SEAN MURPHY Associated Press
February 18, 2014
OKLAHOMA CITY (AP) — Hundreds of teachers, firefighters and state employees rallied at the Oklahoma Capitol on Monday to protest proposed changes to the retirement system for public workers.
Many of the workers visited with their legislators and urged them to stop a Republican-backed plan to shift newly hired state employees from the current traditional defined-benefit pension system to a 401(k)-style defined-contribution retirement plan.
“That’s our security,” said Cheryl Tate, a 35-year teaching veteran from Lawton. “We’re upset. We want to know why they want to change it.”
Two bills already have passed through committees in the House and Senate that would shift newly hired state workers into the new retirement system, and Gov. Mary Fallin says she supports the effort. Although the measures don’t apply to teachers or firefighters, opponents of the bills say it’s likely teachers will be targeted next.
“When they come for one of us, they come for all of us,” said Linda Hampton, president of the Oklahoma Education Association. “Who is going to stand up for us if we don’t all stand up for each other?”
The Oklahoma Teachers’ Retirement System is the state’s largest public pension fund and accounts for about $8.4 billion of the state’s overall $11.6 billion unfunded liability, which is the amount needed to cover current and future obligations.
Sterling Zearley, the executive director of the Oklahoma Public Employees Association, which represents state workers, said the group currently has taken a neutral position on the bills and is focusing instead on getting a pay raise for state workers.
“We’re not opposing it,” Zearley said.
Zearley has said younger state workers have expressed an interest in a more portable retirement system.
Supporters of the bill say it will help reduce the estimated $11.6 billion in unfunded liability of the state’s retirement systems, which was caused largely by lawmakers failing to adequately fund the systems for decades. They also say the pension debt is hindering the state’s ability to improve its bond rating.
“We have a responsibility to our grandchildren to ensure they are not on the hook for this liability years from now,” said Rick Brinkley, R-Owasso, the author of the Senate bill passed last week.
Brinkley said younger workers also are more mobile and looking for a portable retirement plan, and that a 401(k)-style plan “is reflective of their needs.”
But opponents say Oklahoma already has made tremendous strides to shore up its unfunded pension liabilities. A bill passed in 2011 that required the Legislature to fund any cost-of-living allowances for retirees immediately reduced the unfunded liability of the state’s systems by more than $5.5 billion.
The House bill, dubbed the Retirement Security and Freedom Act, would apply to state employees hired after July 1, 2015, with the exception of most state prison workers who have a separate “hazardous duty” retirement plan. The bill sets a minimum employee contribution rate of 3 percent, with a maximum employer match of 7 percent.