House Closes Retirement System Loophole

A loophole that allows some state workers to obtain greater retirement benefits than they ever earned as a state employee was closed today by the House of Representatives.


Senate Bill 1641, by state Rep. Dan Sullivan, would ensure that elected officials will not receive retirement benefits "greater than their single highest annual compensation received as a member of the Oklahoma Public Employees Retirement System."

"Elected officials should not be earning more in
retirement than they earned while serving," said
Sullivan, R-Tulsa. "These excessive benefits
are being paid for on the backs of the hardworking
state employees that work for these officials. Our
pension system cannot continue to support these
unfair retirement benefits, particularly when so
many of our retired state employees are living
paycheck to paycheck."

Under existing law elected officials can pay a 10
percent contribution rate and elect to receive a
4 percent multiplier in their pension calculation
formula. In contrast, regular state employees pay
a 3.5 percent contribution rate and receive a 2
percent multiplier.

However, if an individual who worked for state or
county government retires as an elected official
with at least six years of elected service, that person
can have his or her benefit calculated using the 4
percent multiplier for all years of service, including
years when the individual was not in elective office
and paid only the 3.5 percent contribution rate.

Officials have indicated that more than 500 people
receive enhanced benefits because of the loophole,
which is costing the state hundreds of thousands of
dollars each year.

The most famous beneficiary of the loophole may be
former Auditor and Inspector Clifton Scott, who now
draws a pension of nearly $147,000 for a job that
paid $83,510.

Under Senate Bill 1641, benefits would be calculated
using the higher multiplier for only the years of service
in elective office.

Senate Bill 1641 passed out of the House by a vote of
58-41 and now returns to the Senate for final approval.