Your Retirement Plan Options
Investment Plan
- 401(k)-type investment plan — you are responsible for managing your account.
- You qualify for a benefit after 1 year of service; once earned, the benefit is yours.
- Your benefit is based on contributions made to your account and on investment performance over time.
*See more Below
Pension Plan
- Traditional retirement pension plan — the State is responsible for managing the Pension Plan Trust Fund.
- You qualify for a benefit after 8 years2 of service; your benefit is payable when you reach retirement age as defined by the plan.
- Your monthly benefit is guaranteed and based on a formula using your salary, years of service, FRS membership class, and age.
**See more below
Both plans require you to contribute 3% of your salary, beginning with your first paycheck. You cannot change the amount you contribute. Your employer also makes contributions to the plan you choose.
*Investment Plan
How It Works
The FRS Investment Plan is a defined contribution plan, in which employer and employee contributions are defined by law, but your ultimate benefit depends in part on the performance of your investment funds.
The FRS Investment Plan is funded by employer and employee contributions that are based on your salary and your FRS membership class (Regular Class, Special Risk Class, etc.). The Investment Plan directs contributions to individual member accounts, and you allocate your contributions and account balance among various investment funds.
Your Investment Plan retirement benefit is the value of your account at termination. Unlike the Pension Plan, there is no fixed benefit level at retirement. However, a guaranteed lifetime annuity (based on the benefit to be distributed) can be purchased and is available with annual 3% cost of living increases.
The FRS Investment Plan is a defined contribution plan, in which employer and employee contributions are defined by law, but your ultimate benefit depends in part on the performance of your investment funds.
The FRS Investment Plan is funded by employer and employee contributions that are based on your salary and your FRS membership class (Regular Class, Special Risk Class, etc.). The Investment Plan directs contributions to individual member accounts, and you allocate your contributions and account balance among various investment funds.
Your Investment Plan retirement benefit is the value of your account at termination. Unlike the Pension Plan, there is no fixed benefit level at retirement. However, a guaranteed lifetime annuity (based on the benefit to be distributed) can be purchased and is available with annual 3% cost of living increases.
Why the FRS Is Offering This Plan
The Investment Plan has been offered to FRS employees since 2002 and is similar to other defined contribution plans that have been offered to select groups of FRS employees for over 25 years. It is primarily designed to serve shorter-service and mobile employees. Other employees that might find the Investment Plan appealing are older employees that don’t expect to work at least six years (if enrolled in the FRS prior to July 1, 2011) or eight years (if initially enrolled in the FRS on or after July 1, 2011).
The Investment Plan has been offered to FRS employees since 2002 and is similar to other defined contribution plans that have been offered to select groups of FRS employees for over 25 years. It is primarily designed to serve shorter-service and mobile employees. Other employees that might find the Investment Plan appealing are older employees that don’t expect to work at least six years (if enrolled in the FRS prior to July 1, 2011) or eight years (if initially enrolled in the FRS on or after July 1, 2011).
Who’s Eligible for the FRS Investment Plan?
All FRS employees are eligible for the Investment Plan except:
All FRS employees are eligible for the Investment Plan except:
- Participants in the Deferred Retirement Option Program, known as DROP (except as a distribution option).
- Mandatory State University System Optional Retirement Program (SUSORP) members. (This is not an FRS plan.)
- Teachers’ Retirement System members. (This plan is closed to new members.)
How Your Benefit Accumulates
In the Investment Plan, benefits are earned more or less evenly over your career (subject to fluctuations in the financial markets and your investment strategy). This is different from the Pension Plan, in which you accumulate benefits slowly at first and then at a faster rate the longer you stay.
So, if you don’t stay with FRS employers for most of your career or for the final years of your career, you’re more likely to receive a greater benefit under the Investment Plan.
In the Investment Plan, benefits are earned more or less evenly over your career (subject to fluctuations in the financial markets and your investment strategy). This is different from the Pension Plan, in which you accumulate benefits slowly at first and then at a faster rate the longer you stay.
So, if you don’t stay with FRS employers for most of your career or for the final years of your career, you’re more likely to receive a greater benefit under the Investment Plan.
When You Own Your Benefit
You will be vested (that is, you will own the assets in your Investment Plan account) when you complete one year of service in the FRS Investment Plan. If you transfer from the FRS Pension Plan to the FRS Investment Plan, you will be able to count your Pension Plan service toward the one-year vesting requirement.
If you transfer the present value of your FRS Pension Plan benefit to your FRS Investment Plan account, you need to complete six years of service (if enrolled in the FRS prior to July 1, 2011) or eight years (if initially enrolled in the FRS on or after July 1, 2011) before you “own” this money. Service in the FRS Investment Plan will count toward the applicable FRS Pension Plan vesting requirement for the transferred value of your FRS Pension Plan benefit.
Employee contributions are immediately vested. This means that if you terminate employment prior to meeting the vesting requirements of the Investment Plan, you will be entitled to a distribution of your employee contributions. However, taking such a distribution may not be a sound financial decision because you will forfeit any unvested employer contributions and service credit associated with the service and be declared a retiree of the FRS. If you return to FRS-covered employment after taking a distribution (effective for reemployed service on or after July 1, 2017), you are considered a “reemployed retiree” or “renewed member.” As a reemployed Investment Plan retiree, participation in the Investment Plan is mandatory, unless you are reemployed in a position eligible to participate in the State University System Optional Retirement Program (SUSORP) or State Community College System Optional Retirement Program (SCCSORP).
You will be vested (that is, you will own the assets in your Investment Plan account) when you complete one year of service in the FRS Investment Plan. If you transfer from the FRS Pension Plan to the FRS Investment Plan, you will be able to count your Pension Plan service toward the one-year vesting requirement.
If you transfer the present value of your FRS Pension Plan benefit to your FRS Investment Plan account, you need to complete six years of service (if enrolled in the FRS prior to July 1, 2011) or eight years (if initially enrolled in the FRS on or after July 1, 2011) before you “own” this money. Service in the FRS Investment Plan will count toward the applicable FRS Pension Plan vesting requirement for the transferred value of your FRS Pension Plan benefit.
Employee contributions are immediately vested. This means that if you terminate employment prior to meeting the vesting requirements of the Investment Plan, you will be entitled to a distribution of your employee contributions. However, taking such a distribution may not be a sound financial decision because you will forfeit any unvested employer contributions and service credit associated with the service and be declared a retiree of the FRS. If you return to FRS-covered employment after taking a distribution (effective for reemployed service on or after July 1, 2017), you are considered a “reemployed retiree” or “renewed member.” As a reemployed Investment Plan retiree, participation in the Investment Plan is mandatory, unless you are reemployed in a position eligible to participate in the State University System Optional Retirement Program (SUSORP) or State Community College System Optional Retirement Program (SCCSORP).
If You Change Employers
Under the Investment Plan, if you leave FRS-covered employment after vesting and go to a non-FRS employer, you can choose to leave your account invested in the Plan. There, it will continue to earn market returns until you begin to draw it down during retirement. You may also “roll it over” to an Individual Retirement Account (IRA) or to the plan of your new employer (if allowed by that plan). However, if you roll your money out of the Investment Plan, you will be considered retired from the FRS. If you return to FRS-covered employment after taking a distribution (effective for reemployed service on or after July 1, 2017), you are considered a “reemployed retiree” or “renewed member.” As a reemployed Investment Plan retiree, participation in the Investment Plan is mandatory, unless you are reemployed in a position eligible to participate in the State University System Optional Retirement Program (SUSORP) or State Community College System Optional Retirement Program (SCCSORP).
If you leave prior to vesting, your account balance will be placed in a suspense account for up to five years. If you return to FRS-covered employment within the five-year period, you will regain control over your account. If you do not return within the five-year period, you will forfeit the accumulated account balance, excluding any employee contributions.
Under the Investment Plan, if you leave FRS-covered employment after vesting and go to a non-FRS employer, you can choose to leave your account invested in the Plan. There, it will continue to earn market returns until you begin to draw it down during retirement. You may also “roll it over” to an Individual Retirement Account (IRA) or to the plan of your new employer (if allowed by that plan). However, if you roll your money out of the Investment Plan, you will be considered retired from the FRS. If you return to FRS-covered employment after taking a distribution (effective for reemployed service on or after July 1, 2017), you are considered a “reemployed retiree” or “renewed member.” As a reemployed Investment Plan retiree, participation in the Investment Plan is mandatory, unless you are reemployed in a position eligible to participate in the State University System Optional Retirement Program (SUSORP) or State Community College System Optional Retirement Program (SCCSORP).
If you leave prior to vesting, your account balance will be placed in a suspense account for up to five years. If you return to FRS-covered employment within the five-year period, you will regain control over your account. If you do not return within the five-year period, you will forfeit the accumulated account balance, excluding any employee contributions.
Benefit Paid at Retirement
Under the Investment Plan, your retirement benefit is based on your account balance at the time you request a distribution, which consists of any cumulative employer and employee contributions, dividends and interest, and investment gains or losses, less expenses. The amount of your benefit payments is affected by the retirement income option you choose.
Under the Investment Plan, your retirement benefit is based on your account balance at the time you request a distribution, which consists of any cumulative employer and employee contributions, dividends and interest, and investment gains or losses, less expenses. The amount of your benefit payments is affected by the retirement income option you choose.
Retirement Income Options
Under the Investment Plan, you may choose to receive your account balance at termination of employment as a lump sum or to take periodic withdrawals on demand or by a pre-determined payout schedule you select. There may be tax penalties if you withdraw your money before age 59 1/2. You may also use some or all of your account balance to purchase the same types of lifetime payment options (annuities) as offered in the FRS Pension Plan, with payments guaranteed by a private sector insurance company (MetLife). Survivor benefits and 3% annual benefit increase option are available, as well as a number of other retirement income options.
Under the Investment Plan, you may choose to receive your account balance at termination of employment as a lump sum or to take periodic withdrawals on demand or by a pre-determined payout schedule you select. There may be tax penalties if you withdraw your money before age 59 1/2. You may also use some or all of your account balance to purchase the same types of lifetime payment options (annuities) as offered in the FRS Pension Plan, with payments guaranteed by a private sector insurance company (MetLife). Survivor benefits and 3% annual benefit increase option are available, as well as a number of other retirement income options.
Pre-Retirement Benefits
In the Investment Plan, your vested account balance will be paid to your beneficiary or estate if you die.
In the Investment Plan, your vested account balance will be paid to your beneficiary or estate if you die.
DROP
DROP participation is not available under the Investment Plan, though Pension Plan DROP participants can roll over their DROP benefit into the Investment Plan following termination from DROP.
DROP participation is not available under the Investment Plan, though Pension Plan DROP participants can roll over their DROP benefit into the Investment Plan following termination from DROP.
DROP Rollover to the FRS Investment Plan
DROP participants (former and current) are permitted to rollover their DROP accumulation into the FRS Investment Plan. This option allows you to take advantage of the low cost investment products offered in the Investment Plan. When you decide to take a distribution of your accumulated funds from the Investment Plan, you have multiple distribution options: a fixed or deferred annuity (much like your Pension Plan benefit), periodic payments (quarterly, semiannually, or annually), lump sum payout of your account balance, or a rollover of your account balance to another plan. Review Questions and Answers
DROP participants (former and current) are permitted to rollover their DROP accumulation into the FRS Investment Plan. This option allows you to take advantage of the low cost investment products offered in the Investment Plan. When you decide to take a distribution of your accumulated funds from the Investment Plan, you have multiple distribution options: a fixed or deferred annuity (much like your Pension Plan benefit), periodic payments (quarterly, semiannually, or annually), lump sum payout of your account balance, or a rollover of your account balance to another plan. Review Questions and Answers
Rollovers From Former Investment Plan Members
Former FRS Investment Plan members (retirees) who terminated FRS employment and took a distribution from their Investment Plan account are permitted to roll eligible funds into the FRS Investment Plan. Retirees who roll their funds into the Investment Plan will be able to take advantage of the Investment Plan’s low-cost investment funds and access unbiased financial planners provided through the MyFRS Financial Guidance Program to help manage their retirement account. Review Questions and Answers
Former FRS Investment Plan members (retirees) who terminated FRS employment and took a distribution from their Investment Plan account are permitted to roll eligible funds into the FRS Investment Plan. Retirees who roll their funds into the Investment Plan will be able to take advantage of the Investment Plan’s low-cost investment funds and access unbiased financial planners provided through the MyFRS Financial Guidance Program to help manage their retirement account. Review Questions and Answers
Health Insurance Subsidy (HIS)
The Health Insurance Subsidy (HIS) is a monthly supplemental payment that you may be eligible to receive if you have health insurance coverage (Medicare and TRICARE coverage are accepted). This monthly payment, which you must apply for, is calculated by multiplying your total years of service at retirement (up to a maximum of 30 years) by $7.50.
The HIS is only available after you have 6 years of service (if enrolled in the FRS prior to July 1, 2011) or 8 years (if initially enrolled in the FRS on or after July 1, 2011). To be eligible to receive the HIS under the Investment Plan, you must meet the normal retirement age or service requirements of the Pension Plan for your class of membership and provide proper documentation certifying that you have health insurance coverage. For example, if you enrolled in the FRS prior to July 1, 2011, a Regular Class member must be either age 62 and have 6 years of service or have a total of 30 years of service, and a Special Risk member must be either age 55 with 6 years of Special Risk service or have a total of 25 years of Special Risk service to qualify. If you enrolled in the FRS on or after July 1, 2011, a Regular Class member must be either age 65 and have 8 years of service or have a total of 33 years of service, and a Special Risk member must be either age 55 with at least 8 years of Special Risk service or have a total of 25 years of Special Risk service to qualify.
If you leave FRS-covered employment and take a benefit distribution prior to satisfying the normal retirement requirements, you must wait until you reach normal retirement age to begin receiving your HIS benefit. If you elect the Hybrid Option, you will receive your HIS payment once you begin receiving your Pension Plan benefit.
The HIS subsidy is $7.50 for each year of creditable service, with a minimum HIS payment of $45 per month and a maximum HIS payment of $225 per month.
The Health Insurance Subsidy (HIS) is a monthly supplemental payment that you may be eligible to receive if you have health insurance coverage (Medicare and TRICARE coverage are accepted). This monthly payment, which you must apply for, is calculated by multiplying your total years of service at retirement (up to a maximum of 30 years) by $7.50.
The HIS is only available after you have 6 years of service (if enrolled in the FRS prior to July 1, 2011) or 8 years (if initially enrolled in the FRS on or after July 1, 2011). To be eligible to receive the HIS under the Investment Plan, you must meet the normal retirement age or service requirements of the Pension Plan for your class of membership and provide proper documentation certifying that you have health insurance coverage. For example, if you enrolled in the FRS prior to July 1, 2011, a Regular Class member must be either age 62 and have 6 years of service or have a total of 30 years of service, and a Special Risk member must be either age 55 with 6 years of Special Risk service or have a total of 25 years of Special Risk service to qualify. If you enrolled in the FRS on or after July 1, 2011, a Regular Class member must be either age 65 and have 8 years of service or have a total of 33 years of service, and a Special Risk member must be either age 55 with at least 8 years of Special Risk service or have a total of 25 years of Special Risk service to qualify.
If you leave FRS-covered employment and take a benefit distribution prior to satisfying the normal retirement requirements, you must wait until you reach normal retirement age to begin receiving your HIS benefit. If you elect the Hybrid Option, you will receive your HIS payment once you begin receiving your Pension Plan benefit.
The HIS subsidy is $7.50 for each year of creditable service, with a minimum HIS payment of $45 per month and a maximum HIS payment of $225 per month.
*Pension Plan
How It Works
The FRS Pension Plan is a defined benefit plan, in which you are guaranteed a benefit at retirement if you meet certain criteria. The amount of your future benefit is determined by a formula, based on your earnings, length of service, and membership class, and may be adjusted by a cost-of-living increase each July (adjustment only applicable for FRS service earned prior to July 1, 2011). If you are initially enrolled in the Pension Plan on or after July 1, 2011, you will not have a cost-of-living increase after retirement. Your benefit is pre-funded by your employee and employer contributions. The Florida Retirement System must ensure that sufficient funds are available when your benefits are due and bears the market risk and investment decisions.
The FRS Pension Plan is a defined benefit plan, in which you are guaranteed a benefit at retirement if you meet certain criteria. The amount of your future benefit is determined by a formula, based on your earnings, length of service, and membership class, and may be adjusted by a cost-of-living increase each July (adjustment only applicable for FRS service earned prior to July 1, 2011). If you are initially enrolled in the Pension Plan on or after July 1, 2011, you will not have a cost-of-living increase after retirement. Your benefit is pre-funded by your employee and employer contributions. The Florida Retirement System must ensure that sufficient funds are available when your benefits are due and bears the market risk and investment decisions.
Why the FRS Is Offering This Plan
The Pension Plan has been offered to employees for over 50 years. It is primarily designed to serve longer-service employees who will be with the FRS for most of their career. Older employees and those employees who do not want to control their retirement plan may also prefer the Pension Plan.
The Pension Plan has been offered to employees for over 50 years. It is primarily designed to serve longer-service employees who will be with the FRS for most of their career. Older employees and those employees who do not want to control their retirement plan may also prefer the Pension Plan.
Who’s Eligible for the FRS Pension Plan?
All FRS employees are eligible for the Pension Plan except:
All FRS employees are eligible for the Pension Plan except:
- Mandatory State University System Optional Retirement Program (SUSORP) members. (This is not an FRS plan.)
- Teachers’ Retirement System members. (This plan is closed.)
How Your Benefit Accumulates
In the Pension Plan, your benefits are generally back-loaded, which means that you accumulate benefits slowly at first and then at a faster rate the longer you stay. This is different from the Investment Plan, where benefits are earned more or less evenly over your career (subject to fluctuations in the financial markets and your investment strategy).
In the Pension Plan, your benefits are generally back-loaded, which means that you accumulate benefits slowly at first and then at a faster rate the longer you stay. This is different from the Investment Plan, where benefits are earned more or less evenly over your career (subject to fluctuations in the financial markets and your investment strategy).
When You Own Your Benefit
You will be eligible for a Pension Plan benefit (i.e. be vested) when you complete six years of service (if you were enrolled in the FRS prior to July 1, 2011) or eight years of service (if you were enrolled in the FRS on or after July 1, 2011). If you terminated FRS-covered employment before July 1, 2001, vesting varied based on membership class:
You will be eligible for a Pension Plan benefit (i.e. be vested) when you complete six years of service (if you were enrolled in the FRS prior to July 1, 2011) or eight years of service (if you were enrolled in the FRS on or after July 1, 2011). If you terminated FRS-covered employment before July 1, 2001, vesting varied based on membership class:
- Members of the Regular Class, Special Risk Class and Special Risk Administrative Support Class vested in the FRS Pension Plan after completing 10 years of creditable service.
- Members of the Elected Officers’ Class vested in the FRS Pension Plan after completing eight years of creditable service.
- Members of the Senior Management Service Class vested in the FRS Pension Plan after completing seven years of creditable service.
If you use your 2nd Choice option to transfer from the FRS Investment Plan to the FRS Pension Plan, you will be able to count your Investment Plan service toward the vesting requirement.
(To transfer from the Investment Plan to the Pension Plan, you will need to “buy in” to the Pension Plan by paying an amount from your Investment Plan account balance, plus any necessary amount from your personal resources. If you have previous Pension Plan service prior to joining the Investment Plan, the buy in cost will be calculated as the present value of the “accrued” FRS Pension Plan benefit. If you do not have previous Pension Plan service, the buy in cost will be the actuarial accrued liability, or total cost, of the “accrued” Pension Plan benefit. The buy in cost could be a substantial amount and could make transferring to the Pension Plan unaffordable.)
If You Change Employers
Under the Pension Plan, if you leave FRS-covered employment and go to a non-FRS employer, your Pension Plan benefit is frozen until you return at a later date to continue your FRS-covered employment or begin receiving your early or normal retirement benefit.
Under the Pension Plan, if you leave FRS-covered employment and go to a non-FRS employer, your Pension Plan benefit is frozen until you return at a later date to continue your FRS-covered employment or begin receiving your early or normal retirement benefit.
Benefit Paid at Retirement
Under the Pension Plan, your retirement benefit is based on a formula comprised of your age, length of FRS service, your Average Final Compensation, and your membership class. If you begin receiving an early retirement benefit (before you have reached normal retirement), then your monthly retirement benefit will be reduced 5 percent for each year up to your normal retirement age. The amount of your benefit payments is affected by the retirement income option you choose.
Under the Pension Plan, your retirement benefit is based on a formula comprised of your age, length of FRS service, your Average Final Compensation, and your membership class. If you begin receiving an early retirement benefit (before you have reached normal retirement), then your monthly retirement benefit will be reduced 5 percent for each year up to your normal retirement age. The amount of your benefit payments is affected by the retirement income option you choose.
Retirement Income Options
Under the Pension Plan, you may choose to receive your benefit in retirement under one of four lifetime benefit options and may include an annual Cost-of-Living Adjustment (COLA) each July (adjustment only applicable for FRS service earned prior to July 1, 2011). If you are initially enrolled in the Pension Plan on or after July 1, 2011 you will not have a COLA after retirement. Option 1 provides a monthly benefit for your lifetime, but does not provide a continuing benefit to a beneficiary. Option 2 provides a reduced monthly benefit for your lifetime, with a guarantee that your beneficiary will be eligible for a continuing benefit for 10 years from the date you retire. After 10 years of retirement, no benefits are payable to your beneficiary, in the event of your death.
Options 3 and 4 provide a continuing benefit to your spouse or other dependent beneficiary who is your joint annuitant. Option 3 provides a reduced benefit to both you and your joint annuitant in the same amount for as long as you or they are living. Option 4 provides an adjusted monthly benefit for you and your joint annuitant and is reduced upon the death of either.
Under the Pension Plan, you may choose to receive your benefit in retirement under one of four lifetime benefit options and may include an annual Cost-of-Living Adjustment (COLA) each July (adjustment only applicable for FRS service earned prior to July 1, 2011). If you are initially enrolled in the Pension Plan on or after July 1, 2011 you will not have a COLA after retirement. Option 1 provides a monthly benefit for your lifetime, but does not provide a continuing benefit to a beneficiary. Option 2 provides a reduced monthly benefit for your lifetime, with a guarantee that your beneficiary will be eligible for a continuing benefit for 10 years from the date you retire. After 10 years of retirement, no benefits are payable to your beneficiary, in the event of your death.
Options 3 and 4 provide a continuing benefit to your spouse or other dependent beneficiary who is your joint annuitant. Option 3 provides a reduced benefit to both you and your joint annuitant in the same amount for as long as you or they are living. Option 4 provides an adjusted monthly benefit for you and your joint annuitant and is reduced upon the death of either.
Pre-Retirement Benefits
In the Pension Plan, your vested benefit will be paid to your beneficiary or in accordance to Florida law if you die prior to retiring.
In the Pension Plan, your vested benefit will be paid to your beneficiary or in accordance to Florida law if you die prior to retiring.
DROP
You may participate in the Deferred Retirement Option Program (DROP) once you have reached normal retirement age or date. See more DROP information here.
You may participate in the Deferred Retirement Option Program (DROP) once you have reached normal retirement age or date. See more DROP information here.
Health Insurance Subsidy (HIS)
The Health Insurance Subsidy (HIS) is a monthly supplemental payment that you may be eligible to receive if you have health insurance coverage (Medicare and TRICARE coverage are accepted). This monthly payment, which you must apply for, is calculated by multiplying your total years of service at retirement (up to a maximum of 30 years) by $7.50. The HIS is only available after you have six years of service (if enrolled in the FRS prior to July 1, 2011) or eight years (if enrolled in the FRS on or after July 1, 2011). You will receive the HIS as part of your early or normal retirement benefit after you have provided proper documentation certifying that you have health insurance coverage. The HIS, which is paid monthly, is $7.50 for each year of creditable service, with a minimum HIS payment of $45 per month and a maximum HIS payment of $225 per month.
The Health Insurance Subsidy (HIS) is a monthly supplemental payment that you may be eligible to receive if you have health insurance coverage (Medicare and TRICARE coverage are accepted). This monthly payment, which you must apply for, is calculated by multiplying your total years of service at retirement (up to a maximum of 30 years) by $7.50. The HIS is only available after you have six years of service (if enrolled in the FRS prior to July 1, 2011) or eight years (if enrolled in the FRS on or after July 1, 2011). You will receive the HIS as part of your early or normal retirement benefit after you have provided proper documentation certifying that you have health insurance coverage. The HIS, which is paid monthly, is $7.50 for each year of creditable service, with a minimum HIS payment of $45 per month and a maximum HIS payment of $225 per month.
DROP
The Deferred Retirement Option Program (DROP) provides you with an alternative method for payment of your retirement benefits for a specified and limited period if you are an eligible Florida Retirement System (FRS) Pension Plan member. Under this program, you stop earning service credit toward a future benefit and your retirement benefit is calculated at the time your DROP participation begins. While you are in the DROP, your monthly retirement benefits accumulate in the FRS Trust Fund earning interest while you continue to work for an FRS employer. Upon termination, your DROP account is paid to you as a lump sum payment, a rollover to another qualified plan or a combination partial lump sum payment and partial rollover. Monthly benefits are paid to you in the amount calculated at DROP entry, plus any applicable cost-of-living adjustments during DROP participation. For more information, see the latest version of the DROP guide available on our “Guides” page.
In most cases, the DROP participant must cease employment after a maximum of 96 calendar months in the DROP; however, certain exceptions apply for DROP participants to defer their employment termination.
- Effective July 1, 2002, a DROP participant who holds an elective office may end DROP participation and postpone compliance with the termination requirement until no longer holding the elective office (including consecutive terms in the same office). For the period between the end of DROP participation and employment termination, no retirement credit is earned, the member’s accumulated DROP does not accrue additional monthly benefits, and no additional interest is accrued.8 DROP participants must terminate all employment in order to begin receiving benefits. . An elected officer who has deferred termination as provided in s.121.053 before June 30, 2023, is ineligible to extend DROP participation beyond 60 calendar months. Effective July 1, 2026, an elected officer (other than an officer serving as a legislator), who has completed their DROP participation period may receive their DROP accumulations after attaining age 59 ½, without beginning monthly retirement benefits and without terminating FRS employment.
- Effective July 1, 2023, K-12 instructional personnel employed with a district school board, the Florida School for the Deaf and the Blind, or a developmental research school of a state university may be allowed to extend their DROP participation for up to an additional 24 calendar months beyond their initial 96 calendar month DROP participation period. 9 To qualify for the extension, the DROP participant must receive authorization from the employer and be approved by the division. If authorized to extend DROP participation, a participant must remain employed in an eligible position during the period of DROP extension. K-12 instructional personnel who are authorized to extend DROP participation beyond the 96-month period must end their extended DROP participation on the last day of the last calendar month of the school year.
- K-12 administrative personnel as defined in section (s.) 1012.01(3), F. S., who have a DROP termination date on or after July 1, 2018, may be authorized to extend their DROP participation beyond the initial 96 calendar month period if their termination date is before the end of the school year. Such administrative personnel may have their DROP participation extended until the last month of the same school year. The employer is required to notify the Division of Retirement when these eligible personnel have their termination date changed to comply with this provision.
The DROP Forms page provides access to forms available to DROP participants.
The following documents provide additional information about DROP:
- Preparing to Terminate DROP(opens in new window)(PDF file) – Document that explains what to expect when you terminate DROP (the forms to submit, when you will begin receiving monthly benefits, etc.).
- DROP Special Tax Notice(opens in new window)(PDF file) – Document that provides information for DROP participants including eligible rollover plans, payment options, tax effects and more.
- DROP Rollover Flyer(opens in new window)(PDF file) – Document that provides information about your ability to roll over your DROP lump sum into the FRS Investment Plan.
- Keep your DROP in the FRS(opens in new window)(PDF file) – Document that explains how you can roll over your DROP lump sum into the FRS Investment Plan.
The DROP Participation Chart page allows you to determine your maximum DROP termination date, based on your DROP begin date.