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Learn About Your Pension

Welcome to your Florida Pensions Resource Page. You will find Retirement links that will be useful now and when you get closer to your separation. You will first find useful links then the Table of Contents from the books. Below the Table of Contents some selected chapters are shown to give you an idea of the information and layout of the books. You will also have the opportunity to purchase the books while on this page. If you have any links that should be added to the website or ideas for improvements, please send it by clicking here, and if we add it, we will send you a complementary book.

Call me today, or order a book, and I can help you plan for tomorrow…

For active FRS and Municipal Pension members only.
Financial professionals please request your copy via
Florida Pensions Book*

Your FRS Book*


Table of Contents

1. Common Questions (Click to View Partial Chapter)
2. Municipal Pensions (Click to View Partial Chapter)
3. Pension Plan (Click to View Partial Chapter)
4. Investment Plan
5. DROP (Click to View Partial Chapter)
6. Other Retirement Accounts
7. Special Risk
8. 10 Common Mistakes
9. HIS - Health Insurance Subsidy
10. Taxes by Sean Johnson, CPA P.A.
11. Estate Planning by Attorney Deborah Glover-Pearcey
12. Social Security
13. Medicare & Medicaid by Cathy Brown
14. FRS Resources
15. Common Terminology
16. Authors (Click to View)
17. Your Personal Financial Plan

FRS Legislation

Based on SB 2100, here is a breakdown of the new laws, with specific details in the appropriate chapters. What has NOT changed:
  • The Pension and Investment Plan remain.
  • DROP remains the same for current DROP members. The interest rate will continue to be 6.5%.
  • Current DROP members will not have to pay 3% of their gross compensation.

What has changed for current employees:
  • If you enter the DROP on or after July 1, 2011 your guaranteed interest rate will be 1.3% instead of the current 6.5%
  • No Cost of Living Adjustment (COLA) until 2016. See Chapter Two for more details.

For New Hires - After July 1, 2011:
  • Average Final Compensation (AFC) becomes the highest eight fiscal years.
  • Regular Class, Elected Officers’ Class and Senior Management Service Class normal retirement age will go from age 62 to age 65, or from 30 years of service up to 33 years of service. For Special Risk Members the normal retirement age will jump from age 55 up to age 60, and the years of service to retire goes from 25 years up to 30 years.
  • All members will be required to make a 3% contribution on gross compensation. DROP members will not have to pay the 3% contribution.

Chapter 1 - Common Questions

1. Which pension choice is best for me? This depends on your personal situation. Here are some of the questions that you should ask yourself before the best choice can be made:

  • Are you single or married?
  • Do you have dependent children?
  • How much are your daily, monthly, and annual expenses?
  • Do you have other financial accounts? If so, what are the types and amounts in those accounts?
  • Are you going into the DROP?

  • 2. Is the DROP a good choice?

    In most cases, the DROP is still a good choice. When you have a DROP account you can roll it over to several other types of accounts with no tax implications or take distributions when needed. This account, depending on your individual situation, could be worth several hundred thousand dollars at retirement. (See Chapter 5 on the DROP for examples.)

    3. Should I take the Lump Sum, aka the Investment Plan?

    Again, this depends on your personal financial situation including your spending plan in retirement. For example, if you can pay your bills now and into the future with a 4-5% distribution from your lump sum, it might be a good choice. However, keep in mind, the risk is now on you for your future paycheck, not on the State of Florida.

    There are also other special situations that you need to consider.

    • The entire amount is not released to you up front.
    • You will need to factor in the special tax considerations that are affected by your age and choice of where your money is invested. See Chapter 4 on the Investment Plan.

    4. Will the legislature change things in the future?

    The only thing constant is change. Understand that when things change, they usually change slowly. Here are just two possible contingencies to consider as part of your overall planning:

    • What if the DROP is eliminated?
    • What if they take away the Pension?

    These and several other contingencies should be part of your overall planning. Remember, If you plan early and properly, you can minimize the effects of each of these possibilities.

    5. Should I use the DROP money to pay off my mortgage?

    If you take a large DROP distribution when you retire, you will have to add it to your annual income from that year, and you will be taxed at that rate. Consider the following example:

    If you make $50,000 and take a $100,000 distribution to pay off your mortgage, your new total income for the year is now $150,000. Your new gross income of $150,000 could bump you up one or two tax brackets.

    In a nutshell, if you want to save on taxes, you may want to consider taking smaller amounts over time, and still accelerate the payment of your mortgage.

Chapter 2 - Municipal Pensions

Pen’sion A stated allowance to a person in consideration of past services; payment made to one retired from service, on account of age, disability, or other cause. Webster’s on-line dictionary

When working for a governmental agency in Florida, you usually have a pension. That pension is provided by your employer through the FRS or their own municipal plan. These individual municipal pensions are similar, yet sometimes their differences make them appear very different. Because there are hundreds of municipal pensions, I like to compare them to cars. With each different car you will find similarities; an engine, body, steering wheel and transmission, making them all very similar. If you consider the differences you might get down to details about where the windshield wiper and headlight switch is located and works, which side is the fuel cap on, and the accessories - is there a sun roof, chrome wheels, a turbocharger, etc.?

Because of these differences, the details of each separate plan is beyond the scope of this book. I encourage you to visit with your Human Resource or Risk Management department for your employer, who should be able to provide you the details of your particular plan. The remainder of this chapter will explore the basics of a pension and the other financial choices you might want to consider as part of your planning.

Each pension is considered a Defined Benefit plan. The design of that benefit is perhaps slightly different for each reader. Many plans will determine your final pension benefit by calculating some combination of your years of service, age, a multiplier (depending on your job classification), and your compensation. The compensation factor is sometimes an average. For example it could be your best 3 or 5 year average.

Here are some Municipal Examples for Police and Firefighters:


Multiplier - 3.15%
Minimum years - 20 years or Age 46 + 10 years
Compensation - Best 3 of the last 10 years


Multiplier - 3%
Age 50 or Rule of 70 (Age+years=70)
Compensation - Best 1 year

Daytona Beach - Police

Multiplier - 3.0% with a maximum of 90%
Minimum years - 20 years or age 55 + 10 years
Compensation - Best 3 years

Daytona Beach - Firefighter

Multiplier - 3.0% with a maximum of 90%
Minimum years - 20 years or age 55 + 10 years
Compensation - Best 3 years

Call me today, or order a book, and I can help you plan for tomorrow…

For active FRS and Municipal Pension members only.
Financial professionals please request your copy via
Florida Pensions Book*

Your FRS Book*


Chapter 3 - Pension Plan

FLORIDA PENSION STILL REMAINS AMONG THE STRONGEST IN OUR NATION! There has been a lot written and debated about the Florida Pension. It has sometimes been considered fully funded and sometimes underfunded. The legislature has looked at changing some of its provisions to reduce the payouts to FRS members. Although past performance can’t be used to predict future results, over time it still has remained one of the strongest pensions in our nation. The State Board of Administration (SBA) reported the 2017-2018 fiscal year end return as 8.98%. The 10yr, 5yr, and 3yr respective returns were 6.85%, 8.69% and 7.62%. These periods are based on the fiscal year of the state (July 1 - June 30), not on the calendar year. We need to keep in mind that past performance is not indicative of future performance.

In the last 30 years, the Annual Investment Report dated June 30, 2018 from the State Board of Administration (SBA) reported that the pension investments had a net return of 6.90% vs the objective of 6.40% . This was above the goal and one advantage they have is the sheer size of the plan which allows the SBA to use economies of scale to their advantage and the result is a plan that has very low expenses.

One of the best qualities of a Pension Plan is the ability to receive a monthly check without having to invest the money yourself. For example, if you retire with the pension, you will automatically receive a monthly check. Additionally, depending on your Option choices, your spouse or dependants may also receive a check for the remainder of their lives or a specified period.

If you would rather manage your own money you have the option to choose the Investment Plan.

Common benefits for all members There are some benefits which are common among all employees. One such benefit is the ability to enter the Deferred Retirement Option Program (DROP), when you are eligible for full retirement.

Example if COLA is reinstated after 5 years

The current legislation reinstates the COLA, if approved in 2016. Assuming it is reinstated at 3%, then you will only have the next 5 years of the reduction. For example, if you have 22 years, plan to work 8 more years then enter the DROP for 5 years, your calculation will be: 25/30 times the 3% COLA. Your COLA when entering the DROP will be 2.5%. Th is illustrates 25 years with the 3% COLA and only 5 years without the COLA increase.

Chapter 5 - DROP

Eligibility for DROP is only available to FRS Pension members who are vested and have reached their normal retirement date. If you are in the Investment Plan, you are not eligible for the DROP.

DROP Timing
You may make your election to enter the DROP up to 6 months before the date you plan to begin. You must make your election within a 12 month window that begins when you first reach your normal retirement date. If you do not apply within your prescribed election window, you will lose your eligibility to participate for a full 60 months.

Special Note:
The FRS will allow you to take up to 500 hours of annual leave time and have it paid out to you before entering the DROP. This will allow you to increase your average final compensation (AFC) and will lead to a larger DROP balance. Your employer may not allow you the full 500 hours. Check with your human resource department to verify.

Special Risk
If you have been employed in the FRS Special Risk Class by a different FRS membership class or plan, you may elect to participate in DROP when you reach your normal retirement date for either class

Call me today, or order a book, and I can help you plan for tomorrow…

For active FRS and Municipal Pension members only.
Financial professionals please request your copy via
Florida Pensions Book*

Your FRS Book*


Chapter 16 - Authors

Jody Clayton
First Responders Financial

I was born in Lakeland, Florida and my Florida roots go back, I am told many generations to William Pope Duval III, who was the 1st civilian governor of Florida after Andrew Jackson.

I grew up in Auburndale, Florida, attended Auburndale High School, then Polk Community College in Winter Haven. After my AA degree, I was off to the University of Florida where I majored in Architecture. After two years, I moved to Tampa. Later I returned to school,where I completed my Bachelors Degree at the University of South Florida in Finance.

My first job at Publix Supermarkets lasted 26 years. I started as a bagger and served my last 12 years as a store manager. Over those years, I worked in 3 divisions of the company and had the privilege of working with many great people. I draw on those experiences everyday to help my clients in their individual and business needs.

Sean M. Johnson
Broyles, Rooks and Johnson, CPAs. P.A.
1009 W. Cleveland Street
Tampa, FL 33606

Sean is a partner with Broyles, Rooks and Johnson CPAs, P.A. in Tampa, Florida. Before merging with Broyles and Rooks, Sean managed a successful personal practice. His past professional experience includes:

  • Former Senior Accountant for local public accounting firm specializing in auditing, tax preparation and consulting.
  • Former Senior Accountant for statewide insurance company responsible for financial statement and tax return preparation.
  • Comprehensive knowledge of US accounting standards and Internal Revenue Service Tax Code.
  • Managed diverse engagements for multiple industries including construction, restaurant, and financial services among other industries. Sean is not affiliated with Royal Alliance Associates, Inc.

Linda S. Faingold
Tampa Bay Elder Law
5334 Van Dyke Road
Lutz, FL 33558

Linda was admitted to the Florida Bar in 2005 and to the U.S. District Court, Middle District of Florida in the same year. In 2005 and 2006 she practiced criminal defense as an Associate Public Defender for the 13th Judicial Circuit, Hillsborough County, Florida.

Since 2006 her primary practice has been Estate Planning: (Wills, Trusts, Powers of Attorney, Advanced Directives), Probate, Trust Administration, and Guardianship Proceedings. Linda, is not affiliated with Royal Alliance Associates, Inc.

David Andre
Andre Insurance Services, Inc.
12749 W. Hillsborough Ave., Suite A
Tampa, FL 33635

After graduating from Virginia Commonwealth University with a degree in Associates of the Arts in General Studies and a Bachelors of Science in Marketing, David spent the next twelve years as a national account manager and branch manager in the telecommunications industry.

Since 2004, David has been an insurance agent providing Health, Life and Disability products to individuals and groups. He holds a 2-15 Life, Health and Variable Annuities license through the Florida Department of Financial Services.

After becoming a member of Business Networking International (BNI) in 2002, David has served in virtually every leadership position, including President of the Westchase Business Builders twice. Because of David's honesty, integrity and belief in Givers Gain, he can attribute over 90% of his business from referral-based relationships. David takes pride in knowing that he helps his clients find the best coverage for the best price, and fits within their needs and expectations, as well as, providing the best customer service by being a single point of contact after the policies have been issued. David is not affiliated with Royal Alliance Associates, Inc.

Call me today, or order a book, and I can help you plan for tomorrow…

For active FRS and Municipal Pension members only.
Financial professionals please request your copy via
Florida Pensions Book*

Your FRS Book*

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