House advances bill to close OTRS loophole
Published: March 9th, 2011
CapitolBeatOK Staff Report
Published 09-Mar-2011
Legislation approved by the Oklahoma House of Representatives would close a loophole in the Oklahoma Teacher Retirement System that allows former public school teachers to continue to accrue years of service through the public retirement system while working for non-public education organizations.
House Bill 1648, by state Rep. Tom Newell, would close what many critics have deemed a loophole in order to reduce the unfunded liability in the retirement system.
Last year, state Rep. Sally Kern, an Oklahoma City Republican, had pressed for legislation to end the special status for association executives who retained their status in the Oklahoma Teacher Retirement System (OTRS) after entering the private sector.
“The intent of my legislation is to protect the benefits of actual teachers by discontinuing the inappropriate practice of former teachers accruing publicly-funded benefits while working in a non-public organization,” said Newell, a Seminole Republican. “These individuals are also earning more than the average public school teacher, which means they are accruing a larger share of benefits. It’s a loophole that needs to be closed.”
Newell said that Oklahoma’s teacher retirement system is one of the worst in the nation and has approximately $10 billion in unfunded liability. According to an interim study held by lawmakers in 2010, the loophole accounts for $100,000 per person of that unfunded liability.
“It would be a shame for a teacher who has devoted 20 or more years of his or her life to teaching to be unable to receive their benefits because individuals who had gone on to serve in non-public groups like the OEA were accruing benefits,” Newell said. “The system is in jeopardy and needs all the help it can get.”
House Bill 1648 now proceeds to the Senate for consideration.
Note: Editor Patrick B. McGuigan contributed to this report.