Frequently Asked Questions
Optional Retirement Plan for Political Appointees

Contributions

• Who contributes?
• Does the IRS treat the employer contributions as wages?
• Does this mean I will never have to pay taxes on the employer contributions made on my behalf?
• What is the vesting schedule?
• How much does my employer contribute for me?
• What is creditable compensation?
• Can I make contributions to the Plan?
• What other types of retirement plan money can be rolled into the ORPPA Plan?
• Does participating in this plan affect my right to participate in the Commonwealth's 457 Deferred Compensation Plan (457 Plan) or Cash Match Plan?

Who contributes?

Your employer.

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Does the IRS treat the employer contributions as wages?

No. The IRS does not treat the employer contributions as wages to the employee.

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Does this mean I will never have to pay taxes on the employer contributions made on my behalf?

No. Under federal and Virginia law, your ORPPA contributions and any earnings are tax-deferred, allowing more of your money to potentially grow compared to after-tax contributions. Upon distribution from the Plan, each payment you receive from your account is subject to federal and state income taxes as you receive it. Amounts remaining in your account continue to accumulate on a tax-deferred basis until they are withdrawn.

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What is the vesting schedule?

Account balances are 100 percent vested at all times.

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How much does my employer contribute for me?

Your employer contributes a percentage of your creditable compensation based on federal and state law. The current percentage rate is 10.4 percent of creditable compensation.

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What is creditable compensation?

Creditable compensation means your salary minus any overtime pay, payments of a temporary nature or payments for extra duties such as advising special activities. This Plan's definition of creditable compensation is the same used by the VRS defined benefit plan.

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Can I make contributions to the Plan?

No. This Plan only accepts contributions made by the employer. However, you may roll into the Plan monies from other types of retirement plans.

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What other types of retirement plan money can be rolled into the ORPPA Plan?

Other types of retirement plan money that can be rolled into the ORPPA Plan include 401(a), 401(k), 457, 403(b), traditional IRA and Federal Thrift Savings Plan.

You may take a distribution of monies you have rolled into the Plan at any time, even while still employed with the employer that offers the Plan.

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Does participating in this plan affect my right to participate in the Commonwealth's 457 Deferred Compensation Plan (457 Plan) or Cash Match Plan?

No. You can participate in the ORPPA and also participate in the 457 Plan. You also will receive an employer cash match on your contributions to the 457 Plan, if you qualify.

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