The future of Florida's massive pension system for state and local government workers is now on the line.The Florida Senate passed a measure that would strip pensions for new hires beginning next year.Experts say the pension system in Florida is running dry."It's going to run out of gas. The only question is, when," Dr. Adrian Moore said.Moore is an economics expert with the nonprofit Reason Foundation.Moore says 20 years ago the Florida Retirement System's "liabilities versus assets" had a $14.5 billion surplus. After the recession in 2009, it became a $15 billion deficit. Now, it's at a $36 billion deficit.The Department of Management services claims by 2050, investment growth will erase the debt. "Which seems unlikely since it's the same people making the same investments in actually a much more volatile stock market," Moore said.More than 465,000 retirees and nearly 645,000 active, working members of the program are counting on the retirement system remaining sound. Republican lawmakers say the answer is a bill that brings a retirement overhaul. The bill would close the pension plan to new enrollees after July 1, 2022, and make an investment plan or 401K membership compulsory.Excluded from being dropped from the pension: firefighters, emergency medical technicians, police and corrections officers.The idea that the state pension for new hires would go away is devastating news for students on the campus of the University of Central Florida studying to be future teachers. "It's really scary knowing that everything is changing," Hannah McCray said.McCray is expected to begin work teaching special education next year. If the retirement changes become law she'll likely be shut out of the pension."Now I have to start worrying about, okay, what are my options? What if this doesn't work? Should I move to another state?" McCray said.Those already in the pension system are safe. However, retired state workers say shutting down the pension puts the investment risk for retirement unfairly on workers.Supporters of closing the pension say teachers and other state employees will have more control and portability with their retirement as they move from one job to the next.
The future of Florida's massive pension system for state and local government workers is now on the line.
The Florida Senate passed a measure that would strip pensions for new hires beginning next year.
Experts say the pension system in Florida is running dry.
"It's going to run out of gas. The only question is, when," Dr. Adrian Moore said.
Moore is an economics expert with the nonprofit Reason Foundation.
Moore says 20 years ago the Florida Retirement System's "liabilities versus assets" had a $14.5 billion surplus. After the recession in 2009, it became a $15 billion deficit.
Now, it's at a $36 billion deficit.
The Department of Management services claims by 2050, investment growth will erase the debt.
"Which seems unlikely since it's the same people making the same investments in actually a much more volatile stock market," Moore said.
More than 465,000 retirees and nearly 645,000 active, working members of the program are counting on the retirement system remaining sound.
Republican lawmakers say the answer is a bill that brings a retirement overhaul.
The bill would close the pension plan to new enrollees after July 1, 2022, and make an investment plan or 401K membership compulsory.
Excluded from being dropped from the pension: firefighters, emergency medical technicians, police and corrections officers.
The idea that the state pension for new hires would go away is devastating news for students on the campus of the University of Central Florida studying to be future teachers.
"It's really scary knowing that everything is changing," Hannah McCray said.
McCray is expected to begin work teaching special education next year. If the retirement changes become law she'll likely be shut out of the pension.
"Now I have to start worrying about, okay, what are my options? What if this doesn't work? Should I move to another state?" McCray said.
Those already in the pension system are safe. However, retired state workers say shutting down the pension puts the investment risk for retirement unfairly on workers.
Supporters of closing the pension say teachers and other state employees will have more control and portability with their retirement as they move from one job to the next.