1. Brooke Stearns

2. What’s New in the FRS and What is the DROP?
Presented by
Brooke Stearns
Osceola County
Human Resources Director

3. SB 2512A (Chapter 2015-227, Laws of FL)
Established new employer contribution rates for the plan year.
Employee contributions remain the same 3%.
Health Insurance Subsidy (HIS) increased from 1.26% to 1.66%
The assessment to administer the FRS Investment Plan and the My FRS Financial Guidance Program remains at .04%.
Gove Scott signed the bill into law on 6/23/15…effective July 1, 2015.
List a few rates (handouts)
Explain HIS

4. Financial Planners NOT Endorsed
The FRS offers Self-Directed Brokerage Accounts (SDBA).
Allows members to access different investment choices in addition to the IP’s funds.
The FRS has a contract with Ernst and Young (EY) to provide FREE, UNBIASED financial planning and counseling.
EY does not sell any investment or insurance products.
Members are providing their personal financial planner authorization to trade their SDBA. This is permissible, but they are not endorsed by the FRS
Be cautious providing your PIN, User ID, Password. Monitor your account for unauthorized distributions, fees from outside planners.

5. U.S. District Court Ruling
FRS Plan Retirees and DROP participants in same sex marriages recognized in other States and Counties will have an opportunity to change their option selection.
Had to choose 1 or 2, not can select 3 or 4.
Must notify the FRS in writing.

6. Deferred Retirement Option Program or… THE DROP!
Provides you with an alternative method of payment of your retirement benefits for a specified and limited period (if eligible).
You stop earning service credit toward a future benefit.
Your retirement benefit is calculated at the time you enter the DROP.
Your monthly retirement benefits accumulate in the FRS Trust Fund earning interest while you continue to work for an FRS employer.

7. When am I Eligible to Retire/Enter the DROP?
BEFORE JULY 1, 2011
Regular Service Class
Age 62 or 30 Years of Service
6 Years Vesting
Special Risk
Age 55 or 25 Years of Service

8. Eligibility (cont.) Special Risk AFTER JULY 1, 2011
Regular Service Class
Age 65 or 33 Years of Service
8 Years Vesting
Special Risk
Age 60 or 30 Years of Service
You must go into DROP one year to the date you are age eligible or you cannot enter the DROP. They also take one month away for every year you do not enter the DROP when age appropriate.
If you go by YOS, you must be age 57 or 52 for Special Risk

9. Paper work to enter DP11 DPELE FR11o SA1 Birth Certificate (or BVR-1)
Beneficiary form for retirees
All forms must be notarized and one form is signed by your County FRS Rep
SA1 must be signed by spouse if you select option 1 or 2

10. Let’s Talk About Options
You can select from 4 Options that provide a lifetime benefit for you.
Options 2, 3, and 4 provide a reduced lifetime benefit for your beneficiary. (Adjustment is based on your Option 1 monthly calculated benefit).
Once you make a decision and enter the DROP, it is FINAL.

11. Who Can Be A Beneficiary?
Brooke Stearns….that’s Brooke with an “e”
And S.T.E.A.R.N.S. The “a” is silent!  JUST KIDDING!!!!! See next slide…

12. Who Can Be A Beneficiary?
Option 1 or 2
Any person, organization, trust, estate
You can list more than one of the above
They can be listed sequentially or jointly
See upcoming slides for Options 3 and 4

13. Option 1 Lifetime benefit to you.
Your beneficiary is refunded only the contributions paid that exceeds the amount of benefits

14. Option 2 Reduced benefit paid to you
After retirement, if you live 10 years or more, no one receives benefits.
After retirement, if you do not live 10 years, your beneficiary would receive the same monthly amount you were receiving up to the 10 years.

15. Option 3 Joint Annuitant Spouse
Parent or Grandparent who relies on you for at least ½ of their financial support
Your Child (under age 25) who is physically/mentally disabled
An individual of whom you are the legal guardian and they rely on you for at least ½ of their financial support.
Reduced monthly benefit for your lifetime and upon your death, the same monthly benefit for your beneficiary

16. Option 4 Adjusted monthly amount while you both are alive.
Reduced to 2/3 upon your death.
There are other rules for joint annuitants under 25

17. The DROP
Upon termination, your DROP account is paid in one of three ways.
Monthly benefits are paid to you in the amount as calculated when you entered the DROP.
You cannot be in the Investment Plan to enter the DROP.
Once you enter the DROP, you no longer qualify for FRS Disability.
You are considered retired per the FRS.
Talk about the 5 year rule and why it might be less based on then you are eligible and when you go into the program.
Lump, rollover or partial.
Once you complete DROP, you can do a direct rollover into the IP.

18. DROP Term Form
You must request the DROP term form from the FRS directly.
DP-PAYT
Rollover form (if needed)
HIS
Direct Deposit
Taxes
Insurance paid with your FRS check

19. Update your information!
Beneficiary forms
Address

20. Questions? https://frs.myflorida.com Toll Free at 844-377-1888
Brooke Stearns