Oklahoma 2024 Regular Session

Oklahoma House Bill HB2174 Compare Versions

Version 1 (Old)

Version 2 (New)

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1	1		RBH No. 6116
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3		-	HB2174 HFLR Page 1
4		-	BOLD FACE denotes Committee Amendments. 1
	3	+	Req. No. 6116 Page 1 1
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29		-	HOUSE OF REPRESENTATIVES - FLOOR VERSION
30		-
31	28		STATE OF OKLAHOMA
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33	30		1st Session of the 59th Legislature (2023)
34	31
35	32		HOUSE BILL 2174 By: Ford
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41	38		AS INTRODUCED
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43	40		An Act relating to the Oklahoma Police Pension and
44	41		Retirement System; amending 11 O.S. 2021, Section 50-
45	42		111.3, which relates to deferred op tion plans;
46	43		modifying provision relat ed to interest; and
47	44		providing an effective date .
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53	54		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
54	55		SECTION 1. AMENDATORY 11 O.S. 2021, Section 50 -111.3, is
55	56		amended to read as follows:
56	57		Section 50-111.3 A. In lieu of terminating employment and
57	58		accepting a service retirement pension pursuant to Section 50 -114 of
58	59		this title, any member of the Okla homa Police Pension and Retirement
59	60		System who has not less than twenty ( 20) years of creditable service
60	61		and who is eligible to receive a service retirement pension may make
61	62		an irrevocable election to participate in the Oklahoma Police
62	63		Deferred Option Plan and defer the receipts of benefits in
63	64		accordance with the provisions of this section. RBH No. 6116
64	65
65		-	HB2174 HFLR Page 2
66		-	BOLD FACE denotes Committee Amendments. 1
	66	+	Req. No. 6116 Page 2 1
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91	91		B. For purposes of this section, creditable service shall
92	92		include service credit reciprocally recognized pursuant to Section
93	93		50-101 et seq. of this title but for eligib ility purposes only.
94	94		C. The duration of participation in the Oklahoma Po lice
95	95		Deferred Option Plan for a member shall no t exceed five (5) years .
96	96		Participation in the Oklahoma Police Deferred Option Plan must begin
97	97		the first day of a month and end on the last day of a month. At the
98	98		conclusion of a member 's participation in the Oklahoma Police
99	99		Deferred Option Plan, the memb er shall terminate employment with all
100	100		participating municipalities as an officer, and shall start
101	101		receiving the member 's accrued monthly retirement benefit from the
102	102		System. Such a member may receive in -service distributions of such
103	103		member's accrued monthly retirement benefit from the System if such
104	104		member is reemployed by a participating municipality only if such
105	105		reemployment is as a po lice chief or in a position not covered under
106	106		the System.
107	107		D. When a member begins participation in the Oklahoma Police
108	108		Deferred Option Plan, the contribution of the employee shall cease .
109	109		The employer contributions shall continue to be paid in accordance
110	110		with Section 50-109 of this title. Municipal contributions for
111	111		employees who elect the Oklahoma Police Deferred Option P lan shall
112	112		be credited equally to the Oklahoma Police Pension and Retirement
113	113		System and to the Oklahoma Police Deferred Option Plan . The monthly
114	114		retirement benefits that would have been payable had the member RBH No. 6116
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116		-	HB2174 HFLR Page 3
117		-	BOLD FACE denotes Committee Amendments. 1
	116	+	Req. No. 6116 Page 3 1
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142	141		elected to cease employment and receive a servi ce retirement shall
143	142		be paid into the Oklahoma Police Deferred Option Plan account.
144	143		E. 1. A member who participates in this plan sha ll be eligible
145	144		to receive cost of living increases.
146	145		2. A member who partici pates in this plan shall earn interest
147	146		at a rate of two percentage points below the rate of return of the
148	147		investment portfolio of the System, but no less than the actuarial
149	148		assumed interest rate as certified by the actuary in the yearly
150	149		evaluation report of the actuary seven and one-half percent (7.5%)
151	150		interest effective November 1, 2023 . The interest shall be credited
152	151		to the individual account balance of the member on an annual basis.
153	152		F. A participant in the Oklahoma Police Deferred Option Plan
154	153		shall receive, at the option of the participant:
155	154		1. A lump sum payment from th e account equal to the option
156	155		account balance of the participant, payable to the participant;
157	156		2. A lump sum payment from the account equal to the option
158	157		account balance of the participant, payable to the annuity provider
159	158		which shall be selected by the par ticipant as a result of the
160	159		research and investigation of the participant; or
161	160		3. Any other method of payment if approved by the State Board.
162	161		Notwithstanding any other provis ion contained herein t o the
163	162		contrary, commencement of distr ibutions under the Okla homa Police
164	163		Deferred Option Plan shall be no later than the time as set forth in
165	164		subsection C of Section 50 -114 of this title. RBH No. 6116
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167		-	HB2174 HFLR Page 4
168		-	BOLD FACE denotes Committee Amendments. 1
	166	+	Req. No. 6116 Page 4 1
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193	191		G. If the participant dies during the period of participation
194	192		in the Oklahoma Police Deferred Option Plan , a lump sum payment
195	193		equal to the account balance of the participant shall be paid to the
196	194		recipients, which may include a trust, properly designated in
197	195		writing by the participant or, if none, to t he surviving spouse who
198	196		was married to the participant for t he thirty (30) continuo us months
199	197		immediately preceding the death of the participant; provided, a
200	198		surviving spouse of a participant who died in, and as a consequence
201	199		of, the performance of the part icipant's duty for a participating
202	200		municipality shall not be subject to the thirty -month marriage
203	201		requirement for survivor benefits or, if no surviving spouse, to the
204	202		estate of the participant.
205	203		H. In lieu of participating in the Oklahoma Police Deferred
206	204		Option Plan pursuant to subsections A, B, C, D, E and F of th is
207	205		section, a member ma y make an irrevocable election to participate in
208	206		the Oklahoma Police Deferred Option Plan pursuant to this subsection
209	207		as follows:
210	208		1. For purposes of this subsection, the following definitions
211	209		shall apply:
212	210		a. "back drop date" means the date selected by the
213	211		member, which is up to five (5) years before the
214	212		member elects to participate in the Oklahoma Police
215	213		Deferred Option Plan, but not before the date at which RBH No. 6116
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217		-	HB2174 HFLR Page 5
218		-	BOLD FACE denotes Committee Amendments. 1
	215	+	Req. No. 6116 Page 5 1
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243	240		the member completes twenty (20) years of credited
244	241		service,
245	242		b. "termination date" means the date the member elects to
246	243		participate in the Oklahoma Police Deferred Option
247	244		Plan pursuant to this subsection, and the date the
248	245		member terminates employment with all participat ing
249	246		municipalities as an ac tive police officer, such
250	247		termination has at all times inclu ded reemployment of
251	248		a member by a participating municipality only if such
252	249		reemployment is as a police chief or in a position not
253	250		covered under the System,
254	251		c. "earlier attained credited service " means the credited
255	252		service earned by a member as of the back d rop date,
256	253		and earlier attained credited service cannot be
257	254		reduced to less than twenty (20) years of credited
258	255		service, and
259	256		d. "deferred benefit balance " means all monthly
260	257		retirement benefits that w ould have been payable had
261	258		the member elected to cease emplo yment on the back
262	259		drop date and receive a service retirement from the
263	260		back drop date to the termination date, all of the
264	261		member's contributions and one -half (1/2) of the
265	262		employer contributions fro m the back drop date to the
266	263		termination date, with interest based on how the RBH No. 6116
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268		-	HB2174 HFLR Page 6
269		-	BOLD FACE denotes Committee Amendments. 1
	265	+	Req. No. 6116 Page 6 1
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294	290		benefit would have accumulated as if the member had
295	291		participated in the Oklahoma Police Deferred Option
296	292		Plan pursuant to subsections A, B, C, D and E of this
297	293		section from the back drop date to the termination
298	294		date;
299	295		2. At the termination d ate, the monthly pension benefit shall
300	296		be determined based on earlier attained credited service and on the
301	297		final average salary as of the back drop date . The member's
302	298		individual deferred option a ccount shall be credited with an amou nt
303	299		equal to the deferre d benefit balance; the member shall terminate
304	300		employment with all participating municipalities as a police officer
305	301		and shall start receiving the member 's accrued monthly retirement
306	302		benefit from the System. The provisions of subsecti ons B, C, E, F
307	303		and G of this section shall apply to this subsection . A member
308	304		shall not participate in the Oklahoma Police Deferred Option Plan
309	305		pursuant to this subsection if the member ha s elected to participate
310	306		in the Oklahoma Police Deferred Option Pla n pursuant to subsectio ns
311	307		A, B, C, D, E and F of this section; and
312	308		3. If a member who has not less than twenty (20) years of
313	309		creditable service and who is eligible to receive a service
314	310		retirement pension dies prior to terminating employment, the
315	311		surviving spouse shall be eligib le to elect to receive a benefit
316	312		determined as if the member had elected to participate in the
317	313		Oklahoma Police Deferred Option Plan in accordance with this RBH No. 6116
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319		-	HB2174 HFLR Page 7
320		-	BOLD FACE denotes Committee Amendments. 1
	315	+	Req. No. 6116 Page 7 1
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345	340		subsection on the day immediately preced ing the death. The
346	341		surviving spouse must have been married to the member for the thirty
347	342		(30) continuous months preceding the member 's death; provided, the
348	343		surviving spouse of a member who died while in, and as a consequence
349	344		of, the performance of the memb er's duty for a participating
350	345		municipality shall not be subj ect to the thirty-month marriage
351	346		requirement for this election.
352	347		SECTION 2. This act shall become effective November 1, 2023.
353	348
354		-	COMMITTEE REPORT BY: COMMITTEE ON BANKING, FINANCIAL SERVICES AND
355		-	PENSIONS, dated 02/22/2023 - DO PASS.
	349	+	59-1-6116 CMA 01/04/23
	350	+
	351	+	THOMAS E. CUMMINS CONSULTING ACTUARY, INC.
	352	+	2512 E. 71
	353	+	st
	354	+	Street , Suite D ∙ Tulsa, Oklahoma 74136
	355	+	(918) 492-9658 ∙ (918) 492- 9659
	356	+
	357	+
	358	+
	359	+
	360	+
	361	+	January 5, 2023
	362	+
	363	+
	364	+
	365	+	Representative Russ Ford
	366	+	Room 300
	367	+
	368	+
	369	+	Re: RBH No. 6116
	370	+
	371	+
	372	+	RBH No. 6116 creates a hard minimum interest rate of 7.5% per year
	373	+	for participants in the Oklahoma Police Pension and Retirement
	374	+	System. The current interest rate to be used is greater of interest
	375	+	rate earned by the fund less 2% and the actuarial interest rate used
	376	+	in the latest actuarial valuation. The current actuarial interest
	377	+	rate is 7.5%.
	378	+
	379	+
	380	+	RBH No. 6116 is a non fiscal bill as defined by OPLAAA.
	381	+
	382	+
	383	+	RBH No. 6116 could become fiscal sometime in the future should the
	384	+	system’s actuary lower the actuarial interest assumption. Such
	385	+	change would be made on fund’s performance and expecte d performance
	386	+	in the future.
	387	+
	388	+
	389	+
	390	+	I am a member of the American Academy of Actuaries and meet the
	391	+	Qualification Standards of the American Academy of Actuaries to
	392	+	render the actuarial opinion herein.
	393	+
	394	+
	395	+	Thomas E. Cummins
	396	+
	397	+	Thomas E. Cummins, MAAA
	398	+
	399	+
	400	+