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STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
SENATE BILL 826 By: Howard
AS INTRODUCED
An Act relating to firefighter retirement; amending
11 O.S. 2011, Section 49 -106.1, as last amended by
Section 3, Chapter 281, O.S.L. 2 014 (11 O.S. Supp.
2020, Section 49-106.1), which relates to the
deferred option plan; modifying methods of payment
for plan participants.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 11 O.S. 2011, Section 49 -106.1, as
last amended by Section 3, Chapter 281, O.S.L. 2014 (1 1 O.S. Supp.
2020, Section 49-106.1), is amended to read as follows:
Section 49-106.1. A. In lieu of terminating empl oyment and
accepting a service retirement pension p ursuant to Sections 49 -101
and 49-106 of this title, any member of the Oklah oma Firefighters
Pension and Retirement System serving as an active firefighter in a
fire department of a participating municipal ity who has not less
than twenty (20) years of cred itable service, or any member of the
Oklahoma Firefighters Pension and Retir ement System whose first
employment with a participating employer of the System occurs on or
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after November 1, 2013, and who has not less than twenty -two (22)
years of creditable s ervice and who is eligible to receive a service
retirement pension may elect to participate in the Oklahoma
Firefighters Deferred Option Plan and defer the receipts of bene fits
in accordance with the provi sions of this section.
B. For purposes of this sec tion, creditable service shall
include service credit reciprocally recognize d pursuant to Sections
49-100.1 through 49-100.8 and Sections 49 -101, 49-101.1 and 49-101.2
of this title but for eligibility pur poses only.
C. The duration of participation in th e Oklahoma Firefighters
Deferred Option Plan for active firefighters shall n ot exceed five
(5) years. Participation in the Oklahoma Firefighters Deferred
Option Plan must begin the first day of a month an d end on the last
day of a month. At the conclusio n of a member’s participation in
the Oklahoma Firefighters Deferred Option P lan, the member shall
terminate employment with all participating municipalities as a
firefighter, and shall start receiving the member’s accrued monthly
retirement benefit from th e System. Such a member may be reemployed
by a participating municipality b ut only in a position not covered
under the System, and receive in -service distributions of such
member’s accrued monthly retirem ent benefit from the System.
D. When a member begi ns participation in the Oklahoma
Firefighters Deferred Option Plan, the cont ribution of the member
shall cease. The employer contributions shall continue to be paid
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in accordance with subsection B of Sect ion 49-122 of this title.
Employer contributions f or members who elect the Oklahoma
Firefighters Deferred Option Plan shall be credited equally to the
Oklahoma Firefighters Pension and Retirement System and to the
member’s Oklahoma Firefighters Deferred O ption Plan account. The
monthly retirement benefit s that would have been payable had the
member elected to cease employment an d receive a service retirement
shall be paid into the member ’s Oklahoma Firefighters Deferred
Option Plan account.
E. 1. A member who participates in this plan shall be eligible
to receive cost-of-living increases.
2. A member who participates in this p lan shall earn interest
at a rate of two percentage points below the rate of return of the
investment portfolio of the System, bu t no less than the actuarial
assumed interest rate as certified by the actuary in the yearly
evaluation report of the actuary. The interest shall be credited to
the individual account balance of the member on an annual bas is.
3. Effective November 1, 201 3, the Oklahoma Firefighters
Deferred Option Plan a ccount for a member whose first service with a
participating municipality of the System occurs on or after Nov ember
1, 2013, and who participates for the first time in the Oklahoma
Firefighters Deferred Op tion Plan on or after November 1, 2013, and
has completed active participation in the Oklahoma Firefighters
Deferred Option Plan, shall earn interest at a rate e qual to the
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actual rate of return of the investment portfolio of the System,
less one (1) percentage point to offset administrative costs of the
System as determined by the System.
F. A member in the plan shall r eceive, at the option of the
member, a lump-sum payment from the account equal to the payments to
the account or an annuity based upon the account of the member or
may elect any other metho d of payment if approved by the B oard of
Trustees. Any member whose participation in the plan began on or
after November 1, 2013, shall receive, at the option of the member ,
a lump-sum payment from the ac count equal to the option account
balance or a lump-sum payment from the account equal to the opti on
account balance, a direct rollover of the member ’s option account
balance to a qualified individual retirement account or t he member
may direct payment to a third party annuity provider for purchase of
an annuity with the member ’s option account balance . If a member
becomes so physically or menta lly disabled while i n, or in
consequence of, the performance of his or her duty as to prevent the
effective performance of his or her duties that the State Board
approves an in-line-of-duty disability pension, the payment from the
account shall be an in -line-of-duty disability payment.
Notwithstanding any other provision con tained herein to the
contrary, commencemen t of distributions under the Oklahoma
Firefighters Deferred Option Plan shall be no later than the time as
set forth in subsection B of Section 49-106 of this title and a
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member whose first service with a participa ting municipality of the
System occurs on or after November 1, 2013, and who participates for
the first time in the Oklahoma Firefighters Deferred Option Plan o n
or after November 1, 20 13, must receive a d istribution of the entire
remaining balance in the member’s Oklahoma Firefighters Deferred
Option Plan account no later than April 1 of the cale ndar year
following the later of:
1. The calendar year in which th e member reaches seventy and
one-half (70 1/2) years of age; or
2. The actual retirement date o f the member.
G. If a member dies while m aintaining an account balance in the
plan the System shall pay to the designated recipient or recipients
of the member, or if there is no desig nated recipient or i f the
designated recipient predeceases the member, to the spouse of the
member, or if there i s no spouse or if the spouse predeceases the
member, to the estate of the member a lump -sum payment equal to the
account balance of the member. If such member was receiving, or
eligible to receive, an in -line-of-duty disability pension at the
time of his or her death, payment of the account balance shall be an
in-line-of-duty disability payment. If a designated recipien t is
the surviving spouse of the member, the surviving spouse shall
receive his or her portion o f the account balance of the member
pursuant to subsection F of this section. The surviving spouse,
whether or not he or she is a designated recipient of the m ember,
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may elect to receive his or her portio n of the account balance of
the member in the same manner as was applicable to the member.
H. In lieu of participating in the Oklahoma Firefigh ters
Deferred Option Plan pursuant to subsections A, B, C, D, E and F of
this section, a member may elect to par ticipate in the Oklahoma
Firefighters Deferred Opti on Plan pursuant to this subsection as
follows:
1. For purposes of this subsection and subse ction I of this
section, the following definitions shall apply:
a. “back drop date” means the member’s normal retirement
date or the date five (5) years before the member
elects to participate in the Oklah oma Firefighters
Deferred Option Plan, whichever da te is later,
b. “termination date” means the date the member elects to
participate in the Ok lahoma Firefighters Deferred
Option Plan pursuant to this subsection, a nd the date
the member terminates employme nt with all
participating municipalities as an acti ve firefighter,
c. “earlier attained credited service ” means the credited
service earned by a member as of the b ack drop date,
and
d. “deferred benefit balance ” means all monthly
retirement benefits that w ould have been payable had
the member elected to ce ase employment on the back
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drop date and receive a service retireme nt from the
back drop date to the termination date, all the
member’s contributions and one -half (1/2) of the
employer contributions from t he back drop date to the
termination date, with int erest based on how the
benefit would have accumulated on a compound annual
basis as if the member had participat ed in the
Oklahoma Firefighters Deferred Option Pla n pursuant to
subsections A, B, C, D, E an d F of this section from
the back drop date to the termination date; and
2. At the termination date, the monthly pens ion benefit shall
be determined based on earl ier attained credited service and on the
final average salary as of the back drop date. The member’s
individual deferred option account shall b e credited with an amount
equal to the deferred benefit balance, th e member shall terminate
employment with all participating municipalities as a firefighter,
and shall start receiving the member ’s accrued monthly retirement
benefit from the System. Such a member may be reemployed by a
participating municipality but only in a position not covere d under
the System, and receive in-service distributions of such member ’s
accrued monthly retirement benefit from the System. The provisions
of subsections B, C, E , F and G of this section shall apply to this
subsection. A member shall not participate in the Oklahoma
Firefighters Deferred Option Plan pursuant to this subsec tion if the
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member has elected to particip ate in the Oklahoma Firefighters
Deferred Option Plan pursuant to subsections A, B, C, D, E and F of
this section.
I. Certain surviving spouse s and members shall be eligible to
participate in the Oklahoma Firefigh ters Deferred Option Plan
pursuant to subsection H of this section and this subsection.
1. For purposes of this subsection, the following definitions
shall apply:
a. “back drop election date” means the date the surviving
spouse or member elects to commenc e participation in
the Oklahoma Firefighte rs Deferred Option Plan
pursuant to subsection H of this section and this
subsection,
b. “interest” means the actuarial assumed interest rate
as certified by the a ctuary in the yearly evaluation
report of the actuary,
c. “monthly adjustment amount ” means the difference
between the monthly pension prior to the back drop
election and the adjusted monthly pension due to the
back drop election,
d. “back drop pension adj ustment amount” means the sum of
all the monthly adjustment amounts adjusted for
interest from the pension commencement date to the
back drop election date, and
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e. “deferred benefit balance adjustment amount ” means the
interest on the deferred benefit bala nce from the
pension commencement date to the back drop election
date.
2. If a member who ha s more than twenty (20) years of
creditable service and is eligible to receive a service, or a member
of the Oklahoma Firefighters Pension and Retirement System wh ose
first employment with a participating employer of the System occurs
on or after November 1, 2013, and such member has more than twenty -
two (22) years of creditable service, retirement pension dies on or
after June 4, 2007, and prior to terminating employment, the
member’s surviving spouse shall be elig ible to elect to receive a
benefit determined as if the member had elected to participate in
the Oklahoma Firefighters Deferred Option Plan in accordance with
subsection H of this secti on on the day immedi ately preceding such
member’s death. Prior to July 1, 2010, the surviving spouse must
make any such election within one (1) year from the date of the
member’s death. Effective July 1, 2010, the surviving spous e must
make any such election within ninety ( 90) days from the date of the
member’s death. If on or after June 4, 2007, such election is made,
the monthly pension such surviving spouse is entitled to receive
shall be adjusted in accordance with the provis ions of subsection H
of this section to accou nt for the member’s participation in the
Oklahoma Firefighters Deferred Option Plan. The sur viving spouse
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may only make this election if the me mber has not previously elected
to participate in the Oklahoma Fire fighters Deferred Option Plan.
For purposes of this election, the surviving spouse must have be en
married to the firefighter for the thir ty (30) continuous months
preceding the firefighter ’s death; provided, the surviving spouse of
a member who died while in, or as a consequence of, the performance
of the member’s duty for a participating municipali ty shall not be
subject to the marriage li mitation for this election.
3. If a member has mor e than twenty (20) years of creditable
service, or a member of the Oklahoma Firefighters Pen sion and
Retirement System whose first employment with a participating
employer of the System occurs on or after November 1, 2013, and such
member has more than twe nty-two (22) years of creditable service and
is eligible to receive a service retirement pen sion, and is eligibl e
for a retirement for disability monthly pension p ursuant to Section
49-109 of this title on or after June 4, 2007, such member shall be
eligible to elect to receive a benefit determined as if the member
had elected to participate in t he Oklahoma Firefigh ters Deferred
Option Plan, in accordance with subse ction H of this section, on the
day immediately preceding the date of the member ’s disability
retirement, provided such election is made within two (2) years fr om
the date of the member ’s disability retirement. The disability
monthly pension such member i s receiving, or entitled to receive,
shall be adjusted in accordance with the provisions of s ubsection H
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of this section to account for the member ’s participation in the
Oklahoma Firefighters Deferred Opti on Plan. The deferred benefit
balance such member is entitled to receive shall be reduced by the
back drop pension adjustment amount and increa sed by the deferred
benefit balance adjustment amount. The member may only make a back
drop election if the deferred benefit balance after the adjustment
described in this paragraph is greater than Zero D ollars ($0.00).
The member may only make this elec tion if the member has not
previously elected to participate in the Oklahoma Firefighters
Deferred Option Plan.
4. If a member has more than twenty (20) years of creditable
service, or a member of the Okl ahoma Firefighters Pension and
Retirement System wh ose first employment with a participating
employer of the System oc curs on or after November 1, 2013, and such
member has more than twenty -two (22) years of credit able service and
is eligible to receive a service retirement pension, and filed a
grievance for wrongful termination occurring on or after June 4,
2007, or is not a member of a collecti ve bargaining organi zation as
a firefighter, is involuntarily terminate d and is seeking to have
his or her position as a firefighter reinstated through a legal
process, but is not reinstated as an active member, such member
shall be eligible to elect to re ceive a benefit dete rmined as if the
member had elected to participate in the Oklahoma Firefighters
Deferred Option Plan in accordance with subsection H of this sec tion
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on the day immediately preceding the date of the member ’s
termination. Such election m ust be made within t wo (2) years from
the date of the member ’s termination as an active member and, if the
member’s case pertaining to the member ’s termination is on appeal to
a court of competent jurisdiction, within such period s et by the
State Board in its sole discretion. The monthly pension such member
is receiving, or entitled to receive, shall be adjusted in
accordance with the provisions of subsection H of t his section to
account for the member ’s participation in the Oklaho ma Firefighters
Deferred Option Plan. The de ferred benefit balance such member is
entitled to receive shall be reduced by the back drop p ension
adjustment amount and increased by the defer red benefit balance
adjustment amount. The member may only make a back drop election if
the deferred benefit balance after the adjustment described in this
paragraph is greater than Zero Dollars ($0.00). The member may only
make this election if the memb er has not previously elected to
participate in the Oklahoma Firefi ghters Deferred Option Pl an.
5. Subparagraphs d and e of paragraph 1 and paragraphs 3 and 4
of this subsection are effective June 4, 2007 , provided the Internal
Revenue Service issues a fa vorable determination letter for the
System which includes the prov isions of such subparagra phs and
paragraphs without modification or as modified to conform to an y
changes required by the Internal Revenue Service as part of its
determination letter review process. In the event the Internal
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Revenue Service does not issue such a determination let ter which
includes the provisions of such subparagraphs or paragraphs w ithout
modification or as modified to conf orm to any changes required by
the Internal Revenue Service as part of its determination letter
review process, then s ubparagraphs d and e of p aragraph 1 and
paragraphs 3 and 4 of this subsection shall be repealed effective
June 4, 2007.
58-1-354 CB 1/21/2021 3:39:30 PM