Important Information About Using the Retirement Plan Comparison Tool

Skip Navigation

Your employer-sponsored retirement plan is a valuable benefit and a smart way to invest for your future. As an eligible employee you have a limited window of time to choose between two very different retirement plans - a defined benefit plan (TSERS) or a defined contribution plan (ORP). There are inherent benefits and risks of each type of retirement plan offered to you.

It's important that you consider the risks and benefits of each plan and your personal situation before you make a final election decision. Read more information on both types of plans.

Defined Contribution Plans:

  • Education and investment knowledge - Participant should understand investment decisions and evaluate current circumstances and risk tolerance.
  • Investment risks/returns - Participant assumes the risk that poor market conditions could negatively impact investment returns in the short and long term.
  • Security - Unforeseen circumstances could deplete the account balance prior to retirement (such as financial hardship, plan loans, job changes, etc.)
  • Contributions and access - Contributions (and investment earnings) must be sufficient to provide desired level of assets and income after retirement. The participant is responsible for continuing contributions to the plan (not diverting retirement assets to other current or pressing financial obligations).
  • Longevity and Cognitive Risks - Participant may outlive the assets in your account, or lose the cognitive abilities to invest in their account appropriately.

Defined Benefit Plan:

  • Investments - Investments are the responsibility of the plan sponsor (not the participant).
  • Funding - The plan could be at risk of insufficient funding by the plan sponsor.
  • Duration of employment - A shorter time of employment would result in a smaller accrued benefit.
  • Vesting - It may take longer to be fully entitled to benefits than in a defined contribution plan.
  • Tax savings - These are potentially limited (no pre-tax deductions from salary).
  • Additional benefits - An early retirement subsidy is offered by some defined benefit plans after a participant completes a specified period of employment, sometimes coupled with attaining a specified age. Important: Employees who have reached (or are near) 'early retirement', as defined under the Institution's plan, could lose valuable early retirement subsidies upon transition to a defined contribution plan.

This tool does not consider prior participation in an employer-sponsored retirement plan. In making your decision, it's important to read all of the information provided concerning the use of this tool, including the Methodology & Assumptions. You should consult a financial advisor before making an irrevocable decision.

Use the tool now > >

Important: Be sure to supplement your retirement savings regardless of the plan you choose. You're strongly encouraged to consult with a tax or financial advisor prior to making any elections.

C7292