The University of Texas System provides a number of vehicles that you can use to save for retirement. In addition to mandatory participation in the Teacher Retirement System of Texas (TRS) or the Optional Retirement Program (ORP), you can enroll in the Tax-Sheltered Annuity Program (UTSaver TSA) or the Deferred Compensation Plan (UTSaver DCP). You are eligible for retirement benefits with TRS or in the ORP on your first day of employment. You may enroll in the UTSaver TSA or UTSaver DCP at any time.
See the Summary of Retirement Programs for a comparison of all plans.
Teacher Retirement System
TRS is a defined benefit retirement plan governed by Internal Revenue Code Section 401(a). All eligible employees of The University of Texas System are automatically enrolled in TRS on their first day of employment. Employee and employer contributions go into a large trust fund that is managed by knowledgeable professionals. Retirement benefits are based on legislatively determined formulas. You are vested after five years of service with a right to a retirement benefit. There are also disability and death and survivor benefits available to TRS members.
See the TRS Benefits Handbook for more information on this valuable benefit.
Optional Retirement Program
The Optional Retirement Program (ORP) may be chosen by certain employees in lieu of TRS based on the job they perform. This program is a defined contribution plan governed by Internal Revenue Code Section 403(b). Benefits are based on the performance of the investments selected and are controlled by the employee. You are vested after one year and one day of participation with a right to both employee and employer contributions. This program provides a greater degree of portability than TRS.
There are significant differences between the ORP and TRS. Please see An Overview of TRS and ORP , provided by the Texas Higher Education Coordinating Board for a comprehensive review of these differences.
UTSaver Voluntary Retirement Savings Programs
UT System offers two voluntary retirement savings programs, the UTSaver TSA (403(b)) and the UTSaver DCP (457(b)). These programs allow you to tax-defer additional income for retirement, through pre-tax contributions. The programs do not include an employer contribution. Participants reduce their taxable income by making pre-tax contributions from their paycheck to invest in a fixed or variable annuities or mutual funds with an authorized company. As investments grow, the earnings are tax-deferred until the money is withdrawn; presumably at retirement when income tax rates are generally lower.
See the Comparison of Voluntary Retirement Savings Programs for more details.