UNC Optional Retirement Program
The University of North Carolina Optional Retirement Program (ORP) is an option or alternative to the North Carolina Teachers' and State Employees' Retirement System (TSERS).
Eligible employees have the option to elect either TSERS or the ORP. The ORP is a defined contribution plan as qualified under Section 401(a) and 403(a) of the Internal Revenue Code. The ORP provides participants with investment flexibility, portability of accumulated account balances, and a variety of distribution options.
Eligibility
Faculty, with the rank of instructor or above, who are employed by the University of North Carolina; field faculty of the Cooperative Agriculture Extension Service; the President and senior academic and administrative officers of the University of North Carolina who are appointed by the Board of Governors on recommendation of the President pursuant to G.S. 116-11(4), 116-11(5), and 116-14 or who are appointed by the Board of Trustees of a constituent institution upon the recommendation by the Chancellor pursuant to G.S. 116-40.22(b); and non-faculty instructional and research staff who are exempt from the State Personnel Act are eligible to participate in the ORP if they are permanently employed at least three-fourths time for nine or more months per year on a recurring basis. If you are not sure if you are eligible, contact your campus benefits office for clarification.
Enrollment
If you are eligible for ORP, you have 60 days from commencing employment at the University to elect to enroll in the ORP. During this 60 day period, you will need to select an ORP carrier and complete the required enrollment forms.
Please note: Failure to make an election will result in automatic membership in TSERS. This is irrevocable.
To enroll with Lincoln Financial Group, click Enrollment, or contact your Lincoln professional.
Contributions
Employee and Employer contribution percentages are established by the General Assembly. Currently, participants contribute a mandatory 6% of pay and the State contributes an amount equal to 6.84% of pay.
Vesting
Participants are immediately 100% vested in the value of their employee contributions.
The value of your employer contributions is 100% vested after five years of participation in the ORP.
If you terminate employment with less than five years of ORP participation, you will become 100% vested in the ORP employer contribution provided that you meet all of the following requirements:
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Your new employer is a higher education institution that sponsor a substantially similar program,
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The successor plan offers a like retirement plan that is underwritten by one of the four carriers which provide services to the ORP, and
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You begin employment 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
N.C. Teachers' and State Employees' Retirement System (TSERS)
TSERS is a defined benefit retirement plan governed by Internal Revenue Code Section 401(a). If you are not eligible for ORP then you are automatically enrolled into the TSERS plan when you are hired. Since this is a defined benefit plan, the benefit amount is based on a formula that takes into consideration your average final compensation (the average of your 4 highest-paid years in a row), the number of years and months of creditable service, and your age at retirement. This plan also has a 5year vesting schedule. The Employee contributes 6% of pay into the plan and the Employer contribution is based on actuarial calculations. When you retire you may choose among several monthly payment options based on your personal circumstances. Your campus benefits office and the State Retirement System can help you calculate your retirement benefit amount.
ORP vs. TSERS
There are significant differences between the ORP and TSERS. Please contact your campus benefits office (or access your campus benefits web site) for a comparison booklet. You can also contact a Lincoln professional to help you understand the differences.
Voluntary Retirement Savings Plans
In addition to the ORP, each campus offers a voluntary 403(b) retirement savings program. The 403(b) program allows you to defer additional income for retirement, through pre-tax contributions. Note, though, that taxes will be due upon withdrawal at ordinary income rates. This plan is separate from the ORP and is intended to supplement your retirement planning.
Eligibility
Generally, eligibility may be extended to any individual who performs services for the employer. Please contact your Benefits office or Lincoln professional to confirm eligibility.
Enrollment
Participants are required to complete the necessary enrollment forms. To obtain the enrollment materials, contact your Benefits Office.
To enroll with Lincoln Financial Group, contact your Lincoln professional.
Contributions
Generally, limited to $15,500 in 2007. Participants may also be eligible to make additional catch-up contributions. Please contact your Lincoln professional to see if your are eligible to make an additional elective deferral.
The program does not include an employer contribution.
Vesting
Participants are immediately 100% vested in the value of their contributions under the voluntary 403(b) Plan.
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