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TITLE 19EDUCATION
PART 1TEXAS HIGHER EDUCATION COORDINATING BOARD
CHAPTER 25OPTIONAL RETIREMENT PROGRAM
SUBCHAPTER AOPTIONAL RETIREMENT PROGRAM
RULE §25.3Definitions

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

  (1) Active Participation--Period of employment during which an ORP participant makes regular ORP contributions through payroll deduction based on the statutory percentage of the employee's salary earned during that period, which along with the matching employer contributions, are sent by the ORP employer to an authorized ORP company. A faculty member who is not employed by a Texas public institution of higher education during the three summer months but who was participating in ORP at the end of the spring semester immediately preceding the summer and who resumes ORP participation with the same or another Texas public institution of higher education in the fall semester immediately following that summer shall be considered an active participant during the three summer months.

  (2) Applicable Retirement System--The Teacher Retirement System of Texas for employees of Texas public institutions of higher education and the Employees Retirement System of Texas for employees of the Board.

  (3) Board--The Texas Higher Education Coordinating Board.

  (4) Break in Service--A period following a participant's termination of all employment with all Texas public institutions of higher education or the Board that is at least one full calendar month in which no ORP contribution is made, excluding the three summer months for faculty members who were participating in ORP at the end of the spring semester immediately preceding the summer and who resume ORP participation with the same or another Texas public institution of higher education in the fall semester immediately following that summer, and excluding periods of leave-without-pay. A transfer between Texas public institutions of higher education with less than a full calendar month in which no ORP contribution is made shall not be considered a break in service.

  (5) ERS--The Employees Retirement System of Texas.

  (6) ERS Waiting Period--A period of 90 calendar days beginning with the first day of employment with the Board in a position that is otherwise eligible for membership in ERS. In accordance with state law, active membership in ERS does not become effective until the 91st calendar day.

    (A) The ERS waiting period does not apply to:

      (i) new employees of the Board who are already members of ERS based on contributions made during prior employment with the Board or other state agency that have not been withdrawn; or

      (ii) new employees of the Board who elected ORP in lieu of ERS in a prior period of employment with the Board and who are eligible to resume ORP participation.

    (B) As provided in §25.4(h) of this title (relating to Active Membership in Retirement System Requirement), a new employee of the Board who becomes employed in an ORP-eligible position and who is subject to the ERS waiting period is not permitted to elect ORP in lieu of ERS until satisfying the ERS waiting period because the election of ORP is in lieu of active membership in ERS.

  (7) Full-time--For purposes of determining initial ORP eligibility, the term "full-time" shall mean employment for the standard full-time workload established by the institution ("100 percent effort") at a rate comparable to the rate of compensation for other persons in similar positions for a definite period of four and one-half months or a full semester of more than four calendar months.

  (8) Initial ORP Eligibility Date--The first day of an ORP-eligible employee's 90-day ORP election period. An employee's initial ORP eligibility date shall be determined as follows:

    (A) Employees of Institutions of Higher Education. For employees of a Texas public institution of higher education, the initial ORP eligibility date shall be the first day of employment in an ORP-eligible position.

    (B) Employees of the Board.

      (i) Non-ERS Members. For a new employee of the Board who has never been a member of ERS or who is a former member of ERS who canceled membership by withdrawing employee contributions from ERS after termination from a prior period of employment, the initial ORP eligibility date shall be the 91st calendar day of employment in an ERS-eligible position that is also an ORP-eligible position.

      (ii) Current ERS Members. For an employee of the Board who is a current member of ERS at the time that he or she becomes employed in an ORP-eligible position, the initial ORP eligibility date shall be the first day of employment in an ORP-eligible position.

  (9) Initial ORP Eligibility Period--The period of time beginning with the first date of employment in an ORP-eligible position that is expected to be 100 percent effort for a period of at least one full semester or four and one-half months. For new employees of the Board who become employed in an ORP-eligible position, the initial ORP eligibility period includes the 90-day ERS waiting period, if applicable.

  (10) Major Department Requirement--One of the factors used to determine whether a position is ORP-eligible in the "Other Key Administrator" category as defined in §25.4(k) of this title (relating to Eligible Positions). A department or budget entity at a public institution of higher education shall meet this requirement if:

    (A) the department or budget entity is considered a "major" department by the institution based on the specific organizational size and structure of that institution; and

    (B) the department or budget entity has its own budget, policies and programs.

  (11) ORP--The Optional Retirement Program.

  (12) ORP Election Period--The period of time during which ORP-eligible employees have a once-per-lifetime opportunity to elect to participate in ORP in lieu of the applicable retirement system. The ORP election period shall begin on an employee's initial ORP eligibility date, as defined in paragraph (7) of this section, and shall end on the earlier of:

    (A) the date the employee makes an ORP election by signing and submitting the appropriate forms to the ORP employer; or

    (B) the 90th calendar day after the employee's initial ORP eligibility date, not including the initial ORP eligibility date and including the 90th calendar day. If the 90th calendar day after the initial ORP eligibility date falls on a weekend or holiday, the deadline shall be extended until the first working day after the 90th calendar day.

  (13) ORP Employer--All public institutions of higher education in Texas and the Board.

  (14) ORP Retiree--An individual who participated in ORP while employed with a Texas public institution of higher education or the Board and who established retiree status by meeting the applicable retiree insurance requirements and enrolling in retiree group insurance provided by ERS, The University of Texas System, or The Texas A&M University System, regardless of whether currently enrolled.

  (15) Principal Activity Requirement--One of the factors used to determine whether a position is ORP-eligible based on the percent of effort required by the position to be devoted to ORP-eligible duties. The principal activity requirement shall be met if at least 51 percent of the position's duties are devoted to ORP-eligible duties in one of the ORP-eligible categories defined in §25.4(k) of this title (relating to Eligible Positions), with two exceptions:

    (A) During Initial ORP Eligibility Period. During an employee's initial ORP eligibility period (when the position is required to be 100 percent effort to qualify as ORP-eligible), if the ORP-eligible duties associated with an ORP-eligible category are less than 51 percent of the activities for a particular position, the position shall be considered to meet the principal activity requirement if all of the position's other duties are ORP-eligible duties under one of the other ORP-eligible categories defined in §25.4(k) of this title (relating to Eligible Positions), for a total of 100 percent effort devoted to ORP-eligible duties, as would be the case, for example, for a position with required duties that are 50 percent instruction and/or research (faculty position) and 50 percent department chair (faculty administrator position).

    (B) After Initial ORP Eligibility Period. For a participant who has completed the initial ORP eligibility period but who has not vested in ORP and who fills a position that is less than 100 percent effort but at least 50 percent effort, then the principal activity requirement shall be considered met if at least 50 percent effort is devoted to applicable ORP-eligible duties in one of the ORP-eligible categories defined in §25.4(k) of this title (relating to Eligible Positions).

  (16) TRS--The Teacher Retirement System of Texas.

  (17) Vesting Requirement--The minimum amount of ORP participation required to attain vested status. An ORP participant shall be considered vested on the first day of the second year of active participation in lieu of the applicable retirement system, as provided in §25.5(a) of this title (relating to Vesting Requirement). A vested participant shall have ownership rights to the employer contributions in his or her ORP accounts, meaning that, upon termination of employment with all ORP employers or reaching age 70-1/2, he or she may access both the employee and employer contributions (and any net earnings) in his or her accounts. A vested participant shall remain in ORP even if subsequently employed in a position that is not ORP-eligible, as provided in §25.5(f) of this title (relating to Employment in a non-ORP-Eligible Position).


Source Note: The provisions of this §25.3 adopted to be effective May 23, 2004, 29 TexReg 5079; amended to be effective November 28, 2005, 30 TexReg 7873

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