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Benefits at Retirement

Retirement Benefits

The State University System Optional Retirement Program (SUSORP or ORP) is a defined contribution plan offered for certain eligible employees 1 of universities in the State University System. On an ongoing basis throughout each year, the state through your university will contribute a percentage of your earnings to the participating company or companies you selected on your contract application(s). These contributions 2 are invested on your behalf, at your direction, to create your retirement fund.
The percentage of compensation to be contributed each month by your employer to your contract provider is based on a rate established by State law 2. The employer contribution rate is subject to change by the Florida Legislature. In the past, the employer contribution rate has been as low as six percent and as high as 11.83 percent. However, since July 1, 2002, the contribution rate has been established at 10.43 percent of your covered wages 3 - with 10.42 percent going into your individual ORP account(s), to be invested at your direction by the provider companies you select, and the extra 0.01 percent funding the costs of program administration.
Under a defined contribution plan, there can be no determination of your benefit before you retire. The amount you will receive at retirement will depend on the size of your account(s) at that time. How much money will be available to you will be based on your contribution level, your investment choices (leading to gains/losses), market conditions, and the type of distribution option(s) you select. When you participate in a defined contribution plan, you bear the risk that sufficient moneys may or may not be raised to provide you adequate retirement income at the time you hope to retire. Your future contributions and investment performance can have a significant impact on your ultimate fund balance.
If you elect to take your account distribution in the form of an annuity, the income you will receive will be determined when you actually decide to retire, based on your gender, your age at retirement, and market conditions at that time. Your benefit amount will also be affected if you opt to provide a survivor benefit for your spouse or other dependent beneficiary and/or choose to add inflation protection in the form of periodic cost-of-living adjustments.
For examples of investment amounts and the result of different return rates, you may wish to visit the MyFRS Web site and make use of the various calculators available there.
1 For more on SUSORP eligibility, see Eligibility & Plan Comparison.
2 For more on SUSORP employer contributions, see Contributions.
3 The SUSORP contribution rate is set at a level that includes an amount provided to program participants in lieu of the health insurance subsidy.

Disability Benefits

There are no specific disability benefits provided by the SUSORP. However, since the plan provides full and immediate vesting upon execution of a contract, if your disability should cause you to terminate your employment, depending on your age and tax penalties that may apply, you could elect to annuitize or otherwise receive your employer-funded benefits at that time. Alternatively, if you have sufficient income through other means, you can allow the fund to continue to change through future investment earnings or losses. You may also want to consider purchasing disability insurance during your employer to help subsidize your income in case you are disabled.

Survivor Benefits

In the event of your death before retirement, your beneficiary will be entitled to receive the full value of your ORP account(s). Your beneficiary may elect to receive a lump sum payment, or to receive monthly annuity payments.
Under s. 121.35, Florida Statutes, survivor benefits re payable as follows:
  1. A lump-sum distribution of the ORP account(s), payable to the beneficiaries or to the deceased participant's estate;
  2. An eligible rollover distribution on behalf of the surviving spouse of a deceased participant, whereby all accrued benefits, plus interest and investment earnings, are paid from the deceased participant's account directly to an eligible retirement plan, as described in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the surviving spouse;
  3. Such other distribution options as are provided for in the participant's optional retirement program contract; or
  4. A partial lump-sum payment whereby a portion of the accrued benefit is paid to the deceased participant's surviving spouse or other designated beneficiaries, less withholding taxes remitted to the Internal Revenue Service, if any, and the remaining amount is transferred directly to an eligible retirement plan, as described in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the surviving spouse. The proportions must be specified by the participant or surviving beneficiary.
You should contact your annuity provider company or companies for a full explanation of the survivor benefits that are available under ORP.

Inflation Protection

When you elect to begin receiving retirement payments, your benefit stream will be determined by the type of payment contract you select:
  • If you select a form of distribution other than an annuity (such as a lump-sum distribution or periodic payments), no cost-of-living adjustment (COLA) option will be available.
  • If you select a fixed-income annuity with no adjustment for inflation (less expensive than an annuity with inflation protection), your payment amount will be set at retirement and will continue unchanged for the remainder of your life (or for a fixed payment period as established by contract).
  • If your investment provider offers an annuity with a COLA as a distribution option, and you choose this more expensive type of annuity, your initial payment amount will be set at retirement and will increase periodically by the contracted amount for the remainder of your life (or for a fixed payment period as established by contract).
  • If you select a variable income annuity, your payments may fluctuate based on the investment returns of the annuity underwriter. Variable contracts may provide the investor with some inflation protection, but also with some downside risk.
No other adjustments apply to your ORP benefits. However, if you also have creditable service under the FRS when you elect to begin receiving retirement payments from ORP, you may be eligible for a COLA based on your FRS benefit, as described under Benefits.

Health Insurance Subsidy Payments

ORP participants are not eligible to receive HIS payments for any period of time they were covered under the ORP. However, if an ORP participant has creditable service under the FRS when he/she retires, the retiree may be eligible for a monthly HIS payment based on his/her FRS service, as described under Benefits.
E-mail your SUSORP comments or questions to us. Please include your name, mailing address, e-mail address, the last four digits of your social security number (SSN), and your phone number if you require an answer from us.