Changes in Benefits When Terminating or Resigning

When terminating or resigning from the university, supervisors and employees should discuss the procedures for leaving the university. Please contact HR if you have questions about leaving the university or changes in benefits.

Changes in Benefits Details

If an employee terminates on the first day of the month, all insurance coverage ends at midnight. If an employee terminates after the first day of the month, all insurance coverage ends at midnight on the last day of the month in which the individual's employment terminates, except life, disability and accidental death and dismemberment (AD&D), which end at midnight on the day the employee terminates. A Certificate of Coverage will be mailed to the employee's home address by the insurance company after coverage ends.

Once terminated, eligible employees and covered dependents qualify for continued coverage through COBRA continuation coverage. 

The information below describes the participant’s options and responsibilities associated their retirement plans when ending employment at the University of Oklahoma.

This is for informational purposes only and is not intended to be a legal interpretation of retirement benefits.


OU 401(a) Defined Contribution Plans (Hired on or Before 12/31/2022)

The OU Contributory Retirement Plan and the OU Retirement Plan are 401(a) defined contribution plans established in accordance with IRS Section Code 401(a).  This type of plan provides for an individual retirement savings account for each participant and retirement benefits are based on the account balance.

These plans have a three year vesting period. If the employee does not complete the vesting period, the funds are returned to OU.

  • Employees must participate for three calendar years to own the funds.
  • Faculty must participate three academic years to own the funds.

Rights and Privileges after Termination of Employment

Upon termination of employment and completing the vesting period participants may:

  • Request a rollover of a portion or the total balance to an IRA, another employer plan, or a qualified retirement plan
  • Request a full or partial withdrawal
  • Leave the funds in this account
  • Withdrawals are subject to taxes as these funds were contributed on a pre-tax basis. Generally withdrawals are subject a 20% mandatory Federal Tax rate
  • The exceptions to the 20% tax are rollovers and electing a lifetime annuity
  • When a participant reaches age 70 ½ and is no longer employed, they are required by law to begin receiving a minimum distribution of their balance

Participant's Responsibility

  • Participant must contact the investment company to request forms for a withdrawal or rollover.
  • Participants must be aware of any restrictions regarding withdrawal of a guaranteed or fixed fund.
  • Forms must be signed by an authorized representative of OU to verify termination and vesting.
  • Funds can be received in a shorter period of time if an electronic deposit is elected on the withdrawal form.
  • Notifying investment companies of a change of address is important. Participants receive periodic paper account statements.

OU 401(a) Defined Contribution Plan (Hired on or After 1/1/23)

The OU Optional Retirement Plan is a 401(a) defined contribution plan established in accordance with IRS Section Code 401(a). This type of plan provides for an individual retirement savings account for each participant and retirement benefits are based on the account balance.

This plan has a three year vesting period. If the employee does not complete the vesting period, the funds are returned to OU.

  • Employees must participate for three calendar years to own the funds.
  • Faculty must participate three academic years to own the funds.


Rights and Privileges after Termination of Employment
Upon termination of employment and completing the vesting period participants may:

  • Request a rollover of a portion or the total balance to an IRA, another employer plan, or a qualified retirement plan.
  • Request a full or partial withdrawal.
  • Leave the funds in this account.
  • Withdrawals are subject to taxes as these funds were contributed on a pre-tax basis. Generally, withdrawals are subject a 20% mandatory Federal Tax rate.
  • The exceptions to the 20% tax are rollovers and electing a lifetime annuity
  • When a participant reaches age 70 ½ and is no longer employed, they are required by law to begin receiving a minimum distribution of their balance

Participant's Responsibility

  • Participant must contact the investment company to request forms for a withdrawal or rollover.
  • Participants must be aware of any restrictions regarding withdrawal of a guaranteed or fixed fund.
  • Forms must be signed by an authorized representative of OU to verify termination and vesting.
  • Funds can be received in a shorter period of time if an electronic deposit is elected on the withdrawal form.
  • Notifying investment companies of a change of address is important. Participants receive periodic paper account statements.

Oklahoma Teachers' Retirement System (OTRS)

Oklahoma Teachers' Retirement System (OTRS) is a defined benefit plan designed to provide eligible retirees with lifetime income. The lifetime benefit is based on years of participation in the plan and annual compensation.

  • Vesting period is 7 years.
  • Participants are eligible to retire and receive monthly income for life when they meet one of the following eligibility requirements:
    • Rule of 80 - Age plus years of service must equal 80 – joined prior to 7/1/1992.
    • Rule of 90 - Age plus years of service must equal 90 – joined 7/1/1992 or after.
    • Age 62 and vested.
    • Any age with 30 years of participation.
    • Reduced retirement at 55 and vested.

​Rights and Privileges after Termination of Employment

Participant terminates employment and is not vested in OTRS

  • Eligible to request a lump sum distribution plus any interest earned. Distribution is taxable income. Distributions are generally taxed at a rate of 20%. Early withdrawal tax penalties will usually apply if withdrawn prior to age 59 ½.
  • Eligible to receive employee contributions plus interest. Participants do not receive employer contributions.
  • Eligible to rollover funds into another retirement plan – for example an IRA or 401K.
  • OTRS will not distribute funds prior to 120 days after participant’s last day employee was physically at work.

Participant terminates employment and is vested in OTRS

  • Participants vested in OTRS, should consider leaving their funds in OTRS and receiving a lifetime benefit upon eligibility.
  • Vested participants are eligible for distributions and rollovers as described for non-vested participants in the section above. When vested participants receive a distribution, they are withdrawing their years of service credit which will lower any retirement benefit for which they might be eligible.
  • Participants leaving funds in OTRS should have their extended leave balance verified with OTRS.
  • Participants transferring to or considering employment at another institution where they are eligible to participate should strongly consider leaving their funds in OTRS. 

OTRS Participant's Responsibility

  • Contact OTRS to request forms for withdrawal or transfer of account balance.
  • Withdrawal and transfer forms must be signed by an OU representative.
  • Forms can be mailed to Human Resources or dropped off. HR will mail completed forms directly to OTRS unless participant requests otherwise.
  • Notify OTRS if retiring at a later date.
  • Notifying OTRS of a change of address is important. Participants receive periodic paper statements.

403(b) Voluntary Retirement Savings Plan

The 403(b) Voluntary Retirement Savings Plan is a 403(b) defined contribution plan established in accordance with IRS Section Code 403(b). This type of plan provides for an individual retirement savings account for each participant and retirement benefits are based on the account balance. There is no vesting period and the funds belong to the participant.

Rights and Privileges after Termination of Employment

Upon termination of employment, participants may:

  • Request a rollover of a portion or the total balance to an IRA, another employer plan, or a qualified retirement plan.
  • Request a full or partial distribution.
  • Leave the funds in the account.
  • Withdrawals are subject to taxes as these funds were contributed on a pre-tax basis. Generally withdrawals are subject to a 20% federal tax rate. Rollovers and electing a lifetime annuity are exceptions to the 20% tax rate.
  • When a participant reaches age 70 ½ and is no longer employed, they are required by law to begin receiving a minimum distribution of their balance.

Participant's Responsibility

  • Participant must contact the investment company to request forms for a withdrawal or a rollover.
  • Participants should be aware of any restrictions regarding withdrawals from guaranteed or fixed funds.
  • Forms must be signed by an authorized representative of OU to verify termination.
  • Withdrawn funds can be received more quickly if electronic deposit is chosen on the withdrawal form.
  • Notifying investment companies of a change of address is the participants’ responsibility. Participants receive periodic paper account statements.

457(b) Voluntary Retirement Savings Plan

The 457(b) Voluntary Retirement Savings Plan is a 457(b) defined contribution plan established in accordance with IRS Section Code 457(b). This type of plan provides for an individual retirement savings account for each participant and retirement benefits are based on the account balance. There is no vesting period and the funds belong to the participant.

Rights and Privileges after Termination of Employment

Upon termination of employment, participants may:

  • Participants in Roth plans, may be subject to different rules than those described here. Contact HR for information.
  • Request a rollover of a portion or the total balance to an IRA, another employer plan, or a qualified retirement plan.
  • Request a full or partial distribution.
  • Leave the funds in the account.
  • Withdrawals are subject to taxes as these funds were contributed on a pre-tax basis. Generally withdrawals are subject to a 20% federal tax rate. Rollovers and electing a lifetime annuity are exceptions to the 20% tax rate.
  • When a participant reaches age 70 ½ and is no longer employed, they are required by law to begin receiving a minimum distribution of their balance.

Participant's Responsibility

  • Participant must contact the investment company to request forms for a withdrawal or a rollover.
  • Participants should be aware of any restrictions regarding withdrawals from guaranteed or fixed funds.
  • Forms must be signed by an authorized representative of OU to verify termination.
  • Withdrawn funds can be received more quickly if electronic deposit is chosen on the withdrawal form.
  • Notifying investment companies of a change of address is the participants’ responsibility. Participants receive periodic paper account statements.

Employees will be paid their paid time off leave balances up to their annual accrual amount. Extended sick leave balances are not paid when an employee leaves OU.

If you end employment and you have unspent money in your Healthcare Flexible Spending Account (FSA), you can claim reimbursement only for service dates up to the last day of your termination month.

You can protect your unspent balance by extending your Healthcare Flexible Spending Account through COBRA and continuing your contributions through the end of the calendar year. If you elect to continue your Healthcare Flexible Spending Account through COBRA, the plan will terminate at the end of the current calendar year subject to the same service deadline and claims filing deadline as the active employee plan.