Upon receipt of your plan choice election, a confirmation of your choice will be mailed to you at your home address as reported by your employer within 5-7 business days. If you have moved, please update your address with your local personnel office as soon as possible.
You are always fully vested in your own contributions. There is no period of time you must work to own your employee contributions.
Beginning on your first day of employment, you are automatically enrolled in the FRS Pension Plan and begin to accrue benefits under that plan. If you elect to join the Investment Plan before your enrollment deadline, all of the retirement contributions (less any earnings) paid on your behalf by your employer into the Pension Plan Trust Fund will be transferred to your Investment Plan account to become your opening account balance.
If you think the FRS Investment Plan is the best plan for you, enroll right away. Depending on your membership class, you may begin receiving higher contributions to your Investment Plan account the month after your enrollment election is received (as soon as administratively possible) if the current contribution rate is higher than the uniform blended rate.
The earlier higher contributions begin, the quicker your account balance will grow. Don't miss out on months of potentially higher contributions by waiting until your enrollment deadline.
Click here to get a full description of the differences between the two plans.
If you are a current FRS-covered employee and using your 1st or 2nd election opportunity to change plans, your Election Enrollment Form or online election (if applicable) must be submitted and received by the Plan Choice Administrator, Aon Hewitt, while still earning service credit and prior to your termination from employment. If you terminate prior to your online election being made or receipt of the form by Aon Hewitt, your plan change will be rejected. For example, if you make an online election on May 15 or submit your Election Enrollment Form and it is received by Aon Hewitt on May 15, you may terminate on May 16 or after. However, if you terminated on May 12 and you made your online election on May 15 or your form was received by Aon Hewitt on May 15, your election will be rejected.
If you stay in the Pension Plan, you are subject to an 8-year* vesting requirement. If you move to the Investment Plan, your Pension Plan benefit (whether you transfer it as in the 100% Transfer Option or freeze it as in the Hybrid Option) will be vested after 8 years. *You will be vested after 1 year of total service for all future employer contributions in your Investment Plan account. You are always fully vested in your own contributions, as long as you remain enrolled in the plan you initially elect. How your employee contributions are distributed or refunded to you depends on a number of factors, especially if you use your 2nd Election to switch plans.
Any Pension Plan or Investment Plan service counts toward both of these vesting requirements. For example, if you had 7 years of FRS Pension Plan service and decided to switch to the Investment Plan, here's how the vesting rules would apply:
*Members who have previous FRS service credit prior to July 1, 2011 are subject to a 6-year vesting requirement.
Yes, if you are still eligible based on the eligibility criteria for DROP participation. Once you buy back your Pension Plan benefit, you are no longer in the Investment Plan. You are a member of the Pension Plan and are entitled to the full benefits of that plan.
There are two very different retirement plans to choose from: the FRS Pension Plan and the FRS Investment Plan. Your most important decision is which of these two plans you want going forward.
Within these two plans there is the potential of three choices. The Pension Plan is one choice; the Investment Plan's 100% Transfer Option is a second choice; and the Investment Plan's Hybrid Option is the third choice. See below:
Choice 1: If you choose to remain in the Pension Plan, your benefit will be determined as follows:
Every year and partial year of creditable service that you earn is worth a percentage of your Average Final Compensation (AFC) and serves to increase your retirement benefit. The following formula is used to determine the amount of your normal retirement monthly benefit if you choose an option 1 benefit payout (where monthly benefits are paid to the retiring member for his/her lifetime only).
Retirement Formula: Years of Creditable Service x Percentage Value x AFC = Yearly Option 1 Benefit at Normal Retirement Date.
Yearly benefit divided by 12 equals Monthly Benefit.
Choice 2: If you choose to move to the FRS Investment Plan, you may do it in one of two ways:
100% Transfer Option (Choice 2) - You can convert the present value of your current pension benefit into the opening balance of the FRS Investment Plan and begin receiving future employer contributions in your FRS Investment Plan account. In this case, you'll receive a retirement benefit only from the FRS Investment Plan, in the payment form you choose.
Hybrid Option (Choice 3) - If you have at least 8* years of FRS service as of the start of your enrollment period, you may freeze your pension benefit (it will remain in the FRS Pension Plan but will not grow), and begin receiving future employer contributions in your FRS Investment Plan account. In this case, you'll receive two retirement benefits - a monthly benefit from the FRS Pension Plan and an FRS Investment Plan benefit in whatever payment form you choose. If you have less than 8* years of FRS service at the start of your enrollment period, you are not eligible for this option.
*Members who have previous FRS service credit prior to July 1, 2011 must have 5 years of service to participate in the Hybrid Option.
Second opportunity to switch: Any time after you have made your initial choice or your enrollment period ends, you can decide to switch plans once - but only once - during your active FRS employment.
DROP allows you to simultaneously earn a salary and retirement income under the Pension Plan. That means you can accumulate a tax-deferred "nest egg." If you expect to retire from an FRS employer, that may be a significant factor. To help you decide, the CHOICE SERVICE will provide online modeling so you can investigate the impact of DROP participation on your benefits under the two plans. Or, you can request an estimate from the Division of Retirement.