Guidelines |
The Pension Plan might be better if you... |
The Investment Plan might be better if you... |
| FRS Service |
- Have already earned significant FRS service, such as 25 or more years
- Begin your FRS career later in life
- Expect to stay long enough to retire from an FRS employer
- Expect to spend most of your career with an FRS employer
|
- Have thus far earned a limited amount of FRS service, such as 10 or fewer years*
- Begin your FRS career young in life
- Expect to take a non-FRS job in the next 5 to 10 years
- May not stay for the years needed to vest in the Pension Plan. Vesting is 8 years if you were enrolled in the FRS on or after July 1, 2011, or 6 years if enrolled in the FRS prior to July 1, 2011.
|
| Salary Growth |
- Receive most promotions and salary increases near the end of your career
|
- Receive most promotions and salary increases near the beginning of your career
|
| Managing Your Retirement Benefit |
- Don't want to make investment decisions; and
- Are uncomfortable receiving objective investment assistance
|
- Prefer making investment decisions and setting goals; or
- Are comfortable receiving objective investment assistance
|
| Investment Risk |
- Are uncomfortable with the risk that your retirement benefit could decrease because of poor financial markets
- Are unwilling to experience short-term fluctuations in the value of your account
|
- Are comfortable relying on long-term investment returns to forecast your retirement benefit
- Are comfortable with short-term fluctuations in your retirement account in order to possibly earn higher long-term benefits
|
| Retirement Income Options |
- Prefer that your benefit be paid as lifetime monthly checks with no lump-sum options
- Are comfortable with 1 of the 4 lifetime annuity payment options guaranteed by the Pension Plan
- Expect to use the DROP program to build a nest egg to meet special or unanticipated spending needs
|
- Prefer the flexibility to decide how much of your retirement account is taken as a lump-sum or lifetime monthly benefits
- Are comfortable with an annuity payment option (if purchased) guaranteed by a highly rated private insurance company
- Prefer a customized benefit payment schedule to meet your special retirement situation/needs
|
| Early-Retirement Considerations |
- Expect to retire in your 50s with full or reduced monthly benefits (the reduction is 5% per year for each year prior to normal retirement age of age 62 or 65 for Regular Class and age 55 or 60 for Special Risk)
- Prefer that your HIS benefit begins immediately upon retirement
|
- Are willing to receive your benefit as an annuity to avoid tax penalties when drawing this benefit before age 55; or can live on other savings or income until age 55 or don't expect to draw benefits until later in life
- Are comfortable deferring your HIS until normal retirement age
|
| Survivor Considerations |
- Prefer that your surviving beneficiaries receive lifetime monthly benefits guaranteed by the FRS
- Expect that only your spouse or other dependents need to be named as beneficiaries
|
- Prefer that your survivors have the flexibility to receive a lump-sum benefit or lifetime benefits guaranteed by a private insurance company
- Expect to name non-family heirs
|
| Purchase Optional Service |
- Want to purchase military or other service credit such as out-of-state service or a leave of absence to increase benefits
|
- Have no need to purchase military or other service credit to increase benefits (or have already made this purchase under the Pension Plan)
|
