Optional Retirement Program (ORP)
Senior Academic and Administrative Officers and the President's professional staff, both as designated by the Board of Governors of The University of North Carolina; a faculty member with the rank of instructor or above at any of the 16 constituent institutions of The University of North Carolina; and field faculty of the Cooperative Agriculture Extension Service are eligible to participate in the Optional Retirement Program, if they are permanently employed at least 3/4 time (at least 30 hours per week) for 9 or more months per year on a recurring basis.
Choosing a Retirement Program - This booklet provides a brief comparison of both Teachers' and State Employees' Retirement System (TSERS) and Optional Retirement Program (ORP), summaries on each approved vendor, and forms.
How Do I Enroll?
Eligible employees have 60 days from commencing employment to elect to enroll in the Optional Retirement Program. During this period, the employee will need to select an ORP carrier and complete certain enrollment forms that are available in Benefits Office. Failure to make an election will result in automatic membership in the Teachers' and State Employees' Retirement System (TSERS), the defined benefit plan. This consequence is irrevocable.
Note: NC State will deduct retroactive contributions when a delay in enrollment occurs. For example, if an employee hired in September waits until November to enroll in a retirement plan, retroactive contributions based on salary received for September, October and November will be deducted from the next available payroll. This may result in a significantly large payroll deduction.
How Do I Make Contributions?
Employer and employee contribution percentages are established by the General Assembly. Employee contributions to the Optional Retirement Program are made on a pre-tax basis as provided under Section 414(h) of the Internal Revenue Code. As a result, the University will deduct the contribution from your pay before calculating federal or state income tax withholding.
The employee may elect to allocate both his/her contribution and the University's contribution to any one of the carriers or may direct his/her contribution to one carrier and the University's to another. Contribution allocations may be changed during any future month for which the payroll office can accommodate the change. The employee determines the investment direction of both contributions.
Investment direction changes can be made by contacting the Optional Retirement Program carrier.
What Are My Choices?
AIG Retirment, Lincoln Financial, Fidelity, and TIAA-CREF are authorized carriers for the Optional Retirement Program. Link directly to each carrier's specific web-site to learn more about the carriers and their services, or contact a local representative.
Fidelity Investments
- 1-866-588-2619 (Retirement Services)
- Locally: Katie Taylor (919) 451-3047
Lincoln Financial
- 1-800-348-1212 ext. 1285 (Customer Service)
- Locally: Kimberly Wilson, (919) 596-1475
AIG Retirement
- 1-800-448-2542
- Locally: Scott Inge, (919) 801-4944
- Locally: George Wood, (919) 630-3508
TIAA-CREF
- 1-800-842-2776 (Telephone Counseling Center)
- Locally, Everett Cook: 1-877-267-4505 (toll free) or (919) 687-5219
What Is Vesting?
Employees who participate in the ORP are immediately 100% vested in their own contributions. An employee is considered fully vested after five years of participation in the ORP. If termination from employment occurs with less than five years of ORP participation, the employee becomes 100% vested in the ORP employer contribution provided all of the following requirements are met.
- Your new employer is a higher education institution that sponsors a substantially similar or "like" retirement plan
- The successor plan offers a "like retirement plan" that is underwritten by one of the four carriers currently underwriting the Optional Retirement Program benefit
- You begin participation in that successor plan as your "core retirement plan" within 12 months following your termination of eligible service in the plan (usually your termination of employment) with The University of North Carolina
Note: Future Optional Retirement Program plan distributions may be restricted by the Optional Retirement Program carrier and/or the new employer if an employee terminates from The University of North Carolina.
How Are My Benefits Calculated?
Retirement benefit amounts are based on the total accumulation in the account(s) including any credited interest or dividends, your age, the age of your annuity partner, if applicable, and the income option selected. There are no age or service requirements to meet in order for a vested participant to begin receiving a benefit.
What Are My Retirement Payment Options?
Each ORP carrier makes available a variety of retirement payment options designed to help employees customize their overall retirement program to meet personal and family financial needs. These may be fixed annuity payments or payments on a variable basis, or a combination thereof.
Employees may also elect to receive a lump sum distribution, as permitted by the Optional Retirement Program carrier(s), or leave the balance on deposit to accumulate tax-deferred earnings until a retirement payment option is elected. IRS regulations require an individual to begin receiving plan distributions no later than April 1 of the calendar year following the year in which the plan participant either attains age 70 1/2 or retires, whichever is later
Note: To continue the State Health Plan coverage in retirement, the employee must elect and begin to receive a monthly retirement payment option from the ORP carrier.
Are There Any Additional Benefits?
- If you become disabled, the total value of your Optional Retirement Program account is available for income benefits that will begin upon retirement.
- In addition, participants of the Optional Retirement Program are covered under the North Carolina Disability Income Plan (DIPNC).
- Voluntary supplemental disability benefits plans are available for both short-term and long-term disability coverage; premiums are payroll deducted.
In the event of the employee's death, the total account value from both employee and employer contributions is 100% vested and available to the designated beneficiary designated on the Optional Retirement Program enrollment application. If there is a need to change the beneficiary, contact the Optional Retirement Program authorized carrier or the Benefits Office.
