Benefits with the Optional Retirement Plans (ORP) are based on the level of contributions, investment gains or losses, retirement age and the retirement income option. The following plans are available: Fidelity and TIAA.
Employees hired prior to July 1, 2010 are covered under the provisions of Plan 1. Employees who are rehired in a Virginia Retirement System covered position and maintain a balance in their Optional Retirement Plan accounts are also considered Plan 1.
For Plan 1 employees, Virginia Tech contributes 10.4 percent of the employee's salary and the employee in not required to make a contribution.
Employees whose hire date is July 1, 2010 or later are covered under the provisions of Plan 2. Employees who were previously employed in a Virginia Retirement System covered position and withdrew their retirement funds will be rehired under Plan 2 if they return to covered employment with no Optional Retirement Plan account balance.
For Plan 2 employees, Virginia Tech contributes 8.5 percent of the employee’s salary and the employee contributes 5 percent of their salary into the Optional Retirement Plan.
Employees who separate from Virginia Tech may choose to:
- Leave their Optional Retirement Plan account where it is. The employee would continue to manage the account and contributions will cease.
- Rollover to other qualified plan. A rollover is the transfer of all or part of the contributions to another eligible plan or an Individual Retirement Account (IRA) that allows the employee to postpone paying taxes on the account until it is paid to them.
- Request a distribution. The terminating employee may request that the account be paid directly to them. If a distribution is requested, taxes in the amount of 20 percent federal and 4 percent state will be withheld. For employees under the age of 59 1/2 years, the IRS may impose an additional 10 percent federal tax penalty on the distribution. Employees should work directly with their Optional Retirement Plan company to initiate a distribution. The distribution process may take 90-120 days to complete.