TRS and ORP Retirement Options

Please read the following information carefully as retirement elections are irrevocable for the duration of employment with the University System of GA.
 
Regular (not temporary) employees of the University System of Georgia who work 20 hours a week (or more) are required to participate in a 401(a) retirement plan.  Non-exempt (hourly/biweekly paid) employees who meet retirement plan eligibility are required to contribute to Teachers Retirement System of Georgia (TRS).   Exempt (salaried/monthly paid) employees can choose to participate in TRS or enroll for the Optional Retirement Plan (ORP). Eligible employees who do not make an active election to ORP by completing the enrollment process in Retirement@Work in OneUSG within 60 days of becoming eligible will instead be defaulted to enrollment in TRS.  
 
A summary of each plan is listed below.  Please note that retirement eligibility definitions as described here are for retirement plan payment purposes only and may differ from retirement eligibility definitions for purposes of having benefits beyond employment (medical, dental, vision, life insurance, campus privileges, etc.).  Employee and employer contribution rates are determined annually at the state level.  A 401(a) plan comparison chart has also been provided below.
 
Most employees who begin benefited employment after age 60 may elect to decline participation.  Employees who enter into a retirement eligible position while receiving a pension benefit from TRS (earned through a non-University System of GA employer) must participate in the ORP.  Employees who enter a retirement eligible position while actively contributing to TRS or ORP with another employer should contact HR as soon as possible.
 

  • TRS is a 401(a) defined benefit plan.  In this type of plan, the benefit payable upon reaching retirement eligibility is “predefined” based on a designated formula.  For more specific details on the plan elements below, please visit www.trsga.com.

    • Contributions: Participants make mandatory pre-tax contributions to the plan and KSU sends an additional contribution.  Participants’ contributions are designated to their personal TRS account and earn the specified interest rate (generally 4%).  KSU contributions are used to fund the overall program and are not attached to a specific individual’s account.  Participants do not make investment decisions nor do they assume direct risks associated with investment decisions.  Money contributed by the participant is 100% secure. 

    • Benefits in retirement: Employees who become vested in the plan are entitled to benefit payments upon obtaining retirement eligibility.  The predefined benefit formula is calculated using both the number of years of creditable service and the highest salary during those years of service.  For example: an employee with 15 years of service whose high salary averaged $40,000 over 2 years would be entitled to 30% of that salary in retirement for a pension payment of $12,000 annually.  Pension payments continue for the duration of the retiree’s life and are generally eligible for annual cost of living adjustments (COLAs).

    • Vesting: To be entitled to receive a pension benefit in retirement, participants must obtain 90 months of creditable service.  Service credit can be earned at a maximum rate of 9 months per fiscal year (July 1 – June 30).  Creditable service is combined with all TRS participating employers.

    • Retirement eligibility: Participants can activate pension payments upon obtaining one of the following scenarios:
        • 10 years of creditable service AND age 60
        • 30 years of creditable service at any age
        • 25 years of creditable service at any age (early retirement penalties will apply)

    • Creditable service: Some participants may be eligible to purchase additional creditable service for time served in the military, working for public university in another state, employment with another state entity, or previously withdrawn TRS service.  Unused sick leave may also contribute towards increasing creditable service.

    • Withdrawing contributions: Contributions cannot be withdrawn at any time during active employment with the University System of GA.  If a participant leaves USG employment before becoming vested:
        • Contributions can be left with TRS.  The account will be considered active for four years and it will continue to accrue interest during that time.  If the participant ever begins contributing again with any TRS participating employer, service credit remains intact and the vesting calendar begins where it previously stopped.
        • Contributions and the interest that has accrued can be rolled over into another qualified retirement plan or IRA without taxes or penalties.  The participant forfeits any creditable service and would have to re-establish that service if they ever became a TRS participant again in the future.
        • A lump-sum withdrawal of contributions and interest may be requested but taxes and penalties will apply.  The participant forfeits any creditable service and would have to re-establish that service if they ever became a TRS participant again in the future.
        • Contributions may only be withdrawn or rolled over if the participant has separated from all employment with the University System of GA.

    For more information on this plan, visit www.trsga.com or contact TRS customer service at 404-352-6500.

  • The ORP is a 401(a) defined contribution plan.  In this type of plan, the benefit payable upon reaching retirement eligibility is based on your personal investment decisions such as which vendor(s) is chosen, which investment vehicles are selected, and their performance over time. More specific details on the plan elements are listed below.

    • Contributions: Participants make mandatory pre-tax contributions to the plan and KSU sends an additional contribution.  Participants make investment decisions and assume all risk associated with investment decisions.  Contributions may be divided among multiple vendors (at a minimum of 10% to any one) or sent to a single vendor.  Vendor options include Fidelity, TIAA, and Valic.  Vendor allocations can be changed quarterly with proper notice to HR.  Investment options within each vendor can generally be changed daily by accessing the account directly with the vendor.  See the ORP vendor table for more information.

    • Benefits in retirement: Upon obtaining retirement age, benefit payment options are coordinated directly with the retirement vendor and are based on the performance of the investment of contributions from both the employee and KSU.  Length of benefit payment duration is dependent upon account value and distribution options selected.

    • Vesting: Employees are immediately vested in all funds contributed, including those made by KSU.  There is no minimum years of service requirement.

    • Retirement eligibility: Once separated from employment, eligibility to begin receiving retirement benefits are age based on current 401(a) tax code (generally age 59½ at the earliest with a minimum distribution age of 70).

    • Creditable service: ORP benefits are not associated with service; however, eligibility to have benefits in retirement (medical, dental, campus privileges, etc.) does include a minimum number of service years.

    • Withdrawing contributions: Contributions cannot be withdrawn at any time during active employment with the University System of GA.  If a participant leaves USG employment:
        • Assets can be left with the selected vendor(s) and participants continue to manage their account investment allocations beyond employment.  Benefit payments can be activated upon obtaining the appropriate retirement age.
        • Assets can be rolled over into another qualified retirement plan or IRA without taxes or penalties.  Rollover amounts are based on account values at the time of transfer.
        • Withdrawal of assets may be requested but taxes and penalties will apply. 
        • Withdrawal amounts are based on account values at the time of distribution.

    • Make the most of your retirement plan: the USG ORP Enrollment Guide

    For more information on this plan, view the plan document summary.

  • 401(A) COMPARISON CHART TRS - DEFINED BENEFIT ORP - DEFINED CONTRIBUTION
    Vesting 10 yrs of creditable service (any TRS participating employer) Not service based; immediate
    Length of benefit payment Life of the retiree at a minimum; survivor benefits available if elected at time of retirement Based on account value and distribution elections 
    Benefit payment in retirement Formula: Highest 2 yrs of salary x 2% x yrs of service (ex: 40K avg salary w/ 15 yrs of service = $12K annual retirement benefit) Based on investment account value
    Disability benefits Available after 9½ years of creditable service Not applicable
    Responsibility for management of funds/investment options Employee does not direct investments funds. Contributions are secure & earn interest. Benefits in retirement are predefined & not subject to market fluctuations. Employee chooses the vendor(s) and investment option(s)
    Contribution rate as of 7/1/2024 Employee: 6.00% / Employer: 20.78% Employee: 6.0% / Employer: 9.24%

 

Georgia Defined Contribution Plan

Temporary and part-time (under 20 hours) KSU employees not eligible to participate in the Teachers Retirement System (TRS) or the Optional Retirement Plan (ORP) are required to participate in the Georgia Defined Contribution Plan. This plan was created by the 1992 Georgia Law, Act 996 and became effective on July 1, 1992.

KSU pays benefits to Medicare but does not pay into Social Security on behalf of employees enrolled in GDCP.   This means that temporary and part-time (under 20 hours) employment is recognized for purposes of Medicare but not for Social Security benefits.   More information regarding the requirements of the plan is available through the ERS website at www.ers.ga.gov.
 
*CONTRIBUTION RATE
Members contribute 7.5% of gross salary to the plan through mandatory payroll deductions. This is deposited in each member's account.
 
*INTEREST AND INVESTMENT
The rate of interest is determined by the Board of Trustees based upon the return on investments minus administrative expenses. There could be times when no interest is credited due to low return on investments

*from ERS website, Georgia Defined Contribution Plan Brochure

  • By providing the appropriate documentation, the following temporary employees may be exempt from participating in the Georgia Defined Plan:

    1. Those currently receiving a retirement income benefit from Teachers Retirement System of Georgia (TRS) or the Employees' Retirement System of Georgia (ERS). A TRS/ERS benefits payment statement from the current month must be provided upon employment.
    2. Employees currently contributing to a TRS or ERS through active payroll deduction at another employer. A payroll check advice from the current month showing an active TRS/ERS deduction must be provided upon employment.
    3. Employees working for an institution who are regularly enrolled and attending classes at that institution and who meet IRS student exclusion criteria.
    4. Employees qualified as bona fide independent contractors.

  • A contributing member who terminates employment and/or meets the criteria noted under Refund Policy below may apply for a refund of accumulated contributions and interest. To apply for a refund, login to your ERS online account and select Request a Refund to initiate the refund process. If you do not have an online account, create an ERS online account and then click the Register button.

    Please note: It may take up to 8 weeks for your refund to be processed. You may call ERS directly to check on the status of your refund at 404-350-6300.

  • ERS will process your GDCP Application for Refund under the following circumstances:
    • You resign;
    • Your position ends;
    • You move into a regular position eligible for TRS or ORP participation; or
    • You have a more than a 30 day break in service. 
    KSU will report your termination or change in status to ERS AFTER you receive your final paycheck with the GDCP deduction.

    If you are employed in a position that is sporadic in nature, your employment with KSU will be considered active as long as you continue to be available for assignments or intermittent work. ERS will not process and KSU will not authorize or request GDCP Applications for Refund for active employees.
  • Two Northside 75, Suite 300
    Atlanta, GA 30318-7701
    Customer Service: 404-350-6300

403(b) and 457(b) Voluntary Retirement Savings Plans

KSU offers a 403(b) and 457(b) plan as voluntary retirement savings plans to supplement your TRS or ORP enrollment. These plans are available to part-time and full-time employees. You may elect to contribute pre-tax contributions to the 403(b) or 457(b) plans or after-tax Roth contributions to the 403(b) plan.

  • 2024 Maximum Contribution Limit: $23,000
  • Age 50 Catch-up: additional $7,500
    • Reduces current income tax liability;
    • Contributions and earnings grow tax-free;
    • If you think your tax liability is more now than what you think it will be in the future or upon retirement, a pre-tax savings plan may be more advantageous
    • Since contributions are made after-tax, eligible retirement withdrawals are tax-free;
    • Earnings grow tax-free;
    • You may want to invest in this plan if you think your tax liability will be higher in the future than it is today or if you have a long time to invest until your retirement

  • 403(b) plans allow more withdrawal options if you need to get money out prior to separation of service; penalties apply if you are under age 59 ½ except for loan withdrawals

    457(b) plans allow more withdrawal options after separation from service; penalties do not apply to withdrawals after separation of service

    Investment options are similar in both plans: 

    403(b) and 457(b) Plan Comparison Chart

    FEATURES 403(B) PLAN 457(B) PLAN ADDITIONAL COMMENTS
    Eligibility & Participation All exempt and non-exempt employees with the exception of student workers may enroll at anytime during employment All exempt and non-exempt employees with the exception of student workers may enroll at anytime during employment  
    Fees Fees differ by vendor and by fund Fees differ by vendor and by fund Research and talk to Vendor(s) to make sure you understand all fees before investing in funds
    Taxability Account is taxable at your current taxable rate when distributed Account is taxable at your current taxable rate when distributed  
    Employee Contributions Up to $23,000 in 2024 Up to $23,000 in 2024 Can contribute up to maximum in both plans, or $37,000 total
    Age 50 Catch-up Additional $7,500 in contributions allowed for those ages 50 or older Additional $7,500 contributions allowed for those ages 50 or older Employees are eligible for the age-50 catch-up in both plans
    Investment Changes Each vendor determines how often changes are allowed and what fees may apply Each vendor determines how often changes are allowed and what fees may apply Inquire with vendor about moving funds between investment options and between vendors
    Account Withdrawal Upon separation of employment, age 59 ½, early retirement at age 55 or older, disability, death, or qualified reservist distribution. Hardship and loan withdrawals available Upon severance from employment or retirement. Hardship withdrawals allowed  
    Early Withdrawal Penalty 10% penalty on withdrawals if you are under age 59 ½. (Exception if you separate from service at age 55 and retire, or become disabled, or die) None  
    Rollovers Out Permitted to IRA, 401(a), 401(k), 457(b) public and other 403(b) plans Same as 403(b) – then will be subject to new plan rules (10% penalty on early withdrawals)  
    Loans Up to two loans allowed on your account at anytime; maximum allowed is 50% or your account balance or $50,000 Not Available  

    This chart is for summary purposes only. For more information, contact the Internal Revenue Service at 1-800-829-4477 or www.irs.gov. For advice or further information regarding retirement planning, contact a financial advisor or tax expert. Make sure you carefully research each vendor and investment options before enrolling in a voluntary retirement plan.

  • Log-in to the retirement work portal through OneUSG Connect to enroll.