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Mandatory Retirement Programs

The State of Texas offers two retirement programs for employees of public institutions of higher education.

Teacher Retirement System of Texas (TRS)

TRS is a defined benefit retirement plan governed by Internal Revenue Code Section 401(a). All eligible employees of The University of Texas at Austin are automatically enrolled in TRS on their first day of employment.

Employee and employer contributions go into a large trust fund that's managed by knowledgeable professionals. Retirement benefits are based on legislatively determined formulas. You are vested after attaining five years of service credit with a right to a retirement benefit. There are also disability, death and survivor benefits available to TRS members.

Optional Retirement Program (ORP)

Certain full-time employees, based upon their position, may make a once-in-a-lifetime, irrevocable decision to choose ORP instead of TRS.

ORP is a defined contribution plan governed by Internal Revenue Code Section 403(b). You choose the investments made and the benefits are based on their performance. You're vested after one year and one day of participation with a right to both your and your employer's contributions. ORP is more portable than TRS. But, federal tax law prohibits 403(b) plans from providing disability benefits like those provided by TRS.

The university is required to notify ORP participants of their responsibilities. An ORP participant is responsible for the selection and monitoring of ORP companies and investments. The university has no fiduciary responsibility for the market value of a participant’s ORP investments or for the financial stability of the ORP companies chosen by the participant.

Contribution Rates

Contributions to both programs are pre-tax contributions through payroll deduction. Here are the current contribution rates:

Program

From Employee

From Employer

TRS

6.7%

6.8%

ORP

6.65%

8.5%