Two press conferences were held at the Capitol today to discuss Oklahoma’s pension systems. In the first, OPEA joined with public safety, educators, and firefighters to announce the formation of a coalition to protect Oklahoma’s pension systems.
The Public Pension Coalition was established in part as a response to recent announcements that an overhaul of the state’s pension systems would be a legislative priority during the upcoming session.
Speaker-Elect Kris Steele (R-Shawnee) announced last month that he is appointing state Rep. Randy McDaniel (R-Edmond) to head the House effort for an overhaul of Oklahoma’s pension systems. In the state Senate, Patrick Anderson (R-Enid) requested a study to look at defined contribution plans for new hires.
The Public Pension Coalition unites various organizations that are working to prevent the legislature from balancing the state budget by reducing or eliminating retirement benefits for Oklahoma workers and retirees. Members of the coalition intend to work with the legislature to ensure the state honors its commitment to public employees and retirees who have dedicated their careers to making Oklahoma a better place to live and work.
Members of the Coalition include the Oklahoma State Firefighters Association, Retired Firefighters Association, Professional Firefighters of Oklahoma, Fire Chiefs Association, the Oklahoma State Troopers Association, Fraternal Order of Police, Oklahoma Public Employees Association, American Federation of Teachers and the Oklahoma Retired Educators Association. They plan to inform all public employees and retirees of the issues and encourage them to become active in the discussion.
Facing a slow economy, several states are looking at changing their pension systems in an effort to cut costs. Members of the coalition are concerned about how Oklahoma lawmakers might try the same.
“There is a real concern among the firefighter families in Oklahoma that the legislature will choose to reduce or eliminate pension benefits rather than adequately fund our pension system.” said Phil Ostrander with the Oklahoma State Firefighters Association. “We understand the current budget crisis but we don’t believe the budget should be balanced on the backs of our active and retired firefighters. For years now the firefighters pension system has indirectly funded millions of dollars in tax credits. We may now be facing benefit reductions because of a low funded ratio. It doesn’t seem fair to us.”
Oklahoma’s public employees currently have a defined benefit retirement plan under which retirees receive a set monthly amount based on time of service and salary. One of the proposals is to switch new hires to a defined contribution plan. Under that system, employers contribute a certain percentage to a pension fund that is more market-dependent, like a 401(k).
“Proponents of DC plans are being funded by brokerage firms trying to seize the assets of public pension systems to increase their profits from investment fees,” said Scott Barger of the Oklahoma Public Employees Association. “DC plans are certainly not as safe as a DB plan for workers. They are subject to higher fees and face greater risks. If an employee loses their retirement in a DC plan the state still would have to support them.”
Immediately following the Public Pension Coalition Press Conference, the Oklahoma Council of Public Affairs, a right-wing think tank, began the attack on public employees and their pension systems.
OCPA Executive Director Brandon Dutcher and Steven Anderson, a CPA, held a press conference to announce their plan to place state and education new hires into a defined contribution plan. They claimed their plan, which lacked detail, would provide current employees with their defined benefit plan, put new hires in a defined contribution plan, and save the state money.
“OCPA is pitching their plan to put state employee funds into the hands of private firms without discussing it with employees or retirees,” said Barger. “Never in the history of this issue has any study reported the state could honor its commitment to current employees and fund a defined contribution plan. If it sounds too good to be true, it probably is.”
“OPEA will be carefully scrutinizing the OCPA plan,” concluded Barger. “The Association and our coalition partners will not allow an experiment with the public pension systems and public employee retirement.”