An Act
ENROLLED HOUSE
BILL NO. 2293 By: Roberts (Dustin) of the
House
and
Paxton of the Senate
An Act relating to the Teachers ' Retirement System of
Oklahoma; amending 70 O.S. 2011, Section 17 -108,
which relates to matching contribution amounts;
providing for differential rates; defining terms;
modifying requirements with respect to summer school
programs; imposing requirements related to contracts;
providing exceptions; and providing methodology for
certain contribution rate .
SUBJECT: Teachers' Retirement System of Oklahoma
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 70 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 whose
employees are members of the Teachers ' Retirement System
("participating employer s"), shall match, on a pro rata basis, in
accordance with subsection B of this section the contributions of
members whose salaries are paid by federal funds or externally
sponsored agreements such as grants, contracts and cooperative
agreements. These funds shall be remitted at the same time as t he
regular contributions of members are remitted to the Teachers '
Retirement System of Oklahoma and deposited in the Retirement
Benefit Fund. RBH No. 8274
ENR. H. B. NO. 2293 Page 2
B. On an annual basis, the Board of Trustees shall set the two
contribution rate rates to be paid by contributin g employers as
provided in subsection A of this section. The Both contribution
rate rates shall be determined using cost principles established by
federal regulations and shall be consistent with policies,
regulations and procedures that apply uniformly t o both federally
assisted and other activities, and be accorded consistent treatment
through application of generally accepted accounting principles.
The Board shall approve the contribution rate rates for each fiscal
year ending June 30, no later than Ap ril 1 of the previous fiscal
year. The first rate shall be applied to service performed during
the regular school year of the participating employer. The second
rate shall be applied to service performed by members during a
summer school program of the p articipating employer. For the
purposes of this subsection , "summer school program " is defined as a
program offering academic enrichment f or students from Pre -K through
12th grades during the summer term after the close of the school
year. Members shall only be considered as providing service to a
summer school program if such service is provided pursuant to a
separate summer school contract between the member and the
participating employer. The term "summer school program " does not
include services perf ormed at a participating employer offering an
extended school year pursuant to Section 1-109.1 of this title, or
services performed by staff pursuant to a twelve-month contract with
the employer. The method applied to setting the second contribution
rate may take into consideration whether, or to what extent, such
service is likely to add to members' service credit or final average
salary; provided, however, the second rate shall not exceed one -half
(1/2) of the first rate established in this subsection. The actuary
retained by the Board may recommend such rates using assumptions
that apply to the group of those members whose service is subject to
the second contribution rate.
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
members, including interest earnings prior to July 1, 1968.
Contributions to and payments from the Teachers ' Savings Fund shall RBH No. 8274
ENR. H. B. NO. 2293 Page 3
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 notwithstanding that the minimum
compensation provided for an y member shall be reduced thereby.
Every member shall be deemed to consent and agree to the deductions
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 cl aims 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 Board 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 be 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 mem ber shall be closed and the amount
due the member as provided in Section 17 -105 of this title shall be
paid upon the filing of formal application. At the time such
membership is terminated the amount due 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 RBH No. 8274
ENR. H. B. NO. 2293 Page 4
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
receive monthly retirement benefits on such deposits,
the actuarial equivalent of a two -year period and each
succeeding fiscal year thereafter shall be transferred
to the Retirement Benefit Fund. The memb er may choose
any of the plans available in the Teachers ' Retirement
Act as a method of receiving monthly retirement
benefits on the money he has on deposit in the
Teachers' Deposit Fund or the Tax -Sheltered Annuity
Fund. The monthly retirement benefits p aid from the
Teachers' Deposit Fund or the Tax -Sheltered Annuity
Fund shall be in addition to the regular retirement
benefits and the money transferred from the Teachers '
Deposit Fund or Tax-Sheltered Annuity Fund shall not
be matched by the State of Oklah oma.
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.
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 member 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 RBH No. 8274
ENR. H. B. NO. 2293 Page 5
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 other funds to which interest
is to be credited. All income, interest and dividends derived from
the deposits and investments authorized by this act shall be paid
into the Interest Fund. On June 30, each year, interest shall be
transferred to the other funds as herein provided.
7. The Permanent Retir ement 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 endowment 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 maintenance of the retirement system shall b e
paid. The Board of Trustees shall cause to be prepared and adopt
annually an itemized budget showing the amount required to defray
the expenses for the ensuing fiscal year.
Transfers to and payments from this fund shall be made as
follows: first, from the Interest Fund; second, from any dedicated
revenue; and, third, from appropriation by the Oklahoma Legislature.
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 the Teachers '
Retirement System of Oklahoma.
9. The Suspense Fund shall be comprised of amounts transferred
to the fund as provided in this sec tion and Section 17-105 of this
title and obligations of the retirement system to any member or
person which cannot be legally discharged.
RBH No. 8274
ENR. H. B. NO. 2293 Page 6
10. Teachers' Deposit Fund.
Any member may request, prior to a pay period, that his or her
employer make additiona l 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, and 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 member
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 e ach
and every payroll or claim of a member for each
and every payroll claim period subsequent to the
date of establishment of the retirement system
the contribution payable by such member as
provided in this act. With each and every
payroll or claim the e mployer shall deliver to
the treasurer of the employer warrants issued to
the employees as shown to be due by the payroll
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 deliver 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 RBH No. 8274
ENR. H. B. NO. 2293 Page 7
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 the Teachers ' Retirement
warrants from the treasurer or proper disbursing
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 of
Oklahoma. Any college or university or other
educational institution or agency operated in
whole or in part by the state shall have th e
amount retained or deducted from the funds
regularly appropriated by the state for the
current maintenance for such educational
departments and institutions.
(3) For the purpose of enabling the collection of the
contributions of the members of the retir ement
system to be made as simple as possible, the
Board of Trustees shall require the secretary or
other officer of each 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 Executive Director of
the Board of Trustees of the Teachers ' Retirement
System. If additions to or deductions from this
list should be made dur ing the year such
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 inspection
and any member of the retirement system shall be
furnished with a statement of the amount of the
credit to his or her individual acc ount upon
written request by such member, provided the
Board of Trustees shall not be required to answer RBH No. 8274
ENR. H. B. NO. 2293 Page 8
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 impose d 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,
after ninety (90) days from the date of issue or
from transmittal for payment, it shall be the
duty of the issuing authority forthwith, 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 p rovisions
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 Teachers ' 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 f rom 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)
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 excess
of the amount necessary to purchase such service credit shall not be
allowed.
RBH No. 8274
ENR. H. B. NO. 2293 Page 9
13. Retiree Medical Benefit Fund.
The Retiree Medical Benefit Fund shall 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 described in Section 1316.3 of
Title 74 of the Oklahoma Statutes. All allocated assets and the
earnings thereon in the Retiree Medical B enefit Fund shall be held
for the exclusive purpose of providing retiree medical benefits
pursuant to Section 1316.3 of Title 74 of the Oklahoma Statutes.
The Retiree Medical Benefit Fund shall be administered in accordance
with the requirements under Sec tion 401(h) of the Internal Revenue
Code of 1986, as amended from time to time. An amount necessary to
pay the health insurance premiums for retired members as provided by
Section 1316.3 of Title 74 of the Oklahoma Statutes shall be
deposited each month i nto the Retiree Medical Benefit Fund.
RBH No. 8274
ENR. H. B. NO. 2293 Page 10
Passed the House of Representatives the 17th day of May, 2021.
Presiding Officer of the House
of Representatives
Passed the Senate the 24th day of May , 2021.
Presiding Officer of the Senate
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
THOMAS E. CUMMINS CONSULTING ACTUARY, INC.
2512 E. 71
st
Street , Suite D ∙ Tulsa, Oklahoma 74136 (918) 492-9658 ∙ (918) 492- 9659
January 18, 2021
Representative Dustin Roberts
Room 456.2
Re: RBH No. 6260
RBH No. 6260 modifies the provisions relating to the computation of
the contribution for OTRS employers.
RBH No. 6260 is a nonfiscal bill as defined by OPLAAA.
I am a member of the American Academy of Actuaries and meet the
Qualification Standards of the American Academy of Actuaries to
render the actuarial opinion herein.
Thomas E. Cummins
Thomas E. Cummins, MAAA
THOMAS E. CUMMINS CONSULTING ACTUARY, INC.
2512 E. 71
st
Street , Suite D ∙ Tulsa, Oklahoma 74136 (918) 492-9658 ∙ (918) 492- 9659
May 12, 2021
Representative Dustin Roberts
Room 456.2
Re: Conference Committee Substitute for Engrossed House Bill No.
2293
Under Conference Committee Substitute for Engrossed House Bill No.
2293 OTRS there will be contribution matching rates participating
employers. One rate is normal service. The second rate is for
teaching service during summer sessions that are part of a separate
contract and is to be used for increasing service and final average
compensation for retirement benefit service. The System actuary may
be consulted in determining the second rate.
Conference Committee for Engrossed House Bill No. 2293 is a non
fiscal bill as defined by the Oklahoma Pension Legislation Actuarial
Analysis Act.
I am a member of the American Academy of Actuaries and meet the
Qualification Standards of the American Academy of Actuaries to
render the actuarial opinion herein.
Thomas E. Cummins
Thomas E. Cummins, MAAA