The 2009 Legislative session saw relatively few bills enacted into state law regarding OPERS and its members.

Senate Bill 899 strengthened the law that concerns forfeiture of retirement benefits upon conviction of a felony. The bill added crimes related to campaign contributions or campaign financing, bribery, corruption, forgery or perjury related to the duties of any elected or appointed county or state officer which would require them to forfeit their benefits upon final conviction, or pleading guilty or nolo contendere.

There were also two bills passed related to the Uniform Retirement System for Justices & Judges (URSJJ) - Senate Bill 212 and House Bill 1254. These bills concern the funding and employer contributions to the URSJJ system.

For more information on these bills, click here.

The federal “Stimulus Package” (formally known as the American Recovery and Reinvestment Act of 2009) was signed into law on Feb. 17, 2009. Because of the new law, the IRS has changed the federal tax withholding tables. The new tables will only affect you if you direct OPERS or URSJJ to use tax tables to calculate your tax withholding. The new tables are in effect for retirees for April 2009 and subsequent months. The new tables may impact the amount of federal taxes you have withheld and your 2009 and 2010 tax returns. However, you are not required to use the tables.

The tax tables have changed to reflect a new tax credit and a one-time stimulus payment under the new federal law. These two new features are the “Making Work Pay Credit” and the “Economic Recovery Payment”.

Making Work Pay Credit

The Making Work Pay Credit only applies to retirees of OPERS or URSJJ who return to work after retirement. The credit is based on “earned income” for the taxable year. “Earned income” generally includes taxable compensation from employment, but does not include amounts you receive from a pension or annuity like your OPERS or URSJJ benefits. The credit is defined as the lesser of 6.2% of earned income or $400 ($800 if filing a joint return). It is a refundable credit treated as an overpayment of taxes and is received through a monthly reduction in the federal tax withholding from your paycheck. Retirees who do not return to work are not entitled to this tax credit.

Economic Recovery Payment

If you are receiving Social Security benefits, you will automatically receive a one-time $250 payment from the Social Security Administration. This should be paid no later than June 2009, and is called the Economic Recovery Payment. If you are employed and entitled to the Making Work Pay Credit, the Economic Recovery Payment will reduce the amount of your Making Work Pay Credit. As a result, you may end up owing the difference when you file your taxes.

A Note of Caution on Selecting Your Federal Withholding

The IRS has not issued separate tax withholding tables for retirees. They are the same as the tables used for employment. If your federal withholding on your employment and/or pension benefits is reduced enough by the new withholding tables, you may find that you owe taxes at the end of the year. For example:

• If you are employed and also receiving an OPERS or URSJJ benefit, you may not have enough federal taxes withheld because the withholding on both your paycheck and retirement benefit will be reduced for the same Making Work Pay Credit; or,
• If you are no longer employed, but the reduction in your monthly withholding during employment was significant enough, you may also owe taxes at the end of the year.

To address this issue, some retirees may want to adjust the federal amount withheld to more accurately reflect the amount of taxes they will likely owe. That can be done by completing a new Withholding Preference Certificate with OPERS or URSJJ. You can find this form on our website at www.opers.ok.gov/forms or contact us to send you one.

This information is provided as a courtesy to our members. OPERS and URSJJ staff members are not tax professionals and cannot give tax advice. We encourage you to consult with a competent tax advisor or the IRS for further information.

Withholding Preference Certificate

Federal Tax Withholding Tables – Important information about federal withholding can be found on pages 5 and 19-22.

State Tax Withholding Tables – Important information about state withholding can be found on pages 8 and 16-17.

The 2008 Comprehensive Annual Financial Reports (CAFRs) for OPERS and URSJJ are now available on our Publications page. This year's reports draw attention to OPERS’ core values and behaviors.

The six sections of the annual report are introduced by one of the six core values and behaviors the OPERS Board and staff adhere to in the administration of a strong, financially sound retirement system:

• Honesty and Integrity
• Accountability
• Quality
• Customer Service
• Teamwork
• Workforce Development

These values and behaviors serve as guideposts in meeting the daily challenges of serving a growing membership, as well as establishing and meeting long-term business goals. The System will continue to rise to new challenges with these fundamental beliefs influencing our decisions and guiding our actions.

The Stable Value Fund is a portfolio of highly diversified investment grade government bonds that are held in an account just for the participants in the state’s deferred compensation plan. In addition, Great-West Life & Annuity Insurance Company provides an insurance policy to guarantee the participants’ principal investment in this Fund. It is not the equivalent of Federal Deposit Insurance Corporation (FDIC) protection, but it is certainly added security for the participants. For more specific information, please click on the link below that will take you to the Great West website.

There will always be investment risks, but we believe that this is a time to stay calm and ride out the current economic storm. So consider very carefully before making decisions that affect your SoonerSave accounts.

http://www.dcprovider.com/PDF/ok/Oklahoma_SVF.pdf

The 2008 Regular Session of the Oklahoma Legislature passed only two bills that directly impact members of OPERS. HB 3112 and SB 1641 have both been signed in to law by Governor Henry. The major provisions of the two bills include a cost of living adjustment (COLA) for retirees, changes to rules affecting retirees returning to work, and changes in the way benefits are calculated for elected officials.

Cost of Living Adjustment

HB 3112 provides a four percent (4%) COLA for members who were retired as of June 30, 2007, and still receiving a benefit as of July 1, 2008. The COLA will be applied and members will see this increase in their monthly benefits paid in July 2008.

Rules changes for retirees returning to work

IRS Code and IRS regulations require a true separation from employment for OPERS members to receive retirement benefits in good faith.  Pre-arranged employment agreements between retiring members of OPERS and their previous employers are not considered a good faith separation. HB 3112 was passed to make pre-arranged re-hiring less likely. The bill prevents a retiree from returning to work with the same agency for a period of one (1) year unless the member waives the receipt of their OPERS retirement benefit and returns to work as a regular employee.  This applies to performing services under contract with the same employer also. 

Major revisions to elected officials’ benefits

SB 1641 becomes effective on August 21, 2008, and closes a loophole that allows non-elected service to be counted the same as elected service for retirement . Prior to the passage of this bill, any regular, non-elected member of OPERS who finished their career as an elected official, and had at least six (6) years in elected office, got to count all of their non-elected service as if they were in office for their entire career. This may have given certain elected officials a larger pension than they actually paid for throughout their career.

Under the bill, members who are elected officials prior to the effective date of the bill are not affected by the amendments.  Current OPERS members who are elected after the effective date will have a benefit cap of 100% of their highest annual salary that they received.  The loophole is eliminated completely for those who join OPERS after the effective date of the bill.  These members will receive a benefit consisting of two separate calculations. Their non-elected years will be multiplied by 2%, and their elected years multiplied by the applicable percentage selected and paid for by the member.

You must file a federal tax return for 2007 to be eligible for the stimulus payment. This filing requirement applies to some people who do not normally file, including many low-income households and recipients of Social Security, certain benefit recipients from the Department of Veterans Affairs and certain Railroad Retirement benefit recipients.

The actual amount depends on the information reported on your tax return. However, most working people will receive between $300 and $600 if filing single or $600 and $1,200 if married, filing jointly. The payment is not taxable and will not reduce your 2007 or 2008 refund or increase the amount you owe when you file your 2008 return.

Basic Eligibility Requirements

• You must file a 2007 tax form, i.e., Forms 1040, 1040A or 1040EZ, if you have at least $3,000 of qualifying income. The payment will be available to everyone with adjusted gross income less than $75,000 for single filers and $150,000 for married couples filing jointly.
• You also are eligible to receive an additional $300 per child. For example, this would mean up to $1,800 of tax relief for an eligible couple with two children.
• Recipients of Social Security and certain veterans' benefits are also eligible for rebates. Those who receive at least $3,000 from any combination of benefits from these programs will receive the payment. The IRS and Treasury Department will be working closely with the Department of Veterans Affairs and the Social Security Administration, along with beneficiary organizations, to ensure that all eligible individuals are able to receive their payments.

In addition to filing a 2007 tax return, you, and our spouse if filing jointly, must have a valid Social Security number. Payments will not be sent to nonresident aliens, estates, trusts or people who are or could be claimed as a dependent on someone else's tax return (e.g., many high school or college students claimed on their parent’s taxes).

Low and moderate-income workers, including veterans, can get free tax help through the Volunteer Income Tax Assistance (VITA) program.  Call 1-800-906-9887 to locate the nearest VITA site.

The Tax Counseling for the Elderly (TCE) Program provides free tax help to people age 60 and older. As part of the IRS-sponsored TCE Program, AARP offers the Tax-Aide counseling program at more than 7,000 sites nationwide during the filing season. To find an AARP Tax Aide site, call 1-888-227-7669 or visit the AARP Web site at www.aarp.org.

The Internal Revenue Service will begin issuing rebates in early May. The IRS recommends choosing direct deposit when you file, but paper checks are also available and will be mailed starting May 16. There is an Economic Stimulus Calculator on the IRS website, www.irs.gov, which can help you estimate the amount of your payment.