House Bill 2078 moved the vesting schedule from 10 to 11 years and raised the minimum age for receiving retirement benefits to 50. The measure also raised firefighters’ contribution rate from 8 percent to 9 percent. Cities’ rates rose from 13 percent to 14 percent, and the state’s percentage of the insurance premium tax allocation from 34 percent to 36 percent.
Gov. Mary Fallin signed HB 2078 into law, but she vetoed another bill that would have allowed new state employees to opt out of the traditional pension program in favor of a defined contributions plan.
Other ideas on the table include a proposal to consolidate the boards, staffs and offices of several state pension plans into a single organization. Lawmakers tabled the consolidation proposal this year but may take it up again in 2014.
Also next year, Fallin is expected to push lawmakers to approve a proposal requiring new employees to participate in a defined contribution program similar to a 401(k) plan. The plan would provide retiring employees with a payout based on past contributions and investment gains or losses.
Members of Keep Oklahoma’s Promises are worried that the state is moving away from traditional pension plans to defined contribution programs. They contended that changing the pension system could hurt Oklahoma teachers, firefighters and state workers.
Sipe said the state’s current pension plans are built around the concept that participants pay into the system, just like other Americans pay into Social Security.
“We pay a significant portion of our paycheck every time we get paid into that system,” he said. “The system works, and I think there’s significant evidence to prove that.
“Perhaps it needs some reforms, and we’ve actually agreed to those reforms and that’s occurred in the last three years. And our position is, simply give it time to work.”
Area lawmakers said the Legislature is likely to take up pension reform again in 2014, but it’s too early to predict how that discussion will go.