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Politics and pensions don’t mix: Retirees prevail in the Sooner State

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by Tim Hill, opinion contributor - 05/16/26 9:00 AM ET

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by Tim Hill, opinion contributor - 05/16/26 9:00 AM ET

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In a victory for Oklahoma retirees, the Oklahoma Supreme Court recently ruled that a law forcing state entities to divest from certain financial companies is unconstitutional. The decision sends a clear message to Oklahoma and every state: Public pensions must be managed in the best financial interests of retirees — not steered by political mandates.

For the thousands of public workers who rely on the Oklahoma Public Employees Retirement System, that ruling isn’t just a legal win. It is peace of mind.

At its core, the case was about whether politicians can dictate how pension funds are invested. The now-struck-down Energy Discrimination Elimination Act required the state to blacklist financial firms accused of boycotting fossil fuel companies and to divest from them, regardless of financial performance.

The court was unequivocal: Pension trustees, it said, are constitutionally required to act “solely in the interest of the participants and beneficiaries.” Forcing them to consider political criteria would create a “dual purpose” that directly conflicts with that duty.

Pension funds exist for one reason only: to deliver strong, reliable returns for retirees. It means Oklahoma’s public servants can trust that their retirement savings will be managed based on performance and risk, not political agendas.

And that matters more than ever, as retirement confidence remains fragile for many Americans.

For teachers, firefighters, police officers and other public employees, pensions aren’t abstract policy debates. They are the foundation of retirement security after decades of demanding, often physically and emotionally taxing work. Many of these workers retire earlier than the average American, and they depend on their pensions to sustain them. That promise of a secure retirement depends on one thing above all else — that pension funds are managed with a singular focus on financial outcomes.

But across the country, that principle has come under increasing pressure. Over the past several years, elected officials on both sides of the aisle have treated pension systems as vehicles for ideological goals. When politicians interfere, retirees pay the price.

Oklahoma’s experience makes that clear. Analyses found the law increased municipal borrowing costs by more than $164 million in just 17 months by reducing competition in financial markets. For pension systems, compliance would have meant fewer investment options, less diversification and potentially millions in lost returns.

And Oklahoma is not alone. A federal judge in Texas struck down a similar law earlier this year, ruling that it violated the First Amendment. Yet many states, from Arkansas to West Virginia, still have comparable policies on the books, often modeled after the same flawed approach. The Oklahoma ruling gives their courts, legislators and pension trustees a clear constitutional roadmap to follow.

At a time when retirement confidence is already fragile, this kind of political interference only makes things worse.

The Oklahoma Supreme Court’s decision should serve as a model in its own right — not just a warning. It establishes a clear legal and constitutional framework that other states can, and should, apply: pension fiduciaries must prioritize beneficiaries above all else.

Retirees deserve better than to have their financial security used as a political tool. The message from Oklahoma is simple, long overdue, and worth heeding in every statehouse in America: Keep politics out of pensions, and let fiduciaries do their jobs.

Tim Hill is president of the Alliance for Prosperity and a Secure Retirement and a former director of the International Association of Fire Fighters Pension Resources Department.

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