TALLAHASSEE, Fla. – A Senate committee on Monday narrowly backed a controversial change in the state pension plan and endorsed an overhaul of the health-insurance program for state employees.
The Governmental Oversight and Accountability Committee voted 4-3, along partisan lines, to change the default retirement option for newly hired public employees, including school teachers, county workers and state employees. Under the bill (SPB 7030), new workers who do not actively choose to join the traditional pension plan or a 401(k)-type investment plan will default into the investment plan six months after they are hired.
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Sen. Dennis Baxley, R-Ocala, chairman of the panel, said the revision does not take away the initial choice for workers to pick the traditional pension plan and that moving employees into the investment plan could help those who do not vest in the pension plan, which requires at least eight years of service to obtain benefits.
“No one is taking anything away,” Baxley said.
But he also conceded the pension bill as well as legislation revamping the health-insurance program for state workers are House-backed priorities that could be part of the two chambers' final negotiations on a state budget.
“I mainly want to get this over to (the) Appropriations (Committee) so it can be part of that discussion,” Baxley said about the pension bill. “We might have some different tires and wheels on it before it gets to the floor.”
Democrats opposed the bill because of the default option, although the legislation has other provisions, including expanding eligibility benefits for firefighters who develop cancer “in the line of duty.”
Sen. Darryl Rouson, D-St. Petersburg, said moving new workers into the investment plan rather than the traditional pension plan would put them financially at risk.
“New employees, who do not feel confident or knowledgeable enough to make a (pension plan) selection, should be defaulted to the safest plan, not the most risky plan,” Rouson said. “In fact, it's risk-shifting.”
Rouson's amendment that would have maintained the traditional pension plan as a default was defeated in a voice vote. Another amendment, which would have increased a public agency's match in the investment plan for its employees from 3 to 6 percent, was also rejected.
The bill's narrow passage was helped by the appointment of Sen. Wilton Simpson, R-Trilby, to the panel, replacing Sen. Frank Artiles, R-Miami, who resigned last week. Without Simpson, the legislation would have failed in a tie vote.
The Senate committee approved another bill (HB 7007) that would allow employees to choose among four different levels of health-insurance benefits beginning in 2020. The proposl would provide an incentive for employees to choose coverage that would cost less than the amount of money the state contributes for premiums.
If employees choose lower-premium plans, which could carry higher deductibles, they could receive additional benefits, ranging from a salary increase to other health coverage benefits.
Sen. Tom Lee, R-Thonotosassa, who sponsored a similar bill (SB 900), said the legislation is aimed at overhauling “an arcane” health-insurance plan that provides few incentives for providers or employees.
But Rich Templin, a lobbyist for the Florida AFL-CIO, warned the cheaper health-insurance plans could represents “a cost shift from the state to the employees in terms of health insurance.”
“It may put more money into a state worker's pocket, but it has much higher out-of-pocket expenses,” he said.