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Procedures Manual

16.0: Optional Retirement Plan (ORP)

Last Revised: Feb 16, 2016


Purpose

The Optional Retirement Plan (ORP) was established July 1, 1990, to provide retirement and death benefits to eligible participants while affording the maximum portability of these benefits to the participants. The ORP is a defined contribution plan and an alternative retirement plan for eligible employees who may make an irrevocable election to participate in the ORP rather than the Teachers’ Retirement System of Louisiana (TRSL).

Three carriers have been selected to manage ORP accounts. They are Voya Financial (formerly ING Life Insurance and Annuity Company); Teachers Insurance and Annuity Association of America (TIAA); and the Variable Annuity Life Insurance Company (VALIC). Contracts with these providers expire June 30, 2020. The “Optional Retirement Plan” brochure is available from TRSL explaining the provisions of the ORP.

Links to Louisiana ORP Carriers Websites Electronic reporting and record layout are provided in Index 18.2.
Sections

Action to be Taken
  1. Determining Eligibility
  2. Enrolling Employees into the ORP
  3. Reporting ORP Contributions
  4. Remitting ORP Contributions
  5. Correcting Reporting Errors
  6. Recovering Overpayments for
    Terminated Employees or Where Rates
    are Different
  7. Changing ORP Carrier
  8. Terminating ORP Membership
  9. Reporting Salary for Employees
    on Sabbatical Leave 
  10. Member Change of Address Authorization and Member Name Change Request
  11. Rollover Requests
Related Forms

Application for Optional Retirement Plan or Change of Carrier (Form 16)

ORP Member Change of Address Authorization (Form 16AC)

ORP Member Name Change Request (Form 16NC)

Action to be Taken

  1. Determining Eligibility
    • For institutions of higher education, the following employees may make an irrevocable election to participate in the ORP:
      1. Unclassified employees who are eligible for membership in TRSL
         
      2. Unclassified employees who are not eligible for membership in TRSL because of part-time, seasonal, or temporary employment as defined in 26 CFR 31:3121(b)(7)-2, LSA-R.S. 11:162.
         
      3. TRSL members who have less than five years of retirement service credit.
         
    • Effective August 15, 1995, (LSA-R.S. 11:928) an ORP member who becomes employed by a TRSL reporting agency not in the field of higher education and who is hired into a TRSL-eligible position, must continue participation in the ORP—even if the employment is part-time, seasonal, or temporary.
       
  2. Enrolling Employees in the ORP
    • New Employees and TRSL-Regular Members Transferring from Another TRSL Employer
      1. Provide new employee with an Application for Optional Retirement Plan or Change of Carrier (Form 16). The employee must complete Sections 1, 2, and 3 within 60 days of employment. If the member is not a U.S. citizen, the member’s visa status must be indicated in Section 1. If the member has permanent resident status, a copy of the permanent resident card must be submitted to TRSL to determine eligibility. (F visas are not eligible for ORP.)
         
      2. The employer must complete Section 4 of Form 16 and mail the original form to TRSL. The employer signature certifies that the employee is eligible to participate in the ORP and that the member has signed a contract with the carrier designated in Section 2. The effective date should reflect the new employee’s first date of employment.
         
      3. Report contributions to TRSL-Regular until the new employee makes an ORP election.
         
      4. If the employee completes an ORP application within 60 days of employment, but after the first contributions are reported to TRSL-Regular, the contributions must be deleted from TRSL-Regular and reported to the ORP in total.
        • Complete an Online Contributions Report (CCR) deleting the contributions reported to TRSL-Regular Plan.
           
        • If the contributions were reported in the prior year; an Online Prior Year Correction of Earnings and Contributions, Form 4F, must be completed to delete earnings reported to TRSL-Regular Plan in error.
           
        • Add contributions from the above step on your next month’s ORP report using current year employer rates.
           
    • Employees Who are Current Members of TRSL With Less Than Five Years of Service Credit (These are not new employees but those who have been working and have now decided to join the ORP):
      1. Provide employee with an Application for Optional Retirement Plan or Change of Carrier (Form 16). The employee must complete Sections 1, 2, and 3.
         
      2. The employer must complete Section 4 of the ORP application and submit to TRSL. The effective date is the first of the current month when the member signs application on or before the 15th of the month OR the first of the following month when application is signed on or after the 16th of the month.
         
  3. Reporting ORP Contributions
    • Contributions for ORP (a defined contribution plan) members are subject to a cap of $54,000 (for calendar year 2017). The annual contributions limit is subject to change each year in January in accordance with the Internal Revenue Code guidelines.
       
    • Upload unencrypted file on the Employer/Membership Information Site by clicking “Submit Files” or submit an encrypted FTP file containing ORP Contributions Report data for all ORP participants. Refer to Index 18.2 for electronic reporting instructions.
       
    • TRSL Employer/Membership site can be used if employer has fewer than 25 ORP members. Refer to Index 1.1 to gain access.
       
  4. Remitting ORP Contributions
    • Remit contributions by the tenth day of each month along with the online file submission or FTP file of the ORP Contributions Report.
      1. Payments may be remitted by wire transfers. The text on the wire transfer should indicate that the remittance is for ORP.
        • For wiring instructions, contact Randy Fekete at 225-925-6478.
           
        • Fax the Payment Distribution Voucher (Form 4D) to TRSL at the time of the wire transfer. The fax number is (225) 925-4258.
           
      2. Payments made by check should be made payable to TRSL-ORP. Mail the check and the Payment Distribution Voucher (Form 4D) to TRSL.
         
    • The appropriate employee and employer contributions will be transferred to the ORP carrier within five working days of receiving the online file or FTP file and the correct dollar amount of contributions from the employer.
       
    • If contributions received are less than the amount reported, TRSL will contact the employer for the additional amount. No transfer will be made to the carriers until the additional amount is received.
       
    • If the contributions received are greater than the amount reported, the excess will be returned to the employer.
       
    • Contributions received without an ORP Contributions Report will be returned to the employer by the end of the month, if report is not received. Employer must combine salary and contributions with the following month ORP report.
       
    • If additional earnings from a prior period (month or year) need to be reported for an employee, they must be reported in the current reporting month based on the current fiscal year’s contribution rate.
       
  5. Correcting Reporting Errors
    • Corrections of contributions already posted to TRSL’s database and forwarded to the carriers may be adjusted for the participant on the following month’s ORP contributions report. Corrections shall not result in negative amounts.
       
    • The employer will be contacted if any of the following errors occur:
      1. Rate error on employee or employer contributions
         
      2. The ORP application is not submitted prior to receiving ORP contributions. (Member is not enrolled in ORP.)
         
      3. The carrier code on the ORP Contributions Report does not match the carrier code on the TRSL system.
         
      4. Negative amounts are reported on the online file or FTP file and the ORP contributions report.
         
      5. Contributions received are less or more than reported.
         
  6. Recovering Overpayments for Terminated Employees or Where Rates are Different
    • The employer must contact the ORP carrier directly to request a refund of any overpayments. A copy of the request letter should be provided to TRSL. The request should be submitted on agency letterhead with the following information: employee’s name, complete SSN, address to mail payment, name of recipient payment should be mailed to, the incorrect amount, the corrected amount, and the month and year earnings were reported. The ORP carrier will return the member contributions and the normal cost portion of the employer contributions that were transferred to them from TRSL.
       
    • Upon receipt of a copy of the request letter mentioned above, TRSL will return the unfunded accrued liability portion of the employer contributions. The administrative fee retained from the member contributions is not refundable.
       
    • Employers should contact TRSL if money is received from carrier that was not requested as stated in the first step above.
       
  7. Changing ORP Carrier
    • The employee must complete application with new carrier in addition to completing new Form 16. A carrier change can be made by an employee at any time.
       
    • The employer must complete Section 4 of the ORP application and submit to TRSL.
       
    • The employer must change the ORP carrier code on the diskette or FTP file containing ORP contributions.
       
  8. Terminating ORP Membership
    • The employer must remove the name of the terminated employee from the diskette or FTP file.
       
    • The employer should not submit an Employment Termination (Form 4C) for a terminated employee.
       
  9. Reporting Salary for Employees on Sabbatical Leave
    • ORP members have the option to contribute on their full salaries while on sabbatical leave.
       
    • If the ORP member elects to contribute based on his or her full salary, the sheltered contributions reported to TRSL are limited to 25 percent of the ORP member’s taxable income or $53,000 for calendar year 2015, whichever is less. This limit is for calendar year earnings. Therefore, the employer must ensure that sheltered contributions do not exceed this limit.
       
  10. The employer should provide an ORP Member Change of Address Authorization (Form 16AC) and/or ORP Member Name Change Request (Form 16NC) to the member, who should follow the instructions given below:
    • The member should complete the designated form to report the change.
       
    • The member should then submit the form to TRSL at the following address:
      Teachers’ Retirement System of Louisiana
      P.O. Box 94123
      Baton Rouge, LA  70804-9123
       
  11. Rollover Requests

    Carriers can process most types of distributions/rollovers from the plan without having to receive signature approval from TRSL. The carriers are aware of the plan provisions and IRS guidelines and have processes in place to meet our compliance requirements. Carriers will need to process allowable distributions according to the following steps:
    • Carriers will request a termination date from TRSL upon receipt of a rollover request from the member providing all information is in good order.
       
    • TRSL will contact the employer for the termination date and provide it to the carrier. If contributions have not been received for the employee within six months of the request date, TRSL will use the last period in which contributions were posted as the termination date. In these situations, no request will be made from the employer.
       
    • Carriers will process distributions requests only after receiving the termination date from TRSL.
       
    • Death Claim Forms, along with death certificate and QDRO Forms, must be submitted to TRSL for Plan Administrator approval/signature.

Related Forms

Application for Optional Retirement Plan or Change of Carrier (Form 16)

ORP Member Change of Address Authorization (Form 16AC)

ORP Member Name Change Request (Form 16NC)

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