The Florida Senate commissioned Milliman to conduct an actuarial study of the financial impact of closing the Florida Retirement System's defined benefit plan to some state employees, said Katie Betta, communications director for state Sen. Don Gaetz, the Senate president.
The study is expected to be completed April 12. It was ordered as part of legislation that will be taken up by the full Senate during the week of April 15, Ms. Betta said.
Milliman is the actuarial consultant for the Division of Retirement Services of the Florida Department of Management Services, which administers the $126.3 billion Florida Retirement System defined benefit plan, Tallahassee.
Senate Bill 1392 would automatically move new elected officials and senior state executives to a 401(a) plan and default all new employees to the 401(a) unless they act to change to the DB plan.
One provision of the bill offers an incentive for the 401(a) that would decrease the required employee contribution to 2% of pay from the current 3% and require the state pay the extra 1%. The mandatory annual defined benefit contribution for employees would remain at 3%. Another provision would raise defined benefit plan vesting to 10 years from eight years.
An earlier pension bill was approved by the House on March 22 that would close the defined benefit plan to all new employees and require them to enroll in the existing $7.6 billion 401(a) plan. According to a Milliman analysis, House Bill 7011 would have a total $2.8 million negative financial impact on state and other participating public employers in the fiscal year ended June 30, 2015, but a $66.3 million positive impact in the subsequent fiscal year and continued positive impact in the following years.
The Senate currently has no plans to take up House bill 7011, Ms. Betta said. If the Senate passes its bill, a joint Senate-House committee will meet to reconcile differences in the two bills.