Oklahoma 2022 Regular Session

Oklahoma House Bill HB2486 Compare Versions

Version 1 (Old)

Version 2 (New)

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1	1		RBH No. 3808
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29		-	SENATE FLOOR VERSION
30		-	April 13, 2022
	28	+	STATE OF OKLAHOMA
31	29
	30	+	2nd Session of the 58th Legislature (2022)
32	31
33	32		COMMITTEE SUBSTITUTE
34	33		FOR ENGROSSED
35		-	HOUSE BILL ~~NO.~~ 2486 By: Frix and Randleman of the
	34	+	HOUSE BILL 2486 By: Frix and Randleman of the
36	35		House
37	36
38	37		and
39	38
40	39		Pemberton of the Senate
41	40
42	41
43	42
44	43
45		-	[ defined contribution system - certain measures
46		-	increasing certain contributions for system as
47		-	nonfiscal retirement bills - employer matching amount
48		-	- effective date ]
	44	+
	45	+
	46	+	COMMITTEE SUBSTITUTE
	47	+
	48	+	An Act relating to the defined contribution system;
	49	+	amending 62 O.S. 2021, Section 3103, which relates to
	50	+	Oklahoma Pension Legislation Actuarial Analysis Act
	51	+	definitions; establishing certain measures increasing
	52	+	certain contributions for system as nonfiscal
	53	+	retirement bills; amending 74 O.S. 2021, Section
	54	+	935.5, which relates to employer and employee
	55	+	contributions; increasing employer matching amount
	56	+	for certain contributions ; further increasing
	57	+	employer match requirement under certain
	58	+	circumstances; exempting certain contribution rate
	59	+	increases from Oklahoma Pension Legislation Actuarial
	60	+	Analysis Act; updating statutory language; and
	61	+	providing an effective date .
	62	+
	63	+
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50	65
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52	67
53	68		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
54	69		SECTION 1. AMENDATORY 62 O.S. 2021, Section 3103, is
55		-	amended to read as follows:
56		-	Section 3103. As used in the Oklahoma Pension Legislation
57		-	Actuarial Analysis Act:
58		-	1. “Amendment” means any amendment, including a substitute
59		-	bill, made to a retirement bill by any commi ttee of the House of
60		-	Representatives or Senate, any conference committee of the House of
61		-	Representatives or Senate or by the House of Representatives or
62		-	Senate;
63		-	2. “RB number” means that number preceded by the letters “RB”
64		-	assigned to a retirement bill by the respective staffs of the RBH No. 3808
	70	+	amended to read as follows: RBH No. 3808
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	97	+	Section 3103. As used in the Oklahoma Pension Legislation
	98	+	Actuarial Analysis Act:
	99	+	1. “Amendment” means any amendment, including a substitute
	100	+	bill, made to a retirement bill by any commi ttee of the House of
	101	+	Representatives or Senate, any conference committee of the House of
	102	+	Representatives or Senate or by the House of Representatives or
	103	+	Senate;
	104	+	2. “RB number” means that number preceded by the letters “RB”
	105	+	assigned to a retirement bill by the respective staffs of the
92	106		Oklahoma State Senate and the Oklahoma House of Representatives when
93	107		the respective staff office prepares a retirement bill for a member
94	108		of the Legislature;
95	109		3. “Legislative Actuary” means the firm or entity that enters
96	110		into a contract with t he Legislative Service Bureau pursuant to
97	111		Section 452.15 of Title 74 of the Oklahoma Statutes to provide the
98	112		actuarial services and other duties provided for in the Oklahoma
99	113		Pension Legislation Actuarial Analysis Act;
100	114		4. “Nonfiscal amendment” means an amendment to a retirement
101	115		bill having a fiscal impact, which amendment does not change any
102	116		factor of an actuarial investigation specified in subsection A of
103	117		Section 3109 of this title;
104	118		5. “Nonfiscal retirement bill ” means a retirement bill:
105	119		a. which does not affect the cost or funding factors of a
106		-	retirement system,
107		-	b. which affects such factors only in a manner which does
108		-	not:
109		-	(1) grant a benefit increase under the retirement
110		-	system affected by the bill,
111		-	(2) create an actuarial accrued liability for or
112		-	increase the actuarial accrued liab ility of the
113		-	retirement system affected by the bill, or
114		-	(3) increase the normal cost of the retirement system
115		-	affected by the bill, RBH No. 3808
	120	+	retirement system, RBH No. 3808
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	147	+	b. which affects such factors only in a manner which does
	148	+	not:
	149	+	(1) grant a benefit increase under the retirement
	150	+	system affected by the bill,
	151	+	(2) create an actuarial accrued liability for or
	152	+	increase the actuarial accrued liab ility of the
	153	+	retirement system affected by the bill, or
	154	+	(3) increase the normal cost of the retirement system
	155	+	affected by the bill,
143	156		c. which authorizes the purchase by an active member of
144	157		the retirement system, at the actua rial cost for the
145	158		purchase as computed pursuant to the statute in effect
146	159		on the effective date of the measure allowing such
147	160		purchase, of years of service for purposes of reaching
148	161		a normal retirement date in the applicable retirement
149	162		system, but which canno t be used in order to compute
150	163		the number of years of service for purposes of
151	164		computing the retirement benefit for the member,
152	165		d. which provides for the computation of a service -
153	166		connected disability retirement benefit for members of
154	167		the Oklahoma Law Enforce ment Retirement System
155	168		pursuant to Section 2-305 of Title 47 of the Oklahoma
156	169		Statutes if the members were unable to complete twenty
157		-	(20) years of service as a result of the disability,
158		-	e. which requires membership in the defined benefit plan
159		-	authorized by Section 901 et seq. of Title 74 of the
160		-	Oklahoma Statutes for persons whose first elected or
161		-	appointed service occurs on or after November 1, 2018,
162		-	if such persons had any prior service in the Oklahoma
163		-	Public Employees Retirement System prior to November
164		-	1, 2015,
165		-	f. which provides for a one-time increase in retirement
166		-	benefits if the increase in retirement benefits is not RBH No. 3808
	170	+	(20) years of service as a result of the disability, RBH No. 3808
167	171
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	197	+	e. which requires membership in the defined benefit plan
	198	+	authorized by Section 901 et seq. of Title 74 of the
	199	+	Oklahoma Statutes for persons whose first elected or
	200	+	appointed service occurs on or after November 1, 2018,
	201	+	if such persons had any prior service in the Oklahoma
	202	+	Public Employees Retirement System prior to November
	203	+	1, 2015,
	204	+	f. which provides for a one-time increase in retirement
	205	+	benefits if the increase in retirement benefits is not
194	206		a permanent increase in the gross annual retirement
195	207		benefit payable to a member or beneficiary, occurs
196	208		only once pursuant to a single statutory authorization
197	209		and does not exceed:
198	210		(1) the lesser of two percent (2%) of the gross
199	211		annual retirement benefit of the member or One
200	212		Thousand Dollars ($1,000.00) and requires that
201	213		the benefit may only be provided if the funded
202	214		ratio of the affected retirement system would not
203	215		be less than sixty percent (60%) but not greater
204	216		than eighty percent (80%) after the benefit
205	217		increase is paid,
206	218		(2) the lesser of two percent (2%) of the gross
207	219		annual retirement benefit of the member or One
208		-	Thousand Two Hundred D ollars ($1,200.00) and
209		-	requires that the benefit may only be provided if
210		-	the funded ratio of the affected retirement
211		-	system would be greater than eighty percent (80%)
212		-	but not greater than one hundred percent (100%)
213		-	after the benefit increase is paid,
214		-	(3) the lesser of two percent (2%) of the gross
215		-	annual retirement benefit of the member or One
216		-	Thousand Four Hundred Dollars ($1,400.00) and
217		-	requires that the benefit may only be provided if RBH No. 3808
	220	+	Thousand Two Hundred D ollars ($1,200.00) and RBH No. 3808
218	221
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	247	+	requires that the benefit may only be provided if
	248	+	the funded ratio of the affected retirement
	249	+	system would be greater than eighty percent (80%)
	250	+	but not greater than one hundred percent (100%)
	251	+	after the benefit increase is paid,
	252	+	(3) the lesser of two percent (2%) of the gross
	253	+	annual retirement benefit of the member or One
	254	+	Thousand Four Hundred Dollars ($1,400.00) and
	255	+	requires that the benefit may only be provided if
245	256		the funded ratio of the affected retirement
246	257		system would be greater th an one hundred percent
247	258		(100%) after the benefit increase is paid, or
248	259		(4) the greater of two percent (2%) of the gross
249	260		annual retirement benefit of the volunteer
250	261		firefighter or One Hundred Dollars ($100.00) for
251	262		persons who retired from the Oklahoma
252	263		Firefighters Pension and Retirement System as
253	264		volunteer firefighters and who did not retire
254	265		from the Oklahoma Firefighters Pension and
255	266		Retirement System as a paid firefighter.
256	267		As used in this subparagraph, “funded ratio” means the
257	268		figure derived by dividing the ac tuarial value of
258		-	assets of the applicable retirement system by the
259		-	actuarial accrued liability of the applicable
260		-	retirement system,
261		-	g. which modifies the disability pension standard for
262		-	police officers who are members of the Oklahoma Police
263		-	Pension and Retirement System as provided by Section 3
264		-	50-115 of this act Title 11 of the Oklahoma Statutes,
265		-	or
266		-	h. which provides a cost-of-living benefit increase
267		-	pursuant to the provisions of Sections 2 through 7 of
268		-	this act 49-143.7 and 50-136.9 of Title 11 of the RBH No. 3808
	269	+	assets of the applicable retirement system by the RBH No. 3808
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	296	+	actuarial accrued liability of the applicable
	297	+	retirement system,
	298	+	g. which modifies the disability pension standard for
	299	+	police officers who are members of the Oklahoma Police
	300	+	Pension and Retirement System as provided by Section 3
	301	+	50-115 of this act Title 11 of the Oklahoma Statutes,
	302	+	or
	303	+	h. which provides a cost-of-living benefit increase
	304	+	pursuant to the provisions of Sections 2 through 7 of
	305	+	this act 49-143.7 and 50-136.9 of Title 11 of the
296	306		Oklahoma Statutes, Section 1104K of Title 20 of the
297	307		Oklahoma Statutes, Section 2-305.12 of Title 47 of the
298	308		Oklahoma Statutes, Section 17-116.22 of Title 70 of
299	309		the Oklahoma Statutes, and Section 930.11 of Ti tle 74
300	310		of the Oklahoma Statutes .
301	311		A nonfiscal retirement bill shall include any retirement bill that
302	312		has as its sole purpose the appropriat ion or distribution or
303	313		redistribution of monies in some manner to a retirement system for
304	314		purposes of reducing the unfunded liability of such system or the
305	315		earmarking of a portion of the revenue from a tax to a re tirement
306	316		system or increasing the percentag e of the revenue earmarked fr om a
307	317		tax to a retirement system. Notwithstanding any other provision of
308		-	law, a nonfiscal retirement bill shall also include any measure that
309		-	increases the employer and employee contribution rates in the
310		-	defined contribution retirement system;
311		-	6. “Reduction-in-cost amendment” means an amendment to a
312		-	retirement bill having a fiscal impact whic h reduces the cost of the
313		-	bill as such cost is determined by the actuarial investigation for
314		-	the bill prepared pursuant to Section 3109 of this title;
315		-	7. “Retirement bill” means any bill or joint resolution
316		-	introduced or any bill or joint resolution amend ed by a member of
317		-	the Oklahoma Legislature which creates or amends any law directly
318		-	affecting a retirement system. A retirement bill shall not mean a
319		-	bill or resolution that impacts the revenue of any state tax in RBH No. 3808
	318	+	law, a nonfiscal retirement bill shall also include any measure that RBH No. 3808
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	345	+	increases the employer and employee contribution rates in the
	346	+	defined contribution retirement system;
	347	+	6. “Reduction-in-cost amendment” means an amendment to a
	348	+	retirement bill having a fiscal impact whic h reduces the cost of the
	349	+	bill as such cost is determined by the actuarial investigation for
	350	+	the bill prepared pursuant to Section 3109 of this title;
	351	+	7. “Retirement bill” means any bill or joint resolution
	352	+	introduced or any bill or joint resolution amend ed by a member of
	353	+	the Oklahoma Legislature which creates or amends any law directly
	354	+	affecting a retirement system. A retirement bill shall not mean a
	355	+	bill or resolution that impacts the revenue of any state tax in
347	356		which a portion of the revenue generated from such tax is earmarked
348	357		for the benefit of a retirement system;
349	358		8. “Retirement bill having a fiscal impact” means any
350	359		retirement bill creating or establishing a retirement system and any
351	360		other retirement bill other than a nonfiscal retirement bill; and
352	361		9. “Retirement system” means the Teachers’ Retirement System of
353	362		Oklahoma, the Oklahoma Public Employees Retirement System, the
354	363		Uniform Retirement System for Just ices and Judges, the Oklahoma
355	364		Firefighters Pension and Retirement System, the Oklahoma Police
356	365		Pension and Retirement System, the Oklahoma Law Enforcement
357	366		Retirement System, or a retirement system established after January
358		-	1, 2006.
359		-	SECTION 2. AMENDATORY 74 O.S . 2021, Section 935.5, is
360		-	amended to read as follows:
361		-	Section 935.5. A. Except as otherwise provided by subsection B
362		-	of this section, employers of employees who become participants in
363		-	the defined contribution retirement system shall match the employee
364		-	contribution paid on a monthl y or more frequent basis at the rate of
365		-	six percent (6.0%) eight percent (8.0%) based on the same
366		-	compensation amount used to compute the emplo yee contribution
367		-	amount.
368		-	B. If an employee selects a contribution rate of seven percent
369		-	(7.0%) or more, but not higher than allowed pursuant to the maximum
370		-	annual contribution limit prescribed by Section 415 of the Internal RBH No. 3808
	367	+	1, 2006. RBH No. 3808
371	368
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	394	+	SECTION 2. AMENDATORY 74 O.S . 2021, Section 935.5, is
	395	+	amended to read as follows:
	396	+	Section 935.5. A. Except as otherwise provided by subsection B
	397	+	of this section, employers of employees who become participants in
	398	+	the defined contribution retirement system shall match the employee
	399	+	contribution paid on a monthl y or more frequent basis at the rate of
	400	+	six percent (6.0%) eight percent (8.0%) based on the same
	401	+	compensation amount used to compute the employee contribution
	402	+	amount.
	403	+	B. If an employee selects a contribution rate of seven percent
	404	+	(7.0%) or more, but not higher than allowed pursuant to the maximum
	405	+	annual contribution limit prescribed by Section 415 of the Internal
398	406		Revenue Code of 1986, as amended, the employer matching amount s hall
399	407		be seven percent (7.0%) ten percent (10%).
400	408		C. The initial four and fiv e-tenths percent (4.5%) employee
401	409		contribution shall be the only mandatory contribution of an em ployee
402	410		participating in the defined contribution retire ment system created
403	411		by this act the Retirement Freedom Act. These funds shall be placed
404	412		by the System in either a 401(a) plan or a 4 57(b) plan, to be
405	413		determined by the Board to maintain the plan consistent with the
406	414		Internal Revenue Code. Any employee con tributions eligible to be
407	415		matched under this section over the four an d five-tenths percent
408		-	(4.5%) initial contribution shall be consi dered voluntary deferrals
409		-	of compensation and placed in a 457(b) plan. All em ployer matching
410		-	funds shall be placed in a 401(a) plan.
411		-	Any contribution rate that is more than the four and five -tenths
412		-	percent (4.5%) rate can be chosen by the participating em ployee upon
413		-	the employee’s initial participation, and can be changed once per
414		-	month. The employee contribution rate cho sen shall continue until
415		-	the employee elects to change the contribution rate or terminates
416		-	service or retires.
417		-	D. The employer match as set forth in subsection A of this
418		-	section may be increased at any time by the Legislature without
419		-	affecting the then-existing rights of participating employees and
420		-	beneficiaries in order to e ncourage participating empl oyees to
421		-	accumulate deferred income r eserves for themselves and their RBH No. 3808
	416	+	(4.5%) initial contribution shall be consi dered voluntary deferrals RBH No. 3808
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	443	+	of compensation and placed in a 457(b) plan. All em ployer matching
	444	+	funds shall be placed in a 40 1(a) plan.
	445	+	Any contribution rate that is more than the four and five -tenths
	446	+	percent (4.5%) rate can be chosen by the participating em ployee upon
	447	+	the employee’s initial participation, and can be changed once per
	448	+	month. The employee contribution rate chosen shall continue until
	449	+	the employee elects to change the contribution rate or terminates
	450	+	service or retires.
	451	+	D. The employer match as set forth in subsection A of this
	452	+	section may be increased at any time by the Legislature without
	453	+	affecting the then-existing rights of participating em ployees and
	454	+	beneficiaries in order to e ncourage participating empl oyees to
	455	+	accumulate deferred income r eserves for themselves and their
449	456		dependents. The employer match may be decrea sed at any time by the
450	457		Legislature without af fecting the then-existing rights of
451	458		participating employees and benef iciaries in order to provid e
452	459		funding as may be needed to reduce the unfunded liabilities of the
453	460		defined benefit plan as set forth in Section 9 01 et seq. of this
454	461		title, but shall not be le ss than six percent (6.0%) for any year
455	462		during which the defined cont ribution plan is maintained .
456	463		E. Increases in the employee and employer contribution rate to
457	464		the defined contribution retirement system shall not be subject to
458		-	the provisions of the Oklahoma Pension Legislation Actuarial
	465	+	the provisions of the Oklahoma Pension Legislation Actu arial RBH No. 3808
	466	+
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459	492		Analysis Act pursuant to Section 3103 of Title 62 of the Oklahoma
460	493		Statutes.
461	494		SECTION 3. This act shall become effective November 1, 2022.
462		-	~~COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS~~
463		-	~~April 13,~~ 2022 ~~- DO PASS AS AMENDED~~
	495	+
	496	+	58-2-3808 RJ 4/11/2022 11:16:28 AM