Oklahoma has taken another step toward addressing the $16 billion in unfunded liability facing the state’s public pension systems. House Bill 2132, which was authored by Senate President Pro Tempore Brian Bingman and presented by Senator Mike Mazzei, chairman of the Select Committee on Pensions, was approved Tuesday on a bipartisan vote of 33 to 13.
“The most important thing this measure does is to require the legislature to fund any cost of living increases (COLAS) instead of leaving them to be absorbed by the pension systems,” said Bingman, R-Sapulpa. “This reform alone should reduce our unfunded liability by more than $5 billion.”
Mazzei said a recent change by Moody’s Investment Services underscores the importance of reforming Oklahoma’s pension systems. Moody’s announced it would now include a state’s unfunded pension liability when determining a state’s credit rating.
“Failing to reduce our unfunded liability could result in massive tax hikes, lower bond ratings, and even more budget cuts to keep our pension systems functional,” said Mazzei, R-Tulsa. “Making these decisions today means avoiding those scenarios, and ensuring the long-term stability of public pensions.”
HB 2132 returns to the House of Representatives for consideration of Senate amendments.