Study Shows Big Gains for Oklahoma’s Pension System
Published: November 13th, 2014
OKLAHOMA CITY – The financial health of Oklahoma’s retirement system has significantly improved according to the most recent actuarial reports, members of the Oklahoma House Economic Development and Financial Services Committee learned during a legislative study on the state’s pension systems. The study hearing was held Wednesday (November 12).
State Rep. Randy McDaniel, chair of the committee, said it was a welcome announcement.
“I am thankful for the substantial improvement,” said McDaniel, R-Edmond. “The recovery is a result of major reforms, funding and investment gains.”
In 2010, the state pension systems unfunded liability totaled over $16 billion. The funding shortfall was more than $500 million a year, despite record levels of contributions. According to Standard and Poor’s, Oklahoma ranked as one of the five weakest state pension systems in the country.
“The status quo was not sustainable,” McDaniel said. “Reforms were needed to ensure strength and security.”
For the current fiscal year, the unfunded liability has dropped to $9.6 billion. It is the first time in a decade that the state pension system’s unfunded liability has been below $10 billion.
The annual funding deficiencies to pay benefits and service the debt have been filled. Meanwhile, the funded ratio has improved from 58 percent four years ago to 74.4 percent.
“The key measurements of the pension system clearly indicate a remarkable turn for the better,” McDaniel said. “However, changes in factors such as investment returns, funding, accounting rules, demographics and the granting of unfunded benefit increases could cause a reversal of the current favorable outlook.”