Manage Your FRS Retirement Plan Benefits
The Florida Retirement System (FRS) provides retirement benefits to vested plan participants who worked with participating employers throughout the State of Florida. The two retirement plans offered by the FRS are FRS Pension Plan, a defined benefit plan and FRS Investment Plan, a defined contribution plan.
FRS Pension Plan
The FRS Pension Plan provides guaranteed monthly retirement income which is determined by a formula based on a member’s average final compensation (AFC) and years of service. There is an annual retirement income increase, cost of living adjustment (COLA), of up to 3% per year which is prorated based on their number of years of service on July 1, 2011. The Deferred Retirement Option Program (DROP) is available to members who have reached eligibility, achieved through years of service or attained age. The DROP benefit is accumulated over a period of up to 60 months funded through the deferral of a member’s FRS pension benefit. The DROP distribution is considered a qualified plan distribution received as a lump sum. It is important to manage your FRS DROP distribution and other savings accounts to meet unexpected living expenses during retirement, such as health care costs, not covered by Medicare. At retirement, FRS Pension Plan members must make an election, amongst one of four retirement income payout options. FRS Pension Plan members should consider Pension Maximization Strategies which take into consideration the survivorship and beneficiary income needs of family members.
FRS Investment Plan
The FRS Investment Plan which includes the FRS Self-Directed Brokerage Account (SDBA) provides retirement benefits that are based on the contributions made and the investment performance of the investment allocations. After retirement, FRS Investment Plan account balances can remain with the FRS invested in the available investment options, including the SDBA, or rolled over the retirement account into an Individual Retirement Account (IRA). The amount of the retirement income and the sustainability of the withdrawals that can be generated will be based on the annual rate of withdrawal and the retirement portfolio asset allocations. FRS Investment Plan participants have flexible survivor and beneficiary options similar to any qualified account balance.
True North Financial Advisors provides financial planning and investment advisory services through Cambridge Investment Research Advisors, Inc. and investment and brokerage services through Cambridge Investment Research, Inc. To better understand your retirement plan investment options, contact us.
