House Bill 2630 moves future state employees from a defined benefit plan to a defined contribution plan similar to private sector plans, says an Associated Press news report. It exempts teachers as well as state workers who are designated “hazardous duty,” including firefighters and law enforcement officers. It does not change the pension system for current employees or retirees.
The new law will affect employees hired after November 1, 2015, who are part of the Oklahoma Public Retirement System. It will phase out the current pension system during the next several decades and reduce the state’s unfunded pensions.
New state workers covered by the Oklahoma Public Retirement System will be required to contribute at least 3% of their salary to their retirement and the state would match employees’ contributions up to 7%.
The bill was proposed as a way of dealing with the underfunded status of Oklahoma’s current public pension system, which has an unfunded liability of $11 billion, according to the bill’s author, Oklahoma State Representative Randy McDaniel (see “Oklahoma Bill Seeks Transition to DC Plan”).
More information about the legislation can be found here.