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Florida Retirement System

Florida Retirement System. Division of Human Resources. Florida Retirement System. Defined benefit plan Non-contributory system DROP Available 1998. Eligibility. Regular retirement benefits 6-year vesting Age 62 or 30 years of service at any age Early retirement benefits

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Florida Retirement System

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  1. Florida Retirement System Division of Human Resources

  2. Florida Retirement System • Defined benefit plan • Non-contributory system • DROP Available 1998

  3. Eligibility • Regular retirement benefits • 6-year vesting • Age 62 or 30 years of service at any age • Early retirement benefits • Benefits reduced 5 percent per year under age 62

  4. Benefit Formula • Years of service X value per year X Average Final Compensation (AFC) = Option 1 annual benefit at normal retirement age • Divide by 12 = monthly benefit

  5. Years of Service • Based on fiscal year (July 1 - June 30) • Work year • 9/10 month employee • 12 month employee

  6. Years of Service May Include • Withdrawn or refunded service • Leave of absence • Two years total (24 months) • Must return immediately after leave for one complete calendar month • Must be vested before it is creditable

  7. Years of Service May Include • Military service • Employed prior to January 1, 1987 • Active duty during wartime • Four year maximum • Must be vested before it is creditable • Cannot claim if using in another pension

  8. Years of Service May Include • In-state public service • In-state private school service • Must be accredited and non-sectarian • Out-of-state & federal public service • 5-year maximum • Cannot be used in another pension plan • Must be vested to be creditable

  9. Years of Service May Include • May use pre-tax dollars (403(b), 457, IRA’s) to purchase additional service • Must roll money direct to FRS Trust Fund to purchase additional service

  10. Value Per Year • FRS service Age 62 or 30 years 1.60% Age 63 or 31 years 1.63% Age 64 or 32 years 1.65% Age 65 or 33 years 1.68% • TRS service 2.00%

  11. Average Final Compensation(AFC) • Fiscal year (July 1 - June 30) • Average of highest five years of salary

  12. Preparing to Retire • Review annual statement from Division of Retirement • Verify total years of service • Verify costs for service credit (i.e. refunded, military, LOA) • Apply for retirement 3 to 6 months in advance of retirement date

  13. At Retirement • Designate a beneficiary • Option 1 or 2 Anyone • Option 3 or 4 Spouse/Joint Annuitant

  14. Choose An Option • Option 1: No survivor’s benefit after member’s death • Option 2: Ten years guaranteed • Option 3: Benefit continues to beneficiary • Option 4: Reduced continuing benefit to survivor

  15. Option Calculation 18.58 yrs @ 1.60% = 29.73% 1 $ 24,000 2 $ 26,500 3 $ 28,000 Total: $140,500 = $28,100 4 $ 30,000 5 5 $ 32,000

  16. Option Calculation Option 1 AFC X % value Annual Monthly $28,100 X 29.73% = $8,354.13 = $696.18 12

  17. Option Calculation Member 62 Spouse 60 Option 1 $696.18 Option 2 (.95627) $665.74 Option 3 (.76806) $534.71 Option 4 (.86072) $599.22 ($399.44)

  18. Early Retirement Calculation Member 60 Spouse 58 Option 1 $696.18 (.90000)=$557.44 Option 2 (.96543) $538.17 Option 3 (.78165) $435.72 Option 4 (.86946) $484.67 ($323.08)

  19. Leave Payments • Vacation leave cash out up to maximum based on position • TEAMS and 12-month faculty up to 352 hours • USPS up to 240 hours • Payment included in wages for calculation of highest five years (AFC)

  20. Leave Payments • Sick Leave • ¼ of hours accrued after 10/73—not to exceed payment for 480 hours

  21. At Retirement • Birth verification (member and joint annuitant) • Spousal acknowledgment (Option 1 or 2) • Application up to 6 months prior to date of termination

  22. After Retirement • Reemployment limitations • Restrictions only apply to FRS-covered employers • 1st month of retirement off any FRS employer’s payroll • Any work cancels retirement • All benefits lost

  23. After Retirement • 2nd - 12th month with a FRS-covered employer • Benefit forfeited for any work in month • Limited exceptions • After 12 months - no restrictions! • No restrictions on private employment!

  24. After Retirement • Retirement final - check cashed/deposited • Option cannot be changed • No service may be added

  25. After Retirement • Benefits paid monthly • Electronic Fund Transfer • Tax withholding • Cost of Living Adjustment (COLA) - 3% • Paid July 1 of each year

  26. After Retirement • Eligible for Health Insurance Subsidy (HIS) • Years of service X $5 = monthly subsidy • Minimum amount - $ 30 • Maximum amount - $150

  27. After Retirement • Continuation of health/state life insurance • Health insurance costs as of 1/2005 • Individual $371.12 • Family $841.98 • Medicare (Single) $197.36 • Medicare (Family 1<65) $568.48 • Medicare (Family>65) $394.72

  28. After Retirement • Continuation of State Life Insurance • Policy coverage is $10,000/retains AD&D provisions • Costs $4.20/month

  29. Medicare Care Costs • Effective January 1, 2005 • Part A—Hospitalization (no additional costs) • Part B--Medical services ($78.20/month) • Enrollment through Social Security Administration

  30. Retirement Services • Retirement Online • Visit www.frs.state.fl.us or www.myFRS.com • Member services for active members—current or former employees • DROP services for members participating in DROP • Retiree services for all retirees and monthly benefit recipients

  31. For Assistance Contact: Benefits/Retirement PO Box 115005 Division of Human Resources Gainesville, FL 32611-5005 Phone: (352) 392-4941 or Suncom 622-4941 E-mail: retirement@ufl.edu

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