Oklahoma Master Observation System is a public education employee retirement program in Oklahoma State. As of June 30, 2014, the program has nearly 168,000 members. Teachers and administrators of public education must be members of the OTRS; support staff can join voluntarily. The state law established OTRS in 1943 to manage pension funds and provide financial security for employees of public education. The first check to the pensioners was sent in 1947. It was staffed by a 14-member board and board. Its current Executive Director is Tom Spencer who started in that position on November 1, 2014.
Video Oklahoma Teachers' Retirement System
Organization
OTRS is governed by 14 members of the Supervisory Board consisting of 10 designated members, three members of ex officio and one non-voting member. The Oklahoma Governor appoints six members to the House of Representatives and Speaker of the House of Representatives and President of the Pro Tempore of the State Senate each appointing two members to the Council. The three ex officio members are the State General School Supervisor, the Director of the State Finance Office and the Director of the Career Technology System. All three members are ex officio permitted by state law to appoint members to the Board in their place. Non-voting members are appointed by organizations representing retired educators.
Committee
The Supervisory Board has three standing committees, the Investment Committee, the Audit Committee, and the Governance Committee. These panels focus on their respective topics and do the work in a more detailed focus area than is appropriate for full Board consideration. No committee action shall be final and binding unless agreed by the full Council.
The board meets monthly, usually on the fourth Wednesday of each month. The Investment Committee usually meets monthly on a Tuesday afternoon before regularly scheduled Board meetings.
Maps Oklahoma Teachers' Retirement System
Retirement Details
OTRS uses a defined benefit pension plan that pays retirees a special benefit to life that begins when they retire.
Retirement eligibility
To obtain OTRS and then be eligible to receive a monthly retirement allowance, the client must collect at least five years of qualified service in Oklahoma public schools. Eligible clients are eligible to begin receiving monthly allowances at the age of 62, from the age of 65, depending on which combination they fall.
There are three thresholds for eligibility to retire with benefits. Those who joined the OTRS before July 1, 1992, can retire when their creditable years and years of service amount to 80 points, or they have reached the age of 62 years. People who join the System after that date can retire as they age and year from the total credit service 90 points, or they have reached the age of 62 years. Anyone who joins the System after November 1, 2011 can retire at the age of sixty, provided they have collected 90 points, or at the age of 65.
Early retirement
Reduced benefits are available to clients who have not yet reached a fully retired eligibility under regular pensions. To meet these criteria, OTRS members must complete at least 30 years of state service, but younger than 50 years of age, or the person concerned must have at least five years of personal service, and be between 55 and 61 years of age. under rule 80, or rule 90. These clients are under the 90/65 rule, they will be eligible to reduce benefits between the ages of 60 and 64.
Benefits
OTRS calculates its benefits using the following formula:
2 percent x (working period) x (final average salary) Ã Â · 12 = monthly allowance.
Depending on the number of years of service and the final average salary, a person's retirement allowance may vary, but everyone, regardless, will receive 2 percent. In addition, for services gained prior to June 30, 1995 contributions into the system are only paid on the first $ 25,000 of $ 40,000 in annual revenue. Because contributions to these service years are limited, pension benefits are also limited. This results in the calculation of a two-tier retirement allowance with the first tier being the years in which the contribution is closed and the year not closed at the second level, resulting in a smaller than expected pension benefit only based on the above formula..
There are two traditional categories of OTRS clients: Rule 80 (or age 62) and Rule 90 (or age 62) eligible retirement. Those who join the System before 1 July 1992, are under Rule 80 and those who join on or after that date fall under Rule 90. The benefit formula is the same for both; only the eligibility of different pensions. Legislative changes enacted in 2011 create a third level for those who join the OTRS after November 1, 2011. These clients will have the same benefit calculations, but their retirement eligibility will be Rule 90 with a minimum age of 60 years (or age 65).
EESIP
The Employee Service Employee Service Incentives Plan (EESIP) provides incentives to continue services beyond the regular retirement feasibility. To participate, the client must be at the upper limit of $ 40,000. EESIP provides an opportunity to remove a salary cap by moving a two-year service from a $ 40,000 salary level to an unclosed closing salary for each year that goes beyond the 1st of July school year in which the eligibility of the pension is met. Years of moving on a two-for-one EESIP plan increase the number of years spent on final average salary calculations.
To be eligible for EESIP, an employee must be an active contributor, working in qualified companies such as primary or secondary school, career technology center, two-year college, or state education institution. Employees must work an additional year after the regular retirement age, and meet an uncharged average salary level in excess of $ 40,000. Their contributions before 1 July 1995, were deposited at maximum compensation rates and they had to pay a contribution deficit in the year between 1987-1988 and 1994-1995 where salaries exceeded $ 40,000.
Investment
The Supervisory Board determines the investment of OTRS funds. In January 2009, the board made a strategic decision to invest in high yield bonds. As of June 30, 2011, all major domestic equity stamps/caps consisted of 21.8 percent of assets, domestic equities of 13.2 percent medium cap and 10 percent small domestic equity cap. Target asset allocation, is 45 percent in domestic equity, 15 percent in international equity, 25 percent in fixed income, 5 percent in high yield bonds, 5 percent in MLP and 5 percent in private equity. The OTRS investment consultant is Gregory W. Group. JPMorganChase is the System custodian bank. OTRS uses a spectrum of investment managers, including but not limited to Mackay Shields, Loomis Sayles, Lord Abbett, Hoisington and Stephens.
As of June 30, 2014, the total balance of OTRS funds was over $ 14 billion.
Unfunded liabilities
The Oklahoma teacher retirement program has long been one of the most under-funded of its kind in the US Company's contribution not started until 1986, a fact that has contributed to a powerless $ 10.4 billion in May 2011.
The 2008 Public Fund Survey places OTRS as the fourth lowest funding ratio (assets set aside against pension obligations) among 126 state pension plans. At that time, the OTRS funding ratio was 50.5 percent. That number has been swayed behind the economic downturn.
The continuity of the pension system for future retirees has encouraged legislative maneuvering in recent years. In 2010, OTRS staff told The Oklahoman newspaper that there were only three options to support the system. The three things put more money into the system, increase the return on investment, or do something about the benefits.
The pension system received a boost in 2006 when the Oklahoma State Legislature increased the employer's contribution to OTRS from 7 percent to 9 percent over a three-year period. From 2009 to 2011, the OTRS administration, with guidance from the board of directors, has renegotiated an investment contract that will save the agency for $ 2.3 million annually. The agency also simplifies the process and implements other operational efficiencies, which have saved OTRS more than $ 7.6 million over the next two years. In addition, OTRS has noted that it achieved a 9.4 percent return on investment from 1992 to 2011, far exceeding its long-term target of 8 percent.
The Law to Overcome Liability Does Not Work
In 2011, Oklahoma lawmakers passed Bill 377 Senate and House Bill 2132, which immediately reduced the obligation of the Supervisory System Master that was not funded by $ 2.9 billion of debt. Significant changes in SB 377 and HB 2132 include: raising the retirement age for new members entering the system (current members will be unaffected) and preventing the legislature from providing pension payments (COLAs) to pensioners unless funds are provided. The Oklahoma legislature still has the ability to provide COLA but only when it provides funds to pay them. This change alone reduces the OTRS non-funded liabilities to $ 7.5 billion.
References
Source of the article : Wikipedia
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