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Defined Contribution Plan

The Defined Contribution Plan (DCP), a tax-qualified plan under Section 401(a) of the Internal Revenue Code, consists of a diverse range of investment options provided through four retirement investment companies. The four companies are: ING, Fidelity Investments, TIAA-CREF, and The Vanguard Group. The companies invest the contribution made by the university to establish investment accounts that help provide income during retirement years.

Salaried employees, under age 45, must decide within the first 90 days of employment if they wish to elect Track A which consists of the Oklahoma Teachers’ Retirement System (OTRS) and the Defined Contribution Plan (DCP). This is a one time irrevocable election for these employees. If an election is not made within the first 90 days of employment, salaried employees under age 45 will be defaulted into Track A with the Oklahoma Teachers’ Retirement System and Defined Contributions.

Participation, Salaried Employees - Salaried employees electing Track A will participate in the Oklahoma Teachers’ Retirement System and receive Defined Contributions. There is no minimum age restriction for most salaried participants.

Participation, Hourly Employees – Hourly employees are eligible to participate in the Defined Contribution Plan if:

  • The employee is age 28 or has three years of benefits eligible OU service OR,
  • The employee has participated in a 401(a) plan while employed at another institution of higher education.

Contributions - For Hourly Track B Participants -  The University of Oklahoma contributes nine percent of the employee’s base salary (not including benefits) to the retirement investment option selected by participating employees. The employee does not contribute to the Defined Contribution Plan.

For Hourly and Salaried Track A Participants - Track A participants hired on or after 7/1/1995 receive defined contributions from the university at a rate of their base salary minus $9,000, multiplied by eight percent.  The employee does not contribute to the Defined Contribution Plan.

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

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

 

Vesting- Three years from the date of enrollment in the DCP

Investment Options - There is a diverse range of investment options provided through the four retirement investment firms (ING, Fidelity, TIAA-CREF and Vanguard). The employee chooses the companies and options in which to invest the contributions.  In the event the employee does not make an election within 30 days of eligibility, the contributions will be automatically placed in a TIAA-CREF Money Market Account and will remain there until the employee makes a decision to send the money to another company or fund.

Termination Prior To Retirement - An employee who terminates and has met the three year vesting period may withdraw funds from the investment accounts. All withdrawals are subject to taxation. Some penalties and restrictions may apply to certain accounts. An employee has the option to leave accumulated funds in the investment accounts until age 70 1/2. Any employee who joins the plan on or after July 1, 1993, and whose employment terminates prior to completing three years of participation, will forfeit all contributions. Employees who return to work at OU in any capacity 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. It is generally required that annuity income be started no later than age 70 1/2. Each retirement investment firm has a number of retirement income options to choose from. Upon retirement, the payout option best suited to the needs of the retiree should be selected.