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Benefits February 17, 2012
Okla. Lawmakers Approve Change in Firefighters’ Pension Plan
February 17, 2012 (PLANSPONSOR.com) - A bill, HB 2320, approved by the Oklahoma House of Representatives, modifies interest rate provisions within the Oklahoma Firefighters Deferred Option Plan (DROP).
Reported by Rebecca Moore
The rate of return will be 7.5% instead of the current rate of return guaranteed to be the better of the market performance or 7.5%, whichever is higher, the Associated Press reports. The measure also increases the employee contribution rate from 8% to 9% of gross salary and raises the employer contribution rate from 13% to 14% of paid gross salaries.
Based on current annual payroll figures for the system, the higher contribution rates will generate approximately $2.5 million per year from employer contributions and $2.5 million annually in additional employee contributions for a total of approximately $5 million, according to the Associated Press.
In addition, HB 2320 increases the percentage of insurance premium tax allocated to the firefighters’ retirement system from 34% to 36%. Based on previous year collections, that change will provide approximately $3.5 million per year in additional revenue for the system.