HB 3313: Retirement; Retirement Freedom Act; minimum employer contribution amount; employer matching; vesting schedule for certain funds; reemployed participants; effective date. - Oklahoma

House Committee Substitute → Floor (House) · 4 edits

MODERATE

The bill was updated from a House Committee Substitute version to the Floor version, incorporating amendments by the Senate. The substantive policy changes include increasing the mandatory employer match rate from 6% to 7% and removing the vesting schedule for employer contributions, making them 100% vested immediately. Additionally, the text regarding the forfeiture of unvested contributions for employees leaving before October 31, 2026, was removed.

Scope change

The scope of the bill remains focused on the Oklahoma Retirement Freedom Act, but the financial obligations for employers and the vesting rules for employees have been significantly altered.

FISCAL

The mandatory employer matching contribution rate was increased from six percent (6%) to seven percent (7%).

REQUIREMENT

The vesting schedule for employer matching contributions was eliminated; employees are now 100% vested in employer funds immediately, rather than vesting over five years.

Provisions allowing for the immediate forfeiture of unvested employer contributions for employees who left before October 31, 2026, were deleted.

TECHNICAL

The document header was updated to reflect the 'Floor Version' and included Senate sponsor information (Bullard).

Proposed Policy Committee Substitute 1 → House Committee Substitute · 5 edits

MODERATE

The bill was completely rewritten to replace the original text with a new version that significantly increases employer matching contributions from 6% to 7% and eliminates the vesting schedule for employee-owned accounts. The new version also clarifies that non-vested employer contributions are forfeited if an employee leaves before October 31, 2026, but allows re-employed participants to regain vesting status upon returning to work.

Scope change

The bill's scope shifted from a complex mix of defined contribution and defined benefit rules to a streamlined defined contribution system with specific new vesting rules and contribution rates.

FISCAL

Employer matching contribution rate increased from 6% to 7% for employees contributing at least 4.5%.

REQUIREMENT

Eliminated the previous vesting schedule for employee contributions, granting 100% immediate vesting on employee-owned funds.

Established a new vesting schedule for employer matching funds: 20% after Year 1, 40% after Year 2, 60% after Year 3, 80% after Year 4, and 100% after Year 5.

TIMELINE

Added a forfeiture rule stating that non-vested employer contributions are lost if an employee leaves before October 31, 2026.

ELIGIBILITY

Clarified that re-employed participants regain vesting status based on their previous level and receive credit for prior service.

Proposed Committee Substitute (full committee) 1 → Proposed Policy Committee Substitute 1 · 8 edits

MODERATE

The bill was reclassified from an 'Oversight' substitute to a 'Policy' substitute, indicating a shift in legislative focus from monitoring to establishing new rules. The text was significantly rewritten to expand the scope of the Retirement Freedom Act, adding new sections on operating plans, individualized services, and distribution options. Eligibility criteria were updated to include specific groups like legislative employees and vendors, while the employer matching rate was increased from 6% to 7% and the mandatory employee contribution was raised from 4.5% to 5%.

Scope change

The bill's scope expanded from a narrow focus on employer matching and vesting schedules to a comprehensive framework including operating plans, service customization, and distribution methods for a broader range of employees.

TIMELINE

The document header and filing numbers were updated to reflect the new policy committee version and a revised date.

FISCAL

The required employer matching contribution rate was increased from 6.0% to 7.0%.

REQUIREMENT

The mandatory minimum employee contribution rate was increased from 4.5% to 5.0%.

New requirements were added for the Board of Trustees to create an operating plan document and provide individualized planning services.

SCOPE

New provisions were added regarding how benefits are distributed and the ability for participants to elect alternative distribution forms.

ELIGIBILITY

Eligibility for the defined contribution system was expanded to include legislative employees, district attorneys, and certain public trust employees.

DEFINITION

The definition of eligible employees was broadened to include those in positions with health insurance and leave benefits, as well as specific government roles.

ENFORCEMENT

Vesting rules were changed; the old graduated vesting schedule was replaced with immediate 100% vesting for employer matching funds.

Engrossed → Proposed Committee Substitute (full committee) 1 · 3 edits

MINOR

The bill was amended to increase the mandatory employer match from 6% to 7% and to remove the vesting schedule for employer contributions, making them immediately 100% vested. This change increases the cost to employers and provides employees with immediate ownership of their employer-matched retirement funds.

Scope change

The scope of the employer matching requirement was expanded by increasing the percentage rate, and the vesting rules were modified to eliminate the waiting period for employees.

FISCAL

The mandatory employer match rate was increased from 6% to 7% of employee contributions.

REQUIREMENT

The vesting schedule for employer contributions was eliminated, changing the rule from a graduated schedule (20% to 100% over 5 years) to immediate 100% vesting.

TIMELINE

The effective date for the new 7% match and immediate vesting rules was set for November 1, 2026.

Introduced → Engrossed · 6 edits · Mar 11, 2026

MODERATE

The bill was amended to update the effective date to November 1, 2026, and significantly revised the retirement plan's contribution rules. The most important change is the increase in the mandatory employer matching contribution from 6% to 7%. Additionally, the bill now explicitly allows employees to voluntarily contribute more than the mandatory rate (up to 7%) and clarifies that these voluntary contributions are treated as deferrals eligible for matching.

Scope change

The bill's scope was expanded to explicitly include provisions for reemployed participants, ensuring they receive credit for previous service and vesting upon returning to work.

FISCAL

Increased the mandatory employer matching contribution rate from 6% to 7%.

ELIGIBILITY

Added specific provisions for reemployed participants to receive credit for prior service and vesting upon rehire.

MODIFIED

Clarified that employees can voluntarily contribute between 4.5% and 7%, with the employer matching the full 7% on these voluntary contributions.

TIMELINE

Updated the effective date of the act to November 1, 2026.

REQUIREMENT

Removed the vesting schedule for employee contributions, establishing 100% immediate vesting for all participant accounts.

Revised the purpose statement to focus on modifying employer matching and employee contribution provisions rather than establishing a new defined contribution system from scratch.

Retirement; Retirement Freedom Act; minimum employer contribution amount; employer matching; vesting schedule for certain funds; reemployed participants; effective date.

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