Mike Kelley: OSFA Executive Director’s Report

Greetings Oklahoma Firefighters!

Hopefully your year is off to a great start as the weather gets warmer and spring sports season is in full swing.

Speaking of full swing, the legislative session is definitely in full swing. One of the things that your association does on your behalf is propose, track and speak on your behalf at the state legislature.

Obviously with a membership base as diverse as ours, there is a wide range of issues and perspectives for us to track.

Since the five members that make up your OSFA Board are also five of the 13 pension board members, we are deeply involved in anything that would affect pension benefits or the viability of your pension system.

I can tell you as a former board member and also working with your current board that they take their fiduciary responsibility to the pension system extremely seriously.

Due to the delay in writing this article and its publication, I will refrain from speaking specifically about current legislation because during session, it can truly change hour to hour.

A little history about your pension system:

Prior to 1981, the system(s) were municipal systems meaning each city had their own system. When the law was passed combining the systems, our system was 11% funded utilizing the combined assets. We are currently 73% funded.

So as you can see, your system has improved exponentially in a little over 40 years. Our system is funded through contributions from you the employee, your employer (City) and through a percentage of insurance premium tax (State).

At one time, our retirees received a COLA (Cost of living adjustment) every other year. These increases were funded by the pension system and were typically passed by the legislature in even or election years.

Around 2010, there was a major national effort to reform pen- sions and there was a lot of misinformation and halftruths being circulated in political circles concerning defined benefit plans such as ours.

The bottom line was that the OSFA, PFFO, Local Unions, and our brother and sister volunteers across the state had to fight against the push to change our system from a defined benefit to a defined contribution system.

Prevailing and keeping our defined benefit system was a huge win, however the fight was not over. Lawmakers still demanded reforms and the OSFA was on the front line offering solutions that would improve the system and maintain our member’s benefits.

We offered a legislative solution to preserve Plan B benefits, and while it received overwhelming support in the House, it stalled in the Senate.

The lawmakers passed a law at that time that made it nearly impossible for them to grant another COLA. It required any COLA legislation be introduced in an odd year and, if agreed upon, sent for an actuarial study between sessions to determine a cost which would then be considered in an even year.

The law also required that the legislature fund any benefit increase.

That legislation has made COLAs extremely difficult to secure for our retirees, and the benefit increases that we have secured have not been paid for by the legislature as the law intended. Instead, the pension system has absorbed the cost of any benefit increase.

What I attempted to describe is a very simple explanation of our systems history and the on-going legislative fight.

Bills that have been sent to the actuary this session include an increase in the volunteer multiplier to $10 per year of service, a 2% COLA, a 4% COLA, and a $2,500 increase to the death benefit.

I can assure you that your OSFA will be at the Capitol protecting and securing your benefits well into the future!

Hope to see you in Tulsa for State Fire School in May and at convention in Tahlequah in June! Stay safe my sisters and brothers! Leave it better than you found it!