1. Chad Poppell, Secretary Understanding Your Retirement Benefits Under the FRS Pension Plan DIVISION OF RETIREMENT For Members of the Regular Class and Senior Management Service Class

2. FRS MEMBERSHIP HANDBOOK DIVISION OF RETIREMENT

3. RETIREMENT GUIDES DIVISION OF RETIREMENT

4. WWW.FRS.MYFLORIDA.COM

5. DISCLAIMER If questions of interpretation arise as a result of the attempt to make retirement provisions easy to understand, Chapter 121, Florida Statutes; Chapter 60S, Florida Administrative Code; and the Internal Revenue Code shall remain the final authorities. DIVISION OF RETIREMENT

6. FRS PENSION PLAN HISTORY Created December 1970 (TRS/SCOERS Merger) Employee Non-Contributory System (1/1975 – 6/2011) 3% Employee Contributions effective 7/1/2011 (Pre-Tax) Deferred Retirement Option Program (DROP) became Available 1998 549,082 Active Members (34,829 of these in DROP) 377,671 Retired Members/Benefit Recipients 1023 Participating Employers DIVISION OF RETIREMENT

7. THE TWO FRS PLANS Pension PlanInvestment Plan Defined Benefit Plan Defined Contribution Plan Provides a lifetime monthly benefit when you retire based on a formula Member chooses how to receive the balance of the investment account after retirement Benefit is based on the following formula: Years of Service x Accrual % Value/Year of Service x Average Final Compensation Account balance is based on the following formula: Contributions + Earnings – Losses – Administrative Expense charges This comparison has been designed to be intentionally brief and is not intended to include every plan detail. Complete details can be found in Chapter 121, Florida Statutes, and the rules of the State Board of Administration of Florida (SBA) in Title 19, Florida Administrative Code (F.A.C.) and the rules of the Division of Retirement of the Department of Management Services; Chapter 60-S, F.A.C. DIVISION OF RETIREMENT

8. THE TWO FRS PLANS State Board of Administration Division of Retirement Pension Plan Investment Plan Aon Hewitt Ernst & Young Dept. of Management Services Plan Choice Guidance call the My FRS Guidance Line at (866) 446-9377 MyFRS.COM DIVISION OF RETIREMENT

9. ELIGIBILITY FOR A FUTURE BENEFIT UNDER THE FRS PENSION PLAN Occurs when you become a vested member. Vested member means you have met the years of service required to be eligible to receive a future benefit under the plan. DIVISION OF RETIREMENT

10. YEARS OF SERVICE REQUIRED TO VEST VESTING REQUIREMENTREGULAR CLASSSENIOR MANAGEMENT SERVICE CLASS Members enrolled prior to July 1, 2001:10 years of serviceSeven years of service Members enrolled on July 1, 2001 through June 30, 2011; or If enrolled prior and actively employed on July 1, 2001: Six years of service Members enrolled prior to July 1, 2001 and not actively on July 1, 2001: Must return to work for one year to be eligible for six-year vesting or if less than a year from vesting under the provisions enrolled under, must work the number of months to vest. Members enrolled on or after July 1, 2011:Eight years of service 10

11. NORMAL RETIREMENT DATE Is when you are first eligible to receive an unreduced retirement benefit; and Is also when your are eligible to participate in the Deferred Retirement Option Program (DROP). DIVISION OF RETIREMENT

12. NORMAL RETIREMENT DATE If initially enrolled before July 1, 2011, normal retirement date for a vested member is: – Age 62; or when you have completed 30 years of service whichever occurs first; or – The age after 62 when you become vested DIVISION OF RETIREMENT

13. NORMAL RETIREMENT DATE If initially enrolled on or after July 1, 2011, normal retirement date for a vested member is: – Age 65 or when you have completed 33 years of service whichever occurs first; or – The age after 65 when you become vested DIVISION OF RETIREMENT

14. NORMAL RETIREMENT DATE If reaching your Normal Retirement date by age, your Normal Retirement date would be the first of the month you turn that age. If reaching your Normal Retirement date by years of service, your Normal Retirement date would be the first of the month following the month you attain the years of service. Service Retirement and DROP begin dates are always the first of the month. DIVISION OF RETIREMENT

15. NORMAL RETIREMENT DATE - DROP School Board K-12 Instructional Personnel, as defined in Section1012.01(2)(a)-(e) Florida Statutes may enter DROP at Normal Retirement or at anytime after reaching Normal Retirement and participate for a full 60 months. All others, the 60-month DROP participation period commences at Normal Retirement date and must enter DROP at that time to participate for a full 60 months unless eligible to defer their 60 month DROP participation period. 12 month election window DIVISION OF RETIREMENT

16. NORMAL RETIREMENT DATE - DROP For members enrolled before July 1, 2011- If you reach your Normal Retirement date by years of service prior to reaching age 57, you may defer your entry into DROP up until the month in which your reach age 57 and still be eligible to participate in DROP for 60 months. 12 month election window. DIVISION OF RETIREMENT

17. NORMAL RETIREMENT DATE - DROP For members enrolled on or after July 1, 2011- If you reach your Normal Retirement date by years of service prior to reaching age 60, you may defer your entry into DROP up until the month in which your reach age 60 and still be eligible to participate in DROP for 60 months. 12 month election window. DIVISION OF RETIREMENT

18. WHAT IS DROP? You effectively retire under the Florida Retirement System (FRS) Pension Plan delaying termination for up to 60 months. Your monthly retirement benefits accrue in your DROP account while participating in DROP. Your DROP account earns an effective annual rate of 1.3 percent. Your Retirement benefit while in DROP receives an annual Cost-of-Living Adjustment (COLA). As a DROP participant you are not subject to 3 percent employee contributions. DIVISION OF RETIREMENT

19. WHAT IS DROP? Upon termination of DROP, your DROP accumulation is paid in one of three ways: as a lump-sum payment, with 20 percent withheld for federal income taxes; as a direct rollover to an eligible retirement plan; or as a combined partial lump-sum payment and direct rollover. A DROP termination packet will be mailed to your address reflected in our records three months prior to your DROP ending date. 19 DIVISION OF RETIREMENT

20. THE BENEFIT CALCULATION FORMULA = Option 1 Annual Benefit at Normal Retirement Divide by 12 = Monthly Option 1 Benefit DIVISION OF RETIREMENT

21. YEARS OF SERVICE Is the total of all years and parts of years you worked in a covered position with an FRS employer plus any optional service credit that you purchase. DIVISION OF RETIREMENT

22. OPTIONAL SERVICE CREDIT Refunded ServiceLeave of AbsenceWartime Military Service Must earn a year of creditable service after taking the refund to be eligible to purchase. Up to 2 years. Must have been authorized in writing by employer before or during the leave. Must have returned to work for one complete month immediately after leave of absence. Form FR-28. Up to 4 years. Must have been employed in an FRS covered position prior to 1/1/1987. Must be active duty service during certain wartime military dates. Service cannot have been used under any other Pension Plan. DD-214. DIVISION OF RETIREMENT

23. OPTIONAL SERVICE CREDIT In-State and/or Out of State Service May claim up to a combined total of 5 years of In-state and Out of State service purchasable only as Regular Class service. Service claimed must have been performed as a public employee participating in a pension plan in another state, a political subdivision of another state, as a public employee in Florida, including periods of employment in charter schools or in any nonpublic school or college in Florida that is accredited by the Southern Association of Colleges and Schools. Service with the federal government or military may qualify as out-of-state service. You must not be eligible to receive a retirement pension or benefit (including currently receiving a benefit or being eligible to receive a future benefit, and any payment including employer contributions) in any other retirement plan based on the service being claimed under the FRS. Form FR-30 or DD-214 DIVISION OF RETIREMENT

24. Fiscal Year and Work Periods Fiscal Year – July 1 through June 30 9, 10, 11, or 12 contract 6 months /12 month contract =.50 service credit 6 months /10 month contract =.60 service credit Your receive credit for each month that you have worked. Maximum service credit per fiscal year = 1.00 SERVICE CREDIT DIVISION OF RETIREMENT

25. VALUE PER YEAR Based on the membership and/or age/service credit. If initially enrolled before July 1, 2011: If initially enrolled on or after July 1, 2011: Regular Class ServiceSenior Management Service Class Age 62 or 30 years = 1.60%2.00% Age 63 or 31 years = 1.63% Age 64 or 32 years = 1.65% Age 65 or 33 years = 1.68% Regular Class ServiceSenior Management Service Class Age 65 or 33 years = 1.60%2.00% Age 66 or 34 years = 1.63% Age 67 or 35 years = 1.65% Age 68 or 36 years = 1.68% DIVISION OF RETIREMENT

26. AVERAGE FINAL COMPENSATION (AFC) If initially enrolled prior to July 1, 2011: – Average of your highest five fiscal years of salary* If initially enrolled on or after July 1, 2011: – Average of your highest eight fiscal years of salary* Up to 500 hours of lump sum annual leave can be used in the calculation of your AFC. * Fiscal Year is July 1 through June 30 DIVISION OF RETIREMENT

27. BENEFIT FORMULA CALCULATION Example of a member initially enrolled before July 1, 2011; Normal Retirement – Regular Class Member: : Years of Service x % Value per Year x AFC 30 x 1.60% x $25,000.00 = Annual Option 1 benefit $12,000 Monthly Option 1 benefit = ($12000/12) = $1000 DIVISION OF RETIREMENT

28. EARLY RETIREMENT Service Retirement before Normal Retirement Date Benefit Reduced 5% for each year under Normal Retirement age – If initially enrolled prior to July 1, 2011, Normal Retirement age is 62. – If initially enrolled on or after July 1, 2011, Normal Retirement age is 65 DIVISION OF RETIREMENT

29. BENEFIT PAYMENT OPTIONS Option 1: Lifetime monthly benefit to you. Option 2: Provides a reduced monthly benefit payment to you for your lifetime. If you die 10 years or more after retirement, no benefits are payable to your beneficiary. However, if you die within 10 years (120 months) of your effective retirement date, your beneficiary will receive a monthly benefit payment in the same amount you were receiving for the balance of the 120-month period (including any period of DROP participation). No further benefits are then payable. Option 3: Provides a reduced monthly benefit payment to you for your lifetime and a continuing benefit to your beneficiary. No further benefits are payable after both you and your beneficiary die. Option 4: Life time monthly benefit to you. Upon the death of either you or your beneficiary, the monthly benefit is reduced to 2/3 of the benefit payable while both were living. DIVISION OF RETIREMENT

30. BENEFICIARY DESIGNATION Option 1 or 2 Beneficiary can be anyone. Option 3 or 4 Beneficiary must be a qualified Joint Annuitant. DIVISION OF RETIREMENT

31. Joint Annuitant Your spouse. Your parent, grandparent, or a person for whom you are the legal guardian, claimed as a dependent on your federal income tax. Your natural or legally adopted child who is either under age 25 or is physically or mentally disabled and incapable of self-support (regardless of age). DIVISION OF RETIREMENT

32. COST OF LIVING ADJUSTMENT (COLA) Retirees (including DROP participants) receive a COLA in their July benefit each year. All service earned through June 2011 receives a 3% COLA Service earned July 2011 and after – 0% COLA Formula: Years of service through June 2011 Years of service at retirement 26/30 X 3% = 2.60% 28.50/32.50 X 3% = 2.63% DIVISION OF RETIREMENT X 3%

33. PREPARING TO RETIRE Request an audit of your account at any time to: Determine cost of additional service Verify total years of retirement credit Request benefit estimate within 3-4 years of retirement date or participation in DROP Apply for retirement 3 to 6 months prior to retirement date or participation in DROP DIVISION OF RETIREMENT

34. APPLYING FOR SERVICE RETIREMENT Applications are accepted up to 6 months prior to retirement date Retirement date is the first of the month following your termination date if your application has been received by the Division within 30 days of your termination date.  Form FR-11Application for Service Retirement  Form FRS-11oOption Selection Form  Form SA-1Spousal Acknowledgement Form  Birth date verification For yourself  Birth date verification For Joint Annuitant if selecting Option 3 or 4 DIVISION OF RETIREMENT

35. APPLYING FOR DROP RETIREMENT Applications are accepted up to 6 months prior to retirement date. Form DP-11 and/or DP-ELE, must be received by the division no later than the last working day of the month you elect to participate in DROP.  Form DP-11Application for Service Retirement and DROP  Form DP-ELE Notice of Election to Participate in the DROP and Resignation of Employment  Form FRS-11oOption Selection Form  Form SA-1Spousal Acknowledgement Form  Birth date verification For member  Birth date verification For Joint Annuitant if selecting Option 3 or 4 DIVISION OF RETIREMENT

36. FORMS ON WEBSITE: FRS.MYFLORIDA.COM DIVISION OF RETIREMENT

37. THE RETIREE PACKET A retiree packet is mailed to new retirees just prior to receipt of their first benefit check and includes the following: Form W-4P, Withholding Certificate for Pension Payments (or complete online) Form DFS-A1-26R, Direct Deposit Authorization Form HIS-1, Health Insurance Certification for Pension Plan Members A retiree packet is not mailed to DROP participants until they have terminated DROP. DIVISION OF RETIREMENT

38. REEMPLOYMENT AFTER RETIREMENT During the first six calendar months of retirement or following your DROP termination date, you may not work for any FRS employer. If you do, you will void your retirement and you will have to pay back any benefits received including your DROP payout During the 7 th – 12 th calendar months of retirement or following your DROP termination date, if your return to work for an FRS employer you must suspend your retirement benefit for the months you worked. No exceptions! You may work for any private or public employer not participating in the FRS without affecting your retirement benefit. DIVISION OF RETIREMENT

39. REEMPLOYMENT AFTER RETIREMENT Renewed Membership – Closed effective 07/01/2010. Any retiree initially reemployed with an FRS participating employer on or after July 1, 2010, will not be eligible to participate in any state- administered retirement system. DIVISION OF RETIREMENT

40. IMPORTANT NOTICE Forfeiture of Benefits as defined by Florida Statutes 121.091(5) or 112.3173 If you commit a specified offense prior to retirement or while participating in DROP and you were either: Convicted by a court of competent jurisdiction; or Terminated from employment as a result of admitting to the commission of a specified offense You will forfeit ALL of your retirement rights and benefits! DIVISION OF RETIREMENT

41. FRS.MYFLORIDA.COM

42. FRS ONLINE LOG IN PAGE DIVISION OF RETIREMENT

43. Online Services Division of Retirement

44. CONTACTING THE DIVISION Telephone: Toll free 844-377-1888 Locally 850-907-6500 Email: retirement@dms.myflorida.com retirement@dms.myflorida.com DIVISION OF RETIREMENT

45. QUESTIONS AND ANSWERS 45 DIVISION OF RETIREMENT