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State News

October 17, 2013

Senate panel talks Oklahoma pension changes

Oklahoma City —

 

Battle lines were publicly drawn in the political fight over changes to the retirement systems for public safety workers, teachers and other state employees during a legislative hearing on Wednesday before a Senate committee.

Officials from groups representing teachers and firefighters told members of the Senate Pension Committee they oppose legislative efforts to end the traditional pension program for new hires and consolidate the administrations of the state’s several pension systems. Some version of both proposals has been endorsed by Republican leaders, including Gov. Mary Fallin, and is expected to emerge in the upcoming session.

Although details haven’t emerged, Fallin, state Treasurer Ken Miller and many Republican legislative leaders support an end to the traditional pension system for some newly hired state workers who would move to some kind of alternative 401k-style, or defined contribution, retirement account more common in private industry. They argue such a move would help shore up the roughly $11.6 billion in unfunded liability of the state’s seven pension systems, most notably a roughly $8.4 billion unfunded liability of the Oklahoma Teachers Retirement System.

Miller, who worked with Fallin on behind-the-scenes negotiations on pension changes last session, testified that he supports such a move for “non-hazardous duty workers.”

“Such a plan could take the form of a traditional defined contribution plan or a hybrid model,” Miller testified. “This would allow workers to earn benefits sooner and to take those benefits with them as their careers evolve.

“Further, the state could live within its means without balancing its books on the backs of future generations.”

Backed by Fallin, Miller also pushed hard last session for a proposal to consolidate the separate boards and administrations of the various state pension systems, but a bill never materialized amid fierce resistance from groups representing teachers and firefighters.

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