STATE UNIVERSITY OF NEW YORK

SUNY Optional Retirement Plan

These are important details regarding this plan.

ELIGIBILITY

Membership in the ORP is open to full-time UUP represented faculty and professional staff and part-time faculty and staff with term appointments, as well as to management-confidential employees.

  • Full-time employees must join a retirement program. You must complete your Retirement Election Form within the first 30 days of employment; once you choose a retirement prgram your election may not be changed.
     
  • Part-time employees with term appointments are eligible to join a retirement program at any time. For additional information, contact your campus administrator.
     
  • New employees without existing contracts from TIAA-CREF, AIG/VALIC, ING or MetLife will receive accumulated university contributions to the plan once they have completed 366 days of service. (If you do not serve for at least 366 days, the university will not contribute to your account, and your own contributions will be refunded with interest - see your Campus Administrator.

CONTRIBUTIONS

Employees hired on or after April 1st, 2012 will be in Tier VI and subject to the contribution schedule referenced below. Note that Tier VI employees continue to pay their employee contribution after 10 years of membership.

The Optional Retirement Plan requires members hired since July 27, 1976 to contribute 3% of base salary through regular payroll deductions. Legislation passed in 2007 requires the state or sponsoring organization to pick up the 3% employee contribution after 10 years of ORP membership by increasing the employer contribution correspondingly.

For those hired on or after July 17, 1992 the university also will contribute the equivalent of 8-10% of salary on your behalf, depending on your length of service. (Earlier hirees receive university contributions based on their salary levels; see table below for details.)

For new members: During the initial 366-day service period described in Eligibility, both your contributions and those of the university will accumulate in interest-bearing accounts. At the end of this period, the university will transfer a single lump-sum contribution, with interest, to TIAA-CREF covering the period, followed by regular biweekly contributions. In addition, your own contributions will be transferred to TIAA-CREF. Note: If you do not complete 366 days of service, your initial contributions will be refunded to you with interest, but you will not receive the University's contributions.

Contribution levels for new and existing Optional Retirement Plan members are based on your employee tier, according to this schedule:

TierHire Date
SUNY
Contribution Rate
Your Contribution
Tier IBefore July 1, 197312% of salary up to $16,500
15% of salary over $16,500
n/a
Tier IIJuly 1, 1973 - July 26, 197612% of salary up to $16,500
15% of salary over $16,500
n/a
Tier IIIJuly 27, 1976 - Aug. 31, 19839% of salary up to $16,500
12% of salary over $16,500
3% of salary
Tier IVSept. 1, 1983 - July 16, 19929% of salary up to $16,500
12% of salary over $16,500
3% of salary
Tier IV (a)July 17, 1992 to March 31st 20128% of salary/up to 7 years' service
10% of salary/over 7 years' service
3% of salary
Tier VIApril 1st 2012 and later (note for Tier VI there are two distinct sets of contribution rates as indicated below) 
 April 1st 2012 – March 31st 20138% of salary up to 7 years of service
10% of salary over 7 years of service
3% Pre-tax
 Effective April 1st, 2013 and later8% of salary/up to 7 years' service
10% of salary/over 7 years' service
3% Pre-tax
Based on Salary Ranges (Pre-tax)

Wages up to $45,000 ......3%

Wages $45,000.01 and up to $55,000 ......3.5%

Wages $55,000.01 and up to $75,000 ......4.5%

Wages $75,000.01 and up to $100,000 ......5.75%

Wages $100,000.01 and greater ......6%
Note that these percentages of contributions are based on the total salary and not based on percentages within cumulative salary ranges.
For example: Someone earning $50,000 will contribute 3.5% based on $50,000
Note: For Tiers I, II, III, IV and V employee contributions will be picked up by the University after ten years of ORP membership. Tier VI employees will continue to contribute their required employee percentage. This is not picked up by the University.

EMPLOYER MATCHING

Please see Contributions for details.

VESTING

"Vesting” refers to an employee's right, to receive retirement benefits whether or not they continue their SUNY employment. Once you have completed 366 days of service with SUNY (waived for employees who enter service with employer funded existing contracts from TIAA-CREF, AIG/VALIC, ING or MetLife), you are fully vested in all retirement and death benefits provided by the investments purchased through both the university’s and your own contributions.

INVESTMENTS

Your employer offers you a variety of investment choices from an array of asset classes. You can see a list of the investment choices under this plan on the Investment Choices page.

EXPENSES

Expenses vary from investment to investment. To learn about expenses associated with an investment, see a list of the investment choices under this plan on the Investment Choices page, and read the Fact Sheet or the prospectus for that investment.

DISTRIBUTIONS

When it's time to decide how to take income from your SUNY Optional Retirement Plan, you have a variety of options*:

  • Fixed Period - You can choose to receive income for a set period of two to 30 years, depending on the terms of our contract and your plan's rules (and not to exceed your life expectancy). Payments stop at the end of the period, during which you will have received all your principal and earnings.
     
  • Hardship Distribution - In accordance with IRS guidelines, for specific reasons and financial circumstances an eligible employee may request a hardship withdrawal from pre-1990 elective deferral contributions for the purpose of satisfying an immediate and heavy financial need that cannot be met from other sources, including loans. The distribution must be necessary for at least one of these reasons:

    • Payment of medical expenses incurred by the employee, his or her spouse or other dependent(s), or payment necessary for these persons to obtain medical care, as described in Section 213(d) of the Internal Revenue Code;
    • Prevention of eviction from or foreclosure of the employee’s primary residence.
You must certify and be solely responsible for providing satisfactory information to TIAA-CREF to process any such withdrawals. Hardship withdrawals cannot exceed the amount of financial need. Contact TIAA-CREF if you wish to take a hardship withdrawal.

  • Interest Only - You can receive the current interest earned on your TIAA Traditional Account in monthly payments. Your principal remains intact while you receive the interest. (Note: These payments are generally available to individuals between ages 55 and 70½ when minimum distributions are required.)
     
  • Lifetime Retirement Income:
    • One-life annuity - provides income for as long as you live.
    • Two-life annuity - provides lifetime income for you and an annuity partner (your spouse or someone else you name) for as long as either of you live.
    • One- or two-life annuity with guaranteed period - guarantees income for up to 20 years, as long as the period you choose does not exceed your life expectancy. It ensures that income continues to go to your beneficiaries if you (one-life annuity) or both you and your annuity partner (two-life annuity) die before the end of the guaranteed period for the remainder of the guaranteed period.
       
  • Lump Sum - You can withdraw all or part of your account in a single cash payment, depending on your plan rules and the terms of your contracts. (Your right to a lump-sum distribution from your TIAA Traditional Account may be restricted under those terms).
     
  • Minimum Distribution Option - Generally, you must begin taking minimum withdrawals from your account by April 1 following the year in which you turn age 70½ or retire, whichever is later. This can help you defer the minimum required distribution while keeping you in compliance with federal regulations.
     
  • Retirement Transition Benefit - If your contract allows, you can withdraw, in cash, up to 10% of your accumulation at the beginning of a conversion to lifetime annuity income. The amount you withdraw will reduce your lifetime annuity income accordingly.
     
  • Single-Sum Death Benefit - A set amount your beneficiary(ies) will receive from your retirement account if you die before taking income.
     
  • Small-Sum Distribution - If your plan doesn't otherwise allow cash distributions, upon separation from service you can withdraw your entire retirement savings if your TIAA Traditional Account value does not exceed $2,000 and your overall account balance is below a limit set by your employer's plan (typically $4,000). If your plan does allow cash distributions, upon separation you may be able to withdraw your TIAA Traditional accumulation if the value does not exceed $2,000.
     
  • Systematic Withdrawals - If your plan allows, you can choose to receive regular income payments (minimum $100) on a semimonthly, monthly, quarterly, semiannual or annual basis. You can increase, decrease or suspend the payments at any time. (Note: These withdrawals are not available from TIAA Traditional Account balances.)
     
  • TPA to Cash - If your plan allows, you can withdraw your TIAA Traditional Account accumulation through a Transfer Payout Annuity (TPA) in 10 approximately equal annual payments. A lump-sum payment, subject to a surrender fee, may be available depending on your plan rules and the terms of your contract.
*The availability of certain distributions may depend on the type of contract underlying your plan. Also, if you're married, your right to choose an option may be subject to your spouse's right to survivor benefits. Your SUNY Optional Retirement Plan is designed to provide you with income throughout your retirement. Leaving money in your account may allow the funds to grow on a tax-deferred basis. The SUNY Optional Retirement Plan allows you to receive a cash withdrawal. This may be restricted by the terms of your TIAA-CREF contract(s). Taxes and penalties may apply.

TAXATION

When your SUNY employment ends, you may surrender your contract(s) for its cash value, subject to IRS regulations. Cash distributions are subject to ordinary income taxes and may be subject to an additional IRS 10% early-withdrawal tax penalty. TIAA-CREF must withhold 20% from any lump-sum benefit paid to you and send the amount to the IRS, who will apply it toward federal income tax due.

An IRS 10% tax penalty will generally apply to cash withdrawals made before age 59½, unless you have medical expenses exceeding the tax-deductible limit or you become disabled, die or retire after reaching age 55. No IRS 10% tax penalty is applied to payments made to children or to a divorced spouse in accordance with a qualified domestic-relations order. This information is not intended to be relied upon as tax advice. You are encouraged to consult a tax advisor.

LOANS

Employees may borrow up to 45% of the accumulated value of their contracts, subject to Internal Revenue Service regulations and rules promulgated by the investment provider. Current IRS regulations set a maximum aggregate loan balance of $50,000. If you default on an existing loan, your ability to obtain future loans from this plan maybe limited to the rules of your employer.


1 The availability of certain distributions may depend on the type of contract underlying your plan. Also, if you're married, your right to choose an option may be subject to your spouse's right to survivor benefits. Talk to your benefits office for details.

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