State Rep. Randy McDaniel: Rising above retirement challenges
BY STATE REP. RANDY MCDANIEL
The unfunded liability of Oklahoma’s state retirement system ballooned to more than $16 billion after the recession. The status quo wasn’t sustainable. A failing system threatens the retirement security of public employees, jeopardizes the state’s bond rating and consumes a substantial share of state taxes.
Many insiders thought the problem was insurmountable. In the past, most reform proposals were easily defeated by powerful coalitions. Even plans to stand still were rejected. Benefit increases were customary. Worrying about the money was not.
Transforming the culture would be easier said than done. Leaders made pensions a top priority. No group has been excluded from reforms. From increasing retirement ages and closing loopholes, to outlawing unfunded benefit increases, billions in cost-saving reforms have been enacted.
The Retirement Freedom Act created a new defined contribution plan. The measure is designed to address the mobility trends of the modern workforce, while ensuring that costs are predictable. And there’s more good news. Investment returns are always a concern, especially during periods of low interest rates and elevated international conflict.
While pessimists retreated, system managers continued to believe in the free- enterprise system and strategically allocated assets for growth. The plan worked. Benchmarks have been surpassed.