FRS Pension Plan:

The FRS Pension Plan is a defined benefit retirement plan designed for longer-term employees. Members are promised a benefit determined by a formula based on the member's earnings, length of service, age and membership class. Vesting in the plan is six years and, for most members, normal retirement is attained at the earliest of age 62 or 30 years of service. Benefits are paid under one of four lifetime monthly payment options. A 3% annual benefit increase is given each July. A Deferred Retirement Option Program (DROP) is available for up to 60 months (96 months for teachers under certain conditions) after a member reaches normal retirement.

The SBA invests the FRS Pension Plan Trust Fund on behalf of all members, subject to the ERISA fiduciary standards of care and a Trustee-approved Investment Policy Statement. The plan does not require employee contributions, and employer contribution rates are adjusted annually according to investment performance and actuarial experience.

FRS Investment Plan

The FRS Investment Plan is a defined contribution plan designed for mobile employees. Employees can choose the Investment Plan in lieu of the Pension Plan. The Plan does not require employee contributions and employer contributions go directly into members' accounts. Rates range from 9% to 20% of salary depending on membership class. The plan is self-directed and members decide how much risk to take by allocating their account balance among a set of 20 institutional and retail investment funds. Vesting in the plan is one year. Distribution options include lump sums, periodic distributions and a variety of fixed and variable annuities.

The SBA selects and monitors the investment funds, subject to the ERISA fiduciary standards of care and a Trustee-approved Investment Policy Statement. Within the available investment funds, as of June 30, 2007, nearly 37% of assets are invested in one of three low-cost balanced funds that are optimized by Financial Engines. On average, members pay investment management fees of approximately 29 basis points.

The SBA is also responsible for day-to-day administration of the FRS plan choice (between the Pension Plan and Investment Plan) and recordkeeping for the Investment Plan.

MyFRS Financial Guidance Program

MyFRS Financial Guidance Program is a multi-media education program available to all 693,000 FRS members in the FRS Pension Plan and FRS Investment Plan. The State Board of Administration is responsible for the overall administration of the Program, in coordination with the Division of Retirement. The Program provides information necessary to make informed choices between the FRS plans, within the FRS plans and in preparation for retirement. The following communication channels are used:

• Print and Video: Personalized statements and generic material on FRS plan choice and retirement planning.
• Toll-free MyFRS Financial Guidance Line: Employees can discuss their FRS options and retirement planning issues with experienced and objective financial planners from Ernst & Young. Division of Retirement counselors are also available on this line.
• MyFRS.com: This award-winning site contains a wealth of plan choice information and retirement planning applications; including Financial Engines’ Choice Service (compares FRS plans) and flagship Advisor Service (financial guidance). Employees can enroll and manage their benefits on line.
• Workshops: Ernst & Young conducts FRS plan choice workshops and retirement and financial planning workshops throughout Florida.

Non-FRS Plans

The SBA functions in an advisory capacity to several defined contribution programs. The SBA provides its independent review of proposed new investment funds to the plan administrators.

State University System Optional Retirement Program (SUSORP) is a 403(b) retirement plan. Eligible employees may choose the SUSORP in lieu of the FRS. The SUSORP is organized as an annuity plan with 5 companies that provide investment products, recordkeeping, education and marketing to members. The Florida Department of Management Services is the plan administrator and makes all final decisions regarding providers, investment products or services.

State Senior Management Service Optional Annuity Program (SMSOAP) is a 401(a) defined contribution annuity plan. Eligible employees may choose the SMSOAP in lieu of the FRS. The SMSOAP is organized as an annuity plan with 2 companies that provide investment products, recordkeeping, education and marketing to members. The Florida Department of Management Services is the plan administrator and makes all final decisions regarding providers, investment products or services.

State Deferred Compensation Plan is a 457 governmental deferred compensation plan for state employees. Eligible employees may choose to have their employer direct pre-tax payroll deductions to their accounts. The plan provides members the opportunity to choose from mutual funds, commingled trusts, fixed accounts and insured bank deposits. Six companies provide investment products, recordkeeping, education and marketing to members. The Florida Department of Financial Services is the plan administrator and makes all final decisions regarding providers, investment products or services.