RBH No. 5254
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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
HOUSE BILL 1969 By: Newton
AS INTRODUCED
An Act relating to retirement; amending 11 O.S. 2021,
Sections 50-111.3 and 50-112, which relate to the
Oklahoma Police Pension and Retirement System;
modifying provision related to assumed rate of
return; allowing municipalities u nder certain
population to hire certain retired police officers
without reentering system; providing an effective
date; and declaring an emergen cy.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 11 O.S. 2021, Section 50 -111.3, is
amended to read as follows:
Section 50-111.3 A. In lieu of terminating employment and
accepting a service retirement pension pursuant to Section 50 -114 of
this title, any member of the Oklahoma Police Pension and Retirement
System who has not less than twenty ( 20) years of creditable service
and who is eligible to receive a service retirement pension ma y make
an irrevocable election to participate in the Oklahoma Police
Deferred Option Plan and defer the receipts of benefits in
accordance with the provisions of this section. RBH No. 5254
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B. For purposes of this section, creditable service shall
include service credi t reciprocally recognized pursuant to Section
50-101 et seq. of this tit le but for eligibility purposes only.
C. The duration of participation in the Oklahoma Po lice
Deferred Option Plan for a member shall not exceed five (5) years .
Participation in the Oklahoma Police Deferred Option Plan must begin
the first day of a month and end on the last day of a month. At the
conclusion of a member's participation in the Oklahoma Police
Deferred Option Plan, the member shall terminate employment with all
participating municipalities as an officer, and shall start
receiving the member 's accrued monthly retirement benefit from the
System. Such a member may receive in -service distributions of such
member's accrued monthly retirement benefit from the System if such
member is reemployed by a participating municipality only if such
reemployment is as a police chief or in a position not covered under
the System.
D. When a member begins participation in the Oklahoma Police
Deferred Option Plan, the contribution of the em ployee shall cease.
The employer contributions shall continue to be pai d in accordance
with Section 50-109 of this title. Municipal contributions for
employees who elect the Oklahoma Police Deferred Option Plan shall
be credited equally to the Oklahoma P olice Pension and Retirement
System and to the Oklahoma Police Deferred Option Plan. The monthly
retirement benefits that would have been payable had the member RBH No. 5254
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elected to cease employment and receive a service retirement shall
be paid into the Oklahoma P olice 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 partici pates in this plan shall earn interest
at a rate of two percentage points below the rate of re turn of the
investment portfolio of the System, but no less than the actuarial
assumed interest rate as certified by the actuary in the yearly
evaluation report of the actuary seven and one-half percent (7.5%)
interest effective July 1, 202 3. The interest shall be credited to
the individual account balance of the member on an annual basis.
F. A participant in the Oklahoma Police Deferred Option Plan
shall receive, at the option of the participant:
1. A lump sum payment from th e account equal to the optio n
account balance of the participant, payable to the participant;
2. A lump sum payment from the acc ount equal to the option
account balance of the participant, payable to the annuity provider
which shall be selected by the par ticipant as a result of the
research and investigation of the participant; or
3. Any other method of payment if approved by the State Board.
Notwithstanding any other provis ion contained herein to the
contrary, commencement of distributions under the Okla homa Police
Deferred Option Plan shall be no later than the time as set forth in
subsection C of Section 50-114 of this title. RBH No. 5254
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G. If the participant dies during the period of participation
in the Oklahoma Police Deferred Option Plan, a lump sum payment
equal to the account balance o f the participant shall be paid to the
recipients, which may include a t rust, properly designated in
writing by the participant or, if none, to t he surviving spouse who
was married to the participant for the thirty (30) continuo us months
immediately preceding the death of the participant; provided, a
surviving spouse of a part icipant who died in, and as a consequence
of, the performance of the part icipant's duty for a participating
municipality shall not be subject to the thirty -month marriage
requirement for survivor benefits or, if no surviving spouse, to the
estate of the participant.
H. In lieu of participating in the Oklahoma Police Deferred
Option Plan pursuant to subsections A, B, C, D, E , and F of this
section, a member ma y make an irrevocable elect ion to participate in
the Oklahoma Police Deferred Option Plan pursuant t o this subsection
as follows:
1. For purposes of this subsection, the following definitions
shall apply:
a. "back drop date" means the date selected by the
member, which is up to fiv e (5) years before the
member elects to participate in the Oklahoma Polic e
Deferred Option Plan, but not before the date at which RBH No. 5254
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the member completes twenty (20) years of credited
service,
b. "termination date" means the date th e member elects to
participate in the Oklahoma Police Deferred Option
Plan pursuant to this subsecti on, and the date the
member terminates employment with all participat ing
municipalities as an active police officer, such
termination has at all times inclu ded reemployment of
a member by a participating municipality only if such
reemployment is as a polic e chief or in a position not
covered under the System,
c. "earlier attained credited service" means the credited
service earned by a member as of the back d rop date,
and earlier attained credited service cannot be
reduced to less than twenty (20) years of credited
service, and
d. "deferred benefit balance" means all month ly
retirement benefits that would have been payable had
the member elected to cease emplo yment on the back
drop date and receive a service retirement from the
back drop date to the terminat ion date, all of the
member's contributions and one -half (1/2) of the
employer contributions from the back drop date to the
termination date, with interest based on how the RBH No. 5254
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benefit would have accumulated as if the member had
participated in the Oklahoma Po lice Deferred Option
Plan pursuant to subsections A, B, C, D , and E of this
section from the back drop date to the termination
date;
2. At the termination d ate, the monthly pension be nefit shall
be determined based on earlier attained credited service and on the
final average salary as of the back drop date . The member's
individual deferred option account shall be credited with an amount
equal to the deferre d benefit balance; the memb er shall terminate
employment with all participating municipalities as a police officer
and shall start receiving the member's accrued mont hly 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 Police Deferred Option Plan
pursuant to this subsection if the member ha s elected to participate
in the Oklahoma Police Deferred Option Plan pursuant to subsectio ns
A, B, C, D, E, and F of this section; and
3. If a member who has not less than twenty (20) years of
creditable service and who is eligible to receive a service
retirement pension dies prior to terminating employment, the
surviving spouse shall be eligib le to elect to receive a benefit
determined as if the member had elected to participate in the
Oklahoma Police Deferred Option Plan in accordance with this RBH No. 5254
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subsection on the day immediately preceding the death . The
surviving spouse must have been married to the member for the thi rty
(30) continuous months preceding the member's death; provided, the
surviving spouse of a member w ho died while in, and as a consequence
of, the performance of the member's duty for a participating
municipality shall not be subj ect to the thirty-month marriage
requirement for this election.
SECTION 2. AMENDATORY 11 O.S. 2021, Section 50-112, is
amended to read as follows:
Section 50-112. A. All persons employed as full-time duly
appointed or elected officers who are paid for w orking more than
twenty-five (25) hours per week or any person hired by a
participating municipality who is undergoing police training to
become a permanent police officer of the municipality shall
participate in the System upon initial employment with a p olice
department of a participating municipality. All such persons shall
submit to a physical -medical examination pertaining to sight,
hearing, agility and other conditions the requirements of which
shall be established by the State Board. The person sha ll be
required to complete this physical -medical examination prior to the
beginning of actual employm ent. This examination shall identify any
preexisting conditions. Except as otherwise provided in this
section, a police officer shall be not less than tw enty-one (21) nor
more than forty-five (45) years of age when accepted for membership RBH No. 5254
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in the System. However, if a municipality should be found to be in
noncompliance with the provisions of Article 50 of this title, as
determined by the State Board, then any current full-time active
police officer employed by a municipality as of July 1, 2001, shall
not be denied eligibility to participate in the Oklahoma Police
Pension and Retirement System solely due to age. The State Board
shall have authority to deny or revoke membership of any person
submitting false information in such person ’s membership
application. The State Board shall have final authority in
determining eligibility for membership in the System , pursuant to
the provisions of this article.
B. The police chief of any participating municipality may be
exempt from membership in the System or may b ecome a member provided
the member is not a retired member and the requirements of this
section are met at the time of employment.
C. A member of the Syst em who has attained his or her normal
retirement date may, if the member so elects, agree to terminat e
employment and retire as a member of the System and make an election
to receive distributions from th e System. If a retired member is
reemployed by a participating municipality in the position of police
chief or in a position which is not covered by the System,
retirement shall include receipt by such retired member of in-
service distributions from the S ystem. RBH No. 5254
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D. A former member of the System who termina tes from covered
employment and who has neither retired from the System nor entered
the Oklahoma Police Deferred Option Plan and is later employed in a
covered position with a participating municipality s hall not be
denied eligibility to become a member of the System because he or
she is forty-five (45) years of age or older. If such member has
withdrawn his or her contributions prior to re-entering the System
and the member desires to receive credit for such prior service,
then the member shall pay back s uch contributions and interest
pursuant to Section 50 -111.1 of this title.
E. Notwithstanding any ot her provision of law to the contrary,
a municipality that employs two (2) or fewer full-time police
officers with a population of four thousand five hundre d (4,500) or
less, according to the latest Federal Decennial Cens us, may employ a
police officer retired police officers who is are more than forty-
five (45) years of age and who has never have participated in the
Oklahoma Police Pension and Retiremen t System, but such police
officer and are receiving retirement benefits. Such officers shall
not be eligible to reenter and participate in the System. Such
police officer shall be counted in the limitation im posed by this
subsection. Notwithstanding any othe r provisions of law, the State
Board shall be granted access to information concerning a list of
actively working police o fficers within the municipalities and RBH No. 5254
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agencies under the purview provided by the Co uncil on Law
Enforcement Education and Training.
SECTION 3. This act shall become effective July 1, 2023.
SECTION 4. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
59-1-5254 CMA 01/10/23
THOMAS E. CUMMINS CONSULTING ACTUARY, INC.
2512 E. 71
st
Street , Suite D ∙ Tulsa, Oklahoma 74136 (918) 492-9658 ∙ (918) 492- 9659
January 11, 2023
Representative Carl Newton
Room 507
Re: RBH No. 5254
RBH No. 5254 creates a hard minimum interest rate of 7.5% per year
for participants in the Oklahoma Police Pension and Retirement
System. The current interest rate to be used i s greater of interest
rate earned by the fund less 2% and the actuarial interest rate used
in the latest actuarial valuation. The current actuarial interest
rate is 7.5%.
RBH No. 5254 is a non fiscal bill as defined by OPLAAA.
RBH No. 5254 could become fiscal sometime in the future should the
system’s actuary lower the actuarial interest assumption. Such
change would be made on fund’s performance and expected performance
in the future,
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