Senate Bill 1894
Oklahoma Pension Legislation Actuarial Analysis Act (“Georgia” bill)
The bill applies to OPERS, the Judicial Retirement System and the Teachers Retirement System. The bill has three (3) prominent features. All retirement bills with fiscal impact must be introduced in odd years and voted on in even-numbered years. This can be bypassed for an “emergency” bill by a ¾ vote of each house. Each such bill must be analyzed for actuarial fiscal impact by a “Legislative Actuary.” The actuary is hired by the Legislative Service Bureau. Finally, any retirement bill with fiscal impact must contain adequate funding either through a lump-sum appropriation or an increase in contributions sufficient to pay the cost of the change. The bill permits the Legislature to grant Cost of Living Adjustments (COLAs) without following the restrictions in the bill. COLAs can be given by the Legislature as long as they do not exceed the actuarial assumption of the System. OPERS assumes it will pay a 2% COLA each year for actuarial purposes.
House Bill 1179 XX (Special Session)
OPERS Option C Retirement Benefit
Section 33 of the bill amends the “Option C” retirement benefit option in 74 O.S. § 918. Option C provides for a benefit paid to a member which is only slightly reduced from the maximum benefit. If the member dies before the passage of ten years, a beneficiary is guaranteed to receive the same payment for the remaining part of the 10 year certain period. Under current law, if a member dies before the passage of the ten year period, and the beneficiary isn’t alive or doesn’t survive for the ten year period, the estate of the member or the beneficiary receives the payment. The amendment permits OPERS to pay the present value of the payments in a lump sum so it can be distributed immediately.
OPERS Employee Contribution Rate
Section 34 amends 74 O.S. § 919.1 and makes the OPERS state employee contributions a flat 3.5%. The current rate structure of 3% on the first $25,000 of salary and 3.5% on the remainder is repealed. All state employees who earn at least $25,000 per year will only pay $125 more due to this increase.
OPERS Retiree Cost of Living Adjustment (COLA)
House Bill 1179 XX provides that any person receiving benefits from OPERS as of June 30, 2005, who is still receiving the benefit on July 1, 2006, will get a 4% increase in that benefit. The increased benefit will take effect with the payments and checks at the end of July. Retirees, disability retirees, Option C beneficiaries, and surviving joint annuitants will all get this increase. As an example, if the gross benefit was $1,000 per month, the new gross benefit will be $1,040.