Bill
HB 1739
HB 1739 updates OLERS: raises employer/employee contributions, bases some benefits on top base salary for certain roles, and sets new effective dates.
HB 1739 (2026) — Oklahoma Retirement: Oklahoma Law Enforcement Retirement System (OLERS) contributions, top base salary, benefit computation, effective dates, emergency clause
Overview
- Purpose: Update and modify the Oklahoma Law Enforcement Retirement System (OLERS) provisions, including employer and employee contribution rates, top base salary-based benefit calculations, disability benefit rules, and related effective dates. The bill also contemplates contingent effective dates tied to the emergency clause and adopts changes consistent with the Oklahoma Pension Legislation Actuarial Analysis Act.
Key Provisions and Changes
1) OLERS Employer and Employee Contributions
- Employer contributions (to the OLERS fund) begin July 1, 2026 and are set as a percentage of actual paid base salary for each member:
- Schedule: 12.5% (2026–2027), 13.5% (2027–2028), 14.5% (2028–2029), 15.5% (2029–2030), and 16.5% for July 1, 2030–June 30, 2031 and thereafter.
- Employee contributions: 8% of actual paid base salary, increasing to 9% under the bill’s updated version (the text shows 8%/9% in the amendment context; the effective language states: “Eight percent (8%) nine percent (9%)” of actual paid base salary).
- “Picked up” employer contributions: Employers shall pick up the member’s contributions (under Section 414(h)(2) of the IRS Code) for all compensation earned after December 31, 1989. These amounts are treated as employer contributions for tax purposes but are included in gross salary for benefit calculations and deductions. The member cannot opt to receive the picked-up contributions directly.
- Administrative mechanics: Member contributions picked up by employers are deposited with the OLERS fund and are counted toward benefits in the same manner as pre-pickup contributions.
2) Top Base Salary-Based Benefit Computation (OLERS)
- For certain statutory salary-restricted positions, retirement benefit calculations may use the top base salary currently paid to the highest nonsupervisory position in the participating agency, subject to defined limits and ACT-based caps (in line with the Economic Growth and Tax Relief Reconciliation Act of 2001 limits).
- Eligible positions include:
- Oklahoma Highway Patrolman, Communications Dispatcher, Capitol Patrolman, Lake Patrolman, and OSBI Special Agent/Criminalist.
- Alternatively, retirees may compute benefits using the member’s final average salary, multiplied by 2.5% per year of credited service.
- The scheme provides floor protections:
- No retiree who left OLERS before July 1, 2002 shall receive less than their June 30, 2002 benefit level.
- For other OLERS-relevant positions (non-top-base-salary-based), benefits are calculated using the highest nonsupervisory salary currently paid or the final average salary, with the 2.5% factor.
3) Disability Benefits
- The bill retains and updates the disability benefit framework (disability pension calculations vary by service, credit years, and final average salary/top base salary, depending on the specific disability type and position).
- It includes detailed rules for disability examinations, eligibility, and post-disability treatment, including potential reductions if the member participates in related plans (e.g., Oklahoma Law Enforcement Deferred Option Plan).
4) Eligibility and Conditions
- The bill includes provisions that apply to active commissioned agents of the Office of the Attorney General or the Military Department of the State of Oklahoma, enabling OLERS membership for those positions under the specified statutes.
- It also broadens Employer/Employee contributions and benefit computations in concert with other sections of the Oklahoma Pension Legislation Actuarial Analysis Act (Section 3103).
5) Effective Dates and Contingent Effects
- Section 4–5: Emergency clause contingent dates
- If the emergency clause is not approved, Section 1 becomes effective Oct. 1, 2026; Section 2 and 3 become effective Nov. 1, 2026.
- Section 7: General effective dates
- Sections 2 and 3 are generally effective July 1, 2026.
- Section 8: Establishes emergency clause taking effect upon passage.
Impact and Affected Parties
- Affects OLERS-eligible law enforcement personnel and participating employers within Oklahoma (state agencies, departments, and related law enforcement entities).
- Impacts retirement benefit computations for certain positions, shifting some calculation basis toward top base salary (with caps) versus final average salary.
- Increases both employer and employee contributions over time, with a stepped schedule for the employer portion and a fixed (initially proposed 8% then 9% in amended text) employee contribution.
- Administrative and fiscal implications for state budgeting and OLERS funding, requiring actuarial oversight.
Procedural and Timeline Notes
- Legislative action: The bill has passed multiple committees with a committee substitute (CS) and emergency clause; it includes contingent effective dates tied to the approval of the emergency clause.
- If the emergency clause is approved, the act takes effect immediately; otherwise, effective dates are staggered (October/November 2026 for different sections) with a July 1, 2026 baseline for sections 2–3 in the absence of emergency approval.
- The bill includes definitions and clarifications consistent with the Oklahoma Pension Legislation Actuarial Analysis Act (Section 3103).
Summary
HB 1739 seeks to restructure OLERS contributions (employer and employee), adjust benefit computation methods to include top base salary considerations for certain positions, refine disability and survivor-related provisions, and set clear effective and contingent dates tied to an emergency clause. The changes aim to align OLERS funding and benefit formulas with actuarial standards while ensuring protections for long-standing retirees and providing updated structures for future contributions and computations.
Compiled from official sources — confirm details with the bill’s official record.
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