RBH No. 5208
1 STATE OF OKLAHOMA
2 1st Session of the 59th Legislature (2023)
3 HOUSE BILL 2854 By: Wallace
4
5
6 AS INTRODUCED
7 An Act relating to public retirement systems;
amending 62 O.S. 2021, Section 3103, as amended by
8 Section 1, Chapter 306, O.S.L. 2022 (62 O.S. Supp.
2022, Section 3103), which relates to the Oklahoma
9 Pension Legislation Actuarial Analysis Act; modifying
definitions; imposing conditions related to approvals
10 by the Internal Revenue Service; providing for
termination of provisions of the Retirement Freedom
11 Act; providing for cessation of certain employee
contributions; requiring employee contributions
12 pursuant to provisions of defined benefit plan;
providing for cessation of certain employer
13 contributions; requiring employer contributions
pursuant to provisions of defined benefit plan;
14 authorizing management of defined contribution plan
accounts for certain period of time; requiring
15 irrevocable election with regard to defined
contribution plan account balances; providing for
16 termination of effect of provisions of the Retirement
Freedom Act; providing exceptions; providing for
17 vesting treatment of defined contribution plan
account balances as of designated date; providing for
18 computation of service credit in defined benefit plan
based on purchase of service at actuarial cost;
19 amending 74 O.S. 2021, Sections 913.4, 920, 929,
1316.2 and 1707, which relate to the Oklahoma Public
20 Employees Retirement System and the Deferred Savings
Incentive Plan; modifying provisions related to
21 participation in defined contribution plan; providing
for participating service credit resulting from
22 purchase at actuarial cost; modifying provisions
related to membership of elected officials in defined
23 contribution plan; modifying provisions related to
payment of employer contributions; modifying
24 provisions related to participation in deferred
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1 compensation plan; providing for codification; and
providing effective dates.
2
3
4 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
5 SECTION 1. AMENDATORY 62 O.S. 2021, Section 3103, as
6 amended by Section 1, Chapter 306, O.S.L. 2022 (62 O.S. Supp. 2022,
7 Section 3103), is amended to read as follows:
8 Section 3103. As used in the Oklahoma Pension Legislation
9 Actuarial Analysis Act:
10 1. "Amendment" means any amendment, including a substitute
11 bill, made to a retirement bill by any committee of the House or
12 Senate, any conference committee of the House or Senate or by the
13 House or Senate;
14 2. "RB number" means that number preceded by the letters "RB"
15 assigned to a retirement bill by the respective staffs of the
16 Oklahoma State Senate and the Oklahoma House of Representatives when
17 the respective staff office prepares a retirement bill for a member
18 of the Legislature;
19 3. "Legislative Actuary" means the firm or entity that enters
20 into a contract with the Legislative Service Bureau pursuant to
21 Section 452.15 of Title 74 of the Oklahoma Statutes to provide the
22 actuarial services and other duties provided for in the Oklahoma
23 Pension Legislation Actuarial Analysis Act;
24
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1 4. "Nonfiscal amendment" means an amendment to a retirement
2 bill having a fiscal impact, which amendment does not change any
3 factor of an actuarial investigation specified in subsection A of
4 Section 3109 of this title;
5 5. "Nonfiscal retirement bill" means a retirement bill:
6 a. which does not affect the cost or funding factors of a
7 retirement system,
8 b. which affects such factors only in a manner which does
9 not:
10 (1) grant a benefit increase under the retirement
11 system affected by the bill,
12 (2) create an actuarial accrued liability for or
13 increase the actuarial accrued liability of the
14 retirement system affected by the bill, or
15 (3) increase the normal cost of the retirement system
16 affected by the bill,
17 c. which authorizes the purchase by an active member of
18 the retirement system, at the actuarial cost for the
19 purchase as computed pursuant to the statute in effect
20 on the effective date of the measure allowing such
21 purchase, of years of service for purposes of reaching
22 a normal retirement date in the applicable retirement
23 system, but which cannot be used in order to compute
24
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1 the number of years of service for purposes of
2 computing the retirement benefit for the member,
3 d. which provides for the computation of a service-
4 connected disability retirement benefit for members of
5 the Oklahoma Law Enforcement Retirement System
6 pursuant to Section 2-305 of Title 47 of the Oklahoma
7 Statutes if the members were unable to complete twenty
8 (20) years of service as a result of the disability,
9 e. which requires membership in the defined benefit plan
10 authorized by Section 901 et seq. of Title 74 of the
11 Oklahoma Statutes for persons whose first elected or
12 appointed service occurs on or after November 1, 2018,
13 if such persons had any prior service in the Oklahoma
14 Public Employees Retirement System prior to November
15 1, 2015,
16 f. which provides for a one-time increase in retirement
17 benefits if the increase in retirement benefits is not
18 a permanent increase in the gross annual retirement
19 benefit payable to a member or beneficiary, occurs
20 only once pursuant to a single statutory authorization
21 and does not exceed:
22 (1) the lesser of two percent (2%) of the gross
23 annual retirement benefit of the member or One
24 Thousand Dollars ($1,000.00) and requires that
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1 the benefit may only be provided if the funded
2 ratio of the affected retirement system would not
3 be less than sixty percent (60%) but not greater
4 than eighty percent (80%) after the benefit
5 increase is paid,
6 (2) the lesser of two percent (2%) of the gross
7 annual retirement benefit of the member or One
8 Thousand Two Hundred Dollars ($1,200.00) and
9 requires that the benefit may only be provided if
10 the funded ratio of the affected retirement
11 system would be greater than eighty percent (80%)
12 but not greater than one hundred percent (100%)
13 after the benefit increase is paid,
14 (3) the lesser of two percent (2%) of the gross
15 annual retirement benefit of the member or One
16 Thousand Four Hundred Dollars ($1,400.00) and
17 requires that the benefit may only be provided if
18 the funded ratio of the affected retirement
19 system would be greater than one hundred percent
20 (100%) after the benefit increase is paid, or
21 (4) the greater of two percent (2%) of the gross
22 annual retirement benefit of the volunteer
23 firefighter or One Hundred Dollars ($100.00) for
24 persons who retired from the Oklahoma
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1 Firefighters Pension and Retirement System as
2 volunteer firefighters and who did not retire
3 from the Oklahoma Firefighters Pension and
4 Retirement System as a paid firefighter.
5 As used in this subparagraph, "funded ratio" means the
6 figure derived by dividing the actuarial value of
7 assets of the applicable retirement system by the
8 actuarial accrued liability of the applicable
9 retirement system,
10 g. which modifies the disability pension standard for
11 police officers who are members of the Oklahoma Police
12 Pension and Retirement System as provided by Section 3
13 of this act,
14 h. which provides a cost-of-living benefit increase
15 pursuant to the provisions of:
16 (1) Section 49-143.7 of Title 11 of the Oklahoma
17 Statutes,
18 (2) Section 50-136.9 of Title 11 of the Oklahoma
19 Statutes,
20 (3) Section 1104K of Title 20 of the Oklahoma
21 Statutes,
22 (4) Section 2-305.12 of Title 47 of the Oklahoma
23 Statutes,
24
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1 (5) Section 17-116.22 of Title 70 of the Oklahoma
2 Statutes,
3 (6) Section 930.11 of Title 74 of the Oklahoma
4 Statutes, or
5 i. which modifies the computation of the line-of-duty
6 disability benefit pursuant to the provisions of this
7 act, or
8 j. which provides for the termination of the defined
9 contribution retirement plan created pursuant to
10 Section 935.1 et seq. of Title 74 of the Oklahoma
11 Statutes pursuant to the provisions of Sections 2
12 through 10 of this act together with provisions for
13 conversion of defined contribution plan account
14 balances into participating service in the Oklahoma
15 Public Employees Retirement System defined benefit
16 plan created pursuant to Section 901 et seq. of Title
17 74 of the Oklahoma Statutes or such other disposition
18 of defined contribution plan account balances as may
19 be authorized pursuant to the provisions of this act.
20 A nonfiscal retirement bill shall include any retirement bill that
21 has as its sole purpose the appropriation or distribution or
22 redistribution of monies in some manner to a retirement system for
23 purposes of reducing the unfunded liability of such system or the
24 earmarking of a portion of the revenue from a tax to a retirement
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1 system or increasing the percentage of the revenue earmarked from a
2 tax to a retirement system;
3 6. "Reduction-in-cost amendment" means an amendment to a
4 retirement bill having a fiscal impact which reduces the cost of the
5 bill as such cost is determined by the actuarial investigation for
6 the bill prepared pursuant to Section 3109 of this title;
7 7. "Retirement bill" means any bill or joint resolution
8 introduced or any bill or joint resolution amended by a member of
9 the Oklahoma Legislature which creates or amends any law directly
10 affecting a retirement system. A retirement bill shall not mean a
11 bill or resolution that impacts the revenue of any state tax in
12 which a portion of the revenue generated from such tax is earmarked
13 for the benefit of a retirement system;
14 8. "Retirement bill having a fiscal impact" means any
15 retirement bill creating or establishing a retirement system and any
16 other retirement bill other than a nonfiscal retirement bill; and
17 9. "Retirement system" means the Teachers' Retirement System of
18 Oklahoma, the Oklahoma Public Employees Retirement System, the
19 Uniform Retirement System for Justices and Judges, the Oklahoma
20 Firefighters Pension and Retirement System, the Oklahoma Police
21 Pension and Retirement System, the Oklahoma Law Enforcement
22 Retirement System, or a retirement system established after January
23 1, 2006.
24
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1 SECTION 2. NEW LAW A new section of law to be codified
2 in the Oklahoma Statutes as Section 935.101 of Title 74, unless
3 there is created a duplication in numbering, reads as follows:
4 The Oklahoma Public Employees Retirement System shall administer
5 this act in accordance with applicable provisions of the federal
6 Internal Revenue Code and take whatever action is reasonable and
7 necessary in order to comply with the federal Internal Revenue Code
8 and any regulations promulgated thereto.
9 SECTION 3. NEW LAW A new section of law to be codified
10 in the Oklahoma Statutes as Section 935.102 of Title 74, unless
11 there is created a duplication in numbering, reads as follows:
12 A. Except as may be required by the provisions of this act, the
13 provisions of Section 935.1 through Section 935.11 of Title 74 of
14 the Oklahoma Statutes shall cease to have the force and effect of
15 law on November 1, 2023.
16 B. Effective November 1, 2023, each member maintaining an
17 account established pursuant to the provisions of Section 935.1
18 through 935.11 of Title 74 of the Oklahoma Statutes shall cease
19 making employee contributions to their account and shall begin
20 accruing participating service in the defined benefit plan created
21 pursuant to the provisions of Section 902 et seq. of Title 74 of the
22 Oklahoma Statutes. Effective November 1, 2023, each member who
23 maintains an account established pursuant to the provisions of
24 Section 935.1 through 935.11 of Title 74 of the Oklahoma Statutes
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1 and employed on November 1, 2023, by an employer participating in
2 the defined contribution plan shall make employee contributions to
3 the defined benefit plan as required by Section 919.1 of Title 74 of
4 the Oklahoma Statutes.
5 C. Employer contributions and matching amounts otherwise
6 required by the provisions of Section 935.5 of Title 74 of the
7 Oklahoma Statutes shall cease and employer contributions with
8 respect to employee compensation shall be made as provided by
9 Section 920 or 920A of Title 74 of the Oklahoma Statutes.
10 D. Employees maintaining a plan account established pursuant to
11 the provisions of Section 935.1 through 935.11 of Title 74 of the
12 Oklahoma Statutes may continue to actively manage the plan account,
13 including any gains or losses resulting from such active management,
14 until final disposition of the plan account balance by acquisition
15 of service credit in the defined benefit plan created pursuant to
16 the provisions of Section 901 et seq. of Title 74 of the Oklahoma
17 Statutes, a transfer of the account balance to a tax-qualified
18 retirement plan or such other disposition as may be authorized
19 pursuant to the Internal Revenue Code of 1986, as amended, and rules
20 and regulations promulgated pursuant thereto.
21 E. Each person maintaining a plan account pursuant to the
22 provisions of Section 935.1 through 935.11 of Title 74 of the
23 Oklahoma Statutes and employed on November 1, 2023, by an employer
24 participating in the defined contribution plan shall make an
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1 election, which shall be irrevocable, within one hundred eighty
2 (180) days from the effective date of this act to purchase service
3 credit in the defined benefit plan