Question: What is the Louisiana Optional Retirement Plan (ORP)?
Answer: The Louisiana ORP is a defined contribution plan under Internal Revenue Code (IRC) section 401(a). It is offered to certain employees of Louisiana's public institutions of higher education as an alternative to the Teachers' Retirement System of Louisiana (TRSL). Both employee and employer contribute an amount to a variable annuity based on a percentage of the employee's salary -- those contributions are allocated among investment options chosen by the employee. The account value is based on the contributions and any earnings on those contributions.
Question: What are the major benefits to eligible employees who choose the Louisiana ORP?
Answer: A major benefit of the ORP is its flexibility. ORP benefits are portable — you may take them with you if you change employers and still enjoy tax favorable benefits until you actually retire. ORP also offers you the flexibility of controlling the investment of your own retirement account, thereby tailoring the program to your specific needs.
Question: How much is contributed to my ORP account?
Answer: The member's contribution is 8%, less 0.05% administrative fee to TRSL. The employer contribution that will be transferred to individual ORP participant accounts is determined by employer type. To find out more about contribution rates, access the Teachers' Retirement System of Louisiana website .
Question: What happens to my contributions?
Answer: Your employer remits contributions to TRSL. TRSL then transfers the appropriate employee and employer contributions to AIG Retirement Services for investment in your choice of options.
Question: Can I withdraw funds from the ORP?
Answer: Under the provisions of Louisiana law, you may receive your account value as a lifetime payout. In addition, ORP account balances may be rolled over to another eligible retirement plan at any time after termination of employment. Cash withdrawals from your ORP account are not allowed.
Question: How long can I leave my money in ORP after I stop working?
Answer: You can leave money in your ORP until age 70½.
Question: How does AIG Retirement Services select and monitor the offered investment options?
Answer: Individual funds are monitored on a quarterly basis and undergo due diligence using a four factor analysis approach. This approach allows our in-house funds analysts to select, monitor and rank funds that maintain a balance between good and consistent performance, have acceptable expenses, consistent management style and are in line with the prospectus objectives. Funds are monitored using a combination of peer group analysis, Morningstar, and the AIG Retirement Services proprietary ranking system that looks for consistently performing funds in each asset class.
Question: What happens if AIG Retirement Services identifies a poor performing investment fund?
Answer: If AIG Retirement Services identifies a fund to be replaced due to poor performance or if other considerations so warrant, the participant will receive a letter from AIG Retirement Services informing them that the poor performing fund is being replaced. The employee’s balance in that poor performing fund will be transferred or mapped accordingly to the new fund. After the fund exchange has occurred, participants will no longer be allowed to contribute to the poor performing fund as it will be removed as a fund option.
Question: How do I withdraw my contributions from ORP?
Answer: Contribution funds from your ORP must be transferred to a qualified fund or an IRA.
To start the withdrawal process:
Contact your financial advisor at the District Office.
A term date is then requested from TRSL.
Complete the appropriate paperwork and submit to the home office.