House, Senate, both sign off on plan.
The Oklahoma House of Representatives voted to send House Bill 2077 to Gov. Mary Fallin. Authored by Rep. Randy McDaniel, R-Oklahoma City, HB 2077 offers a new defined contribution plan for future state employees.
“This bill creates a more sustainable and competitive contribution plan for future employees,” said Speaker T.W. Shannon, R-Lawton. “The modern workforce is continually evolving and changing, and the state must keep up if we are to successfully recruit from that workforce.”
With a defined contribution plan, the amount of the retirement value provided to an employee depends on the amount of total contribution as well as the gains or losses of the account. Most companies and some states are moving to 401(k) type plans like the one created in HB 2077 because of the improved predictability and other benefits.
“The core principles contained in HB 2077 are enhanced mobility, economic opportunity and financial freedom,” said McDaniel, chairman of the House Economic Development and Financial Services Committee.
There is a cost certainty for the state once the employee decides their own personal contribution level. HB 2077 calls for a dollar-for-dollar match, up to 7 percent of salary. This is very competitive with the matching rules found in America’s largest and most successful companies.
“The modern workforce wants more mobility,” said Sen. Rick Brinkley, state Senate author and chair of the Senate Pension Committee. “Working for one employer an entire career is becoming uncommon. This legislation also provides superior predictability for the state.”
HB 2077 offers new public employees choices. They can select this new defined contribution plan or they can choose the traditional defined benefit plan.
“The legislation builds on existing infrastructure,” said McDaniel. “This is important to achieving economies of scale immediately for employees to minimize investment expenses, provide a premier selection of investment options and reduce overall risks.”
Following unanimous support in the Senate, HB 2077 passed the House 72-20 and has been sent to the Governor for her approval.