By Paula Aven Gladych
The Oklahoma Senate Pension Committee approved legislation this week that will move state employees hired after Nov. 1, 2015, into a defined contribution plan
instead of the traditional defined benefit plan.
The move won’t impact current employees. It will help lower the unfunded pension liabilities in the $8 billion Oklahoma Public Employees Retirement System as well as attract younger workers who appreciate the portability of a defined contribution option.
“We always talk about the importance of running government like a business. This is a transition that much of the private sector made over a decade ago,” said Senate President Pro Tempore Brian Bingman. “Kicking the can down the road is no longer an option.”
Senate Bill 2120 requires an employee to contribute a minimum of 3 percent of their salary up to 7 percent, which will then be matched by their employer in a 401(k)-style plan. Employees designated "Hazardous Duty" are exempted from the bill, including fire and police. Teachers are not included this year.
“We have made great strides in lowering our state’s pension liability
, but more must be done,” said Sen. Rick Brinkley, author of the bill and chairman of the Senate Pensions Committee. “We believe that for us to continue to attract the best and the brightest, we must provide the next generation of state employees a retirement system that is reflective of their needs, allows an employee to take their retirement plan with them if they choose to leave and prevents politicians and bureaucrats from harming their retirement. We have a responsibility to our grandchildren to ensure they are not on the hook for this liability years from now.”
The legislation passed the Senate Pensions Committee with a vote of 5-2 and now moves to the full Senate for further consideration.
Originally published on BenefitsPro.com