2.5% Step-Up – Allows members to increase their retirement benefits by paying an additional contribution each pay period. The Step-Up will increase the computation factor only on participating service accrued after the election and only for full years of participating service.
Accumulated Contributions – The sum of all employee contributions by a member to OPERS, which are credited to the member’s account.
Actuarial cost more closely represents the actual cost of the additional credit to OPERS, and as such assists in maintaining a financially sound retirement plan for all of us. Actuarial cost has no relationship to contributions that would have been paid. The purchase price takes into account the past loss of the use of those funds for investment purposes and the length of time the funds will be available for investment in the future before OPERS begins to pay benefits to that member. As a general rule, the earlier a purchase is made, the less the cost will be, and the actuarial cost for a younger member with fewer years of service credit will not be as high as for a member who is nearer to retirement, since OPERS will have investment use of those funds for a greater amount of time before being required to pay benefits.
Actuary – The actuary or firm of actuaries employed by the Board at any given time to monitor the income and benefit structure of the System for the purpose of keeping the retirement fund sound and financially solvent.
Beneficiary – Any person, other than a joint-annuitant, named by a member to receive any benefits as provided by the laws governing the System. If there is no beneficiary living at the time of member-employee’s death, his or her estate shall be the beneficiary. An eligible OPERS beneficiary does not have to be a natural person. For example, a member can name a trust or a funeral home as a beneficiary. Contact OPERS for instruction on how to properly designate a trust as beneficiary. A member should name both primary and contingent beneficiaries.
- Primary beneficiaries: These are the people (or entities) who will receive your benefit. All primary beneficiaries share the benefit equally, unless otherwise noted on the form.
- Contingent beneficiaries: These individuals only receive benefits in the event that all primary beneficiaries are deceased. All contingent beneficiaries share equally, unless otherwise noted on the form.
Board – The governing body of the System known as the Oklahoma Public Employees Retirement System Board of Trustees.
Compensation – All salary and wages, including amounts deferred under deferred compensation agreements entered into between a member and a participating employer, but exclusive of payment of overtime, payable to a member of the System for personal services performed for a participating employer, including maintenance, or any allowance in lieu thereof provided a member as part of compensation but not including compensation or reimbursement for traveling, or moving expenses, or any compensation in excess of the maximum annual compensation. Longevity payments are included.
Coordinator, Retirement – The individual designated by each participating employer through whom System transactions and communication shall be directed.
Credited Service – The sum of participating service and prior service.
Defined Benefit – Under the defined benefit plan, members and employers are required to contribute a specific percentage of the member’s salary, and continue working and contributing until reaching retirement eligibility, which is based on a combination of age and service. Retired members receive a guaranteed, lifetime benefit based on salary, years of service, and a contribution factor. OPERS administers a defined benefit plan for state and local government employees as well as the URSJJ defined benefit plan.
Defined Contribution (Pathfinder Plan) – The Pathfinder plan is the mandatory defined contribution plan for eligible state employees who first join OPERS on or after November 1, 2015. Under this plan, members will choose a contribution rate which will be matched by their employer up to 7%, and members have the freedom to select and change their investments. However, a defined contribution plan like Pathfinder does not provide a guaranteed, lifetime source of income like the OPERS defined benefit plan mentioned above. The amount of resources you have at retirement under a defined contribution plan is dependent upon how much you saved over your career, how well those investments performed, and how quickly you take distributions in retirement.
Early Retirement Date – The date on which a member may retire with permanently reduced retirement benefits as provided by the System.
Elected Official – A person elected to a state office in the legislative or executive branch of state government or a person elected to a county office (on or after July 1, 1988) for a definite number of years and an individual who is appointed to fill the unexpired term of an elected state official. County superintendents of schools are not considered elected officials.
Eligible Employer – The state and any county, county hospital, city or town, conservation districts, emergency medical districts, and any public or private trust in which a county, city or town participates and is the primary beneficiary, whose employees are covered by Social Security and are not covered by or eligible for another retirement plan authorized under the laws of the State of Oklahoma which is in operation on the initial entry date. Emergency medical service districts may join the system upon proper application to the Board.
Employee – Any officer or employee of a participating employer, whose employment is not seasonal or temporary and whose employment requires at least 1,000 hours of work per year and whose salary or wage is equal to the monthly minimum wage for state employees. Those employees who are less than full time shall have wages equal to at least one-half that amount, but an eligible employee shall not include:
- Any employee who is currently a contributing member of the United States Civil Service Retirement System; or,
- Any employee who is currently a contributing member of another retirement plan authorized under any other law of the State for the same employment (other than an elected official).
Special Instances are:
- The officers, appointees, or employees of the district attorney who are required to belong to OPERS unless they were employed in counties which had separate retirement systems and were enrolled in the county system and elected to remain in such county system in lieu of participating in OPERS. Effective July 1, 1981, all new employees of the District Attorney were required to belong to OPERS; and,
- Effective July 1, 1982, employees of the Oklahoma Employment Security Commission who were ineligible for enrollment in the Employment Security Commission Retirement Plan were required to become members of OPERS January 1, 1987. Most Oklahoma Employment Security Commission employees and all new OESC employees were transferred to membership in OPERS.
Entry Date – The date on which an eligible employer joins the System. The first entry date pursuant to the statutes governing this System is January 1, 1964. All subsequent entry dates shall be the first day of January of a given year.
Essential OPERS – A two-page reference for plan provisions. The EssentialOPERS is to be given to all new members at enrollment. Specific versions are available for State and Local, Hazardous Duty, Elected officials and URSJJ members.
Executive Director – The managing officer of the System employed by the Board.
Final Average Compensation – The average annual salary, including amounts deferred under deferred compensation agreements entered into between a member and a participating employer and longevity payment. Only salary for which the required contributions have been made may be used in computing the Final Average Compensation.
- Final Average Compensation for service rendered prior to July 1, 1994, is the average of the highest three of the last ten years of participating service immediately preceding retirement or termination of employment up to but not exceeding the maximum annual compensation authorized. Provided no member shall retire with a final average compensation for service rendered prior to July 1, 1994, in excess of $25,000 unless the member made the required election and has paid the contributions on such salary in excess of $25,000. No member shall retire with a final average compensation for service rendered prior to July 1, 1994, in excess of $40,000.
- Final Average Compensation for service rendered July 1, 1994, and thereafter is the average of the highest three of the last ten years of participating service immediately preceding retirement or termination of employment, or if participating service is less than three years, the full period of participating service after July 1, 1994, not to exceed the salary cap maximum amounts.
- Final Average Compensation for members who join on or after July 1, 2013 will be calculated using the highest five years out of the last 10 years of participating service prior to retirement or termination, including the highest five longevity payments upon which contributions have been made.
1099-R – A federal tax form distributed to those OPERS retirees and active members who received some type of payment from OPERS during the calendar year. The form shows the amount of the payment, the taxable portions of the payment and if any taxes were withheld.
Full-time-equivalent employment (FTE) – A member’s actual employment with a participating employer of OPERS. A member earns FTE for work on which retirement contributions are paid.
All part-time work or periods of leave without pay are prorated in relation to full-time employment. For example:
- A member who worked full-time (40 hours a week) for one year has earned one year of FTE.
- A member who worked half-time (20 hours a week) for one year has earned half a year or six months of FTE.
A member can receive FTE service credit by purchasing certain types of service. The purchased service must represent actual employment with a participating employer of OPERS. Examples include:
- purchased prior service,
- repayment of withdrawn contributions,
- purchased temporary total disability,
- purchases made pursuant to USERRA, and
- delinquent service paid by the employer.
Service granted free of charge (no contributions paid) or not accrued with a participating employer of OPERS is not FTE. This includes prior service granted free of charge, military service, unused sick leave, transported serviced, termination credit, bonus years, and purchase of incentive service.
Why does this matter? Members have different eligibility requirements to vest or retire but one thing is the same. At the minimum, every non-elected member must have at least 6 years of FTE service before any other accrued, purchased, or granted service that can help them meet eligibility.
Hazardous Duty Member – A specific member classification with different retirement provisions as described in Chapter 25. These members currently include certain Correctional Officers, Probation & Parole Officers, Fugitive Apprehension Agents, Oklahoma Military Department Firefighters, Grand River Dam Authority Lake Patrol Officers and County Deputy Sheriffs and Jailers.
Joint-annuitant – A natural person who is designated by an OPERS member to receive a lifetime retirement benefit under Option A or Option B after the death of the member. A joint-annuitant designation cannot be changed after retirement.
Leave of Absence – A period of absence from employment without pay, authorized and approved by the employer and acknowledged to the Board, and which after the effective date does not exceed two years.
Medicare Gap Option – An option allowing most OPERS members who are under age 65 at retirement and who retire May 1, 2006 or later to make an irrevocable election to temporarily increase the amount of their monthly retirement benefit.
Member – An eligible employee or elected official who is in the System and is making the required employee or elected official contributions, or any former employee or elected official who shall have made the required contributions to the System and has not received a refund or withdrawal.
Military Service – Service in the Armed Forces of the United States in time of war or national emergency, as defined by the Oklahoma Statutes, from which the member was honorably discharged.
Mortally Wounded – Death ultimately caused by injuries inflicted during the performance of an Officer’s duties with the Oklahoma Department of Corrections.
Normal Retirement Date – The date on which a member may retire with full retirement benefits as provided by the System.
Participating Employer – An eligible employer who has agreed to make contributions to the System on behalf of its employees.
Participating Service – The period of employment after the entry date for which credit is granted a member. Effective March 1, 1979, part-time employment or any leave without pay will be prorated in relation to full time employment (173 hours per month).
Prior Service – The period of a member’s employment with an eligible employer prior to the employer’s entry date into this System for which credit is granted a member. Prior service is free service if the employer joined OPERS on or before January 1, 1975. The employee may purchase prior service with an employer that joined OPERS after January 1, 1975. Certain military service is also considered prior service.
Retiree – A member who has retired under the System.
Retirement Benefit – A monthly income with benefits accruing from the first day of the month coinciding with or following retirement and ending on the last day of the month in which death occurs or the actuarial equivalent thereof paid in such a manner as specified by the member pursuant to the act governing this System or as otherwise authorized by the Board.
Separation Dates – Last Date Physically on the Job, Last Date on Payroll and Termination are dates that may be requested on forms for verification purposes.
Last Date Physically on the Job – is the last day an employee physically performed their job at work. This can never be after the last date on payroll and termination date.
- Purpose – The Social Security Administration must deem the employee disabled within one year of the last day physically on the job to qualify for disability retirement.
Last Date on Payroll – is the employee’s last paid day including paid leave. This is the last day an employee worked or used leave, not the day they receive their paycheck.
- Purpose: OPERS must verify last date on payroll for retirement and vesting purposes. On the Retirement Application, last date on payroll allows OPERS to project service through that date. OPERS can then provide estimates to the member during the retirement process. After the employee leaves payroll, the actual last date on payroll is certified by the retirement coordinator on the Final Retirement Certification. Last date on payroll is certified after the employee leaves payroll on the Application for Vested Benefits.
- Example: Tina uses annual leave to finish out to the end of the month. Her Last Day Physically on the Job is July 27. She has 4 days of annual leave. Her Last Date on Payroll is July 31. Last date on payroll can be the same date as the termination date but never after.
Termination Date – is usually the last date on payroll, but not always. Termination date can never be before last date on payroll. The termination date can come after the last date on payroll when using unpaid leave, disability insurance or FMLA.
- Purpose: State law requires withdrawal pay date must be at least four months after the employee’s termination date.
- Example: Sam uses FMLA for 12 weeks. His Last Day Physically on the Job is July 1. He has 21 days of shared leave that will allow him to stay on full payroll through July 31. Sam’s last day on payroll is July 31. His Termination Date as approved by his agency is September 30. Sam uses FMLA and stays on leave without pay. Sam’s job is maintained during that time but terminates when 12 weeks of FMLA ends on September 30. The termination date is September 30.
Social Security – Refers to the old-age survivors and disability section of the Federal Social Security Act.
System – The Oklahoma Public Employees Retirement System as established by an act of the Oklahoma State Legislature in 1963. (Statutory Reference: OKLA. STAT. tit. 74 § 901 et seq., as may be amended.)
Termination Credit – The purchase of termination credit will allow an eligible OPERS member to preserve the same normal retirement date as he or she would have had if the member’s position had not been terminated by a reduction-in-force. In other words, termination credit allows a member to “constructively” participate as if still employed by a participating OPERS employer until reaching eligibility for normal retirement either by age 62 or 80/90 points. The purchase of termination credit represents the amount of service that would have accrued through the member’s normal retirement date.
Total Disability – A physical or mental disability accepted for disability benefits by the Federal Social Security Administration or Railroad Retirement Board.
Unused Sick Leave – A maximum of 960 hours of unused sick leave may be added to retirement service. Twenty days (160 hours) of sick leave equals one month of retirement service credit and will be added only in monthly segments. Fractions of a month of credit will not be given. If the unused sick leave results in adding an additional year of service, the employer must pay the cost of funding that year of service.
Vesting – Refers to when a member acquires a future interest in a retirement benefit. A member must complete at least eight years of credited service, six full years of which must be full-time-equivalent employment with a participating employer.
Withdrawal – A member may not withdraw contributions while working with a participating employer. After termination, a member may withdraw his or her share of accumulated contributions, but the employer’s contribution will remain with OPERS.