State must be true to the promises it has made to it retirees
By REP. RANDY McDANIEL
Abraham Lincoln said, “You cannot escape the responsibility of tomorrow by evading it today.” Until recently, the decisions impacting the state pension system provided a clear example of not heeding this sound logic.
In the past, as pension finances started to improve, resources would be cut to fill different budget holes and new unfunded benefits would be given. Subsequently, markets would inevitably correct. The combination of less money, larger benefits and market corrections led to growing financial instability.
By 2010, the state’s unfunded pension liability had grown to more than $16 billion. The funding deficit was more than $500 million per year and growing, despite record annual state contributions. Oklahoma’s retirement system ranked nationally in the bottom five and was on a pathway to insolvency.
Leaders took responsibility. Major reforms were passed. From preventing unfunded benefit increases, to increasing retirement ages and establishing a new plan, billions in cost-saving reforms were approved. Meanwhile, funding rates remained steady and pension investments rebounded. As a result, the funding gap has been plugged and the unfunded liability has been reduced to $8.8 billion, the lowest level in a decade.