Volume 3: Issue 3
Issue Date: August 10, 2004

Changes to FRS New Hire Education

We have been working with employers and employees on ways to further simplify the new hire FRS education and enrollment process. A number of employers requested a shorter FRS New Hire Video for their orientations. As a result, we have shortened the 15-minute FRS video by nearly 50%. You can order both versions by calling the Employer Assistance Line (1-866-377-2121) or visiting MyFRS.com. The long version (15 minutes) remains available for viewing online at MyFRS.com.

We have also simplified the FRS Benefit Comparison Statement and other materials that new employees receive in their New Hire Enrollment Kit. We will begin using the new Statements and revised Kits in the September mailing to new employees. You can see a sample of the new Benefit Comparison Statement and other Enrollment Kit materials by clicking below. Samples of the entire Kit will be forwarded to employers in the Fall once they are available.

• Sample of the new FRS Benefit Comparison Statement
• New Hire Retirement Options Flyer
• EZ Retirement Plan Enrollment Form
• New Hire IFS Quick Guide

Finally, we have worked with employers to develop a New Employee Certification Form. The Form requires new employees to certify they understand that they have retirement plan choices under the FRS, will default if they do not enroll in an FRS plan, and have free retirement education resources. New employees also are required to disclose if they are retired under the FRS, have been in DROP or have worked for a previous FRS employer. The Form is designed to provide important protection for employers and to assist them in processing new employees.
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2004 Legislative Update

The dust has cleared from the 2004 Legislative session with relatively few changes that affect the Florida Retirement System. Some of the highlights from the session include:

• CS/Senate Bill 1650 (Chapter 2004-71, Laws of Florida), which revises the employers' role in FRS education, employers responsibility for providing accurate payroll contributions, and modifies miscellaneous provisions of the FRS Investment Plan and provisions relating to the investment of state funds by the State Board of Administration of Florida, effective July 1, 2004.

  Senate Bill 1650 provides that the FRS Pension Plan and FRS Investment Plan cannot incur any loss or gain as a result of employer payroll corrections. It also provides that employers may be held responsible for market losses to Investment Plan participants as a result of incorrect or late contribution payments. As a result of this legislation, FRS employers may be held liable for plan losses from payroll corrections.

• CS/Senate Bill 2230 (Chapter 2004-293, Laws of Florida), which revises the retirement contribution rates for the Florida Retirement System, effective July 1, 2004.

• Senate Bill 3010 (Chapter 2004-355, Laws of Florida), which revises the reemployment exceptions applicable to retirees of the FRS and the Teachers' Retirement System reemployed by district school boards, the Florida School for the Deaf and the Blind, developmental research schools, and charter schools, effective July 1, 2004.

For more detail and a list of all the legislative changes from this past session, go to MyFRS.com and click on "Resources", "Legislation, The Laws and Public Records", then click on the "Legislation" link and scroll to the 2004 session, or click here.
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Personal Retirement Forecast Statements Coming Soon

Beginning later this month, most members of the FRS Pension Plan and FRS Investment Plan will be receiving a Personal Retirement Forecast Statement mailed to their home address. The current schedule has these statements being mailed in random groups through October.

The Personal Forecast will give members information on their total projected retirement income, including: FRS benefits, Social Security retirement benefits and potential retirement benefits should they leave the FRS. Importantly, the Personal Forecast will give members an estimate of how much they might need to save on their own [for example, in 457, 403(b), 401(k) plans] in order to have enough income in retirement to live comfortably.

The Personal Forecast is different than the Member Annual Statement (MAS) mailed to FRS Pension Plan members each fall. The Personal Forecast is designed to go beyond FRS benefits alone and it shows retirement income in "today's dollars" using the same convention as is used in the annual Social Security Statement. The estimated benefits shown on the Pension Plan MAS are not adjusted for inflation (i.e., they are in future dollars). Therefore, the estimated benefit amounts shown on the Personal Forecast will not match the estimated benefit amounts shown on the MAS.

Members who are retired, in DROP, or have less than 1-year of service when the Personal Forecast is generated will not receive a new Personal Retirement Forecast Statement.

To review two samples (one Pension Plan and one Investment Plan) of the Personal Forecast Statements click here (pension) and here (investment).
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Changes Made to the Investment Plan's Investment Options

The State Board of Administration (Plan Sponsor of the Investment Plan) decided earlier this year to simplify the Investment Plan and reduce costs by streamlining the number of fund options for 2004. The objective is to eliminate under-performing and low-usage funds (90% of account balances are allocated to only 15 of the available investment options). These fund closings are taking place in stages, so the Plan Sponsor has time to carefully monitor individual fund performance as well as track ongoing regulatory investigations. Initially, 9 funds were eliminated in February. A second round of changes will occur in July and August. All the changes are described in the attached Quarterly IP Newsletter .

If your employees have questions on these changes or questions on how to transfer their account balances, ask them to call the toll-free MyFRS Financial Guidance Line at 1-866-446-9377 (TTY: 1-888-429-2160) or go online and log in to MyFRS.com. Additional information on all of the investment funds can be found by clicking on the "$" in the green tool bar in the upper right-hand corner of the MyFRS.com web site.
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Resource Poster

To assist you in keeping your employees informed of the free resources available from the Florida Retirement System, we have attached a resource poster that you can display at your work place(s). This poster gives employees quick information whether they are a new employee making a retirement plan choice or an existing employee who needs retirement planning assistance.
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Deadlines!

The table below lists all the new employee FRS retirement plan enrollment deadlines for the next 12 months. You may wish to send your new employees a short note to remind them that their enrollment deadline will end at 4:00 p.m. Eastern Time on the applicable date as shown below.