qualified people to begin with in these key cogs of society. People know that they won't be rich by doing these jobs for a career, but they knew that the trade off was a comfortable retirement so they proceeded to go and make it a career. Unless the state comes up with a matching program of "X" percent that a person donates like the Fed system does, the quality of people will decline until we have the lowest common denominator in those spots.

What I want to know is this..... What is the plan for the money that the state saves by not having a retirement system in place for state workers? Remember the lottery? It was supposed to SUPPLEMENT the money provided by the legislature for education. That wasn't what happened and the legislators peed it away on frivolous things. Sure hope the state legislature is a part of this deal as well.

seems like to me they have been getting the pay up to standard private job level. so I don't see any reason they still cant recruit. I dot think they will have a hard time filling jobs honestly do you really?

its a nice perk but its created a system and this seems like a fair way for them to not have to break promises to people like yourself while fixing a issue in the future. Gov pensions is big problems for budgets all over.

I don't know what they are going to do with the saved money. id have to look and then I might now even believe it lol

I personally feel that this is a prudent fiscal policy decision . . . . . . . . it mimics many corporate models who have abandoned generous retirement systems and replaced them with the model of the 401(k). I say that assuming that the state will contribute or match an employees contribution up to a maximum amount. Any state continuing down a road of promising retirement benefits that are unfunded would put them on the path of corporations like American Airlines as an example that eventually made them bankrupt on paper.

As far as a reduction in the quality of employees I think is a stretch since most positions generally do not require a MBA. It is being fiscally responsible and I support the change.

PACEDOG#1 wrote:It will create a shortage of people deciding to go into those jobs. It's hard enough to get qualified people to begin with in these key cogs of society. People know that they won't be rich by doing these jobs for a career, but they knew that the trade off was a comfortable retirement so they proceeded to go and make it a career. Unless the state comes up with a matching program of "X" percent that a person donates like the Fed system does, the quality of people will decline until we have the lowest common denominator in those spots.

What I want to know is this..... What is the plan for the money that the state saves by not having a retirement system in place for state workers? Remember the lottery? It was supposed to SUPPLEMENT the money provided by the legislature for education. That wasn't what happened and the legislators peed it away on frivolous things. Sure hope the state legislature is a part of this deal as well.

The retirement is not the only thing why people get state jobs. The health insurance and benefits are very cheap. I have state health insurance and pay very little for it although I don't work for the state. I would rather have the 401K matching which I have now than the pension system. I can leave my job now and take my money w/ me rather than wait 10 years to be vested in the state w/ a little bitty pension.

Dreamsglore wrote:

PACEDOG#1 wrote:It will create a shortage of people deciding to go into those jobs. It's hard enough to get qualified people to begin with in these key cogs of society. People know that they won't be rich by doing these jobs for a career, but they knew that the trade off was a comfortable retirement so they proceeded to go and make it a career. Unless the state comes up with a matching program of "X" percent that a person donates like the Fed system does, the quality of people will decline until we have the lowest common denominator in those spots.

What I want to know is this..... What is the plan for the money that the state saves by not having a retirement system in place for state workers? Remember the lottery? It was supposed to SUPPLEMENT the money provided by the legislature for education. That wasn't what happened and the legislators peed it away on frivolous things. Sure hope the state legislature is a part of this deal as well.

The retirement is not the only thing why people get state jobs. The health insurance and benefits are very cheap. I have state health insurance and pay very little for it although I don't work for the state. I would rather have the 401K matching which I have now than the pension system. I can leave my job now and take my money w/ me rather than wait 10 years to be vested in the state w/ a little bitty pension.

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Exactly, good point.

It would be great if the pension assumptions were static. The problem is going to be many of the current folks in the plan had assumptions about contributions from new teachers. This can necessarily lead to actuarial imbalance and loss benefits for existing state employees. I never could understand why we could not have lockbox mentality in regards to actuarial tables in traditional pensions. The truth is that this transition is required because the assumptions were always faulty and politically influenced. People are going to be looking at real pension reductions when you cut off new contributions. I have never heard of one pension fund in America which does not have assumptions of continuing contributions, and in Il and NJ you have close to 50% underfunded pensions which will require increased contributions, higher taxes, and cola freezes on retirees......Florida has a much better administered fund, but there are gaps, and teachers are going to get screwed if you simply cut off new contributions without making up the pension actuarial assumptions........this is very similar to what was done in the Post Office, and when these new teachers quit contributing......we will slowly begin hearing Il and NJ stories.

2seaoat wrote:It would be great if the pension assumptions were static. The problem is going to be many of the current folks in the plan had assumptions about contributions from new teachers. This can necessarily lead to actuarial imbalance and loss benefits for existing state employees. I never could understand why we could not have lockbox mentality in regards to actuarial tables in traditional pensions. The truth is that this transition is required because the assumptions were always faulty and politically influenced. People are going to be looking at real pension reductions when you cut off new contributions. I have never heard of one pension fund in America which does not have assumptions of continuing contributions, and in Il and NJ you have close to 50% underfunded pensions which will require increased contributions, higher taxes, and cola freezes on retirees......Florida has a much better administered fund, but there are gaps, and teachers are going to get screwed if you simply cut off new contributions without making up the pension actuarial assumptions........this is very similar to what was done in the Post Office, and when these new teachers quit contributing......we will slowly begin hearing Il and NJ stories.

I disagree oat.

right now they have 'Fixed" pensions. these pensions are funded by the GOV. not a private plan that goes up and down and requires contributions or even growth to be guaranteed a payout. Current employees will continue to have that guarantee so stop with the scary fibs.

so stop with the scary fibs.


You need to pull your head out of the ground and take a look what is happening with government pensions. Tell the folks in Pensacola that their public pension crisis is a fib. Tell the teachers in NJ and IL that their underfunded pensions are a fib. Thirty years of the state not contributing to the pensions and they are underfunded in the range of 40-50%. Christy made cuts and the teacher unions screamed.....in Illinois they doubled the state income tax and hardly made a dent on their underfunding as teachers are being laid off. In Pensacola, the 12 million of pension contribution is resulting in huge budget imbalance.............what part of fib do you not understand when state wide the assumptions always required future contribution.....there will be shortfalls.......but your eyes are closed.