OKLAHOMA CITY – Governor Mary Fallin today signed a bill that creates a more flexible pension system for future state workers.
House Bill 2630 moves future state employees from a defined benefit plan to the 401k-style, defined contribution plan being widely used in the private sector. The law does not cover employees designated “hazardous duty” – including firefighters and law enforcement officers—or teachers. It does not change the pension system for current employees or retirees.
“This bill allows flexibility for future state employees to take the money they have accrued if they change careers,” said Fallin. “That helps us to make state employment more attractive and aids in recruitment.”
The bill also starts to address the unfunded liability within the debt-burdened system that currently exits.
“Oklahoma pension systems currently have $11 billion in unfunded liabilities,” said Fallin. “The system as it stands today is not financially sound or sustainable. Moving future hires to a 401k-style system helps to ensure we can pay our current retirees and employees the benefits they have already earned.”
HB 2630 affects employees hired after November 1, 2015 who are part of the Oklahoma Public Retirement System (OPERS). The system will phase out the state’s current pension system over the next several decades and reduce the state’s unfunded pension.
HB 2630 requires those new OPERS employees to contribute a minimum of 3 percent to their retirement, and the state will match the employees’ contributions up to 7 percent.
The law will also apply to officials elected or appointed after November 1, 2015.