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Maryland Optional Retirement Plan

Maryland Optional Retirement Plan

September 09, 2022

The Maryland Optional Retirement Plan (ORP) was established in 1975 as an alternative to the defined benefit plan (pension). When hired, faculty and administrators have the option to select either the ORP or the state pension plan.  Once an employee makes the selection between these two plans, it is a permanent decision.

 

With the ORP, the employer automatically sets aside 7.25% of the employee’s salary into the account. The account is 100% vested immediately. As an employee, you cannot add your own funds to the ORP plan; only employers may make contributions.  If you would like to make contributions to a retirement plan, you can still contribute to the 403b and/or 457 Deferred Compensation plan.

 

Currently, the two state-selected vendors operating the ORP are Fidelity and TIAA.  One vendor is chosen by the employee when the ORP is chosen.  As an employee, you are allowed to change which ORP vendor you would like contributions sent to at any time, and you can move the money from one vendor to the other.  You can choose how their money is invested at either Fidelity or TIAA; both have different options available. 

 

When you retire as an employee, you have the following options: 1) choose to receive a lump sum payment; 2) rollover the ORP (move the ORP into a new and separate account); or 3) take distributions or an annuity. The ORP is portable, so if you leave state employment, you can take the retirement benefits with you.

 

In summary, the ORP is a retirement plan option for those that want more control over their retirement savings without the vesting requirements of the pension plan.

 

If you would like to learn more about the ORP, feel free to reach out and we would be happy to answer any questions you may have.