The OPERS staff has prepared this summary of 2015 retirement legislation for our members. The following is a description of new legislation affecting members of the Oklahoma Public Employees Retirement System. The implementation of the legislation may initiate new policies, rules, and procedures in the coming months.
HB 1376 (Rep. Randy McDaniel)
Effective November 1, 2015
House Bill 1376 further clarifies and defines aspects of the new Defined Contribution (DC) plan set forth in HB 2630. HB 2630 was signed by Governor Mary Fallin on May 30, 2014. It directs OPERS to establish a tax-qualified defined contribution retirement system for those members who join the system on or after November 1, 2015, including statewide elected officials and legislators. The following is a summary of key provisions of the bill:
Only those employees who are employed on more than a part-time basis are eligible to participate in the new Defined Contribution (DC) plan. Eligibility is tied to the receipt of benefits, which only those employees who work more than part-time are eligible to receive.
Enrollment dates for both the 457(b) plan and the 401(a) plan will begin the month following employment, not the entry date. This alignment allows for ease of administration. The IRS requires the delay for the 457(b) plan.
Employees who begin employment on or after November 1, 2015, with an employer who is excluded from the DC plan and then later go to work for a DC employer will join the DC plan upon employment with the DC employer. The exclusion does not follow the employee. This does not affect anyone first hired before November 1, 2015.
- Session Employees
Session employees will have the option to participate in the DC plan. That option is irrevocable.
Employees will contribute a minimum of 4.5% of their salary and the employer will contribute a 6% match. Alternately, employees can also contribute 7% of their salary and receive a 7% match from their employer.
An employee who leaves the DC plan, but then returns to employment, will receive credit for previous service and be vested at the same percentage as when they left employment. All employer contributions will remain in the plan to offset administrative costs. Statute already includes the forfeiture language, but HB 1376 clarifies the existing language and adds the vesting language.
- Qualified Domestic Relations Orders (QDROs)
Language that was only relevant to the Defined Benefit (DB) plan was deleted. Alternate payee distribution will not be tied to the distribution or death of a member in the DC plan. This language was previously signed into law in Senate Bill 462 (please see below).
SB 462 (Sen. Rick Brinkley)
Effective November 1, 2015
Senate Bill 462 relates to qualified domestic orders. More specifically, Senate Bill 462 allows benefits to be paid under a qualified domestic order to an alternate payee before the OPERS participant has started to receive benefits and allows the benefits to continue to be paid to an alternate payee after the participant has died. To qualify as an alternate payee, a former spouse is required to have been married to the participating employee for a period of not less than thirty continuous months immediately prior to the proceedings from which the qualified domestic order is issued.