FRS Pension Plan Choices
The Florida Retirement System offers two retirement plan options - the FRS Investment Plan and  the FRS Defined Benefit Pension Plan. 

The MyFRS Financial Guidance Program is the official financial education program funded by the FRS and designed to give you personalized support for your choice. It provides free financial and retirement planning - no matter which plan you choose. Please visit the web site at www.myfrs.com or call toll free 1-866-44-MyFRS (1-866-446-9377).

The Good...The Bad...The Ugly

The following is an unofficial commentary on the new choices offered by the Florida Retirement System by Joseph C. Chalom, CLU, LUTCF - President of Retirement Council, Inc. (954) 340-1588. For legal and or tax advice please consult your legal and or tax advisor.

The good news is that employees  have a choice of pension plans. The bad news is that choices need to be made. The ugly news is that the wrong choice could worsen your financial future.

The  FRS Investment Plan benefits those most who will not be in FRS  long enough to reach normal retirement age. Time is the big factor. The  FRS Defined Benefit Pension Plan benefits those most who work until normal retirement age. In addition ONLY those who participate in the FRS Defined Benefit  Pension Plan may enroll in DROP.  The Deferred Retirement Option Plan, (DROP) provides eligible employees with the opportunity to create a substantial fund during the last five to eight years of their careers. The DROP fund may then be rolled over to a IRA, TSA/403 (b), 401 (k), 457 plan or received in a lump sum. Amounts received are taxable.
  FRS Pension Plan FRS Investment Plan
     
Vesting Period for FRS Members Prior to July 1, 2011 Six Years One Year
Vesting Period for New FRS Members as of July 1, 2011 Eight Years One Year
DROP Eligible Yes No
Investment Choices No Yes
Rollover to IRA, TSA No Yes
Annuity Options Yes Yes
The bottom line is that if you plan to be employed with one or more of the 700 participating employers in the FRS system until normal retirement age the current FRS Defined Benefit Pension Plan is your best bet. However, if you plan to be in the FRS system for a relatively short time frame the FRS Investment Plan may better suit your needs. FRS offers one opportunity to change your mind after the selection period is completed.

If you have questions about which plan to choose  please feel free to contact my office at (954) 340-1588.

I urge you to take the time to understand your options and make your choices wisely.

The information on this page is not approved or endorsed by the Florida Retirement System.