OKLAHOMA CITY – One of the first items on the state Senate’s calendar when the Legislature reconvenes next Feb. 3 is consideration of a cost-of-living-allowance for retired public employees.
House Bill 2304 would provide a 4% COLA, the first in 11 years, since 2008. However, state pension system members who had been retired for at least five years received a one-time stipend in 2018. The House of Representatives overwhelmingly endorsed the measure, 98-3, on March 11, and sent it across the Capitol rotunda to the Senate. Although the Senate did not vote on the bill before the Legislature adjourned on May 23, HB 2304 remains a “live round.”
State retirees are particularly incensed because the state Legislative Compensation Board approved a 35% pay bump that will boost the paychecks of rank-and-file legislators to $47,500 – just two years after cutting their base pay from $38,400 to $35,021. The salary hike goes into effect Nov. 18, 2020. Sabra Tucker, executive director of the Oklahoma Retired Educators Association, said health insurance premiums for retired Oklahoma teachers have climbed 42% since 2008.
In the Senate, HB 2304 was assigned to the Retirement and Insurance Committee – whose members include Sen. John Michael Montgomery, R-Lawton – and then to the Appropriations Committee. Further consideration of the bill was postponed after the measure was subsequently referred to a legislative actuary for analysis on how the state’s pension systems would be affected by COLAs of either 2% or 4%.
“We’re seeking 100% assets to back the liabilities” of the state retirement systems, Montgomery said. However, the U.S. Social Security System isn’t completely asset-backed, he noted. Some countries have pay-as-you-go pension systems, while some require a funding level of at least 105% “before they will even think about approving a COLA,” said Montgomery, who earned a bachelor’s degree in International Studies at the University of Oklahoma.
He wants the Legislature to examine the “structure” of the state pension systems, and said administrators of the retirement plans should have “some flexibility in authorizing benefit allowances.” Montgomery said that during the 2020 legislative session he will continue efforts to “shore up” the state retirement systems.
“Overall , I think they’re headed in the right direction,” he said. The 28-year-old Lawton native has been in the Legislature for five years. He served a pair of two-year terms in the House of Representatives, where he was assigned to the Financial Services and Pensions Committee, and is completing his first year in the Senate.