Bloomberg reports the bill increases the number of years a new teacher must work to become eligible to participate in the Oklahoma Teachers Retirement System (OTRS) from five to eight years. It also increases from 62 to 65 the age at which a new teacher would become eligible for retirement.
Another key change would require that any cost of living allowance, or COLA, granted to retirees be funded by the Legislature (see OK Lawmakers Approve Pension COLA Funding Measure). Lawmakers have traditionally granted 2% COLAs during election years, even if the allowances weren’t funded, according to the news report.
Senator Mike Mazzei, who wrote the bill, said that move alone is expected to reduce the overall unfunded liability of the five pension systems by more than $5 billion. James Wilbanks, director of OTRS, said the system has a $10.4 billion unfunded liability, and the change would reduce that amount by $2.9 billion.
Mazzei added that his plan is designed to keep Oklahoma’s bond rating from being downgraded, the news report said.The bill now goes to the state House.