Funds that are particularly good for "one-stop shopping." They seek favorable long-term returns by keeping costs low and investing across multiple asset classes to diversify and control risks. They invest in various investment funds in different proportions to keep their overall level of risk relatively steady over time. The proportions and specific funds included in each Balanced Fund may change over time. Financial Engines, a federally registered investment advisor and fiduciary to the FRS, will periodically update investment fund mixes to the FRS that they believe will provide the best trade-off between expected risk and return.
The joint annuitant or any other person, estate, organization, or trust fund designated by you to receive any benefits which may be payable upon your death.
Any payment—lump sum or periodic—to you, a retiree, or a beneficiary, based partially or
entirely on employer contributions.
Blended Rate, Blended Retirement Contribution Rate
One uniform contribution rate paid by an FRS employer on behalf of each employee, regardless of retirement plan, and based on percentage of pay and FRS membership class.
Funds that invest primarily in bonds, which are similar to IOUs. A company or government agency borrows money and pays it back with interest to the bondholder (the person making the loan). The quality of a bond is reflected in the credit rating of the company or agency that issues the bond. The short-term risk of bond funds is relatively low. However, over time, the value of a bond is affected by interest rates, inflation, and other factors. When inflation or interest rates go up, the value of a bond goes down because bonds pay a fixed rate of interest. In other words, the market sees other investments as being more attractive than bonds. Therefore, bonds and bond funds don't always protect the value of your retirement savings against inflation.
Buy Back, Buy-Back Amount
The total amount of money needed to buy back into the Pension Plan after switching to the Investment Plan; the buy-back amount is equal to the "present value" of an employee's accumulated benefit in the Pension Plan (assuming the employee had previous service in that plan). If the employee did not have previous Pension Plan service, the buy-back amount is the Actuarial Accrued Liability (AAL) or total cost of the accumulated FRS Pension Plan benefit.