ORP Plan Overview
Below are the important features about your employer's plan. This website is intended to be a summary of the plan provisions. In the event that a conflict exists between the information contained within this website and the plan document, the plan document provisions prevail.
The Optional Retirement Program (ORP) is offered to employees in Texas public higher education as an alternative to the Teacher Retirement System (TRS). It was made available through legislation passed by the State of Texas in 1967. Employees eligible for the ORP must enroll within 90 days of eligibility to participate in the plan. Your choice between ORP and TRS is irrevocable once elected.
- Investment control of your account.
- Extensive menu of investment options to help fit your individual needs and objectives.
- 100% vested after one year and one day from eligibility (versus 5 years with TRS)
- The ORP is portable. If you leave employment, your vested portion is eligible to be rolled over to another qualified plan or IRA.
- Tax-deferred investing – under the Internal Revenue Code, with this program your contributions and any earnings on those contributions are taxed only when you begin to take distributions, at which time you may be in a lower tax bracket.*
(Withdrawals from an annuity may be subject to an early withdrawal fee and, if taken prior to age 59½, an IRS 10% premature distribution penalty tax will apply, unless an IRS exception applies.)
- Various Investment Options - You have the opportunity to select where your contributions are allocated.
- Periodic payments for the future - Under the annuity provisions, you choose the payout option that best fits your future needs.
- Portability of your account
- Unlimited transfers between variable investment options via Internet, phone or paper. Subject to the excessive transfers policy.
- No surrender/withdrawal charges (a mortality and expense risk charge of 1.00% will apply)
You and your employer each contribute a certain percentage of your total compensation to the program. Your salary is then "reduced" by the amount of your contribution (currently 6.65%), which along with the employer's contribution (between 6.0% and 8.5%), is sent to Voya and invested according to your instructions. The amounts reduced are similar to the amounts that would have been deducted under TRS (currently 6.4% for employee contributions and 6.0% for employer contributions).
Under the Plan, the maximum annual contribution amount is set by Internal Revenue Service (IRS) guidelines on a yearly basis. You may view the current limits here.
Under the provisions of the Texas Education Code, you may not withdraw funds from the ORP while you are employed by the Texas public higher education system. If you leave the system, you may obtain a letter from the University to remove the withdrawal and loan restrictions. A 10% IRS premature distribution penalty tax may be assessed on withdrawals unless you are age 55 or older; become disabled or die; receive the funds under a settlement option payable over your lifetime or the lifetimes of you and your beneficiary; or exchange the funds for another 403(b) or IRA account
If you change employers, both your vested employee and employer account balances are available to take with you.
When you retire, there are a wide variety of payout options (subject to your plan provisions) including:
- A full or partial withdrawal (may be subject to federal withholding and possible tax penalties)
- Systematic payout options
- Payments guaranteed for your lifetime or for a specified period*
*Guarantees are based on the claims-paying ability of Voya Retirement Insurance and Annuity Company.
- Interest-only option
- Rollover to an IRA
If you die before you retire, your beneficiary may elect to receive the value of your account or select one of several settlement options.
You should consider the investment objectives, risks, and charges and expenses of the variable product and its underlying fund options carefully before investing. The prospectuses/prospectus summaries containing this and other information can be obtained by contacting your local representative. Please read the information carefully before investing.
Variable annuities are intended as long-term investments designed for retirement purposes. Withdrawals from an annuity may be subject to an early withdrawal fee and, if taken prior to age 59½, an IRS 10% premature distribution penalty tax will apply, unless an IRS exception applies. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you.
For 403(b)(1) fixed or variable annuities, employee deferrals (including earnings) may generally be distributed only upon your: attainment of age 59½, severance from employment, death, disability, or hardship. Note: Hardship withdrawals are limited to employee deferrals made after 12/31/88. Exceptions to the distribution rules: No Internal Revenue Code withdrawal restrictions apply to '88 cash value (employee deferrals (including earnings) as of 12/31/88) and employer contributions (including earnings). However, employer contributions made to an annuity contract issued after December 31, 2008 may not be paid or made available before a distributable event occurs. Such amounts may be distributed to a participant or if applicable, the beneficiary: upon the participant's severance from employment or upon the occurrence of an event, such as after a fixed number of years, the attainment of a stated age, or disability.
Insurance products, annuities and retirement plan funding issued by (third party administrative services may also be provided by) Voya Retirement Insurance and Annuity Company, One Orange Way, Windsor, CT 06095-4774. Securities are distributed by Voya Financial Partners LLC (member SIPC). Custodial account agreements or trust agreements are provided by Voya Institutional Trust Company. All companies are members of the Voya® family of companies. Securities may also be distributed through other broker-dealers with which Voya has selling agreements. Insurance obligations are the responsibility of each individual company. Product and services may not be available in all states.