Do You Participate In The Florida Retirement System?
If you are a Florida teacher this should be important to you!
On July 1, 2012 Legislation was passed that changed the Florida Retirement System’s contribution limits. Read more about the 2012 Legislation.
Currently there are two retirement plans in the Florida Retirement System:
Defined benefit plan
-Six Years if member before 7-1-11
-Eight Years if member after 7-1-11
Eligible for DROP (Deferred Retirement Option Program)
-Employee contributes 3% of annual salary
-Employer rate is determined on an annual base’s
-Determined by a formula (years of service x factor) x AFC
AFC (Average Final Compensation)
Five highest years, if member before 7-1-11
Eight highest, if member after 7-1-11
Years of creditable service
Percentage factor based on age or years of service
Retirement at age 62 or 30 years 1.60%
Retirement at age 63 or 31 years 1.63%
Retirement at age 64 or 32 years 1.65%
Retirement at age 65 or 33 years 1.68%
Example: Option 1 Benefit
30 years of Service, AFC $50,000
30 x 1.60=48%
$50,000 (AFC) x 48%=$24,000 Annual Benefit (Gross)
Retirement Eligibility, if member before 7-1-11
Any age with 30 years of credible service or at least age 62 (vested 6 years)
Reduction of 5% per year for each short of age 62
Retirement Eligibility, if member after 7-1-11
Any age with 33 years of creditable service or at least 65 (vested 8 years)
Benefit Payment Options
Option 1 (life only)
Option 2 (Life with 10 years certain)
Option 3 (100% Joint and Survivor)
Option 4 (2/3 Joint and Survivor)
DROP (Deferred Retirement Option Program)
Must have reached normal retirement age
Usually 60 months is maximum
Must select retirement option when you enter
Monthly benefits accumulate in your account
Employee 3% contributions are not required
Drop accounts interest, after 7-1-11 it is 1.3%
Benefits can be rolled into a qualified retirement plan
Retirement benefits depend upon the performance of the investment funds.
There are currently 20 funds to choose from.
Lump sum distribution (Taxable)
Periodic distributions (Taxable)
Direct rollover to a qualified retirement plan
There is new legislation that went into effect on July 1, 2012 that affects contribution limits. Read more on this.
For more information on expert retirement planning on your FRS. Please contact us at any of our three insurance offices in Southwest Florida.