FRS Employer Electronic Newsletter
Volume 1: Issue 1 |
Issue Date: January 2002 |
Welcome to the FRS Employer Electronic Newsletter!
By now, you're well aware of the retirement choices facing you and your employees this year. As part of our communication effort, we're committed to keeping employer representatives up-to-date on what's happening with the Outreach and Choice periods for the FRS Pension Plan and FRS Investment Plan. These electronic newsletters will highlight upcoming key dates and provide other important information. Some issues will have links to information on the Employer Services portion of the MyFRS.com Web site, such as articles you can put in your in-house employee newsletters or post in public areas.
Important Upcoming Dates
The Retirement Choice Kit, including information on both plan options and a personalized benefit comparison statement, will be mailed to Group 1 employees on or about February 25, 2002; Group 2 employees on or about April 15, 2002; and Group 3 employees on or about August 19, 2002. - Group 1 employees include state, university, community college, water management districts, and blind vending operators.
- Group 2 employees include all district school personnel.
- Group 3 employees include all county, city and special district personnel.
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Employer Seminar Update
Thanks to those of you who participated in the Employer Seminars held last October and November. A total of 1,420 employer representatives from 578 different Florida Retirement System agencies attended - with these agencies representing over 573,126 employees. We're getting the word out about the importance of making an informed, personal choice over the next year, and you'll play a vital role in the communication effort to employees.
If you weren't able to attend an Employer Seminar and would like to receive copies of the materials that were distributed or a videotaped copy of one of the seminars, you can go to the new MyFRS.com Web site to access them.
- Just click on Employer Services in the upper right hand corner of the home page, and then choose Online Resource Library on the main menu bar.
- Then click Order Materials from the sub-menu bar and select Employers' Briefing Kit or Employer Seminar Videotape.
- For the Employers' Briefing Kit, you can choose to view/print PDF files (you'll need Adobe Acrobat to open the files) or you can request that a printed copy be mailed to you by completing the online order form or by calling the Employer Assistance Line at 1-866-377-2121.
What's Your Role?
Unsure of what your role is in the rollout of the communication of this important choice to your employees? Be sure to check out the attached document "HR Roles and Responsibilities," to be sure that you are communicating the right message!
Group 1 Employers: New Hires After November 1, 2001 Won't Receive a Package in February
If you have employees who were hired after November 1, 2001, their FRS enrollment data will not be processed in time to generate a Personalized Benefit Comparison Statement and Retirement Choice Kit prior to our print date for mailing materials.
So that these employees can take full advantage of the resources available to them, you should request additional Retirement Choice Kits from the MyFRS.com Web site to have on hand to distribute to employees hired after November 1, 2001. Personalized Benefit Comparison Statements will be mailed on a three-month lag time from hire date. November new hires will receive their statements beginning March 1, 2002; December new hires will receive their statements beginning April 1, 2002, and so on.
More Frequently Asked Questions
One of the reasons we held the Employer Seminars was so you could get your questions answered in real time and hear the questions of your fellow employers. Here are answers to a couple of the questions that were asked:
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Why is there a difference in the employer contribution rates between the Pension Plan and the Investment Plan?
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| A. |
The Pension Plan contribution rates are set by the legislature and are subject to change annually based on the plan's annual actuarial valuation and the total value of the plan's trust fund. When the fund's value falls due to market or actuarial experience, contribution rates may go up; when the fund's value rises, the contribution rates may go down. Currently, there is a surplus in the Pension Plan trust fund, resulting in reduced employer contributions. Although these rates are artificially lower now, it is anticipated that the long-term effect (over the next 10-15 years) will result in these contribution rates rising. This contribution amount may fluctuate, depending upon the rise and fall of the stock market, how much surplus remains in the trust fund and what the actuarial experience is over time (how many people begin receiving retirement benefits).
In the Investment Plan, the contribution rates are fixed by law and can be changed only by a future act of the legislature.
It is anticipated that, over time, the contribution rates for the Investment Plan may be lower than those in the Pension Plan.
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Can you explain the vesting requirements under both plans in more detail and describe what happens if an employee leaves and is later rehired?
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You must have six years of creditable service to vest in your Pension Plan benefit and one year of service to vest in your Investment Plan benefit. Service in either plan counts toward the vesting requirement of the other. However, if you elect to transfer the present value of your Pension Plan benefit into the Investment Plan, those contributions are still subject to the six-year vesting rule. If you have one or more years of service in the Pension Plan when you transfer into the Investment Plan, you will be immediately vested in any future contributions you receive in the Investment Plan.
For example, let's assume you have five years of service when you elect the Investment Plan option and you choose to have the present value of your Pension Plan benefit transferred into the Investment Plan. Three months later you leave FRS employment. At that time, you have a total of 5.25 years of creditable service. The present value of your Pension Plan benefit that you transferred into the Investment Plan is not yet vested, because you do not have a total of six years of service, but the contributions you have received into your Investment Plan and the earnings on those contributions for the past three months are vested and yours to keep. If you return to FRS employment within five years of your termination date, your prior Pension Plan service will be combined with any future service credit and applied toward vesting of your transferred Pension Plan benefit. If you return to work for an FRS employer after five years from your termination date, you will forfeit your unvested transferred Pension Plan benefit.
Let's use the same example, but in this instance you keep your accrued benefit in the Pension Plan and elect only to have future contributions directed into the Investment Plan. When you leave FRS employment after 5.25 years of service, your Pension Plan benefit is unvested and your Investment Plan contributions are fully vested. If you return to FRS employment at any point in time, your prior service will be combined with any future service credits and applied toward vesting of your Pension Plan benefit.
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New Articles for In-House Publications or Posting Available
We've posted several articles that you can also use in your in-house employee publications. These articles are geared toward helping all employees better understand retirement planning issues such as how much money they'll need in retirement, what role inflation plays with respect to their retirement planning, and how to make the most of their Social Security benefits.
Employer Resources
You're not alone! When you need help or have questions about the plans or the choice, we have several resources available to assist you.
- The MyFRS.com Web site. Click on the Employer Services tab in the upper right hand corner of the home page to get information specifically geared toward employers.
- The FRS Employer Assistance Line, toll-free at 1-866-FRS-2121* (1-866-377-2121). Representatives are available 9 a.m. - 8 p.m. (Eastern time)/8 a.m. - 7 p.m. (Central time), Monday through Friday, except holidays.
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