UT System Physicians: TRS vs. ORP — The 90-Day Retirement Election at MD Anderson, UT Southwestern, and UTMB (2026)

The University of Texas System employs roughly 20,000 faculty and staff across MD Anderson, UT Southwestern, UTMB, UT Health Houston, UT Health San Antonio, Dell Medical School, UT Health East Texas, and the Austin, Arlington, Dallas, and El Paso campuses. Somewhere in that number is one of the largest physician workforces of any employer in the country — and every new physician among them faces the same 90-day, once-in-a-lifetime decision.

The choice: enroll in the Teacher Retirement System of Texas (TRS), the state's traditional pension, or the Optional Retirement Program (ORP), a 403(b) defined contribution plan. Choose wrong — or fail to choose at all — and you're locked in for the rest of your Texas public higher education career.

The generic HR materials treat this as a routine benefits election. For physicians, it isn't. Physician incomes, physician career mobility, and the specific structure of UT's retirement plans interact in ways the general employee guidance never addresses.

This is the physician-specific analysis, verified against current UT System, TRS, and Texas legislative sources.

Who's eligible for ORP. Not everyone. Under UT System policy — which follows Texas Higher Education Coordinating Board rules — ORP eligibility attaches to specific job categories: faculty members whose duties include teaching or research as a principal activity, certain executive administrators, and specialized professional positions where the credential itself is the job (physicians, engineers, attorneys). If you're a UT System physician in a faculty appointment, you're almost certainly ORP-eligible. If you're a staff physician in a non-faculty role, you're likely TRS-only.

Eligibility is job-based, not salary-based. You'll be notified of ORP eligibility by your institution's HR benefits office, typically within one to three weeks of your start date.

The election window. You have 90 calendar days from your first day of ORP eligibility to elect ORP in writing. Miss the window, and you remain in TRS for the entire duration of your Texas public higher education career — a default that catches physicians who assume the decision can be deferred while they get settled.

The election is irrevocable. Once you elect ORP, you cannot switch back to TRS at that or any other Texas public institution, ever. If you remain in TRS (either by default or by declining ORP), you cannot switch to ORP later at the same job — though a subsequent job change that makes you newly ORP-eligible may reopen the 90-day window. This is not like UC's second choice window; Texas does not offer one.

The parallel to our UC Pension Choice vs. Savings Choice guide is worth naming directly: same 90-day mechanic, same irrevocability, same default trap. The differences are in the math underneath.

The Teacher Retirement System of Texas is a defined benefit pension plan established in 1937, funded by employee contributions, state contributions, and investment returns.

The formula. Your annual retirement annuity equals:

2.3% × years of service × highest five-year average salary

At 20 years of service, that's 46% of your high-5 average. At 30 years, 69%. At 35 years, 80.5% — the cap. This is a genuinely generous formula, similar in tier to Iowa's IPERS at 65% at 35 years and better than California's PEPRA-capped UC pension at the physician salary level.

Contribution rates (fiscal 2026, unchanged for 2027). Employee: 8.25%. State: 8.25%. The employee contribution is pre-tax and deducted per pay period. Combined 16.5% funds the pension plus a modest health care contribution (0.65% of the state's share goes to TRS-Care, the retiree health program).

Vesting. 5 years of service credit. Leave before 5 years and you get back your own contributions plus modest interest — none of the state's share.

Retirement eligibility. The famous "Rule of 80" — your age plus years of service equal or exceed 80, with at least 5 years of service credit — allows unreduced retirement. You can also retire at age 65 with 5 years of service, or take a reduced benefit earlier under specific conditions.

Health care in retirement. TRS-Care provides retiree health insurance to eligible TRS retirees, with premium structures that depend on years of service and Medicare eligibility. This is a real benefit, but it's not free — check current TRS-Care premium tiers as part of your calculation.

The compensation cap. TRS retirement benefits are calculated on eligible compensation up to the IRS Section 401(a)(17) limit, which is $360,000 for 2026 (rising annually with inflation). Physician salaries above the cap don't count toward your pension. This is the same federal ceiling that constrains most public pensions — but as with UC's PEPRA cap, the ceiling matters more the further your salary exceeds it.

Does the TRS pension have cost-of-living adjustments?

Not automatically. TRS annuities do not rise with inflation on their own. TRS's actuarial disclosures state that the plan has no automatic post-employment benefit changes, including automatic COLAs (TRS GASB 68 note disclosures, 2024). Any increase has to be enacted by the Texas Legislature, so it arrives irregularly and on terms set by that session's bill.

The most recent one came in 2023. Senate Bill 10 (88th Legislature) and its companion constitutional amendment, HJR 2, gave a one-time, permanent increase to annuitants who retired on or before August 31, 2020. Voters approved the amendment as Proposition 9 on November 7, 2023 (Texas Legislative Reference Library), and the increase started with January 2024 payments. The size depended on retirement date (TRS: 2023 Retiree Benefit Enhancements):

• 6% for those who retired on or before August 31, 2001
• 4% for those who retired from September 1, 2001 through August 31, 2013
• 2% for those who retired from September 1, 2013 through August 31, 2020

The same bill paid one-time stipends in September 2023: $7,500 to retirees 75 or older and $2,400 to those 70 to 74 (TRS stipend FAQs). Neither the COLA nor the stipend reached anyone who retired after August 31, 2020.

What this means for the election. Plan on a TRS annuity that stays flat in dollars between whatever increases future Legislatures choose to pass. ORP has no COLA at all, because it is a defined contribution account with no promised benefit to adjust: your protection against inflation is how the balance is invested and how you draw it down, including any annuity you choose to buy with it. Under either plan, inflation risk in retirement is yours to plan for.

The Optional Retirement Program is a 403(b) defined contribution plan created by the Texas Legislature in 1967 specifically because higher education employees — especially those whose careers might not follow a decades-long state trajectory — needed portable retirement savings.

Contribution rates (fiscal 2026). Employee: 6.65%. State: 6.6% minimum. UT System adds 1.9% local supplement, bringing the effective employer match to 8.5%. This detail matters — the state minimum is what appears in most published tables, but UT specifically pays more. Verify your specific institution's supplement rate with your HR benefits office; UT Austin and most UT System institutions carry the 8.5% total, but the local supplement is set institution-by-institution and can theoretically vary.

Combined contribution: 15.15%. Slightly below TRS's 16.5% total, but the entire amount goes into a personal account you own and direct.

Vesting. One year and one day of participation. If you leave UT before 13 months, you keep your own contributions and forfeit the employer match. After 13 months, you own everything.

Investment control. You choose from UT System's approved providers — currently five vendors including Voya, TIAA, and others depending on institution. You direct the investments. The account balance grows or shrinks based on market performance, with no guaranteed benefit at retirement.

Portability. This is ORP's defining feature. Your account belongs to you. When you leave UT — whether for private practice, another academic system out of state, or retirement — you take the full vested balance with you, exactly as you would a 401(k). TRS is portable only in the limited sense that Texas public higher education institutions cross-honor service credit; leave Texas public higher ed entirely, and your TRS benefit is frozen at your final salary until you eventually claim it.

The compensation cap. ORP contributions are subject to the same IRS Section 401(a)(17) limit as TRS: $360,000 for 2026. Contributions and matching stop once your annual eligible compensation reaches the cap.

No disability benefits. Federal law prohibits 403(b) plans from providing disability benefits, which is why individual own-occupation disability insurance is non-negotiable for ORP participants — a point covered in the fit section below.

Every pension-vs-DC analysis for physicians hits the same wall, and Texas is no exception: the compensation cap.

TRS benefits are calculated on eligible pay up to $360,000. A UT physician earning $250,000 has 100% of their income working toward the pension formula. A UT interventional cardiologist earning $700,000, or an academic surgeon at MD Anderson pulling $650,000, has their pension calculated on roughly half of their actual compensation. The other half generates no additional benefit — no matter how many years they work.

Under TRS's 2.3% multiplier, that means the pension caps out at approximately:

• 20 years × 2.3% × $360,000 = $165,600/year
• 30 years × 2.3% × $360,000 = $248,400/year
• 35 years × 2.3% × $360,000 = $289,800/year (the 80.5% ceiling)

Those are meaningful annuities. But for a physician earning $600,000+ at MD Anderson, they replace 30–50% of pre-retirement income, not 80%. This is the same PEPRA-cap dynamic that reshapes the UC analysis, applied to Texas — though critically, TRS's $360,000 cap is more than double UC's $159,773 PEPRA cap, meaning the pension captures far more of a Texas physician's real income than a California physician's.

For ORP, the cap operates differently but bites the same way. ORP contributions stop once your annual eligible compensation reaches $360,000 — meaning even at 8.5% match, your maximum annual employer contribution to ORP is roughly $30,600. A physician earning $700,000 gets exactly the same ORP employer contribution as a physician earning $360,000. The excess income above the cap goes to voluntary retirement accounts (UTSaver TSA 403(b) and DCP 457(b), each with their own IRS limits) or to taxable savings.

The practical consequence for high-earning UT physicians: regardless of which plan you choose, the mandatory retirement stack does not fully replace your pre-retirement income. The voluntary side of your saving strategy — the UTSaver 403(b) and 457(b) plans, backdoor Roth IRA, taxable brokerage, and any Mega Backdoor Roth capability your institution's plan documents allow — is doing more of the work than the primary election implies. Model it that way from year one.

Buried in MD Anderson's retirement documentation is a benefit that changes the calculation for one specific institution: MD Anderson pays 100% of the retiree medical insurance premium for qualifying retirees, plus a $10,000 life insurance policy at no charge. This is a genuinely rare benefit — most employers charge retirees the full premium, or a heavily subsidized share, but not zero.

The catch is in the qualification: to receive retiree medical coverage from MD Anderson (or from UT System institutions generally, under similar rules), you must have retired under the rules of TRS, ERS, or ORP, and you must meet specific age and service requirements — typically:

• Age plus years of state service credit ≥ 80 with at least 5 years of state service, OR
• Age 55 with 5 years of state service, OR
• If hired on or after 9/1/03: 10 years of service in a benefits-eligible UT System position, with your last state employer being a UT System institution

This benefit interacts with the TRS-vs-ORP decision in an important way. Both plans qualify you for retiree medical, provided you meet the service requirements — but TRS's Rule of 80 is often the cleanest path to hitting the age-plus-service threshold, particularly for physicians who joined UT in their 30s or 40s and would naturally accumulate 20+ years of service by traditional retirement age.

For an MD Anderson physician planning a full career at the institution, the retiree medical benefit is worth quantifying: pre-Medicare retiree health premiums for a physician couple can easily run $20,000–$30,000/year, meaning MD Anderson's 100% coverage represents $200,000–$300,000+ of value over a decade of pre-Medicare retirement. That's not a rounding error in the TRS-vs-ORP analysis — it's a factor that can swing the decision toward whichever plan makes hitting the eligibility threshold most reliable, which for many physicians is TRS.

The general point: UT System retiree medical benefits are institution-specific. MD Anderson's 100% coverage is unusually generous. UT Southwestern, UTMB, and other institutions offer retiree medical but with different cost-sharing structures. Confirm your specific institution's retiree medical rules — including any recent changes, since state and system rules have been under legislative pressure — as part of your election research.

Three Texas-specific variables reshape the retirement math versus California, Iowa, or most other academic systems:

No state income tax. Texas is one of nine states with no personal income tax, which affects your retirement math in both directions. During working years, more of your paycheck becomes available for voluntary retirement contributions and taxable saving. In retirement, TRS annuities and ORP withdrawals are not subject to Texas income tax (though federal tax still applies). The state-tax comparison to California's 13.3% top rate on retirement income is substantial — a physician taking $150,000 annually in retirement withdrawals could see a $10,000–$20,000/year state tax difference between the two states, purely on identical dollars.

WEP and GPO repealed. The Social Security Fairness Act, signed in January 2025, fully repealed the Windfall Elimination Provision and the Government Pension Offset. Before repeal, TRS retirees who also earned Social Security credits from non-TRS work — or whose spouses had Social Security benefits — faced significant reductions. Now, both TRS members and ORP members fully retain any Social Security benefits they qualify for through other employment, spousal benefits, or (for ORP participants) their own ORP-covered earnings. This particularly benefits physicians with prior private-sector Social Security-covered work before joining UT.

ORP participants build Social Security credit; TRS members generally don't. This is a subtle but important difference. TRS employment is Social Security-exempt in Texas, meaning TRS members don't pay Social Security taxes on their TRS-covered wages and don't accrue Social Security credits from that employment. ORP employment, by contrast, is Social Security-covered — meaning ORP participants pay FICA and build their own Social Security earnings record throughout their UT career. With WEP repealed, both groups keep any Social Security benefits they earn from other sources, but ORP participants have the additional advantage of accruing their own primary Social Security benefit alongside their ORP account.

For a physician with any expected Social Security benefit accrual — either from pre-UT employment, from a spouse, or from potential post-UT work — this is a variable worth including in the analysis, particularly if you're near the borderline between plans.

High confidence in a long UT career (20+ years, retiring from UT), stable income under $360K, valuing guaranteed income: TRS is defensible and often the right answer. The 2.3% multiplier is generous, the Rule of 80 provides genuine flexibility, and TRS eligibility helps qualify you for retiree medical benefits (especially valuable at MD Anderson). Your income falls under the compensation cap, so the pension formula captures your full salary.

Mid-career or later physician joining UT, uncertain about staying past 5 years: ORP, without hesitation. The 5-year TRS vesting cliff is a real risk for any physician joining after age 55 or with realistic uncertainty about tenure. ORP's 1-year-and-a-day vesting eliminates that risk entirely, and the 8.5% employer match is competitive with private practice retirement offerings.

Early-career academic physician (30s or 40s), uncertain trajectory: ORP wins for most in this profile. Academic physicians move — for tenure track opportunities, chair positions, private practice, or industry — more often than they expect. ORP's portability protects the employer match; TRS's 5-year vesting cliff punishes exactly the physician who leaves in year 4 for a better position elsewhere.

High-earning proceduralist ($500K+) planning a full UT career: the compensation cap ($360,000) affects both plans equally, so this dimension doesn't drive the choice. TRS still delivers a meaningful pension on the capped salary; ORP still receives capped contributions. The decision comes down to your risk tolerance for market volatility (ORP) versus your comfort with a formula-driven benefit (TRS), and — critically — how heavily you weight retiree medical eligibility at your specific UT institution.

Physician with significant Social Security-covered work before joining UT, or a spouse with Social Security benefits: run both plans against your Social Security projection. With WEP repealed, TRS no longer reduces your Social Security benefit — but ORP additionally lets you keep accruing Social Security throughout your UT career, which for younger physicians with 25–30 UT years ahead can materially increase your total Social Security benefit.

MD Anderson physician specifically: weight the 100% retiree medical benefit heavily. If you can realistically meet the age-plus-service eligibility for retiree medical, that benefit alone may be worth more than the plan-vs-plan difference between TRS and ORP over most reasonable career projections.

Physician who might leave academia for private practice or industry: ORP. Full stop. TRS's portability is essentially zero outside Texas public higher education; ORP travels with you like any 403(b).

If you're a current or former UT System physician who has been through the TRS or ORP election, corrections and additions make this guide better for the next physician who reads it. Email editorial@medmoneyguide.com.

The employer deep dive series: The UC Physician Retirement Decision · IPERS for Iowa Physicians · Kaiser Permanente Physician Finances · The VA Physician Money Guide · UT System (you are here)

Related reading: The Mega Backdoor Roth for Physicians · Own-Occupation Disability Insurance · The Backdoor Roth IRA for Physicians · Physician Salary by State · Physician Contract Negotiation