Bills target ‘loophole' in pensions
Bills target 'loophole' in state pensions

By John Greiner

Published: March 3, 2008

An Oklahoman who toils for years as a state or county employee can hit the retirement jackpot if he manages to be elected to public office.

When he retires, his higher pension rate as an elected official will be applied not only to his elected years, but also to the years when he was a non-elected employee.

"It's costing the system tens of millions of dollars,” said Tom Spencer, executive director of the Oklahoma Public Employees Retirement System.

Bills are pending in the Legislature to prohibit elected officials from receiving the same pension rate for years that they were not elected officials.

More than 500 retired elected officials in county and state government have benefited from this since 1988, Spencer said.

The 1988 bill was what you call a "Christmas tree,” Spencer said. It had all kinds of good pension benefits in it, he said.

Gov. Henry Bellmon vetoed it, but the Legislature overrode the veto. The part that enabled an elected official to get a higher pension rate for non-elected service is difficult to find, Spencer said.

"You have to look in at least two different sections of that to figure it out,” he said of the law. "I can't imagine everybody knew about this.”

The retirement bill was presented late in the legislative session. Bellmon vetoed it June 27, 1988, and the Legislature overrode it June 30.

The perks provided for elected officials by the 1988 law do not apply to Oklahoma and Tulsa county officers because they are under separate retirement systems.

An example of a state official whose pension was sweetened by this 1988 law is Cliff Scott, former state auditor-inspector.

Scott served 20 years as a state employee and 20 years as an elected official, according to retirement records.

His retirement is about $147,000 a year because his non-elected and elected years are computed on the higher rate for elected officials.

Scott is now secretary of the Commissioners of the Land Office, earning additional retirement credits and drawing his pension because he is over 65.

Scott said the best way to change that law is to put a cap — maybe $100,000 — on the amount of pension a county or state officer could receive.

Most county officers who have non-elected time probably would never get very close to the $100,000 caps, he said.

"I'm all for county officers … they work hard,” Scott said.

Also, the salaries aren't anything like they are for elected county officials in the metropolitan counties, Scott said.

He won't get an argument from Dave Herbert, legislative liaison for the County Government Legislative Council, which is fighting the legislation to change the current law.

Herbert said the pension law helps keep good people in county government who might later become elected officials.

"It's their career track,” said Herbert, a former state senator from Midwest City.

It's not fair to change that now, he said.

"The true fix would be to say that after July 1, 2008, anybody who comes into OPERS (the pension system) cannot have that benefit,” Herbert said.

That's not the way the two bills pending in the Legislature would work.

They would say that no person elected after the effective date of the act could benefit from this.

And that means that anyone who currently is a non-elected employee of the county or state wouldn't be able to benefit from it either if later elected to a county or state office.

Sen. Mike Mazzei, R-Tulsa, has a bill, Senate Bill 1641, in the Senate to eliminate this benefit.

He said he may submit it for consideration this week.

Rep. Mike Reynolds, R-Oklahoma City, who has been trying to pass this same legislation for the past four years, has a similar measure, House Bill 2559, pending in the House.

"If we can't fix a loophole like this, I don't know how we can ever claim to manage a retirement system,” Reynolds said.

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