TRS vs. ORP What HR Liaisons Should Know
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Follow us on: TRS vs. ORP What HR Liaisons Should Know June 27, 2013
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TRS vs. ORP What HR Liaisons Should Know. June 27, 2013. Overview. Basics of Teachers Retirement System (TRS) vs. Optional Retirement Program (ORP) ORP Notification Process ORP Election/Enrollment Process HR Liaison – Your Role TRS Legislative Update. TRS Basics. - PowerPoint PPT Presentation
Transcript of TRS vs. ORP What HR Liaisons Should Know
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TRS vs. ORPWhat HR Liaisons Should Know
June 27, 2013
Human ResourcesJune 27, 2013 | Page 2
Basics of Teachers Retirement System (TRS) vs. Optional Retirement Program (ORP)
ORP Notification Process ORP Election/Enrollment Process HR Liaison – Your Role TRS Legislative Update
Overview
Human ResourcesJune 27, 2013 | Page 3
TRS eligibility is working 50% for 4.5 months during the fiscal year (FY) Excludes Student Titles
Automatic enrollment on date of hire/eligibility Current employee contribution is 6.4% Vested at 5 years TRS service credit Service credit earned for 90 working days
each FY
TRS Basics
Human ResourcesJune 27, 2013 | Page 4
Defined benefit plan Receive monthly annuity upon reaching
retirement criteria Retirement criteria contingent on various
factors A withdrawn account ONLY receives employee
contributions and NOT the employer contributions.
TRS Basics Continued
Human ResourcesJune 27, 2013 | Page 5
Requires ORP eligible title Requires 100% effort for at least 4.5 months One-time irrevocable decision Vested at 1 year, 1 day from ORP participation
date (not hire or eligibility date) Requires enrollment forms to elect ORP in lieu
of TRS Defined contribution plan
ORP Basics
Human ResourcesJune 27, 2013 | Page 6
Benefits Services receives weekly report of potential ORP eligibility based on employment data in BPP after EPA completes
Benefits Services verifies ORP eligibility Benefit Services sends ORP packet to eligible
employees
ORP Notification Process
Human ResourcesJune 27, 2013 | Page 7
Employee choosing to elect ORP must: select ORP vendor and complete the vendor
application forms complete forms in the ORP packet including the
TRS 28 Notice of Election to Participate in Optional Retirement Program
Submit completed forms to Payroll Services Must be completed within 90-day election window
ORP Election/Enrollment Process
Human ResourcesJune 27, 2013 | Page 8
Refer employees to Benefit Services Process EPA documents timely
Impacts enrollment window Impacts payroll deductions
Work with Benefits Services for special situations or early notifications
Enter accurate appointment term especially during summer
HR Liaison – Your Role
Human ResourcesJune 27, 2013 | Page 9
TRS must address unfunded liability Ordered to conduct a comprehensive study Evaluated many options including:
Increase minimum age from 60 to 62 Increase average salaries from 5 to 7 Change benefit calculator from 2.3% to 2.0% Change member contribution rate
TRS Legislation
Human ResourcesJune 27, 2013 | Page 10
SB1458 and HB1884 passed during legislative session
Effective September 1, 2014 Changes impact several key areas Changes to eligibility criteria effect those who
do not have 5 years with TRS as of 9/1/2014 Does not impact the retirement eligibility rules
for Texas A&M University System retiree status
TRS Legislation Passed
Human ResourcesJune 27, 2013 | Page 11
Decreases the interest rate from 5% to 2% Increases the minimum age for full, normal age
(unreduced annuity) retirement from 60 to 62 for “non-grandfathered”
Adjusts the employee contribution rate in phases: Remains 6.4% for FY14 6.7% for FY15 7.2% for FY16 7.7% for FY17
TRS Legislation – Key Changes
Human ResourcesJune 27, 2013 | Page 12
TRS Legislation – Key Changes
6.4% 6.7% 7.2% 7.7%
$2,560 $2,680 $2,880 $3,080
Amount of annual employee TRS member contribution based on annual salary of $40,000.00.
FY14 FY15 FY16 FY17
Human ResourcesJune 27, 2013 | Page 13
Timely and accurate processing of EPA is critical Strict timelines apply and timing of the ORP
election has consequences for the employee TRS Legislative changes passed recently
Effective September 1, 2014 Grandfathered with 5 years of TRS service credit
HR Liaisons play an important role in the process; please help HR by forwarding information found in HR Liaison Network News
Final Thoughts
Human ResourcesJune 27, 2013 | Page 14
Judy KurtzRetirement [email protected]
Sarah TobolaEmployee Benefits [email protected]
Resources: http://employees.tamu.edu/employees/benefits/
How may we help you?
(979) 845-4141 [email protected] HTTP://EMPLOYEES.TAMU.EDU
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