RBH No. 9679
1 STATE OF OKLAHOMA
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2 2nd Session of the 59th Legislature (2024)
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3 HOUSE BILL 3858 By: Ford
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6 AS INTRODUCED
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7 An Act relating to retirement; amending 11 O.S. 2021,
7 Sections 50-110, as amended by Section 2, Chapter 53,
8 O.S.L. 2023 (11 O.S. Supp. 2023, Section 50-110) and
8 50-114, as last amended by Section 5, Chapter 151,
9 O.S.L. 2023 (11 O.S. Supp. 2023, Section 50-114),
9 which relate to the Police Pension and Retirement
10 System; modifying late charge amount; updating
10 reference; directing that revisions be taken into
11 account; and declaring an emergency.
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16 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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17 SECTION 1. AMENDATORY 11 O.S. 2021, Section 50-110, as
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18 amended by Section 2, Chapter 53, O.S.L. 2023 (11 O.S. Supp. 2023,
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19 Section 50-110), is amended to read as follows:
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20 Section 50-110. A. Each member in the System shall contribute
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21 to the System a minimum of eight percent (8%) of the member's actual
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22 paid base salary.
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23 At the option of the participating municipality, the
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24 participating municipality may pay all or any part of the member's
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1 required contribution. The sums contributed shall be paid online to
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2 the System as provided in this article within ten (10) days
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3 following the payroll period on which the contributions are based.
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4 Amounts deducted from the salary of a member and not paid to the
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5 System after thirty (30) days from each ending payroll date shall be
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6 subject to a monthly late charge of one and one-half percent (1
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7 1/2%) five percent (5%) of the unpaid balance to be paid by the
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8 municipality to the System. All funds received by a participating
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9 municipality for police retirement purposes shall be forwarded to
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10 the State Board for credit to the Fund.
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11 B. Each municipality shall pick up under the provisions of
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12 Section 414(h)(2) of the Internal Revenue Code of 1986 and pay the
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13 contribution which the member is required by law to make to the
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14 System for all compensation earned after December 31, 1988.
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15 Although the contributions so picked up are designated as member
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16 contributions, such contributions shall be treated as contributions
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17 being paid by the municipality in lieu of contributions by the
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18 member in determining tax treatment under the Internal Revenue Code
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19 of 1986 and such picked up contributions shall not be includable in
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20 the gross income of the member until such amounts are distributed or
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21 made available to the member or the beneficiary of the member. The
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22 member, by the terms of this System, shall not have any option to
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23 choose to receive the contributions so picked up directly and the
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1 picked up contributions must be paid by the municipality to the
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2 System.
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3 Member contributions which are picked up shall be treated in the
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4 same manner and to the same extent as member contributions made
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5 prior to the date on which member contributions were picked up by
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6 the municipality. Member contributions so picked up shall be
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7 included in gross salary for purposes of determining benefits and
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8 contributions under the System.
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9 The municipality shall pay the member contributions from the
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10 same source of funds used in paying salary to the member, by
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11 effecting an equal cash reduction in gross salary of the member.
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12 SECTION 2. AMENDATORY 11 O.S. 2021, Section 50-114, as
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13 last amended by Section 5, Chapter 151, O.S.L. 2023 (11 O.S. Supp.
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14 2023, Section 50-114), is amended to read as follows:
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15 Section 50-114. A. The State Board is hereby authorized to pay
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16 out of funds in the System a monthly service pension to any member
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17 eligible as hereinafter provided, not exceeding in any event the
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18 amount of money in such funds and not exceeding in any event the
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19 accrued retirement benefit for such member, except as provided for
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20 herein. In order for a member to be eligible for such service
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21 pension the following requirements must be complied with:
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22 1. The member's service with the police department for any
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23 participating municipality must have ceased; however, a member may
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1 be subsequently reemployed in the position of police chief pursuant
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2 to subsection C of Section 50-112 of this title;
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3 2. The member must have reached the member's normal retirement
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4 date; and
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5 3. The member must have complied with any agreement as to
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6 contributions by the member and other members to any funds of the
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7 System where said agreement has been made as provided by this
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8 article; provided, that should a retired member receive disability
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9 benefits as provided in this and other sections of this article, the
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10 time the retired member is receiving disability benefits shall count
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11 as time on active service if the retired member should be recalled
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12 by the Chief of Police from disability retirement. It shall be
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13 necessary before such time shall be counted toward retirement that
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14 the retired member make the same contribution as the member would
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15 have otherwise made if on active service for the time the retired
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16 member was disabled.
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17 B. Any member complying with all requirements of this article,
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18 who reaches normal retirement date, upon application, shall be
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19 retired at the accrued retirement benefit. When a member has served
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20 for the necessary number of years and is otherwise eligible, as
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21 provided in this article, if such member is discharged without cause
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22 by the participating municipality, the member shall be eligible for
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23 a pension.
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1 C. Effective July 1, 1989, in no event shall commencement of
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2 distribution of the accrued retirement benefit of a member be
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3 delayed beyond April 1 of the calendar year following the later of:
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4 1. The calendar year in which the member reaches seventy and
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5 one-half (70 1/2) years of age for a member who attains age seventy
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6 and one-half (70 1/2) before January 1, 2020, or effective for
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7 distributions required to be made after December 31, 2019, but
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8 before January 1, 2023, the calendar year in which the member
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9 reaches seventy-two (72) years of age for an individual who attains
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10 age seventy and one-half (70 1/2) after December 31, 2019, or
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11 effective for distributions required to be made after December 31,
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12 2022, the calendar year in which the member reaches seventy-three
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13 (73) years of age for an individual who attains age seventy-two (72)
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14 after December 31, 2022, or "the applicable age" as defined in
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15 Section 401(a)(9)(C)(v) of the Internal Revenue Code of 1986, as
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16 amended, if later; or
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17 2. The actual retirement date of the member.
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18 For distributions made for calendar years beginning on or after
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19 January 1, 2001, through December 31, 2004, the System shall apply
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20 the minimum distribution requirements and incidental benefit
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21 requirements of Section 401(a)(9) of the Internal Revenue Code of
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22 1986, as amended, in accordance with the regulations under Section
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23 401(a)(9) of the Internal Revenue Code of 1986, as amended, which
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24 were proposed on January 17, 2001, notwithstanding any provision of
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1 the System to the contrary. For distributions made for calendar
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2 years beginning on or after January 1, 2005, the System shall apply
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3 the minimum distribution incidental benefit requirements, incidental
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4 benefit requirements, and minimum distribution requirements of
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5 Section 401(a)(9) of the Internal Revenue Code of 1986, as amended,
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6 in accordance with the final regulations under Section 401(a)(9) of
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7 the Internal Revenue Code of 1986, as amended, including Treasury
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8 Regulations Sections 1.401(a)(9)-1 through 1.401(a)(9)-9; provided,
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9 however, that for distributions required to be made after December
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10 31, 2019, for individuals who attain seventy and one-half (70 1/2)
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11 years of age after December 31, 2019, but before January 1, 2023,
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12 such distributions shall take into account that age 70 1/2 was
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13 stricken and age 72 was inserted in Section 401(a)(9)(B)(iv)(I),
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14 Section 401(a)(9)(C)(i)(I) and Section 401(a)(9)(C)(ii)(I) of the
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15 Internal Revenue Code of 1986, as amended, and, provided further,
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16 that for individuals who attain seventy-two (72) years of age after
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17 December 31, 2022, such distributions shall take into account that
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18 "age 72" was stricken and "the applicable age", as defined in
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19 Section 401(a)(9)(C)(v) of the Internal Revenue Code of 1986, as
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20 amended, was inserted in Section 401(a)(9)(B)(iv)(I) of the Internal
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21 Revenue Code of 1986, as amended (applicable to calendar year 2023),
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22 Section 401(a)(9)(C)(i)(I) and Section 401(a)(9)(C)(ii)(I) of the
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23 Internal Revenue Code of 1986, as amended, and that further revision
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24 of Section 401(a)(9)(B)(iv) of the Internal Revenue Code of 1986, as
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1 amended, effective for calendar years after 2023 with respect to
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2 certain distributions shall be taken into account in all cases
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3 notwithstanding any provision of the System to the contrary.
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4 Effective January 1, 2009, with respect to the Oklahoma Police
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5 Deferred Option Plan, to the extent applicable, no minimum
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6 distribution is required for 2009 in accordance with Section
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7 401(a)(9)(H) of the Internal Revenue Code of 1986, as amended.
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8 Effective September 8, 2009, notwithstanding anything to the
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9 contrary of the System, the System, which is a governmental plan
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10 (within the meaning of Section 414(d) of the Internal Revenue Code
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11 of 1986, as amended) is treated as having complied with Section
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12 401(a)(9) of the Internal Revenue Code of 1986, as amended, for all
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13 years to which Section 401(a)(9) of the Internal Revenue Code of
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14 1986, as amended, applies to the System if the System complies with
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15 a reasonable and good-faith interpretation of Section 401(a)(9) of
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16 the Internal Revenue Code of 1986, as amended.
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17 D. In the event of the death of any member who has been awarded
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18 a retirement benefit or is eligible therefor as provided in this
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19 section, such member's beneficiaries shall be paid such retirement
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20 benefit. The remaining portion of the member's retirement benefit
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21 shall be distributed to the beneficiaries at least as rapidly as
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22 under the method of distribution to the member. Effective March 1,
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23 1997, if a member to whom a retirement benefit has been awarded or
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24 who is eligible therefor dies prior to the date as of which the
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1 total amount of retirement benefit paid equals the total amount of
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2 the employee contributions paid by or on behalf of the member and
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3 the member does not have a surviving beneficiary under paragraph 13
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4 of Section 50-101 of this title, the total benefits paid as of the
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5 date of the member's death shall be subtracted from the accumulated
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6 employee contribution amount and the balance, if greater than zero
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7 (0), shall be paid to the member's estate.
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8 E. The State Board may review and affirm a member's request for
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9 retirement benefits prior to the member's normal retirement date
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10 provided that no retirement benefits are paid prior to the normal
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11 retirement date.
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12 F. A member retired under the provisions of this article may
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13 apply to the State Board to have the member's retirement benefits
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14 set aside and may make application for disability benefits. Upon
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15 approval of the disability benefits, the member would become subject
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16 to all provisions of this article pertaining to disability
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17 retirement.
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18 G. Upon the death of a retired member, the benefit payment for
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19 the month in which the retired member died, if not previously paid,
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20 shall be made to the beneficiary of the member, which shall include
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21 a successor in interest for whom an affidavit is provided to the
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22 System in accordance with Section 393 of Title 58 of the Oklahoma
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23 Statutes, or if there is no surviving beneficiary under paragraph 13
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24 of Section 50-101 of this title, to the member's estate or, if
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1 properly designated by the member, a trust. Upon the death of a
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2 beneficiary, the benefit payment for the month in which the
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3 beneficiary died, if not previously paid, shall be made to the
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4 beneficiary's estate or, if properly designated by the beneficiary,
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5 to a trust. Such benefit payment shall be made in an amount equal
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6 to a full monthly benefit payment regardless of the day of the month
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7 in which the retired member or beneficiary died.
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8 H. If the requirements of Section 50-114.4 of this title are
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9 satisfied, a member who, by reason of attainment of normal
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10 retirement date or age, is separated from service as a public safety
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11 officer with the member's participating municipality, may elect to
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12 have payment made directly to the provider for qualified health
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13 insurance premiums by deduction from his or her monthly pension
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14 payment, after December 31, 2006, in accordance with Section 402(l)
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15 of the Internal Revenue Code of 1986, as amended. For distributions
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16 made after December 29, 2022, the election provided for under
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17 Section 402(l) of the Internal Revenue Code of 1986, as amended, may
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18 be made whether payment of the premiums is made directly to the
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19 provider of the accident or health plan or qualified long-term care
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20 insurance contract by deduction from a distribution from the System
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21 or is made to the member.
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22 SECTION 3. It being immediately necessary for the preservation
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23 of the public peace, health or safety, an emergency is hereby
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1 declared to exist, by reason whereof this act shall take effect and
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2 be in full force from and after its passage and approval.
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4 59-2-9679 CMA 01/02/24
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THOMAS E. CUMMINS CONSULTING ACTUARY, INC.
2512 E. 71st Street , Suite D ∙ Tulsa, Oklahoma 74136
(918) 492-9658 ∙ (918) 492- 9659
January 11, 2024
Representative Ford
Room 300.2
Re: RBH No. 9679
RBH No. 9679 provides for a late fee of 5% per month of monies due
the Oklahoma Police Pension