What is the difference between ORP and the Florida Retirement System (FRS)?_
The ORP is a defined contribution plan sponsored by the State of Florida. Your university will contribute a percentage of your earnings (based on the amount established by Florida State Law) each pay period to a variable tax-deferred annuity issued by a chosen provider. You may also contribute a percentage of your salary on a tax-deferred basis – you are 100% vested in your employee contributions and any earnings on those contributions. Regardless of your length of service, you will be eligible to receive a lifetime monthly annuity income at retirement that will be based on the total amount of funds contributed, and the earnings or losses of those contributions.
FRS is a defined benefit pension plan sponsored by the State of Florida. Upon completion of 10 years of creditable service, you are vested in the plan and will be eligible to receive a lifetime monthly income from the plan when you retire. The University pays the full cost of the plan – no employee contributions are currently allowed. The amount you receive will be based on your age, your years of creditable service, the value of each year of service, and your average final compensation when you retire.
Important information about annuities
Tax deferral is provided by the plan and an annuity does not provide any additional tax deferral benefit. Annuities may be subject to additional fees and expenses to which other tax-qualified plan funding vehicles may not be subject. However, annuities provide features and benefits such as lifetime income payments and death benefits which may be valuable to you.
When do I have to decide between the ORP and the FRS?+
You will have 90 days from the start of your employment to choose an ORP provider company or elect membership in FRS. Any employee who is eligible to participate in the ORP who fails to execute an annuity contract with one of the approved companies and to notify the division in writing within those 90 days shall be deemed to have elected membership in FRS.
Note: it is important to know that the retirement plan choice you make may be irrevocable. For example, if you elect to remain in ORP or you elect FRS, you must remain in that plan as long as you remain employed with the same institution and continue to meet the eligibility requirement.
Can I switch from FRS to ORP?+
If through other employment, you have already established membership in FRS, you may elect to enroll in ORP. If you are already vested in FRS and elect to participate in ORP, you will not lose any FRS benefits you have accrued to date; however, once you join ORP you will no longer have FRS disability coverage. You will also not be eligible for the Health Insurance Subsidy (HIS) benefits of FRS for any period of time that you participate in the ORP.
What are the major benefits of ORP?+
Most professionals entering public higher education choose ORP because of the following benefits:
- Various investment options – you have access to multiple investment choices through the variable annuity contract, allowing you to build a retirement portfolio to meet your needs.
You should consider the investment objectives, risks, charges and expenses of the variable product and its underlying fund options carefully before investing. The prospectuses/prospectus summaries containing this and other information can be obtained by contacting your local representative. Please read the information carefully before investing.
- Systematic retirement plan – your voluntary contributions will be deducted from your salary on a regular basis. Note: this type of plan does not assure a profit and does not protect against loss in declining markets.
- Tax-deferred investing – under the Internal Revenue Code, with the ORP you are taxed only when you begin taking distributions, generally at retirement at which time you may be in a lower tax bracket.
- Immediate vesting – you are always 100% vested in your contributions to the program, as well as any additional earnings on those contributions
- Portability of your account
Are loans available from ORP?+
Loans are not available with the ORP. Please contact your representative for more information.
Can I withdraw funds from ORP?+
As a participant of the ORP, you are eligible for full and partial cash withdrawals of your vested account balance upon termination of employment or retirement. Participants may also receive benefits in the form of an annuity of cash distributions. Any withdrawals prior to age 59½ will be subject to a 10% IRS premature distribution penalty tax, unless an exception applies.
What happens if I choose Voya for my ORP?+
When you enroll in the ORP, your employer contributes a certain percentage of your total compensation (based on Florida State law) to the program - these monthly contributions are the annuity “purchase payments”. When you choose Voya as your provider, your contributions are forwarded to Voya Retirement Insurance and Annuity Company, which issues the ORP variable annuity contract.
How are my contributions invested?+
The contract offers a full range of investment options from some of the nation’s most well-known money managers, with choices that span the risk/reward spectrum. You choose which investment options best suit your needs, and decide what percentage of your account is allocated to each option.
If you choose to make additional voluntary contributions, you will be immediately 100% vested in those contributions and any earnings on those contributions. You contribute a percentage of your earnings on a tax-deferred basis (subject to Internal Revenue Code contribution limits) and you pay no current tax on those contributions or the earnings until you begin taking distributions.
What happens when I retire?+
When you are ready to retire, you may select from several payout options, including:
- Lump sum withdrawal (total employer contributions and earnings on those contributions must not exceed $5,000 for lump sum withdrawal)
- Series of partial withdrawals
- Systematic payout options specifying a percentage, a dollar amount, or a time period.
- Payments guaranteed for your lifetime or as long as you and your beneficiary are alive. Guarantees are based on the claims-paying ability of Voya Life Insurance and Annuity Company.
What if I die before I retire?+
If you die before you retire, your beneficiary may elect to receive the value of your account or select one of several settlement options.
Are there any transaction fees if I make changes using the Internet? What if I use the toll-free telephone line? +
No. There are no transaction fees, regardless of whether you make changes through the Internet or the automated voice response unit, or by speaking with a live customer service associate.
How quickly will my transaction requests be processed? +
Transaction requests received at our designated location in good order before the close of the New York Stock Exchange (normally 4:00 p.m. Eastern Time, Monday through Friday) will be processed at the next determined price. Processed transaction requests are reflected in your account on the next business day. Transaction requests received in good order after the close of the New York Stock Exchange will be processed as of the close of business on the next business day. Transaction requests are processed within these timeframes regardless of whether you use the Internet, automated voice response system or talk with a customer service associate.
When will I receive my account statements? +
You will receive quarterly statements shortly after the close of each calendar quarter.