Benefit Calculation

Your benefit calculation is how your retirement benefit is determined under each plan.

FRS Pension Plan

FRS Investment Plan

Your first year benefit is based on a fixed formula and is determined by your age, years of service, the average of your highest 5 or 8 fiscal years of pay (see details below), your membership class and the payment option you select at retirement.

Step 1: Years of Creditable Service Multiplied by Percentage Value (Percentage amount you receive for each year of creditable service based on your membership class. For example, Regular Class members receive 1.60% and Special Risk members receive 3% for each year of service.)

Step 2: Average Final Compensation (the average of the highest 5 or 8 fiscal years of salary [July - June] you earn during your covered employment).
If you enrolled in the FRS prior to July 1, 2011, your Average Final Compensation will be 5 years. If you enrolled in the FRS on or after July 1, 2011, your Average Final Compensation will be 8 years.
Your final year's salary may include lump sum pay for up to 500 hours of terminal annual leave.

Step 3: Result of Step 1 X Step 2 = Option 1 Annual Benefit at Normal Retirement Age (divide by 12 to get the monthly benefit)

An example for Regular Class members enrolled in the FRS prior to July 1, 2011:
If you have 13 years of service and your Average Final Compensation is $34,549
Step 1: 13 X 1.60% = .208
Step 2: $34,549
Step 3: .208 X $34,549 = $7,186 Annual Option 1 Retirement Benefit at Age 62 (or $598.83 per month)

An example for Special Risk Class members enrolled in the FRS after July 1, 2011:
Step 1: 13 X 3% = .390
Step 2: $34,549
Step 3: .390 X $34,549 = $13,474 Annual Option 1 Retirement Benefit at Age 60 (or $1,122.83 per month)

Option 2, 3 and 4 first year benefits are less than Option 1 benefits because they may be paid over a longer period of time and provide benefits for two lives, rather than one (i.e., if your spouse survives you, he or she will continue receiving benefits under Options 2, 3 or 4, although the payments under Option 2 will stop after completion of the 10-year certain period). Benefit payments under all four options provide a 3% cost of living adjustment each year following retirement (adjustment only applicable to FRS service earned prior to July 1, 2011).
Your benefit is not based on a fixed formula.

Your benefit is determined by your ending account balance, which is:

Your Initial Account Balance
Plus
Monthly Employer and Employee Contributions
Plus
Investment Earnings
Minus
Any Account Expenses


Investment Earnings include the cumulative change in the value of your account due to capital gains (price changes in your investments) and reinvested income earned on the account. Your employer and employee contributions will also include the contributions paid for up to 500 hours of lump sum terminal annual leave pay.

Important Note: Capital gains can be positive or negative over any single period of time, but historical financial data indicates that losses are less frequent over longer periods of time. Investment earnings may also fail to keep up with increases in the cost-of-living, particularly investments with lower short-term risk, like money market and bond funds.

The investment fees you will pay are calculated as a percent of your account balance and are generally low compared to those in other governmental or private plans. However, even a 0.50% annual fee will eat up about 15% of your account balance over 30 years.

It's important for you to know that, according to Florida law, if you or a beneficiary exercises control over the assets in your account, no program fiduciary will be liable for any loss to your account which results from your or your beneficiary's investment decisions.

You determine when and how to take the distribution of your account balance when you leave FRS employment. Tax issues are discussed in the Taxability of Benefit section.
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