Updated October 7, 2026. Quick answer: A City of Oklahoma City general employee retiring from the Oklahoma City Employee Retirement System chooses before the retirement date whether to take a single-life pension or a reduced pension with a joint annuitant. Option A continues the same reduced amount, Option B 75 percent and Option C 50 percent, and the choice cannot be changed after retirement. The actuarial summary also describes a partial lump sum of up to $30,000. A member with five years of vesting service who leaves may take a refund instead of a deferred pension, giving up all other benefits. These documents cover non-uniformed employees.
What this page covers and what it does not
This page works from documents read on October 7, 2026: the Oklahoma City Employee Retirement System (OCERS) Annual Comprehensive Financial Report for fiscal years 2022 and 2021, which includes an actuarial summary of benefit provisions as of December 31, 2021, and seven sections of the City of Oklahoma City Code of Ordinances, Chapter 40, which carry the benefit rules. Any figure here comes from those documents, or is labeled as a computed example from assumed inputs.
The system and its members: “The Oklahoma City Employee Retirement System was created under the authority granted by Chapter 11 of the Oklahoma State Statutes on January 21, 1958, to provide pension and survivor benefits to all full-time civilian employees of The City of Oklahoma City.” The report adds that “OCERS provides retirement benefits for substantially all full-time, non-uniformed employees of the System, the City, the Oklahoma City Public Property Authority, and the Oklahoma City Zoological Trust.” These documents cover that non-uniformed group, not police and fire pensions or any other plan. The report is dated to fiscal 2022, so OCERS controls if current wording differs. State tax questions are on Oklahoma retirement taxes and does Oklahoma tax pensions.
How the pension is figured and when it can start
The actuarial summary states the regular formula this way: “2% of average final compensation for all years and complete months of service, to a maximum of 100% of AFC.” Compensation is averaged over a window: “Average earned compensation (excluding compensation for unused vacation and sick leave) during highest 36 months of service out of the last 60 consecutive months of service.” The employee side is stated in the report: “The employee contributes 6.00% of covered payroll.”
A computed example from assumed inputs, not an OCERS figure: with an assumed average final compensation of $60,000 and 25 years of service, 2% times 25 years is 50% of $60,000, a computed $30,000 a year, or a computed $2,500 a month. OCERS issues the member’s own estimate.
For members who end City service on or after March 1, 2001, the ordinance sets two age-and-service tests. For those hired before January 1, 2008, it is “served with the City for a period of five or more years, and attained the age of 65, or he/she must have served with the City for a period of 25 years, regardless of his/her age”. For those hired or rehired on or after that date, it is “earned five (5) Consecutive Years of Vesting Service and attained the age of 65, or he/she must have served with the City for a period of 25 years of Vesting Service, regardless of his/her age”. Further conditions apply to everyone: service must have ceased as described in Section 40-83; “upon leaving the service of the City, he/she must have left his/her Employee Contribution Account with the System”; and the last five years of service before retirement must be consecutive (five Consecutive Years of Vesting Service for those hired or rehired on or after January 1, 2008). The actuarial summary gives the same tests in short form for the later hiring group, which it labels “Post 3-1-67 hires”: “Age 65 with 5 years of service; or, any age with 25 years of service.” It lists early retirement eligibility as “Age 55 with 5 years of service”.
What starting early costs
The summary states the early retirement amount as follows: “Same as regular retirement amount but reduced 4% for each full year or portion of a year that payments commence prior to age 65 (age 60 if hired prior to 3-1-67)”
A computed example from assumed inputs, not an OCERS figure: starting at an assumed age 55 is 10 years before 65, and 4% times 10 years is a computed 40% reduction. An assumed unreduced pension of $2,500 a month, reduced by 40%, would be a computed $1,500 a month.
| Step in the example | Result |
|---|---|
| Annual pension, 25 years at 2% of an assumed $60,000 average final compensation | $30,000 a year (computed) |
| The same pension per month | $2,500 a month (computed) |
| Reduction for starting 10 years before 65 at 4% a year | 40% (computed) |
| An assumed $2,500 monthly pension after that reduction | $1,500 a month (computed) |
The election: single-life or a joint annuitant
Every retiring member makes one choice that shapes what a spouse receives. The ordinance says: “A Participant may choose to have a portion of his/her Retirement Benefits continued to his/her surviving spouse, following his/her death on or after his/her normal or early retirement date, until the death of his/her surviving spouse.” The ordinance requires that “he/she shall, before his/her retirement date, choose whether he/she wishes to select or reject a Joint Annuitant option”.
| Choice | What the member receives | What a survivor receives |
|---|---|---|
| Single-life annuity (default if no option is chosen) | The full retirement benefit as a single-life annuity, including longevity supplement, until death | The surviving spouse receives only the employee contribution account at the date benefits begin, less total benefits already paid |
| Option A | An actuarially reduced pension for life | The same reduced amount continues to the Joint Annuitant for life |
| Option B | An actuarially reduced pension for life | 75 percent of the reduced pension continues to the Joint Annuitant for life |
| Option C | An actuarially reduced pension for life | 50 percent of the reduced pension continues to the Joint Annuitant for life |
The default matters. “Any Participant who fails to exercise any of the options in Section 40-71 shall, upon Retirement, receive the full retirement to which he/she may be entitled under this division as a single-life annuity, including longevity supplement, until his/her death.” The general trade-off is covered on single-life versus joint-and-survivor pension.
What each option does for a survivor
Option A, in the ordinance’s words: “The Participant shall receive an actuarially reduced pension payable for life, and payments in the same reduced amount shall, after the Participant’s death, be continued to the Joint Annuitant during the latter’s lifetime.” Options B and C use the same reduced pension but continue 75 percent and 50 percent of it, as the table shows.
The size of the reduction is not published as a percentage. The ordinance says “the amount of the reduced pension shall be the Actuarial Equivalent of the benefit to which he/she would otherwise be entitled”. The pages read do not give the factors the actuary uses, so the monthly cost of each option comes from an OCERS estimate.
A computed example from an assumed reduced pension, not an OCERS figure: if the reduced pension were an assumed $1,500 a month, Option B would continue 75% of $1,500, a computed $1,125 a month, and Option C would continue 50% of $1,500, a computed $750 a month. Option A would continue the full $1,500.
What is irrevocable and what must be done first
The election has a deadline: “the election shall be made prior to the Participant’s actual retirement date.” The member also owes proof: “The Participant must also furnish proof, satisfactory to the Board of Trustees, of the Joint Annuitant’s age at the time of the election.” After retirement, the ordinance says “once a Participant has retired, his/her Joint Annuitant election may not be changed in any respect or canceled”, apart from the life events below.
“if the Joint Annuitant dies or a final decree of divorce is entered between the Participant and the Joint Annuitant after the Retirement of the Participant, the Participant’s Retirement Benefits will continue in the same actuarially reduced amount as that otherwise payable at the normal or early retirement date under the joint and survivor annuity option selected by the Participant.” The ordinance also says “Should the Participant remarry, the new spouse, when he or she becomes eligible, shall be the beneficiary under the same joint and survivor annuity option elected at retirement”, and limits that claim: “No benefits shall be payable to the new spouse unless the Participant and the new spouse are married at the time of and for at least three years prior to the Participant’s death”. Confirm divorce or remarriage questions with counsel and OCERS before retiring. Spousal rules in general are on survivor benefit with a government pension.
If money is left in the account when a retiree dies
The ordinance ties options to the employee contribution account. “In the event of the death of the Joint Annuitant (after the death of the Participant), payment of monthly benefits shall cease.” “If the total payments paid to the Participant and Joint Annuitant under these provisions are less than the Participant’s Employee Contribution Account as of the date benefits commence to the Participant, the difference will be paid to the beneficiary named by the Participant”.
A partial lump sum at retirement
The actuarial summary describes a limited cash option: “Members who are eligible for Regular Retirement may elect this optional form of payment, which allows for cash at retirement of up to $30,000.” “Any remaining monthly retirement benefit is reduced actuarially to reflect the payment of cash at retirement.”
Taking cash lowers the monthly check for life, and the pages read give the ceiling but not the reduction factors. Cash paid to the member is also a taxable distribution unless rolled over (see below and 20% withholding on a pension lump sum). See also pension lump sum versus monthly annuity break-even.
Leaving before retirement: refund or deferred pension
The vesting rule in the ordinance on termination options: “When an Employee’s service terminates after five years of Vesting Service, but before his/her Normal Retirement Age, his/her Employee Contributions to the System shall cease.” Then the choice: “He/she may elect either (1) to leave his/her Employee Contribution Account on deposit with the System and be a Deferred Vested Participant, or (2) to receive, in lieu of all other benefits, a refund of his/her Employee Contribution Account.”
Two timing rules matter. A refund has a waiting period: “he/she shall receive payment no earlier than 91 days after his/her date of Termination of Employment and provided such Participant is not an employee of the City in any capacity at the time of the refund and has not been employed by the City in any capacity since his/her date of Termination of Employment.” Doing nothing is also a choice: “he/she shall be deemed to have elected to leave his/her Employee Contribution Account, regardless of amount, on deposit with the System and become a Deferred Vested Participant”, if no election is made within 90 days. The door to a refund then stays open: “A Deferred Vested Participant may elect at any time prior to his/her Normal Retirement Age, to receive, in lieu of all other benefits, a refund of his/her Employee Contribution Account.” For the general question of whether to leave money in, see pension refund versus leaving it.
For a deferred pension, the ordinance states the early start: “the deferred vested participant may elect to receive a reduced retirement benefit beginning anytime subsequent to his/her attainment of age 55 with at least five years, but less than 25 years of service.”
What a refund costs in tax withholding
A refund paid to the member is taxable and subject to mandatory withholding unless rolled over. A computed example from an assumed $20,000 taxable refund, not an OCERS figure: 20% of $20,000 is a computed $4,000 withheld for federal tax, leaving a computed $16,000 in cash before any state withholding.
If a member dies before retiring
For a member who dies while still employed, the ordinance says: “In the event of the death of any Participant prior to his/her Termination of Employment with the City, the Eligible Spouse of that deceased Participant may elect to receive monthly, for life, 20 percent of the Average Final Compensation of the Participant” The two qualifying cases are “if the Participant is killed in the line of duty with the City regardless of the time of service with the City”, and “if the Participant was not otherwise eligible for retirement pay but had completed 15 years service with the City and died from causes not arising in the line of duty with the City”.
A member who had not yet been awarded retirement pay but was eligible to retire is treated differently under the same ordinance: “Regardless of whether or not the Participant had selected a Joint Annuitant option as described in Sections 40-71 and 40-72, the Eligible Spouse will be entitled to receive Joint Annuitant benefits pursuant to Option A.”
Cost of living adjustments and the death benefit after retirement
Pension increases are permitted, not promised. The cost of living ordinance says: “all persons receiving benefits pursuant to the provisions of this division may have their current benefits adjusted by the amount of the change in the Consumer Price Index over the previous year ended December 31, provided such adjustment shall not exceed two percent of the current benefits.” “Nothing in this section shall be construed as requiring cost-of-living adjustments to be granted.” On timing: “Eligibility for cost of living adjustments shall not begin until the first day of the month following the month in which four years of benefits have been received from the effective date of benefit commencement”. The four-year wait does not apply to a member who had reached normal retirement age at the retirement date or who “is granted a Disability allowance”; for a Disability allowance, one year of benefits must have been received before the cost of living adjustments begin.
The actuarial summary adds: “A one-time payment of $5,000 payable upon the death of the retiree.” “This benefit is payable only upon the death of the retiree, and is payable to the designated beneficiary.”
What the IRS adds on tax
A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of OCERS’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. A refund or partial lump sum from OCERS is a distribution of this kind, and a direct rollover to another eligible plan avoids the mandatory withholding; ask OCERS what forms it offers before electing. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.
On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan” if the employee separated from service during or after the year they attained age 50 or 25 years of service under the plan, whichever is earlier. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.
What this page could not settle
- The pages read do not state the actuarial factors that set the reduced pension under Option A, B or C, only that it is an actuarial equivalent.
- The pages read do not state whether interest is credited to the employee contribution account or added to a refund.
- The pages read do not give an election deadline or the reduction factors for the partial lump sum of up to $30,000, or say how it works with the joint annuitant options.
- The pages read do not describe a deferred retirement option plan (DROP) or a service credit purchase.
- The pages read do not state the rollover forms or payment methods OCERS offers for a refund.
- Rules for terminations before 2001, disability retirement and any money purchase plan were not covered in full.
- The 2022 financial report and the legal publisher’s copy of the ordinance may trail later amendments, so the current OCERS summary of plan provisions controls.
Common mistakes
- Ignoring the default; with no option chosen the pension is a single-life annuity and a surviving spouse is entitled only to the remaining employee contribution account.
- Expecting to change the joint annuitant after retirement; the ordinance says the election may not be changed in any respect or canceled, apart from the listed events.
- Taking a refund without weighing what ends; the refund is paid in lieu of all other benefits.
- Missing the 90 day window and assuming a refund is still the default; the ordinance treats silence as leaving the account on deposit.
- Expecting the refund immediately or while still working for the City; payment comes no earlier than 91 days after termination and only if not employed by the City.
- Treating a possible cost of living adjustment as guaranteed; the ordinance says nothing requires one to be granted.
Related on this site: Oklahoma retirement taxes, does Oklahoma tax pensions, pension refund versus leaving it, single-life versus joint-and-survivor pension, pension buyback calculator, 20% withholding on a pension lump sum, pension lump sum versus monthly annuity break-even, survivor benefit with a government pension and public pension retirement decisions by system.
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Answer againSources
- Oklahoma City Employee Retirement System, Annual Comprehensive Financial Report, fiscal years ended June 30, 2022 and 2021, with Actuarial Section benefit summary (valuation December 31, 2021): https://www.okc.gov/files/assets/city/v/1/finance/documents/afrs/employee-retirement-system/ocers-2022.pdf
- City of Oklahoma City, Code of Ordinances, Chapter 40, Section 40-68, Normal Retirement Benefits (eLaws, read October 7, 2026): https://okc-ok.elaws.us/code/coor_ch40_artiii_div1_ptb_sec40-68
- City of Oklahoma City, Code of Ordinances, Chapter 40, Section 40-70, Termination option; vesting (eLaws, read October 7, 2026): https://okc-ok.elaws.us/code/coor_ch40_artiii_div1_ptb_sec40-70
- City of Oklahoma City, Code of Ordinances, Chapter 40, Section 40-71, Death benefits after retirement; annuity options (eLaws, read October 7, 2026): https://okc-ok.elaws.us/code/coor_ch40_artiii_div1_ptb_sec40-71
- City of Oklahoma City, Code of Ordinances, Chapter 40, Section 40-72, Conditions imposed on election of Joint Annuitant options (eLaws, read October 7, 2026): https://okc-ok.elaws.us/code/coor_ch40_artiii_div1_ptb_sec40-72
- City of Oklahoma City, Code of Ordinances, Chapter 40, Section 40-73, Death benefits prior to cessation of employment (eLaws, read October 7, 2026): https://okc-ok.elaws.us/code/coor_ch40_artiii_div1_ptb_sec40-73
- City of Oklahoma City, Code of Ordinances, Chapter 40, Section 40-77, Payment of death benefits to named beneficiary (eLaws, read October 7, 2026): https://okc-ok.elaws.us/code/coor_ch40_artiii_div1_ptb_sec40-77
- City of Oklahoma City, Code of Ordinances, Chapter 40, Section 40-79, Cost of living adjustments (eLaws, read October 7, 2026): https://okc-ok.elaws.us/code/coor_ch40_artiii_div1_ptb_sec40-79
- IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
- IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558
Sources: the primary documents linked above, read on October 7, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.