Optional Retirement Plan (ORP)

THE OPTIONAL RETIREMENT PLAN (ORP)

The Optional Retirement Plan (ORP) is an alternative retirement plan to TRSL and is provided by a private carrier for academic employees and unclassified staff members of the LSU System.

The ORP is a “defined contribution plan” to which you, as an employee, and the LSU System make contributions to be invested in a retirement annuity contract in your name.  ORP benefits are paid in the form of a lifetime income and, except for death benefits, single-sum payments (lump sum) are not permitted.

Administrator of the Plan:
The Teachers’ Retirement System of Louisiana administers the plan.  ORPs, which were first offered in 1990, are offered by:

  • ING Financial Services- For more information please visit www.ingretirementplans.com.
  • Teachers’ Insurance and Annuity Association – College Retirement Equity Fund (TIAA-CREF)- For more information please visit www.tiaa-cref.org.
  • Variable Annuity Life Insurance Company (VALIC)- For more information please visit www.valic.com/.

Directory of ORP representatives for each agency

Effective Date of Enrollment:
As a permanent employee you are automatically enrolled into the TRSL defined benefit plan.  If you wish to enroll in an ORP, you have 60 days from your date of hire to enroll retroactive to your original hire date.

If you wait past your first 60 days to enroll, your effective date will be delayed to the first of the following month and only your contributions will transfer over to your ORP carrier (not those made by the LSU System).  Once you have contributed to the TRSL defined benefit plan for greater than five years, you are not eligible to enroll into an Optional Retirement Plan.

IMPORTANT!  The decision to participate in the ORP is IRREVOCABLE.  You may not enroll in the ORP and then later change to the TRSL defined benefit plan.  However, you may elect to change ORP carriers in November of each year for an effective date of January 1st.

Contributions:
Your employee contribution is 8% of allowable earned compensation and is tax-sheltered.  TRSL charges you 0.1% to administer the funds.  The LSU System contributes 5.70% of your allowable earned compensation.  The contribution rate is subject to change each July 1st.
There are many investment options in the ORP.  Each option has varying degrees of financial risk and rates of return.  You may contact the ORP representatives for information concerning these options and the best profile for you.

Vesting:
Your ORP account is immediately vested.

Retirement Eligibility:
As an ORP participant, you are eligible to annuitize your ORP account at termination of employment.  In order to be eligible to continue group insurance policies after retirement, as an ORP retiree, you must meet the minimum retirement eligibility requirements under the provisions of TRSL.

Retirement Benefit Calculation:
Under the provisions of Louisiana law (Louisiana R.S. 11:923), you may receive your account only as a lifetime payout.  Cash withdrawals from your ORP account are not allowed except under limited provisions at retirement.  You may elect an initial benefit payment, not to exceed 36 months of your single-life annuity, when you elect to annuitize your account at retirement. If you elect to receive the initial benefit payment, all future payments will be reduced.  At retirement or termination of employment, the funds in your ORP account are also eligible for a lump-sum IRA rollover, subject to withdrawal provisions of your ORP carrier.

The ORP is a defined contribution retirement plan and the amount of the monthly income payable at retirement is directly related to the balance in your account, your age at retirement, and the income option you select.  When you are ready to retire, you will select from several annuity options (the options may differ slightly, depending on the company you have selected as your ORP carrier).

Disability Benefits:
Please note that ORP benefits are always based on the value of the ORP account.  Therefore, there is no guaranteed or defined disability benefit as a participant in the ORP.  However, in the event of a disability, an ORP participant may be able to continue participation in other insurance programs.

If you become disabled, you must have at least five years of service in an ORP to apply for continued participation in the insurance plans at retirement.  The LSU System will require a medical examination by an independent physician.  The physician must certify that you are mentally or physically incapacitated for further performance of the duties currently being performed, that the incapacity is likely to be total and permanent, and that you should be retired.

If approved, you may continue participation in the insurance plans in effect at the time of your retirement on the ORP.

Survivor Benefits:
Your survivor(s) may choose a lump-sum refund or elect to receive a monthly benefit based on the value of your account.

Termination of Employment before Retirement:
State law does not permit a lump-sum refund at termination of employment.  You retain ownership of your account and you may elect to receive a monthly benefit based on the value of your account.  Funds in your ORP account are eligible for a lump-sum IRA rollover, subject to withdrawal provisions of your ORP carrier.