, Muskogee, OK

Oklahoma News

October 16, 2013

Senate panel discusses state pension changes

OKLAHOMA CITY (AP) — Battle lines were publicly drawn in the political fight over changes to the retirement systems for public safety workers, teachers and other state employees during a legislative hearing on Wednesday before a Senate committee.

Officials from groups representing teachers and firefighters told members of the Senate Pension Committee they oppose legislative efforts to end the traditional pension program for new hires and consolidate the administrations of the state’s several pension systems. Some version of both proposals has been endorsed by Republican leaders, including Gov. Mary Fallin, and is expected to emerge in the upcoming session.

Although details haven’t emerged, Fallin, state Treasurer Ken Miller and many Republican legislative leaders support an end to the traditional pension system for some newly hired state workers, who would move to some kind of alternative 401k-style, or defined contribution, retirement account more common in private industry. They argue such a move would help shore up the roughly $11.6 billion in unfunded liability of the state’s seven pension systems, most notably a roughly $8.4 billion unfunded liability of the Oklahoma Teachers Retirement System.

Miller, who worked with Fallin on behind-the-scenes negotiations on pension changes last session, testified that he supports such a move for “non-hazardous duty workers.”

“Such a plan could take the form of a traditional defined contribution plan or a hybrid model,” Miller testified. “This would allow workers to earn benefits sooner and to take those benefits with them as their careers evolve.

“Further, the state could live within its means without balancing its books on the backs of future generations.”

Backed by Fallin, Miller also pushed hard last session for a proposal to consolidate the separate boards and administrations of the various state pension systems, but a bill never materialized amid fierce resistance from groups representing teachers and firefighters.

Phil Ostrander, the legislative liaison for the Oklahoma State Firefighters Association, argued that major changes already have been made to the state’s pensions and that those changes will put the systems on a path to financial recovery over time.

“There seems to be some urgency to make these changes now, now, now,” Ostrander said. “We’re not giving these reforms a chance to work yet.”

Among the key changes to the firefighters’ pension approved last session were increasing the amount that firefighters, municipalities and the state pay into the system each year, and increasing the age and length of service for newly hired firefighters to become eligible for retirement benefits.

Although firefighters likely wouldn’t be included in a switch to a defined contribution plan, Ostrander said it’s still possible the rank-and-file firefighters, a powerful lobbying influence at the Capitol, would stand with groups representing teachers and state workers to oppose such changes to their systems.

“It’s going to depend on what’s introduced as to whether you see firefighters out at the state Capitol en masse.”

Sen. Rick Brinkley, chairman of the Senate Pension Committee, said the purpose of Wednesday’s study was not to develop specific proposals, but to bring all the stakeholders together to hear their concerns.

“Our objective is going to be to try and get to the table as quickly as possible, so that way no one is caught off guard when session starts and we’ve at least got a good starting point, and I think today was the beginning of that,” said Brinkley, R-Owasso.

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