Administered by the SBA, the Florida Retirement System (FRS) Investment Plan was established by the 2000 Florida Legislature to provide Florida’s public employees with a portable, flexible alternative to the FRS Pension Plan. The FRS Investment Plan is a defined contribution plan, in which contributions are defined by law, but ultimate benefits for any participant depend in part on the performance of member-selected investment funds.
The FRS Investment Plan is funded by employer and employee contributions that are based on salary and FRS membership class (Regular Class, Special Risk Class, etc.). The Investment Plan directs contributions to individual member accounts, and members allocate their contributions and account balance among a diverse offering of 11 low-cost institutional and mutual fund investment options within 5 public market asset classes and 10 retirement date funds that are mixtures of various asset classes. A Self-Directed Brokerage Account is also available.
The plan is primarily designed to serve shorter-service and mobile employees. Other employees that might find the Investment Plan appealing are older employees that don’t expect to work at least 8 years and employees that want greater control over their retirement plan. Since opening its first employee account in July 2002, the FRS Investment Plan has become one of the largest optional public-sector defined contribution retirement plans in the U.S.
The Executive Director of the State Board of Administration is responsible for selecting, evaluating, and monitoring performance of the investment options, with a focus on maximizing returns within appropriate risk constraints. The SBA follows Florida Statute fiduciary standards of care in managing the FRS Investment Plan’s options and the Investment Advisory Council provides independent oversight of the plan’s general objectives, policies, and strategies.