Florida is in the midst of an interesting debate over its state retirement system’s future, and almost all sides involved are getting something wrong about what’s going on.

Senate Republicans recently passed Senate Bill 84, which would close FRS’s pension benefits to most new hires, other than public safety. Future teachers, state workers, and municipal employees would be enrolled in the state’s Investment Plan, one of two options for FRS members. Because there’s no House companion bill, it’s unlikely the legislation will become law before the Legislature adjourns on April 30.

The bill’s supporters claim this will solve the state’s $43 billion pension funding shortfall, but closing a plan to new members doesn’t make that debt disappear. The Senate should have focused on creating a serious plan to get that pension debt paid down.

Opponents are right that SB84 doesn’t fix what it claims. The Palm Beach Post recently editorialized that Florida’s unfunded liabilities are “very manageable,” given the size of the state’s economy. But they’re also wrong that there’s no problem to be solved.

Florida could be managing its pension debt well, but it hasn’t been. Florida’s unfunded liabilities are only about 3% of state GDP, so the government shouldn’t have a problem with pension debt. And yet as financial markets from 2009-19 improved, FRS’s funding shortfall grew by about $10 billion.

It got worse in the last two years, as Florida had to recognize its long-standing investment assumptions weren’t realistic. The result is that there are billions more in pension debt than FRS previously acknowledged.

Florida’s pension debt problem is a real concern because contribution rates for public employees and government employers have grown just as the debt has. Apathy toward the funding shortfall means less money for school districts and cities, even as they’ve had to manage through the pandemic.

It doesn’t matter if there is enough money in the fund to pay out promised benefits for the next several decades. Unless Florida adopts a serious plan to get the pension debt paid down, costs in the near-term are going to create problems for today’s taxpayers and public workers.

There are multiple ways Florida can do this — here are just a few.