The Florida Retirement System (FRS) is one of the largest public retirement plans in the United States, serving employees of the state, counties, school boards, and participating local governments. For Florida school system employees, FRS is an essential part of their long-term financial security.

Here’s what you (and your employees) need to know:

🔹 What is the Florida Retirement System (FRS)?

The FRS offers two main plans:

Pension Plan — A traditional defined benefit plan.

Investment Plan — A defined contribution plan similar to a 401(k).

Employees must choose one plan when they enroll. Additionally, many school districts offer a supplemental 403(b) plan to help employees save even more for retirement.

🔹 The Two FRS Plan Options

1️⃣ FRS Pension Plan

What it is: A traditional pension with a guaranteed monthly benefit at retirement, based on salary and years of service.

How it works:

Vesting: Fully vested after 8 years of service.

Benefit Formula: Years of service × percentage value × average final compensation.

Monthly Payments: Lifetime payments with survivor options.

Benefits:
✅ Predictable, guaranteed lifetime income.
✅ Protection against market volatility.
✅ Survivor options for beneficiaries.

Downsides:
⚠️ Less portable—leaving before vesting can mean limited benefits.
⚠️ Limited control—benefits based on a formula, not personal investment decisions.
⚠️ May provide less total wealth growth than an investment account, depending on career trajectory and market returns.

2️⃣ FRS Investment Plan

What it is: A defined contribution plan where the employee directs how their retirement money is invested.

How it works:

Vesting: Fully vested after 1 year of service.

Control: Employee chooses from investment funds.

Account Value: Based on contributions and investment performance.

Flexibility: Portable and can be rolled into an IRA or other qualified plan.

Benefits:
✅ Employee controls investments.
✅ Portable—can take it with you if you leave.
✅ Potential for higher growth over time.

Downsides:
⚠️ Market risk—account value can decline with market downturns.
⚠️ No guaranteed monthly income—must manage withdrawals to avoid outliving funds.
⚠️ Investment decisions require more financial knowledge and attention.

🔹 The 403(b) Plan Option

Many Florida school districts also offer a 403(b) plan, which is a tax-deferred retirement savings plan similar to a 401(k). This plan allows employees to supplement their FRS benefits with additional retirement savings.

Benefits:
✅ Tax-deferred growth—reduce taxable income now; earnings grow tax-deferred.
✅ Flexible—choose how much to contribute and how to invest.
✅ Higher contribution limits than IRAs.
✅ Catch-up contributions available for those 50+.

Downsides:
⚠️ No employer match in most districts.
⚠️ Investment options and fees vary—some plans have high fees.
⚠️ Investment risk—like the Investment Plan, no guaranteed return.

🔹 Contributions

Both FRS plans require employee contributions (currently 3% of salary), with additional employer contributions. Contributions help fund either the pension benefit or the investment account.

For the 403(b) plan:

Employees choose how much to contribute, up to IRS limits.

Employers typically do not match contributions, though some may.

🔹 Switching Plans

FRS participants have a one-time second election to switch between the Pension and Investment Plans during their career — a strategic move if an employee’s situation changes.

🔹 Additional Benefits

Health Insurance Subsidy: Monthly assistance for retirees.

Disability Benefits: Protection if unable to work due to disability.

Death Benefits: Survivor benefits vary by plan.

🔹 How to Choose

Choosing between the Pension Plan, Investment Plan, and 403(b) plan depends on career goals, risk tolerance, and financial needs.

Pension Plan: Best for those seeking a stable, predictable monthly income for life.

Investment Plan: Ideal for those wanting control and flexibility—with potential market risk.

403(b) Plan: A great way to supplement either plan with additional retirement savings.

🔹 Resources

MyFRS.com — Official site with comparison tools, webinars, and calculators.

FRS Guidance Line — 1-866-446-9377 for personalized advice.

Your Human Resources Department — For enrollment help.

403(b) Providers — Contact HR for a list of approved vendors.

📌 Final Thoughts

Understanding the Florida Retirement System — including both FRS plans and the supplemental 403(b) — empowers school system employees to make informed decisions about their future. As an agent, you play a key role in helping them navigate these options and build a secure retirement.