Montana University System (MUS)
Optional Retirement Program


YOUR RETIREMENT PLAN CHOICE

Employees of the Montana University System who are new or rehired members of PERS may elect to:

Remain in the PERS Defined Benefit Retirement Plan; or

Transfer to the PERS Defined Contribution Retirement Plan; or

Transfer to the Montana University System's Optional Retirement Program (ORP).

You may not simultaneously be a participant of more than one retirement plan. You must
be a participant of the Defined Benefit Retirement Plan, the Defined Contribution Retirement
Plan or the Optional Retirement Program.



OPTIONAL RETIREMENT PLAN: BASICS

The Montana University System's Optional Retirement Program (ORP) is a defined contribution plan. This means that, similar to the PERS Defined Contribution Retirement Plan, the ORP does not specify a benefit in retirement. Instead, it specifies how much is contributed to the retirement account. The retirement account will grow over time depending on:

  • How much is contributed to the account;

  • How long the money remains invested; and

  • The rate of return earned over that time period.


    • The ORP participant invest contributions in selected investment options. The participant assumes all investment risk, but is also entitled to all investment returns.

    Please see the Defined Contribution Retirement Plan Basics for illustrations on how defined contribution plan accounts can accumulate.

    The Montana Board of Regents administers the ORP under Montana law and has contracted with TIAA-CREF (Teachers Insurance and Annuity Association-College Retirement Equities Fund) as plan provider.

    DIFFERENCES BETWEEN THE ORP AND THE PERS DEFINED CONTRIBUTION RETIREMENT PLAN

    The ORP and the PERS Defined Contribution Retirement Plans are similar becuase they are both defined contribution plans. There are key differences between the plans, shown in the comparison chart.

    FeatureOptional Retirement ProgramPERS Defined Contribution Retirement Plan
    Vesting on Employer ContributionsImmediate. Depending on age and
    account balance, distributions of employer contributions may be restricted.    		5 Years
    Allocations of Employer ContributionsTotal Contributions   =   7.17%
      Less
    Plan Choice Rates        - 2.64%
    Education Fund           - 0.04%
    Participant Account       4.49%    		Total Contributions = 7.17%
      Less
    Plan Choice Rates   - 2.64%
    Education Fund      - 0.04%
    Disability Plan         - 0.30%
    Participant Account  4.19%
    Long Term Disability PlanNot available through ORP.
    Is required as part of the Montana
    University System Choices benefits
    program.    		Component of the Plan.
    Administrative CostsTaken from quarterly returns on investments, and range from 0.32% and 1.00% of assets. For example, on a $10,000 account balance, cost would average between $128-$400 per year.Recordkeeping fee is $57 per year - deducted quarterly ($14.25/quarter) from participant accounts. MPERA administrative costs are 0.20% yearly. For example, on a $10,000 account balance, cost would be $20 per year.
    Investment OptionsSelection of variable annuity products. Variable annuities do not guarantee principal or return.
    Traditional fixed annuity product guarantees principal and return.    		Selection of retail and institutional mutual funds. These funds do not guarantee principal or return.
    Stable value product guarantees principal and return.

    Frequently Asked Questions about the ORP

    Can I belong to both the ORP and one of the PERS Retirement Plans?

    No.

    If I elect the ORP, what amount will transfer from PERS?

    The amount that will transfer is:

  • the contributions you have made to PERS since you were hired plus 8% interest compounded annually.

  • 4.49% of the contributions your employer has made to PERS since you were hired plus 8% interest compounded annually.

    • How do I elect the ORP?

    You choose the Optional Retirement Program by completing the PERS Retirement Plan Choice Election Form, signing it and sending the form to MPERA.

    Do not file the PERS Retirement Plan Choice with your campus payroll personnel. An ORP election filed with your campus payroll personnel is not valid. Upon receipt of your ORP election, MPERA will coordinate university system employee elections and transfer of funds with the appropriate personnel within the Montana University System.

    You will need to contact your payroll and personnel office to complete TIAA-CREF enrollment forms if you elect the ORP.

    What happens to my rights under PERS if I elect the ORP?

    As a Montana University System employee only, if you elect the ORP you waive all rights and benefits under PERS.

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