A. Description: New faculty who meet the eligibility requirements, as described in the
Florida Statutes, have the option of planning for their retirement security by choosing
among three distinct retirement plans: the Florida Retirement System (FRS) Pension
Plan, the Florida Retirement System (FRS) Investment Plan, and the Optional Retirement
1. The FRS Pension Plan – A defined benefit plan with 6 year vesting. Retirement
income depends on years of service, age and salary (average of five highest fiscal
years). The State pays the full cost of the plan.
The Deferred Retirement Option Program (DROP) is an alternative method for
payment of FRS Pension Plan benefits for a specified and limited period to eligible
FRS Pension Plan members. Participants may retire and have their FRS benefits
accumulate in the DROP, earning interest, while simultaneously continuing to work
for the university for up to five years. When the DROP period ends, the participant
must terminate employment. At that time the participant will receive payment of the
accumulated DROP benefits, and thereafter, the FRS monthly pension benefits for the
2. The FRS Investment Plan – A defined contribution plan with 1 year vesting in
which the State contributes a percentage of the gross salary for each participant,
regardless of service, to purchase an annuity or receive a lump sum payment at the
time of retirement. The retirement benefit will be based on the amount of funds
contributed, the investment earnings on those funds, and the type of annuity or lump
sum payment selected by each participant.
3. The Optional Retirement Program (ORP) – A defined contribution plan with
immediate vesting in which the State contributes a percentage of the gross salary for
each participant, regardless of service, to provide a source of income at the time of
retirement. In the ORP, the employee will also be given the opportunity to contribute
an amount up to the amount contributed by the State, on a tax-sheltered basis. The
amount of income at retirement will be based on the amount of funds contributed, the
investment earnings on those funds, and the type of annuity selected by each
NOTE: New faculty members are automatically enrolled in the ORP. However,
enrollment is not completed until the employee selects a provider company and
completes a contract(s). Failure to complete a contract with a provider company
within 90 days of hire date will result in enrollment in the FRS Pension Plan.
B. Selection of Plan/Program –
1. FRS Pension Plan – enrollment must be completed during the first 90 days of
2. FRS Investment Plan – enrollment must be completed during the first 180 days of
employment. Failure to complete enrollment during this period will result in
automatic enrollment in the FRS Pension Plan.
3. Optional Retirement Program – enrollment must be completed during the first 90
days of employment. Failure to complete enrollment during this period will result in
automatic enrollment in the FRS Pension Plan.
NOTE: The FRS Pension Plan and the FRS Investment Plan allow a one time switch
option. This allows you to change from one FRS plan to the other, but only once.
C. Social Security Coverage – All retirement plans include Social Security coverage.
Comparison of Retirement Plans
FRS Pension Plan FRS Investment Plan Optional Retirement
Eligibility for With 6 or more years at age 62 With 1 or more years of Immediately – no restrictions
Benefits (vesting) or any age after 30 years service, no restrictions as as to age or length of service
(Benefits reduced for early to age or length of service. (Federal tax penalties may
retirement). (Federal tax penalties may apply prior to age 59 1/2).
apply prior to age 59)
Benefits at Fixed amount based on age, Amount depends on Amount depends on earning
Retirement years of service, the value of earning rate of investments, rate of investments, amount
each year of service, average of amount invested, and type invested, and types of
highest five years salary, and of contract selected. contract selected.
payment option selected.
Employer State pays full amount. State pays full amount. State pays full amount.
Employee None (Some Provisions for the None VOLUNTARY tax-sheltered
Contributions purchase of certain service contribution up to the same
credits). amount as State contributes
or IRS limits, whichever is
Disability Provisions Yes No; however, legislation No specific disability
proposed for this year, benefits.
Survivor Provisions Yes Yes Yes
Guaranteed Cost of 3% annual benefit increase 3% annual benefit increase None