Oklahoma House Bill 3313 (HB 3313) brings the retirement benefits for the state’s public employees participating in the Pathfinder defined contribution (DC) plan offered by the Oklahoma Public Employees Retirement System (OPERS) up to industry standards, ensuring that government employers are fostering adequate retirement savings for their employees. As the DC plan has been and continues to be the primary retirement vehicle for OPERS members, and as this plan has been instrumental in shielding the state from growing pension debts, it is crucial that lawmakers make Pathfinder a retirement benefit that continues to serve its members well into the future.
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The minimum combined 10.5% of pay that the Pathfinder plan currently allows employers and employees to contribute is below industry standards for building adequate retirement savings. HB 3313 would increase minimum employee contributions from 4.5% to5% and minimum employer contributions from 6% to 7%, ensuring that everybody is saving at the industry-proscribed 12% of pay to provide a secure retirement.
HB 3313 removes vesting requirements.
HB 3313 eliminates Pathfinder’s heavy penalty applied to employees who leave for other jobs or life situations before completing five years of service. As currently constructed, employer contributions into Pathfinder accounts vest gradually over five years, leaving many hires with inadequate retirement savings built during their tenure in the system. HB 3313 completely eliminates this vesting requirement, ensuring that all employees are saving enough from the very start.
HB 3313 still allows members to contribute extra to their retirement.
HB 3313 maintains the current ability for members to contribute up to 2% extra toward their DC benefit.This means members will retain the option to save for even more post-employment security if they choose, with total contributions potentially rising to 14%. This will help ensure the Pathfinder plan remains a valuable retirement benefit for Oklahoma’s public workforce.
Bottom line
HB 3313 is a major step toward improving the Pathfinder plan that has been offered to OPERS members since 2015. It would significantly improve the retirement security of Oklahoma’s public workers and bring the plan up to minimum industry standards.