McDaniel Pension Bill Seeks To Provide More Portable Solutions For Prospective Teachers

 

FOR IMMEDIATE RELEASE:  Jan. 18, 2016

 

Legislator Files Education Bills Aimed At Improving Pension System

OKLAHOMA CITY – Two pieces of legislation to modernize and strengthen the Oklahoma Teachers’ Retirement System have been filed by Rep. Randy McDaniel, R-Edmond, chairman of the House Banking, Financial Services and Pension Committee.

The Retirement Freedom Act of 2017, HB 1172, would implement an optional defined contribution plan for prospective educators. With defined contribution plans, annual costs are predictable since contribution requirements are clearly defined and paid up front.

“The modern workforce is more mobile. Many new teachers value occupational freedom and desire a transferable retirement plan. Plus, the new plan would limit unfunded promises,” McDaniel said. “Nonetheless, aspiring Oklahoma educators continue to only be offered a compensation package that is heavy on other benefits and often require lengthy service commitments.

McDaniel, a proponent of increasing teacher pay, realizes that every component of a teacher’s total compensation is appreciated. However, pay tends to tower above other items. Resources are limited. As teachers retire in record numbers, reforms to the existing pension system are necessary in order to ensure long-term sustainability.

The Pension Protection Act, HB 1162, would increase the retirement age for prospective educators by two years. The retirement provisions for career educators would rise from 60 years of age to 62. The normal retirement age would increase from 65 to 67. Through the years, retirement age qualifications have not kept pace with longevity gains.

Leaders across the country struggle with the rising costs associated with an aging population and early retirement laws. Consequently, educators are reaching retirement in historic numbers and are projected to continue doing so for decades.

“These bills would help offset rising expenses and offer future educators an opportunity to invest in a retirement plan that best suits their needs,” McDaniel said.

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