The Investment Plan is similar to a 401(k) plan. It is designed primarily for employees who want greater control over their retirement plan and who want flexibility in how their benefit is paid at retirement.
The Investment Plan is known as a “defined contribution” plan. That’s because contributions to the plan — yours and your employer’s — are defined by law. The benefit you ultimately receive from the plan will depend on how much is contributed to your account, the performance of your investments over time, and the impact of account fees and expenses. When you’re ready to withdraw your money, you will have a variety of payment options to choose from. Options to continue payments to a beneficiary after your death may also be available. You can designate any person, organization, trust, or your estate as your beneficiary.
Based on Florida law, you contribute 3% of your gross salary, beginning with your first paycheck, to your Investment Plan account. You cannot change the amount you contribute. Your employer also contributes a fixed percentage of your gross salary to your account. The percentage is based on your membership class as required by law.
The benefit you receive from the Investment Plan is based on the value of your account. The value of your account will change over time based on contributions made by you and your employer, the performance of the investment options you choose, and the impact of account fees and expenses.
Once you complete one year of service, you own all contributions and earnings in your Investment Plan account (any previous Pension Plan service transferred into the Investment Plan is subject to 6 or 8 year vesting). If you leave FRS employment prior to meeting the vesting requirements, you own only your employee contributions and any earnings on those contributions. This makes the Investment Plan a good choice for employees who need a more portable benefit or who expect to retire before they would qualify for a benefit under the Pension Plan.
As the Investment Plan’s name implies, the money in your account is invested in stocks, bonds, and other types of financial instruments. With a variety of investment options available, the plan gives you as much or as little control over your investments as you like.
Retirement Date Funds. If you are not comfortable choosing your own investments, Retirement Date Funds are an easy “one and done” option. Each Retirement Date Fund includes a mix of investments based on the amount of time left before you retire. That mix gradually changes automatically as your retirement gets nearer, adjusting its focus from investment growth to account preservation.
Fund Lineup. If you would like to choose your own investments, the plan’s fund lineup lets you create a unique portfolio from a variety of prescreened high-quality funds.
Self-Directed Brokerage Account. If you want greater control and flexibility, the self-directed brokerage account gives you access to thousands of additional investments and is geared toward experienced investors.
When the time comes to receive your benefit, the Investment Plan offers a lot of flexibility. You can choose a lump-sum payment, a rollover to another qualified plan, a customized payment schedule, lifetime income, or any combination of these.
