Oklahoma Teachers’ Retirement System (OTRS)
Oklahoma Teachers’ Retirement System (OTRS) is a retirement plan administered by the State of Oklahoma. Oklahoma statutes establish the rules and procedures governing OTRS. Teachers’ Retirement System provides a defined lifetime income to participating members who become eligible for retirement. You may obtain a copy of the OTRS Rules and Laws booklet by contacting OTRS at 405-521-2387 or visiting their website.
Participation - All university employees who work 50 percent FTE (20 hours or more per week), for six months or longer and who receive benefits are eligible to participate. Temporary employees including adjunct faculty (unless proof is provided the adjunct faculty is contributing to OTRS at another institution) at the Norman campus are not eligible to participate in this benefit. Participation for monthly paid employees hired after July 1, 2004 is optional. There is no age requirement to participate in OTRS. Monthly paid employees hired prior to July 1, 2004 were required under university policy to participate in OTRS, unless they were age 45 or older at the time of employment, or were visiting faculty, or certain other temporary faculty positions, in which case they could elect not to participate in OTRS. Hourly paid employees are eligible to participate in OTRS, but are not required under university policy to become members. Instructors and Lecturers, on the Norman campus, who have not worked five consecutive semesters, have the option to participate in OTRS. Beginning with the fifth consecutive semester, they must make a one-time election.
Employees on official sabbatical leave receiving at least one-half pay may participate and make contributions to OTRS at the time of the sabbatical. The contributions are based on the salary plus benefits earned as a regular full-time employee in the last preceding school year. Employees who elect not to participate in OTRS while on sabbatical, will need to notify the benefits office in writing. A member cannot purchase sabbaticals taken after July 1, 1990, at a later date. Employees who are in optional categories and choose to participate in OTRS must complete new member enrollment information even if they have participated in OTRS previously.
Employee Contributions - OTRS member annual contribution is based on the individual's total compensation package. Total compensation is the sum of earnings, employer paid insurance premiums (health, dental, life, and AD&D), and the amount the university designates for the Defined Contribution Plan. Employees may make pre-tax contributions to the OTRS, by completing a tax-deferral agreement.
Employer Contributions - Employer contribution schedule for all OTRS participants for school year 2006–2007 is 7.55 percent on total compensation OR up to the applicable salary cap.
Termination Prior To Retirement - Members are vested in Oklahoma Teachers’ Retirement System when contributions are made for 5 full years. Once vested, employees may receive retirement benefits from OTRS when eligibility requirements are met.
If a member terminates employment after becoming vested, contributions can remain intact until retirement benefits begin, or application can be made to withdraw all contributions four months after the last day of employment. Members who terminate employment within 16 years of membership will receive all OTRS contributions plus interest.
Retirement Benefits - OTRS members who joined prior to July 1, 1992, can retire with full benefits from Teachers’ Retirement System
OTRS members who joined on or after July 1, 1992, can retire with full benefits from Teachers’ Retirement System
Members are eligible to apply for disability retirement benefits from OTRS at any age with at least 5 years of service credit. Members with at least 5 years of service credit may begin receiving a reduced retirement benefit when they reach age 55 or when they have 30 or more years of service, regardless of age.
Teachers’ Retirement System will grant one year of service credit for any fiscal year that a full-time member worked and made contributions. OTRS will grant six months of service credit for 120 days of unused sick leave (Extended Sick Leave) OTRS makes the final determination of all service credit.
OTRS will allow members to purchase up to a maximum of five years out-of-state service if it qualifies as membership service in Oklahoma. The members must have two years of Oklahoma service for each year of out-of-state service purchased. OTRS will allow members to purchase up to five years credit for military service. The member must have two years of Oklahoma service for each year of military service purchased.
Tax-Deferred Installment Purchases (OTRS Buy Back) - Have you ever wanted to purchase back years of benefits eligible service credit from the Oklahoma Teachers’ Retirement System, but felt you just could not afford to? The Oklahoma Teachers’ Retirement System and The University of Oklahoma have agreed on a tax-deferred installment plan for the purchase of years of service for TRS. Perhaps you withdrew years of service in the past or did not join TRS when you were eligible and would now like to catch up contributions for retirement. Tax-deferred installment payments will make member purchases more affordable, since the reduction in a member’s take home pay will be less than if the member made direct payments to TRS in after-tax dollars.
If you are an active member of TRS and interested in purchasing years of service credit, please contact TRS at 521-2387 to receive a billing statement. Members can use tax-deferred payroll deductions to purchase TRS service by signing an irrevocable payroll deduction authorization. This payroll deduction will remain in effect until the purchase is paid in full up to a maximum of 60 months. In the event of a member’s death, their beneficiary can pay the amount owed or be entitled to a pro-rated amount for the contributions made. If a member terminates employment with the university, they may continue payments with after-tax dollars or receive credit at retirement for the time paid.
Calculating Retirement Benefits - To receive a detailed personalized calculation of your OTRS retirement benefit, contact the Oklahoma Teachers’ Retirement System at 405-521-2387. For illustrative sample calculations demonstrating the interaction of DCP and OTRS with respect to “uncapped” employees, please contact your benefits office representative. NOTE: Employees participating in OTRS who work less than a .75 FTE for an entire fiscal year will only receive one half year's credit toward retirement.
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