Academic Affairs Manual (ACD)

Effective: 7/1/1978

Revised: 8/6/1999

ACD 607–06: Arizona Optional Retirement Plan Benefits

Purpose

To define benefits provided to members of the Arizona Optional Retirement Plan upon termination of employment

Sources

Arizona Revised Statutes § 15–1628

Arizona Board of Regents Policy Manual - 6–602

Applicability

A faculty member or academic professional who:

1. is a member of the Arizona Optional Retirement Plan

   and

2. terminates employment.

Policy

The Optional Retirement Plan (ORP) is a defined contribution plan. Vesting of the employer’s contributions requires five years of plan participation. Employees who join the university with an active contract of a defined contribution retirement program of a college, university or higher education organization in a state other than Arizona shall be immediately vested in the ORP. Monthly retirement payments are calculated based on an annuity rate applicable to an individual's total account balance. Provision for early retirement begins at any age and for normal retirement, at age 65.

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Options upon Termination

Upon termination while participating in ORP, an employee has the option to:

1. receive a monthly benefit if the qualifying provisions of ORP are met
2. remain a noncontributing member until the eligibility requirements for an early or normal retirement benefit are met
3. request a return of individual and employer contributions with credited interest based on vesting and service provisions

   or

4. roll individual and any vested employer contributions with credited interest into an IRA.

A faculty member or academic professional should contact the plan provider to determine which payout options are available to him or her for employee contribution and earnings and employer contribution and earnings, prior to terminating employment.

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Return of Contributions

In lieu of a retirement benefit a faculty member or academic professional may elect a return of the amount on deposit based upon the individual contributions and any earned interest. This will result in forfeiture of the university’s contributions and any claim to future benefits from the plan. The faculty member or academic professional may have the option of taking up to a 10 percent lump sum distribution before the remainder is annuitized.

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Death Payment

In the event of death, the beneficiary will receive the total deposit in the employee’s account, including employee and university contributions, with interest.

ProceduresD

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Retirement Payments or Return of Contributions at Termination

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Responsibility	Action
Department	Submit a termination Payroll Action Request (PAR) to the Human Resources (HR) – Customer Service Center.
	If the terminating faculty member or academic professional elects to withdraw contributions:
Faculty member or academic professional	Request a Return of Contributions form from the appropriate plan provider.
	If the terminating faculty member or academic professional elects to retire:
	Request a retirement application form from the appropriate plan provider. Complete and return the form to the appropriate plan provider.
Plan provider	Process payment of benefits or return of contributions.

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Death Payments

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Responsibility	Action
Beneficiary	Contact the appropriate plan provider.
Plan provider	Provide for payment of the benefit.

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