FLORIDA RETIREMENT SYSTEM

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Welcome! ORP-FRS Workshop
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ORP-FRS Deadline to make a Change 12/31/08
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Florida Retirement System

• CREATED DECEMBER 1970
• DEFINED BENEFIT PLAN 401(a) IRC
• NON-CONTRIBUTORY SYSTEM
• DROP BECAME AVAILABLE 1998
• OVER 620,000 ACTIVE MEMBERS
• OVER 250,000 RETIRED MEMBERS

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VESTING

• 6 Years of Service

NORMAL RETIREMENT

• Age 62 or 30 Years of Service

EARLY RETIREMENT

• Benefit reduced 5 per year under age 62

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BASIC BENEFIT FORMULA
Yrs of Service x Value per Year x AFC
Option 1 Annual Benefit at Normal Retirement
Divided by 12 Monthly Benefit
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YEARS OF SERVICE
Based on July 1 through June 30 Fiscal Year

• Completed Work Year
• 10 Month Employee
• 12 Month Employee
• Less than Complete Work Year
• 10 Month Employee (5/10 .50)
• 12 Month Employee (5/12 .42)

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YEARS OF SERVICE MAY INCLUDE

• Withdrawn or Refunded Service (for those with
  previous FRS time)

• Leave of Absence
• 2 Years Total
• Must Return Immediately After Leave
• For One Complete Calendar Month
• Must Be Vested Before It Is Creditable

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YEARS OF SERVICE MAY INCLUDE

• Military Service

• Employed Prior to 01/1987
• Active Duty During Wartime
• 4 Year Maximum
• Must Be Vested Before It Is Creditable
• Cannot Be Claimed If Using In Another Pension
  (except reservist pension)

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YEARS OF SERVICE MAY INCLUDE

• In-State Public Service

• In-State Private School Service
• Must be Accredited
• Out-of-State Federal Public Service
• Includes Non-Wartime Military Service
• Covered by Pension System
• 5 year maximum
• Cannot be used in another pension system
• Must be vested before it is creditable

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VALUE PER YEAR

• FRS SERVICE
• Age 62 or 30 Years - 1.60
• Age 63 or 31 Years - 1.63
• Age 64 or 32 Years - 1.65
• Age 65 or 33 Years - 1.68

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AVERAGE FINAL COMPENSATION (AFC)

• July 1 through June 30 Fiscal Year
• Average of Highest Five Years of Salary

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FRS BENEFIT EXAMPLE 1

• Years of Service Value Per Year Total
  Value
• 31.00 Years _at_ 1.63
  50.53

AFC 1. 26,500 2. 29,854 3. 32,500 4.
33,000 5. 34,500 156,354 / 5
31,270.80

• Calculation
• 31,270.80 AFC
• X 50.53 Total Value
• 15,801.14 Annual Benefit
• 12 (months)
• 1,316.76 Monthly Option 1
• Normal Retirement Benefits

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FRS BENEFIT EXAMPLE 2

• Years of Service Value Per Year Total
  Value
• 18.58 Years _at_ 1.60
  29.73

• Calculation
• 25,000 AFC
• X 29.73 Total Value
• 7,432.50 Annual Benefit
• 12 (months)
• 619.38 Monthly Option 1
• Normal Retirement Benefits

• AFC
• 22,000
• 23,500
• 3. 24,520
• 26,980
• 28,000
• 125,000 / 5 25,000

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EARLY RETIREMENT CALCULATION

• Age at Retirement 55 years 2 months
• Option 1 Normal Ret Benefit 1,654.22
• Early Retirement Factor x 65.833
• Option 1 Early Ret Benefit 1,089.02
• Benefit reduces to zero at age 42
• Reduction (5 a year) is based on number of
  months from normal retirement age of 62

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AT RETIREMENT

• DESIGNATE A BENEFICIARY
• Option 1 or 2 Anyone
• Option 3 or 4 Spouse or Joint Annuitant
• CHOOSE AN OPTION
• Option 1 No Benefit After Members Death
• Option 2 Ten Year Guaranteed
• Option 3 Benefit Continues to Beneficiary
• Option 4 Reduced Continuing Benefit to Survivor

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OPTION CALCULATIONS

• Member age 60 Spouse/JA age 62

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OPTION CALCULATIONS

• Member age 62 Spouse/JA age 57

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Disability Benefits

• 8 years of service for regular

• Total/Permanent disability
• Regular - Guarantee 25 AFC
• In-line duty Guarantee 42 AFC
• No vesting requirement for In-line duty
• (Application process and doctors statements
  required)

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AFTER YOU RETIRE

• Subject to Tax Withholding

• Health Insurance Subsidy
• Yrs of Service X 5.00 Monthly Subsidy
• Minimum Amount - 30.00
• Maximum Amount - 150
• For DROP Participants will begin at the end of
  DROP
• Cost of Living Increase 3 every 7/1st

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Deferred Retirement Option Program (DROP)

• Must establish future termination or resignation
  date
• Maximum of 60 months (5 years)
• School Board Instructional Position may extend
  on an annual contractual basis, with approval of
  the Superintendent, for up to three years

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DROP vs FRS Example

• Continuing to Earn Additional Service Credit
• Annual FRS Benefit After 5 More Yrs Service
• 17,041

• Participating in DROP
• Annual FRS Benefit When DROP Begins
• 12,000
• Annual FRS Benefit After 5 Yrs w/COLA
• 13,916
• DROP Lump Sum Benefit After 5 Yrs
• 74,406

Based on 25,000 AFC 30 Yrs vs 3 Annual Salary
incl 28,982 AFC 35 Yrs
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FRS INVESTMENT PLAN

• Established in 2002
• Available for Staff, Administration and Faculty
  employees
• Employer Contributions 9 gross salary monthly
• 1 year vesting requirement
• Plan Administrator- CitiStreet
• 20 Investment Funds to choose from
• Various distribution options
• Financial Guidance through Ernst Young

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1 Lifetime Option to Switch

• You have 1 lifetime option to switch between the
  FRS Pension Plan and FRS Investment Plan
• FRS Pension to FRS Investment- The value of your
  pension plan will be transferred into the FRS
  Investment Plan. Value determined by the Division
  of Retirement.
• FRS Investment to Pension- The FRS Investment
  account is transferred to the Pension plan to buy
  back into the pension plan. May or may not owe
  additional if the cost to buy back is greater
  than your investment plan account balance.

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Optional Retirement Program ORP

• Available to Administration and Faculty
• USF contributes 10.42 of gross salary on a
  bi-weekly basis
• Employee may contribute up to 10.42 of gross
  salary on a bi-weekly basis
• You make the investment decisions
• 5 Provider companies to choose from
• Benefits based on investment performance/ various
  distribution options
• Vested immediately

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WHO TO CONTACT?

• Bureau of Retirement Calculations
  1-866-446-9377, option 3
• ORP Provider
• Listing www.USF.edu A-Z index
  Retirement
• FRS Financial Guidance Line
• 1-866-446-9377, option 1

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Complete details can be found in the respective
Summary Plan Descriptions chapter 121, Florida
Statutes and the rules of the State Board of
Administration of Florida in Title 19, Florida
Administrative Code