$15.1 million was appropriated to enhance the compensation package for state employees. The two-pronged package provides the average state employee with compensation of up to $600 more in FY'98, much of it pre-tax:

  • HB 1895 provides a $450 increase in annual benefit allowance for full-time state employees. The monthly benefit allowance of $187.19 will increase by $37.50 to $224.69. Employees can use the allowance to buy more benefits or convert the excess to taxable income. An identical increase in benefit allowance was approved for FY'99. State employees who do not currently qualify for the flexible benefit allowance will receive this increase directly in the form of tax able income. Employees of the University Hospital Authority will receive a one-time stipend of $225.00 in lieu of the flexible benefits increase.

  • HB 1895 also establishes a $25/month employer matching contribution for employees participating in the state's Deferred Compensation Program. The program, effective January 1, 1998, will match the first $25 that workers contribute to deferred comp. Other states that have offered to match employees' contributions have seen participation rates increase significantly (currently 19% of Oklahoma state employees participate).

HB 1224 provides the first-ever statewide severance package for state employees who lose their jobs through a reduction-in-force (RIF). The bill provides for mandatory and optional severance benefits. State agencies are required to provide RIFed employees 180 days of health care coverage or the cash equivalent, a full year of longevity pay, and out-placement services. Agencies are given the option of providing additional benefits, including lump sum payments, pay for unused sick leave, extra retirement credits and educational vouchers.

SB 354 allows retirees from all public retirement systems to maintain higher state life insurance policies. Under current law, retirees are eligible for a maximum of $15,000 in basic life coverage. Under SB 354, they may continue basic coverage at ($20,000) at an actuarially adjusted rate.

$9.8 million was provided for a graduated retirement stipend for members of the Oklahoma Public Employee Retirement System, Oklahoma Law Enforcement Retirement System, Oklahoma Police Pension Retirement System and Oklahoma Firefighters Retirement System. Note, volunteer firefighters will receive one-half of the stipend amount. In addition, Oklahoma Teachers' Retirement System retirees will receive a $1,000 increase in death benefits.

HB 1221 prohibits the Oklahoma State and Education Employees Group Insurance Board from making a mid-year adjustment in insurance premium rates for the FY'98 plan year.


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