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The Florida Retirement System Pension Plan
- How It Works
- Why the FRS is offering this Plan
- Who's Eligible for the FRS Pension Plan?
- How Your Benefit Accumulates
- When You Own Your Benefit
- If You Change Employers
- Benefit Paid at Retirement
- Retirement Income Options
- Pre-Retirement Benefits
- DROP
- Health Insurance Subsidy (HIS)
How It Works
The FRS Pension Plan is a defined benefit plan, in which you are guaranteed a benefit at retirement if you meet certain criteria. The amount of your future benefit is determined by a formula, based on your earnings, length of service, and membership class, and may be adjusted by a cost-of-living increase each July (adjustment only applicable for FRS service earned prior to July 1, 2011). If you are initially enrolled in the Pension Plan on or after July 1, 2011, you will not have a cost-of-living increase after retirement. Your benefit is pre-funded by your employee and employer contributions. The Florida Retirement System must ensure that sufficient funds are available when your benefits are due and bears the market risk and investment decisions.
The FRS Pension Plan is a defined benefit plan, in which you are guaranteed a benefit at retirement if you meet certain criteria. The amount of your future benefit is determined by a formula, based on your earnings, length of service, and membership class, and may be adjusted by a cost-of-living increase each July (adjustment only applicable for FRS service earned prior to July 1, 2011). If you are initially enrolled in the Pension Plan on or after July 1, 2011, you will not have a cost-of-living increase after retirement. Your benefit is pre-funded by your employee and employer contributions. The Florida Retirement System must ensure that sufficient funds are available when your benefits are due and bears the market risk and investment decisions.
Why the FRS Is Offering This Plan
The Pension Plan has been offered to employees for over 50 years. It is primarily designed to serve longer-service employees who will be with the FRS for most of their career. Older employees and those employees who do not want to control their retirement plan may also prefer the Pension Plan.
The Pension Plan has been offered to employees for over 50 years. It is primarily designed to serve longer-service employees who will be with the FRS for most of their career. Older employees and those employees who do not want to control their retirement plan may also prefer the Pension Plan.
Who's Eligible for the FRS Pension Plan?
All FRS employees are eligible for the Pension Plan except:
All FRS employees are eligible for the Pension Plan except:
- Mandatory State University System Optional Retirement Program (SUSORP) members. (This is not an FRS plan.)
- Teachers' Retirement System members. (This plan is closed.)
How Your Benefit Accumulates
In the Pension Plan, your benefits are generally back-loaded, which means that you accumulate benefits slowly at first and then at a faster rate the longer you stay. This is different from the Investment Plan, where benefits are earned more or less evenly over your career (subject to fluctuations in the financial markets and your investment strategy).
In the Pension Plan, your benefits are generally back-loaded, which means that you accumulate benefits slowly at first and then at a faster rate the longer you stay. This is different from the Investment Plan, where benefits are earned more or less evenly over your career (subject to fluctuations in the financial markets and your investment strategy).
When You Own Your Benefit
You will be eligible for a Pension Plan benefit (i.e. be vested) when you complete six years of service (if you were enrolled in the FRS prior to July 1, 2011) or eight years of service (if you were enrolled in the FRS on or after July 1, 2011). If you terminated FRS-covered employment before July 1, 2001, vesting varied based on membership class:
If you use your 2nd Choice option to transfer from the FRS Investment Plan to the FRS Pension Plan, you will be able to count your Investment Plan service toward the vesting requirement.
(To transfer from the Investment Plan to the Pension Plan, you will need to "buy in" to the Pension Plan by paying an amount from your Investment Plan account balance, plus any necessary amount from your personal resources. If you have previous Pension Plan service prior to joining the Investment Plan, the buy in cost will be calculated as the present value of the "accrued" FRS Pension Plan benefit. If you do not have previous Pension Plan service, the buy in cost will be the actuarial accrued liability, or total cost, of the "accrued" Pension Plan benefit. The buy in cost could be a substantial amount and could make transferring to the Pension Plan unaffordable.)
You will be eligible for a Pension Plan benefit (i.e. be vested) when you complete six years of service (if you were enrolled in the FRS prior to July 1, 2011) or eight years of service (if you were enrolled in the FRS on or after July 1, 2011). If you terminated FRS-covered employment before July 1, 2001, vesting varied based on membership class:
- Members of the Regular Class, Special Risk Class and Special Risk Administrative Support Class vested in the FRS Pension Plan after completing 10 years of creditable service.
- Members of the Elected Officers' Class vested in the FRS Pension Plan after completing eight years of creditable service.
- Members of the Senior Management Service Class vested in the FRS Pension Plan after completing seven years of creditable service.
If you use your 2nd Choice option to transfer from the FRS Investment Plan to the FRS Pension Plan, you will be able to count your Investment Plan service toward the vesting requirement.
(To transfer from the Investment Plan to the Pension Plan, you will need to "buy in" to the Pension Plan by paying an amount from your Investment Plan account balance, plus any necessary amount from your personal resources. If you have previous Pension Plan service prior to joining the Investment Plan, the buy in cost will be calculated as the present value of the "accrued" FRS Pension Plan benefit. If you do not have previous Pension Plan service, the buy in cost will be the actuarial accrued liability, or total cost, of the "accrued" Pension Plan benefit. The buy in cost could be a substantial amount and could make transferring to the Pension Plan unaffordable.)
If You Change Employers
Under the Pension Plan, if you leave FRS-covered employment and go to a non-FRS employer, your Pension Plan benefit is frozen until you return at a later date to continue your FRS-covered employment or begin receiving your early or normal retirement benefit.
Under the Pension Plan, if you leave FRS-covered employment and go to a non-FRS employer, your Pension Plan benefit is frozen until you return at a later date to continue your FRS-covered employment or begin receiving your early or normal retirement benefit.
Benefit Paid at Retirement
Under the Pension Plan, your retirement benefit is based on a formula comprised of your age, length of FRS service, your Average Final Compensation, and your membership class. If you begin receiving an early retirement benefit (before you have reached normal retirement), then your monthly retirement benefit will be reduced 5 percent for each year up to your normal retirement age. The amount of your benefit payments is affected by the retirement income option you choose.
Under the Pension Plan, your retirement benefit is based on a formula comprised of your age, length of FRS service, your Average Final Compensation, and your membership class. If you begin receiving an early retirement benefit (before you have reached normal retirement), then your monthly retirement benefit will be reduced 5 percent for each year up to your normal retirement age. The amount of your benefit payments is affected by the retirement income option you choose.
Retirement Income Options
Under the Pension Plan, you may choose to receive your benefit in retirement under one of four lifetime benefit options and may include an annual Cost-of-Living Adjustment (COLA) each July (adjustment only applicable for FRS service earned prior to July 1, 2011). If you are initially enrolled in the Pension Plan on or after July 1, 2011 you will not have a COLA after retirement. Option 1 provides a monthly benefit for your lifetime, but does not provide a continuing benefit to a beneficiary. Option 2 provides a reduced monthly benefit for your lifetime, with a guarantee that your beneficiary will be eligible for a continuing benefit for 10 years from the date you retire. After 10 years of retirement, no benefits are payable to your beneficiary, in the event of your death.
Options 3 and 4 provide a continuing benefit to your spouse or other dependent beneficiary who is your joint annuitant. Option 3 provides a reduced benefit to both you and your joint annuitant in the same amount for as long as you or they are living. Option 4 provides an adjusted monthly benefit for you and your joint annuitant and is reduced upon the death of either.
Under the Pension Plan, you may choose to receive your benefit in retirement under one of four lifetime benefit options and may include an annual Cost-of-Living Adjustment (COLA) each July (adjustment only applicable for FRS service earned prior to July 1, 2011). If you are initially enrolled in the Pension Plan on or after July 1, 2011 you will not have a COLA after retirement. Option 1 provides a monthly benefit for your lifetime, but does not provide a continuing benefit to a beneficiary. Option 2 provides a reduced monthly benefit for your lifetime, with a guarantee that your beneficiary will be eligible for a continuing benefit for 10 years from the date you retire. After 10 years of retirement, no benefits are payable to your beneficiary, in the event of your death.
Options 3 and 4 provide a continuing benefit to your spouse or other dependent beneficiary who is your joint annuitant. Option 3 provides a reduced benefit to both you and your joint annuitant in the same amount for as long as you or they are living. Option 4 provides an adjusted monthly benefit for you and your joint annuitant and is reduced upon the death of either.
Pre-Retirement Benefits
In the Pension Plan, your vested benefit will be paid to your beneficiary or in accordance to Florida law if you die prior to retiring.
In the Pension Plan, your vested benefit will be paid to your beneficiary or in accordance to Florida law if you die prior to retiring.
DROP
You may participate in the Deferred Retirement Option Program (DROP) once you have reached normal retirement age or date. See more DROP information here.
You may participate in the Deferred Retirement Option Program (DROP) once you have reached normal retirement age or date. See more DROP information here.
Health Insurance Subsidy (HIS)
The Health Insurance Subsidy (HIS) is a monthly supplemental payment that you may be eligible to receive if you have health insurance coverage (Medicare and TRICARE coverage are accepted). This monthly payment, which you must apply for, is calculated by multiplying your total years of service at retirement (up to a maximum of 30 years) by $7.50. The HIS is only available after you have six years of service (if enrolled in the FRS prior to July 1, 2011) or eight years (if enrolled in the FRS on or after July 1, 2011). You will receive the HIS as part of your early or normal retirement benefit after you have provided proper documentation certifying that you have health insurance coverage. The HIS, which is paid monthly, is $7.50 for each year of creditable service, with a minimum HIS payment of $45 per month and a maximum HIS payment of $225 per month.
The Health Insurance Subsidy (HIS) is a monthly supplemental payment that you may be eligible to receive if you have health insurance coverage (Medicare and TRICARE coverage are accepted). This monthly payment, which you must apply for, is calculated by multiplying your total years of service at retirement (up to a maximum of 30 years) by $7.50. The HIS is only available after you have six years of service (if enrolled in the FRS prior to July 1, 2011) or eight years (if enrolled in the FRS on or after July 1, 2011). You will receive the HIS as part of your early or normal retirement benefit after you have provided proper documentation certifying that you have health insurance coverage. The HIS, which is paid monthly, is $7.50 for each year of creditable service, with a minimum HIS payment of $45 per month and a maximum HIS payment of $225 per month.
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