Senate committee amends COLA bill, sends to actuarial study

Senate Retirement committee passes amended COLA bill

OKLAHOMA CITY – The Senate Retirement and Insurance Committee in a special meeting on Thursday acted on a House bill that would provide a 2 percent cost of living adjustment for state pension retirees contingent on the outcome of an actuarial study of the pension systems.

Senator Dewayne Pemberton, R-Muskogee, is the Senate author of House Bill 2304 and filed a committee substitute to ensuring the bill followed the provisions of the Oklahoma Pension Legislation Actuarial Analysis Act (OPLAAA).

Among OPLAAA requirements are for fiscal retirement bills, which HB 2304 has been declared, to undergo an actuarial analysis before being passed into law. The analysis covers such topics as:

• the unfunded actuarial accrued liability which will result from the bill;
• the dollar amount of the annual normal cost which will result from the bill;
• and the dollar amount of the increase in the annual employer certification which will be necessary to maintain the system in a sound condition.

The Retirement and Insurance Committee approved sending HB 2304 for an actuarial study. Per OPLAAA, the actuarial analysis shall be returned to the Senate committee chair no later than Dec. 1 of the year it is requested. After the actuarial analysis is received, a fiscal retirement bill is eligible for consideration by committee (in this case the Senate Retirement and Insurance Committee) the following session, and should it pass out of committee, would be eligible for consideration by the entire Senate.

Senate President Pro Tempore Greg Treat allowed the special meeting of the Senate Retirement and Insurance Committee for consideration of HB 2304. The bill was among the topics studied by a pension reform working group formed by Treat.

“Republican leadership has done great work over the past decade to save the state pension systems from fiscal ruin. Years of mismanagement prior to Republicans leading the Capitol left billions of dollars in unfunded liabilities for the state, threatened the retirement of public servants, and drove up the borrowing costs for the state, local governments, and school districts,” said Senate President Pro Tempore Greg Treat, R-Oklahoma City. “OPLAAA is one of the crucial tools Republicans have used to shore up the state pension systems. We should follow laws like OPLAA that got us to this better position now. Public servants want and deserve a cost of living adjustment and HB 2304 can still deliver COLAs once the pension actuaries give the Legislature a report so that we have a complete picture of the costs and impacts of granting a COLA.”

Senator Pemberton said, “We don’t want to do anything to walk back the great progress Republicans have made in shoring up the state pension systems. Retired teachers, firefighters, police officers, and state employees deserve a cost of living adjustment. Laws like OPLAAA have been critical in the success story of state pension systems. We don’t know yet what the actuarial study will show, but it will give us a full picture when we consider to move forward with a 2 percent COLA without harming the funded liability of the pension systems.”