Retirement

TERP

The Omnibus Reconciliation Act of 1990 (OBRA 90) introduced into the law IRS Section 3121(b)(7)(f). As a result, temporary employees of a government entity may deposit money into a private retirement plan instead of Social Security.

The Temporary Employee Retirement Plan, or TERP, is a defined contribution plan authorized under Section 401(a) of the Internal Revenue Code. BENCOR is the plan administrator for the University of South Florida.

Temporary Employee Retirement Program (TERP) Notice 

FICA EasyAccess Flyer

For more information about individual investments, participants may contact BENCOR Administrative Services at 1-888-258-3422 or visit the BENCOR website. 

How the plan works

Social Security payroll taxes are collected under authority of the Federal Insurance Contributions Act (FICA). Social Security is currently withheld at 6.2% of eligible wages and matched by the university. Participants (Temporary, formerly OPS, employees) in this plan do not contribute to the Social Security Administration, nor is the amount contributed by the employee matched by the university. Instead, employees contribute 7.5% of their wages pre-tax into an investment account in their name. Medicare contributions at 1.45% are still withheld and matched by the university. The plan is mandatory for eligible employees. Employees are automatically enrolled or un-enrolled based on their eligibility status during the affected pay period. There is no minimum age or service requirement.

Once a contribution has been made to the plan, the employee will receive a Notice from BENCOR, the Plan Administrator. Employees are automatically place in the Guaranteed Pooled Fund (an interest bearing account), but may select other investment options. Participants should designate a beneficiary for their account.

Who is eligible?

Employees who are not covered by the State retirement plans are eligible. Adjunct faculty, Postdoctoral Scholars, medical residents and hourly and exempt Temporary employees who are not otherwise exempt from Social Security taxes are eligible to participate in TERP.

Who is not eligible?

Faculty, Staff, Administration and Executive Services employees participating in a State retirement plan are excluded from TERP. Also excluded are most students and graduate assistants.

Advantages of the plan

Withdrawals from the plan

Withdrawals from the plan may be made at the following times:

Distributions can be made to the participant 30 days after the date of termination from the TERP eligible appointment.

Withdrawals from an account may be made in a lump-sum cash payment (the IRS 10% penalty on early withdrawals does not apply to withdrawals upon separation at age 55 or later), or plan balances may be rolled over to an IRA or other eligible retirement plan. No IRS penalty applies to these transfers.

To obtain the necessary form for a Withdrawal/Rollover from the account, log on to the Bencor website.

Additional Information