Okla. lawmakers study teacher retirement loophole

By Tim Talley
Associated Press Writer / October 20, 2010

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OKLAHOMA CITY—An Oklahoma lawmaker on Tuesday said she planned to file legislation to close a loophole in the state's teacher retirement system, which critics say allows nonpublic educators to accrue benefits while working for private education associations.

Rep. Sally Kern, R-Oklahoma City, said the legislation would eliminate guidelines allowing former educators to remain members of the Oklahoma Teacher's Retirement System even after they join private education associations, including some that lobby lawmakers on behalf of state educators.

"Let's not promote that opportunity," said Kern, a former teacher, after a meeting of the House Appropriations and Budget Committee where the loophole was studied. She said her bill would be similar to one she filed last year and later withdrew for more study.

Committee members took up the proposal a month after Republican House leaders said overhauling the state's pension system will be a top legislative priority as they cope with an expected hole in next year's budget.

Officials have said the state's seven public pension plans have an estimated $15 billion in unfunded liability and that the teacher's retirement system alone has unfunded liability of about $9.5 billion.

Steve Anderson, a certified public accountant and researcher for the Oklahoma Council of Public Affairs, a conservative think tank, said the teacher's retirement system was created to provide benefits to public school teachers, administrators and support personnel.

But state law has allowed a handful of teachers to continue to accrue benefits after they join private associations that Anderson said offer their own retirement benefits like the Cooperative Council for Oklahoma School Administrators and the Oklahoma Education Association, the state's largest teacher's group.

"This is the deal of a lifetime. This thing is a real golden goose," Anderson said.

Many of the education organizations involved in the arrangement employ lobbyists, he said. "This system was not designed to help lobbyists," he said.

The state has dedicated $3.8 billion in state taxes to lower the system's unfunded liability, but Anderson said it is hard to quantify how much the loophole has cost the retirement plan.

The plan's executive director, James Wilbanks, said that since 1976, 80 of the 160,000 people who have participated in the teacher's retirement plan have remained members after leaving public education.

Fifty-one have retired and are receiving benefits, and seven are still earning benefits. The rest have returned to public education, moved on to other jobs or died.

Regardless of the cost, Anderson said tax dollars are being used to support retirement benefits for nonpublic educators.

"The taxpayers of Oklahoma are on the hook for it," he said. "There is a cost to the system."

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