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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
SENATE BILL 632 By: Montgomery
AS INTRODUCED
An Act relating to Oklahoma Public Employees
Retirement System; amending 62 O.S. 2021, Section
3103, as last amended by Section 1, Ch apter 306,
O.S.L. 2022 (62 O.S. Supp. 2022, Section 3103), which
relates to Oklahoma Pension Legislation Actuarial
Analysis Act definitions; modifying definition;
updating statutory language; amending 74 O.S. 2021,
Section 935.5, which relates to employer contribution
amount; increasing employer matching amount for
certain contributions; further increasing employer
match requirement under certain circumstances;
exempting certain contribution rate increa ses from
Oklahoma Pension Legislation Actuarial Analysis Act;
and providing effective dates.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 62 O.S. 2021, Section 3103, as
last amended by Section 1, Chapter 306, O.S.L. 2022 (62 O.S. Supp.
2022, Section 3103), is amended to read as follows:
Section 3103. As used in the Oklahoma Pension Legislation
Actuarial Analysis Act:
1. “Amendment” means any amendment, including a substitute
bill, made to a retirement bill by any committee of the House of
Representatives or Senate, any conference committee of the House of
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Representatives or Senate or by the House of Representatives or
Senate;
2. “RB number” means that number precede d by the letters “RB”
assigned to a retirement bill by the respective staffs of the
Oklahoma State Senate and the Oklahoma House of Representatives when
the respective staff office prepares a retirement bill for a member
of the Legislature;
3. “Legislative Actuary” means the firm or entity that enters
into a contract with the Legislative Service Bureau pursuant to
Section 452.15 of Title 74 of the Oklahoma Statutes to provide the
actuarial services and other duties provided for in the Oklahoma
Pension Legislation Actuarial Analysis Act;
4. “Nonfiscal amendment” means an amendment to a retirement
bill having a fiscal impact, which amendment does not change any
factor of an actuarial investigation specified in subsection A of
Section 3109 of this title;
5. “Nonfiscal retirement bill” means a retirement bill:
a. which does not affect the cost or funding factors of a
retirement system,
b. which affects such factors only in a manner which does
not:
(1) grant a benefit increase under the retirement
system affected by the bill,
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(2) create an actuarial accrued liability for or
increase the actuarial accrued liability of the
retirement system affected by the bill, or
(3) increase the normal cost of the retirement system
affected by the bill,
c. which authorizes the purchase by an active member of
the retirement system, at the actuarial cost for the
purchase as computed pursuant to the statute in effect
on the effective date of the measure allowing such
purchase, of years of service for purposes of reaching
a normal retirement date in the applicable retirement
system, but which cannot be used in order to compute
the number of years of service for purposes of
computing the retirement benefit for the member,
d. which provides for the computation of a service -
connected disability retirement benefit for members of
the Oklahoma Law Enforcement Retirement System
pursuant to Section 2-305 of Title 47 of the Oklahoma
Statutes if the members were unable to complete twenty
(20) years of service as a result of the disability,
e. which requires membership in the defined benefit plan
authorized by Section 901 et seq. of Title 74 of the
Oklahoma Statutes for persons whose first elected or
appointed service occurs on or after November 1, 2018,
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if such persons had any prior service in t he Oklahoma
Public Employees Retirement System prior to November
1, 2015,
f. which provides for a one-time increase in retirement
benefits if the increase in retirement benefits is not
a permanent increase in the gross annual retirement
benefit payable to a member or beneficiary, occurs
only once pursuant to a single statutory authorization
and does not exceed:
(1) the lesser of two percent (2%) of the gross
annual retirement benefit of the member or One
Thousand Dollars ($1,000.00) and requires that
the benefit may only be provided if the funded
ratio of the affected retirement system would not
be less than sixty percent (60%) but not greater
than eighty percent (80%) after the benefit
increase is paid,
(2) the lesser of two percent (2%) of the gross
annual retirement benefit of the member or One
Thousand Two Hundred Dollars ($1,200.00) and
requires that the benefit may only be provided if
the funded ratio of the affected retirement
system would be greater than eighty percent (80%)
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but not greater than one h undred percent (100%)
after the benefit increase is paid,
(3) the lesser of two percent (2%) of the gross
annual retirement benefit of the member or One
Thousand Four Hundred Dollars ($1,400.00) and
requires that the benefit may only be provided if
the funded ratio of the affected retirement
system would be greater than one hundred percent
(100%) after the benefit increase is paid, or
(4) the greater of two percent (2%) of the gross
annual retirement benefit of the volunteer
firefighter or One Hundred Dolla rs ($100.00) for
persons who retired from the Oklahoma
Firefighters Pension and Retirement System as
volunteer firefighters and who did not retire
from the Oklahoma Firefighters Pension and
Retirement System as a paid firefighter.
As used in this subparagr aph, “funded ratio” means the
figure derived by dividing the actuarial value of
assets of the applicable retirement system by the
actuarial accrued liability of the applicable
retirement system,
g. which modifies the disability pension standard for
police officers who are members of the Oklahoma Police
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Pension and Retirement System as provided by Section 3
50-115 of this act Title 11 of the Oklahoma St atutes,
h. which provides a cost-of-living benefit increase
pursuant to the provisions of:
(1) Section 49-143.7 of Title 11 of the Oklahoma
Statutes,
(2) Section 50-136.9 of Title 11 of the Oklahoma
Statutes,
(3) Section 1104K of Title 20 of the Oklahoma
Statutes,
(4) Section 2-305.12 of Title 47 of the Oklahoma
Statutes,
(5) Section 17-116.22 of Title 70 of the O klahoma
Statutes,
(6) Section 930.11 of Title 74 of the Oklahoma
Statutes, or
i. which modifies the computation of the line-of-duty
disability benefit pursuant to the provisions of this
act, or
j. which increases the employer and employee contribution
rates in the defined contribution retirement system
pursuant to Section 935.1 et seq. of Title 74 of the
Oklahoma Statutes.
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A nonfiscal retirement bill shall include any retirement bill t hat
has as its sole purpose the appropriation or distribution or
redistribution of monies in some manner to a retirement system for
purposes of reducing the unfunded liability of such system or the
earmarking of a portion of the revenue from a tax to a ret irement
system or increasing the percentage of the revenue earmarked from a
tax to a retirement system;
6. “Reduction-in-cost amendment” means an amendment to a
retirement bill having a fiscal impact which reduces the cost of the
bill as such cost is dete rmined by the actuarial investigation for
the bill prepared pursuant to Section 3109 of this title;
7. “Retirement bill” means any bill or joint resolution
introduced or any bill or joint resolution amended by a member of
the Oklahoma Legislature which cr eates or amends any law directly
affecting a retirement system. A retirement bill shall not mean a
bill or resolution that impacts the revenue of any state tax in
which a portion of the revenue generated fr om such tax is earmarked
for the benefit of a ret irement system;
8. “Retirement bill having a fiscal impact” means any
retirement bill creating or establishing a retirement system and any
other retirement bill other than a nonfiscal retirement bill; and
9. “Retirement system” means the Teachers’ Retirement System of
Oklahoma, the Oklahoma Public Employees Retirement System, the
Uniform Retirement System for Justices and Judges, the Oklahoma
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Firefighters Pension and Retirement System, the Oklahoma Police
Pension and Retirement System, the Oklahoma Law En forcement
Retirement System, or a retirement system established after January
1, 2006.
SECTION 2. AMENDATORY 74 O.S. 2021, Section 935.5, is
amended to read as follows:
Section 935.5. A. Except as otherwise provided by subsectio n B
of this section, employers of employees who become participants in
the defined contribu tion retirement system shall match the employee
contribution paid on a monthly or more freq uent basis at the rate of
six percent (6.0%) eight percent (8.0%) based on the same
compensation amount used to compute the employee contribution
amount.
B. If an employee selects a contribution rate of seven percent
(7.0%) eight percent (8.0%) or more, but not higher than allowed
pursuant to the maximum annual contribution lim it prescribed by
Section 415 of the Internal Revenue Code of 1986, as amended, the
employer matching amount shall be seven percent (7.0%) ten percent
(10%).
C. The initial four and five -tenths percent (4.5%) employee
contribution shall be th e only mandatory contribution of an employee
participating in the defined contribution retirement system created
by this act. These funds shall be placed by the System in either a
401(a) plan or a 457(b) plan, to be determined by the Board to
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maintain the plan consistent with the Internal Revenue Code. Any
employee contributions eligible to be matched under this section
over the four and five-tenths percent (4.5%) initial contribution
shall be considered voluntary deferrals of compensation and placed
in a 457(b) plan. All employer matching funds shall be placed in a
401(a) plan.
Any contribution rate that i s more than the four and five-tenths
percent (4.5%) rate can be chosen by the participating employee upon
the employee’s initial participation, and can be changed once per
month. The employee contribution rate chosen shall continue until
the employee elects to change the contribution rate or terminates
service or retires.
D. The employer match as set forth in subsection A of this
section may be increas ed at any time by the Legislature without
affecting the then-existing rights of participating employees a nd
beneficiaries in order to encourage participating employees to
accumulate deferred income reserves for themselves and their
dependents. The employe r match may be decreased at any time by the
Legislature without affecting the then -existing rights of
participating employees and beneficiaries in order to provide
funding as may be needed to reduce the unfunded liabilities of the
defined benefit plan as s et forth in Section 901 et seq. of this
title, but shall not be less than six percent (6.0%) for any year
during which the defined contribution plan is maintained.
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E. Increases in the employee and employer contribution rate to
the defined contribution retirement system shall not be subject to
the provisions of the Oklahoma P ension Legislation Actuarial
Analysis Act pursuant to Section 3101 et seq. of Title 62 of the
Oklahoma Statutes.
SECTION 3. Section 1 of this act shall become effective October
1, 2023.
SECTION 4. Section 2 of this act shall become effective
November 1, 2023.
59-1-480 RD 1/18/2023 9:00:07 AM