Full-time faculty, librarians, and certain professionals and administrators employed in public higher education are eligible to elect the Optional Retirement Program (ORP) in lieu of TRS before the 91st day after becoming eligible. It is a one-time irrevocable choice between two distinct plans that are suitable to different individual needs.
ORP is a individualized defined contribution plan which provides participants with the opportunity to select from among various companies and products (all authorized by TAMU) and actively manage their own retirement investments. Participants in the ORP plan manage their personal investment accounts. As such, ORP accounts entail more responsibility due to associated risk and long-term accrual of returns than that associated with TRS accounts. Benefits are a direct result of the amounts contributed and any net return on the investments selected by each participant. ORP further benefits employees who have contributed to personal retirement plans similar to ORP at previous employers and wish to continue to contribute to the ORP plan.
State law requires both the employee and the state to make contributions to ORP based on percentages of the employee's salary. State contribution rates are established semi-annually by the Texas Legislature and may fluctuate over time. ORP participants with more than one year of participation have a vested state contributions upon retirement or termination. Participants are always fully vested in employee contributions. Upon termination from Texas public higher education, ORP participants with more than one year of participation retain control over all investments (both employee and state contributions). Participants who terminate with one year or less of initial participation forfeit state contributions made during that period of employment.
If you choose to participate in ORP instead of TRS, you and the A&M System each contribute to ORP each pay period. The contribution amounts, which are based on a percentage of your salary, are set by the Texas Legislature and can change over time. You do not pay current federal income tax on these contributions. However, your retirement benefit will be taxable when you receive it.
Contributions from you and the A&M System go into an account designated by you. You are required to select a vendor from a list of A&M System-authorized vendors to invest the money in your account. A list of vendors is online at tamus.edu/offices/shro/retirement/orptda.html. Your eventual benefit will be based on contributions from you and the A&M System and applicable investment earnings or losses. You are responsible for the investment performance of your account.
You can begin receiving the money in your account when you retire, are no longer employed by any Texas institution of higher education, reach age 70 ½ or die. You may choose how to receive your benefit from the options available from your investment vendor(s). You pay regular federal income tax on withdrawals from the plan. You also pay a penalty tax if you withdraw money from your account before age 59 ½ unless you withdraw because:
- Disability and are unable to work,
- Death
- Separation from Service - You leave A&M System employment after age 55 and elect an annuity payout.
Hardship withdrawals and loans are not available in the ORP plan while you are employed with a Texas institution of higher education.
You have full ownership of your contributions and investment earnings at all times. You are fully vested in the employer contributions and earnings after one year and one day of participation. Your ORP account is portable, which means you generally can roll over your account to a new employer's plan when you leave the A&M System. You also can leave your account invested through ORP for retirement or roll it into an individual retirement account. You also may withdraw your funds but, in most cases, you'll pay a 10% penalty tax. Rolling your funds to an IRA, 401(k) or 457 plan or withdrawing your contributions will affect your rights to A&M System retiree insurance benefits.
In the event of a discrepancy between this website and the plan documents, the plan documents preside.
To enroll in your ORP, contact your MetLife Resources Representative.
Feedback