Florida Retirement System Investment Plan
Why the FRS Is Offering This Plan
The Investment Plan has been offered to FRS employees since 2002 and is like other defined contribution plans that have been offered to select groups of FRS employees for over 25 years. It is primarily designed to serve shorter-service and mobile employees. Other employees that might find the Investment Plan appealing are older employees that don't expect to work at least six years (if enrolled in the FRS prior to July 1, 2011) or eight years (if initially enrolled in the FRS on or after July 1, 2011).
How Your Benefit Accumulates
In the Investment Plan, benefits are earned more or less evenly over your career (subject to fluctuations in the financial markets and your investment strategy). This is different from the Pension Plan, in which you accumulate benefits slowly at first and then at a faster rate the longer you stay.
So, if you don't stay with FRS employers for most of your career or for the final years of your career, you're more likely to receive a greater benefit under the Investment Plan.
How It Works
The FRS Investment Plan is a defined contribution plan, in which employer and employee contributions are defined by law, but your ultimate benefit depends in part on the performance of your investment funds.
The FRS Investment Plan is funded by employer and employee contributions that are based on your salary and your FRS membership class (Regular Class, Special Risk Class, etc.). The Investment Plan directs contributions to individual member accounts, and you allocate your contributions and account balance among various investment funds.
Your Investment Plan retirement benefit is the value of your account at termination. Unlike the Pension Plan, there is no fixed benefit level at retirement. However, a guaranteed lifetime cost of living payment option (based on the benefit to be distributed) can be purchased and is available with annual 3% cost of living increases.
When You Own Your Benefit
You will be vested (that is, you will own the assets in your Investment Plan account) when you complete one year of service in the FRS Investment Plan. If you transfer from the FRS Pension Plan to the FRS Investment Plan, you will be able to count your Pension Plan service toward the one-year vesting requirement.
If you transfer the present value of your FRS Pension Plan benefit to your FRS Investment Plan account, you need to complete six years of service (if enrolled in the FRS prior to July 1, 2011) or eight years (if initially enrolled in the FRS on or after July 1, 2011) before you "own" this money. Service in the FRS Investment Plan will count toward the applicable FRS Pension Plan vesting requirement for the transferred value of your FRS Pension Plan benefit.
Employee contributions are immediately vested. This means that if you terminate employment prior to meeting the vesting requirements of the Investment Plan, you will be entitled to a distribution of your employee contributions. However, taking such a distribution may not be a sound financial decision because you will forfeit any unvested employer contributions and service credit associated with the service and be declared a retiree of the FRS. If you return to FRS-covered employment after taking a distribution (effective for reemployed service on or after July 1, 2017), you are considered a "reemployed retiree" or "renewed member." As a reemployed Investment Plan retiree, participation in the Investment Plan is mandatory, unless you are reemployed in a position eligible to participate in the State University System Optional Retirement Program (SUSORP) or State Community College System Optional Retirement Program (SCCSORP).