SECTION 25.5. ORP Vesting and Participation

(a) Vesting Requirement. An ORP participant at a Texas public institution of higher education shall be considered vested in ORP on the first day of the second year of active participation, as defined in §25.3 of this title (relating to Definitions), in ORP in lieu of TRS at one or more Texas public institutions of higher education. An ORP participant at the Board shall be considered vested in ORP on the first day of the second year of active participation, as defined in §25.3 of this title (relating to Definitions), in ORP in lieu of ERS at the Board.

(1) Year Defined. For purposes of this subsection, a year shall mean twelve cumulative, but not necessarily consecutive, months of ORP participation.

(2) Leave-without-Pay. A full calendar month of leave without pay shall not be included in the calculation of a year for vesting purposes.

(3) Summer Credit. Because a year for academic faculty members does not normally include the three summer months, an academic faculty member shall be credited the three summer months toward vesting in ORP provided the faculty member is participating in ORP at the end of the spring semester immediately preceding the summer and resumes participation in an ORP-eligible position at the same or another Texas public institution of higher education at the beginning of the fall semester immediately following the same summer.

(4) More than One Period of Employment. As provided in subsection (c) of this section, partial vesting credit shall be retained when there is a break in participation prior to satisfying the vesting requirement. Therefore, the vesting requirement may be satisfied during more than one period of participation. For example, a new faculty member who terminated employment after six months of active participation, and subsequently returns to ORP-eligible employment at the same or another public Texas institution of higher education, with no intervening active service as a TRS member, shall only have to participate for an additional six months to meet the definition of "year" for vesting purposes.

(5) Non-Texas ORP Plan. The vesting requirement may not be satisfied by prior enrollment, participation or vested status in any plan other than the ORP plan authorized under Texas Government Code, Chapter 830.

(6) Separate Vesting. Because the election of ORP in lieu of TRS at a Texas public institution of higher education and the election of ORP in lieu of ERS at the Board shall be considered separate and distinct elections, the vesting requirement for ORP in lieu of TRS may not be satisfied by previous participation or vested status in ORP in lieu of ERS at the Board. The vesting requirement for ORP in lieu of ERS at the Board may not be satisfied by previous participation or vested status in ORP in lieu of TRS at a Texas public institution of higher education.

(b) Once Vested, Always Vested.

(1) Only One Vesting Period. An ORP participant who satisfies the vesting requirement for ORP in lieu of TRS shall not be required to satisfy the vesting requirement again by any Texas public institution of higher education. An ORP participant who satisfies the vesting requirement for ORP in lieu of ERS shall not be required to satisfy the vesting requirement again by the Board.

(2) Withdrawal of ORP Funds has No Effect. A reemployed ORP participant's vested status shall not be affected by any partial or total withdrawals of ORP funds made after termination from a prior period of employment.

(c) Partial Vesting Credit Retained. Unvested ORP participants shall retain partial vesting credit in the following circumstances.

(1) Termination of Employment. An ORP participant who terminates employment in all Texas public institutions of higher education prior to satisfying the vesting requirement shall, upon returning to ORP-eligible employment with the same or a different Texas public institution of higher education, retain credit for previous ORP participation in lieu of TRS. An ORP participant who terminates employment with the Board prior to satisfying the vesting requirement shall, upon returning to ORP-eligible employment with the Board, retain credit for previous ORP participation in lieu of ERS.

(2) Leave-Without-Pay. An ORP participant who goes on leave without pay for a full calendar month or more prior to satisfying the vesting requirement shall, upon resuming active ORP participation with the same or a different Texas public institution of higher education, retain credit for previous ORP participation in lieu of TRS. An ORP participant at the Board who goes on leave without pay for a full calendar month or more prior to satisfying the vesting requirement shall, upon resuming active ORP participation with the Board, retain credit for previous ORP participation in lieu of ERS.

(3) Direct Transfers. An ORP participant who, prior to satisfying the vesting requirement, directly transfers from one ORP-eligible position to another at the same or a different Texas public institution of higher education, shall retain credit for previous ORP participation in lieu of TRS. An ORP participant who, prior to satisfying the vesting requirement, directly transfers from one ORP-eligible position to another at the Board, shall retain credit for previous ORP participation in lieu of ERS.

(4) An ORP participant's partial vesting credit shall not be affected by any partial or total withdrawals of ORP employee contributions made after termination of employment.

(d) Benefits of Vested Status.

(1) A vested ORP 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 ORP accounts.

(2) A vested ORP participant shall remain in ORP even if subsequently employed in a position that is not ORP-eligible, as provided in subsection (f) of this section.

(e) Unvested ORP Employer Contributions Forfeited. An ORP participant who terminates employment prior to meeting the vesting requirement shall forfeit all ORP employer contributions made during that period of employment in accordance with §25.6(a)(11) of this title (relating to Forfeited ORP Employer Contributions). Except as provided in §25.6(a)(11)(F) of this title (relating to Resumption of Participation within 93 Days), forfeited funds shall not be recoverable, even if the participant later satisfies the vesting requirement in a subsequent period of ORP-eligible employment. Such a participant shall be considered vested only in ORP employer contributions made during the subsequent and any future employment periods.

(f) Employment in a non-ORP-Eligible Position. An ORP participant who terminates employment in an ORP-eligible position and becomes employed in a position that is not eligible for ORP, but is eligible for the applicable retirement system, shall remain in ORP or become a member of the applicable retirement system in accordance with the following provisions.

(1) Not Vested in ORP. An ORP participant who terminates employment in an ORP-eligible position prior to satisfying the ORP vesting requirement and who becomes employed in a position that is not eligible for ORP, but is eligible for the applicable retirement system, shall become a member of the applicable retirement system, and shall thereafter be ineligible to participate in ORP in lieu of the applicable retirement system, even if subsequently employed in an ORP-eligible position and/or if membership in the applicable retirement system is canceled through a withdrawal of employee contributions.

(A) ORP in Lieu of TRS. An ORP participant who elected ORP in lieu of TRS at a Texas public institution of higher education, who has not satisfied the ORP vesting requirement, who terminates employment in an ORP-eligible position, and who becomes employed with the same or another Texas public institution of higher education in a position that is not eligible for ORP, but is eligible for TRS, shall become a member of TRS for the remainder of his or her employment with any Texas public institution of higher education. This individual shall never be eligible to participate in ORP in lieu of TRS again, even if subsequently employed in an ORP-eligible position at the same or another Texas public institution of higher education and/or if the individual cancels his or her TRS membership by withdrawal of employee contributions.

(B) ORP in Lieu of ERS. An ORP participant who elected ORP in lieu of ERS at the Board, who has not satisfied the ORP vesting requirement, and who becomes employed with the Board in a position that is not eligible for ORP, but is eligible for ERS, shall become a member of ERS for the remainder of his or her employment with the Board. This individual shall never be eligible to participate in ORP in lieu of ERS again, even if subsequently employed in an ORP-eligible position at the Board and/or if the individual cancels his or her ERS membership by withdrawal of employee contributions.

(2) Vested in ORP. An ORP participant who terminates employment in an ORP-eligible position after satisfying the ORP vesting requirement and who becomes employed in a position that is not eligible for ORP but is eligible for the applicable retirement system, shall remain in ORP unless he or she became an active member of the applicable retirement system during a break in service prior to employment in the non-ORP-eligible position, in which case, he or she shall never be eligible for ORP in lieu of the applicable retirement system again, even if subsequently employed in an ORP-eligible position and/or if membership in the applicable retirement system was canceled through a withdrawal of employee contributions.

(A) ORP in Lieu of TRS. An ORP participant who has vested in ORP in lieu of TRS, who terminates employment in an ORP-eligible position, and who subsequently becomes employed with any Texas public institution of higher education in a position that is not ORP-eligible, but is TRS-eligible, shall continue to participate in ORP and shall not be eligible for TRS membership, unless he or she terminates employment with all Texas public institutions of higher education and becomes employed in a TRS-eligible position with the Texas public school system (e.g., Independent School Districts, regional educational service centers) or any other Texas public educational institution or agency that is covered by TRS but does not offer ORP in lieu of TRS, which will require the participant to become a member of TRS. Such an individual (i.e., one who has had active TRS membership since terminating ORP participation), upon becoming subsequently reemployed with any Texas public institution of higher education:

(i) shall not resume participation in ORP; and

(ii) shall not thereafter be eligible to participate in ORP in lieu of TRS ever again, regardless of the individual's previous ORP vested status, employment in an ORP-eligible position, or if the individual's TRS membership was canceled by withdrawal of employee contributions following termination of employment from the TRS-covered position.

(B) ORP in Lieu of ERS. An ORP participant who has vested in ORP in lieu of ERS at the Board, who terminates employment in an ORP-eligible position with the Board, and who subsequently becomes employed with the Board in a position that is not ORP-eligible, but is ERS-eligible, shall, nevertheless, continue to participate in ORP and shall not be eligible for ERS membership, unless he or she terminates employment with the Board and becomes employed in an ERS-eligible position with a Texas state agency that does not offer ORP in lieu of ERS, which will require the participant to become a member of ERS. Such an individual (i.e., one who has had active ERS membership since terminating ORP participation), upon becoming subsequently reemployed with the Board:

(i) shall not resume participation in ORP; and

(ii) shall not be eligible to participate in ORP in lieu of ERS ever again, regardless of the individual's previous ORP vested status, employment in an ORP-eligible position, or if the individual's ERS membership was canceled by withdrawal of employee contributions following termination of employment from the ERS-covered position.

(g) Employment in a Non-Benefits-Eligible Position.

(1) An employee who elected ORP in lieu of TRS and who terminates employment in the ORP-eligible position and becomes employed with the same or another Texas public institution of higher education in a non-benefits-eligible position shall not be eligible to participate in ORP (i.e., have contributions sent to the ORP company) for the period of time while employed in the non-benefits-eligible position.

(2) An employee who is participating in ORP at one institution of higher education and who simultaneously becomes employed at another institution in a non-benefits-eligible position is not eligible to participate in ORP at the institution in which he or she is employed in a non-benefits-eligible position.

(3) Definition. For purposes of this subsection, a non-benefits-eligible position shall be defined as a position that is one or more of the following:

(A) less than 50 percent effort;

(B) temporary, as defined by TRS for employees of Texas public institutions of higher education; or

(C) requires student status as a condition of employment.

(4) Combining of Percent Effort at Different Institutions Not Permitted. When calculating an employee's percent effort to determine whether a position is non-benefits-eligible as provided in paragraph (3) of this subsection, an institution shall include only the individual's employment with that institution. For example, an individual who is simultaneously employed at 25 percent effort with Institution A and at 50 percent effort with Institution B shall not be eligible to participate in ORP at Institution A even though he or she may already be participating at Institution B based on a minimum 50 percent effort at Institution B. An exception may be made for an individual who is simultaneously employed with more than one component institution under the same governing board that operates its ORP either as a single plan for all components or includes the applicable components in the same plan. In this case, the employee's percent effort at each component may be combined to meet the minimum 50 percent effort requirement.

(5) Regardless of Vested Status. An employee shall not be eligible to participate in ORP while employed in a non-benefits-eligible position regardless of his or her ORP vested status.

(6) No Effect on ORP Eligibility. Because a non-benefits-eligible position is not eligible for TRS, employment in a non-benefits-eligible position normally shall have no effect on an employee's ORP eligibility status upon his or her subsequent return to a benefits-eligible position, regardless of vested status.

(7) Alternate Plan at Certain Community Colleges. Participation in an alternate retirement plan for part-time employees who are not eligible for TRS at a community college that has opted out of the federal social security program shall have no effect on a person's ORP eligibility status upon his or her subsequent return to a benefits-eligible position.

(h) Retirement System Membership after ORP Vesting. A vested ORP participant shall not be eligible for active membership in the applicable retirement system unless he or she terminates all employment with the ORP employer and becomes employed in a position that is eligible for the applicable retirement system with an employer that does not offer ORP.

(1) ORP in Lieu of TRS. A vested ORP participant who elected ORP in lieu of TRS shall not be thereafter eligible for TRS membership, unless he or she terminates employment with all Texas public institutions of higher education and becomes employed in a TRS-eligible position with the Texas public school system (e.g., Independent School Districts, regional educational service centers) or any other Texas public educational institution or agency that is covered by TRS but does not offer ORP in lieu of TRS, which will require the participant to become a member of TRS. Such an individual (i.e., one who has had active TRS membership since terminating ORP participation), upon becoming subsequently reemployed with any Texas public institution of higher education:

(A) shall not resume participation in ORP; and

(B) shall not thereafter be eligible to participate in ORP in lieu of TRS ever again, regardless of the individual's previous ORP vested status, employment in an ORP-eligible position, or if the individual's TRS membership was canceled by withdrawal of employee contributions following termination of employment from the TRS-covered position.

(2) ORP in Lieu of ERS. A vested ORP participant who elected ORP in lieu of ERS shall not thereafter be eligible for ERS membership, unless he or she terminates employment with the Board and becomes employed in an ERS-eligible position with a Texas state agency that does not offer ORP in lieu of ERS, which will require the participant to become a member of ERS. Such an individual (i.e., one who has had active ERS membership since terminating ORP participation), upon becoming subsequently reemployed with the Board:

(A) shall not resume participation in ORP; and

(B) shall not be eligible to participate in ORP in lieu of ERS ever again, regardless of the individual's previous ORP vested status, employment in an ORP-eligible position, or if the individual's ERS membership was canceled by withdrawal of employee contributions following termination of employment from the ERS-covered position.

(i) ORP Retirees Not Eligible to Participate. ORP retirees, as defined in §25.3 of this title (relating to Definitions), who later return to employment with the same or another Texas public institution of higher education or with the Board in what would otherwise be considered a benefits-eligible position shall not be eligible to participate in ORP, with the following exceptions:

(1) ORP retirees who enrolled in retiree group insurance on or before June 1, 1997;

(2) employees who elected ORP in lieu of ERS at the Board and who, after terminating employment with the Board and enrolling in retiree group insurance as an ORP retiree from the Board, subsequently become employed in an ORP-eligible position at a Texas public institution of higher education;

(3) employees who elected ORP in lieu of TRS at a Texas public institution of higher education and who, after terminating employment with all Texas public institutions of higher education and enrolling in retiree group insurance as an ORP retiree from a Texas public institution of higher education, subsequently become employed in an ORP-eligible position at the Board; and

(4) ORP retirees who enroll in retiree group insurance as part of a phased retirement program.

(A) Definition. For the purposes of this subsection, a phased retirement program shall be a locally designed option that is offered by a limited number of institutions as a means of transitioning active employees to retired status through a contractual agreement that requires the employee to meet certain milestones during the contractual period, which is typically one or two years, such as a reduction in percentage of effort and/or enrollment in retiree group insurance prior to termination of employment. At the end of the contractual period, the employee is considered to be in a retired status for all purposes.

(B) Exemption. ORP participants who are covered by a phased retirement program agreement shall remain eligible for ORP contributions during the contractual period as long as they maintain at least 50 percent effort, even after they are required to enroll in retiree group insurance as an ORP retiree. Once the contractual period has expired, the participant shall no longer be exempt from the provisions of this subsection.

(5) ORP retirees who meet the exceptions described in paragraphs (1) through (4) of this subsection shall not be considered eligible to participate in ORP or to elect ORP in lieu of the retirement system from which they did not retire unless they meet the same eligibility criteria as employees who have not established ORP retiree status.

(j) Termination of Participation. An employee shall terminate participation in ORP only upon death, retirement (including disability retirement), or termination of employment with all Texas public institutions of higher education (if the election of ORP was in lieu of TRS) or termination of employment with the Board (if the election of ORP was in lieu of ERS).

(1) Employment Transfer is not a Termination. A participant's transfer of employment between Texas public institutions of higher education without a break in service, as defined in §25.3 of this title (relating to Definitions), shall not be considered a termination of employment for ORP purposes, unless the new position is non-benefits-eligible, as defined in subsection (g) of this section.

(2) Transfer of Funds is not a Termination. A transfer of ORP funds between ORP accounts or ORP companies (contract exchange) shall not be considered a termination of employment for ORP purposes.

Source Note: The provisions of this §25.5 adopted to be effective May 23, 2004, 29 TexReg 5079; amended to be effective November 28, 2005, 30 TexReg 7873; amended to be effective August 30, 2016, 41 TexReg 6484