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05_Retirement_Program_Rev

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					                                        SECTION 5
                              RETIREMENT PROGRAMS

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
     Program (ORP).

     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
        participant’s lifetime.

     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
        participant.

        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.




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B.    Selection of Plan/Program –

      1. FRS Pension Plan – enrollment must be completed during the first 90 days of
         employment.

      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.




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                                                   Appendix I

                                  Comparison of Retirement Plans

                            FRS Pension Plan               FRS Investment Plan              Optional Retirement
                                                                                               Program (ORP)
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.
Contributions
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
                                                                                        less.
Disability Provisions Yes                                No; however, legislation       No specific disability
                                                         proposed for this year,        benefits.
                                                         07/01/02.
Survivor Provisions   Yes                                Yes                            Yes
Guaranteed Cost of    3% annual benefit increase         3% annual benefit increase     None
Living Adjustments




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