Column by Fred Morgan, President & CEO of the State Chamber, published in the Journal Record on June 15, 2018
Over the last several years, much of the news about Oklahoma has been negative. Media stories have focused on budget cuts, agency scandals, dysfunctional state government, abysmal education outcomes, poor health statistics and high incarceration rates.
It’s true our state faces many difficult challenges that the State Chamber, through its OK2030 vision plan, is helping address. Thanks to the leadership and hard work of the governor, the Legislature and many others, the first steps to resolving these difficult issues began this past session.
We often overlook the good and focus on the bad. However, the unheralded leadership Oklahoma has exhibited in pension reform is truly remarkable. Currently, state and municipal pension systems around the country are in serious trouble and threaten the very solvency of government entities.
According to an article by CNN Money, Colorado, Connecticut, Illinois, Kentucky and New Jersey have less than half the assets needed to pay promised benefits and another 17 states have less than two-thirds of what’s needed. This unsustainability is dangerous and must be corrected before it’s too late. Thanks to the dogged determination of state Rep. Randy McDaniel, Oklahoma is not on this list of states facing dire financial consequences.
During his tenure in the Legislature, McDaniel recognized Oklahoma’s pension systems were underfunded and a serious threat to the state’s finances and our ability to meet our obligations to retired public employees, teachers and public safety workers. Quietly and systematically, McDaniel, a financial planner, worked to improve the fiscal viability of our pension systems.
In 2014, after years of small but important legislative reforms, McDaniel was able to pass House Bill 2630, which effectively changed state public employees’ pension systems to a 401(k)-style defined contribution system.
“The 21st-century job market demands mobility and greater employee control of retirement benefits,” McDaniel said at the time. He was and still is correct in his statement.
As a result of McDaniel’s efforts, our pension systems are on sound financial footing and should be able to meet their obligations to our present and future retirees. Oklahoma is one of the few bright spots in the country on pension reform, thanks to McDaniel. Although he’s term-limited and won’t be returning to the Legislature, it’s cause for optimism that he’s running for state treasurer in hopes of bringing his sound, conservative principles of state finance to an even larger stage. We wish him well.