Oklahoma Pension Changes Vetoed

Oklahoma Gov. Mary Fallin said last week she vetoed a pension reform plan because it did not incorporate her proposal to consolidate operations of several state pension plans.

House Bill 2077 would have allowed employees in the Oklahoma Public Employees Retirement System to opt for a 401(k)-style defined contribution plan rather than the traditional defined benefits plan. The defined plan was mandated for new statewide elected officials and legislators.

“I cannot in good conscience sign (the bill) into law,” she said in the veto message.

In her State of the State briefing in February, Fallin said the state could save 15% of the $100 million spent each year to administer the state’s seven pension systems by combining some of them under a single administration.

“While HB 2077 is well intended, it lacks any measurable impact on the unfunded status of the state’s pension plans and fails to reduce the state’s significant pension debts since participation is only voluntary for state employees and required for a small group of first-time elected officials,” Fallin said.

The unfunded liability for Oklahoma’s pension systems is estimated at $11.5 billion. The liability was reduced from 2010’s $16.5 billion by legislation adopted in 2011.

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