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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). |
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The Good...The Bad...The
Ugly |
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The following is an unofficial
commentary on the new choices offered by the Florida Retirement System by
Joseph C. Chalom, LUTCF - President of Retirement Council, Inc. (954)
340-1588. For legal and or tax advice please consult your legal and or tax
advisor. |
| I attended an FRS Retirement Choice
Workshop, presented by Ernst & Young. The workshop lasted about two
hours and was very informative. The information was presented in easy to
understand terms.
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. |
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FRS Pension Plan |
FRS Investment Plan |
| |
|
|
| Vesting Period |
Six Years |
One Year |
| DROP Eligible |
Yes |
No |
| Investment Choices |
No |
Yes |
| Rollover to IRA, TSA |
No |
Yes |
| Annuity Options |
Yes |
Yes |
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| The bottom line is that if you plan to be employed with one
or more of the 800 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. |
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