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RBH No. 17081
ENGR. H. B. NO. 3313 Page 1
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ENGROSSED HOUSE
BILL NO. 3313 By: Eaves of the House
and
Bullard of the Senate
An Act relating to retirement; amending 74 O.S. 2021,
Sections 935.5 and 935.7, as amended by Section 3,
Chapter 47, O.S.L. 2024 (74 O.S. Supp. 2025, Section
935.7), which relate to the Retirement Freedom Act;
modifying minimum employer contribution amount;
modifying provisions related to employer matching;
modifying minimum employee contribution amount;
eliminating vesting schedule for certain funds;
providing that reemployed participants shall be
entitled to certain contributions; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 74 O.S. 2021, Section 935.5, is
amended to read as follows:
Section 935.5. A. Except as otherwise provided by subsection B
of this section Beginning November 1, 2026, employers of employees
who become participants in the defined contribution retirement
system shall match the employee contribution paid on a monthly or
more frequent basis at the rate of six percent (6.0%) seven percent
(7.0%) based on the same compensation amount used to compute the
employee contribution amount.
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B. If an employee selects a contribution rate of seven percent
(7.0%) or more, but not higher than allowed pursuant to the maximum
annual contribution limit prescribed by Section 415 of the Internal
Revenue Code of 1986, as amended, the employer matching amount shall
be seven percent (7.0%).
C. The initial four and five-tenths percent (4.5%) five percent
(5.0%) employee contribution rate shall be the only mandatory
contribution of an employee participating in the defined
contribution retirement system created by this act. These funds
shall be placed by the System in either a 401(a) plan or a 457(b)
plan, to be determined by the Board to maintain the plan consistent
with the Internal Revenue Code. Any employee contributions eligible
to be matched under this section over the four and five-tenths
percent (4.5%) five percent (5.0%) initial contribution shall be
considered voluntary deferrals of compensation and placed in a
457(b) plan. All employer matching funds shall be placed in a
401(a) plan.
Any employee contribution rate that is more than the four and
five-tenths percent (4.5%) five percent (5.0%) rate can be chosen by
the participating employee upon the employee's initial
participation, and can be changed once per month. The employee
contribution rate chosen shall continue until the employee elects to
change the contribution rate or terminates service or retires.
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D. C. The employer match as set forth in subsection A of this
section may be increased at any time by the Legislature without
affecting the then-existing rights of participating employees and
beneficiaries in order to encourage participating employees to
accumulate deferred income reserves for themselves and their
dependents. The employer match may be decreased at any time by the
Legislature without affecting the then-existing rights of
participating employees and beneficiaries in order to provide
funding as may be needed to reduce the unfunded liabilities of the
defined benefit plan as set forth in Section 901 et seq. of this
title, but shall not be less than six percent (6.0%) seven percent
(7.0%) for any year during which the defined contribution plan is
maintained.
SECTION 2. AMENDATORY 74 O.S. 2021, Section 935.7, as
amended by Section 3, Chapter 47, O.S.L. 2024 (74 O.S. Supp. 2025,
Section 935.7), is amended to read as follows:
Section 935.7. A. Participating employees shall at all times
be vested at one hundred percent (100%) of their accounts containing
solely their employee contributions, and the gains or losses on
these contributions. Participating employees will have investment
discretion over these accounts within the available options offered
by the Board.
B. Participating Beginning November 1, 2026, participating
employees shall at all times be vested at one hundred percent (100%)
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with respect to the employer matching amounts, and the gains or
losses on these funds, deposited into their defined contribution
system account or accounts according to the following schedule based
on years of participating service:
Year 1 20%
Year 2 40%
Year 3 60%
Year 4 80%
Year 5 and thereafter 100%.
C. Participating employees will have investment discretion over
all employer contributions.
D. For purposes of determining a participating employee's right
to withdraw employer matching contributions and any investment gains
upon such employer contribution matching amounts, the vesting
percentages apply at the end of each full year of service as
described in subsection B of this section.
E. C. For participating employees who do not select any
investment options, the OPERS Board will establish default
investment options for the contributions received from participating
employees and default investment options for matching employer
contributions.
F. D. To the extent that participants leave employment on or
before October 31, 2026, and have not vested in all of the employer
contributions, the nonvested employer contributions, including any
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gains or losses, shall be immediately forfeited to the 401(a) plan
and may be used to offset costs of administering the plan or as
permitted by federal law. Upon reemployment with an employer on or
after November 1, 2026, and satisfying the eligibility requirements
to become a participant, the reemployed participant shall receive
credit for previous service and be vested at the same percentage the
participant was vested when service was previously terminated be
entitled to his or her previously vested employer contributions and
all new matching employer contributions deposited beginning on the
date of re-employment. However, under no circumstances shall the
participant be entitled to any previously forfeited employer
contributions.
SECTION 3. This act shall become effective November 1, 2026.
Passed the House of Representatives the 11th day of March, 2026.
Presiding Officer of the House
of Representatives
Passed the Senate the _____ day of __________, 2026.
Presiding Officer of the Senate