Optional Retirement Plan (ORP)




What is ORP?

ORP stands for Optional Retirement Plan. The ORP is a Defined Contribution retirement plan available to JMU Faculty. The retirement benefit depends on the contributions provided to the plan and the investment performance of those contributions.

Who are the plan providers for the ORP?

JMU faculty have three provider options to choose from for their ORP account: DCP (Record-kept by ICMA-RC), Fidelity or TIAA

Can I change my ORP plan provider?

Yes

How do I change my ORP plan provider?

You can change your plan provider during an open enrollment period held annually in October. You cannot have your contributions go to more than one provider at the same time. However, if you wish to switch to another provider during the October open enrollment period, you can continue to maintain your ORP account with your previous provider or consolidate your account with the new provider. Changes will be effective for ORP contributions sent to the new provider on or after January 1 of the following year.

What is "vesting" and when am I vested in the ORP?

Vesting is the minimum amount of service needed to qualify for a future retirement benefit. Vesting under the ORP is immediate.

How does my retirement plan work?

ORP Plans 1 and 2 are defined contribution plans where vesting is immediate. The total balance in your account is available to you when you leave covered employment and are not re-employed by a VRS-participating employer. The benefit depends on the contributions provided to the plan and the investment performance of those contributions.

  • ORP Plan 1
    • You are covered under ORP Plan 1 if you have an ORP membership date before July 1, 2010, and maintain an account balance or an annuity. If you have a pre‐July 1, 2010, ORP account balance and moved to a defined benefit plan, you must have any combination of VRS creditable service and/or ORP participation that totals five years as of January 1, 2013, to be considered a Plan 1 member.
    • Employer-paid contributions equal to 10.4% of annual salary
  • ORP Plan 2
    • You are covered under ORP Plan 2 if you have an ORP membership date after July 1, 2010, and maintain an account balance or an annuity.
    • Employer and employee contributions:
      • Employer: amount equal to 8.5% of annual salary
      • Employee: 5% of annual salary (this amount cannot be increased or decreased)

When am I eligible to retire?

ORP Plan 1 ORP Plan 2
Normal retirement age 65 Normal Social Security retirement age
Earliest eligibility for Group Life Insurance in Retirement Age 55 with at least 5 years of creditable service or age 50 with at least 10 years of creditable service.

Age 60 with at least 5 years of creditable service or when age and service equal 90 (Example: Age 58 with 32 years of creditable service).

Earliest eligibility for the Health Insurance Credit
  • Age 50 with at least 15 years of service at retirement.
  • You must pay for health insurance premiums for individual coverage under qualifying plans equal or more than the credit amount to receive the full credit.
  • Age 60 with at least 15 years of creditable service at retirement.
  • You must pay for health insurance premiums for individual coverage under qualifying plans equal or more than the credit amount to receive the full credit.
Eligibility for retiree health insurance
  • Meet the age and service requirements that would be needed to receive an immediate retirement benefit under the non-ORP VRS plan for which they would have been eligible had they not elected the ORP.
  • You are a terminating state employee who participates in one of the qualified Optional Retirement Plans, and
  • Your last employer before termination was the Commonwealth of Virginia; and,
  • You were eligible for (even if you were not enrolled) coverage in the State Employee Health Benefits Program for active employees at the time of your termination

What if I leave employment before I am eligible?

You may choose to leave your funds in your ORP account or choose to have the funds rolled over to your new employer plan, or take a distribution. Distributions from your ORP account are paid directly to you, a survivor, or your beneficiary and are subject to federal and state income taxes. The IRS may impose an additional 10% tax penalty if you take a distribution before you reach age 59 ½. If you leave your ORP covered position after reaching age 55 or you begin an annuity or a periodic distribution over your lifetime, this penalty will be waived. You can contact a tax advisor or the IRS at 1-800-829-1040 for additional information.

What if I transfer to another college or university?

If you transfer from your current ORPHE position to a faculty position at another Virginia public institution of higher education, you will remain in ORPHE or be eligible to elect ORPHE, the applicable VRS defined benefit plan, or the Hybrid Retirement Plan, depending on whether or not you have a bona fide break in service between positions.

What benefits do I get when I retire?

Retirement benefits may include:

  • group life insurance coverage
  • retiree health insurance
  • the health insurance credit (retirees with 15+ years of service at retirement)

How do I apply for retirement?

Schedule to meet with the Retirement Specialist at least 90 days (or more) prior to the date you wish to retire to allow time to complete all necessary paperwork.

How do I update/change my beneficiary?

You can update/change your beneficiary by logging into your online ORP account with your provider (TIAA, Fidelity or DCP).

What if I have more questions?

Contact Tiffany French, Retirement Specialist

Phone: 540-568-4741

Email: frenchtm@jmu.edu

Schedule a meeting

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