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An Act
ENROLLED HOUSE
BILL NO. 1091 By: Kelley of the House
and
Gollihare of the Senate
An Act relating to retirement; amending 11 O.S. 2021,
Sections 49-100.1, as amended by Section 2, Chapter
232, O.S.L. 2022, 49-113, 49-117.1, as amended by
Section 7, Chapter 232, O.S.L. 2022, 49-117.3, and
49-138, as amended by Section 2, Chapter 247, O.S.L.
2024 (11 O.S. Supp. 2024, Sections 49-100.1, 49-
117.1, and 49-138), which relate to the Oklahoma
Firefighters Pension and Retirement System; defining
term; modifying provisions related to death benefits;
specifying which contributions member is to be
refunded; modifying provisions relating to repayment
of contributions; authorizing member to make certain
repayment; authorizing amortized payment if permitted
by State Board; directing the State Board to
promulgate rules or procedures; providing that member
may purchase transferred credited services; providing
procedures; providing limitations; providing
exception; modifying how payments may be made;
updating reference; providing limitation on purchase
of military service credit; providing limitation on
purchase of credited service; providing for purchase
of military service credit; providing requirements to
purchase such credit; providing restrictions;
permitting volunteer members to purchase military
service credit; requiring payment to be received
prior to commencement of benefits; providing for
codification; and declaring an emergency.
SUBJECT: Retirement
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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SECTION 1. AMENDATORY 11 O.S. 2021, Section 49-100.1, as
amended by Section 2, Chapter 232, O.S.L. 2022 (11 O.S. Supp. 2024,
Section 49-100.1), is amended to read as follows:
Section 49-100.1. As used in this article:
1. "System" means the Oklahoma Firefighters Pension and
Retirement System and all predecessor municipal firefighters pension
and retirement systems;
2. "Article" means Article 49 of this title;
3. "State Board" means the Oklahoma Firefighters Pension and
Retirement Board;
4. "Local board" means the local firefighters pension and
retirement boards;
5. "Fund" means the Oklahoma Firefighters Pension and
Retirement Fund;
6. "Member" means all eligible firefighters of a participating
municipality or a fire protection district who perform the essential
functions of fire suppression, prevention, and life safety duties in
a fire department. The term "member" shall include but not be
limited to the person serving as fire chief of any participating
municipality, provided that a person serving as fire chief of a
participating municipality shall meet the age, agility, physical and
other eligibility requirements required by law at the time said
person becomes a member of the System. Effective July 1, 1987, a
member does not include a "leased employee". The term "leased
employee" means any person (other than an employee of the recipient)
who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in
accordance with Section 414(n)(6) of the Internal Revenue Code of
1986, as amended) on a substantially full-time basis for a period of
at least one (1) year, and such services are performed under primary
direction or control by the recipient. Contributions or benefits
provided a leased employee by the leasing organization which are
attributable to services performed for the recipient employer shall
be treated as provided by the recipient employer. A leased employee
shall not be considered an employee of the recipient if the
requirements of the safe harbor provisions of Section 414(n)(5) of
the Internal Revenue Code of 1986, as amended, are satisfied.
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Effective July 1, 1999, any individual who agrees with the
participating municipality that the individual's services are to be
performed as a leased employee or an independent contractor shall
not be a member regardless of any classification as a common law
employee by the Internal Revenue Service or any other governmental
agency, or any court of competent jurisdiction;
7. "Normal retirement date" means the date at which the member
is eligible to receive the unreduced payments of the member's
accrued retirement benefit. Such date shall be the first day
following the date the member completes twenty (20) years of
credited service. If the member's employment continues past the
normal retirement date of the member, the actual retirement date of
the member shall be the first day following the date the member
terminates employment with more than twenty (20) years of credited
service;
8. "Credited service" means the period of service used to
determine the eligibility for and the amount of benefits payable to
a member. Credited service shall consist of the period during which
the member participated in the System or the predecessor municipal
systems as an active employee in an eligible membership
classification, plus any service prior to the establishment of the
predecessor municipal systems which was credited under the
predecessor municipal systems; provided, however, "credited service"
for members from a fire protection district shall not begin accruing
before July 1, 1982;
9. "Participating municipality" means a municipality, county
fire department organized pursuant to subsection D of Section 351 of
Title 19 of the Oklahoma Statutes, or fire protection district which
is making contributions to the System on behalf of its firefighters.
All participating municipalities shall appoint a fire chief who
shall supervise and administer the fire department;
10. "Disability" means the complete inability of the
firefighter to perform any and every duty of the firefighter's
regular occupation; provided further, that once benefits have been
paid for twenty-four (24) months the provisions of Section 49-110 of
this title shall apply to the firefighter;
11. "Executive Director" means the managing officer of the
System employed by the State Board;
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12. "Eligible employer" means any municipality with a municipal
fire department, any county fire department organized pursuant to
subsection D of Section 351 of Title 19 of the Oklahoma Statutes or
any fire protection district with an organized fire department;
13. "Entry date" means the date as of which an eligible
employer joins the System. The first entry date pursuant to this
article shall be January 1, 1981;
14. "Final average salary" means the average paid gross salary
of the firefighter for normally scheduled hours over the highest
salaried thirty (30) consecutive months of the last sixty (60)
months of credited service. Gross salary shall not include payment
for accumulated sick or annual leave upon termination of employment,
any uniform allowances or any other compensation for reimbursement
of out-of-pocket expenses. Only salary on which the required
contributions have been made may be used in computing the final
average salary. Effective January 1, 1988, gross salary shall
include any amount of elective salary reduction under Section 125 of
the Internal Revenue Code of 1986, as amended. Gross salary shall
include any amount of elective salary reduction under Section 457 of
the Internal Revenue Code of 1986, as amended, and any amount of
nonelective salary reduction under Section 414(h) of the Internal
Revenue Code of 1986, as amended. Effective July 1, 1998, for
purposes of determining a member's compensation, any contribution by
the member to reduce the member's regular cash remuneration under
Section 132(f)(4) of the Internal Revenue Code of 1986, as amended,
shall be treated as if the member did not make such an election.
Only salary on which required contributions have been made may be
used in computing final average salary.
In addition to other applicable limitations, and notwithstanding
any other provision to the contrary, for plan years beginning on or
after July 1, 2002, the annual gross salary of each "Noneligible
Member" taken into account under the System shall not exceed the
Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA")
annual salary limit. The EGTRRA annual salary limit is Two Hundred
Thousand Dollars ($200,000.00), as adjusted by the Commissioner for
increases in the cost of living in accordance with Section
401(a)(17)(B) of the Internal Revenue Code of 1986, as amended. The
annual salary limit in effect for a calendar year applies to any
period, not exceeding twelve (12) months, over which salary is
determined ("determination period") beginning in such calendar year.
If a determination period consists of fewer than twelve (12) months,
the EGTRRA salary limit will be multiplied by a fraction, the
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numerator of which is the number of months in the determination
period, and the denominator of which is twelve (12). For purposes
of this subsection, a "Noneligible Member" is any member who first
became a member during a plan year commencing on or after July 1,
1996.
For plan years beginning on or after July 1, 2002, any reference
to the annual salary limit under Section 401(a)(17) of the Internal
Revenue Code of 1986, as amended, shall mean the EGTRRA salary limit
set forth in this subsection.
Effective June 9, 2010, gross salary shall also include gross
salary, as described above, for services, but paid by the later of
two and one-half (2 1/2) months after a firefighter's severance from
employment or the end of the calendar year that includes the date
the firefighter terminated employment, if it is a payment that,
absent a severance from employment, would have been paid to the
firefighter while the firefighter continued in employment with the
participating municipality.
Effective June 9, 2010, any payments not described above shall
not be considered gross salary if paid after severance from
employment, even if they are paid by the later of two and one-half
(2 1/2) months after the date of severance from employment or the
end of the calendar year that includes the date of severance from
employment, except payments to an individual who does not currently
perform services for the participating municipality by reason of
qualified military service within the meaning of Section 414(u)(5)
of the Internal Revenue Code of 1986, as amended, to the extent
these payments do not exceed the amounts the individual would have
received if the individual had continued to perform services for the
participating municipality rather than entering qualified military
service.
Effective June 9, 2010, back pay, within the meaning of Section
1.415(c)-2(g)(8) of the Income Tax Regulations, shall be treated as
gross salary for the year to which the back pay relates to the
extent the back pay represents wages and compensation that would
otherwise be included in this definition.
Effective for years beginning after December 31, 2008, gross
salary shall also include differential wage payments under Section
414(u)(12) of the Internal Revenue Code of 1986, as amended;
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15. "Accrued retirement benefit" means two and one-half percent
(2 1/2%) of the firefighter's final average salary multiplied by the
member's years of credited service not to exceed thirty (30) years;
16. "Beneficiary" means a member's surviving spouse or any
surviving children, including biological and adopted children, at
the time of the member's death. The surviving spouse must have been
married to the firefighter for the thirty (30) continuous months
preceding the firefighter's death provided a surviving spouse of a
member who died while in, or as a consequence of, the performance of
the member's duty for a participating municipality, shall not be
subject to the marriage limitation for survivor benefits. A
surviving child of a member shall be a beneficiary until reaching
eighteen (18) years of age or twenty-two (22) years of age if the
child is enrolled full time and regularly attending a public or
private school or any institution of higher education. Any child
adopted by a member after the member's retirement shall be a
beneficiary only if the child is adopted by the member for the
thirty (30) continuous months preceding the member's death. Any
child who is adopted by a member after the member's retirement and
such member dies accidentally or as a consequence of the performance
of the member's duty as a firefighter shall not be subject to the
thirty-month adoption requirement. This definition of beneficiary
shall be in addition to any other requirement set forth in this
article;
17. "Contributions" means payments remitted to the System
pursuant to Section 49-122 or subsection A of Section 49-138 of this
title. Contributions shall not include payments made to repurchase
credited service pursuant to Section 49-117.1 of this title,
payments made to transfer credited service from another retirement
system pursuant to subsection A of Section 49-117.2 or Section 49-
117.3 of this title, or payments made to purchase prior military
service credit pursuant to subsection E of Section 49-138 of this
title;
18. "Accumulated contributions" means the sum of all
contributions made by a member to the System and includes both
contributions deducted from the compensation of a member and
contributions of a member picked up and paid by the participating
municipality of the member. Accumulated contributions shall not
include any interest on the contributions of the member, interest on
any amount contributed by the municipality or state and any amount
contributed by the municipality or state; and
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18. 19. "Limitation year" means the year used in applying the
limitations of Section 415 of the Internal Revenue Code of 1986,
which year shall be the calendar year.
SECTION 2. AMENDATORY 11 O.S. 2021, Section 49-113, is
amended to read as follows:
Section 49-113. A. 1. In the event of the death of a
firefighter who at the time of the firefighter's death was drawing a
pension, other than a disability pension, or who at the time of the
firefighter's death (whether death occurred while on duty, but not
in or in consequence of the performance of duty, or while on
vacation or off duty) was eligible, upon written request, to retire
and draw a pension, other than a disability pension, the beneficiary
of such person shall be paid an amount not to exceed one hundred
percent (100%) of said pension.
2. In the event of the death of a firefighter who at the time
of the firefighter's death was drawing, or eligible to draw, a
disability pension for a physical or mental disability that occurred
while in, or in consequence of, the performance of the firefighter's
duty, and which prevented the effective performance of the
firefighter's duties, and which caused the State Board to retire the
firefighter from active service, the beneficiary of such person
shall be paid an amount not to exceed one hundred percent (100%) of
the pension paid in accordance with subsection A of Section 49-109
of this title.
3. In the event of the death of a firefighter who at the time
of the firefighter's death was drawing, or eligible to draw, a
disability pension for a physical or mental disability from causes
not arising in the line of duty and which prevented the effective
performance of the firefighter's duties, the beneficiary of such
person shall be paid an amount not to exceed one hundred percent
(100%) of the pension paid in accordance with subsection C of
Section 49-109 of this title.
4. Effective March 1, 1997, if If a firefighter, who does not
have a surviving beneficiary, and to whom a retirement or disability
benefit has been awarded, or who is eligible therefore, dies or, if
later, the last surviving beneficiary dies, prior to the date as of
which the total amount of retirement or disability benefit paid
equals the total amount of the employee contributions paid by or on
behalf of the member and the member does not have a surviving
beneficiary, the total benefits paid as of the date of the member's
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death shall be subtracted from the accumulated employee contribution
amount and the balance, if greater than Zero Dollars ($0.00), shall
be paid to the member's estate receiving payments equal to or
greater than the total contributions made by the employee, as
defined in the next sentence, then a payment shall be made to the
member's estate or, if applicable, the last surviving beneficiary's
estate equal to the total contributions made by the employee minus
the payments made including payments made, or to be made, from the
Deferred Option Plan but excluding the death benefit pursuant to
Section 49-113.2 of this title. The total contributions made by the
employee for purposes of the prior sentence shall mean the sum of:
a. the member's accumulated contributions,
b. payments made to repurchase credited service pursuant
to Section 49-117.1 of this title,
c. payments made to transfer credited service from
another retirement system pursuant to subsection A of
Section 49-117.2 or Section 49-117.3 of this title,
and
d. payments made to purchase prior military service
credit pursuant to subsection E of Section 49-138 of
this title.
Total contributions, as used in this paragraph, shall exclude
interest earned or paid with respect to any contribution or payment
described in subparagraphs a through d of this paragraph.
5. Any person eligible to receive a payment pursuant to this
section may make an election to waive all or a portion of monthly
payments.
B. In the event of the death of the surviving spouse, the
pension shall cease, and should there then be but one living child
same shall receive an amount equal to one hundred percent (100%) of
said pension, but if there then be more than one living child, one
hundred percent (100%) of said pension shall be divided equally
between the children until each child reaches the age of eighteen
(18) years or until the age of twenty-two (22) years if the child is
enrolled full time and regularly attending a public or private
school or any institution of higher education. Provided, that in
the event the State Board finds that such a child who is not married
at the time of death of the member or the member's surviving spouse
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and who at the time the child attains or attained the age of
eighteen (18) years is either physically or mentally disabled, the
pension thereof shall continue so long as such disability remains;
provided, that upon the death of the firefighter and surviving
spouse, if any, said physically or mentally disabled child shall be
entitled to have paid to the child's trustee of a trust, whether
inter vivos or testamentary, which trust provides for the receipt of
the pension benefits to be held and administered for the sole
benefit of said physically or mentally disabled child, or if there
is no trust, to the child's legally appointed guardian, an amount
not to exceed one hundred percent (100%) of said pension. The money
so paid to the guardian or trustee shall be used solely for the
benefit of the disabled child and it shall be reported annually to
the State Board. A child shall not be considered disabled if the
child is able to pursue a remunerative occupation, with the
remuneration being reasonably substantial rather than merely
nominal. The payment so provided shall be calculated after payments
have been made to all eligible children as provided in this section;
provided further, that beneficiaries now receiving pensions under
the provisions of Sections 49-112 or 49-113 of this title shall,
upon application to the State Board, thereafter be entitled to a
pension equal to the amount which they would have received if this
act were in effect at the time the right to said pension accrued.
C. In the event a surviving spouse of a member remarried prior
to June 7, 1993, the surviving spouse shall be eligible to receive
the pension benefits provided for in this section. To receive the
pension benefits provided for in this section the surviving spouse
falling within this section shall submit a written request for such
benefits to the Oklahoma Firefighters Pension and Retirement System.
The Oklahoma Firefighters Pension and Retirement System shall
approve requests by surviving spouses meeting the requirements of
this section. Upon approval by the Oklahoma Firefighters Pension
and Retirement System, the surviving spouse shall be entitled to the
pension benefits provided for in this section beginning from the
date of approval forward. Pension benefits provided to surviving
spouses falling within this section shall not apply to alter any
amount of pension benefits paid or due prior to the Oklahoma
Firefighters Pension and Retirement System's approval of the
remarried surviving spouse's written request for benefits.
D. No surviving spouse shall receive benefits from this
section, Section 50-117 of this title, or Section 2-306 of Title 47
of the Oklahoma Statutes as the surviving spouse of more than one
member of the Oklahoma Firefighters Pension and Retirement System,
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the Oklahoma Police Pension and Retirement System, or the Oklahoma
Law Enforcement Retirement System. The surviving spouse of more
than one member shall elect which member's benefits he or she will
receive.
E. Upon the death of a retired member, the benefit payment for
the month in which the retired member died, if not previously paid,
shall be made to the beneficiary of the member or to the member's
estate if there is no beneficiary. Such benefit payment shall be
made in an amount equal to a full monthly benefit payment regardless
of the day of the month in which the retired member died.
F. Upon the death of an unmarried firefighter, or a firefighter
whose spouse does not meet the qualifications of beneficiary who has
one or more children, said child or children shall receive pension
benefits as provided in subsection B of this section as if the
surviving spouse had died; provided, that upon the death of the
firefighter, said child or children shall be entitled to have the
System pay to the child's or children's trustee of a trust, whether
inter vivos or testamentary, which trust provides for the receipt of
the pension benefits to be held and administered for the sole
benefit of said child, or if there is no trust, to the child's or
children's legally appointed guardian, the pension benefits as
provided in subsection B of this section in an amount not to exceed
one hundred percent (100%) of said pension. The money so paid to
the guardian or trustee shall be used solely for the benefit of the
child and it shall be reported annually to the State Board.
SECTION 3. AMENDATORY 11 O.S. 2021, Section 49-117.1, as
amended by Section 7, Chapter 232, O.S.L. 2022 (11 O.S. Supp. 2024,
Section 49-117.1), is amended to read as follows:
Section 49-117.1. A. A member who terminates service before
normal retirement date, other than by death or disability shall,
upon application filed with the State Board, be refunded from the
Fund an amount equal to the accumulated sum of:
1. Accumulated contributions the member has made to the Fund,
but excluding any interest or;
2. Payments made to repurchase credited service pursuant to
this section;
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3. Payments made to transfer credited service from another
retirement system pursuant to subsection A of Section 49-117.2 or
Section 49-117.3 of this title; and
4. Payments made to purchase prior military service credit
pursuant to subsection E of Section 49-138 of this title.
A refund made pursuant to this paragraph shall exclude interest
earned or paid with respect to any contribution or payment described
in subparagraphs 1 through 4 of this subsection, and any amount
contributed by the municipality or state, and interest earned with
respect to such contributed amount.
B. If a member has completed ten (10) years of credited service
at the date of termination, the member may elect a vested benefit in
lieu of receiving the member's accumulated contributions refund
described in subsection A of this section.
C. If the member who has completed ten (10) or more years of
credited service as prescribed by subsection B of this section
elects the vested benefit, the member shall be entitled to a monthly
retirement annuity commencing on the date the member reaches fifty
(50) years of age or the date the member would have had twenty (20)
years of credited service had the member's employment continued
uninterrupted, whichever is later. The annual amount of such
retirement annuity shall be equal to two and one-half percent (2
1/2%) of the annualized final average salary multiplied by the
number of years of credited service not to exceed thirty (30) years.
The death benefits provided for in Section 49-113.2 of this title
shall not apply to any member retiring under the provisions of this
section.
D. If a member who terminated employment and elected, or was
eligible to elect, a vested benefit dies prior to being eligible to
receive benefits, the member's beneficiary, as defined in paragraph
16 of Section 49-100.1 of this title, shall be entitled to the
member's normal monthly retirement benefit on the date the deceased
member would have been eligible to receive the benefit.
E. If a member terminates employment and withdraws the member's
accumulated contributions and then subsequently rejoins the System,
he may pay to the System the sum of the accumulated contributions he
has withdrawn plus five percent (5%) ten percent (10%) annual
interest from the date of withdrawal to the date of repayment and
shall receive the same benefits as if he had never withdrawn his
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contributions; however, effective January 1, 1991, the rate of
interest provided herein shall be ten percent (10%) per annum.
F. Lump-sum payments for repayment of any amounts received
because of a member's prior termination with interest may be repaid
by a trustee-to-trustee transfer of non-Roth funds from a Code
Section 403(b) annuity, a governmental Code Section 457 plan, and/or
a Code Section 401(a) qualified plan Members may make the repayment
described in subsection E of this section in cash by a trustee-to-
trustee transfer or direct rollover of non-Roth funds from a Code
Section 403(b) annuity or custodial account, an eligible deferred
compensation plan described in Code Section 457(b) which is
maintained by an eligible employer described in Code Section
457(e)(1)(A), a Code Section 401(a) qualified plan, or a combination
thereof, provided that after-tax funds in retirement plans shall not
be used to make a repayment.
G. In the event the member does not pay the purchase price in
whole or part pursuant to subsection F of this section, the State
Board may permit the member to pay the remaining purchase price in
cash by certified check, to amortize the remaining purchase price
over a period not to exceed sixty (60) months, or other method
approved by the State Board. Any amortized payments under this
subsection shall be made by payroll deductions on an after-tax basis
and shall not be picked up by the member's employer. The amortized
payments shall include interest at a rate not to exceed the
actuarially assumed interest rate adopted by the State Board for
investment earnings each year. Any member who ceases to make
payment, terminates, retires, or dies before completing the payments
provided for in this subsection shall receive prorated service
credit for only those payments made, not including interest, unless
the unpaid balance, including interest, is paid by the member, the
member's surviving spouse, the member's beneficiary, or the member's
estate or successor in interest within ninety (90) days after the
first to occur of said member's termination, retirement, or death;
provided that no retirement benefits shall be payable until the
earliest of the date the unpaid balance is paid in full or ninety
(90) days after the first to occur of the member's termination,
retirement, or death.
H. A firefighter shall not be permitted to withdraw from the
System while employed as a firefighter in a participating
municipality.
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I. The State Board shall promulgate such rules or procedures as
are necessary to implement the provisions of this section.
SECTION 4. AMENDATORY 11 O.S. 2021, Section 49-117.3, is
amended to read as follows:
Section 49-117.3. A. The State Board shall adopt rules or
procedures for computation of the purchase price for transferred
credited service. These rules or procedures shall base the purchase
price for each year purchased on the actuarial cost of the
incremental projected benefits to be purchased. The purchase price
shall represent the present value of the incremental projected
benefits discounted according to the member's age at the time of
purchase. Incremental projected benefits shall be the difference
between the projected benefit said member would receive without
purchasing the transferred credited service and the projected
benefit after purchase of the transferred credited service computed
as of the earliest age at which the member would be able to retire.
Said computation shall assume an unreduced benefit and be computed
using interest and mortality assumptions consistent with the
actuarial assumptions adopted by the Board of Trustees for purposes
of preparing the annual actuarial evaluation.
B. In the event that the member is unable to pay the purchase
price provided for in this section by the due date, the State Board
shall permit the members to amortize the purchase price over a
period not to exceed sixty (60) months. Said payments shall be made
by payroll deductions unless the State Board permits an alternate
payment source. The amortization shall include interest in an
amount not to exceed the actuarially assumed interest rate adopted
by the State Board for investment earnings each year. Any member
who ceases to make payment, terminates, retires or dies before
completing the payments provided for in this section shall receive
prorated service credit for only those payments made, unless the
unpaid balance is paid by said member, his or her estate or
successor in interest within six (6) months after said member's
death, termination of employment or retirement, provided no
retirement benefits shall be payable until the unpaid balance is
paid, unless said member or beneficiary affirmatively waives the
additional six-month period in which to pay the unpaid balance. The
State Board shall promulgate such rules as are necessary to
implement the provisions of this subsection A member wishing to
purchase transferred credited service from another retirement system
must be an active paid member at the time of purchase and must have
been an active paid member for a minimum of thirty (30) months so as
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to establish an adequate salary history for the computation of the
purchase price of transferred credited service. Upon application by
an eligible member to purchase transferred credited service, the
State Board shall provide the member with a computation of the
purchase price for transferred credited service. The computed
purchase price shall be good for ninety (90) days from the date the
computed purchase price is provided to the member and, except as
otherwise provided in subsection F of this section, must be paid
within such ninety-day period. After the expiration of the ninety-
day period without payment by the member, or payment commencing as
provided in subsection F of this section, the member must reapply to
purchase transferred credited service, a new purchase price must be
computed and provided to the member by the State Board, and a new
ninety-day period shall commence.
C. Transferred credited service shall be taken into account
only if payment is received prior to the commencement of benefits,
except as otherwise provided in subsection F of this section.
C. D. Members who pay the purchase price in cash by the due
date described in subsection B of this section may make payment by:
1. A trustee-to-trustee transfer of non-Roth funds from a Code
Section 403(b) annuity or custodial account, an eligible deferred
compensation plan described in Code Section 457(b) which is
maintained by an eligible employer described in Code Section
457(e)(1)(A), and/or a Code Section 401(a) qualified plan, provided
that after-tax funds in retirement plans shall not be used to
purchase transferred credited service; or
2. A direct rollover of tax-deferred funds from a Code Section
403(b) annuity or custodial account, an eligible deferred
compensation plan described in Code Section 457(b) which is
maintained by an eligible employer described in Code Section
457(e)(1)(A), a Code Section 401(a) qualified plan, and/or a Code
Section 408(a) or 408(b) traditional or conduit Individual
Retirement Account or Annuity (IRA)., provided that Roth accounts,
after-tax funds in retirement plans or IRAs, and Coverdell Education
Savings Accounts shall not be used to purchase transferred credited
service; or
3. Certified check.
A combination of payment methods described in paragraphs 1 through 3
of this subsection may be used.
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The State Board shall promulgate such rules or procedures as are
necessary to implement the provisions of this subsection.
D. E. Members amortizing the purchase price and making
amortized payments by payroll deduction on an after-tax basis,
pursuant to subsection F of this section, shall have the option of
making a cash lump-sum payment for the balance of the actuarial
purchase price with interest due through the date of payment by:
1. A trustee-to-trustee transfer of non-Roth funds from a Code
Section 403(b) annuity or custodial account, an eligible deferred
compensation plan described in Code Section 457(b) which is
maintained by an eligible employer described in Code Section
457(e)(1)(A), and/or a Code Section 401(a) qualified plan, provided
that after-tax funds in retirement plans shall not be used to
purchase transferred credited service; or
2. A direct rollover of tax-deferred funds from a Code Section
403(b) annuity or custodial account, an eligible deferred
compensation plan described in Code Section 457(b) which is
maintained by an eligible employer described in Code Section
457(e)(1)(A), a Code Section 401(a) qualified plan, and/or a Code
Section 408(a) or 408(b) traditional or conduit Individual
Retirement Account or Annuity (IRA)., provided that Roth accounts,
after-tax funds in retirement plans or IRAs, and Coverdell Education
Savings Accounts shall not be used to purchase transferred credited
service.; or
3. Certified check.
A combination of payment methods described in paragraphs 1 through 3
of this subsection may be used.
F. In the event that the member does not pay the purchase price
provided for in this section by the due date established in
subsection B of this section as provided for in subsection D of this
section, the State Board may permit the member to amortize the
purchase price over a period not to exceed sixty (60) months or
other method approved by the State Board. Such amortized payments
shall be made by payroll deductions on an after-tax basis and shall
not be picked up by the member's employer. The amortized payments
shall include interest at a rate not to exceed the actuarially
assumed interest rate adopted by the State Board for investment
earnings each year. Any member who ceases to make payment,
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terminates, retires or dies before completing the payments provided
for in this section shall receive transferred, credited service
prorated for only those payments made, not including interest,
unless the unpaid balance, including interest, is paid by the
member, the member's surviving spouse, the member's beneficiary, or
the member's estate or successor in interest within ninety (90) days
of the first to occur of said member's termination, retirement, or
death; provided that no retirement benefits shall be payable until
the earliest of the date the unpaid balance is paid in full or
ninety (90) days after the first to occur of the member's
termination, retirement, or death.
G. The State Board shall promulgate such rules or procedures as
are necessary to implement the provisions of this subsection
section.
SECTION 5. AMENDATORY 11 O.S. 2021, Section 49-138, as
amended by Section 2, Chapter 247, O.S.L. 2024 (11 O.S. Supp. 2024,
Section 49-138), is amended to read as follows:
Section 49-138. A. Any member of a regularly constituted fire
department of any municipality who is now serving or may hereafter
serve in the Armed Forces of the United States whether such service
is voluntary or involuntary, who shall have been a member of such
fire department at the time of entering such service, shall be
entitled to have the whole of the time of such service applied under
the provisions of Section 49-106 of this title, so far as the same
applies to a service pension; provided further, that the
municipality shall continue its payment into said pension fund, to
the same force and effect as though the member were in the actual
service of such fire department; provided, that any person who is
eligible for such service but who shall have volunteered for
military or naval service for a period not to exceed five (5) years
shall likewise be entitled to all of the benefits of Sections 49-138
through 49-142 of this title for the full period of such service or
enlistment; provided further, that only one such period of voluntary
service shall be considered hereunder. If such person shall
reenlist, unless required to do so by law, such person shall not
thereafter be entitled to the provisions of this subsection. The
provisions of this subsection shall not apply where any such person
dies during the period of said service or enlistment, and shall not
entitle the surviving spouse or children to any benefits, and shall
not apply to any member who shall have served on active duty
(including initial active duty) for training purposes only and/or
inactive duty training.
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ENR. H. B. NO. 1091 Page 17
B. Effective February 1, 1997, credited service received
pursuant to this section or credited service for wartime military
service received as otherwise provided by law shall be used in
determining the member's retirement benefit but shall not be used in
determining years of service for retirement, vesting purposes or
eligibility for participation in the Oklahoma Firefighters Deferred
Option Plan. For a member of the System hired on or after July 1,
2003, if the military service credit authorized by this section is
used to compute the retirement benefit of the member and the member
retires from the System, such military service credit shall not be
used to compute the retirement benefit in any other retirement
system created pursuant to the Oklahoma Statutes and the member may
receive credit for such service only in the retirement system from
which the member first retires.
C. A member who retires or elects to participate in the
Oklahoma Firefighters Deferred Option Plan on or after July 1, 1998,
shall be entitled to prior service credit, not to exceed five (5)
years, for those periods of military service on active duty prior to
membership in the Oklahoma Firefighters Pension and Retirement
System.
For purposes of this subsection, "military service" means
service in the Armed Forces of the United States by honorably
discharged persons during the following time periods, as reflected
on such person's Defense Department Form 214, as follows:
1. During the following periods, including the beginning and
ending dates, and only for the periods served, from:
a. April 6, 1917, to November 11, 1918, commonly referred
to as World War I,
b. September 16, 1940, to December 7, 1941, for members
of the 45th Division,
c. December 7, 1941, to December 31, 1946, commonly
referred to as World War II,
d. June 27, 1950, to January 31, 1955, commonly referred
to as the Korean Conflict or the Korean War,
e. February 28, 1961, to May 7, 1975, commonly referred
to as the Vietnam era, except that:
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(1) for the period from February 28, 1961, to August
4, 1964, military service shall only include
service in the Republic of Vietnam during that
period, and
(2) for purposes of determining eligibility for
education and training benefits, such period
shall end on December 31, 1976, or
f. August 1, 1990, to December 31, 1991, commonly
referred to as the Gulf War, the Persian Gulf War, or
Operation Desert Storm, but excluding any person who
served on active duty for training only, unless
discharged from such active duty for a service-
connected disability;
2. During a period of war or combat military operation other
than a conflict, war or era listed in paragraph 1 of this
subsection, beginning on the date of Congressional authorization,
Congressional resolution, or Executive Order of the President of the
United States, for the use of the Armed Forces of the United States
in a war or combat military operation, if such war or combat
military operation lasted for a period of ninety (90) days or more,
for a person who served, and only for the period served, in the area
of responsibility of the war or combat military operation, but
excluding a person who served on active duty for training only,
unless discharged from such active duty for a service-connected
disability, and provided that the burden of proof of military
service during this period shall be with the member, who must
present appropriate documentation establishing such service.
D. An eligible member pursuant to subsection C of this section
shall include only those persons who shall have served during the
times or in the areas prescribed in subsection C of this section,
and only if such person provides appropriate documentation in such
time and manner as required by the System to establish such military
service prescribed in this section, or for service pursuant to
division (1) of subparagraph e of paragraph 1 of subsection C of
this section, those persons who were awarded service medals, as
authorized by the United States Department of Defense as reflected
in the veteran's Defense Department Form 214, related to the Vietnam
Conflict for service prior to August 5, 1964. The provisions of
subsection C of this section shall include military retirees, whose
retirement was based only on active service, that have been rated as
RBH No. 13157
ENR. H. B. NO. 1091 Page 19
having twenty percent (20%) or greater service-connected disability
by the Veterans Administration or the Armed Forces of the United
States. The provisions of subsection C of this section shall not
apply to any person who shall have served on active duty for
training purposes only unless discharged from active duty for a
service-connected disability.
E. A member of the System who served in the Armed Forces of the
United States, or any component thereof, who was honorably
discharged from full-time active military service prior to becoming
a member of the System and whose full-time active duty military
service does not otherwise meet the qualifications for prior service
credit pursuant to subsections B through D of this section may
purchase up to five (5) years of full-time active duty military
prior service credit at the actuarial cost of service credit as
determined by the Oklahoma Firefighters Pension and Retirement
System Board, pursuant to Section 49-117.3 Section 7 of this title
act.
The service credit provided by this subsection shall be
administered pursuant to subsections B through D of this section,
including, but not limited to, only full-time active duty military
service not for training-only purposes, unless discharged from
active duty for a service-connected disability, as reflected on the
member's Defense Department Form 214, shall be considered for prior
service credit, and such prior service credit shall only be used in
determining the member's retirement benefit but shall not be used in
determining years of service for retirement, vesting purposes, or
eligibility for participation in the Oklahoma Firefighters Deferred
Option Plan.
F. Notwithstanding any provision herein to the contrary:
1. Contributions, benefits and service credit with respect to
qualified military service shall be provided in accordance with
Section 414(u) of the Internal Revenue Code of 1986, as amended,
which is in accordance with the Uniformed Services Employment and
Reemployment Rights Act of 1994, as amended (USERRA); and
2. Effective January 1, 2007, if any member dies while
performing qualified military service (as defined in Section 414(u)
of the Internal Revenue Code of 1986, as amended), the survivors of
the member are entitled to any additional benefits (other than
benefits accruals relating to the period of qualified military
RBH No. 13157
ENR. H. B. NO. 1091 Page 20
service) provided under the System had the member resumed and then
terminated employment on account of death.
G. Members or beneficiaries shall make application to the
System for credited service related to wartime military service.
Interest on additional benefits related to wartime military service
owed by the System to a retired member or beneficiary as provided by
law shall cease accruing one (1) year after the effective date the
additional benefits are payable by the System or July 1, 2000,
whichever is later, if the member has not applied to the System for
credited service related to such wartime military service.
H. The purchase of prior military service credit pursuant to
subsections B, C, D, and G shall not, in the aggregate, exceed five
(5) years of service credit.
SECTION 6. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 49-117.4 of Title 11, unless
there is created a duplication in numbering, reads as follows:
Notwithstanding any other provision in Section 49-100.1 et seq.
of Title 11 of the Oklahoma Statutes, the maximum number of years of
credited service taken into account under the System shall not
exceed thirty (30) years.
SECTION 7. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 49-138.1 of Title 11, unless
there is created a duplication in numbering, reads as follows:
A. The State Board shall adopt rules or procedures for
computation of the purchase price for prior military service credit
provided for in subsection E of Section 49-138 of Title 11 of the
Oklahoma Statutes. These rules or procedures shall base the
purchase price for each year purchased on the actuarial cost of the
incremental projected benefits to be purchased. The purchase price
shall represent the present value of the incremental projected
benefits discounted according to the member's age at the time of
purchase. Incremental projected benefits shall be the difference
between the projected benefit said member would receive without
purchasing the prior military service credit and the projected
benefit after purchase of the prior military service credit computed
as of the earliest age at which the member would be able to retire.
Said computation shall assume an unreduced benefit and be computed
using interest and mortality assumptions consistent with the
RBH No. 13157
ENR. H. B. NO. 1091 Page 21
actuarial assumptions adopted by the Board of Trustees for purposes
of preparing the annual actuarial evaluation.
B. A member wishing to purchase prior military service credit
must be an active paid member for a minimum of thirty (30) months so
as to establish an adequate salary history for the computation of
the purchase price of prior military service credit. Upon
application by an eligible member to purchase prior military service
credit, the State Board shall provide the member with a computation
of the purchase price for prior military service credit. The
computed purchase price shall be good for ninety (90) days from the
date the computed purchase price is provided to the member and,
except as otherwise provided in subsection G of this section, must
be paid within such ninety-day period. After the expiration of the
ninety-day period without payment by the member, or payment
commencing as provided in subsection G of this section, the member
must reapply to purchase prior military service credit, a new
purchase price must be computed and provided to the member by the
State Board, and a new ninety-day period shall commence.
C. An active volunteer member may request to purchase volunteer
prior military service credit in accordance with the second, third,
and fourth sentences of subsection B of this section. A volunteer
member who purchases volunteer prior military service credit and
later becomes a paid member may purchase paid prior military service
credit in accordance with all of subsection B of this section,
including the requirement that the member be an active paid member
for a minimum of thirty (30) months so as to establish an adequate
salary history for the computation of the purchase price of prior
military service credit. Any amount paid to purchase volunteer
prior military service credit, excluding interest, shall reduce the
purchase price for the paid prior military service credit, and the
purchased volunteer prior military service credit shall be
disregarded.
D. Purchased prior military service credit shall be taken into
account only if payment is received prior to the commencement of
benefits, except as otherwise provided in subsection G of this
section.
E. Members who pay the purchase price in cash by the due date
described in subsection B of this section may make payment by:
1. A trustee-to-trustee transfer of non-Roth funds from a Code
Section 403(b) annuity or custodial account, an eligible deferred
RBH No. 13157
ENR. H. B. NO. 1091 Page 22
compensation plan described in Code Section 457(b) which is
maintained by an eligible employer described in Code Section
457(e)(1)(A), and/or a Code Section 401(a) qualified plan, provided
that after-tax funds in retirement plans shall not be used to
purchase military service credit;
2. A direct rollover of tax-deferred funds from a Code Section
403(b) annuity or custodial account, an eligible deferred
compensation plan described in Code Section 457(b) which is
maintained by an eligible employer described in Code Section
457(e)(1)(A), a Code Section 401(a) qualified plan, and/or a Code
Section 408(a) or 408(b) traditional or conduit Individual
Retirement Account or Annuity (IRA), provided that Roth accounts,
after-tax funds in retirement plans or IRAs, and Coverdell Education
Savings Accounts shall not be used to purchase military service
credit; or
3. Certified check.
A combination of payment methods described in paragraphs 1 through 3
of this subsection may be used.
F. Members amortizing the purchase price and making amortized
payments by payroll deduction on an after-tax basis, as described in
subsection G of this section, shall have the option of making a cash
payment for the balance of the actuarial purchase price with
interest due through the date of payment by:
1. A trustee-to-trustee transfer of non-Roth funds from a Code
Section 403(b) annuity or custodial account, an eligible deferred
compensation plan described in Code Section 457(b) which is
maintained by an eligible employer described in Code Section
457(e)(1)(A), and/or a Code Section 401(a) qualified plan, provided
that after-tax funds in retirement plans shall not be used to
purchase military service credit;
2. A direct rollover of tax-deferred funds from a Code Section
403(b) annuity or custodial account, an eligible deferred
compensation plan described in Code Section 457(b) which is
maintained by an eligible employer described in Code Section
457(e)(1)(A), a Code Section 401(a) qualified plan, and a Code
Section 408(a) or 408(b) traditional or conduit Individual
Retirement Account or Annuity (IRA), provided that Roth accounts,
after-tax funds in retirement plans and IRAs, and Coverdell
RBH No. 13157
ENR. H. B. NO. 1091 Page 23
Education Savings Accounts shall not be used to purchase military
service credit; or
3. Certified check.
A combination of payment methods described in paragraphs 1 through 3
of this subsection may be used.
G. In the event that the member does not pay the purchase price
provided for in this section by the due date established in
subsection B of this section as provided for in subsection E of this
section, the State Board may permit the member to amortize the
purchase price over a period not to exceed sixty (60) months or
other method approved by the State Board. Such amortized payments
shall be made by payroll deductions on an after-tax basis and shall
not be picked up by the member's employer. The amortized payments
shall include interest at a rate not to exceed the actuarially
assumed interest rate adopted by the State Board for investment
earnings each year. Any member who ceases to make payment,
terminates, retires, or dies before completing the payments provided
for in this section shall receive prior military service credit
prorated for only those payments made, not including interest,
unless the unpaid balance, including interest, is paid by the
member, the member's surviving spouse, the member's beneficiary, or
the member's estate or successor in interest within ninety (90) days
of the first to occur of said member's termination, retirement, or
death; provided that no retirement benefits shall be payable until
the earliest of the date the unpaid balance is paid in full or
ninety (90) days after the first to occur of the member's
termination, retirement, or death.
H. The State Board shall promulgate such rules or procedures as
are necessary to implement the provisions of this section.
SECTION 8. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
RBH No. 13157
ENR. H. B. NO. 1091 Page 24
Passed the House of Representatives the 13th day of March, 2025.
Presiding Officer of the House
of Representatives
Passed the Senate the 1st day of May, 2025.
Presiding Officer of the Senate
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
THOMAS E. CUMMINS CONSULTING ACTUARY, INC.
2512 E. 71st Street , Suite D ∙ Tulsa, Oklahoma 74136
(918) 492-9658 ∙ (918) 492- 9659
February 13, 2025
Representative Kelly
Room 242NS
Re: Proposed Policy Substitute for Committee Substitute for House
Bill No. 1091
Proposed Policy Substitute for Committee Substitute for House Bill
No. 1091 contains definitions for contributions, administrative
rules for repurchase of services credits, purchase of military
service and transfer of funds from other systems.
It also contains a minimum death benefit of accumulated participant
contributions less retirement benefits paid.
Proposed Policy Substitute for Committee Substitute for House Bill
No. 1091 is a non fiscal bill as defined by OPLAAA.
I am a member of the American Academy of Actuaries and meet the
Qualification Standards of the American Academy of Actuaries to
render the actuarial opinion herein.
Thomas E. Cummins
Thomas E. Cummins, MAAA