State Optional Retirement Program

The State Optional Retirement Program (State ORP) is a defined contribution retirement plan for employees of state agencies, public and charter school districts and public higher education institutions. State ORP is also available to individuals first elected to the South Carolina General Assembly at or after the general election in November 2012. Employees of optional employers are not eligible to participate in the State ORP. In this retirement plan you are solely responsible for your retirement account, and you choose how to invest and manage your money.

Eligibility

State ORP participation requires you to be employed by and receiving compensation from an employer that participates in the State ORP. Initial enrollment, including service provider selection, must take place within 30 days of your initial hire.

PEBA will provide your selected service provider with basic enrollment information; however, you will need to provide direction on how you want your contributions invested and designate a beneficiary for your State ORP account balance. The current providers are:

View contact information for the service providers now.

The current contract with the four providers expires December 31, 2020. The new contract, which begins January 1, 2021, was awarded to AIG, MassMutual, TIAA and Voya Financial (Voya). As a result of this award, MetLife will no longer be a State ORP service provider, and Voya will be a new State ORP service provider beginning January 1, 2021. Learn more on the service provider transition page.

Annual open enrollment

The annual open enrollment period for all participants of State ORP is January 1 to March 1 each year. During the annual open enrollment period you may:

  • Choose to change service providers; or
  • Elect to irrevocably switch to SCRS if it has been at least one year, but not more than five years, since your initial enrollment in the State ORP.

Contributions

You contribute a tax-deferred 9 percent of gross pay. Your employer contributes 5 percent of your gross pay to your chosen service provider for allocation to your State ORP account.

Benefits

  • Your retirement benefit consists of your account balance at retirement, made up of contributions made by you and your employer throughout your years of employment, as well as any earnings on those contributions. It is not based on a set formula, and you assume all investment and longevity risk.
  • You select one of four service providers, contracted by PEBA, to administer your State ORP account. You choose the provider that best suits your needs.
  • You have immediate rights to your entire account balance, including employee and employer contributions, when you leave covered employment or reach age 59½.
  • An active member incidental death benefit is available through PEBA.

Distribution options

  • You have multiple payment options, including lump sum and periodic withdrawals.
  • Although you are eligible to take a distribution if you leave covered employment before age 59½, you may be subject to a penalty tax in addition to regular income tax unless you roll over the funds into an eligible retirement plan. There are some exceptions to the penalty tax. Consult a tax advisor for more information.
  • You can access all the funds in your account, including employee and employer contributions, at age 59½. You can do this even if you are actively working and contributing to the plan. Although the distribution will not be subject to the penalty tax, it will be a taxable distribution unless the funds are rolled over into an eligible retirement plan.
  • You may leave your balance in your account until you choose to take withdrawals or until the IRS requires you to take annual minimum distributions. Keep in mind that while you are actively employed by an employer participating in the plan, you are not obligated to take a required minimum distribution.

Retiree insurance eligibility

For State ORP participants, insurance eligibility is determined as if you were a member of SCRS. It’s important to understand that eligibility for retiree group insurance is not the same as eligibility for retirement. Only PEBA can make retiree insurance eligibility determinations. You are encouraged to contact PEBA before making final arrangements for retirement.

Planning for your future

PEBA’s retirement awareness series, Be Aware and Prepare, provides you with information that can help you make smart decisions about your financial future. Regardless of how we define retirement awareness, PEBA believes it’s important to plan for a secure financial future and think about what life will be like after you quit working. We encourage you to use these resources and act now to help secure your financial future.