Retirement Plans
All eligible employees and faculty are required to participate in a retirement program after a 90-day waiting period. The Teacher Retirement System of Texas (TRS) is available to employees. Faculty and certain administrators may elect to participate in either TRS or the Optional Retirement Program (ORP).
To be eligible to participate in TRS, employees must be regular full-time or part-time (i.e. work a minimum of 20 hours per week for 4 ½ months, or if faculty, work a minimum of 4 ½ months or one semester of more than 4 months). Full-time status is required in order to participate in ORP. The following is a summary of the features of each plan:
Teacher Retirement System:
This is a defined benefit type plan. Retirement annuities are determined by a formula that considers the employees age, the average of the highest three annual salaries, and total years of creditable service. In this plan, the State assumes the investment risks and manages the retirement fund. Employees are vested (i.e. have rights to retirement benefits) after 5 years of service. TRS provides death and disability benefits to participants as well. Employees contribute 6.4% and the State contributes 6.58% into the retirement fund each month. Employee contributions are tax-sheltered and deposits earn 5%. If employees leave employment, employees can take their contributions and interest earnings, or, if vested, employees can leave their contributions until retirement age. Normal retirement age is 65 with 5 years of service, or a combination of years of service and age which total 80. Early retirement may be taken at age 55 with 5 years of service (with reduced benefits). TRS benefit information can be found on the TRS Web site. Contribution rates are not guaranteed and subject to legislative change.
Optional Retirement Program:
This is a defined contribution type of plan. Retirement annuities are determined by the actual dollar amount in the employee's retirement account. ORP is an individualized plan in which participants select investment companies from an approved list and then choose fixed/variable investment products. Employees are vested (i.e. have rights to retirement benefits) after one year and one day of service. ORP does not provide death or disability benefits. Participants contribute 6.65% and the State contributes 6.58% into these retirement accounts. Employee contributions are tax-sheltered. ORP is a portable plan, that employees can take with them should they leave
employment with ASU.
Supplemental Retirement Plans
Supplemental Retirement Plans are voluntary, long-term savings programs designed to supplement employees' retirement income. Full-time and part-time employees and faculty are eligible to participate. Pre-tax dollars are used to invest in annuities, mutual funds, etc. from a list of companies approved by the State. Enrollment is permitted at any time. Employees may also stop, increase, or decrease contributions, or change vendors/products at any time. Employees may elect to participate in the following programs:
Deferred Compensation Plan:
This is an IRS Section 457 approved program into which employees may defer pre-tax dollars, thereby lowering their gross salary for tax purposes. Up to $15,500 may be deferred into this plan annually. Money withheld is available only as a result of retirement, termination, disability, financial hardship, or death.
Tax-Sheltered Annuity Plan:
This is an IRS Section 403 (b) program, which is similar to the Deferred Compensation Program, but is more portable and more flexible with respect to transfer of funds. Employees may defer up to $15,500 each year.