Office of Human Resources - Benefits Design & Management
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Frequently Asked Questions
about ORP Phased Retirement
INVESTMENT CONTACT NUMBERS QUESTIONS? |
Arizona State Retirement System (ASRS)
Benefits and Retirement During Phased Retirement
Eligibility and Participation
Am I eligible to participate in this Phased Retirement Program?
This program is available to contributing Optional Retirement Plan participants who:
- are at least 62 years old;
- are fully vested in the Optional Retirement Plan; and
- sign an irrevocable, written legal agreement and release with ASU.
IMPORTANT NOTE: Faculty and staff who meet the eligibility criteria but who have an existing agreement to retire cannot rescind the existing agreement.
How long does it take to become vested in the Optional Retirement Plan (ORP)?
Participants usually are fully vested after five (5) years of service.
To find out if you qualify for immediate vesting, see page 4 of the ORP Guide: www.asu.edu/hr/benefits/documents/orpguide.pdf.
What are the benefits of participating in the Phased Retirement Program?
You can reduce your workload and salary and make withdrawals from the Optional Retirement Plan
for up to three years. A reduced workload will give you the opportunity to spend more time
with your family and friends or have more time to pursue your favorite leisure activities.
IMPORTANT NOTE: Your reduced schedule is subject to negotiation and agreement
between you and your dean/vice president.
How much can I reduce my work schedule?
You and your dean/vice president must decide together, based on the academic and business needs of your department, how much you can reduce your work schedule. In your written agreement, you must document the dates and percentages of your reduced work schedule. You can specify different percentages for different periods of your phased retirement. The standard range will vary between 50% and 95% time (FTE).
IMPORTANT NOTE: If you reduce your schedule to less than 50% FTE, you will lose your group insurance benefits. To retain group insurance under the benefits program, you must work 50% FTE or more. You also must be appointed 50% or more FTE to continue contributions to the Optional Retirement Plan.
How long can I participate in the Phased Retirement Program?
You may request up to a maximum of three (3) years. The length of the phased retirement is subject to negotiation and agreement between you and your dean/vice president.
Can I change my Phased Retirement Program agreement after it is signed?
In general, the terms are irrevocable. However, if a participant and their dean/vice president mutually agree to either accelerate retirement or amend the reduced work schedule, the agreement can be altered. This option allows for unforeseen circumstances such as a change in health or the ability to fulfill the responsibilities of the negotiated phased retirement period.
You should contact your dean or vice president as soon as possible if you need to accelerate your retirement date or amend your reduced work schedule, so the change does not adversely affect your department.
How will participation in this program affect my tenure status if I am tenured faculty or an academic professional with continuing status?
Tenured faculty or academic professionals with continuing status irrevocably relinquish all status rights at the end of the phased retirement period.
How does participation in this program affect my contract renewals if
I am an administrator, service professional, or academic professional
not on continuing status?
You will continue to be subject to regular employment contract renewals during the phased retirement period. Participation in the Phased Retirement Program does not create a guarantee or implied agreement of continuous employment.
Arizona State Retirement System (ASRS)
Are ASRS participants eligible for this Phased Retirement Program?
No. This voluntary program is limited to contributing Optional Retirement Plan participants and is designed to allow participants to collect ORP benefits while working less than 100% FTE.
If I contributed to ASRS prior to joining the Optional Retirement Plan,
will I be able to begin collecting ASRS benefits during the phased retirement period?
No. You only can begin distributions from ASRS (current system and previous plan) as defined under the plans when you terminate or retire from all ASRS participating universities and employers.
I am currently an ASRS participant, but have an ORP account.
Am I eligible for the Phased Retirement Program?
No. Only active Optional Retirement Plan participants are eligible.
Benefits and Retirement during Phased Retirement
How do I withdraw from my Optional Retirement Plan account?
Please allow 10 business days for your agreement to be submitted to Human Resources and your investment company to be notified you plan to participate in the Phased Retirement Program. Then you can contact your investment company to begin withdrawals. It could take up to three weeks for the investment company to process withdrawals.
AIG Retirement
(formerly AIG Valic) | 800.448.2542
Fidelity | 800.343.0860
TIAA-CREF | 866.548.3705
Do I have to continue to contribute to the Optional Retirement Plan
during the phased retirement period?
Yes, if you are appointed 50% time or more. Both employee and employer contributions continue until your retirement date in accordance with Arizona Revised Statutes 15-1628C and the Optional Retirement Plan. Both contributions—your seven percent and the ASU matching contribution—will be taken based on your reduced salary.
Will I continue to receive benefits during my phased retirement?
Yes, if you are appointed at 50% or more time, you may continue or elect participation in all ASU, ABOR and State of Arizona benefits plans—medical, dental, vision, basic and supplemental life, short-term and long-term disability, flexible spending accounts, and other voluntary benefit plans (such as home/auto and long-term care). All benefits election changes, additions and cancellations are subject to open enrollment and qualified life event rules.
ASU will base disability and supplemental life insurance benefits on your reduced salary.
Am I allowed to contribute to the supplemental retirement plans?
Yes. You may continue or begin participating in the Tax-Sheltered Annuity 403(b) Plan and/or 457 Deferred Compensation Plan. You also can change your biweekly (flat rate) contributions to these plans.
Does phased retirement affect my sick and vacation leave accruals?
Accruals will be pro-rated, based on your reduced FTE percentage.
How does phased retirement affect my benefits under the Retiree Accumulated Sick Leave (RASL) Program?
It does not affect the hourly rate of pay used to calculate the benefit; however, you will accrue sick leave at a reduced rate.
RASL FORMULA Multiply your hourly rate at the date of retirement by the
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If I am eligible for vacation, will my reduced work schedule or FTE affect my vacation payout upon retirement?
Yes. ASU bases the cash payment for accrued vacation leave on your current rate of pay and reduced accrual rate (determined by FTE) upon termination. You are encouraged to use your vacation during your phased retirement period.
Will I be eligible for retiree health insurance at the end of the phased retirement period?
Yes, but you must still satisfy the eligibility requirements for the State of Arizona retiree health insurance programs.
Am I allowed to work for ASU after the phased retirement period ends?
There is no guarantee of future employment after your formal retirement date, but the program does allow Optional Retirement Plan participants to return to work when the phased retirement period ends. This program, however, has been designed to help you transition into retirement; therefore, you are not eligible for tenure or continuing status if you return to work.
NOTE: If you also are collecting ASRS pension benefits, you will be subject to ASRS
Return-to- Work rules: www.azasrs.gov/web/pdf/fact_sheets/Return_To_Work.pdf.
If I return to work after my phased retirement period, will ORP distributions continue?
Yes, as long as distributions began before your return-to-work date.
If I return to work after my phased retirement period, will I be allowed to contribute
to the ORP or ASRS retirement plans?
Yes. In fact, you must contribute to the retirement plan that applies to your new job classification if you return to work at 50% or more time (FTE) with the intent of working 20 weeks or more in the fiscal year. (This assumes you are not collecting ASRS pension benefits.)
View retirement eligibility information at www.asu.edu/hr/benefits.
If I am collecting ASRS pension benefits and return to work after my phased retirement period, am I allowed to contribute to the ORP or ASRS retirement plans?
If your ASRS pension benefits have begun, these return-to-work rules apply:
RETURN-TO-WORK RULES |
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First Year of Retirement |
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After One Year of Retirement |
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Normal Retirement |
Early Retirement |
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Normal Retirement |
Early |
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Less than 50% appointment (not |
No retirement participation permitted |
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50% |
Continuing ASRS pension |
No retirement participation permitted * |
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May enroll in the ORP plan, if eligible |
No retirement participation permitted until Normal Retirement date is reached ** |
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Suspending ASRS pension |
Must enroll in ASRS only |
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May enroll in either ASRS or, if eligible, the ORP plan |
May enroll in either ASRS or, if eligible, |
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Will I be able to participate in the benefits program at ASU if I return to work?
Yes, as long as you are appointed at least 50% time for six months or more, you can participate in all ASU, ABOR and State of Arizona benefits plans: medical, dental, vision, basic and supplement life, short-term and long-term disability, flexible spending accounts, and other voluntary benefits plans such as home/auto and long-term care.
May I re-enroll in the employee health plan if I have chosen the retiree health coverage?
Yes. If you already have enrolled in a State of Arizona retiree health insurance program, you can suspend your retiree health coverage and enroll in ASU health benefits. When you retire again, you must re-enroll in a State of Arizona retiree health insurance program within 31 days of your new retirement date.
Where can I get answers to phased retirement and other retirement questions?
Call the HR Faculty Services line at 480.727.9900 (extension 7.9900).
When should I attend other pre-retirement meetings?
Here are the steps to ensure a successful transition into retirement:
Three months before you retire
Contact the Social Security Administration (www.ssa.gov) to apply for Medicare
and Social Security retirement benefits, if applicable.30 days before you retire
Attend an ASU retirement meeting conducted by HR Benefits Design & Management for information on retiree insurance options.
Call 480.727.9900 to schedule a date.
www.asu.edu/hr/benefits/retirement_info.html
Contact your ORP investment company.
AIG Retirement (formerly AIG Valic) | 800.448.2542
Fidelity | 800.343.0860
TIAA-CREF | 866.548.3705