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The University of Oklahoma Human Resources Website

Assumptions

To develop these examples, we made the following assumptions:

  • You start working at OU when you are age 35.
  • Your starting Base Pay is $45,000 per year.
  • Each year, you receive a pay increase of 2.5%.
  • Each year, OU’s cost to provide you with insurance coverage* also increases by 2.5%.

Of course, there is no real way to know whether or by how much a person’s pay will increase or how much OU’s cost to provide other benefits will increase. We have shown
these examples at 6%, 7%, and 8% investment returns and calculated them based on your life expectancy.** Actual investment returns will vary depending on the investment
vehicles you choose.

Annual Equivalent Benefits

OTRS calculates benefits differently than DCP and ORP. Under OTRS, you can calculate your annual benefits with this formula:
2%
x Your years of service
x Your final average pay for your five highest-paid years
= Your Retirement Benefit
Under DCP, ORP, and the Voluntary Retirement Plans, you end up with an account balance—not an annual benefit.

To enable you make side-by-side comparisons, we have converted accumulated account balances to annual benefits by calculating an equivalent annuity amount that your accumulated account balance would be able to purchase.

Definitions of Compensation

To calculate your benefits, each of the plans looks at your pay differently. To understand how the plans work, you need to understand what “pay” means under each plan.

  • OTRS calculates OU’s contributions and your payroll deductions based on Total Compensation—which includes your Base Pay, OU’s cost for providing your medical, dental, life, and AD&D coverage, and OU’s contributions to your DCP account.

    Base Pay

    $ 45,000.00

    Insurance Benefits*

    $ 3,772.56

    OU’s 8% contribution to your DCP account

    $ 2,880.00

    Total Compensation

    $ 51,652.56

  • DCP calculates contributions using your Base Pay over $9,000.
  • ORP calculates contributions using all of your Base Pay.

* This refers to the amount OU pays toward the cost of your insurance benefits, including Medical, Dental, Life, and Accidental Death and Dismemberment.
** Pension plan actuaries use standard mortality tables to determine life expectancy.