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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 88 By: Boren
AS INTRODUCED
An Act relating to the Teachers’ Retirement System of
Oklahoma; amending 70 O.S. 2021, Section 17 -106.1,
which relates to the Board of Trus tees of the
Teachers’ Retirement System of Oklahoma; allowing
Board of Trustees to approve cost -of-living
adjustment for certain retirees under certain
circumstances; updating statutory language; and
making language gender neutral .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 70 O.S. 2021, Section 17 -106.1, is
amended to read as follows:
Section 17-106.1. A. The Board of Trustees of the Teachers ’
Retirement System of Oklahoma shall disch arge their duties with
respect to the System solely in the interest of the participants and
beneficiaries and:
1. For the exclusive purpose of:
a. providing benefits to participants and their
beneficiaries, and
b. defraying reasonable expenses of administ ering the
System;
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2. With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of
an enterprise of a like character and wit h like aims;
3. By diversifying the investments of the System so as to
minimize the risk of large losses, unless under the circumstances it
is clearly prudent not to do so; and
4. In accordance with the laws, documents and instruments
governing the System.
B. The Board of Trustees of the Teachers ’ Retirement System of
Oklahoma may invest the assets of the System in real property owned
or to be acquired by the State of Oklahoma state. It is further
authorized to acquire, exchange, and grant any real prop erty under
its jurisdiction as is necessary to carry out the investment in the
real property. The Board of Trustees of the Teachers ’ Retirement
System of Oklahoma is authorized to invest not more than ten percent
(10%) of the total value of assets of the System in connection with
such investments. Limitations on investment of the assets of the
System provided herein shall be determined as of the date of its
making or acquisition.
C. The Board of Trustees may procure insurance indemnifying the
members of the Board of Trustees from personal loss or
accountability from liability resulting from a member ’s action or
inaction as a member of the Board.
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D. The Board of Trustees may establish an investment committee.
The investment committee shall be composed of not more than five (5)
members of the Board of Trustees appointed by the chairman chair of
the Board of Trustees. The committee shall make recommendations to
the full Board of Trustees on all matters related to the choice of
custodians and managers of th e assets of the System, on the
establishment of investment and fund management guidelines, and in
planning future investment policy. The committee shall have no
authority to act on behalf of the Board of Trustees in any
circumstances whatsoever. No recom mendation of the committee shall
have effect as an action of the Board of Tru stees nor take effect
without the approval of the Board of Trustees as provided by law.
E. The Board of Trustees may retain qualified investment
managers to provide for the inves tment of the monies of the System.
The investment managers shall be chosen by a solicitation of
proposals on a competitive bid basis pursuant to standards set by
the Board of Trustees. Subject to the overall investment guidelines
set by the Board of Trus tees, the investment managers shall have
full discretion in the management of those monies of the System
allocated to the investment managers. The Board of Trustees shall
manage those monies not specifically allocated to the investment
managers. The monies of the System allocated to the investment
managers shall be actively managed by the investment managers, which
may include selling investments and realizing losses if such action
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is considered advantageous to longer term return maximization.
Because of the total return objective, no distinction shall be made
for management and performance evaluation purposes between realized
and unrealized capital gains and losses.
F. Funds and revenues for investment by the investment managers
or the Board of Trustees shall be placed with a custodian selected
by the Board of Trustees. The custodian shall be a bank or trust
company offering pension fund master trustee and master custodial
services. The custodian shall be chosen by a solicitation of
proposals on a competitive bid basis pursuant to standards set by
the Board of Trustees. In com pliance with the investment policy
guidelines of the Board of Trustees, the custodian bank or trust
company shall be contractually responsible for ensuring that all
monies of the System are invested in income -producing investment
vehicles at all times. If a custodian bank or trust company has not
received direction from the investment managers of the System as to
the investment of the monies of the System in specific investment
vehicles, the custodian bank or trust company shall be contractually
responsible to the Board of Trustees for investing the monies in
appropriately collateralized short -term interest-bearing investment
vehicles.
G. By November 1, 1988, and prior to August 1 of each year
thereafter, the Board of Trustees shall develop a written investment
plan for the System.
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H. The Board of Trustees shall compile a quarterly financial
report of all the funds of the System on a fiscal year basis. The
report shall be compile d pursuant to uniform reporting standards
prescribed by the Oklahoma State Pe nsion Commission for all state
retirement systems. The report shall include several relevant
measures of investment value, including acquisition cost and current
fair market value with appropriate summaries of total holdings and
returns. The report shall contain combined and individual rate of
returns of the investment managers by category of investment, over
periods of time. The Board of Trustees shall include in the
quarterly reports all commissions, fees or payments for investment
services performed o n behalf of the Board. The report shall be
distributed to the Governor, the Oklahoma State Pension Commission,
the Legislative Service Bureau, the Speaker of the House of
Representatives and the President Pro Tempore of the Senate. In
lieu of compiling and distributing the quarterly report, the Board
may provide the Oklahoma State Pension Commission with direct access
to the same data from the custodian bank for the System.
I. After July 1 and before December 1 of each year, the Board
of Trustees shall publish widely an annual report presented in
simple and easily understood language pursuant to uniform reporting
standards prescribed by the Oklahoma State Pension Commission for
all state retirement systems. The report shall be submitted to the
Governor, the Speaker of the House of Representatives, the President
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Pro Tempore of the Senate, the Oklahoma State Pension Commission and
the members of the System. The annual report shall cover the
operation of the System during the past fiscal year, including
income, disbursements, and the financial condition of the System at
the end of the fiscal year. The annual report shall also contain
the information issued in the quarterly reports required pursuant to
subsection H of this section as well as a summary of the results of
the most recent actuarial valuation to include total assets, total
liabilities, unfunded liability or over funded status, contributions
and any other information deeme d relevant by the Board of Trustees.
The annual report shall be written in s uch a manner as to permit a
readily understandable means for analyzing the financial condition
and performance of the System for the fiscal year.
J. 1. The Board of Trustees may approve a two percent (2%)
cost-of-living adjustment, pursuant to the schedule prescribed by
this subsection for persons who have received benefits from the
System for one or more years. The Board of Trustees may only
approve a cost-of-living adjustment when the System’s funded ratio,
according to the latest annual actuarial valu ation, exceeds a
percentage as prescribed in paragraph 2 of this subsection;
provided, a cost-of-living adjustment shall not be granted if the
adjustment would cause the funding r atio of the System to drop below
the percentage which authorized the adjustment.
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2. Except as provided in paragraph 1 of this subsection, a
cost-of-living adjustment may be approved by the Board of Trustees
if the funded ratio of the System exceeds eighty percent (80%).
Subsequent cost-of-living adjustments may be approved each t ime
thereafter that the System ’s funded ratio increases by two and one -
half percent (2 1/2%) from the percentage which authorized the
previous cost-of-living adjustment.
60-1-1050 RD 12/20/2024 2:40:49 PM