State retirees demand COLA as legislators set to receive pay raises

Oct. 28--Earlier coverage

As Oklahoma legislators are set to get 35% pay raises next year, state retirees are quietly fuming.

Retired state employees haven't seen a cost-of-living adjustment in their pensions since 2008 and legislative efforts to boost their pensions last year were postponed to study how the state's retirement systems would be affected.

Retirees say the optics of the situation reflect poorly on the Legislature, despite the fact legislators did not approve raises for themselves.

Susie Boone, 60, a retired elementary school teacher in Chouteau, said 35% raises are nearly unheard of in any field.

"If the state's got that kind of money, they need to use some of it elsewhere," she said. "I know there are fewer legislators than there are teachers or retirees, but still, it's like a statement they're making that that's more important."

Since Boone and her husband retired, they've both returned to working at Chouteau-Mazie Public Schools part-time as a way to keep up with ballooning health insurance costs.

Retired Oklahoma teachers have seen health insurance premiums go up 42% since 2008 when they received their last cost-of-living adjustment, said Sabra Tucker, executive director of the Oklahoma Retired Educators Association.

Accommodating more than half of the state's retirees, the Oklahoma Teachers Retirement System is the state's largest pension system.

The state has seven public pension systems. The others are for public employees, judges, police, law enforcement, firefighters and former wildlife and conservation employees.

The Legislature is behind on everything when it comes to education and taking care of teachers, including retired teachers, said Jon Hazell, a retired Durant teacher.

It's disrespectful for legislators to get awarded hefty pay raises while retired teachers are scrimping to survive, said Hazell, Oklahoma's 2017 Teacher of the Year.

"It looks bad, but the thing about it is they keep making those bad decisions," he said. "Once or twice you could say it's just a lack of thoughtfulness, but after a while, it's almost overt. You get to wondering if they flat-out don't care."

Last year, the pension systems gave most retirees a one-time payment that, for many, was equal to 2% of their yearly distribution.

But legislators are being cautious about how and when they fund pension adjustments because just a decade ago, the state's pension systems were among the worst in the country.

From 2000 to 2010, the unfunded liability of Oklahoma's state pension systems increased from $6 billion to $16 billion -- more than twice the amount of the entire state budget -- in part because former lawmakers gave retirees more generous benefits than the state could afford.

The health of the pension systems affects the state's financial ratings and ability to borrow money at lower costs.

As a result of the financial situation, legislators passed a number of pension reforms, including a 2011 measure requiring all cost-of-living adjustments to be fully funded at the time of their enactment.

But last year, after seeing growth in the pension funds, the state House nearly unanimously approved a permanent 4% pension adjustment for state retirees in six pension systems. The measure stalled in the Senate where leadership wanted more information about the health of the state's retirement systems before proceeding.

As a result, legislators asked for actuarial analyses of offering a 2% or a 4% cost-of-living adjustment. The studies will be complete by Dec. 1.

Rep. Avery Frix, R-Muskogee, hopes most or all of the analyses will be done in time to go over the details at his Nov. 15 interim study on cost-of-living pension adjustments.

He's also invited the heads of all the state pension systems to talk about the health of their systems and what they would look like if they gave retirees a pension adjustment.

Frix hopes his fellow legislators will see the state's retirement systems have improved dramatically.

"At one time in our state's history, we were one of the worst-funded pension systems in the nation," he said. "But because of former legislators and because of tough decisions that the Legislature made, along with many sacrifices that our retirees have made, our system has recovered significantly."

In 2010, none of the state's retirement systems were funded at or above 100%. Now, if you look at the systems as a whole, they're about 80% funded, which is typically the benchmark of a solvent system, Frix said.

"We've got some systems that are over 100% funded so I think the time is now to do [a COLA]," he said. "We need to be responsible about it, but we do need to do something."

In mid-October, Oklahoma's Legislative Compensation Board granted legislators a 35% pay bump that will take effect on Nov. 18, 2020. The board composed of non-elected officials decided to raise legislators' annual salaries from $35,021 to $47,500, marking their first pay raise in 20 years.

Members of the board appointed by Gov. Kevin Stitt, House Speaker Charles McCall and Senate Pro Tem Greg Treat talked at length about how the cost of living has dramatically increased since legislators last received pay raises.

Steve Lumry, executive director of the Oklahoma State Firefighters Association, said the board's action was a recognition that the cost of living in Oklahoma has gone up in the past two decades. But that doesn't just apply to legislators -- the cost of living has increased more than 20% for retirees since 2008, he said.

"It just shows the need now that the cost of living has gone up that much that legislators get that kind of increase and that should reflect down to those retirees, who also depend on those legislators to approve their COLAs," he said.

Rep. Kelly Albright, D-Midwest City, said the state's retirees were the first thing she thought of when she heard about the legislative pay bump.

The board made numerous valid points about why boosting legislative pay is a good idea, she said.

But she questioned how the board can have a conversation about legislators' pay when there are so many other Oklahomans who also need livable wages. State retirees haven't had a pension adjustment in 11 years, teachers still don't have the buying power they had 10-15 years ago and lots of Oklahomans are working multiple jobs just to get by, she said.

The compensation board decided in under two hours to grant legislators pay raises. But the process for retirees, teachers and state employees to receive additional compensation is nowhere near that simple, Albright said.

"How easy was it for a room full of people to decide that the Legislature needs a pay raise, but when we decide everyday Oklahomans need a pay raise, it's a much more strenuous process," she said.

Albright anticipates Oklahomans will not soon forget about the legislators' pay bump.

"I think the public will definitely have that in mind when they lobby their legislators on the issues that are important," she said.

When Bill Allison retired in 2011 after 26 years of teaching in Adair County, his monthly health insurance premium was $377. Now, it's up to $533, which eats up more than a quarter of his $1,990 monthly pension check.

The size of a retirees' pension check is determined by a formula that factors in their years of service and final salary.

Bill and his wife, Dottie, get some relief from across state lines. After 26 years of teaching in Oklahoma, Dottie drove to Arkansas to work as a full-time substitute for about a decade.

The pension checks from Arkansas include regular cost-of-living adjustments. In 2011, she received $57 a month, and now it's $81 per month, Allison said. The amount is enough to cover their monthly electric bills.

Allison, whose retirement home is just a stone's throw from the beach in Cape Canaveral, Florida, feels lucky to be financially stable.

"For myself, can I make it without them giving me a COLA? Probably," he said. "But there's a lot of people that can't."

Despite moving out of state, Allison still keeps tabs on Oklahoma's Legislature, especially when cost-of-living adjustments are involved.

And he has a piece of advice for state lawmakers.

"Lead, follow or get out of the way," he said.

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