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Optional Retirement Plan Overview

What is the Optional Retirement Plan (ORP)?

What is an annuity?

State University System of Florida ORP and ING

What is the Optional Retirement Plan (ORP)?

The Optional Retirement Plan (ORP) is a defined contribution plan, sponsored by the State of Florida, that is offered to eligible employees as an alternative to the Florida Retirement System (FRS) defined benefit pension plan.

With ORP, your university will contribute a percentage of your earnings each pay period so that you may purchase an annuity when you retire. You also may choose to make voluntary contributions to your ORP account. Regardless of your length of service, you will be eligible to receive a lifetime monthly annuity income at retirement that will be based on the amount contributed, the investment earnings or losses of those contributions, and the type of annuity that you have selected.

What is an annuity?

With an annuity you can accumulate a sum of money, which you have set aside for retirement, and then convert that money into either one or more larger payments or ongoing smaller payments that can last your lifetime. A tax-deferred annuity has two periods: Accumulation and Annuity (payout).

During the Accumulation period:

You direct contributions to the investment options you have chosen

The amounts you contribute accumulate earnings or losses based on the returns of the investment options chosen less contract and fund-level charges

Your contributions and earnings accumulate tax-deferred and are taxed when you make a withdrawal, start receiving annuity payments or fail to make a required withdrawal

The Annuity period is the time when you actually receive your annuity payments.

Important information about annuities

Tax deferral is provided by the plan and an annuity does not provide any additional tax deferral benefit. Annuities may be subject to additional fees and expenses to which other tax-qualified plan funding vehicles may not be subject. However, annuities provide features and benefits such as lifetime income payments and death benefits which may be valuable to you.

State University System of Florida ORP and ING

When you choose ING, you and your employer each contribute a certain percentage of your total compensation to the ING Retirement Master variable annuity contract, issued by ING Life Insurance and Annuity Company. Those contributions are invested in the fund options you select.

ING Retirement Master is a group variable annuity customized to help meet the needs of higher education employees. With this annuity, you have the opportunity for:

Asset building - a great way to invest for future needs and supplement your retirement income.

Tax-deferred investing – under the Internal Revenue Code, with this program your contributions and earnings on those contributions are taxed only when you begin to take distributions, usually at retirement.

Diversified investment options - you have the opportunity to select where your contributions are allocated.

Periodic payments for the future - under the annuity provisions, you choose the payout option that best fits your future needs.

Portability of your account

Ability to make transfer between investment options via Internet, phone or paper (subject to ING’s policy on excessive trading).

1.0 % mortality and expense risk charge (investment management fees also apply)

No contract surrender/withdrawal charges

Variable annuities are long-term investments designed for retirement purposes. Early withdrawals taken prior to age 59½ may be subject to a 10% IRS premature distribution penalty tax. Money distributed from the annuity will be taxed as ordinary income in the year the money is received. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested. Tax deferral is provided by the plan and an annuity does not provide any additional tax deferral benefit. Annuities may be subject to additional fees and expenses to which other tax-qualified plan funding vehicles may not be subject. However, annuities provide features and benefits such as lifetime income payments and death benefits which may be valuable to you.

Eligibility

Who is eligible to join the plan?

If you are employed in an ORP-approved position expected to last no less than one academic year and are otherwise eligible to participate in the FRS, you automatically will be enrolled in the ORP. You will have 90 days to choose an ORP provider company or to elect membership in FRS in lieu of ORP.

Any employee who is eligible to participate in the ORP who fails to execute an annuity contract with one of the approved companies, and to notify the division in writing within 90 days of the date of eligibility, shall be deemed to have elected membership in FRS.

Note: it is important to know that the retirement plan choice you make may be irrevocable. For example, if you elect to remain in ORP or you elect FRS, you must remain in that plan as long as you remain employed with the same institution and continue to meet the eligibility requirement.

ORP eligible positions include persons who are employed or appointed for no less than one academic year in one of the following positions:

General faculty

Administrative and Professional

Chancellor of State University System

President of the University

Member of the SUS Executive Service

Contributions

Your university pays the full cost of the ORP. The university will contribute an amount equal to a percentage of your earnings each pay period, based on the amount established by State law, less some expenses for ORP program administration and implementation of the Public Employees Optional Retirement Program (PEORP).

You may also make voluntary tax-deferred contributions to your ORP account (subject to Internal Revenue Code contribution limits). If you choose to make voluntary contributions, you must sign a Salary Reduction Agreement to authorize payroll deductions.

Withdrawals

Employer contributions:

The ORP prohibits any lump-sum withdrawal of University funds contributed on your behalf. However, when you terminate your employment and have accumulated employer contributions and investment earnings of not more than $5,000, you may request a lump-sum payout of those contributions and investment earnings. The payout will be subject to IRS restrictions, and a six-month waiting period from the date of termination from employment.

Employee contributions:

You are 100% vested in any voluntary contributions you make, and earnings on those contributions. If early withdrawals are taken prior to age 59½, you may be subject to a 10% IRS premature distribution penalty tax.

Payout Options

If you change employers, your account is portable and can be continued on a tax-deferred basis if your new employer sponsors a retirement plan that will accept a rollover of such funds. Or, the account can remain at ING until you elect to receive it.

When you retire, the ING Retirement Master program provides a wide variety of payout options (subject to your plan provisions) including:

Lump sum withdrawal (total employer contributions and earnings on those contributions must not exceed $5,000 for lump sum withdrawal)

Series of partial withdrawals

Systematic payout options specifying a percentage, a dollar amount, or a time period.

Payments guaranteed for your lifetime or as long as you and your beneficiary are alive. Guarantees are based on the claims-paying ability of ING Life Insurance and Annuity Company.

If you die before you retire, your beneficiary may elect to receive the value of your account or select one of several settlement options.

Distributions will be taxed as ordinary income when received and if taken prior to age 59½, a 10% IRS premature distribution penalty tax may apply.

Loans

Loans are available with the ORP. Note: loans will reduce account balances. Please contact your representative for more information.

Variable annuities through a retirement plan are long-term investments designed for retirement purposes. Early withdrawals taken prior to age 59½ may be subject to a 10% IRS premature distribution penalty tax. Money distributed from the annuity will be taxed as ordinary income in the year the money is received. Account values fluctuate with market conditions and when surrendered, the principal may be worth more or less than its original amount invested. Tax deferral is provided by the plan and the annuity does not provide any additional tax deferral benefit. Annuities may be subject to additional fees and expenses to which other tax-qualified plan funding vehicles may not be subject. However, annuities provide features and benefits such as lifetime income payments and death benefits which may be valuable to you.

Neither ING nor its affiliated companies or representatives provide tax or legal advice. Please consult a tax adviser or attorney before making a tax-related investment/insurance decision.

Variable annuity contract is offered through ING Life Insurance and Annuity Company (ILIAC), One Orange Way, Windsor, CT 06095-4774. This variable annuity contract has terms under which it may be continued in force or discontinued. For costs and complete details of coverage, call or write your representative. Securities are distributed through, and seminars and financial planning services offered by, ING Financial Advisers, LLC (member SIPC). These companies are wholly owned subsidiaries of ING Groep N.V. Products and services may not be available in all states. Securities also offered through other broker-dealers with which ING Financial Advisers, LLC has selling agreements, including First Allied Securities, Inc (member FINRA/SIPC). First Allied Securities, Inc. and the Gabor Agency are not affiliated with ING entities.