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Florida Retirement System

FRS Pension and Investment Plan Particpants

As a state/government employee in Florida you are provided some very unique retirement benefits from the Florida Retirement System. Even though you may not remember doing so, you made a very important choice when you started your career. You decided, at that time, whether you wanted to participate in the FRS Investment Plan or the FRS Pension Plan. This choice determined how you would accumulate retirement benefits throughout your career, as well as how those benefits would be paid to you at the end your career. These plans and the benefits provided are intricate and can be complicated to understand. 

Pension Plan and DROP

Pension Plan and DROP

The FRS Pension Plan is a defined benefit plan. Once you reach full retirement age and based on your credited years of service with an FRS employer(s), you will receive a guaranteed income from the FRS. As a pension plan participant, you are also able to enter the Deferred Retirement Option Program (DROP), once you've attained full retirement age. You are essentially retiring from the Florida Retirement System, but continuing to work in your same position. This means you and your employer no longer contribute to the FRS. You pension is "turned on", but rather than it be paid to you as a monthly income, it is deferred into a holding account which will continue to accumulate as you participate in DROP. This allows you to continue earning your salary from your employer, while your pension is deferred and your DROP account grows. This is a way to help bolster your retirement portfolio at the end of your career. The concern comes at the end of DROP, when the FRS says you are required to do something with those funds within 60 days of retirement. 

Investment Plan

Investment Plan

The FRS Investment Plan is a Defined Contribution Plan. This means that there are no guaranteed income benefits provided to you. You and your employer's contributions are invested into the funds of your choosing while you are working. This provides you more flexibility and control over how your funds are invested throughout your career. As financial advisors, we are able to provide fiduciary services for these funds while you are working. Once you attain full retirement age, we can then move forward with allocating those funds to best meet your needs in retirement. 

Making the decision on what to do with your DROP or Investment Plan funds should be based on your timing, not the FRS. Just because you retire on a specific date, doesn't necessarily mean that's the right day to invest. As independent financial advisors, our loyalty lies with our clients and their families. We're not beholden or captive to any one financial firm or investment product. This allows us the flexibility to taper our plans to perfectly match your needs. Generally, our approach is to earn your trust by walking you through the retirement process. Then, once you've settled into retirement, we can begin discussing how to best invest your funds to meet your short and long term needs. 

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