About TSERS & ORP
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Through the Mandatory Retirement Program, UNC System employees are required to participate in either the Teachers’ and State Employees’ Retirement System (TSERS) or the Optional Retirement Program (ORP). Your irrevocable selection between them must be made within 30 days of your date of initial UNC employment. The plans are compared below and in the Faculty Retirement Planning Guide. For further details, see the UNC System Mandatory Retirement Decision Guide.
For either retirement plan, within 120 to 90 days prior to your retirement date, you should provide your chair or dean with written notice of your intent to retire and contact UNC Benefits at 919-962-3071 or benefits@unc.edu to schedule an appointment to complete required paperwork and receive instructions for the retirement process.
Comparison Guide
Use the table below to help guide your decision about which mandatory retirement option is best for you.
| Key Provision | TSERS | ORP |
|---|---|---|
| Who’s eligible? | Permanent employees working 30 hours or more per week | Permanent employees working 30 hours or more per week |
| Type of plan | Defined Benefit (DB) | Defined Contribution (DC) |
| Who contributes? How much? | You contribute 6% of pay on a pre-tax basis; UNC System contributes an amount as defined by the General Assembly to the general pension fund. | You contribute 6% of pay on a pre-tax basis; UNC System contributes 6.84%. |
| Who makes the investment decisions and assumes investment risk? | State Treasurer’s Division makes all the investment decisions and assumes investment risk. | You control and monitor your investment elections within a list approved by the UNC System for each carrier. You can choose from two carriers and allocate your and the UNC System’s contributions to one carrier. |
| What about vesting? | You must complete five years of membership service to be fully vested. | You are 100% vested in your contributions immediately; you are 100% vested in the UNC System’s contributions after five years of ORP participation. |
| How is the benefit determined? | The benefit formula is based on your years and months of Creditable Service, salary, actuarial formula, and the payment option you choose when you retire. | Your benefit is based on the contributions to the plan, investment performance, and the payment option you choose when you take a distribution from the plan. |
| What happens if I am not vested before I leave for another institution? | You must have five years of participation in this plan to be vested. | There is a provision for vesting if you leave UNC, go to another higher education institution, and within 12 months enroll in a like retirement plan. The UNC System determines vesting. |
Note: If you entered the ORP or were vested in TSERS to Aug. 12, 1989, your retirement benefits may be exempt from State of North Carolina taxes. Talk with your UNC Benefits Consultant if you are in this category.
About TSERS
A defined benefit plan determined by a set formula based on:
- Average Final Compensation (the average compensation of your highest 48 consecutive months).
- Years of Creditable Service.
- Retirement Factor (currently 1.82%).
Most forms are completed online, but there are two forms in particular that must be printed, signed in front of a Notary Public and uploaded back into ORBIT. Unfortunately, these forms come at different points in the retirement process, meaning two visits to a Notary Public.
Prior to your retirement, you will need to check with your department’s HR Consultant for future pay information and any sick leave balances you may have, if applicable. This form is sent back to the Retirement System via email by the UNC Benefits Office.
Do not earn sick leave.
Twelve- month faculty
As of your retirement date, 20 days of unused sick leave will convert to one month of Creditable Service. You also receive one more month of Creditable Service for any amount of unused sick leave that is less than 20 days but at least one hour. For example, if you retired with 24 days of unused sick leave, you would receive an additional two months of Creditable Service.
To check your Creditable Service, obtain an Estimate of Retirement Benefits or access annual benefits statements to determine your retirement readiness, visit the ORBIT website. If you have not used ORBIT before, you will need to register by clicking on the “Register” button on the login page.
About ORP
A defined contribution plan in which the your benefit determined by:
- Contributions you and UNC make to your ORP account.
- How well your investments perform over time.
- The value of your ORP account at the time you begin taking a distribution.
To access and monitor your ORP account information, visit your investment vendor’s website. You can also use its online tools and calculators to estimate your monthly benefit and identify potential income gaps. You should talk or meet regularly with a retirement representative from your retirement vendor, especially before you retire.
After you sign this form, the UNC Benefits Office signs it and sends it over to the UNC System Office. The System Office will verify your vesting and sign off on the form and then will update the vendor systems to reflect your vested status and notify you by email.
Your ORP campus retirement service representative can provide your projected retirement income and distribution options. You may work with UNC ORP campus representatives to begin your retirement distribution process.