According to a nationwide public fund survey conducted in FY 2017, the average public pension plan at that time was funded at 71.9%. Six of Oklahoma’s state pension plans exceeded that level last year, and the seventh was within 1 percentage point of it.
Moreover, five of Oklahoma’s pension systems are funded at levels greater than 80%, which is a typical benchmark of a solvent system, according to Rep. Avery Frix, R-Muskogee. He was the principal author of House Bill 3350, which Governor Stitt signed to authorize the first cost-of-living adjustment in Oklahoma’s state pension systems in 12 years.
Oklahoma seven state pension systems cover more than 296,000 active and retired state and municipal employees, spouses, disabled members, plus inactive vested and non-vested members.
• The second-largest pension system is the Oklahoma Public Employees Retirement System. Its funded status improved by nearly 30 points: from 66% in FY 2010 to 98.6% in FY 2019, actuarial reports show. The COLA authorized in HB 3350 will have an estimated impact of 2.2% on the funding ratio, a fiscal analyst reported.
OPERS represents 76,511 employees, including 34,536 active members; 35,869 retirees, spouses and disabled members; and 6,106 vested members with deferred benefits.
Participating employers include state agencies, boards and commissions; cities and towns, including Cyril, Grandfield, Mountain View and Rush Springs; municipal governmental units such as housing, utility and public works authorities; counties and county government units, such as the Comanche County Facilities Authority; several health care providers, such as the Tillman County EMS; several rural water districts, including the Tillman County Rural Water District; and regional economic development districts, such as the Association of South Central Oklahoma Governments (ASCOG) and the South Western Oklahoma Development Authority (SWODA).
• The funded status of the Oklahoma Teachers’ Retirement System, the largest of the state pension systems, grew from 47.9% in Fiscal Year 2010 to 72.4% as of June 30, 2019, ledgers reflect. In essence, that means that if every member of the OTRS retired tomorrow, the system could pay 72.4 cents of every $1 owed to pensioners.
The COLA in HB 3350 will have an estimated 1.5% impact on the OTRS, the fiscal analyst said.
For years, the OTRS was one of the shakiest pension systems in the nation because approximately four decades ago the state Legislature approved generous teacher retirement benefits but didn’t adequately underwrite them.
The OTRS covers 181,135 people, or approximately 60% of all state pension system members. They include 90,014 active educators; 64,821 retirees, beneficiaries and spouses; 12,784 inactive but vested members; and 13,516 inactive non-vested members.
POLICE, JUDGES’ SYSTEMS FUNDED AT MORE THAN 100%
• The best-funded large state plan is the Oklahoma Police Pension and Retirement System; its funded status last June 30 was 102.5% – a huge increase from 74.9% in FY ’10. The COLA authorized in HB 3350 will have an estimated 2% impact on the funded ratio of the OPPRS, the fiscal analysis shows.
The OPPRS covers 9,704 individuals: 5,727 active members, 2,887 retirees, and 1,090 beneficiaries, disabled, inactive but vested, or deferred-option members. The system had 143 municipal members and three state-agency members as of Sept. 19, 2019.
• The Oklahoma Law Enforcement Retirement System reported a funded ratio of 89.6% on July 1, 2019, compared to 73.6% in FY ’10. The COLA will have an estimated impact of 1.9% on OLERS, the fiscal analyst calculated.
OLERS has 2,740 active, disabled and retired members plus beneficiaries. Its members include employees of the Alcoholic Beverage Laws Enforcement (ABLE) Commission, the Oklahoma Highway Patrol and its parent agency, the Department of Public Safety, the Oklahoma Bureau of Narcotics and Dangerous Drugs Control, the Oklahoma State Bureau of Investigation, state parks rangers, plus the OU and OSU campus police.
• The funded status of the Oklahoma Firefighters Pension and Retirement System has improved over the past decade: from 53.4% in FY ’10 to 70.8% in FY ’19. The COLA will have an estimated impact of 1.2% on the funded ratio of the OFPRS, the fiscal analysis shows.
The OFPRS represents more than 25,700 people: 4,356 active paid firefighters and 7,991 active volunteer firefighters, 2,163 terminated vested members, 8,652 retired or disabled members, and 2,511 beneficiaries.
• The best-funded system overall is the Uniform Retirement System for Justices and Judges; it was funded at almost 112% on June 30, 2019. The COLA will have an estimated impact of 2.9% on that pension system, the fiscal analyst reported. That system has 587 members: 269 active jurists and 318 retired, disabled, and inactive but vested members plus spouses.
• The pension system for the state Department of Wildlife Conservation recorded a funding ratio of 91.4% on July 1, 2018, according to an actuarial report prepared for the State Pension Commission dated Feb. 26, 2019. However, the pension system for the ODWC is not included in the COLA proposed by HB 3350. That agency is self-supporting “and they operate their own separate retirement system,” explained Sterling Zearley, executive director of the Oklahoma Public Employees Association.