FRS Employer Electronic Newsletter

You Are the Most Important Link ... in Helping Terminated Employees

Are you reporting employee termination dates on your monthly payroll reports -- accurately and as soon as possible? Once terminated, some employees want to take a distribution or rollover from their Investment Plan account as soon as possible.

As an employer, you are the link between the terminated employee and the FRS. A terminated employee cannot receive a distribution until you notify the Division of Retirement of that employee's termination date on your monthly payroll report. (The Division consolidates the data for the FRS Investment Plan and reports it to the Investment Plan Administrator, CitiStreet.)

Employees must be off all FRS covered payrolls for a full calendar month following the month of their employment termination, to receive a distribution. You can help speed the process by reporting an employee's termination date on the next available monthly payroll report and by double-checking the information for accuracy. Additionally, it's not unusual for terminating employees to use their one-time second election to transfer to the FRS Investment Plan. While this increased flexibility in the FRS is there to help employees, it also creates some administrative challenges. If an employer files a late termination notice, an employee's second election could be processed before the FRS learns that the employee was not eligible for a second election. Reversing a second election can create unnecessary costs for the FRS.

Example: If an employee is terminated on June 2, you should report this on your June payroll report that is due by the 5th business day in July so that the employee could potentially request a distribution and receive it in August. Any delay could result in a much longer wait time for an employee who might be financially dependent on a distribution. That's why it's so important that you submit termination date information as soon as possible -- and error-free -- so that we can speedily coordinate distributions to terminated employees who request them.

Here are some handy tips for reporting terminated employee information:

• Only submit termination dates of employees who are actually terminating all employment with your agency. Employees who are merely changing jobs within your agency from one department to another -- or have been promoted -- are not considered terminated.
• Report a contract end date as the termination date only when the employee actually severs the employee-employer relationship. Some employers have been incorrectly reporting termination dates for employees on a 9- or 10- month contract.
• Please do not notify the FRS of an employee's termination until it actually happens -- even if you know in advance. The automated payroll process is not designed to accept terminations for future dates.

Remember, you are the most important link in this chain of events. The Division of Retirement, CitiStreet and Ernst & Young are unable to certify termination dates. If termination date information has not been submitted on your monthly retirement report for any Investment Plan participant requesting a distribution, the participant will be directed to contact his/her employer and request termination date submission.

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Reminding New Employees of an Important Choice Deadline

Why is it that we often procrastinate and wait until the last minute to make an important decision? Probably because we all have many demands on our schedules and some decisions are simply too complex. Even though new employees have about five months to choose a retirement plan, many have indicated that they appreciate reminders of their deadline. If possible, the FRS would encourage you to send an email message reminder to your undecided employees -- about a month before their deadline.

As you know, all new employees have until 4:00 p.m. ET on the last business day of the 5th month -- after their month of hire -- to make a retirement plan choice. The FRS will mail a Choice Reminder letter to those who haven't yet made a choice by the fourth month of their employment. Experience shows that the FRS letter combined with a personalized note from you is very effective in promoting active elections.

As an FRS employer, you will be able to download a monthly list of your employees who will receive a Reminder letter from the FRS beginning in August. You can find the list under the Employer Services tab under the Election Information screen. The list will be updated monthly between the 10th and 15th of the month.

Why not make it a monthly habit to download the list of employees who have yet to choose a retirement plan and send them a short email message reminding them of the free resources available to help them file an active plan election?

The table below summarizes upcoming new employee deadlines.

Florida Retirement System New Employee Deadlines

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News Update: 2003 Legislative Actions

Want to know more about how the 2003 Florida Legislature's new bills affect the administration of the Florida Retirement System?

Here are some highlights:

• The legislature increased employer retirement contribution rates effective July 1, 2003.
• The legislature extended DROP participation for K-12 teachers under certain conditions.
• The legislature did not change the amount of the contributions being made toward the accounts of participants in the FRS Investment Plan or Hybrid Option.

You can read about the legislative changes by clicking below:

• Go to http://www.frs.state.fl.us
• Then click on "Legislation"
• Then click on "2003 Legislation"

Enrollment Opportunities for DROP Participants

Have any employees participating in DROP asked you if they can continue working beyond their DROP end date? The attached Financial Guidance Program Information Release 2003-04 should help you answer their questions.

Financial Guidance Program Information Release 2003-04

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MyFRS Financial Guidance Program Partnerships Explained

The MyFRS Financial Guidance Program consists of public and private partners working together to provide the education resource infrastructure of the Florida Retirement System. These resources are provided at no cost to FRS employees -- from the beginning of their career until the day they retire.

The Program's private partners are not selling any products and do not have any incentive to favor either the Pension Plan or the Investment Plan.

Here's a list of the MyFRS Financial Guidance Program partners that you and your employees are most likely to interact with or see mentioned in FRS communications:

• State Board of Administration of Florida -- administers the MyFRS Financial Guidance Program, including the FRS plan choice and ongoing retirement planning education. The SBA also administers the FRS Investment Plan, utilizing CitiStreet as the private sector partner responsible for day-to-day operations of the FRS plan choice and recordkeeping for the Investment Plan.
• Florida Division of Retirement -- operates as a part of the Financial Guidance Program, which they helped develop and actively support. They also administer the FRS Pension Plan and Health Insurance Subsidy (HIS) program, provide retirement payroll reporting services, and manage the disability benefit programs for the Pension Plan and Investment Plan.
• Ernst & Young -- reports to the State Board and is the private sector partner that staffs the toll-free MyFRS Financial Guidance Line, providing retirement and financial planning guidance to members of both the Pension Plan and Investment Plan. At the request of FRS employers, Ernst & Young also conducts employee workshops on retirement and financial planning topics.
• Financial Engines -- reports to the State Board and is the private sector partner that offers the online Choice Service, Second Election Choice Service and Advisor Service to help all FRS participants select their retirement plan and then manage their overall retirement strategies using the online Advisor Service.

Behind the scenes, there are other private sector partners that make major contributions to the print and MyFRS.com educational resources (e.g., Ketchum and Enterpulse).

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EMPLOYER RESOURCES

When you need help or have questions about the plans or the choice options, we have several resources available to assist you.

• The MyFRS.com Web site. Click on the "Employer Services" tab in the upper right corner of the home page to get information specifically geared toward employers. If you're a state agency employer who needs access to a list of your employees who have joined the Investment Plan, you will receive a monthly report from COPES containing this information.
• The FRS Employer Assistance Line, toll-free at 1-866-FRS-2121 (1-866-377-2121). Representatives are available 9 a.m. to 8 p.m. (Eastern time)/8 a.m. to 7 p.m. (Central time), Monday through Friday, except holidays. Remember, this telephone number is for employers only! Employees should call the MyFRS Financial Guidance Line at 1-866-44-MyFRS (1-866-446-9377).

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