With one month left in the legislative session, groups opposed to making changes in state pension fund systems are ramping up efforts to see that they succeed.
The Oklahoma Education Association is among those urging members to tell lawmakers to leave pension plans alone. State Rep. Mike Brown, D-Tahlequah, for one, has bought in. Brown says he's gotten several emails from teachers “terrified they are going to lose their retirement.” In a news release, he acknowledged that Oklahoma's unfunded pension liability merits attention, but “jeopardizing the retirement of our teachers and public employees is not the answer.”
Of course it's not. Most of the groups covered by state pensions oppose the idea of making any changes to their current plans, which provide a defined benefit. Gov. Mary Fallin and state Treasurer Ken Miller are exploring a switch away from defined benefit plans, as about half the states have done.
Why? Because Oklahoma's pension plans are unfunded by about $11 billion. That amount was greater a few years ago, before lawmakers changed the way cost-of-living adjustments are funded. Further pension reform is needed. It's unlikely to happen this session, due to the scope of the issue and the accompanying contention, but it can't be put off forever.
What can be accomplished this session is the consolidation of the state's seven pension boards — six of which have independent boards, staff, offices and investment managers — into one centralized board. The state spends $80 million to $100 million each year simply to administer pensions. Consolidation could save an estimated $50 million annually.
This idea also has been met with opposition, but conservatives who champion smaller, more cost-efficient government should embrace it. And given their concerns about debt, they should be open to exploring further pension reform — if not this session, then certainly in 2014.