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BPAA Retirement Update
Florida Retirement System (FRS) members who retire and enter DROP after July 1, 2010 will earn 3% each year of DROP. Current DROP participants will earn 6.5% each year.
Last year the Florida Legislature passed two items: an FRS retiree cannot be reemployed by a participating FRS employer for 6 months and cannot earn a 2nd FRS retirement.
Vacation Limit Reminder – recent principals can accumulate 60 days and older principals can accumulate 62 ½ days. Any earned vacation beyond the above limits will be reduced on July 1, 2010.
The legislature will present a significant number of bills in the next session. It bears watching.
Please call our BPAA Retirement Consultant, if you have any questions.
Pete Tingom (954 850-1321)
A Brief Retirement
Review for BPAA Members
There are four critical points in planning
30 Years of
service
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Age 57
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Age 62
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Age 70 ½
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Eligible to
retire
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If you have 30
years of service, you will lose 1 month of DROP for each month you don’t
enroll
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Eligible to retire
and/or enter DROP if you are vested with a minimum of 6 years of service
You will lose 1
month of DROP if you don’t enroll
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You must begin
to withdrawn tax-sheltered funds at a rate defined by the federal government
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First – Make sure your beneficiary designation
is correct. You should have a
Living Will and a Health Surrogate.
Second- Chose between Defined Benefit or Defined
Contribution
The State of Florida has two retirement plans
DEFINED BENEFIT
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DEFINED CONTRIBUTION
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Vested after
six (6) years
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Vested after
one (1) year
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Not able to
transfer fund if you leave prior to normal retirement qualification
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Money is
portable as you move to different employers
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Eligible for
DROP
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NOT ELIGIBLE FOR DROP
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When you enter
DROP, you have officially retired
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Employee may
move funds within a variety of financial instruments
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Employee
account functions much like a private investment fund
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Third – Chose an Option
Option One
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Maximum Benefit
Payment ends
with employee’s death
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Option Two
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Minimum
reduction of Benefit
Payment is
guaranteed for ten (10) years to employee or beneficiary or until employee’s
death
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Option Three
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Reduced Benefit
depending on spouse’s age
Payment will
continue until both employee and spouse’s deaths
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Option Four
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Reduced Benefit
depending on spouse’s age
Payment will be
reduced by approximately one-third (1/3) upon either the employee or spouse’s
death and ends when both have died
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Fourth – BENCOR and Insurance
Upon reaching
normal retirement or entering DROP sick leave (unlimited) and vacation leave
(60 days) will be paid into BENCOR. The benefit is that you will never pay FICA (Social Security) on this
money. Once the money is deposited
(usually takes about 60 days) you may either move it to another qualified
tax-sheltered plan or leave it with BENCOR,
You will pay for
your insurance when you terminate from the SBBC. The current cost for Humana HMO Enhanced, Dental and Vision
is $465.52 per month for 2008. You
must pay dental and vision separately.
Florida provides
a benefit of $5.00 per year of service up to 30 years for the purchase of
insurance. This money is added to
your retirement payment.
Fifth – Take Time to Make Decision
Start planning
six months before you enter DROP or separate from the SBBC. At least 30 days, probably 60 days, before
you actually leave the SBBC make a retirement appointment at Benefits. (754)
321-3100.
Florida
Retirement System Office is in Tallahassee: 1317 Winewood Boulevard, Building 8.
Phone: (850) 488-6491. The website is www.rol.frs.state.fl.us
http://frs.MyFlorida.com (This is a website to follow up on the proposed retirement-related bills. Go to the "Legislation,Laws and Rules" page.)
www.myfloridahouse.gov or www.flsenate.gov. These websites will help find your legislator or the sponsor of any bill as well as the senators.
The 2011 Regular Legislative Session begins March 8 and runs through May 6.
Pete Tingom (954) 850-1321 Cell