Welcome to your ORP retirement plan. Click below to view the features and highlights of your employer’s retirement plan.
The plan highlights are only a brief overview of the plan's features and are not a legally binding document. The information in this section does not modify the terms of the plan and in the event of a conflict, the terms of the plan control.
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- All full-time state employees are required to participate in the state's retirement system as a condition of employment.
- Certain part-time employees have the option of participating.
Once an employee elects to participate in the ORP, that election is irrevocable except for a one-time window to transfer upon attaining five years of service, but less than six years.
This information is intended to provide a general introduction to some of the provisions applicable to participants in Tennessee's Optional Retirement Program. This information is subject to legislative change and judicial interpretation. It does not supersede nor restrict procedures or authority established under state statute. The provisions of the Optional Retirement Program and the Tennessee Consolidated Retirement System are set forth in Chapters 34-37 of Title 8 of Tennessee Code Annotated. Participants in the Optional Retirement Program may be subject to additional conditions established by the annuity contract(s) they select.
Starting early has its advantages
Mandatory Enrollment in the Plans and University Mandatory Matching Contributions
Employee Hired Prior to July 1, 2014
- The ORP is a "defined contribution" retirement plan, which means that the amount of any future benefit will be determined by the member's account balance.
- Employer contributions are credited to each ORP member's account during service to a Tennessee higher education institution. The employer contributes 10% of gross salary covered by Social Security and 11% of salary in excess of the Social Security Wage Base.
Employee Hired After July 1, 2014
|By the Participant||Plan Contributions Credited to Member's Account by the Institution||Total|
An ORP participant attains vesting rights immediately. A vested member is one who has accrued a right to a retirement benefit upon termination of service.
Accessing your money before retirement
Payout methods available to members
Members are eligible to select a single life annuity, a joint and survivor annuity, periodic payments for their life expectancy, or a minimum distribution payout beginning at age 70½. Members whose Tennessee ORP accounts total less than $15,000 in 2012 may file a Lifetime Distribution Exception form to qualify for a lump sum payment. In addition, any member who is beginning a lifetime payment plan may elect to receive a partial lump sum payment of up to 50% of the account balance at the time the lifetime payout or annuity payment begins.
Access to your contributions
Generally, the money in your account may be distributed under any of the following circumstances:
Separation from state service:
After a member leaves service with the State of Tennessee, no further contributions may be made to that member's account in Tennessee's Optional Retirement Program (ORP). All funds contributed to the State of Tennessee ORP remain part of the trust, subject to the rules of Tennessee's ORP until after they have been paid to the member or the member's beneficiary.
An ORP member who has separated from state service may elect to begin benefits at any time prior to age 70½. Any member who leaves state service but does not begin drawing benefits by age 70½, may become subject to a penalty tax assessed by the federal government.
Following separation from state service, retiring members may select various payout options offered by AIG Retirement Services. Funds accumulated in Tennessee's ORP may not be withdrawn in a lump sum except in the event of the member's death prior to retirement or in the event that a member who has separated from service has less than the de minimis ORP account balance set by state statute, which is $15,000 in 2012.
The ORP provides no special disability benefits; therefore, participants may wish to consider obtaining disability insurance. A disabled member may request an annuity settlement or life expectancy distribution based upon the account balance at the time of disability. A member who is receiving Social Security disability benefits is also entitled to elect a partial lump sum distribution of his account balance each year, subject to the provisions of AIG Retirement Services. The partial distribution may be $25,000 in 2012.
In the event of the member's death prior to retirement, the value of the total accumulation is payble to the named beneficiary or, if no beneficiary exists, to the member's estate. Any beneficiary named would be entitled to a refund of the account balance. If the value of the accumulation is sufficiently large, the beneficiary may be eligible to elect an annuity payout. A member may change beneficiaries at any time prior to retirement by submitting the applicable change form to AIG Retirement Services.
Please remember, income taxes are payable upon withdrawal. Federal restrictions and a 10% tax penalty may apply to withdrawals prior to age 59½.
Loans are not permitted in the Tennessee ORP plan.
An array of investment choices
The mutual funds available in your retirement plan will help provide you with the flexibility you need to create a suitably diversified portfolio that matches your personal retirement time horizon, investment risk tolerance and investment preferences. Please note, investment values will fluctuate and there is no assurance that the objective of any fund will be achieved. Mutual fund shares are redeemable at the then-current net asset value, which may be more or less than their original cost.
View the entire list of funds and their historical performance available to the State of Tennessee Optional Retirement Program participants.
Please keep in mind that past performance is not a guarantee of future results.
To view or print a prospectus, access “Prospectuses and Other Important Materials”. The prospectus contains the investment objectives, risks, charges, expenses and other information about the respective investment companies that you should consider carefully before investing. Please read the prospectus carefully before investing or sending money. You can also request a copy by calling 1-800-428-2542.