401(a) Defined Contribution Plans

OU Contributory Retirement Plan & OU Retirement Plan

The OU Contributory Retirement Plan and the OU Retirement Plan are 401(a) defined contribution plans that are tax-qualified plans under Section 401(a) of the Internal Revenue Code. These plans consist of a four-tier structure of investment options administered by Fidelity Investments and designed to fit a range of investment styles. OU's contribution to these plans depends on whether the employee has chosen to participate in OTRS.

Employees must elect to participate in Option 1 with OTRS or Option 2 (9% employer-paid 401(a) contribution). This is a one-time irrevocable election. If an election is not made within the first 30 days of employment, employees will be automatically enrolled in Option 1 with the Oklahoma Teachers’ Retirement System. Only benefits-eligible employees who elect Option 1 with OTRS and are hired on or before 12/31/22 will be eligible for the OU Contributory Retirement Plan, a 401(a) defined contribution plan (DCP).

Participation

Salaried & Hourly Benefits-Eligible Employees - All benefits-eligible employees electing Option 1 will participate in the Oklahoma Teachers’ Retirement System and those who were hired on or before 12/31/22 will receive defined contributions from OU to the OU Contributory Retirement Plan. Salaried employees who choose Option 2 will receive contributions from OU to the OU Retirement Plan. There is no minimum age restriction for benefits-eligible participants. 

Employee Contributions

All contributions to this plan are made by OU. The employee does not contribute to the 401(a) defined contribution plans.

OU-Employer Contributions

Waiting Period - Beginning July 1, 2016, all employees eligible for either 401(a) Defined Contribution Plans described above must complete a 12-month waiting period from their benefit eligibility date before receiving contributions from the university. This update was approved by the OU Board of Regents at their June 2016 meeting.

For Participants without OTRS in Option 2 - The University of Oklahoma will contribute 9% of the employee’s base salary (not including benefits) to the retirement investment option selected by participating employees. Hourly employees participate in the OU Contributory Retirement Plan and salaried employees participate in the OU Retirement Plan. Both plans are 401(a) defined contribution plans.

For Participants in Option 1 with OTRS - Option 1 participants hired on or after 7/1/1995 participate in the Oklahoma Teachers' Retirement System and receive defined contributions to the OU Contributory Retirement Plan from the university at a rate of their base salary minus the first $9,000 of their pay every calendar year, multiplied by 8%. Employees who are hired on or after 1/1/23 who select Option 1 are not eligible for defined contributions

For employees hired on or before 12/31/22:

Example: Annual Salary of ($24,000 - $9,000) x 8%  =  $1,200 DCP contribution

University contributions may differ if you were hired before 7/1/1995. Most salaried employees hired prior to 7/01/2004 were required to participate in OTRS.  

Vesting

Employees are vested in the 401(a) plans after 3 years of plan participation. The one-year waiting period is included as one year of participation.

Investment Options

There is a diverse range of investment options provided through a four-tiered investment fund line-up. You select the funds in which to invest OU's contributions. Fidelity can provide information to help you choose investments that might be right for you. If you do not choose a fund within 30 days, the contributions will be automatically placed in an age-appropriate target date retirement fund. They will remain there until you select other funds.

Termination Prior To Retirement

If you terminate employment and have completed the three-year vesting period, you may withdraw or rollover your account balance. All withdrawals are subject to taxation and some penalties and restrictions may apply to certain accounts. You have the option to leave the accumulated account balance until age 73. Any employee who joins the plan on or after July 1, 1993, and whose employment terminates prior to completing three years of participation in the plan, will forfeit all contributions. Employees who return to work at OU in a benefits-eligible position will not be eligible to withdraw funds while drawing a paycheck from the university.

Retirement Benefits

Retirement income can be started any time after retirement occurs. When you reach age 73 and are retired, you will begin to receive required minimum distributions*. If you are a current employee, you have the option to begin withdrawal at age 73 or wait until you retire.