Legislation granting cost-of-living adjustments (COLAs) for retirees in six Oklahoma pension plans, including teachers, firefighters, police, public employees and justices and judges was signed into law by the governor.

House Bill 3350 bases COLAs on the number of years individuals have received retirement benefits from the state. Those retired for five years or more as of July 1, 2020, will receive a 4% increase in monthly pension payments. Those retired at least two years but not five will get a 2% increase. 

“I’ve fought for this additional benefit for our state retirees for several years,” said Rep. Avery Frix, R-Muskogee, the bill’s principal author. “It is gratifying to see this finally become law. It has been 12 years since these former state employees received a COLA, even as they’ve seen the cost of health insurance premiums and other living expenses rise.”

HB3350 was proposed after an actuarial analysis showed that a 4% COLA would not affect any retirement plan’s funded ratio by more than 2.9%. Overall, the plan would affect the system’s cumulative funded status by around 2%, and the plans would continue on an upward funding trajectory in the future even after a COLA.

Benefit managers for each of the pension plans spoke during an interim study hosted by Frix last fall about their plan’s ability to absorb the COLA and its necessity for pensioners.

State retirees last received a COLA in 2008. Since then, inflation has increased 19.5%, according to the U.S. Bureau of Labor Statistics.

Frix said the strength of the retirement system is vastly improved since that time. Several of the state’s pension plans are now more than 100% funded and most are 80% funded, which is indicative of solvency. The state’s financial rankings also have improved. Frix said retired state employees are every bit as concerned about the overall performance of their benefit plans as anyone and don’t want to see their plans harmed. At the same time, they are facing a loss of buying power and some state retirees don’t receive Social Security benefits.