The University of Texas at Arlington

Contents

1. Purpose
2. Eligibility
3. Election Standards
4. Effective Date
5. ORP Contributions
6. Currently Authorized Companies
7. ORP Participation Standards
8. Vesting in ORP
9. Changes in Companies
10. Termination of Participation
11. Modified Service
12. Administrative Procedures
13. Qualified Domestic Relations Orders (QDRO's)
14. Investment Advisory Agreements
15. Sales Solicitation
16. Definitions

1. Purpose

   This policy shall be the governing document for The University of Texas at Arlington Optional Retirement Program (ORP) along with applicable federal and state laws, and policies consistent with the Rules and Regulations of the U.T. System Board of Regents and the University of Texas System. It shall be interpreted in a manner so that it is consistent with the Internal Revenue Code of 1986, as amended, and its regulations there under, including but not limited to, Section 403(b) thereof and Section 830.001 et seq. of the Texas Government Code. This policy shall not in any manner reduce, restrict or make forfeitable any participant's vested rights or accrued benefits under the ORP.

2. Eligibility

   1. ORP Occupational Eligibility Standards

      The University shall use the following definitions to determine the eligibility for participation in ORP. These definitions are in accordance with those promulgated by the Texas Higher Education Coordinating Board.

      1. A member of the faculty whose duties include teaching or research shall mean all persons whose specific assignments are made for the purpose of conducting instruction or research as a principal activity (or activities) and hold the position and title of professor, associate professor, assistant professor, instructor, lecturer, or the equivalent.

      2. An administrator responsible for teaching and research faculty shall mean deans, directors, associate deans, assistant deans, chairpersons or heads of academic departments if their principal activity is planning, organizing, and directing the activities of faculty as defined in the preceding paragraph of this section.

      3. A professional librarian.

      4. The Chancellor, Executive Vice Chancellor, Vice Chancellor, Assistant or Associate Vice Chancellor, President, Executive Vice President, Vice President, Assistant or Associate Vice President, or the equivalent.

      5. Other professional staff person shall mean administrative and professional positions.

         Administrative Positions include positions that:

         1. Are generally and customarily recruited by advertising in national publications such as the Chronicle of Higher Education or in newsletters of national professional associations or at the meetings of such associations; and

         2. Are at a salary rate equivalent to the rate for faculty at the institution; and

         3. Report directly to an executive officer as provided in 4) above; and

         4. Serve as the director or other administrative head of a major department or budget entity and

            1. Are appointed by the Chief Administrative Officer as defined in 4) above or his or her delegate, and,

            2. Are responsible for the preparation and administration of the budget, policies, and programs of the department.

         Professional positions shall include positions in nationally recognized fields, which require advanced degrees and/or specialized professional or artistic training, experience, and achievement. This would include titles such as physicians, athletic coaches, engineers, and lawyers.

   2. ORP Appointment Standards

      1. Individuals must be appointed to one of the positions described in Section a) above, on a full-time basis for at least four and one-half months or more, to be eligible to participate in ORP.

      2. An employee otherwise meeting the definition of faculty member is eligible to participate if he or she is to remain employed for four and one-half months or longer from the initial date of appointment as a faculty employee, even though the actual period of appointment may be for less than four and one-half months.

3. Election Standards

   Employees eligible to participate shall elect to participate subject to the following standards:

   1. An employee eligible to participate has ninety (90) days from the date of ORP eligibility within which to make a one-time irrevocable election to participate in ORP. The employee will be enrolled into the Teacher Retirement System of Texas (TRS) unless an election is made to participate in ORP.

   2. An employee electing to participate in ORP must select a company, which is authorized to provide products to employees of UTA on the date of participation. No election to participate is considered to have taken place without written selection of a currently authorized company to provide ORP products.

   3. An eligible employee whose ninety-day election period has expired at UTA may not at a subsequent date elect to participate in ORP at another institution of public higher education in Texas.

   4. An employee who has elected to participate in ORP at UTA is not eligible to become a member of TRS as a new employee of another public institution of higher education in Texas.

   5. An employee formerly participating in ORP who is required to rejoin TRS and who is subsequently reclassified once again to an ORP eligible position is not authorized to again participate in ORP. Such employees must remain in TRS.

4. Effective Date

   The effective date of participation shall be determined in accordance with the following provisions.

   1. Eligible employees shall elect to participate in ORP prior to the ninety-first calendar day following the date of employment. All employees eligible to participate in a retirement system are deemed to be participants of TRS unless an election is made to participate in ORP within the first ninety (90) days of employment.

   2. The Benefits Coordinator shall determine the effective date for ORP participation for each employee based on state and institutional payroll procedures and the deadline for receipt of ORP applications at each component institution.

   3. A refund of TRS contributions by TRS will be made to an employee who elects to participate in ORP. Refund of accumulated contributions shall be paid by Teacher Retirement normally within two months from the date the application is received. Upon withdrawal of contributions, the employee forfeits and relinquishes all rights as a member of TRS. Death and survivor benefits under TRS cease on the effective date of an employee's participation in ORP.

5. ORP Contributions

   1. ORP is a tax-deferred defined contribution retirement program authorized by Section 403(b) of the Internal Revenue Code of 1986, as amended. Both the employee and the employer contribute to the participant's ORP on a tax-deferred basis. As such, contributions to ORP are withheld from a participant's salary and from funds provided by the State of Texas and are made on a tax-deferred basis. Both participant and state contribution rates are established by the legislature and are subject to revision. No contributions may be made to ORP accounts except as provided above.

   2. Eligible employees participating in the Optional Retirement Program on or before August 31, 1995 will contribute 6.65% of monthly salary to this retirement program. These employees will receive 8.5% employer matching funds. (The state's contribution is subject to change by Texas Legislature.) Tax deferred contributions must cease upon obtaining the limits specified in Section 415 of the Internal Revenue Code of 1986, as amended.

      Eligible employees electing participation in ORP after August 31, 1995 will contribute 6.65% of salary to the Optional Retirement Program, and employer matching funds are calculated at 8.5% of the employee's salary. (The state's contribution is subject to change by Texas Legislature.) Tax deferred contributions must cease upon obtaining the limits specified in Section 415 of the Internal Revenue Code of 1986, as amended.

   3. If a participant terminates employment or otherwise ceases to be eligible prior to satisfying the vesting requirements and does not resume participation within ninety (90) days of such termination, the Office of Human Resources is required to contact the company to secure the state contribution remitted for the employee. It is the responsibility of the company to notify the former participant within thirty (30) days of receipt of the institutional request for reimbursement. The component institution must redeposit the reimbursement to the originating fund immediately upon receipt. Funds reimbursed in error, due to the participant's reemployment in Texas public higher education, will be returned to the company for redeposit in the participant's account.

6. Currently Authorized Companies

   An employee electing to participate in ORP must select a company, which is currently authorized to provide products to employees of The University of Texas System on the date of participation. No election to participate is considered to have taken place without selection of a currently authorized company to provide ORP products.

7. ORP Participation Standards

   The following are the standards for participation in ORP.

   1. A full-time ORP participant who works at least four and one-half months, and later reduces to part-time employment status, may continue to participate in ORP provided that the employment is at least twenty hours per week for four and one-half months or longer, and there has been no break in service. Participants who reduce to part-time positions, which are not otherwise eligible for benefits, may not continue to participate in ORP.

   2. A participant who transfers to or otherwise accepts employment with UTA in a capacity less than full-time, but which is at least twenty hours per week for four and one-half months or longer, and who otherwise meets the requirements for participation in ORP, may continue participation if participation was established during prior employment in Texas public higher education. Such prior ORP participation must have been in effect at the time of the employee's separation from said institution and must result in continuous ORP participation. A transfer may involve normal breaks between semesters.

   3. An employee participating in the ORP who, after participation in the ORP of at least one year, subsequently is appointed to a position otherwise ineligible for ORP shall continue participation in the ORP. Such employee must not have had intervening employment in Texas public schools other than in higher education.

   4. An employee participating in ORP who, with less than one year of participation, subsequently is appointed to a position otherwise ineligible for ORP but which is eligible for participation in TRS must rejoin TRS on a permanent basis. There is no subsequent eligibility for participation in ORP.

   5. A former ORP participant who must rejoin TRS as described in paragraph d) above is not eligible to receive credit with TRS for any service during which time he or she was participating with ORP.

   6. No contract issued under ORP may provide for loans or cash surrender or contain any other provision, which permits the availability of benefits prior to a participant's attainment of age 70-1/2 years, death or termination as an employee in all institutions of Texas public higher education. All contracts issued under ORP will be in a form that complies with Internal Revenue Code requirements under Section 403(b) and the Criteria for Optional Retirement Program (ORP) Vendors to the University.

8. Vesting in ORP

   1. An ORP participant shall be considered vested on the first day of the second year of participation. A year shall mean twelve cumulative full months. A full calendar month of leave without pay shall not be included in the calculation of such year. An academic faculty employee shall be credited with the three summer months toward vesting in ORP provided the faculty employee teaches in both the spring and fall semesters in the same calendar year.

   2. Upon reemployment in a Texas public institution of higher education, a vested participant shall not be required to satisfy the vesting period again.

   3. An ORP participant who terminates employment in all Texas public institutions of higher education prior to satisfying the vesting requirement shall, upon reemployment in an ORP eligible position, retain credit for previous ORP participation. Such credit shall not be affected by any partial or total withdrawals of the participant's contribution made after termination in ORP or the attainment of age 70-1/2 years.

9. Changes in Companies

   1. Company selection may be changed once every 90 days; however, exceptions will be permitted in documented situations of financial exigency. A participant may only change active participation to one of the currently authorized ORP companies. Active participation is defined as participation in which monthly ORP contributions are deposited into a specific product(s) of one of the currently authorized companies. A participant may not actively participate with more than one company at a time.

   2. A participant may establish passive accounts in which money is transferred into one of the products offered by a company, but no active account is established. A passive account is defined as participation through the establishment of an account with a company only for the purpose of depositing funds and with no active monthly participation. Passive accounts may become active when the participant designates the account to begin receiving monthly contributions.

   3. Individuals participating in ORP prior to April 1, 1995 may continue contributions with the company with whom business was being conducted on March 31, 1995. However, this "grandfathering" provision ceases to apply if there is any break in participation (other than a normal break between semesters) or if active participation is transferred to a currently authorized company.

   4. ORP participants may transfer funds subject to the following limitations.

      1. All transfers of ORP funds must be accomplished by the completion of the Transfer Verification form and processing by the Office of Human Resources.

      2. A participant may retain any active or passive account with any previously authorized ORP company and is not required to transfer such to a currently authorized company.

      3. A participant may transfer funds from either active or inactive accounts with any previously authorized company to any of the companies on the currently authorized list.

      4. Transfers of ORP funds to companies not on the currently authorized list will not be permitted.

      5. A participant may not transfer from more than one company every 90 days. Additional transfers will be processed only if the participant can demonstrate imminent risk of loss by retaining an account with a company. In instances in which a participant is requesting an immediate transfer of funds due to imminent risk, all such funds must be withdrawn.

      6. At retirement, a participant may effect transfers of funds necessary to retire and annuitize from or to any company currently or previously authorized if he or she has had an active account with the company and states that the fund transfers are for such purposes. The 90-day restriction in paragraph 5), above, shall not apply to this type of funds transfer at retirement.

   5. Changes of active participation and the direct transfer of funds are subject to established policy and procedures and may be accomplished only through the Human Resources Office.

10. Termination of Participation

    An employee terminates participation in ORP only upon death, retirement (including disability retirement), or termination of employment in all institutions of Texas public higher education. A change of ORP company or a participant's transfer between institutions of public higher education does not constitute a termination of employment.

11. Modified Service

    A participant who retires and annuitizes an ORP account may return to work in a modified service capacity. Such a participant who returns to work more than half-time in what would otherwise be considered a benefits eligible position should be treated as any active ORP participant. Unless the participant is of age 70-1/2 or more, annuity payments should be suspended and the institution should begin ORP remittances as for any active ORP participant. However, the participant may not concurrently receive annuity benefits from an ORP account and also have ORP remittances made on his/her behalf unless the age requirement is met. The participant will be required to sign a certification statement to the effect that he/she understands this statutory prohibition and will have payment or ORP benefits suspended until such time as the benefits are legally available (i.e. upon attainment of age 70-1/2, death or termination of benefits-eligible employment).

12. Administrative Procedures

    1. Enrollment

       1. Enrollment in ORP must be accomplished within 90 days from the date eligibility begins. Completion of forms promulgated by UTA is required and, where applicable, they must be notarized and returned to the appropriate representative in the Office of Human Resources for processing. No substitute forms will be accepted for use in enrolling ORP Participants.

       2. The following forms must be completed to effect enrollment into ORP.

          1. ORP Acknowledgment Form
          2. TRS Form 28
          3. TRS Form 29 (for TRS refunds only)
          4. ORP Form 1
          5. ORP Form 3
          6. ORP Vendor Application

    2. Verification of Vesting/Termination

       An official letter from the Office of Payroll Services and/or Office of Human Resources shall be issued upon request by a company and/or a participant to verify that an employee has either vested or terminated employment. Disbursements other than direct fund transfers from ORP Accounts are prohibited without receipt of the vesting/transfer letter by companies. To assure timely processing of participant transactions, vesting/termination letters should be processed and transmitted to companies within 30 days of request.

13. Qualified Domestic Relations Orders (QDRO's)

    It is specifically the responsibility of vendors to qualify and process Qualified Domestic Relations Orders (QDRO's) pursuant to Section 804.003 of the Texas Government Code. All ORP participants and alternate payees shall be directed to contact the respective ORP companies directly to file the necessary forms to process QDRO's.

14. Investment Advisory Agreements

    ORP participants may contract with an investment advisor to provide investment services subject to the following terms and conditions.

    1. Vested participants are eligible to enter into an investment advisory agreement in which fees may be paid from the ORP account. Non-vested participants are eligible to enter into investment advisory agreements, but fees may not be deducted from the ORP account.

    2. The fees charged for investment advice may not exceed two percent of the annual value of the ORP account.

    3. Investment advisory fees will be paid directly to the investment advisor who provides the investment advice to the participant. The payment of investment advisory fees to firms from the ORP account is not permitted.

    4. The investment advisor must be registered with the Securities and Exchange Commission and must be engaged on a full-time basis in the business of providing investment advice.

    5. The contract between the ORP participant and the investment advisor may not be for more than one year in length.

    6. The contract is deemed to be between the individual ORP participant and the investment advisor. As such, no representative of The University will participate in or sign any agreement, authorization, or other document pertaining to investment advisory agreements. Representative of the University shall not provide investment advice to participants nor make recommendations with regard to investment advisory agreements or advisors. A decision on investment advisory services is strictly the responsibility of the participant.

15. Sales Solicitation

    Currently authorized companies may sell ORP products to participants subject to the following terms and conditions.

    1. All companies, participants, and advisors must adhere to the provisions of the Regents' Rules and other institutional policies applicable to the ORP. For example, the Regents' Rules prohibit solicitation in any building or structure on the campuses of U.T. System component institutions. Therefore, ORP companies may not make unrequested sales presentations of any kind on campus, including in-person, promotional "cold-calls" on employees. In addition, promotional telephone calls to employees must not interfere with the academic or institutional programs and activities of the component institution.

    2. Individual employees may request that information about proposed plans or coverages be provided to them by an ORP vendor during working hours. However, such presentations may not interfere or disturb the normal business of the component institution.

    3. Meetings to disseminate information about ORP are to be sponsored by U.T. System or its component institutions. Activity at such meetings is limited to providing information about the various ORP products. No sales activities may occur at such meetings.

16. Definitions

    1. Company - Any business, whether organized as a sole proprietorship partnership, corporation, limited liability company, or other legal entity, doing business with either UTA or its employees, retired employees, or participants in an institutionally sponsored employee benefit plan. This term shall be inclusive of currently authorized companies, previously authorized companies, and other companies, whether authorized or not, doing such business.

    2. Component Institution - An institution that is a component of U.T. System.

    3. Currently Authorized Companies - Companies currently on the list authorized to provide ORP products to participants in the ORP program of U.T. System.

    4. Institution - Means any public institution of higher education as defined in Section 61.003(8) of the Texas Education Code.

    5. Investment Advisor Agreement - An agreement between an ORP participant and a registered investment advisor in which the fee for such service is paid from the ORP account, and which meets the requirements of Section 830.107 of the Texas Government Code.

    6. Modified Service - The reemployment of a retired employee by U.T. System.

    7. ORP Funds - Monies deposited in an ORP account.

    8. ORP Participant - An employee or former employee of U.T. System maintaining a balance in an Internal Revenue Code Section 403(b) account under the Optional Retirement Program established by Section 830 of the Texas Government Code.

    9. ORP Products - Investment vehicles, such as mutual funds or annuity contracts, eligible for use as an Internal Revenue Code Section 403(b) investment under the Optional Retirement Program.

    10. Previously Authorized Companies - Companies that are not currently on the list of currently authorized companies to provide ORP products, but that were previously authorized to provide ORP products and with which an ORP participant continues to have a balance in an ORP account. This balance would include both active and passive accounts.