The Florida Legislature advanced defined benefit pension limitations after the Senate Appropriations Committee on Thursday passed and sent to the full Senate a bill that would close the state defined benefit plan to some state employees, while providing an incentive for others to join the defined contribution plan.
Separately, the Florida House voted 74-42 on March 22 to pass a bill closing the Tallahassee-based Florida Retirement System's $126.3.8 billion defined benefit plan to all new employees as of Jan. 1, requiring them to enroll in the existing $7.6 billion FRS 401(a) plan. The measure, House Bill 7011, has not been sent to the Senate yet, said Ron Poppell, senior defined contribution programs officer, Florida State Board of Administration, whose $162.3 billion in assets includes the FRS defined benefit and 401(a) plans.
Senate Bill 1392 would close the FRS defined benefit plan to new elected officials and state employees classified as senior managers, requiring them to join the 401(a) plan. The bill would keep the defined benefit plan open for other state employees, but change the default enrollment for new employees to the 401(a) plan, requiring participants to actively decide to join the DB plan. In addition, it would add an incentive for employees to enroll in the 401(a) plan by reducing to 2% of pay the required annual participant contribution to the 401(a) plan, instead of the current 3%, with the employer making up the one-percentage-point reduction. The mandatory annual participant contributions to the defined benefit plan would remain at 3%. Among other provisions, the bill would raise defined benefit plan vesting to 10 years from eight years.
The full Senate, which was not in session Friday, hasn't taken action on the Senate bill.
Will Weatherford, House speaker, and Katie Betta, communications director for Don Gaetz, Senate president, couldn't be reached for comment.
