For Oklahoma Municipal Officers Retiring Under OPPRS in 2026
SB102 changes your pension math this July. Before you make any decisions about your DROP, your rollover, or your retirement date, here’s what you need to know.
Written by Ken Petrashek, CFP®
Advanced Peace Officer Certification (Oklahoma)
CERTIFIED FINANCIAL PLANNER® Practitioner
Adjunct Financial Planning Instructor at Oklahoma State University
What SB102 Means for Your Retirement
Ken Petrashek, CFP® — OPPRS officer turned financial planner — explains the formula change, the DROP pitfall, and what to do before July.
Your Pension is About to Get a 20% Raise
Here’s the math: Senate Bill 102 increases the OPPRS retirement benefit multiplier from 2.5% to 3.0%. That single change means every year you’ve served is now worth more.
Before SB102:
Final Average Salary × Years of Service
x 2.5%
After July 1, 2026:
Final Average Salary × Years of Service
x 3.0%
For an officer with 25 years in and a final average salary of $75,000, that’s the difference between $3,906/month and $4,688/month. An extra $9,375 a year for the rest of your life.
| Final Avg. Salary | Years | Old (2.5%) | New (3.0%) | Annual Gain |
|---|---|---|---|---|
| $65,000 | 25 | $3,385/mo | $4,063/mo | +$8,125 |
| $75,000 | 25 | $3,906/mo | $4,688/mo | +$9,375 |
| $85,000 | 25 | $4,427/mo | $5,313/mo | +$10,625 |
| $75,000 | 30 | $4,688/mo | $5,625/mo | +$11,250 |
Over a 25-year retirement, that difference adds up to $200,000+ in additional lifetime income.
Phase-In Dates:
July 1, 2026
Officers with more than 25 years of credited service become eligible.
July 1, 2027
Officers with more than 20 years of credited service become eligible.
If you participated in DROP, your situation has layers.
When you entered DROP, your monthly benefit was calculated and frozen based on the formula in effect at that time. How the new 3% multiplier interacts with your specific DROP situation depends on your entry date, your exit date, and your service calculation. There’s no generic answer here. It requires running the numbers for your situation specifically.
After you complete DROP and separate from service, you have 30 days to decide what to do with your DROP account balance. Take a lump sum (and owe income tax on the full amount that year), leave it in the OPPRS plan, or roll it to another qualified plan or IRA.
Each choice creates a different tax outcome, a different income stream, and a different level of flexibility. What’s right depends on your total financial picture, not just the DROP account in isolation.
The Public Safety Worker Exception
Federal tax law imposes a 10% penalty on retirement account distributions taken before age 59½. But there’s a specific exception for qualified public safety employees, including municipal police officers.
If you separate from service at age 50 or older (or after 25 years of credited service, under SECURE Act 2.0), you can take distributions directly from your governmental pension plan or 457(b) without that 10% penalty.
This exception only applies to distributions from your employer’s plan. It does not apply to IRAs. If someone tells you to roll your DROP balance into an IRA and you later take a distribution before 59½, you will owe the 10% penalty. The exception is gone the moment the money leaves the governmental plan.
On a $250,000 DROP balance, that’s $25,000 in unnecessary penalties. Officers get this advice regularly, often from brokers who earn a commission when assets land in an IRA account they manage.
Before you roll anything into an IRA, make sure you understand whether you’ll need access to those funds before 59½. If the answer is yes, or even maybe, leaving the money in the governmental plan may be the smarter move.
There’s a Difference Between Someone Who Sells You Products and Someone Who’s Required to Act in Your Interest.
With a wave of OPPRS retirements approaching, there’s no shortage of people offering to “help” with your money. It’s worth understanding who’s actually on your side.
A broker is required to meet what’s called the Regulation Best Interest standard (Reg BI). That means they must act in your best interest at the time of a recommendation. But their responsibility is transaction-focused. It’s not ongoing.
An Investment Adviser Representative (IAR) is held to a full fiduciary standard. They must act in your best interest at all times, not just during a transaction. Their responsibility is relationship-focused.
Your pension decisions, survivor benefits, and retirement timing require long-range planning. One question cuts through the noise:
“Are you a fiduciary, yes or no?”
If the answer isn’t a clear, unqualified yes, you have your answer.
5 Planning Items that Deserve Your Attention Before July:
Run your pension numbers under the new formula.
Know your exact monthly benefit with the 3% multiplier.
If you have a DROP balance, understand how the two interact.
Map out your first-year tax picture.
Between your pension, DROP distribution, any deferred compensation, Social Security (if applicable), and your spouse’s income, understand what tax bracket you’ll land in. Decisions made in year one of retirement set the trajectory for the next two decades.
Build a distribution sequence.
Pension income, DROP funds, deferred comp, personal savings: each bucket has different tax treatment. The order and timing of withdrawals can save or cost you tens of thousands over a retirement.
Plan your healthcare bridge.
If you’re retiring before age 65, you need coverage between separation and Medicare eligibility. COBRA, ACA marketplace, or a spouse’s employer plan all have different price tags and tradeoffs.
Get your estate documents current.
While your beneficiary designations on your pension are assigned by statute, your DROP, 457(b), and any other personal accounts should reflect your current wishes. These override your will, so it is important not to overlook them.
Healthcare Before Medicare: The Gap Every Officer Should Plan For
Officers often retire years before Medicare starts at 65. Covering that gap is one of the largest and most overlooked costs of early retirement. Ken sat down with Courtney Hoffman, CFP®, EverPar’s Director of Planning, to walk through what coverage really costs in Oklahoma, the options between the badge and Medicare, and a benefit most retired officers don’t know they have.
One thing retiring officers should know:
The Pension Protection Act lets eligible retired public safety officers pull up to $3,000 a year, tax-free, from their pension to pay health or long-term-care premiums. Our white paper breaks down how it works, what coverage actually runs in Oklahoma, and the questions to answer before you turn in your papers.
Jeff Watts, Retired Stillwater Police Chief
33 Years of Service | Retired under the OPPRS system | EverPar Client
Jeff sat down with Ken to talk through what officers approaching retirement actually need to know before making any irreversible decisions.
“I trusted him with my life and my safety. He’s that same guy I trust with my financial investments and my future. You can’t get that anywhere else.” - Jeff Watts
Ken Has Experience With Both Sides of the Conversation
Ken Petrashek, CFP®
- Advanced Peace Officer Certification (Oklahoma)
- CERTIFIED FINANCIAL PLANNER® Practitioner
- M.S., Family Financial Planning, OSU
- Adjunct Financial Planning Instructor at Oklahoma State University
I’ve worked the hours that pull you away from family, made decisions in seconds that civilians take weeks to think through, and seen colleagues make it to retirement only to realize nobody had explained the financial part. I understand this world: the culture, the weight of it, the way information actually travels through departments.
The officers I worry about aren’t the ones asking questions. They’re the ones who make hasty rollover decisions, cash out their DROP, don’t plan for taxes, and end up starting over six months after retirement because no one helped them think through what comes next. You didn’t spend a career serving your community to end up stuck in a financial product you didn’t understand because someone “sold” you on it.
EverPar Advisors is an SEC Registered Investment Advisor based in Tulsa, Oklahoma. EverPar operates as a fiduciary, legally obligated to always act in our clients’ best interest. We are a fee-for-service firm focused on financial planning and professional money management. We intentionally serve fewer families so every client gets the attention they deserve.
Talk Through Your Situation With Ken
No cost for the initial conversation. No products to sell. No obligation.
Just a chance to walk through your numbers with someone who understands the OPPRS system and the decisions you’re facing.
Or call Ken directly: 918-221-9290 | info@everpar.com
EverPar Advisors LLC (“EverPar”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where EverPar and its representatives are properly licensed or exempt from licensure.
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability, or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
Sources:
Oklahoma SB102 — Enrolled Bill Text, Oklahoma Legislature: https://www.oklegislature.gov/cf_pdf/2023-24%20ENGR/SB/SB102%20ENGR.PDF
Oklahoma SB102 — Bill Information Page, Oklahoma Legislature: http://www.oklegislature.gov/BillInfo.aspx?Bill=sb102
Oklahoma Police Pension and Retirement System (OPPRS): https://opprs.ok.gov
IRS — Retirement Topics: Exceptions to Tax on Early Distributions (IRC §72(t)): https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions
SECURE 2.0 Act of 2022 (Consolidated Appropriations Act, 2023): https://www.congress.gov/bill/117th-congress/house-bill/2954
SEC — Regulation Best Interest: https://www.sec.gov/regulation-best-interest
SEC — Investment Adviser Fiduciary Duty: https://www.sec.gov/investment/investment-adviser-fiduciary