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Retirement Options for Exempt Employees

TCRS Hybrid Retirement Plan

The Hybrid Retirement Plan is comprised of two valuable components: a defined benefit plan provided by the Tennessee Consolidated Retirement System (TCRS) and a 401(k) plan offered through Empower Retirement.

Your defined benefit plan - Tennessee Consolidated Retirement System (TCRS)

Recognized as one of the top performing defined benefit plans in the country, TCRS provides lifetime retirement, survivor and disability benefits for employees and their beneficiaries. After a five-year vesting period, an employee becomes eligible to receive a monthly benefit at retirement once the age requirement is met. The benefit is calculated by the employee’s years of service and salary. The benefit provided by TCRS is a solid foundation for building a retirement future.

Your 401(k)

The 401(k) plan lets you take control of your retirement by investing in fund options of your choice. You are immediately vested in the 401(k) and can decide how your money should be invested given your individual goals, risk tolerance, and timeline. The amount you receive from your 401(k) account in retirement is based on how much you save, plus any accumulated earnings from your investments.

Hybrid plan (for employees hired on or after July 1, 2014)

Your retirement is funded by contributions from both the State of Tennessee and you, the member. The State makes a contribution equal to 4% of your salary into TCRS and 5% into your 401(k). You, the member, contribute 5% to TCRS and 2% to the 401(k) plan. Your contributions to the 401(k) plan may be made on a pre-tax or after tax (Roth) basis, meaning you can choose whether the money will be taxed now or in retirement. The State of Tennessee provides a retirement plan that gives you an excellent start toward a successful financial future.

Contributions to your Hybrid Retirement Plan
  Employer contributions Member contributions Total contributions
TCRS 4% 5% 9%
401(k) 5% 2% 7%
TOTAL 9% 7% 16%

Your member contributions to the 401(k) qualify for a monthly dollar-for-dollar match, up to $50 each month!

Learn more about the Hybrid Plan.


 

Legacy plan (for members hired before July 1, 2014)

Members hired prior to July 1, 2014 are in the Legacy Plan, and are non-contributory to their defined benefit (TCRS) plan. Members can also participate in the 401(k) and 457 plans. Your member contributions to the 401(k) plan may be made on a pre-tax or after tax (Roth) basis, meaning you can choose whether the money will be taxed now or in retirement. Your member contributions to the 401(k) also qualify for a monthly dollar-for-dollar match, up to $50 each month.

Learn more about the Legacy Plan.

 

To schedule a Retirement Counseling session as a TCRS member, please visit here.

Optional Retirement Program (ORP)

The ORP is a defined contribution plan that lets you take control of your retirement by contributing to investment options of your choice. You are immediately vested in the ORP and can decide how your money should be invested given your individual goals, risk tolerance, and timeline. The amount you receive from your ORP account in retirement is based on the value of your account at the time of distribution.

The ORP is offered through three plan providers – TIAA, Valic, and Voya***. More information about their specific investment options can be found at the links below:

Or you can contact our ORP representatives:

VALIC

Nelson Clay Green Jr, MBA
VALIC Financial Advisors, Inc.
Financial Advisor | Tennessee District | Southeast Region

AIG Retirement Services
340 Seven Springs Way | MC150 | Brentwood, TN 37027
Tel +1 615 221 2541 | Cell +1 270 348 1620 | Fax +1 270 282 4785

nelson.green@aig.com | www.aig.com/RetirementServices

VOYA

Michael V. Biggs, ChFC, CLU, MBA
Financial Professional


Equitable Advisors, LLC

Waypoint Financial Partners, LLC

1817A Madison Street | Suite 3 | Clarksville, TN 37043
Tel +1 931 245 5480 |

michael.biggs@equitable.com |https://www.voya.com/

TIAA-CREF

Austin Jefferson
Financial Consultant


TIAA Financial Solutions 

AIG Retirement Services
One American Center | 3100 West End Avenue | Suite 300 | Nashville, TN 37023
Tel +1 615 783 2956 ext. 25-2956 | Cell +1 270 348 1620 | Fax +1 270 282 4785


Office: 615.783.2956 ext. 25-2956
ajefferson@tiaa.org

Exempt faculty and staff hired after July 1, 2014 are eligible to participate in the Hybrid ORP Plan. Hybrid ORP members are automatically enrolled in the state’s 401k plan at 2% of salary.

Exempt faculty and staff who were ORP members prior to July 1, 2014 are in the Legacy ORP Plan. The Legacy ORP plan is closed to new enrollees.

Additional information about the Hybrid and Legacy ORP plans can be found in the ORP Member Guide.

Contributions to your ORP
  Employer contributions Member contributions Total contributions
ORP 9% 5% 14%
401(k) 0% 2% 2%
TOTAL 9% 7% 16%

Your member contributions to the 401(k) qualify for a monthly dollar-for-dollar match, up to $50 each month!

 

What is a 401(k) plan? A 401(k) plan is a retirement savings plan designed to allow eligible employees to supplement any existing retirement and pension benefits by saving and investing your taxadvantaged dollars through voluntary salary deferral. You may select from pre-tax and after-tax (Roth 401(k)) deferral options. Pre-tax contributions and any earnings on contributions are tax-deferred until money is withdrawn. Distributions are usually taken during retirement, when many participants are typically receiving less income and may be in a lower income tax bracket than while working. Distributions from pre-tax contributions are subject to ordinary income tax. If taken before you reach age 59½, distributions may be subject to an additional 10% federal early withdrawal tax.

 

What is a Roth 401(k) contribution? A Roth 401(k) contribution is an option under the 401(k) plan that allows eligible employees to supplement any existing retirement and pension benefits by saving and investing after-tax dollars through voluntary salary deferral. Contributions and any potential earnings can be distributed on a tax-free basis after you have reached age 59½ and after the required five-year holding period has passed. You have to designate all or a portion of your 401(k) elective deferrals as Roth contributions.

 

The 2021 maximum contribution limit is $19,500.  The catch-up contribution is an additional $6,500. This maximum contribution limit is an aggregate total of the 401(k) and 403(b).

What is a 457 deferred compensation plan? A governmental 457(b) deferred compensation plan (457 plan1 ) is a retirement savings plan that allows eligible employees to supplement any existing retirement and pension benefits by saving and investing pre-tax dollars through a voluntary salary contribution. Contributions and any earnings on contributions are tax deferred until money is withdrawn. Distributions are usually taken during retirement, when many participants typically receive less income and may be in a lower income tax bracket than while working. Distributions are subject to ordinary income tax. The early withdrawal penalty does not apply to 457 plan withdrawals. The 457 deferred compensation plan does not offer a Roth option.

 

The 2021 maximum contribution limit is $19,500. The catch-up contribution is an additional $6,500. 

What is a 403(b) plan? The 401(k) and 403(b) are very similar in design. Both are deferred compensation plans with immediate vesting. The main difference is the financial institutions that participate in the plans. Empower is the only provider in the 401(k), whereas the 403(b) has the three ORP providers. Therefore, an employee could elect to contribute supplemental/voluntary funds to the same financial institution that they selected for the ORP, should they participate in ORP.

 

The 2021 maximum contribution limit is $19,500.  The catch-up contribution is an additional $6,500. This maximum contribution limit is an aggregate total of the 401(k) and 403(b).

 

 A chart displaying the differences between the 403(b) and 401(k) is below:

 

403(b)

401(k)

Providers

TIAA, VALIC, VOYA

Empower

Eligibility

All active higher education employees

All active state employees

Contribution Source

Employee deferrals

Employer and Employee deferrals

Investments

Investments are self-directed

Investments are self-directed

Distribution Options

Based on the individual’s account balance. Individuals are eligible to select: single life annuity, joint and survivor annuity, lump sum payments, periodic payments, and required minimum distribution payments, among others

Based on the individual’s account balance. Individuals are eligible to select:  lump sum payments, periodic payments, and required minimum distribution payments, among others

Vesting

100% immediate

100% immediate

  • APSU Policy 2:008 Faculty Post-Retirement Program (view)
  • Post Retirement Agreement (view)
  • Amendment to Post-Retirement Service Agreement (view)
  • Post-Retiree Pay Form (view)