Attorney General Opinion Sought on Retirement Offset Dilemma

Post date: Sep 1, 2010 5:43:37 PM

BY MICHAEL MCNUTT Oklahoman

Published: August 26, 2010

The Oklahoman

An attorney general's opinion is being sought to determine which state entity should come up with a $35 million allocation that helps offset a portion of teachers' contributions to their retirement plans.

Board members of the Oklahoma Teachers Retirement System voted unanimously Wednesday to seek the opinion after $35 million allocated by legislators for teachers' retirement credits was spent elsewhere. The state Board of Education used the funds to help pay for increases in health insurance premiums for teachers and education support staff, which is required by law.

Since 1998, the Legislature has appropriated $35 million to the Board of Education with instructions to allocate the money for the teachers'

contributions, which the state is required to pay, said James Wilbanks, executive director of the teachers retirement system.

The money each teacher receives is based on the teacher's years of service, he said. A first-year teacher was expected to receive $60 this year to go to his retirement account; a teacher with at least 25 years would receive slightly more than $1,400. The money is part of the teachers' 7 percent share they pay into the retirement system.

Wilbanks said teachers should not have to make up the difference.

"The money's got to come from somewhere," he said. "The statute creating the credit makes it very, very clear that this is an obligation of the state."

Legislators in the past approved a bill directing how the Board of Education should allocate its appropriations. Legislators this past session did not pass the spending-limits bill because it was decided to give flexibility to the Board of Education to deal with the state's budget crunch.

Gov. Brad Henry earlier this year issued an executive order directing the state Education Department to allocate money to the same programs it funded last year — just less money. He directed the department to fund school programs as they were funded last year, taking into account the

7.9 percent budget cuts common education has seen over the past two fiscal years.

State schools Superintendent Sandy Garrett, who was invited by the teachers retirement board into Wednesday's closed session to discuss legal options, said she is pleased with the decision to seek an attorney general's opinion.

"We were considering that, also, asking the attorney general to clarify," Garrett said. "We think the state of Oklahoma is responsible for this pension, and we want our teachers to have that credit. We know that the schools are paying the offset so teachers are not losing any money, but we think this should have been a line item. We actually think that money should be appropriated every year directly to it (the teachers retirement system)."

More accountability is needed, she said, because the $35 million figure should not be stagnant.

"We know there are lots of new teachers, teachers retiring," Garrett said. "That amount should be changing."

The Board of Education last month also passed a resolution urging legislators to appropriate $35 million to cover the state's contribution to teachers' retirement credits.

Legislative leaders have said earlier they gave the required money to the Board of Education.

Wilbanks said the attorney general's opinion is being sought to determine whether the Legislature or the Board of Education should provide the money.

"All we care about at the end of the day is getting the money that is owed to us on behalf of our clients," he said. "We just want somebody to pay us our money."

Wilbanks said he would like to see the matter resolved before the end of this fiscal year, which is June 30.