|FRS Pension Plan (Normal Retirement)||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 were enrolled in the FRS prior to July 1, 2011, your Average Final Compensation (AFC) will be the average of your highest 5 years. If you were enrolled in the FRS on or after July 1, 2011, your AFC will be the average of your highest 8 years.
Your AFC may include a maximum of up to 500 hours of lump sum annual leave, if reported during the fiscal years included in your AFC. 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
An example for Special Risk Class members enrolled in the FRS after July 1, 2011:
An example of how to calculate the annual cost of living increase 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:
Monthly Employer and Employee Contributions
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.