FRS Programs Comparing the Plans Normal Retirement (2024)

FAQs

What is the difference between my FRS pension and investment plan? ›

The FRS Pension Plan provides a monthly benefit to you when you retire. The FRS Investment Plan lets you choose how your money is invested and how you want to receive payments.

If you elected Payment Option 1, your benefit will end as of the date of your death and no further payments will be made. If you elected Payment Option 2 and die after 10 years of retirement, no benefits are payable to your beneficiary.

For early retirement and to receive a reduced monthly benefit, you must have at least 8 years of service at any age. Your benefit will be reduced 5% for each year your age at retirement is under your normal retirement age (age 65 for Regular Class).

The FRS Pension Plan is a defined benefit plan. That means that your retirement benefit is set by a fixed formula. No matter how well or poorly the trust fund investments perform, you are guaranteed to receive your accrued benefit for your lifetime. The FRS Investment Plan is a defined contribution plan.

Though there are pros and cons to both plans, pensions are generally considered better than 401(k)s because all the investment and management risk is on your employer, while you are guaranteed a set income for life.

As a Florida Retirement System (FRS) member, you have a one-time opportunity to change from your current FRS retirement plan to the other. 1 That means you can transfer from the Pension Plan to the Investment Plan, or from the Investment Plan to the Pension Plan. Making this change is called a 2nd Election.

If you wish to have the security of a lifetime benefit for yourself and to provide a continuing benefit of the same amount to your joint annuitant after your death, the Option 3 benefit would be the appropriate choice.

Members subject to an automatic distribution can choose to receive it as a lump-sum payment or a rollover to another qualified retirement plan, such as an individual retirement account or another employer's 401(k) plan. The FRS will not consider a member to be retired solely for receiving a de minimis distribution.

You have a one-time (once in your active FRS career) opportunity after your Choice period ends, or you make your plan election, if earlier, to switch from the Investment Plan to the Pension Plan, or from the Pension Plan to the Investment Plan.

For example, if you enrolled in the FRS on or after July 1, 2011 and are a Regular Class member and want to retire early at age 57 with 20 years of service (8 years before age 65) and start receiving your benefit, your first year benefit will be reduced 40% (8 years x 5% = 40%).

Can I retire in Florida on $3 000 a month? ›

In fact, a GOBankingRates study identified 10 Florida locations where you can live on less than $3,000 a month, including the cost of renting a one-bedroom apartment, groceries, utilities and healthcare in areas popular with retirees.

Health Insurance Subsidy Increase

The monthly retiree Health Insurance Subsidy was increased by 50% from $5 to $7.50 for each year of creditable service. The maximum monthly benefit was adjusted from $150 to $225 and the minimum monthly benefit was adjusted from $30 to $45. This includes current retirees.

Is my pension taxable? Your pension is taxable as ordinary income and will contribute to any other earned income for the calendar year.

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).

To make your request online, log in to MyFRS.com. Select Investment Plan, FRS Investment Plan > Withdrawals and Rollovers > Withdraw or Roll Over Money, and then select a payment type. To make your request by phone, call 1-866-446-9377, Option 4 (TRS 711). You will need your PIN.

A pension is a retirement-savings plan, typically employer-funded, that gives you regular payments in retirement. A 401(k) is a workplace retirement plan that gives employees a tax break when they contribute.

The Employee Retirement Income Security Act (ERISA) covers two types of retirement plans: defined benefit plans and defined contribution plans. A defined benefit plan promises a specified monthly benefit at retirement.

Annuities have no contribution limits and provide a guarantee of investment, principal protection, and a guaranteed income for life. Other investments have no investment guarantee and can lose money and no income guarantee in retirement.