Budget & Tax, Law & Principles

Senate rejects House effort to pad lawmakers’ retirement

April 11, 2022

Ray Carter

Members of the Oklahoma Senate have rejected legislation, advanced from the Oklahoma House of Representatives, that would have padded many legislators’ own retirement benefits.

Senators instead amended the bill to strip those provisions and essentially passed entirely new legislation that simply boosts the employer match for state workers’ retirement contributions.

As passed by the Oklahoma House of Representatives on March 24, House Bill 2486 eliminated a state defined-contribution retirement plan, similar to a 401(k) plan in the private sector, and instead placed most state government workers into a more lucrative defined-benefit plan.

Members of the Oklahoma Legislature, including those who voted for the bill, would have been shifted to the defined-benefit plan, which would provide a guaranteed, specified amount in retirement-benefit payments.

The change could have significantly boosted retirement benefits for many House lawmakers.

At the same time, the shift would have also eliminated billions of dollars in state savings that have helped shore up Oklahoma state government pension systems.

When lawmakers voted in 2014 to shift most new state government employees into a newly created 401(k)-style retirement plan, the change was predicted to save taxpayers $3.8 billion over 30 years.

Prior to that reform and others enacted around the same time, Oklahoma state government had some of the worst-funded state pension systems in the nation.

Several members of the Senate Retirement and Insurance Committee voiced opposition to rolling back that 2014 reform, particularly given the appearance of self-dealing.

“By the language that I see in (HB) 2486, the House version that came over, on page 37, put lawmakers back into the defined-benefit program,” said state Sen. Marty Quinn, R-Claremore. “Is that true or not?”

“It did,” responded state Sen. Dewayne Pemberton, R-Muskogee, who is Senate author of HB 2486.

“Does House Bill 2486 terminate the defined-contribution plan for state employees and state elected officials and put everyone back on the defined-benefit plan?” asked state Sen. Shane Jett, R-Shawnee.

“That was the design of the original bill,” Pemberton said.

Current law mandates that any statewide elected official or legislator who assumes office after November 1, 2015, “shall become a participant in the defined contribution system” instead of the state’s prior defined-benefit plan.

Page 37 of House Bill 2486, as passed by the House, would have repealed that language.

“I was a ‘no’ on the bill as it came over,” said state Sen. Zack Taylor, R-Seminole.

Pemberton introduced a committee substitute for the bill that effectively gutted the House legislation and replaced it with all new language that Pemberton said leaves the defined-contribution plan “just like it is” aside from increasing the employer match provided by state government.

Under the substitute legislation advanced by senators, the length of the bill was slashed from 51 pages in the House version to just 10 in the Senate and the only major change was to boost employer contributions to the system.

“This would make the plans more lucrative and stronger for the employees, and hopefully would be a little bit more of a reason for individuals to stay with state employment,” Pemberton said.

In its Senate-amended version, stripped of the House language, HB 2486 passed the Senate Retirement and Insurance Committee on a 7-1 vote with one member abstaining.

Despite the clear language of the original bill, some House lawmakers have insisted HB 2486 would not benefit them.

State Rep. Josh West, R-Grove, despite having voted against HB 2486, declared in a Facebook post, “The legislature was not included in this bill,” and insisted any reports stating that House lawmakers voted to boost their own retirement benefits are “misleading,” “false,” and “BS.”

After members of the Senate confirmed that the House version of the bill included legislators, the Oklahoma Council of Public Affairs (OCPA) reached out to West seeking further comment. As of publication, West had not responded.

OCPA also sought comment from House Speaker Charles McCall, R-Atoka, and state Rep. Avery Frix, R-Muskogee. Frix was House author of HB 2486.

Frix conceded that legislators were among the beneficiaries of the initial House version of the bill.

“It was always my intent to apply this change only to our hardworking 33,000 state employees and not to legislators,” Frix said. “When I presented this bill on the House floor, I was clear this was a work in progress and the title was off this bill. This was so we could continue working on precise language as the bill continued to move through the legislative process. As excluding legislators was always our intent, that change should be favorably received by House members when the bill returns to our chamber for final passage.”

A bill passed with its title removed must return to the House of origin for a second vote before it can be sent to the governor's desk.

As of publication, McCall had not responded.

HB 2486 took an unusual path through the legislative process in the House. It was assigned to the House Rules Committee rather than the House Insurance Committee, where insurance bills are typically heard. Also, when the measure came up on the House floor, several prominent lawmakers voted against it, including House Speaker Pro Tempore Kyle Hilbert, R-Bristow; House Majority Floor Leader Jon Echols, R-Oklahoma City; and Deputy Floor Leader John Pfeiffer, R-Orlando.

The House effort to boost legislators’ retirement benefits comes on top of a $12,000 pay raise provided to all state lawmakers that took effect in November 2020.

NOTE: This story has been updated since publication to include comment from Rep. Avery Frix.