Teacher Retirement in Oklahoma


A teacher employed by the state of Oklahoma draws retirement benefits from the Oklahoma Teachers Retirement System. These benefits are designed to keep a retired teacher in the living conditions she has grown accustomed to and also provide for her beneficiaries if she dies before her retirement account is exhausted.

Tax Sheltered Annuity

A teacher employed by the state of Oklahoma pay into a 403b tax sheltered annuity as part of her retirement benefits package. A 403b is a tax-deferred retirement savings account only available to an educational employee or the employee of a nonprofit organization. A teacher's contributions to her 403b retirement plan are made with pretax dollars and such are eligible for the same income tax credit extended to contributions made to a traditional individual retirement account or IRA. This can greatly reduce a teacher's federal income tax liability at the end of the year. As of September 2009, The Oklahoma Teachers Retirement System subcontracted financial management firm ING to manage teacher 403b retirement plans.

Leaving the System

An Oklahoma teacher becomes eligible for reduced retirement benefits at age 55 and full retirement benefits at age 62. If a teacher decides to terminate employment before this date he may withdraw all his personal contributions to his retirement plan plus accumulated interest based on his years of service. A teacher with up to 16 years of service may withdraw all his personal retirement contributions plus 50 percent of accumulated interest. This scale increases up to 90 percent of interest at 26 years or more of service. In Oklahoma, a teacher must accumulate at least five years of service credit to keep retirement contributions in the system indefinitely. A teacher with less than five years service credit may only keep retirement contributions in the system for a maximum of five years unless he returns to work as an Oklahoma public school teacher before that time expires.

Death Benefits

A $5,000 death benefit is paid to a retired Oklahoma teacher's estate or beneficiary as part of the state's retirement benefits package. This benefit is intended to provide additional coverage for burial expenses. A teacher's estate or beneficiary may also receive the balance of the teacher's 403b retirement plan depending on which benefit option the teacher selected. A teacher in the Oklahoma public school system may choose from one of five different benefit options upon retirement.

Benefit Options

The Maximum Plan pays the retired teacher the maximum monthly disbursal of funds from her 403b retirement account with any remaining balance of personal contributions paid to a beneficiary or estate upon death. The remaining four benefit options offer differing levels of reduced monthly benefits in favor of leaving a larger sum for a beneficiary. Option 3 only pays up to 50 percent of a teacher's remaining retirement funds to a beneficiary. Payments to a beneficiary under Option 4 stop 10 years after the teacher's retirement date. The beneficiary under retirement Option 4 may be someone other than a spouse.

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