Okla. Stat. tit. 70, § 70-6-101.1: Annuity contracts, custodial accounts or face amount

investment annuity certificates - Teachers or employees.

A. A part of the salary, not to exceed the limitations on

deferrals provided in Section 403(b) of the Internal Revenue Code of

1986, as amended, payable to a teacher or employee by a school

district may, at the election of such teacher or employee, be

deferred for the investment in an annuity contract from any

insurance company authorized to do business in Oklahoma or by the

investment in shares of regulated investment companies to be held in

a custodial account as authorized by Section 403(b)(7) of the

Internal Revenue Code of 1986, as amended, or by the investment in a

face amount investment annuity certificate issued by a company

authorized to do business in Oklahoma by the district for the

teacher or employee, provided that such teacher or employee is

eligible to defer a portion of their salary under the terms of the

school district's 403(b) plan; and the teacher or employee shall be

entitled to have such annuity contract, custodial account or face

amount investment annuity certificate continued in force in

succeeding years by such school district or any other school

district subsequently employing the teacher. Provided, that such

amounts contributed or paid by a school district must be made to

vendors approved by such school district as eligible to receive the

elective deferrals. Provided further, that a school district may

revoke a previously approved vendor’s eligibility to receive

elective deferrals, thereby prohibiting future contributions or

payments to such vendor until it regains its eligibility through

subsequent approval from such school district. The amounts so

contributed or paid by the school district for the annuity contract,

custodial account or face amount investment annuity certificate, or

to continue it in force, shall be considered as payment of salary,

for the same amounts, to the teacher or employee for State Aid

purposes, Teachers' Retirement System purposes, or Social Security

purposes, but not for state income tax purposes. Provided that the

amount received under such annuity contracts, custodial accounts or

face amount investment annuity certificates shall be income subject

to state income tax when actually received, unless otherwise exempt

from income tax.

B. The provisions of subsection A of this section shall also

apply to employees of institutions, agencies and boards comprising

The Oklahoma State System of Higher Education who are eligible to

defer a portion of their salary under the terms of such institution,

agency or board's 403(b) plan. Such institutions, agencies and

boards may purchase annuity contracts, custodial accounts or face

amount investment annuity certificates from vendors approved by such

institution, agency or board as eligible to receive such

contributions or payments, provided that such vendor is:

1. An insurance company authorized to do business in Oklahoma;

2. A life insurance or annuity company organized and operated,

without profit to any private shareholder or individual, exclusively

for the purpose of aiding and strengthening educational institutions

by issuing insurance and annuity contracts only to or for the

benefit of such institutions and individuals engaged in the services

of such institutions; or

3. A broker dealer licensed to sell shares of regulated

investment companies to be held in custodial accounts as authorized

by Section 403(b)(7) of the Internal Revenue Code of 1986, as

amended.

Provided further, that an institution, agency or board may

revoke a previously approved vendor’s eligibility to receive

elective deferrals, thereby prohibiting future contributions or

payments to such vendor until it regains its eligibility through

subsequent approval from such institution, agency or board.