Texa$aver is a 457(b) tax deferred annuity plan offered through the Employees Retirement System of Texas (ERS). Under the Texa$aver 457 plan:
- You specify a dollar amount.
- With other tax deferred plans, such as the 401(k) and the 403(b), if you withdraw your funds before age 59 1/2, you will pay 20% income tax. There will be an additional tax penalty of 10% for the 401(k) when you file your tax return, but not for the 457.
- The 457 Plan has a 3-year catchup provision.
Additional information on Texa$aver is available on the Employees Retirement System of Texas (ERS) website.
Visit the Texa$aver 401(k) / 457 Program for more information.
Optional Retirement Program
Full-time faculty and eligible administrators are given 90 days from the date of employment to make an irrevocable lifetime choice to become a participant in an Optional Retirement Program (ORP) or the Teacher Retirement System of Texas (TRS).
The ORP is a defined contribution plan that allows the participant to select a life insurance or other financial institution approved by the District where he/she wishes to deposit retirement funds. Premium contributions of both the employee and the State are sent to the financial institution for deposit in the participant's account.
The ORP is a self-directed retirement plan where the participant directs and manages the investment account. An employee is vested in ORP after one year and one day of participation in the plan. If employment is terminated prior to vesting, the State and District contributions are returned to the State and the District.
Since ORP is an individual investment plan and purchased at the participant's own risk, it is important to select the plan that best meets individual needs. Contributions made to the ORP are tax deferred until the tax year in which the funds are withdrawn.
An employee can be eligible to elect ORP once only. Once participation has been selected, the employee cannot elect TRS.
ORP is called a defined contribution plan because the retirement benefit is based on the actual amount contributed to the participant's account (and any return on investments). ORP benefits are dependent upon the contribution rate and total salary earned while a participant.
In ORP, vesting refers to a participant's ownership rights to the employer portion of the contributions. Upon termination of employment in Texas public higher education, vested ORP participants can take both employee and employer contributions with them. ORP participants vest after 1 year and 1 day of participation.
The current version of the "Overview of TRS and ORP" (revised July 2001) is available to employees who become eligible to elect ORP in lieu of TRS.
Optional Retirement Program (ORP) and Tax Deferred Account (TDA) Vendors List effective July 1, 2006 (revised May 14, 2020).
Updated May 14, 2020