The University of North Carolina Optional Retirement Program Summary Appalachian State University East Carolina University Elizabeth City State University Fayetteville State University NC A&T State University North Carolina Central University NC State University UNC – Asheville UNC – Chapel Hill UNC – Charlotte UNC – Greensboro UNC – Pembroke UNC – Wilmington UNC School of the Arts Western Carolina University Winston-Salem State University NC School of Science and Mathematics Other Affiliates: – UNC Health Care – UNC Press 2 Optional Retirement Program | The University of North Carolina Table of Contents Introduction 2 Choosing Between the Two Retirement Plans 3 Other Benefits Related to Your Mandatory Retirement Plan 3 ORP Information 4 Eligibility 4 Enrollment 4 Choosing a Beneficiary 4
Contributions 4 Vesting 5 Investment of Contributions 5 Withdrawing Money from the Plan (Distributions) 6 If You Leave Employment Before You Retire 8 Distributions In the Event of Your Death 8 Helpful Resources and Contact Information 9 The University of North Carolina | Optional Retirement Program Summary 1 Introduction To help you prepare for a secure retirement, The University of North Carolina offers eligible employees a choice between two major retirement plans: Planning for Retirement • The Optional Retirement Program of The University of Income: The Big Picture North Carolina (ORP) One of the most important steps in preparing for • Teachers’ and State Employees’ Retirement System retirement is setting your goals—you need to know (TSERS) how much income you need in order to plan how to achieve it. For help establishing your retirement As a University employee, you must choose to participate in savings goals, review all of the retirement program either the ORP or TSERS, subject to your eligibility. For this materials available at www.northcarolina.edu/hr/ reason, these two plans are sometimes referred to as the unc/benefits/retirement/index.htm . “mandatory” retirement plans. To prepare for a comfortable retirement, you The University offers you a choice because we recognize should plan on having retirement income from that different people have different circumstances, several sources. preferences and goals. Most experts estimate you’ll need between 70‑90% of your pre-retirement income to maintain your standard of living in retirement. Of course, how much income you need during retirement depends on several factors—including what you want to do (travel, buy a second home, etc.) and when you retire (which affects the number of years you’ll need your savings to last). Participating in one of the University’s mandatory retirement programs is a good start. Social Security benefits will also figure into your plans for retirement income, though experts estimate that Social Security only replaces about 40% of your pre-retirement income. 2 Optional Retirement Program Summary | The University of North Carolina Choosing Between the Two Retirement Plans The ORP is a “defined contribution” plan. In this, it differs from TSERS, which is a “defined benefit” plan. Defined Contribution Plan (Example: ORP) Defined Benefit Plan (Example: TSERS) The value of your retirement benefit is not determined The value of your retirement benefit is determined by a by a predetermined formula. Instead, it is based on the predetermined formula, which is usually based on your contributions you make...
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