BusinessWeek reports that one proposal would require a pension plan to be at least 80% funded before a cost-of-living adjustment could be approved for retirees. Committee members also approved legislation that would replace the defined benefit plans for new statewide officials and members of the Legislature with an existing state 401(k)-style defined contribution plan called Save Oklahoma, which currently has 35,000 participants and $458 million in assets.
A measure by Representative Mark McCullough, to reform the firefighter pension system would reduce benefit levels, increase the years of service for normal retirement from 20 to 25 years, and raise employee contributions from 8% to 12% for all new hires while maintaining current benefits for active firefighters. According to BusinessWeek, lawmakers passed a similar plan for the police pension system.
Representative Danny Morgan said the 80% COLA funding rule might prevent retired teachers from ever getting raises. The Oklahoma Teacher’s Retirement System is only 48% funded and has a $10.4-billion unfunded liability.
The news report said the states pension systems have a collective $16.5-billion unfunded liability.