Cockroft Column: Firefighter and Police Pensions
By Rep. Josh Cockroft
One of the greatest financial challenges currently facing Oklahoma is the status of our state pension systems. The total unfunded actuarial accrued liability of all seven Oklahoma pensions systems is currently over $16 billion – about $4,275 per Oklahoman and more than twice the size of the entire state budget. A study by Northwestern University’s Joshua D. Rauh predicts that the state’s retirement funds will be broke by 2020.
This has prompted House lawmakers to begin shoring up the system so retirees are protected. I consider this a top priority.
House Bill 1221 will reform the Oklahoma Firefighters Pension and Retirement System and the Oklahoma Police Pension and Retirement System. The most recent information available for the firefighters’ plan shows a 53.4 percent funded level. For police, it is 74.9 percent. The actuary soundness for a private plan is a minimum of 80 percent.
In its current form, House Bill 1221 would adjust benefit levels for new workers entering the system starting in November 2011. Benefits for current firefighters or police would not be impacted. The bill contains four major changes for those new members entering the system. First, it would change the multiplier from 2.5 percent to 2 percent. The bill would increase the retirement age for those entering the system starting next year so retirement would occur in 25 years instead of 20. It would also raise the employee contribution from 8 percent to 12 percent. And, finally, the bill would eliminate the Drop plan, which impartial and independent research indicates is a fiscal drain on the pension system.
I welcome input from firefighters and police officers as this legislation moves through the process.
If you have questions or need information, please contact my office at email@example.com or (405) 557-7349. Rep. Cockroft is on Facebook and on Twitter, votecockroft27. Video footage of the House Chamber is also available at http://okhouse.mediasite.com/mediasite/Catalog/catalogs/default.aspx.