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Oklahoma House Bill HB1391

Oklahoma 2023 Regular Session

Oklahoma House Bill HB1391 Compare Versions

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2828 STATE OF OKLAHOMA
2929
3030 1st Session of the 59th Legislature (2023)
3131
3232 HOUSE BILL 1391 By: Bashore
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3838 AS INTRODUCED
3939
4040 An Act relating to public retirement system s;
4141 amending 62 O.S. 202 2, Section 3103, as last amended
4242 by Section 1, Chapter 306, O.S.L. 2022 (62 O.S. Supp.
4343 2022, Section 3103), which relates to the Oklahoma
4444 Pension Legislation Actuarial Analysis Act; m odifying
4545 definition; amending 74 O.S. 2021, Section 914, which
4646 relates to retirement; modifying period of time
4747 required with respect to post-retirement employment;
4848 providing effective dates; providing for contingent
4949 effective dates based on outcome of approval of the
5050 emergency clause; and declaring an emergency .
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5656 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
5757 SECTION 1. AMENDATORY 62 O.S 2022, Section 3103 , as last
5858 amended by Section 1, Chapter 306, O.S.L. 2022 (62 O.S. Supp. 2022,
5959 Section 3103v4), is amended to read as follows:
6060 Section 3103 As used in the Oklahoma Pension Legislation
6161 Actuarial Analysis A ct:
6262 1. "Amendment" means any amendment, including a substitute
6363 bill, made to a retirement bill by any committee of the House or
6464 Senate, any conference committee of the House or Senate or by the
6565 House or Senate; RBH No. 5691
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9292 2. "RB number" means that number preceded b y the letters "RB"
9393 assigned to a retirement bill by the respective staffs of the
9494 Oklahoma State Senate and the Oklahoma House of Representatives when
9595 the respective staff office prepares a retirement bill for a member
9696 of the Legislature;
9797 3. "Legislative Actuary" means the firm or ent ity that enters
9898 into a contract with the Legislative Service Bureau pursuant to
9999 Section 452.15 of Title 74 of the Oklahoma Statutes to p rovide the
100100 actuarial services and other duties provided for in the Oklahoma
101101 Pension Legislation Actuarial Analysis Act;
102102 4. "Nonfiscal amendment" means an amendment to a retirement
103103 bill having a fiscal impact, which amendment does not change any
104104 factor of an actuarial investigation specified in subsection A of
105105 Section 3109 of this title;
106106 5. "Nonfiscal retirement bill" mean s a retirement bill:
107107 a. which does not affect the cost or funding factors of a
108108 retirement system,
109109 b. which affects such factors only in a manner which does
110110 not:
111111 (1) grant a benefit increase under the retirement
112112 system affected by the bill,
113113 (2) create an actuarial accrued liability for or
114114 increase the actuarial accrued liability of the
115115 retirement system affected by the bill, or RBH No. 5691
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142142 (3) increase the normal cost of the retirem ent system
143143 affected by the bill,
144144 c. which authorizes the pur chase by an active member of
145145 the retirement system, at the actuarial cost for the
146146 purchase as computed pursuant to the statute in effect
147147 on the effective date of the measure allowing such
148148 purchase, of years of service for pu rposes of reaching
149149 a normal retirement date in the applicable retirement
150150 system, but which cannot be used in order to compute
151151 the number of years of service for purposes of
152152 computing the retirement benefit for the member,
153153 d. which provides for the computat ion of a service-
154154 connected disability retirement benefit for members of
155155 the Oklahoma Law Enforcement Retirement System
156156 pursuant to Section 2 -305 of Title 47 of the Oklahoma
157157 Statutes if the members were unable to complete twenty
158158 (20) years of service as a r esult of the disability,
159159 e. which requires membership in the defined benefit plan
160160 authorized by Section 901 et seq. of Title 74 of the
161161 Oklahoma Statutes for persons whose first elected or
162162 appointed service occurs on or after Nov ember 1, 2018,
163163 if such persons had any prior service in the Oklahoma
164164 Public Employees Retirement System prior to November
165165 1, 2015, RBH No. 5691
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192192 f. which provides for a one -time increase in retirement
193193 benefits if the increase in retirement benefits is not
194194 a permanent increase in the gross annual r etirement
195195 benefit payable to a m ember or beneficiary, occurs
196196 only once pursuant to a single statutory authorization
197197 and does not exceed:
198198 (1) the lesser of two percent (2%) of the gross
199199 annual retirement benefit of the member or One
200200 Thousand Dollars ($1,000 .00) and requires that
201201 the benefit may only be provided if the funded
202202 ratio of the affected retirement system would not
203203 be less than sixty percent (60%) but not greater
204204 than eighty percent (80%) af ter the benefit
205205 increase is paid,
206206 (2) the lesser of two per cent (2%) of the gross
207207 annual retirement benefit of the member or One
208208 Thousand Two Hundred Dollars ($1,200.00) and
209209 requires that the benefit may only be provided if
210210 the funded ratio of the affected retirement
211211 system would be greater than eighty percent (80 %)
212212 but not greater than one hund red percent (100%)
213213 after the benefit increase is paid,
214214 (3) the lesser of two percent (2%) of the gross
215215 annual retirement benefit of the member or One RBH No. 5691
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242242 Thousand Four Hundred Dollars ($1,400.00) and
243243 requires that the benefit ma y only be provided if
244244 the funded ratio of the affected retirement
245245 system would be greater than one hundred percent
246246 (100%) after the benefit increase is paid, or
247247 (4) the greater of two percent (2%) of the gross
248248 annual retirement benefit of the volunteer
249249 firefighter or One Hundred Dollars ($100.00) for
250250 persons who retired from the Oklahoma
251251 Firefighters Pension and Retirement System as
252252 volunteer firefighters and who did not retire
253253 from the Oklahoma Fir efighters Pension and
254254 Retirement System as a paid firefight er.
255255 As used in this subparagraph , "funded ratio" means the
256256 figure derived by dividing the actuarial value of
257257 assets of the applicable retirement system by the
258258 actuarial accrued liability of the app licable
259259 retirement system,
260260 g. which modifies the disability pension standard for
261261 police officers who are members of the Oklahoma Police
262262 Pension and Retirement System as provided by Section 3
263263 of this act,
264264 h. which provides a cost -of-living benefit increase
265265 pursuant to the provisions of: RBH No. 5691
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292292 (1) Section 49-143.7 of Title 11 of the Oklahoma
293293 Statutes,
294294 (2) Section 50-136.9 of Title 11 of the Oklahoma
295295 Statutes,
296296 (3) Section 1104K of Title 20 of the Oklahoma
297297 Statutes,
298298 (4) Section 2-305.12 of Title 47 of the Oklahoma
299299 Statutes,
300300 (5) Section 17-116.22 of Title 70 of the Oklahoma
301301 Statutes,
302302 (6) Section 930.11 of Title 74 of the Oklahoma
303303 Statutes, or
304304 i. which modifies the computation of the line -of-duty
305305 disability benefit pursuant to the provisions of this
306306 act, or
307307 j. which modifies the provisions related to post -
308308 retirement employment for the Oklahoma Public
309309 Employees Retirement System as provided by Section 2
310310 of this act.
311311 A nonfiscal retirement bill shall include any retirement bill that
312312 has as its sole purpose the appropriatio n or distribution or
313313 redistribution of monies in some manne r to a retirement system for
314314 purposes of reducing the unfunded liability of such system or the
315315 earmarking of a portion of the revenue fr om a tax to a retirement RBH No. 5691
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342342 system or increasing the percentage of the revenue earmarked from a
343343 tax to a retirement system;
344344 6. "Reduction-in-cost amendment" means an amendment to a
345345 retirement bill having a fiscal impact which reduces the cost of the
346346 bill as such cost is determined by the actuarial investigation for
347347 the bill prepared pursuant to Section 3109 of this title;
348348 7. "Retirement bill" means any bill or joint resolution
349349 introduced or any bill or joint resolution amended by a member of
350350 the Oklahoma Legislature which creates or amends any law directly
351351 affecting a retirement system. A retirement bill shall not mean a
352352 bill or resolution that impacts the revenue of any state tax in
353353 which a portion of the revenue generated from such tax is earmarked
354354 for the benefit of a retirement system;
355355 8. "Retirement bill having a fiscal impact" means any
356356 retirement bill creating or esta blishing a retirement system and any
357357 other retirement bill other than a nonfiscal retirement bill; and
358358 9. "Retirement system" means the Teachers' Retirement System of
359359 Oklahoma, the Oklahoma Public Employees Retirement System, the
360360 Uniform Retirement System for Justices and Judges, the Ok lahoma
361361 Firefighters Pension and Retirement System, the Oklahoma Police
362362 Pension and Retirement System, the Oklahoma Law Enforcement
363363 Retirement System, or a retirement system established after January
364364 1, 2006. RBH No. 5691
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391391 SECTION 2. AMENDATORY 74 O.S. 2021, Section 914, is
392392 amended to read as follows:
393393 Section 914. A. The normal retirement date for a member of the
394394 Oklahoma Public Employees Retirem ent System shall be as defined in
395395 Section 902 of this title, provided members employed on or after
396396 January 1, 1983, shall have six (6) or m ore years of full-time-
397397 equivalent employment with a participating employer before receiving
398398 any retirement benefits o r if the member is a legislative session
399399 employee of the Legislature, shall have three (3) or more yea rs of
400400 full-time-equivalent employment with a participating employer before
401401 receiving any retirement benefits. In no event shall a normal
402402 retirement date for a member be before six (6) months after the
403403 entry date of the participating employer by whom he or she is
404404 employed.
405405 B. A member may be employed beyond the normal retirement date
406406 by the appointing authority of the participating employer. However,
407407 the member may not receive retirement pay so long as the member
408408 continues employment under this act. Any member who has terminated
409409 employment with a participating employer prior to the month
410410 immediately preceding said member 's normal retirement date must
411411 elect a vested benefit pursuant to Section 917 of thi s title before
412412 receiving any retirement benefits.
413413 C. Notice for retirement shall be filed through the retirement
414414 coordinator for the participating employer in such form and manner RBH No. 5691
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441441 as the Board shall prescri be; provided, that such notice for
442442 retirement shall be filed with the office of the retirement system
443443 at least sixty (60) days prior to the date selected for the member's
444444 retirement; provided further, that the Executive Director may waive
445445 the sixty-day notice for good cause shown as defined by the Board.
446446 1. The participating employer shall provide the Sys tem with the
447447 following information fo r a retiring member, no later than the
448448 fifteenth day of the month of retirement: last day physically on
449449 the job; last day on payroll; and final unused sick leave bal ance.
450450 2. Failure to submit this information by the d eadline, or
451451 errors in submitted infor mation that result in a disqualification of
452452 retirement eligibility shall be the responsibility of the
453453 participating employer. In cases where the error results in
454454 disqualification of retirement eligibility, it is the pa rticipating
455455 employer's responsibility to reemploy the member, or retain the
456456 member on the payroll, for time period required to reach
457457 eligibility, not exce eding two (2) months.
458458 D. No retirement benefits shall be payable to any member until
459459 the first day of the month following the termination of the member's
460460 employment with any participating employer. The type of retirement
461461 benefit selected by a member may not be changed on or after the
462462 effective date of the member's retirement. Receipt of workers'
463463 compensation benefits shall in no respect di squalify the retiree for
464464 benefits. RBH No. 5691
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491491 E. If a retiree should be elected or appointed to any position
492492 or office for which compensation for service is paid from levies or
493493 taxes imposed by the state or any political subdivis ion thereof, the
494494 retiree shall not receive any retirement benefit for any month for
495495 which the retiree serves in such position or office after the
496496 retiree has received compensation in a sum equal to the amount
497497 allowable as wages or earnings by the Social S ecurity Administration
498498 in any calendar year. This subsection shall not apply to service
499499 rendered by a retiree as a juror, as a witness in any legal
500500 proceeding or action, as an election board judge or cl erk, or in any
501501 other office or position of a similar nature, or to an employer that
502502 is not a participating employer. Provided, further, that any
503503 participating employer who is employing such a retiree shall make
504504 proper written notification to the System in forming it of the
505505 beginning date of such retiree's employment and the date such
506506 retiree reaches the maximum compensation allowed by this section in
507507 the calendar year. Any retiree returning to work for a
508508 participating employer shall make contributions to t he System and
509509 the employer shall do likewise. All re tirees who have returned to
510510 employment and participation in the System following retirement
511511 shall have post-retirement benefits calculated on one of the
512512 following methods:
513513 1. All service accumulated fro m date of reemployment shall be
514514 computed based on the benefit formula applicable at that t ime and RBH No. 5691
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541541 the additional benefits shall be added to the previous benefits.
542542 Such additional benefits shall be calculate d each year based upon
543543 additional service accrued from July 1 to June 30 of the previous
544544 year and the additional benefit, if any, will be a dded to the
545545 retiree's monthly benefit beginning January 1, 2000, and each
546546 January 1 thereafter. However, the post -retirement service credit
547547 shall be cumulative, begi nning with service credit accrued after the
548548 date of retirement, provided that the retiree has not received a
549549 distribution of the post-retirement contributions.
550550 2. Any retiree who returns to employment with a participating
551551 employer may elect not to receive any retirement benefits while so
552552 reemployed. If such an election is made and reemploymen t is for a
553553 minimum period of thirty-six (36) consecutive months, all service
554554 accumulated from date of reemployment sh all be participating
555555 service. For purposes of de termining the retirement benefits of
556556 such a member upon the termination of such reemployme nt all
557557 creditable service of the member shall be computed based on the
558558 benefit formula applicable at the time of term ination of such
559559 reemployment. Provided, a retire e who became reemployed prior to
560560 July 1, 1982, and wh o is reemployed for a minimum of thir ty-six (36)
561561 consecutive months shall have all the creditable service of such
562562 retiree computed based on the benefit fo rmula applicable at the time
563563 of termination of su ch reemployment if the retiree elects not to
564564 receive retirement benefits prior to such ter mination of RBH No. 5691
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591591 reemployment. A retiree who has waived receipt of the monthly
592592 benefit, but is not reemployed for the ful l thirty-six (36)
593593 consecutive months, shall upon termination of such reemployment have
594594 only the additional amount added to his or her benef it as if they
595595 had not waived the benefit as provided in paragraph 1 of this
596596 subsection.
597597 3. All post-retirement additional benefits shall be calculated
598598 using actual hours worked as well as the actual compensation
599599 received and upon which contributions are p aid. Post-retirement
600600 service is not subject to the partial year round -up provisions of
601601 subsection C of Section 913 o f this title.
602602 4. A retired member who returns to work for a participating
603603 employer pursuant to this s ection shall be bound by the election
604604 made pursuant to paragraph (2) of subsection A of Section 915 of
605605 this title if the member had made such election pri or to retirement.
606606 If the member had not made suc h election prior to retirement, the
607607 member may do so during the member's reemployment with a
608608 participating employer pursuant to this section. A retired member
609609 may not be rehired by their former employer, no r may the retired
610610 member be permitted to enter in to an employment contract of any kind
611611 with a former employer, for a period of one (1) year six (6) months
612612 after the retired member ended his or her employment with the former
613613 employer unless the retired memb er waives his or her benefit under
614614 paragraph 2 of this subsection and returns as a bona fide employee. RBH No. 5691
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641641 F. Except as otherwise provided by subsection G of this
642642 section, any member may elect to retire before his or her normal
643643 retirement date on the first da y of any month coinciding with or
644644 following the attainment of age fifty-five (55), provided such
645645 member has completed ten (10) years of participating service, but in
646646 no event before six (6) months after the entry date. Any member who
647647 shall retire before t he normal retirement date shall receive an
648648 annual retirement benefit adjusted in accordance with the f ollowing
649649 percentage schedule:
650650 Percentage of Normal
651651 Age Retirement Benefit
652652 62 100.00%
653653 61 93.33%
654654 60 86.67%
655655 59 80.00%
656656 58 73.33%
657657 57 66.67%
658658 56 63.33%
659659 55 60.00%
660660 G. Any member whose first participating serv ice occurs on or
661661 after November 1, 2011, may elect to retire before his or her normal
662662 retirement date on the firs t day of any month coinciding with or
663663 following the attainment of age sixty (60), provided suc h member has
664664 completed ten (10) years of particip ating service, but in no event RBH No. 5691
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691691 before six (6) months after the entry date. Any member who shall
692692 retire before the normal retirement date shall receive an annual
693693 retirement benefit adjusted in accordance wit h the following
694694 percentage schedule:
695695 Percentage of Normal
696696 Age Retirement Benefit
697697 65 100.00%
698698 64 93.33%
699699 63 86.67%
700700 62 80.00%
701701 61 73.33%
702702 60 66.67%
703703 SECTION 3. If the Emergency Clause is not approved pursuan t to
704704 the requirements of the Oklahoma Constitutio n as part of this
705705 measure, the effective date of Section 1 of this act shall be
706706 October 1, 2023.
707707 SECTION 4. If the Emergency Clause is not approved pursuant to
708708 the requirements of the Okla homa Constitution as part of this
709709 measure, the effective date of Section 2 of this act shall be
710710 November 1, 2023.
711711 SECTION 5. Except as otherwise provided by Se ction 3 of this
712712 act, Section 1 of this act shall become effective immediately up on
713713 signature by the Governor or as otherwise provid ed by Section 58 of
714714 Article V of the Oklahoma Constitution. RBH No. 5691
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741741 SECTION 6. Except as otherwise provided by Secti on 4 of this
742742 act, Section 2 of this act shall become effective July 1, 202 3.
743743 SECTION 7. It being immediately neces sary for the preservation
744744 of the public peace, health or safety, an emergency is hereby
745745 declared to exist, by reason whereof this act shall take effe ct and
746746 be in full force from and after its passage a nd approval.
747747
748748 59-1-5691 CMA 12/16/22
749749
750750 THOMAS E. CUMMINS CONSULTING ACTUARY, INC.
751751 2512 E. 71
752752 st
753753 Street , Suite D ∙ Tulsa, O klahoma 74136
754754 (918) 492-9658 ∙ (918) 492- 9659
755755
756756
757757
758758 December 29, 2022
759759
760760
761761
762762 Representative Steve Bashore
763763 Room 248.2
764764
765765
766766
767767 Re: RHB No. 5691
768768
769769
770770
771771 RBH No. 5691 allows OPERS retired participants to return to
772772 employment after being retired for at least 6 months and continue
773773 receive retirement benefits. Current law requires 1 year.
774774
775775
776776 This bill modifies OPLAAA definition of a non fiscal bill to include
777777 the above change.
778778
779779
780780 RBH No. 5691 is a nonfiscal bill as define d by OPLAAA because of the
781781 change in definition .
782782
783783 I am a member of the American Academy of Actuaries and meet the
784784 Qualification Standards of the American Academy of Actuaries to
785785 render the actuarial opinio n herein.
786786
787787
788788 Thomas E. Cummins
789789
790790 Thomas E. Cummins, MAAA
791791
792792