The pension board met on Wednesday January 21, 2015. The system as a whole is still performing well even with the recent market volatility. As of December 31, 2014 the system was currently funded at over two billion dollars. We are still on target to obtain 100% funding within about 18 months to 2 years. Asset Consulting Group presented the board with a Year in Review of the markets in general as well as the normal monthly analysis for our system.
Legislation has been filed in the State Senate, SB 0602 by Sen. Shaw, and SB 0603 by Sen. Shortey that would allow for Sheriffs and their Deputies to become part of our pension system. There is also a House bill, HB 1881 by Rep. Mike Christian, that would allow for the same participation in our system by Sheriffs and Deputies. There are many issues of concern that the Pension board has with this legislation. We believe this will have a negative impact on the system, thereby reducing our funding ratio. An analysis by one of the legal firms we utilize outlined the following concerns:
1. The Proposal Creates a Potential for a Negative Fiscal Impact on the System, Which Impact Should Be the Studied by An Actuary:
A. Salary Spiking
B. No Increase in State Contribution Despite New Employers.
C. No Current Collection Right if a County Fails to Pay Contributions.
D. Potential for an Increase in the Number of Disability Pensions.
E. Increased Administrative Costs.
2. Members May Lose Their Right to Retire from the System and Receive In-Service Distributions While Working As a Law Enforcement Officer for the County Sheriff’s Department.
3. The Statutes and Administrative Code Governing the System Would Require Significant Revisions.
A. Revise Definitions of Participating/Eligible Employers and Change Officer/Member Definition.
B. Limit Participation to Members Who Have Vested.
C. Other Components of the System Should Be Expanded to Counties or Addressed
D. Equality of Benefits.
E. Legislation Should Limit Time Between Termination of Employment with Municipality and Reemployment with County.
We have identified other potential issues with this legislation and all of this is being shared with the legislators.
The pension system will continue to monitor for any legislation that could affect the pension and it will be forwarded it to you as soon as it becomes available.
Please contact me if you have any questions about the system.
Oklahoma Police Pension & Retirement System