(ii) send notification of the transaction to the employee
indicating the reason for the reduction in the account balance.
(E) Deposit into Originating Fund. The ORP employer
shall deposit the reimbursed ORP employer contributions into the originating
fund or funds in accordance with instructions from the Texas Comptroller
of Public Accounts and any other applicable policies and procedures.
(F) Resumption of Participation within 93 Days.
(i) If unvested ORP employer contributions are returned
to the originating fund when the participant did, in fact, resume
ORP participation in lieu of the same retirement system at the same
or another ORP employer within 93 calendar days of the last day of
the calendar month in which the termination of participation occurred,
the ORP employer that requested the reimbursement shall, immediately
upon being notified of the employee's resumption of participation,
return the reimbursed amount to the ORP company for re-deposit into
the participant's account.
(ii) The ORP employer with which the participant resumes
participation, if not the ORP employer that requested the reimbursement,
shall notify the ORP employer that requested the reimbursement of
the participant's status as soon as practicable after the participant
resumes participation.
(iii) The entire amount of actual ORP employer contributions
that were returned to the originating fund under the provisions in
this paragraph shall be sent back to the company. There shall be no
allowance for any earnings or losses on the ORP employer contributions
that may have accrued during the time that the amounts were not in
the participant's account.
(b) Withdrawal of Retirement System Funds. An employee
who elects to participate in ORP may withdraw any member contributions
(plus accrued interest, if any) that he or she may have accumulated
in the applicable retirement system prior to the election of ORP.
Withdrawn member contributions shall not be rolled over into the participant's
ORP account prior to termination of ORP participation.
(c) ORP Companies.
(1) Authorized by Each ORP Employer. Each ORP employer
shall establish its own list of companies that are authorized to provide
ORP products to that employer's ORP participants. Governing boards
with more than one component institution may establish one list for
all components or separate lists for one or more component institutions.
(2) Qualified Companies. Companies authorized by an
ORP employer shall be qualified to do business in the state of Texas
as determined by the Texas Department of Insurance, the Texas State
Securities Board, and any other applicable state or federal agency.
(3) Minimum Number of Companies.
(A) Minimum of Four. Each ORP employer shall authorize
a minimum of four qualified companies, including at least one company
that offers 403(b)(1) annuity accounts and at least one company that
offers 403(b)(7) custodial accounts.
(B) Variety of Choices. Each ORP employer's list of
authorized companies and products shall provide a reasonable variety
of choices among types of accounts and funds.
(C) No Maximum Number. Each ORP employer may authorize
as many ORP companies as the ORP employer deems appropriate.
(4) Return of Unvested Employer Contributions. Before
an ORP employer may authorize a company to receive ORP contributions
from unvested participants, the ORP employer shall require the company
to certify that the entire amount of actual unvested ORP employer
contributions will be returned upon request, in accordance with the
procedures in paragraph (a)(11) of this section. The ORP employer
may require the company to indicate what method will be used, for
example, restriction of unvested funds to money market or similar
accounts.
(5) Authorization Policies and Procedures. Each ORP
employer shall be responsible for establishing local policies and
procedures for authorizing or certifying companies to provide ORP
products to the ORP employer's ORP participants. Governing boards
with more than one component institution may establish one policy
for all components or separate policies for one or more component
institutions.
(A) Consultants. ORP employers may enlist the assistance
of consultants or other outside parties to develop selection criteria.
(B) Objective Selection Process. ORP employers may
utilize an objective process to review the quality of ORP products
and services and select ORP companies and products using pre-determined
standards either in a competitive selection process or in a minimum
criteria process. Standards may include performance relative to peer
products in the same asset class, costs and fees paid by the participant
to participate in the investment products, financial stability of
the company, company ratings, and service to participants, including
type of service delivery model, company financial counseling, and
other services for participating employees. ORP employers may establish
additional standards that must be met by ORP companies to remain on
the ORP employer's list of authorized companies, such as minimum participation
standards.
(C) Participant Requests. ORP employers shall not be
required to authorize any ORP company, company representative, or
product requested by any participant, although ORP employers may take
such requests into account if it may be done in accordance with applicable
laws, rules and policies.
(D) Periodic Review of Policies. Each ORP employer
shall periodically review and update its authorization or certification
policies and procedures.
(E) Periodic Re-Authorization. Each ORP employer shall
periodically re-authorize or re-certify companies.
(6) Participant's Change of Companies.
(A) Two Opportunities per Year. Each ORP employer shall
provide ORP participants with at least two opportunities during each
fiscal year to select a different company from the ORP employer's
list of authorized companies. The opportunities may be provided on
set dates during the year or on a flexible individualized basis.
(B) Two Changes per Year. Each ORP employer shall allow
a participant to change his or her company selection on either or
both of the opportunities provided by the ORP employer under subparagraph
(A) of this paragraph.
(C) Effective within 35 Days. The ORP employer shall
start sending the participant's ORP contributions to his or her newly
selected company beginning with the next payroll period if practicable,
but not later than 35 days after the date the participant signs and
submits the appropriate forms to the ORP employer.
(i) Problems. If the ORP employer cannot comply with
this deadline due to circumstances beyond the ORP employer's control,
the ORP employer shall notify the participant of the problem and shall
provide the participant with an opportunity to change his or her company
selection.
(ii) Additional Change. A participant's change of companies
made in accordance with clause (i) of this subparagraph shall not
be counted against the number of changes required under subparagraph
(B) of this paragraph.
(D) Prior Contributions. Amounts contributed by the
participant to previously selected ORP companies, including ORP contributions
made during prior periods of employment with the same or another ORP
employer, shall be under the same statutory distribution restrictions
as the contributions in the participant's account with his or her
newly selected ORP company.
(E) Transfers of Prior Contributions.
(i) Each ORP employer shall include a provision in
the employer's ORP plan that permits participants to execute a contract
exchange to transfer ORP funds that were contributed during the current
or prior periods of employment with the ORP employer to another ORP
company that is authorized by the employer to receive the funds. A
contract exchange shall not be counted against the number of changes
required under subparagraph (B) of this paragraph.
(ii) Each ORP employer may include provisions in the
employer's ORP plan that permit participants to transfer ORP funds
from one ORP employer's plan to another ORP employer's plan provided
both employer plans include provisions authorizing such plan-to-plan
transfers.
(7) Grandfathered Companies.
(A) ORP employers may allow participants to continue
contributing to an ORP company that is no longer on the ORP employer's
list of authorized companies. Such a company shall be referred to
as a grandfathered company.
(B) Institutions may allow participants who directly
transfer from another Texas public institution of higher education
to continue contributing to the same ORP company that they were contributing
to at their prior ORP employer, provided the institution verifies
that the contract includes the statutory distribution restrictions.
Cont'd... |