OKLAHOMA CITY (AP) — A legislative plan to shore up Oklahoma's underfunded pension systems by requiring any cost-of-living increases to be funded by the Legislature received final approval on Tuesday and is heading to the governor's desk.
The Oklahoma House voted 64-25 for the bill that is expected to immediately reduce the state's total unfunded liability among its five largest pension systems by more than $5 billion. Actuarial studies have determined Oklahoma's pension systems have a $16.5 billion unfunded liability, which is the amount owed to pensioners beyond what the systems can afford to pay.
"We are on an unsustainable path," said Rep. Randy McDaniel, R-Edmond, who carried the bill on the floor for House Speaker Kris Steele. "The best way to get out of a ditch is to stop digging."
By far the largest component of the state's unfunded liability is the Oklahoma Teachers' Retirement System, with an unfunded liability of $10.4 billion. The COLA bill is expected to immediately decrease its unfunded liability by $2.9 billion and increase its funded ratio from 48 percent to 56 percent, according to a fiscal analysis prepared by House staff.
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