Cooperative Extension Service
Departments
Human Resources - Group Benefits
Optional Retirement Plan
General Information:
Contributions - If you enroll in the University of Arkansas Optional
Retirement Plan (ORP), Extension will contribute an amount equal to 5% of your
salary to the plan. You are not required to make a personal contribution.
However, if you choose to make a personal contribution in excess of 5% of your
salary, Extension will match that contribution up to 10%. If you wish to make
contributions of more than 10%, please contact the Human Resources Office.
Vesting (Ownership) - For Classified employees, who are under the
state pay plan, the vesting schedule for contributions to the ORP is handled in
the following way. Your employee contributions will always be vested
(owned by you). Contributions made by Extension on your behalf are vested and
completely owned by you at the earliest of:
1. Completion of three years of service; or
2. Attainment of normal retirement age; or
3. The end of six consecutive months during which you contributed at
least 5% of your regular salary.
For all employees other than Classified employees, the contributions made by
Extension and by you are immediately vested (owned by you). This refers to both
the employee and employer contributions.
Tax Deferral - If you make personal ORP contributions, you may elect
to have these contributions “sheltered” from taxes. Tax-sheltered contributions
will not be taxed currently but will be taxed later as you receive them as
income. Your take-home pay is increased by the amount of income tax that would
have been paid on the amount sent to your retirement plan. The maximum amount
that may be deferred from taxation is determined by limits set by the IRS. If
you wish to tax defer your contributions, you should contact the Human Resources
Office.
ORP Investment Companies - There are two choices in the Optional
Retirement Plan:
TIAA-CREF and Fidelity Investments.
You may enroll in either company or both at the same time. A brief explanation
of each follows.
TIAA-CREF
TIAA and CREF are two non-profit organizations: Teachers Insurance Annuity
Association (TIAA) and College Retirement Equities Fund (CREF). The
objective of the TIAA-CREF system is to provide a combined retirement income
that is more responsive to economic change than a fixed pension benefit alone
and less volatile than a common stock variable annuity alone.
TIAA - TIAA is an insurance company offering two investment choices.
Investment in TIAA Traditional Account includes bonds, mortgages, real estate,
and short-term securities. Its retirement annuity guarantees your principal and
a 3% minimum rate of return. Your income may be increased by annual dividends.
The TIAA Real Estate Account includes ownership interests in income-producing
office, industrial, retail, and multi-family residential properties.
CREF - CREF is an investment company that offers variable annuities with
eight investment choices including, Stock, Money Market, Bond Global Equities,
etc… An overview of all CREF investment accounts can be reviewed on the
TIAA-CREF website at
www.tiaa-cref.org.
Allocations - You may allocate premiums to TIAA and/or any of the CREF
accounts. You may change your allocation at any time. Accumulations in CREF may
be transferred to TIAA at any time. Transfers may be made between CREF accounts.
However, you may only transfer 10% of the TIAA Traditional Account per year to
either the CREF accounts or the TIAA Real Estate Account.
Resignation Prior to Retirement - If you resign prior to normal
retirement age, you may:
1. Make premium payments directly to TIAA-CREF to continue your
retirement.
2. Leave the premiums in the fund for a future annuity or death benefit.
3. Begin your annuity income.
4. Request repurchase.
Retirement Benefits - At retirement, the TIAA-CREF program offers many
choices. To obtain retirement information contact TIAA-CREF directly at
1-800-842-2776.
Fidelity Investments
Fidelity Investments is a mutual fund company established in 1931 with the
Fidelity Fund. It offers you an opportunity to make pooled investments in
stocks, bonds, and short-term instruments. Investment options are structured
into three distinct groups: Ready Mix, Core Investment Options, and Expanded
Investment Options. These groups have varying investment goals based on
potential for return and level risk. Within each group, there are numerous
funds. You may allocate money (yours and/or Extension’s) to one or more funds in
any of the groups. Allocation changes between funds can be made at any time.
Resignation Prior to Retirement - If you resign prior to normal
retirement age, you may:
1. Make premium payments directly to Fidelity to continue your
retirement.
2. Leave the premiums in the fund for a future annuity or death benefit.
3. Begin your annuity income.
4. Request repurchase.
Retirement Benefits - At retirement, the Fidelity program offers many
choices. To obtain retirement information contact Fidelity directly at
1-800-343-0860.
|
ORP Enrollment Checklist
To participate in the Optional Retirement Plan, you
must complete and return the following forms to the Human Resources
Office within 31 days of your date of hire. These forms are
required even if you do not make a personal contribution to the program.
They indicate how you want to allocate the contribution made by
Extension, and they name your beneficiary.
Salary Reduction/Deduction Agreement
- EBEN-228 (PDF) - shows the
amount you wish to contribute, or it may show your election not to
make a personal contribution at this time.
Investment Election Agreement
- EBEN-229 (PDF) - indicates how
premiums will be allocated between TIAA-CREF and Fidelity
Investments.
If you elect TIAA-CREF, complete the Application for
TIAA and CREF Retirement Annuity Contracts. Do not send
the application form to TIAA-CREF; return the form directly to the
Human Resources Office.
If you elect Fidelity, complete the Fidelity
Investments 403(b)(7) Custodial Account Application and Beneficiary
Designation. Do not send the application form to
Fidelity; return the form directly to the Human Resources Office.
|
Return to
Group Benefits
|
