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Optional Retirement Program Overview

What is the Optional Retirement Program?
Why do many eligible employees choose the ORP?
ORP and ING
Contributions
Withdrawals
Distributions

What is the Optional Retirement Program?

The Optional Retirement Program (ORP) is offered to employees in Texas public higher education as an alternative to the Teacher Retirement System (TRS). It was made available through legislation passed by the State of Texas in 1967. Employees eligible for the ORP must enroll within 90 days of eligibility to participate in the plan. Your choice between ORP and TRS is irrevocable once elected.

Why do many eligible employees choose the ORP?

Many eligible professionals elect the ORP because it offers substantial flexibility, including:

Investment control of your account.

Extensive menu of investment options to fit your individual needs and objectives.

Benefits of tax-deferred compounding increase the opportunity to accumulate wealth.

100% vested after one year and one day from eligibility (versus 5 years with TRS)

The ORP is portable. If you leave employment, your vested portion is eligible to be rolled over to another qualified plan or IRA.

ORP and ING

When you choose ING for your ORP, you and your employer each contribute a certain percentage of your total compensation (the percentage determined by Texas state law) to the Retirement Master variable annuity contract, issued by ING Life Insurance and Annuity Company (ILIAC). These contributions are made on a pre-tax basis -- your salary is "reduced" by the amount of your contribution, and you are not taxed on those contributions or the earnings until the money is distributed from the annuity.* Both your and your employer's contributions are invested according to your investment selection.

Retirement Master is a group variable annuity that is offered to institutions of higher education. 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, at which time you may be in a lower tax bracket.^*

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

Unlimited transfers between variable investment options via Internet, phone or paper

No surrender/withdrawal charges (investment management fees and a mortality and expense risk charge of 1.00% will apply)

*Variable annuities are long-term investments designed for retirement purposes. Early withdrawals taken prior to age 59½ may be subject to a 10% federal tax penalty. 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.

CONTRIBUTIONS

You and your employer each contribute a certain percentage of your total compensation to the program. Your salary is then "reduced" by the amount of your contribution (currently 6.65%), which along with the employer's contribution (between 6.0% and 8.5%), is sent to ING and invested according to your instructions. The amounts reduced are similar to the amounts that would have been deducted under TRS (currently 6.4% for employee contributions and 6.0% for employer contributions).

WITHDRAWALS

Under the provisions of the Texas Education Code, you may not withdraw funds from the ORP while you are employed by the Texas public higher education system. If you leave the system, you may obtain a letter from the University to remove the withdrawal and loan restrictions. A 10% IRS premature distribution penalty tax may be assessed on withdrawals unless you are age 55 or older; become disabled or die; receive the funds under a settlement option payable over your lifetime or the lifetimes of you and your beneficiary; or exchange the funds for another 403(b) or IRA account.

DISTRIBUTIONS

ING has developed several payout options available to you at retirement. With these options, the emphasis is on flexibility. For a list of your payout options at separation from service or retirement, click on Payout Options on the left side of this screen.

You should consider the investment objectives, risks and charges, and expenses of the variable product and its underlying fund options carefully before investing. The prospectus summary contains this and other information. You may obtain a prospectus summary by contacting your ING representative or the Company at the address listed below. Please read the prospectus summary carefully before investing.

Variable annuities are long-term investments designed for retirement purposes. If early withdrawals are taken prior to age 59½, a 10% federal tax penalty may apply. 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. Tax deferral is provided by your employer’s plan and the tax deferral of the annuity does not provide any additional 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.

ING does not offer tax advice. Please consult a tax advisor or attorney before making a tax-related investment/insurance decision.

Insurance products issued by ING Life Insurance and Annuity Company. Securities offered through ING Financial Advisers, LLC (member SIPC), One Orange Way, Windsor, CT 06095-4774, or other broker/dealers with which it has a selling agreement.