Controversial Retirement Fund Bill Wins Narrow Passage
OKLAHOMA CITY - A bill that some say could potentially be harmful to the pension funds for the state's teachers and state employees made it a step closer to becoming law Thursday, but not without some controversy.
Senate Bill 242 would place the State Treasurer on the Boards of Trustees for both OPERS, the Oklahoma Public Employees Retirement System, and OTRS, the Oklahoma Teachers Retirement System. Each board currently has 13 trustees, whose appointments are spelled out in law.
The bill easily gained passage in the state Senate in February, but ran into serious opposition Thursday in the House.
While supporters say the measure would bring more accountability and fiscal expertise to these two pension funds, critics rose on the floor to point out what they see as three major problems.
First, the say that bringing the number of trustees on each board to 14 -- an even number -- goes against the traditional thinking that odd-numbered bodies are preferable since they generally preclude tie votes.
Second, House Minority Leader, Rep. Scott Inman, D-Del City, pointed federal law, which would prevent either of the two pension systems from using an investment firm that had recently made a political contribution to the Treasurer's campaign.
Finally, Inman said passage of the legislation would create a conflict of interest, since the Treasurer, Ken Miller, serves as chair of the Oklahoma Pension Commission, which oversees the individual pension systems.
"You can't be the state's watchdog," Inman stated during debate, "and then turn around and make those decisions on OPERS' and OTRS' boards. That conflict is clear."
But, in a statement for News 9, Miller said, "The treasurer’s service on the state pension oversight commission raises no conflict as is evident by the Secretary of Finance already serving on the commission and the individual pension boards. The oversight commission has no decision-making authority."
Miller says, although he did not specifically request the legislation, he has long been on record supporting the statutory changes it contains.
"The state treasurer is elected to invest public funds," Miller wrote, "but, unlike the vast majority of states, is currently excluded from doing so with our state’s largest investments."
"This bill is a no-brainer. It passed the Senate unanimously and had no opposition until the labor unions, bureaucrats and lobbyists gave their marching orders to the House Democrats," continued Miller. "Unfortunately, Rep. Inman showed he would rather curry favor from special interest groups for his race for governor than put the people of Oklahoma first."
But Inman insists the only one who will benefit from the bill is the Treasurer himself, as it would give him more power.
While debate on the bill broke down along party lines, Republicans arguing in favor, Democrats arguing against, numerous members of the majority GOP voted against it, and its approval was in jeopardy. With just 49 'yes' votes on the board, not enough for passage, the acting Speaker asked the clerk to declare the vote. But in the two or three seconds between that request and the clerk actually announcing the vote, two more Republicans voted 'yes', giving the measure 51, just enough to pass.
Inman protested the declaration of the final vote, insisting the GOP's own House rules make clear the 'yes' votes should have locked in at 49, but leadership ruled against him.
The bill did pick up some amendments in the House, meaning it will now have to go back to the Senate.