Oklahoma Senate Bill SB1443

Oklahoma 2024 Regular Session

• Introduced: 2/5/24
• Refer: 2/6/24
• Report Pass: 2/6/24

Caption

State fiscal affairs; creating the Oklahoma Pension Legacy Fund; providing sources of funds; establishing certain guidelines. Effective date. Emergency.

Impact

By setting up the Oklahoma Pension Legacy Fund, this legislation seeks to address the underfunded status of certain state retirement systems, which are crucial for the financial security of state employees and retirees. The bill mandates that a certain proportion of funds must be maintained in liquid assets, allowing for immediate transfers to retirement systems facing actuarial value funding ratios below 100%. This structure aims to stabilize the financial footing of these systems and potentially enhance the benefits received by beneficiaries while also meeting current obligations.

Summary

Senate Bill 1443 proposes the establishment of the Oklahoma Pension Legacy Fund aimed at improving the fiscal management of state retirement systems. This fund will be a perpetual entity created within the State Treasury to accommodate surplus funds allocated by the Legislature. Its existence is part of an overarching strategy to ensure that the retirement obligations of the state are met without over-reliance on volatile revenue sources. The effectiveness of this fund is measured by its ability to accrue and manage funds responsibly, ensuring adequate liquidity and investment fidelity.

Contention

One notable point of contention surrounding SB1443 involves the appropriations outlined in the bill. With significant amounts of money earmarked for this fund over the next few fiscal years – including over $1.84 billion appropriated for the fiscal year ending June 30, 2023 – concerns have arisen regarding the sustainability of such funding levels. Besides, there may be debates regarding the oversight and management of the fund, particularly in terms of investment strategies and expected returns versus risk factors. Stakeholders, including state lawmakers and financial analysts, must ensure that the fund's operations align with sound fiscal principles while addressing the pressing needs of state pension funds.