NORMAN — The $36.8 million in pay raises that will be coming to some of our state’s lowest-paid employees may come at a cost to future state workers.
That’s the contention of some Oklahoma legislators who say the tradeoff for raises of between 5 and 13.5 percent is a change in the retirement plan for newly-hired state workers. The election-year raises come about after a compensation study found wide discrepancies in some areas of state pay compared to private sector workers.
If the legislation advances and the governor approves, new state employees will be switched to a 401(k) style plan where workers and the state contribute a defined amount each pay period. Those investments are directed by the worker and are portable if an employee leaves state service.
It’s the kind of plan that most modern employers offer as old-style pensions go the way of Linotype machines. Legislative backers say the switch is needed to whittle down an $11 billion in unfunded pension liabilities.
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