Okla. House Approves Firefighter Pension Changes

A bill intended to shore up the state firefighter pension system passed overwhelmingly Thursday in the House, even though some members said cities in their districts were concerned about the measure's increased costs.

House Bill 2320 calls for increased contributions by employees, cities and the state for the Oklahoma Firefighters Pension and Retirement System. Under the bill, the contribution from employees and cities each would increase by 1 percent; the state would increase the amount of insurance premium taxes dedicated to the system.

"It requires shared sacrifice ... which will greatly improve the financial condition of the plan," said Rep. Randy McDaniel, the bill's author.

Rep. Mark McCullough, R-Sapulpa, had harsh words for McDaniel because he negotiated directly with the firefighters' union on his own instead of consulting with House members. He also inquired who wrote the language in the bill.

McDaniel, R-Oklahoma City, said he wrote the bill, and that, as chairman of a House task force looking at the state's pension system, he tried to come up with a solution for the underfunded firefighter pension system.

"There are a few that aren't, but most people are for this bill," he said.

House members voted 93-1 to pass HB 2320; McCullough ultimately voted for the measure. Rep. Rebecca Hamilton, D-Oklahoma City, voted against it, disagreeing with McDaniel's assessment of the pension's financial condition.

Rep. Steve Vaughan, R-Ponca City, said HB 2320 may be too expensive for some of the smaller cities in the state.

McDaniel disagreed, saying sales tax collections, a main source of revenue for most cities and towns, set a record last month.

Based on current annual payroll figures for the system, the higher rates will generate about $2.5 million per year from employer contributions and $2.5 million annually in additional employee contributions. The state's increased share will be about $3.5 million a year.

The firefighter pension plan is for municipal employees. McDaniel said the state took over administration of the plan from the cities in the early 1980s when the plan was funded at 17 percent.

"They were on a pathway to bankruptcy," he said. "The only reason why we have these plans here is that they came up and asked us to take over the plans when they were so financially distraught that they needed a solution to do anything from going under."

McDaniel said he is stunned that mayors have been resistant to the bill. The firefighters' pension plan was 53.4 percent funded a year ago; legislation he authored last year that required lawmakers to fund cost-of-living adjustments immediately improved the plan's funding status to 63 percent, he said.

Changes in HB 2320 should put the firefighter pension plan at 93 percent funded in 30 years, he said. "By every objective standard this proposal is fair."

Speaker Pro Tem Jeff Hickman, R-Fairview, said if cities are complaining then perhaps they should take over the firefighter pension plan.

"If they don't like the fact that we have poured millions of tax dollars into this firefighter retirement system for their employees, then they should take the retirement system back and run it themselves," he said. "This is about making sure the system is healthy enough to keep the promise to the people who go out and put their lives on the line for us every day."

HB 2320 also deals with the firefighter pension system's deferred retirement option, which is intended to provide greater savings for the system. The so-called DROP plan allows qualified members who would otherwise be eligible for retirement benefits to continue working and accrue money in a separate account.

Participating firefighters are eligible to receive either a 7.5 percent return on their investment or the system's annual investment returns minus 2 percent, whichever is greater. HB 2320 calls for a flat rate of 7.5 percent.

Copyright 2012 - The Oklahoman, Oklahoma City

McClatchy-Tribune News Service