In accordance with State of Texas law, all benefits-eligible state employees at University of Houston-Clear Lake are required to participate in one of two retirement programs (TRS or ORP), in addition to Social Security.
Teacher Retirement System (TRS)
TRS is a defined-benefits plan, which provides three basic benefits to employees participating in the program: retirement benefits, disability benefits and survivor and death benefits based on length of service and salary level. Detailed descriptions of these benefits, including payment options, are available at www.trs.texas.gov
The amount a member contributes is established by law; currently, the required member contribution rate is 8.0 percent of creditable compensation. The state contribution rate is 7.75 percent. Your employer deducts the TRS member contribution from your salary on a pre-tax basis and forwards it directly to TRS. Member contributions are tax-deferred.
An employee who is an active member in TRS at another higher education institution or public school district must contribute to TRS the required percentage of UHS salary regardless of whether or not the UHS position is eligible for TRS membership.
Optional Retirement Program (ORP)
The Optional Retirement Program (ORP) is a defined contribution plan that is available as an alternative to the Teacher Retirement System (TRS) for full-time faculty, librarians, and certain administrators and professionals employed by Texas public institutions of higher education. ORP-eligible employees have 90 days from their first day of employment in an ORP-eligible position to make a one-time irrevocable election of ORP in lieu of TRS.
New UHCL benefits eligible employees who have received the ORP option and elected ORP prior to their employment, will be required to participate in ORP. The overview below contains information you need to know before your 90-day ORP election period expires.
Voluntary Retirement Accounts
The following plans are available to employees under the rules and regulations of the Internal Revenue Service as well as legislation know as the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Employees may participate in both plans simultaneously or independently. Both plans are voluntary and there are no matching university contributions.
Tax Deferred Annuity Program (TDA)
Employees may purchase tax deferred plans with a portion of their salary. The employee’s contributions are deposited with an approved company of the employee’s selection and are tax sheltered. A variety of investment options are available including fixed annuities, variable annuities and mutual funds. The minimum monthly contribution is $25.00 and the maximum amount is determined according to EGTRRA regulations and qualifications. Employees may increase or reduce the monthly amount (within the maximum limit), change companies or cancel their participation at any time with the required documentation. TDA’s have a 10% penalty tax applied to distributions made prior to age 59 ½ unless an exception applies. For additional information, please contact your Benefits Coordinator.
457 Deferred Compensation Program
Employees may also enroll in the State of Texas 457 deferred compensation program administered by Empower Retirement under the guidelines set by ERS. There are several investment allocations available that include money market funds, bond fund, index funds, value accounts, overseas funds and growth funds. One and or more funds may be selected as the investment option. The minimum monthly contribution is $20.00 and the maximum amount is determined according to EGTRRA regulations and qualifications. Employees may increase or reduce the monthly amount (within the maximum limit), change companies or cancel their participation at any time with the required documentation. This 457 has no penalty tax on distributions at any age after termination of employment. For additional information, please contact your Benefits Coordinator.
Social Security and Medicare
UHCL participates in Social Security and Medicare. The contribution rates are Social Security/FICA - 6.2% by employee; 6.2% by Employer. The Federal Insurance Contributions Act is the federal law that requires you to withhold two separate taxes from the wages you earn. It includes Social Security Tax and Medicare Tax at a flat percentage rate. The Social Security Tax is 6.2% rate of your wages, and the Medicare Tax is 1.45% of your wages. For additional information please refer to www.ssa.gov.
Retirement at Work
Retirement@Work® brings together information from all your Plan’s investment providers in one spot to give you a more complete picture of your retirement savings. Plus, you can review and update your contribution amount and investment choices, and take advantage of calculators and other tools to help plan for the type of retirement you want.