TRS and ORP Retirement Options
Teachers Retirement System of Georgia – TRS
TRS is a 401(a) defined benefit plan. In this type of plan, the benefit payable upon reaching retirement eligibility is “predefined” based on a designated formula. For more specific details on the plan elements below, please visit www.trsga.com.
- Contributions: Participants make mandatory pre-tax contributions to the plan and KSU sends an additional contribution. Participants’ contributions are designated to their personal TRS account and earn the specified interest rate (generally 4%). KSU contributions are used to fund the overall program and are not attached to a specific individual’s account. Participants do not make investment decisions nor do they assume direct risks associated with investment decisions. Money contributed by the participant is 100% secure.
- Benefits in retirement: Employees who become vested in the plan are entitled to benefit payments upon obtaining retirement eligibility. The predefined benefit formula is calculated using both the number of years of creditable service and the highest salary during those years of service. For example: an employee with 15 years of service whose high salary averaged $40,000 over 2 years would be entitled to 30% of that salary in retirement for a pension payment of $12,000 annually. Pension payments continue for the duration of the retiree’s life and are generally eligible for annual cost of living adjustments (COLAs).
- Vesting: To be entitled to receive a pension benefit in retirement, participants must obtain 90 months of creditable service. Service credit can be earned at a maximum rate of 9 months per fiscal year (July 1 – June 30). Creditable service is combined with all TRS participating employers.
Retirement eligibility: Participants can activate pension payments upon obtaining one of the following scenarios:
- 10 years of creditable service AND age 60
- 30 years of creditable service at any age
- 25 years of creditable service at any age (early retirement penalties will apply)
- Creditable service: Some participants may be eligible to purchase additional creditable service for time served in the military, working for public university in another state, employment with another state entity, or previously withdrawn TRS service. Unused sick leave may also contribute towards increasing creditable service.
Withdrawing contributions: Contributions cannot be withdrawn at any time during active employment with the University System of GA. If a participant leaves USG employment before becoming vested:
- Contributions can be left with TRS. The account will be considered active for four years and it will continue to accrue interest during that time. If the participant ever begins contributing again with any TRS participating employer, service credit remains intact and the vesting calendar begins where it previously stopped.
- Contributions and the interest that has accrued can be rolled over into another qualified retirement plan or IRA without taxes or penalties. The participant forfeits any creditable service and would have to re-establish that service if they ever became a TRS participant again in the future.
- A lump-sum withdrawal of contributions and interest may be requested but taxes and penalties will apply. The participant forfeits any creditable service and would have to re-establish that service if they ever became a TRS participant again in the future.
- Contributions may only be withdrawn or rolled over if the participant has separated from all employment with the University System of GA.
For more information on this plan, visit www.trsga.com or contact TRS customer service at 404-352-6500.
Optional Retirement Plan – ORP (also known as the Regents Retirement Plan)
The ORP is a 401(a) defined contribution plan. In this type of plan, the benefit payable upon reaching retirement eligibility is based on your personal investment decisions such as which vendor(s) is chosen, which investment vehicles are selected, and their performance over time. More specific details on the plan elements are listed below.
- Contributions: Participants make mandatory pre-tax contributions to the plan and KSU sends an additional contribution. Participants make investment decisions and assume all risk associated with investment decisions. Contributions may be divided among multiple vendors (at a minimum of 10% to any one) or sent to a single vendor. Vendor options include Fidelity, TIAA, and Valic. Vendor allocations can be changed quarterly with proper notice to HR. Investment options within each vendor can generally be changed daily by accessing the account directly with the vendor. See the ORP vendor table for more information.
- Benefits in retirement: Upon obtaining retirement age, benefit payment options are coordinated directly with the retirement vendor and are based on the performance of the investment of contributions from both the employee and KSU. Length of benefit payment duration is dependent upon account value and distribution options selected.
- Vesting: Employees are immediately vested in all funds contributed, including those made by KSU. There is no minimum years of service requirement.
- Retirement eligibility: Once separated from employment, eligibility to begin receiving retirement benefits are age based on current 401(a) tax code (generally age 59½ at the earliest with a minimum distribution age of 70).
- Creditable service: ORP benefits are not associated with service; however, eligibility to have benefits in retirement (medical, dental, campus privileges, etc.) does include a minimum number of service years.
Withdrawing contributions: Contributions cannot be withdrawn at any time during active employment with the University System of GA. If a participant leaves USG employment:
- Assets can be left with the selected vendor(s) and participants continue to manage their account investment allocations beyond employment. Benefit payments can be activated upon obtaining the appropriate retirement age.
- Assets can be rolled over into another qualified retirement plan or IRA without taxes or penalties. Rollover amounts are based on account values at the time of transfer.
- Withdrawal of assets may be requested but taxes and penalties will apply.
- Withdrawal amounts are based on account values at the time of distribution.
- Make the most of your retirement plan: the USG ORP Enrollment Guide
For more information on this plan, view the plan document summary.
401(a) comparison chartTRS - Defined BenefitORP - Defined Contribution
Vesting10 yrs of creditable service (any TRS participating employer)Not service based; immediate
Length of benefit paymentLife of the retiree at a minimum; survivor benefits available if elected at time of retirementBased on account value and distribution elections
Benefit payment in retirementFormula: Highest 2 yrs of salary x 2% x yrs of service (ex: 40K avg salary w/ 15 yrs of service = $12K annual retirement benefit)Based on investment account value
Disability benefitsAvailable after 9½ years of creditable serviceNot applicable
Responsibility for management of funds/investment optionsEmployee does not direct investments funds. Contributions are secure & earn interest. Benefits in retirement are predefined & not subject to market fluctuations.Employee chooses the vendor(s) and investment option(s)
Contribution rate as of 7/1/2017Employee: 6.00% / Employer: 16.81%Employee: 6.0% / Employer: 9.24%