Presentation on theme: "Lake County Schools. A Tale of Two Retirement Plans: The FRS offers a choice between two very different retirement plans: The FRS Investment Plan and."— Presentation transcript:
A Tale of Two Retirement Plans: The FRS offers a choice between two very different retirement plans: The FRS Investment Plan and the FRS Pension Plan. The good news is that they are both excellent plans to which you and your employer contribute.
All employees contribute 3% of their gross pay to their retirement. Lake County also contributes a percentage of your gross pay to your FRS account.
Pension : If originally hired prior to July 1, 2011 Vested after 6 years of employment May retire when vested and have 30 years of creditable FRS service OR are vested and age 62 years or more
Pension: If originally hired after July 1, 2011 Vested after 8 years of employment May retire when vested and have 33 years of creditable FRS service OR are vested and age 65 years or more
Investment Plan: Vested with 1 year of FRS creditable service Withdrawing funds upon termination of employment: There aren't any age or service requirements for you to receive a benefit, once you've become vested. There are, however, tax implications; I recommend speaking to an Ernst & Young representative so you may understand the tax implications of an early withdrawal. You cannot receive a distribution of your benefits until you have been terminated from FRS-covered employment for 3 calendar months.
7 Free Financial Planning Resources Investment Plan and Pension Plan members are encouraged to telephone Ernst & Young…MyFRS Financial Guidance Line at 1-866- 446-9377- Free and unbiased help with: ◦Retirement planning ◦Investment planning ◦Estate planning ◦Tuition planning ◦Debt, spending, and credit issues
8 4:00 p.m. ET on the last business day 5 months after you are hired. INVESTMENT PLAN OR PENSION PLAN? More Than 5 Months to Decide 12345 “New Employee FRS Enrollment Kit” mailed to your home Reminder letters mailed to your home MONTH OF HIRE ENROLLMENT DEADLINE Your hire date Orientation through your employer Includes your PIN Watch the video CD in your kit Make your choice early and avoid reminder mailings!
Substitutes or Temporary Employees: FICA Alternative Plan: Substitute and Temporary employees are automatically enrolled in the FICA Alternative Plan The FICA Alternative Plan is a retirement plan for substitute and temporary personnel You are not a participant of Social Security while enrolled in the FICA Alternative Plan 7.50% of your gross pay is deposited into your FICA Alternative Plan Distribution of funds: ◦You will generally be taxed on a payment from the plan if you do not roll it over. If you are under age 59 1/2 and do not do a rollover, you will also have to pay a 10% additional income tax on early distributions (unless an exception applies). However, if you do a rollover, you will not have to pay tax until you receive payments later and the 10% additional income tax will not apply if those payments are made after you are age 59 1/2 (or if an exception applies).