Gov. Rick Scott today spoke at a press conference for Floridians for Sustainable Pensions, a newly announced coalition of the tea party, libertarian, and business lobby groups that aims “to ensure that Floridians have an organized voice to encourage immediate reform of government pensions,” according to its website.
Here’s how the St. Pete Times characterized Scott’s message:
Scott wants all new employees put into a defined contribution, or 401k-style private plan, and pay 5 percent of their salaries into their retirement account. The House and Senate have rejected putting all employees into the defined contribution plan, with only the Senate requiring new employees who are either elected officials or senior management making more than $75,000 a year to be required to enroll in the defined contribution plan.
The reason: it creates a short-term deficit in the existing retirement fund, which is considered one of the strongest in the nation. If all 655,000 employees in the $126 billion Florida Retirement System were to retire today, the fund would be short $16.7 billion according to actuaries. However, most pension funds are designed to never be fully funded because they rely on investment returns to offset the contributions from employers and employees.
As the Times notes, the privately managed 401(k) plans Scott and Floridians for Sustainable Pensions want to move employees into would leave the state and municipalities off the hook if workers’ investments go sour, and would give investment managers “access to a vast new pool of money and profits.”
Floridians for Sustainable Pensions’ describes itself on its website as “a group of citizens, civic and business organizations concerned with Florida’s unsustainable government sector pension plans.” Its list of members doesn’t include any citizens, but it does feature a list of the powerful tea party, libertarian, and business lobby groups:
- Americans for Prosperity – Florida: instrumental in helping organize a session-opening tea party rally in Tallahassee
- Americans for Tax Reform: the flat tax advocacy group led by Grover Norquist, who recently promoted prison budget-saving in Tallahassee
- Associated Industries of Florida: powerful business lobby group
- Florida Chamber of Commerce: ditto
- Florida Tax Watch: a state watchdog group whose mission is to “ensure that taxes are equitable, not excessive”
- FreedomWorks Florida: fights for “lower taxes, less government, and more economic freedom”
- National Federation for Independent Businesses: opposes, among other things, local ordinances that help workers cheated out of wages they are owed
- The James Madison Institute: a free-market think tank