Guideline P-040

Subject: Optional Retirement Program

This guideline supplements Tennessee Board of Regents Optional Retirement Program Policy 5:01:03:03 and applies to eligible employees of all institutions governed by the Board.

1. Eligibility to Participate in the Optional Retirement Program 

All regular academic, executive, administrative, and professional personnel except employees of the Tennessee Technology Centers are eligible to participate in the Optional Retirement Program. In addition, visiting lecturers are eligible to participate in the ORP.

2. Election of New Employees to Participate in the Optional Retirement Program 

An eligible employee who is not a member of the Tennessee Consolidated Retirement System and has not accumulated creditable service there under as a member of a local retirement fund may elect prior to the preparation of his or her first salary payment either membership in the Tennessee Consolidated Retirement System or the ORP. The Notice of Election to Participate in the Optional Retirement Program or the Tennessee Consolidated Retirement System Form, which shall be used by employees in designating this election, is available on www.treasury.state.tn.us/orp/forms.htm.   In addition, the Premium Distribution Specification Form that must be completed to specify the distribution of funds for the ORP is attached as Appendix 1.  If no election is made prior to the first salary payment, the employee shall be deemed to have elected the TCRS.

3. Election of Current Members of TCRS to Participate in the Optional Retirement Program

An employee who is a member of the TCRS or of a local retirement fund having rights under the TCRS, and who is otherwise eligible to join the ORP, may elect to participate in the ORP in lieu of continuing contributions to and accumulating creditable service in the TCRS while employed at an institution with an optional retirement program. Any employee who elects to cease membership in the TCRS and commence membership in the ORP may transfer plans effective the first day of the month following thirty (30) days written notice to TCRS and the employee’s institution. (The Election to Transfer Membership from TCRS to the Optional Retirement Program form is available on www.treasury.state.tn.us/orp/forms.htm.)  As stated on the form, an employee who transfers membership from the TCRS to the ORP will thereafter be ineligible to accumulate creditable service in the TCRS during such period or periods as he or she is employed by an institution with an optional retirement program.

4. Transfer of Contributions to the Optional Retirement Program

State Service Prior to July1, 1981

For employees who began state service prior to July 1, 1981, all employee contributions (made through payroll deduction) to TCRS plus that portion of the employer's contribution made on behalf of the employee after July 1, 1981, plus any accrued interest are fully transferable to the ORP. Only contributions made by the employee himself or herself or contributions made by the employer on behalf of the employee under the non-contributory plan are transferable.

State Service Effective July 1, 198l or After

Employees hired on or after July 1, 1981, are non-contributory members only.  Employer contributions are not transferable. 

Any employee who elects to transfer funds in the ORP must execute the Election to Transfer Funds from TCRS to the Optional Retirement Program Form at least 30 days prior to the payroll date in which the change is to be effective.  This form is available on www.treasury.state.tn.us/orp/forms.htm.

5.  Amount of Contributions to the Optional Retirement Program 

Employer contributions will be paid at the rate of ten percent (10%) of monthly salary up to the social security wage base. Contributions for salary above the wage base will be paid at eleven percent (11%).

For either retirement system (TCRS or ORP), the limit to employer contributions made on behalf of employees employed after July 1, 1996 is $210,000.  There is no contribution limit for employees employed before July 1, 1996.  Additionally, for employees enrolled in the ORP, there is also an annual aggregate contribution limit for contributions to the ORP and 401(k).  This limit is defined on an annual basis. 

6. Social Security Contributions 

The amount of social security contributions by the employee and the employer shall be the same each payroll period as if the employee were a member of the TCRS.

Source: September 8, 1977 TBR Presidents Meeting. Revised and supplemented September 12, 1977; May 11, 1978; October 31, 1978; TBR staff memoranda - July 1, 1984; November 14, 1984; August 16, 1988 Presidents Meeting. August 11, 1992 TBR Presidents Meeting; February 10, 2004, Presidents Meeting; February 7, 2006 Presidents Meeting.

Optional Retirement Program (ORP)

Premium Distribution Specifications

 Name________________________________________________________

                        Last                                                                First                                                   

Banner ID or SSN________________________________________

Premium Distribution Specification

You may specify distribution of your ORP premiums among the three ORP companies.  You must specify a percentage (no fractions) to each company in such a way that a sum of the percentage equals 100%.  Each percentage must be a whole number.  Remember:  If you are specifying a distribution to a company for the first time, you must complete an enrollment form for that company.

By this election to participate in the ORP, I acknowledge that I am waiving the right to participate in TCRS.

Signature        _________________________________________

Date                _________________________________________

To Be Completed by HR/Payroll

Retirement Plan Code(s): _____    _____    _____

Effective date of election: ___________________               

Forms to be attached (if applicable):

____ TCRS Waiver Form

____ ING Enrollment Application

____ TIAA-CREF Enrollment Application

____ AIG-VALIC Enrollment Applicant