Below are the important features about your 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. For more information, please contact your local representative.
What is the Optional Retirement Program?
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 from the date of their eligibility for ORP. Eligibility for the ORP may include initial employment, job change, or re-characterization of your position. Eligibility is determined by job title and/or your position’s classification. For more information regarding eligibility in the ORP, contact your human resources benefit specialist. Your choice between ORP and TRS is irrevocable once elected.
Who is eligible to participate?
ORP eligible employees include:
- A member of the faculty whose duties include teaching or research and whose specific assignments are made for the purpose of conducting instruction or research as a principal activity (or activities), and who holds the position and title of professor, associate professor, assistant professor, instructor, lecturer, or the equivalent.
- An administrator responsible for teaching and research faculty, including deans, directors, associate deans, assistant deans, chairpersons, or heads of academic departments.
- A professional librarian.
- The Chancellor, Executive Vice Chancellor, Vice Chancellor, Assistant or Associate Vice Chancellor, President, Executive Vice President, Vice President, Assistant or Associate Vice President, or the equivalent.
- Other professional staff who hold certain administrative and professional positions:
- Administrative positions eligible for ORP are those that are customarily recruited by advertising in national publications such as the Chronicle of Higher Education or in newsletters of national professional associations or at the meetings of such associations; are at a salary rate equivalent to the rate for faculty at the institution; report directly to an executive officer; serve as director or other administrative head of a major department or budget entity; are appointed by the Chief Administrative Officer or his/her delegate; are responsible for the preparation and administration of the budget, policies, and programs of the department.
- Professional positions eligible for ORP include those in nationally recognized fields that require advanced degrees and/or specialized professional or artistic training, experience, and achievement. These would include titles such as physicians, athletic coaches, engineers and lawyers.
Why do many eligible employees choose the ORP?
Many eligible professionals elect the ORP because it offers substantial flexibility, including:
- Investment control of your account.
- Extensive menu of investment options to fit your individual needs and objectives.
- Potential for tax-deferred compounding.
- 100% vested after one year and one day (versus 5 years with TRS)
- The ORP is portable. If you terminate employment in all Texas public institutions participating in the ORP, you can take your vested account balance with you.
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 (currently 6%-8.5%), is sent to Voya Financial® and invested according to your instructions. The amounts reduced are the same amounts that would have been deducted under TRS.
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.
Fund management fees and other fund operating expenses will apply. Fees depend on the investment option chosen:
- For the Variable Annuity Contracts, please refer to the Contract Prospectus Summary for individual fund fee information.
- For the Mutual Fund Programs, please refer to the individual Fund prospectuses for fund fee information.
In addition, a Mortality and Expense Risk Charge applies as follows to the Variable Annuity Contracts:
- During the Accumulation Phase: for Mentor contracts, the mortality and expense risk charge during the accumulation phase is 0.45% annually of your account value listed in the subaccounts. There is no mortality and expense risk charge during the accumulation phase for Direct contracts.
- During the Income (Annuitization Phase): For both the Mentor contracts and Direct contracts, the mortality and expense risk charge is 1.25% annually of your account value invested in the subaccounts during the income phase.
The Mortality and Expense Risk Charge does not apply to the Mutual Fund Programs.
Under the provisions of Texas law, you may not withdraw funds from the ORP except upon the earlier of your termination of participation or attainment of age 70½. You terminate participation by death, retirement (including disability retirement), or termination of employment in all Texas public institutions of higher education participating in the ORP. If you are eligible to take a distribution, you may also be subject to a 10% federal penalty tax.
If you have terminated participation or attained age 70½ and wish to withdraw funds (including taking out a loan), you must provide us with a letter from your employer confirming your termination and/or vesting status.
Under the ORP 403(b)(1) variable annuity contract, Voya provides a wide variety of payout options (subject to your plan provisions) when you retire, including:
- 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. Under both the Mentor and Direct Access Models, a 1.25% M&E applies to payments made on a variable basis during annuitization.
- Rollover to an IRA, or another eligible retirement plan.
If you die before you retire, your beneficiary may elect to receive the value of your account or select one of several settlement options, subject to IRS minimum distribution rules. For the Mentor Model for the 403(b)(1) annuity contract only, a guaranteed death benefit is available. If the beneficiary requests a lump sum payment or an annuity payout option within six months of the participant's death, the death benefit is guaranteed to be greater of: a) the account value minus any outstanding loan balances, or b) total contributions made to your account minus any loans, withdrawals or annuitizations. Guarantee based on the claims paying ability of Voya Retirement Insurance and Annuity Company.
Under the 403(b)(7) custodial account, there are no systematic payouts, guaranteed lifetime or guaranteed specified period payment options available. When you retire, you may:
- Request a full or partial withdrawal (may be subject to federal withholding and possible tax penalties).
- Utilize the funds to purchase a single premium immediate annuity.
- Rollover to an IRA or another eligible retirement plan.
You should consider the investment objectives, risks, and charges and expenses of the variable product and its underlying fund options; or mutual funds offered through a retirement plan, carefully before investing. The prospectuses/prospectus summaries/information booklets contain this and other information, which can be obtained by contacting your local representative. Please read the information carefully before investing.
Variable annuities and mutual funds offered through a retirement plan are intended as long-term investments designed for retirement purposes. Money distributed from the 403(b) Plan and the 457 Plan will be taxed as ordinary income in the year the money is received. Withdrawals taken from either the 403(b)(1) variable annuity or the 403(b)(7) custodial/trust account prior to age 59½ will be subject to a 10% federal penalty tax. This IRS premature distribution penalty tax does not apply to 457 plans. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. 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.
For 403(b)(7) custodial accounts, employee deferrals and employer contributions (including earnings) may only be distributed upon your: attainment of age 59½, severance from employment, death, disability, or hardship. Note: hardship withdrawals are limited to: employee deferrals and '88 cash value (earnings on employee deferrals and employer contributions (including earnings) as of 12/31/88).
Not FDIC/NCUA/NCUSIF Insured | Not a Deposit of a Bank/Credit Union | May Lose Value | Not Bank/Credit Union Guaranteed | Not Insured by Any Federal Government Agency
Insurance products, annuities and retirement plan funding issued by (third party administrative services may also be provided by) Voya Retirement Insurance and Annuity Company ("VRIAC"), Windsor, CT. VRIAC is solely responsible for its own financial condition and contractual obligations. Plan administrative services provided by VRIAC or Voya Institutional Plan Services LLC ("VIPS"). VIPS does not engage in the sale or solicitation of securities. All companies are members of the Voya® family of companies. Securities distributed by Voya Financial Partners LLC (member SIPC) or third parties with which it has a selling agreement. Custodial account agreements or trust agreements are provided by Voya Institutional Trust Company. All products and services may not be available in all states.