Following heated debate, the Oklahoma House of Representatives on Tuesday passed a bill that would switch new employees of the Oklahoma Public Employees Retirement System to a 401(k)-style defined contribution system.
The vote was 57-42. House Bill 2630 will now go to the state Senate.
“The 21st-century job market demands mobility and greater employee control of retirement benefits, said state Rep. Randy McDaniel, House author of the pension overhaul bill. “This reform makes great strides to ensure that state service is a desirable career choice.”
House Minority Leader Scott Inman was unconvinced.
“You’re just putting the screws to state employees,” argued Inman, D-Oklahoma City.
Current employees of the Oklahoma Public Employees Retirement System participate in a defined benefit system under which employees who retire after working at least 7.5 years for the state are promised a set amount that is based on their salaries and years of service.
Employees are required to pay 3.5 percent of their salaries into the system, while the state is kicking in 16.5 percent to meet current requirements and make up for past years in which the system was underfunded.
McDaniel’s bill calls for leaving current employees on the existing system, but putting new employees under a 401(k)-style defined contribution system where the employees would be required to contribute 3 to 7 percent of their salaries into the system and the state would be required to match those contributions dollar for dollar. If signed into law, the defined contribution system for new employees would take effect Nov. 1, 2015.