The Florida Retirement System defined benefit plan would be closed to new participants as of Jan. 1 under a bill introduced Thursday and voted out of the Government Operations Subcommittee in the Florida House of Representatives.
By a 9-3 vote with one member absent, the subcommittee moved the bill, PCB GVOPS 13-01, to the State Affairs Committee, where it is pending.
The bill requires all new enrollees to participate in the $7.65 billion FRS 401(a) plan.
In addition, the bill's provisions include expanding investment options in the 401(a) plan and adding a self-directed brokerage account. The bill doesn't specify the number or type of new investment options.
The 401(a) plan now offers 20 investment options, managed by multiple investment management firms, said John Kuczwanski, communications manager for the Florida State Board of Administration, Tallahassee, whose $162 billion in assets includes the $131.8 billion FRS DB plan and the FRS DC plan. The DC plan doesn't offer a self-directed brokerage option.
The Division of Retirement of the Department of Management Services, which administers the FRS DB plan, hired Milliman to assist in performing an actuarial study to determine the fiscal impact of the bill on the state and other participating employers. The Department of Management Services plans to release the study Feb. 15, said Ben Wolf, DMS director of communications.
The bill would leave unaffected current participants in the FRS DB and FRS DC plans, who would continue to have a one-time option after their initial enrollment in either plan to switch plans.
FSBA officials have no comment on the bill, Mr. Kuczwanski said.
Gov. Rick Scott, one of the three FSBA trustees, couldn't be reached for comment on the bill. In 2011, Mr. Scott endorsed an effort to replace the FRS DB plan with a DC plan.
For the current fiscal year, ending June 30, FRS member employers are expected to contribute $2.3 billion to the DB plan and participants, $1.4 billion. In the fiscal year ended June 30, 2012, FRS employers contributed $276 million to the defined contribution plan and participants contributed $134 million, according to Mr. Wolf.
The bill is sponsored by the subcommittee and Rep. Jason T. Brodeur. Mr. Brodeur and Rep. Will Weatherford, House speaker, couldn't be reached for comment.