Henry Signs Bill To Fix Pension System

OKLAHOMA CITY (AP) _ Gov. Brad Henry on Monday signed a bill to shore up the Oklahoma Teachers Retirement System, rated the third worst funded among the states. <br/><br/>Under the measure, state contributions

Monday, May 7th 2007, 3:11 pm

By: News On 6

OKLAHOMA CITY (AP) _ Gov. Brad Henry on Monday signed a bill to shore up the Oklahoma Teachers Retirement System, rated the third worst funded among the states.

Under the measure, state contributions to the system would be increased by $60 million a year, when fully implemented in four years.

It will raise from 7.85 percent to 9.5 percent the amount of ``employer'' contributions to the system, which now has a long-range liability that exceeds $7 billion.

Legislative sponsors of the Senate bill said the influx of cash will make the system 80 percent funded by 2026. It is now 49 percent funded.

``Oklahoma's teachers are some of the finest public servants in Oklahoma,'' Henry said. ``In serving our children, they have served all of us and they deserve a pension system that is solvent, secure and able to fulfill the state's commitments.''

Key lawmakers involved in a bipartisan agreement on easing the financial woes of the pension system were Sens. Johnnie Crutchfield, D-Ardmore; Mike Johnson, R-Kingfisher; Mike Mazzei, R-Tulsa, and Kenneth Corn, D-Poteau, and Rep. Chris Benge, R-Tulsa.

State Treasurer Scott Meacham, Henry's top financial adviser, said the bill meets a goal that he and Mazzei envisioned early in the session to fund the system at the 80 percent level, considered a prudent benchmark for public pension plans.

Henry said the bill is ``a great step in the right direction'' toward solving the OTRS's funding dilemma.

The Democratic governor said he hopes leaders will agree to tap so-called ``spillover'' surplus cash from the Rainy Day fund to make a further ``significant'' contribution to the OTRS.

Crutchfield said improving the pension system, which has 80,000 members, had been a top goal of his since coming to the Legislature.

``It's long overdue,'' said Rep. Danny Morgan, D-Prague.

Johnson said doing something to fix the pension system had bipartisan support from the start of the session.

Meacham and Benge said an important side benefit to the bill will be to improve the state's financial standing in the eyes of bond rating companies.

``As the unfunded liability is decreased over the next 19 years, I believe the bond rating agencies will look more favorably on our ratings and that will ultimately save taxpayers money,'' Meacham said.

Since the bill does not create a new revenue stream, increased funding for the pension system must come from general revenues.

Corn and Henry said they believe retired teachers will make sure that future Legislatures do not back away from the plan.

Henry said it would be ``foolish'' politically for lawmakers to ``undo the commitment we have made. I seriously doubt that would happen.''