OKLAHOMA CITY —
The proposed switch would not apply to pension systems for firefighters, police and troopers, which are different because of the nature of those professions, and teachers also won’t be included in the proposal being put together by Rep. Randy McDaniel, a point man for House leaders on pension negotiations.
McDaniel, R-Oklahoma City, a financial adviser and stock broker, said he proposes a shift to a 401k-style retirement account for state workers in which the state would match employee contributions in a range from 6 to 7 percent. A system like that, which would utilize the infrastructure already in place for the SoonerSave retirement system for state workers, would realize savings for the state that would then be redirected by statute to continue shoring up the unfunded liability of the existing pension system.
Among the key changes already enacted to the state’s pensions was a bill pushed by McDaniel in 2011 that prohibited automatic cost of living adjustments, or COLAs, for retirees without funding. That change alone immediately dropped the unfunded liability of the state’s seven pension systems by $5.5 billion, from $16.1 billion in 2010 to $10.6 billion in 2011. But that number trended back up to $11.6 billion in 2012, a sign McDaniel said suggests more work is needed.
“That’s a billion dollars. That’s real money,” McDaniel said. “No one can say that we don’t have a problem.”
McDaniel also is looking to close the asset-to-liability shortfall of some of the state’s pension systems through other changes, including a change to the pension for state troopers that allow retirees to continue to receive COLAs based on pay raises given to active duty personnel. He said he also wants to ensure some of the recent changes to the state’s pension system are safeguarded in the future through a proposed constitutional amendment that would require a super-majority of the Legislature to change them. Those proposals would be included in separate bills, McDaniel said.