RBH No. 6260
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SENATE FLOOR VERSION
April 5, 2021
AS AMENDED
ENGROSSED HOUSE
BILL NO. 2293 By: Roberts (Dustin) of the
House
and
Paxton of the Senate
[ Teachers' Retirement System of Oklahoma -
contributions - nonfederal source of funds ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 7 0 O.S. 2011, Section 17 -108, is
amended to read as follows:
Section 17-108. A. Each local school district, or state
college or university, or State Board of Education, or State Board
of Career and Technology Education, or other state agencies agency
whose employees are members of the Teachers ' Retirement System,
shall match, on a pro rata basis, in accordance with subsection B of
this section the contributions of members whose salaries are paid by
based on the member's regular annual compensation, regardl ess of the
source of funds, except federal funds or externally sponsored
agreements such as grants, contracts and cooperative agreements ,
which shall be calculated pursuant to subsection B of this section .
These funds shall be remitted by the member's employer at the same RBH No. 6260
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time as the regular contributions of members are remitted to the
Teachers' Retirement System of Oklahoma and deposited in the
Retirement Benefit Fund.
B. On an annual basis, the Board of Trustees shall set the
contribution rate to be pai d by contributing employers because of
the use of federal funds as provided in subsection A of this
section. The contribution rate shall be determined u sing cost
principles established by federal regulations and shall be
consistent with policies, regulati ons and procedures that apply
uniformly to both federally assisted and other activities, and be
accorded consistent treatment through application of gene rally
accepted accounting principles. The Board shall approve the
contribution rate for each fiscal ye ar ending June 30, no later than
April 1 of the previous fiscal year. No additional contribution by
the member or employer shall be required or allowed because of any
other nonfederal source of funds in subsection A of this section.
C. All the assets of the retirement system shall be credited
according to the purpose for which they are held to one of eight
funds, namely: The Teachers ' Savings Fund, the Retirement Benefit
Fund, the Interest Fund, the Permanent Retirement Fund, the Expense
Fund, the Suspense Fund, the Teachers ' Deposit Fund, and the Retiree
Medical Benefit Fund.
1. The Teachers' Savings Fund shall be a fund in which shall be
accumulated the regular contributions from the compensation of RBH No. 6260
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members, including interest earnings prior to July 1, 1968.
Contributions to and payments from the Teachers ' Savings Fund shall
be made as specifically provided in each plan available within the
retirement system.
2. The deductions provided for in the plans within the
retirement system shall be made notwit hstanding that the minimum
compensation provided for any member shall be reduced thereby.
Every member shall be deemed to consent and agree to the deduc tions
made and provided for herein and payment of salary or compensation,
less the deduction, shall be a full and complete discharge and
acquittance of all claims and demands whatsoever for the services
rendered by such person during the period covered by such payment,
except as to the benefits provided under this act. The employer
shall certify to the Boa rd of Trustees on each and every payroll, or
in such other manner as the Board may prescribe, the amounts to be
deducted, and each of the amounts shall b e deducted, and when
deducted shall be paid into the Teachers ' Savings Fund, and shall be
credited to the individual account of the member from whose
compensation the deduction was made.
3. Following the termination of membership in the retirement
system for any member who has been absent from service for five (5)
years in any period of six (6) consecutive years, the Teachers'
Savings Fund Account of such member shall be closed and the amount
due the member as provided in Section 17 -105 of this title shall be RBH No. 6260
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paid upon the filing of formal application. At the time such
membership is terminated the amount d ue the member as provided in
Section 17-105 of this title shall be transferred to the Suspense
Fund.
4. Upon the retirement of a member, the balance of money he or
she had in the Teachers' Savings Fund shall be transferred to the
Retirement Benefit Fund.
5. Retirement Benefit Fund.
a. After August 2, 1969, there shall be transferred from
the Teachers' Savings Fund for those members drawing
retirement benefits from the Teachers' Retirement
System of Oklahoma an amount necessary to provide the
monthly annuity payments and pension payments as
required in Section 17 -107 of this title. In addition
the fund shall consist of monies received from any
state dedicated revenue, monies received from state
appropriations, monies received from federal matching
funds, and the residue of the interest on investments
after the requirements of Section 17 -107 of this title
have been fully met. The Retirement Benefit Fund
shall consist of an amount of money necessary for the
making of retirement payments to retirees.
b. Should a member have deposits in the Teachers ' Deposit
Fund or the Tax-Sheltered Annuity Fund and wish to RBH No. 6260
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receive monthly retirement benefits on such deposits ,
the actuarial equivalent of a two-year period and each
succeeding fiscal year thereafter shall be tra nsferred
to the Retirement Benefit Fund. The member may choose
any of the plans available in the Teachers ' Retirement
Act as a method of receiving month ly retirement
benefits on the money he has on deposit in the
Teachers' Deposit Fund or the Tax -Sheltered Annuity
Fund. The monthly retirement benefits paid from the
Teachers' Deposit Fund or the Tax -Sheltered Annuity
Fund shall be in addition to the regul ar retirement
benefits and the money transferred from the Teachers '
Deposit Fund or Tax-Sheltered Annuity Fund shall not
be matched by the State of Oklahoma.
c. From the Retirement Benefit Fund shall be paid all
monthly retirement benefits.
d. At the death of a retired member who has retired under
the Maximum Plan of Retirement, Option 1 or Option 4,
the balance of money the member has in the Teachers '
Savings Fund shall be transferred to the Retirement
Benefit Fund and the amount due the beneficiary or his
or her estate under Option 1 or Option 4 shall be paid
from the Retirement Benefit Fund. RBH No. 6260
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e. At the death of both a retired member and the retired
member's spouse, who had retired under Option 2 or 3,
any balance in the Teachers ' Savings Fund shall be
transferred from the Teachers' Savings Fund to the
Retirement Benefit Fund.
f. At the death of a retired me mber who had retired under
Option 5, the balance of any monies the member had in
the Teachers' Savings Fund shall be transferred to the
Retirement Benefit Fund for the purpose of making a
lump-sum settlement to the beneficiary or his estate.
Providing that if the surviving spouse elects to
receive the balance under the Maximum Plan of
Retirement or Option 1 the member 's money, if any, on
a monthly basis, constituting actuarial equivalent of
two (2) years' payments, and each year thereafter the
annual actuarial equivalent, shall be transferred from
the Teachers' Savings Fund for the purpose of paying
monthly retirement benefits to the spouse under this
option.
6. The Interest Fund is hereby created to facilitate the
crediting of interest to the various othe r funds to which interest
is to be credited. All income, interest and dividends derived from
the deposits and investments authorized by this act shall b e paid RBH No. 6260
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into the Interest Fund. On June 30, each year, interest shall be
transferred to the other funds as herein provided.
7. The Permanent Retirement Fund shall consist of the
accumulated gifts, awards, and bequests made to the retirement
system, and transfers from the Suspense Fund, the principal of which
is hereby held and dedicated as a perpetual endo wment of the
retirement system and shall not be diverted or appropriated to any
other cause or purpose unless specifically provided for in such
gifts, awards or bequests.
8. The Expense Fund shall be the fund from which the expense of
administration and m aintenance of the retirement system shall be
paid. The Board of Trustees shall cause to be prepared and adopt
annually an itemized budget showing the am ount required to defray
the expenses for the ensuing fiscal year.
Transfers to and payments from this f und shall be made as
follows: first, from the Interest Fund; second, from any dedicated
revenue; and, third, from appropriation by the Oklahoma Legislat ure.
All monies for the operation of the Teachers ' Retirement System
of Oklahoma shall be paid from the Expense Fund upon the approval by
the Board of Trustees and the checks signed by two people designated
to sign such checks by the Board of Trustees of t he Teachers'
Retirement System of Oklahoma.
9. The Suspense Fund shall be comprised of amounts transfe rred
to the fund as provided in this section and Section 17 -105 of this RBH No. 6260
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title and obligations of the retirement system to any member or
person which cannot be legally discharged.
10. Teachers' Deposit Fund.
Any member may request, prior to a pay period, t hat his or her
employer make additional deposits for him or her, for tax -sheltered
annuity purposes. However, the amount deposited shall not exceed
the limits as defined in Section 402(g) and Section 415 of the
Internal Revenue Code of 1986, as amended, a nd applicable federal
regulations. All such deposits shall be credited to the member 's
account in the Teachers ' Deposit Fund for the purchase of a tax -
sheltered annuity. The amount thus accumulated, with earnings,
shall be used upon the member 's retirement, separation from service,
death or disability to purchase an annuity in addition to his or her
regular service retirement allowance. The amount a mem ber
accumulates in the Teachers' Deposit Fund, not including interest,
may be used to pay distributions in the case of hardship as provided
in Section 403(b)(11) of the Internal Revenue Code of 1986, as
amended, and applicable federal regulations.
11. Collection of Contributions.
The collection of members ' contributions shall be as
follows:
(1) Each employer shall cause to be deducted on each
and every payroll or claim of a member for each
and every payroll claim period subsequent to the RBH No. 6260
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date of establishment of the retirement system
the contribution payable by such member as
provided in this act. With ea ch and every
payroll or claim the employer shall deliver to
the treasurer of the employer warrants issued to
the employees as shown to be due by the payr oll
or claim, together with a warrant or warrants in
favor of the Teachers ' Retirement System as shown
by the payroll or claim.
(2) The treasurer or disbursing officer upon delivery
of the warrants and a true copy of the payroll or
claims as provided above shall register the
warrants as provided for the registration of
other school warrants, and shall deliv er to the
employer warrants issued in favor of the
employees, and shall deliver warrants issued in
favor of the Teachers ' Retirement System and the
copy of the payroll or claims to the school
district superintendent as designated by the
Board of Trustees. For the purpose of collecting
contributions of teachers in the public schools,
the superintendent of a school district is hereby
designated to receive t he Teachers' Retirement
warrants from the treasurer or proper disbursing RBH No. 6260
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officer of the several school districts for the
purpose of transmitting such warrants and payroll
or claims to the Executive Director of the
Teachers' Retirement System of the State o f
Oklahoma. Any college or university or other
educational institution or agency operated in
whole or in part by the state shall have the
amount retained or deducted from the funds
regularly appropriated by the state for the
current maintenance for such e ducational
departments and institutions.
(3) For the purpose of enabling the collection of the
contributions of the members of the retirement
system to be made as simple as possible, the
Board of Trustees shall require the secretary or
other officer of eac h employer-board or agency,
within thirty (30) days after the beginning of
each school year, to make a list of all teachers
in its employ who are members of the retirement
system, certify to the correctness of this list,
and file the same with the Executiv e Director of
the Board of Trustees of the Teachers ' Retirement
System. If additions to or deductions from this
list should be made during the year such RBH No. 6260
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additions or deductions shall likewise be
certified to the Board of Trustees of the
Teachers' Retirement System.
(4) The State Treasurer shall furnish annually to the
Board of Trustees a sworn statement of the amount
of the funds in his or her custody belonging to
the retirement system. The records of the Board
of Trustees shall be open to public inspecti on
and any member of the retirement system shall be
furnished with a statement of the amount of the
credit to his or her individual account upon
written request by such member, provided the
Board of Trustees shall not be required to answer
more than one such request of a member in any one
(1) year.
(5) Failure of any superintendent, officer, or other
person to discharge the duties imposed upon him
or her by this act shall render him or her or his
or her bondsman liable for any loss occasioned
thereby to the Teachers' Retirement System or the
employees of the school district, or both.
(6) On a showing by the Teachers' Retirement System
that a warrant, voucher or check issued to it
has, for any reason, been lost or never received, RBH No. 6260
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after ninety (90) days from t he date of issue or
from transmittal for payment, it shall be the
duty of the issuing authority forthwi th, without
any indemnifying bond or other requirements, to
issue a duplicate thereof in lieu of that which
was lost, to the Teachers ' Retirement System; and
the Teachers' Retirement System shall save
harmless any school district or agency of state
government making payment under the provisions
hereof to the State Teachers ' Retirement System
if the original warrant, voucher or check is
later presented for payment and same is paid
after a duplicate warrant, voucher or check has
been issued and paid to the Te achers' Retirement
System, and any loss sustained therefrom shall be
charged to the Interest Fund.
12. Rollover Contributions and Direct Trustee -to-Trustee
Transfers from Other Plans.
Any member may purchase credit for service, to the extent
specified in this title, with rollovers from an eligible retirement
plan as defined by the Internal Revenue Code of 1986, as amended
from time to time. A member may also purchase permissive service
credit, as defined by Code Section 415(n)(3)(A), with a direct
trustee-to-trustee transfer from a governmental Code Section 403(b) RBH No. 6260
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plan or governmental Code Section 457(b) plan. All rollovers and
direct trustee-to-trustee transfers shall be allowed to the extent
permitted by federal law. Rollovers or direct transfers in ex cess
of the amount necessary to purchase such service credit shall not be
allowed.
13. Retiree Medical Benefit Fund.
The Retiree Medical Benefit Fund sh all be maintained as a
subaccount under the Retirement Benefit Fund. The Retiree Medical
Benefit Fund is composed of all assets contributed to this
subaccount to pay the retirement system 's portion of the monthly
retiree health insurance benefits describe d in Section 1316.3 of
Title 74 of the Oklahoma Statutes. All allocated assets and the
earnings thereon in the Retiree Medical Benefit Fund shall be held
for the exclusive purpose of providing retiree medical benefits
pursuant to Section 1316.3 of Title 7 4 of the Oklahoma Statutes.
The Retiree Medical Benefit Fund shall be administered in accordance
with the requirements under Section 401(h) of the Internal Revenue
Code of 1986, as amended from time to time. An amount necessary to
pay the health insuranc e premiums for retired members as provided by
Section 1316.3 of Title 74 of the Oklahoma Statutes shall be
deposited each month into the Retiree Medical Benefit Fund.
COMMITTEE REPORT BY: COMMITTEE ON RETIREMENT AND INSURANCE
April 5, 2021 - DO PASS AS AMENDED