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Investment Risk

While both plans rely on investments to provide enough money to pay future benefits, the responsibility for who makes investment decisions - and assumes the risk and rewards of those decisions - is very different.
FRS Pension Plan FRS Investment Plan
The State Board of Administration (SBA) manages the Pension Plan trust fund investments for all Pension Plan members. The SBA's fund managers make all of the investment decisions on behalf of the trust.
Any investment gains or losses are borne by the trust fund, and they do not affect your accrued retirement benefit. Your benefit under the Pension Plan is fixed by a formula that considers your age, FRS membership class, service and salary - and not investment performance.
You assume the risk and rewards of your investment decisions. Investment results will affect your retirement benefit.
  • The SBA has selected a diversified set of investment funds that are designed to provide the highest return at low cost. You choose how your employer's contributions are allocated among these investment funds.

  • The value of your account is not fixed and depends on the performance of your investments. You assume any investment risk and profit from any rewards from high-performing investments.

  • Because the investment funds offer different levels of risk and potential return, you can choose the level of risk with which you're comfortable.