Oklahoma House of Representatives

December 1, 2003
FOR IMMEDIATE RELEASE

Contact: State Rep. Larry Ferguson
Capitol: (405) 557-7344
Cleveland: (918) 358-2365

By MIKE W. RAY
House Media Division Director
OKLAHOMA CITY -- Since newly elected Oklahoma legislators will be term-limited, their state government pensions should be reduced, as well, a veteran lawmaker contends. Term limits imposed when Oklahoma voters adopted State Question 632 in 1990 go into effect next year. Starting with the 50th Oklahoma Legislature in 2005, Oklahoma Representatives and Senators will be restricted to a maximum 12 years of service as lawmakers.

Because of the constitutional restriction, 28 state Representatives and 13 Senators are serving their final terms in the Oklahoma Legislature.

Rep. Larry Ferguson believes future legislators and statewide elected officials ought to have pensions commensurate with their years of service, just like private sector employees.

The Cleveland Republican noted that half a dozen House members will "term out" next year upon completing 12 years in office, while the other 22 Representatives will retire after careers ranging from 14 years in the House to 26 years.

A typical pension system is designed "to reward long and faithful service," legislative actuary Tom Cummins told the House Committee on Retirement Laws recently. Ferguson, the committee chairman, observed that term limits will have a profound effect on that policy for future members of the Legislature.

Ferguson, who was first elected to the House in 1985 to complete an unexpired term, will retire next year after 19 consecutive years in the Legislature.

He proposes that future legislators and all statewide elected officials, as well be served by a "defined contribution" retirement plan rather than the existing "defined benefit" pension plan.

In a defined contribution plan, each member contributes a specific amount each month to his/her pension system. Also, a defined contribution plan is portable, meaning the employee can take the savings to another job if he/she moves.

Under a defined benefit plan, a retiree receives a set amount as a pension in exchange for years of service and annual contributions to the pension system while on active duty. The pension system is obligated to pay specific benefits to each retiree, regardless of how much the employee and employer have contributed.

Oklahoma legislators have the option of contributing an amount ranging from 4.5 percent of their gross salary ($38,400 annually for rank-and-file members of the Legislature) up to 10 percent of salary each year toward their retirement. Those who contribute the full 10 percent receive bigger pensions than those who contribute at the lower amounts.

Legislators are vested in the state's Oklahoma Public Employees Retirement System after six years.

Besides raising the defined-contribution pension proposal, Ferguson also wondered aloud whether employee contributions should be increased when additional retirement benefits are approved. "Raising the contribution levels might curb some of the constant demand for more pension benefits and COLAs (cost-of-living allowances)," he said.

Currently, public school teachers contribute 7.05 percent of their gross salaries toward their retirement. Public employees contribute 3 percent on their wages up to $25,000, and 3.5 percent on everything above $25,000. Fire fighters, police officers, state law enforcement officers and correctional officers contribute 8 percent toward their retirement.

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