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Benefits

Benefits at Retirement - ORP

The SUSORP is a defined contribution plan. If you elect to participate in the ORP, an individual account will be established to hold the contributions and investment earnings that will accumulate for your retirement. At retirement, several distribution options will be available to you. In addition to lump-sum and rollover options, you could elect to convert the value of your employer-funded contract(s) to purchase a monthly annuity, which would then be paid to you by the provider company or companies according to the payment provisions you have selected.
As an ORP participant, your ultimate retirement benefit will depend significantly on the earnings and/or losses you realize through investment of funds contributed by your employer on your behalf, or voluntarily by you ( see Contributions). If investment returns are high and the product or products that you have selected perform well, then your anticipated retirement income could increase. If, however, your product or products do not perform well or if your overall account earnings decline, then your anticipated income will also decline. You bear the risk of adverse economic conditions.

The optional forms of payment available at retirement will depend on the type of benefit you have selected and the level of survivor benefits you wish to ensure. At its creation, the SUSORP required that benefits be paid out in the form of an annuity. However, effective June 1, 2002, the benefit provisions of the SUSORP were changed to permit other types of payment:

  1. A lump-sum distribution to the participant;
  2. A lump-sum direct rollover distribution whereby all accrued benefits, plus interest and investment earnings, are paid from the participant's account directly to an eligible retirement plan, as defined in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the participant;
  3. Periodic distributions;
  4. A partial lump-sum payment whereby a portion of the accrued benefit is paid to the participant and the remaining amount is transferred to an eligible retirement plan, as defined in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the participant; or
  5. Such other distribution options as are provided for in the participant's optional retirement program contract.

Benefits payable upon your death are discussed in the Survivor Benefits section.

Any participant who receives a distribution of employer contributions under the SUSORP is considered to have retired under a state-administered plan, regardless of age, and will be subject to reemployment restrictions and renewed membership requirements. Renewed members hired after July 1, 2007 are eligible to participate in the ORP. However, renewed members are not eligible for disability retirement benefits under the FRS nor may they participate in the DROP program. Therefore, it is important that participants take this into account when considering a withdrawal, rollover or other payout of employer-funded benefits under the SUSORP - especially if they think they might be returning to covered employment.
The Internal Revenue Service imposes minimum distribution requirements with respect to when you must begin receiving your ORP retirement income. As a state employee, your distributions must begin by April 1 of the calendar year following either the calendar year in which you attain age 70½ or the calendar year in which you retire, whichever is later.

Benefits at Retirement - FRS Pension Plan

The FRS Pension Plan is a defined benefit plan 1. The FRS pension benefit is determined according to the plan formula established by law. Under the FRS Pension Plan, the benefit is calculated based on the member's average final compensation at retirement, his/her total years of creditable service in the plan, and the percentage value received for each year of service. If the member elects to participate in the Deferred Retirement Option Program (DROP), the benefit calculation is based on factors applicable at DROP entry.
Average Final Compensation means the average of the five highest fiscal years' of earnings during the member's career.
Years of Creditable Service refers to the number of years (and parts of years) for which the member earned credit under the FRS (or in another existing state retirement system for which required contributions have been paid). Creditable service also includes any service the member may have purchased, such as credit for a leave of absence without pay, or for out-of-state or non-FRS in-state service.
Percentage Value is the value the member receives for each year of creditable service. In other words, for each year of service credit, the member earns a percentage of his/her average final compensation. The percentage varies according to the membership class in which the member participated 2. Percentages for the different classes, as well as the basic steps to be used for estimating a benefit, are shown in the retirement guide for each membership class. Guides are available online and printed copies may be obtained from your benefits department or by contacting the Division's Research & Education Section.
There are four lifetime benefit options 3 (methods of payment) under the FRS Pension Plan. Option 1 provides a monthly benefit payable to the retiree for his/her lifetime. Option 2 provides a reduced 4 monthly benefit payment to the retiree for his/her lifetime and, if the retiree should die within ten years of retiring, the benefit would continue to his/her beneficiary for the rest of the 120-month period. Both Options 3 and 4 provide a reduced 4 continuing lifetime benefit to the retiree's spouse or other joint annuitant. Under Option 4 the benefit is further reduced by one-third upon the death of either the member or his/her joint annuitant.
FRS retirees receive annual cost-of-living adjustments 5 of three percent per year and may be eligible for Health Insurance Subsidy (HIS) 5 payments to help pay for the cost of health insurance. The HIS is currently $5 per month for each year of service credit at retirement, up to a maximum of $150 per month.
For more information on FRS retirement or DROP benefits, please contact your benefits department or the Bureau of Retirement Calculations. Outside the Tallahassee calling area, you may telephone the bureau toll free at 888-738-2252. You may also reach the bureau at 850-488-6491 or by e-mail (calculations@dms.MyFlorida.com).
1 The plan sponsor (employer) bears the risk of potential adverse market conditions (i.e., in the event of poor investment performance or economic downturn, benefits would not be affected).
2 Most SUSORP-eligible employees would be members of the Regular Class. Members earn retirement credit for service in this class at the rate of 1.6 percent for each year of service until they become eligible for normal retirement, by reason of age or length of service. If they work one, two, or three or more years beyond that date, the percentage value for all their service is slightly higher (increased to 1.63, 1.65, and 1.68 percent, respectively).
3 For more on benefit payment options, please refer to the retirement guide for your class of membership ( see above) or the publication What Retirement Option Should You Choose?
4 Under Options 2, 3, or 4, the benefit amount is actuarially reduced from the Option 1 amount to provide a total benefit equal to what the member alone would have been expected to receive under Option 1.
5 The cost-of-living adjustment and health insurance subsidy are discussed further in the COLA & HIS Payments section of this Web site.

Benefits at Retirement - FRS Investment Plan

Under the FRS Investment Plan, benefits consist of the total account value at retirement (distribution), based on accumulated employer contributions, plus interest and earnings on those contributions, less fees and plan charges. Benefits are payable to the member, or to his/her designated beneficiary or estate upon the member's death. To be entitled to receive this benefit, the member must satisfy the one-year vesting requirement.
If a member of the FRS Investment Plan who transferred from the FRS Pension Plan also elects to transfer the value of his/her Pension Plan service to the Investment Plan, the transferred amount becomes vested - i.e., the member will "own" this money - only after he/she has satisfied the FRS Pension Plan six-year vesting requirement.

Various distribution options are available under the FRS Investment Plan. (There could be tax penalties if the member elects to withdraw the money before age 59½.) An Investment Plan member may receive payment under any of the following options:

  • Partial or full lump-sum distribution.
  • Partial or full lump-sum direct rollover distribution to an IRA or another employer's plan that accepts rollover contributions. A rollover is a tax-free transfer from one eligible retirement plan to another.
  • A split distribution - part direct rollover and part payable to the member.
  • Periodic distributions from the member's account balance taken on demand or by a predetermined payout schedule selected by the member.
Or the member can use some or all of the account to buy monthly lifetime annuity payments guaranteed by an insurance firm (currently The Hartford Life Insurance Company) contracted with the Florida State Board of Administration (SBA). Using this annuity option, the member can provide for joint benefits or survivor benefits. These payments may include survivor benefit options and an annual benefit increase option similar to provisions found under the FRS Pension Plan.
For more information about the FRS Investment Plan, you may call toll free to 866-446-9377 or go to the MyFRS Web site.

CAVEATS

Estimating your benefit -It is not possible to accurately project the retirement benefits available under each of the three retirement plans described above. Estimating the ultimate benefit that you may be entitled to receive from FRS Pension Plan requires reasonably accurate assumptions regarding your future earnings, your future years of service credit, and your actual retirement date. If you are enrolled in the FRS Pension Plan you may use the FRS benefit calculating program to estimate your benefit (see Online Services). However, the closer you are to normal retirement, the more accurate your estimate is likely to be.
To project accrued benefits that can be expected from the SUSORP or the FRS Investment Plan requires an estimate of future contribution levels to the plan, interest and investment earnings projections into the future, and an actual date of retirement. If you wish to take your ORP distribution in the form of a lifetime annuity, you must know (or estimate) the annuity conversion rates that will apply to your annuity contract at that time.
Estimating long-term investment expectations can be misleading, and past or current performance is not necessarily indicative of future earnings. There may be other factors that you feel are appropriate to your decision-making process.
For more information about retirement benefits under the FRS Investment Plan, you may call toll free to 866-446-9377 or go to the MyFRS Web site.
Forfeiture -Under ORP and the FRS Pension and Investment Plans, any public officer or employee found guilty of a specified crime committed prior to retirement, or whose employment was terminated because of his/her admission to committing, aiding, or abetting a specified crime prior to retirement, may forfeit all retirement rights and benefits, except for a refund of any employee contributions he/she may have on deposit. The crimes are specified in ss. 121.091(5) and 112.3173, F.S.

Disability Benefits - ORP

There are no specific disability benefits provided by the SUSORP. However, since the plan provides full and immediate vesting upon execution of a contract, if your disability should cause you to terminate your employment, depending on your age and tax penalties that may apply, you could elect to annuitize or otherwise receive your employer-funded benefits at that time. Alternatively, if you have sufficient income through other means, you can allow the fund to continue to change through future investment earnings or losses. You may also want to consider purchasing disability insurance during your employer to help subsidize your income in case you are disabled.

Disability Benefits - FRS Pension Plan or FRS Investment Plan

Any active member of the FRS Pension Plan or FRS Investment Plan who is totally and permanently disabled 6 after completing eight years of creditable service, or who becomes totally and permanently disabled in the line of duty regardless of service, would be eligible to receive a monthly disability benefit. Additional information is published in the member guide entitled "Disability Benefits", which is available online. Printed copies may be obtained from your benefits department or by contacting the Division's Research & Education Section.
If you are actively employed in a position covered by the FRS Pension Plan or the FRS Investment Plan and you become totally and permanently disabled such that you are unable to work, and if you meet the other eligibility requirements, the plan will provide a minimum disability retirement benefit equal to 25 percent of your average final compensation. If your service-based benefits are higher when you become disabled, you will be entitled to a disability benefit that is based on your length of service (with no reduction for early retirement). If your total and permanent disability occurs in the line of duty, the benefit would be no less than 42 percent of your average final compensation.
Disability retirement benefits are paid for as long as you remain totally and permanently disabled.
6 See disability provisions under s. 121.091(4)(b), F.S.

Survivor Benefits - ORP

In the event of your death before retirement, your beneficiary will be entitled to receive the full value of your ORP account(s). Your beneficiary may elect to receive a lump sum payment, or to receive monthly annuity payments.

Under s. 121.35, Florida Statutes, survivor benefits are payable as follows:

  1. A lump-sum distribution of the ORP account(s), payable to the beneficiaries or to the deceased participant's estate;
  2. An eligible rollover distribution on behalf of the surviving spouse of a deceased participant, whereby all accrued benefits, plus interest and investment earnings, are paid from the deceased participant's account directly to an eligible retirement plan, as described in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the surviving spouse;
  3. Such other distribution options as are provided for in the participant's optional retirement program contract; or
  4. A partial lump-sum payment whereby a portion of the accrued benefit is paid to the deceased participant's surviving spouse or other designated beneficiaries, less withholding taxes remitted to the Internal Revenue Service, if any, and the remaining amount is transferred directly to an eligible retirement plan, as described in s. 402(c)(8)(B) of the Internal Revenue Code, on behalf of the surviving spouse. The proportions must be specified by the participant or surviving beneficiary.
You should contact your annuity provider company or companies for a full explanation of the survivor benefits that are available under ORP.

Survivor Benefits - FRS Pension Plan

Under the FRS Pension Plan, if you die before retirement, your beneficiary may be entitled to survivor benefits from the FRS.
If you have not earned at least six years of creditable service in the plan, your beneficiary will receive only a refund of any personal contributions that you may have made to the plan 7. No other benefits will be paid.
If you die after vesting in the Pension Plan, and your beneficiary qualifies as a joint annuitant, he/she may choose to take a refund of your contributions or receive a continuing benefit. Your spouse will be your beneficiary and will be entitled to monthly benefits from the plan, unless you have designated another beneficiary subsequent to your most recent marriage. If your designated beneficiary is not your spouse or another qualified joint annuitant, he or she will receive only a refund of any personal contributions made to the plan.
If you are actively employed and vested but die before qualifying for normal retirement, the benefit payable to your joint annuitant would be reduced the same as if you had taken early retirement. If you have between 20 and 30 years of creditable service before your death, the reduction could be less (providing a higher benefit). Your surviving joint annuitant could elect to defer receipt of monthly benefits to a later date to lessen or eliminate the reduction.
If your death occurs in the line of duty, a lifetime monthly benefit equal to one-half of your last monthly salary will be paid to your spouse, regardless of your length of service. Or, if you are vested at the time of your death, your spouse could choose instead a monthly benefit from the plan payable for life based on your service-based benefit.
Additional information is published in the member guide entitled Survivor Benefits, which is available online. Printed copies may be obtained from your benefits department or by contacting the Division's Research & Education Section.
7 However, if are within one year of vesting at the time of your death, and your beneficiary is your spouse or dependent child or otherwise qualifies as a joint annuitant, he/she may be allowed to buy enough service credit for your unused leave or eligible in-state or out-of-state service to vest you after your death and qualify for a lifetime monthly benefit.

Survivor Benefits - FRS Investment Plan

Like the SUSORP, the FRS Investment Plan is a defined contribution plan. There is no guaranteed benefit at retirement or death. Under this plan, if you die before you retire (receive a distribution of your account funds), your account value will be distributed to your named beneficiary or to your estate, minus any required withholding tax remitted to the Internal Revenue Service. Your beneficiary may receive an immediate distribution under the same options as provided for participants, or defer receipt until some future date. If deferring, the beneficiary should call the toll-free MyFRS Financial Guidance Line (866-446-9377) to determine the limits of the deferral. In some instances, beneficiaries must decide within one year how they want the account balance distributed.
Or you can use some or all of your account to buy monthly lifetime annuity payments guaranteed by an insurance firm (currently The Hartford Life Insurance Company) contracted with the State Board of Administration (SBA). Using this annuity option, you can provide for survivor benefits similar to those found in the FRS Pension Plan.
For more information about survivor benefits under the FRS Investment Plan, you may call toll free to 866-446-9377 or go to the MyFRS Web site.
E-mail your SUSORP comments or questions to us. Please include your name, mailing address, e-mail address, the last four digits of your social security number (SSN), and your phone number if you require an answer from us.