Optional Retirement Program (ORP)

Below are the important features of the UT System Optional Retirement Program (ORP). This website is intended to be a summary of the plan provisions. If a conflict exists between the information contained within and the plan document, the plan document provisions prevail. For more information, please contact your dedicated UT approved financial professional.

What is the Optional Retirement Program?

The 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 the ORP.

Who is eligible to participate?

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.

Why do eligible employees choose the ORP?

Many eligible professionals elect the ORP because it offers substantial flexibility, including:

  • Investment control of your account.
  • An extensive menu of investment options to fit your individual needs and objectives.
  • Potential for tax-deferred compounding.
  • 100% vesting after one year and one day (TRS vesting is five years).
  • You can then take your vested account balance with you if you terminate employment in all Texas public institutions participating in the ORP. 

Contributions

You and your employing institution make mandatory monthly contributions to the ORP using percentages of salary that are established by the state legislature and subject to change. Contributions are then sent to Voya and invested according to your instructions. The amounts reduced are the same amounts that would have been deducted under TRS. Contributions and any net earnings are not subject to federal income tax until the funds are withdrawn or paid as a retirement annuity.

Under the Plan, the maximum annual contribution amount is set by IRS guidelines on a yearly basis. View the current contribution limits.

Fees

Fund management fees and other fund operating expenses will apply. Please refer to the individual fund prospectuses for fund fee information.

Withdrawals

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.

Payment Options

Voya provides a wide variety of payout options when you retire. To learn more about your payment options, please contact Voya directly or schedule an appointment with your dedicated UT approved financial professional.

 

Investment adviser representative and/or registered representatives of, and securities and investment advisory services offered through Voya Financial Advisors, Inc. (member SIPC). Investment advisory services are only offered through Investment adviser representatives of Voya Financial Advisors.

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.

Mutual funds under a trust or custodial account agreement are intended to be long-term investments designed for retirement purposes. If withdrawals are taken prior to age 59 ½, an IRC 10% premature distribution penalty tax will apply, unless an IRS exception applies. Account values fluctuate with market conditions, and when surrendered, the principal may be worth more or less than the original amount invested. A group fixed annuity is an insurance contract designed for investing for retirement purposes. The guarantee of the fixed account is based on the claims-paying ability of the issuing insurance company. Although it is possible to have guaranteed income for life with a fixed annuity, there is no assurance that this income will keep up with inflation. Money taken from the plan will be taxed as ordinary income in the year the money is distributed. An annuity does not provide any additional tax benefit, as tax deferral is provided by the Plan. Annuities may be subject to additional fees and expenses, to which other tax-deferred funding vehicles may not be subject. However, an annuity does offer other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you.

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).