Budget & Tax
Some politicians, public employees get pension perks
October 9, 2018
Jonathan Small , Mike Brake
Government jobs have long been known for relatively generous pensions. This is especially true for some longtime elected officials in Oklahoma.
Gov. Mary Fallin will collect about annually after she completes her second term.
Elected to the Oklahoma House of Representatives in 1990, Fallin served for two terms. She was elected lieutenant governor in 1994 and served for three terms, from 1995 to 2007. When Fallin completes her second term as governor in January 2019, she will have served eight years as governor, bringing her state government career total to approximately 24 years (resulting in approximately 24 years credit towards retirement).
If gubernatorial candidate Drew Edmondson is elected in November, he’ll start collecting a $147,000 annual salary—and could continue to draw a yearly state pension of , a total of $296,934.48 per year.
Edmondson served one term in the Oklahoma House of Representatives from 1975 to 1977. He worked as an assistant district attorney for approximately one year in Muskogee County. Edmondson held office as the District Attorney for Muskogee County from 1982 until 1992 when he ran for Congress. He held statewide office from 1995 to 2011 as attorney general. Edmondson’s state and local government career totals approximately 29 years (resulting in approximately 29 years credit towards retirement).
For both Fallin and Edmondson, their annual pension is higher than their annual salary ever was. Why? Elected officials are permitted to include prior state employment in the final calculation of their retirement payout. Moreover, until it was in 2008, a provision in Oklahoma law allowed elected officials to collect an annual pension that exceeded the highest-ever annual salary if enough pension credits were accrued. In 2011, state law was changed to prevent politicians from using a higher multiplier to compute their pension benefits. But, these changes don't apply to politicians participating in OPERS prior to the changes in 2008 and 2011.
Many government workers are able to start drawing pensions at an early age, allowing them to launch a second career. If that second career is also in government, they can either expand their pension benefits or qualify for a second, completely separate pension.
“Double dipping” refers to a scenario wherein a retired government worker returns to work in a job covered by the same pension system and receives a salary—while also receiving or accruing pension benefits from their prior position.
Oklahoma’s public employee pension systems vary, but most of them either allow retirement at a relatively young age or permit workers to return to work after retirement and continue to collect at least some pension benefits while earning a salary.
Both state employees and teachers in Oklahoma can retire at ages younger than that allowed by Social Security. They can then return to work and, in many cases, continue to receive all or part of their pensions.
Both teachers and state workers hired under the “Rule of 80” can retire after their ages and total years of service total 80—as early as age 50 for someone who was first employed in the system at age 20. Those hired later serve under the “Rule of 90” (requiring more years of service to retire), but many of them can still start receiving pensions before Social Security retirement age, which is 65 or 66 for most workers.“Double dipping” refers to a scenario wherein a retired government worker returns to work in a job covered by the same pension system and receives a salary—while also receiving or accruing pension benefits from their prior position.
A retired state employee is forbidden to return to work for the same agency for one year but may go to work for another agency covered by the Oklahoma Public Employee Retirement System (OPERS) after just one month of retirement. Hence someone retiring from the Health Department today could start working for the Oklahoma Health Care Authority in 30 days.
Edmondson would face no earnings limits since he is already over 65. His full state pension would continue alongside his gubernatorial salary, assuming he chooses not to waive his pension.
Edmondson completed his fourth term as attorney general on January 10, 2011. Assuming he started receiving pension benefits on February 1, 2011, he has received more than $1.2 million in payments from OPERS.
Dessa Baker-Inman, general counsel at OPERS, said the agency could not say how many OPERS retirees might have returned to work for covered agencies while retaining their pension benefits.
Retired educators in Oklahoma have even more options to double dip or .
The Oklahoma Teacher Retirement System has no prohibition on returning to work for the same agency, as OPERS does. OTRS retirees may return to work at any education agency after 60 days, including the same school system they left in retirement. So, a teacher could retire at the end of the school year in May, start drawing a pension and go back to the same classroom to earn a salary in September.
Teachers face different earnings limits from those imposed by OPERS. Retired teachers under 61 years of age can earn up to $15,000 before they lose any pension benefits. Those over 62 can earn up to $30,000, and after 36 months there are no earnings limits at all.
Another former politician receiving significant tax-funded retirement checks is recently retired University of Oklahoma President David Boren.
Boren served eight years in the state House of Representatives and four years as governor—all covered by OPERS retirement—then completed three terms in the United States Senate before he returned to Oklahoma to become OU president. According to OTRS, Boren transferred his 12 years of OPERS service to OTRS, ultimately retiring with that pension system with a total of 36 years of service.
Boren’s OTRS pension is $7,724.88 per month. According to a 2010 article in the OU Daily student newspaper, his annual federal pension from his Senate service was an additional $69,500 at that time. The article added that the OU Regents had voted Boren a “special pension” of $45,000 annually, which he would receive until age 85. So, Boren’s annual state and federal pension payments are approximately $207,198.
Boren is currently an active OU employee in an unpaid position, according to OU open records officer Sharon Hsieh.
According to a 2015 report by The Pew Charitable Trusts, state and local pension systems were underfunded by an astonishing $1.1 trillion. Oklahoma’s pension systems have benefited from recent reforms that reduced liability by nearly $5 billion and significantly increased dedicated funding. State pension obligations exceed funding by an estimated $8 billion.
According to the State of Oklahoma’s Comprehensive Annual Financial Report, total government and taxpayer pension contributions (adjusted for inflation) have increased $434 million, or 54.1 percent, from $802.5 million for fiscal year 1997 to $1.23 billion for fiscal year 2017.