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.
Posted on Tue, June 10, 2008