FOR IMMEDIATE RELEASE:
Contact: State Rep. Avery Frix
Office: (405) 557-7302
The House of Representatives today passed legislation to grant cost-of-living adjustments (COLAs) for retirees in six Oklahoma pension plans, including teachers, firefighters, police, public employees and justices and judges.
House Bill 3350 passed with a unanimous bipartisan vote of 99-0.
“Our state retirees have not had a cost-of-living adjustment for 12 years, even as their health insurance premiums and other living expenses have risen,” said Rep. Avery Frix, R-Muskogee, the bill’s principal author. “To see retired public servants one step closer to receiving this benefit is a gratifying, responsible action by the House.”
HB 3350 would base COLAs on the number of years individuals have been receiving retirement benefits from the state. Those retired for five years or more as of July 1, 2020, would receive a 4% increase in monthly pension payments. Those retired at least two years but not five would get a 2% increase. Those retired less than two years would not see an increase at this time.
“The House worked together to pass a fiscally responsible plan addressing this important obligation. It’s a big win to have a plan keeping the pension systems solvent and on an upward funding trajectory while granting an overdue COLA to retired public servants,” said House Speaker Charles McCall, R-Atoka. “We are optimistic that this is the year for a COLA, and look forward to the bill’s continued progress.”
The measure was proposed after an actuarial analysis showed that a 4% COLA would not affect any retirement plan’s funded ratio by more than 2.9%. Overall, the plan would affect the system’s cumulative funded status by around 2%, and the plans would continue on an upward funding trajectory in the future even after a COLA.
Benefit managers for each of the pension plans spoke during an interim study hosted by Frix last fall about their plan’s ability to absorb the COLA and its necessity for pensioners.
“Four percent is a good start toward getting our retired state employees the compensation they have earned,” said Rep. Matt Meredith, D-Tahlequah, a co-author of the legislation. “Oklahoma’s retiree population is primarily on a fixed income where every little bit helps. Adjusting their pension benefits to reflect the rising cost of living should be a bipartisan issue, and as we have seen with this vote, it is in the State House.”
State retirees last received a COLA in 2008. Since then, inflation has increased 19.5%, according to the U.S. Bureau of Labor Statistics.
Nettie Seale is president of the McIntosh County Retired Educators Association and a former practical nursing instructor with the state’s CareerTech system. She said she has been retired for 12 years and has never received a COLA. Her husband also is a former public employee who is looking forward to the increase in benefits.
“I and the other members of our group would love to see a COLA to help us better keep up with the increased cost of health insurances and taxes and other reasons,” Seale said. “Our benefits are one of the reasons we chose to work for less pay than we would have made in the private sector. We want to show our teachers and other retirees respect, and this is a way to do that.”
Sabra Tucker, executive director of the Oklahoma Retired Educators Association, said most of her members are people who are on Medicare.
“Our members are very pleased that the pension systems are in the good shape they are in thanks to the actions of the Legislature. This COLA will have a very low impact to the system, and it is the right thing to do for our elderly,” Tucker said.
Frix said the strength of the retirement system is vastly improved since than the last time a COLA was given. Several of the state’s pension plans are now more than 100% funded and most are 80% funded, which is indicative of solvency. The state’s financial rankings also have improved.
Frix said retired state employees are every bit as concerned about the overall performance of their benefit plans as anyone and don’t want to see their plans harmed. At the same time, they are facing a loss of buying power and some state retirees don’t receive Social Security benefits.
HB 3350 now goes to the state Senate where it is authored by Sen. Dewayne Pemberton (R-Muskogee).