Wednesday, May 11, 2011

Governor Fallin Signs Key Pension Reform Legislation into Law

Reforms Will Reduce Pension Systems’ Unfunded Liability by Over $5 billion

Governor Mary Fallin yesterday signed several key pieces of pension reform legislation into law at a public bill signing with state leaders. The bills aim to provide a boost to the fiscal solvency of the state’s public employee pension systems, which are currently troubled with $16 billion in unfunded liability. 

“Pension reform is about creating a sustainable future for our state budget and our state retirement systems,” Fallin said. “We can’t keep allowing these systems to go deeper and deeper into debt without serious consequences. By beginning the reform process today, we are helping to ensure that we don’t one day face a crisis scenario where the state is simply unable to deliver on the benefits we’ve promised our retired workers.”

One bill, HB 2132, authored by House Speaker Kris Steele and Senate Pro Tem Brian Bingman, would reduce unfunded liability in state pensions by $5 billion by requiring the legislature to provide a funding source for cost of living adjustments (COLA’s). Fallin said the commonsense measure restored fiscal responsibility to the system.
“We can’t promise to increase pension payments without identifying where that money is coming from,” Fallin said.

“That’s the sort of behavior that put the state of Oklahoma $16 billion in the red when it comes to our pension systems. HB 2132 changes that and ensures that any COLA increases are fully funded and fiscally sound.”

Rep. Randy McDaniel
R-Oklahoma City
In addition to HB 2132, Fallin also signed the following pension reform measures into law, all authored by Senator Mike Mazzei and Representative Randy McDaniel:
  • HB 1010: increasing the retirement age for new members of the Uniform Retirement System for Justices and Judges (URSJJ) who started work after January 1st of this year. For new members with 8 years of service, the measure increases the normal retirement age from 65 to 67 years old. For new members with 10 years of service, the measure increases the normal retirement age from 60 to 62 years old.
  • SB 377:  Raising the normal retirement age for new teachers from 62 to 65 years of age and establishing a minimum age of 60 for full retirement benefits for teachers who meet the rule of 90. Currently, there is no minimum age requirement for those employees whose age and service equals the sum of 90.
  • SB 794: Ensuring that elected officials are treated the same as other public employees when calculating retirement benefits. Also, applying the same minimum retirement ages to all new public employees as SB 377 does to new teachers: a minimum age of 60 when the rule of 90 is met and a normal retirement age of 65.
  • SB 347: providing for the forfeiture of a municipal officer or employee’s retirement benefits upon conviction of crimes related to their office (bribery, corruption. etc)
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