Disclaimer: The following description of NWOSU's retirement program is intended to be easy to read and therefore is written in broad, general terms to apply to as many people as possible. If there is a discrepancy between the information presented on this webpage and laws/contracts/policies/, the latter must take precedence.
Important 12-8-2008 Memo to CURRENT 403(b) Participants
Proposed Lincoln Lineup of Funds
Frequently Asked Questions re 1-1-09 403(b) Change
Retiree Insurance Program Presentation.
Road to Retirement Presentation.
Retirement Update Sessions March 22-23, 2004 Presentation.
7-24-07 E-mail Memo to part-time and full-time faculty and staff
Social Security
For calendar year 2009, Social Security taxes are paid according to the following schedule:On April 7, 2000, President Clinton signed into law P.L. 106-182, the Senior Citizen's Freedom to Work Act of 2000 which eliminates the Social Security retirement earnings test in and after the month in which a person attains full retirement age. Contact Social Security for more information.
NWOSU employees nearing retirement age should research federally mandated earnings limits that will be put into place after they retire, so they will not owe money back to the Social Security Administration.
Members who have accumulated five (5) or more years of creditable service ("Service Years") in the public schools of Oklahoma (including Northwestern), on which retirement contributions have been remitted, shall be granted an indefinite extension of membership in OTRS.
I.e., their account is "vested." Only vested employees can draw a benefit from this plan at retirement time. Non-vested members do not lose their contributions if and when they leave Northwestern.
The current contribution rate is 7% of "contributable salary." Contributable salary includes gross pay and employer-paid benefits (medical, vision, life, LTD, and employer "pick-up" of OTRS). The OTRS contribution is withheld on a pre-tax basis (before federal and state income taxes are figured).
GOOD NEWS!
Effective 7-1-08, NWOSU employees are only responsible for the first $350 (7% of $5,000 contributable salary) due the System in a fiscal year (July-June). All contributions due on remaining contributable salary in the fiscal year will be paid by Northwestern.
Prospective
employees interested in regular full-time positions may want to estimate how
much will be withheld for Teachers' Retirement from the first full monthly paycheck
at NWOSU. Just click on this Excel worksheet--
OTRS
cost -- remember, the OTRS withholding is calculated on a pre-tax basis,
which results in a saving on federal and state income taxes. The income
taxes
that would have been withheld are not due until the money is withdrawn (they are
"deferred").
When an employee decides to retire from Northwestern, he or she should contact Human Resources and ask for the "Road to Retirement" presentation that describes in detail the seven steps it takes to retire with OTRS, TIAA-CREF (if applicable), and Social Security.
Questions regarding retirement may be directed to the Human Resources
Office in Herod Hall at the Alva Campus, or to the Oklahoma Teachers' Retirement System:
NEW: NOTICE TO INTERESTED PARTIES
The Supplemental Retirement Plan is a part of the retirement program at Northwestern, but it only applies to those employees meeting all the following requirements:
When an eligible employee decides to retire, he or she should contact the NWOSU Human Resources Office at 580-327-8530 for an official Supplemental Retirement Plan calculation under both Method One and Method Two. The larger of the two amounts will be paid to the qualifying retiree as a monthly annuity.
The Method One formula for a possible monthly benefit is:
The Method Two formula for a possible monthly benefit is:
NOTE: fractions of different fiscal years cannot be combined in the benefit calculation.
Disclaimer: The official Regional University System of Oklahoma 401a SRA group contract with TIAA-CREF takes precedence over this description should any conflict arise. Employees should contact the Human Resources Office in Herod Hall at 580-327-8530 for definitions of above terminology.
NWOSU employees who resign before they are eligible to retire, cannot
qualify for the employer-paid retiree insurance program. However, if a
regular, full-time, benefited employee has at
least 10 years OTRS Oklahoma Service before resigning from NWOSU,
he/she will want to contact
the Oklahoma State and Education Employees Group Insurance Board and ask about
"vesting" the insurance coverage. By paying the premiums as a "vested member,"
they can keep the medical, dental, and/or vision coverage they had in place when
they resigned. As long as the premiums are paid promptly, the member can
participate in the State insurance plan indefinitely, as state law currently
reads.
NEW: Persons new to RUSO employment after June 30, 2009, cannot qualify for the employer-paid retiree insurance program. Persons hired before July 1, 2009, before considering a break in employment, should make sure they know how such a break may impact this valuable benefit. Contact the Human Resources Director at 580-327-8530 for more information, after watching the Retiree Insurance Program presentation.
|
RUSO--Calendar Year 2009--Schedule of Costs to Employer and "Qualifying Retiree" |
|||
| HealthChoice High Medical Insurance | |||
| Cost to Retiree | Cost to University | Total Cost | |
| HealthChoice Insurance Program | |||
| Retiree (if not on Medicare--i.e., <65) | 0.00 | 409.12 | 409.12 |
| and, Spouse is not on Medicare | 587.92 | 0.00 | 587.92 |
| or, Spouse is on Medicare | 279.28 | 0.00 | 279.28 |
| and, Child is not on Medicare | 199.98 | 0.00 | 199.98 |
| or, Child is on Medicare (per child if one or more children) | 279.28 | 0.00 | 279.28 |
| or, Children are not on Medicare | 343.10 | 0.00 | 343.10 |
| or, Spouse and Child are not on Medicare | 787.90 | 0.00 | 787.90 |
| or, Spouse and Children are not on Medicare | 931.02 | 0.00 | 931.02 |
| Retiree (if on Medicare--i.e., >64) | 279.28 | 0.00 | 279.28 |
| and, Spouse (<65) is not on Medicare | 587.92 | 0.00 | 587.92 |
| or, Spouse (>64) is not on Medicare | 587.92 | 0.00 | 587.92 |
| or, Spouse is on Medicare | 279.28 | 0.00 | 279.28 |
| and, Child is not on Medicare | 199.98 | 0.00 | 199.98 |
| or, Child is on Medicare (per child if one or more children) | 279.28 | 0.00 | 279.28 |
| or, Children are not on Medicare | 343.10 | 0.00 | 343.10 |
| or, Spouse and Child are not on Medicare | 787.90 | 0.00 | 787.90 |
| or, Spouse and Children are not on Medicare | 931.02 | 0.00 | 931.02 |
| Vision/Dental: University pays none of the premiums for vision or dental for any retiree or their dependents regardless of age. | |||
| A Retiree must meet the definition of an "Official Retiree." Call Human Resources at 327-8530 for more information. | |||
A: OTRS is a "defined benefit" retirement plan, as opposed to a "defined contribution" plan. The latter plan's future benefits are dependent on investment earnings, if any. OTRS is a type of pension plan in which a specified monthly benefit at retirement is pre-determined by a formula based on the employee's wage history, tenure of service, and age, rather than depending on investment returns. Unless a member reaches "vestment," there is no guaranteed monthly income benefit due at retirement age. It takes 5 Oklahoma OTRS-recognized Service Years to be vested.
Q: When can I retire from Northwestern?
A: You must have at least 5 years of Oklahoma Teachers' Retirement service credit (as defined by OTRS) to retire. OTRS members may retire with unreduced benefits at age 62 with 5 or more Oklahoma service years, or when age and total service equals 80 (referred to as the "Rule of 80"). Members joining OTRS after June 30, 1992, must have a combination of 90 (the "Rule of 90") or be age 62 to retire with unreduced benefits. This is a brief description of the OTRS Rules and Laws. If any discrepancy exists, the latter takes precedence. Call 1-877-738-6365 for more information.
Q: Can OTRS members retire early and get monthly benefits?
A: Yes, reduced benefits are available beginning at age 55, for members who do not yet qualify for the Rule of 80 or 90, but have 5 or more years of Oklahoma service. The benefit reduction is applied according to the following schedule:
| Age | Percent |
|---|---|
| 55 | 61.89 |
| 56 | 65.95 |
| 57 | 70.38 |
| 58 | 75.23 |
| 59 | 80.00 |
| 60 | 86.66 |
| 61 | 93.33 |
| 62 | 100.00 |
Regretfully, some employees must leave employment early due to disability. If the disabled employee has ten (10) years service with Oklahoma Teachers' Retirement, (s)he can apply for disability income by calling their toll-free number, 1-877-738-6365 and completing the necessary paperwork. The OTRS Board uses physicians' statements in making their determination. The employee is responsible for applying for disability income with the Social Security Administration.
Q: How do I request retirement income and how early do I begin the process?
A: There are 7 Steps to the paperwork process, beginning with contacting NWOSU Human Resources, Room 101 of Herod Hall on the Alva Campus, ph. 580-327-8530. You may wish to view the Road to Retirement presentation.
Q: Will my unused sick leave days count toward service years when I retire from Northwestern?
A: If you have at least 120 days of unused sick leave at the time of retirement, from all OTRS employers, you may receive another full year service credit. Call OTRS at 1-877-738-6365 for details as they apply to your situation and for forms to present to employers for sick leave verification.
Q: Once I decide to retire, how much money can I receive monthly from OTRS?
A: Monthly OTRS benefits are usually determined by multiplying a member's Final Average Salary (which includes employer-paid benefit payments) times 2% times total number of service years and dividing by 12. For those who joined OTRS before July 1, 1992, F.A.S. is the average of the three (3) highest years on which contributions have been made to OTRS. If you joined after June 30, 1992, they will use the five (5) highest consecutive years of compensation. In the calculation, service years before July 1, 1995 stand alone. The final total benefit combines pre- fy 95/96 years with subsequent years. Compensation prior to 7-1-95 is capped at $40,000, unless the member signed an agreement to cap at $25,000.
Q: Is there any other way I can contribute to my retirement?
A: You may elect to send pre-tax dollars to a "403(b) tax-deferred annuity." Amounts set aside in this manner, along with all earnings and dividends, are tax-deferred until withdrawn. If interested, ask Human Resources for a Lincoln Financial Group packet, fill out the enclosed Enrollment Form and return to Human Resources, Room 101 in Herod Hall, Alva Campus. The change will take place on the next available payroll. Regular full-time and non-student part-time employees are eligible to participate in this voluntary retirement program. Call 580-327-8530 for more information.
Q: What happens if I leave Northwestern before I'm "vested" (before I have contributed on 5 years of Oklahoma Service) with Teacher's Retirement?
A: All the money that you have paid into Teacher's Retirement and that the University has paid into your account is yours to withdraw or "roll over" into another tax-deferred account, such as an IRA. You may leave the money in your account, but unless you work and contribute in another job with Teacher's Retirement within five (5) years, they will send the contributions to you automatically and close your account.
The employer-paid contributions to TIAA-CREF (program discontinued after 6-30-04) are different: At retirement time, you may want to leave the money in the account and let it work for you. You are not required to make withdrawals until you reach age 70 1/2. At that age, the IRS requires you to make minimum distribution withdrawals or face a stiff penalty. When leaving NWOSU, members under 70 1/2 years of age can "roll over" their TIAA-CREF contributions into an IRA or some other tax-deferred account to delay taxation.
Q: Is there a compensation limit for OTRS?
A: Yes. Once a member's Contributable Salary (gross plus employer-paid fringe benefits) reaches $230,000 in FY 08-09, all contributions stop until July 1, 2009. The limit will be $245,000 for FY 09-10. July 1, 2010, another maximum will be put in place by the IRS for FY 10-11.
Questions should be directed to:
NWOSU Human Resources Office (Herod Hall, Room 101)
709 Oklahoma Boulevard
Alva, Oklahoma 73717
Phone: 580-327-8530 or 580-327-8531
Affirmative Action Statement
This institution, in compliance with Title VI and Title VII of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, sections 503 and 504 of the Rehabilitation Act of 1973, the Americans with Disabilities Act Amendments Act of 2008, and other applicable federal laws and regulations, and to the extent required by law, does not discriminate on the basis of race, color, national origin, sex, age, religion, physical or mental disability, or status as a veteran in any of its policies, practices, or procedures. This includes, but is not limited to, admissions, employment, financial aid, and educational services. Inquiries concerning the application of these programs should be made to Brad Franz, Vice President for Student Affairs and Enrollment Management, Northwestern Oklahoma State University, 709 Oklahoma Boulevard, Alva, OK 73717, (580) 327-8415.
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