What is the Louisiana Optional Retirement Plan (ORP)?
The Louisiana ORP is a defined contribution plan under Internal Revenue Code section 401(a). It is offered to certain employees of Louisiana’s public institutions of higher education as an alternative to the Teachers’ Retirement System of Louisiana (TRSL). Both employee and employer contribute an amount to a variable annuity based on a percentage of the employee’s salary — those contributions are allocated among investment options chosen by the employee. The account value is based on the contributions and any earnings on those contributions.* *Variable annuities are long-term investments designed for retirement purposes. Early withdrawals taken prior to age 59 may be subject to a 10% federal tax penalty. Money distributed from the annuity will be taxed as ordinary income in the year the money is received. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested.
