9 Investigates: Giant Pensions For Certain Elected Officials

<p>Some of Oklahoma's highest paid elected officials are among a select group of state workers able to cash in on a special, but now-defunct provision in state pension law; in many cases, these officials' annual retirement is bigger than their highest salary.</p>

Monday, April 27th 2015, 10:33 pm

By: News 9

Some of Oklahoma's highest paid elected officials are among a select group of state workers able to cash in on a special, but now-defunct provision in state pension law; in many cases, these officials' annual retirement is bigger than their highest salary.

The perk is being enjoyed by county commissioners, district attorneys, and even will be available to the Governor.

It's not illegal, but at least one elected official believes it's wrong and is fighting to stop it.

"There will be people that aren't happy with the fact that I bring this out," admitted State Auditor Gary Jones.

Jones feels taxpayers need to see how some elected officials are getting special treatment.

"It's your tax dollars that basically are paying for this," said Jones.

In 1988, state lawmakers overrode the veto of Gov. Henry Bellmon to put in place a special provision for elected officials who became vested in the Oklahoma Public Employees Retirement System, or OPERS. The measure allowed them to roll non-elected service in with elected service, in calculating their pensions.

OPERS allows elected officials to contribute up to ten percent of their salaries into the pension trust fund and, in return, are entitled to a four percent multiplier. Non-elected members of OPERS contribute just over three percent and get a two percent multiplier.

The 1988 amendment meant that elected officials who also had worked for the state in a non-elected position would be able to count those years of non-elected service as if they were years of elected service, even though they hadn't paid into the system at the higher ten percent rate during those non-elected years.

How does it work?

For many years, former auditor Clifton Scott was the poster child of the special benefit. Under the amended law, Scott was able to count 20 years of non-elected service like elected, and retire from an $83,000 salary to a $157,000 pension.

"So that is quite a nice little benefit," said Joe Fox, Executive Director of OPERS.

Fox says that benefit, however, was hurting OPERS financially, because beneficiaries like Scott hadn't paid enough into the system.

"The trust fund -- the pension fund -- wasn't getting the contributions it should have been getting to pay those kind of benefits," explained Fox.

OPERS leadership made its concerns known and, in 2008, calling the law "morally wrong" and "fiscally irresponsible," state lawmakers ended the perk--but only for future elected officials.

"Everybody before that who was in the system," said Jones, " was grandfathered in."

As a result, hundreds of elected officials who retired after the 2008 law change, as well, as hundreds more who will retire in the future, are still entitled to pensions much larger than they would get if they were calculated the way they are for OPERS' 80,000 non-elected members.

According to OPERS, their pension pay list is now topped by three former district attorneys: Okmulgee's Tom Giulioli, $175,500; Woodward's Hollis Thorpe, $163,700; and Enid's Cathy Stocker, $160,900.

See the top 20 OPERS pensions.

And then there's Governor Mary Fallin.

Fallin is also one of those who was grandfathered in. If she retires at the end of her current (and final) term, her staff acknowledge her pension will be $176,000, almost $30,000 more than her $147,000 salary.

9 Investigates made numerous requests to interview Gov. Fallin and ask her if she thinks it's fair that she still collect this special benefit. Instead, her Communications director, Alex Weintz, sent a statement:

"Once an employee begins working for the state," wrote Weintz, "their pension benefits are constitutionally protected. That is why reforms dealing with state pension systems are geared towards future, not current, employees."

See entire statement from Governor Fallin.

Still, legislation to remove the grandfather clause was set to be introduced in the Legislature this session, but the bill was gutted and re-purposed before it could even be heard in committee.

"Why did that happen?" 9 Investigates asked the committee chair, Rep. Randy McDaniel, R-Oklahoma City.

Rep. McDaniel, whose acknowledged expertise is in retirement systems, says he discussed it at length with the bill's would-be sponsor, Rep. Sean Roberts, R-Hominy. McDaniel says he explained that, as bad as the original 1988 amendment was, it did legally create very specific benefits for certain members of OPERS, and retroactively taking those away would likely invite lawsuits.

"And when we looked at the actual cost savings versus the litigation risk," said McDaniel, "there was real concern--was it worth it?"

Auditor Gary Jones believes, since the benefit -- a four percent multiplier for non-elected years of service -- wasn't truly earned, the beneficiaries have no right to expect it. He says taking the perk away for those who haven't retired yet is worth the risk.

"If that benefit had not been given -- that they didn't earn, didn't pay for," said Jones, "our retirement system for public employees would be over 100 percent funded.

OPERS officials say their pension fund, based on the most recent actuarial review, is 88.6 percent funded.


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