Portability


Depending upon which plan you choose and whether you remain with an FRS employer, your benefit may or may not grow between the time you leave the FRS and begin taking benefit payments.
 
FRS Pension Plan FRS Investment Plan
  • If you terminate employment with your FRS-participating employer and begin working for another FRS-participating employer, you will remain in the plan you have selected, and continue to participate in the Pension Plan. You will continue to accrue a benefit and your combined service with all FRS-participating employers will count when calculating your final retirement benefit.
  • If you're vested when you leave FRS-covered employment and go to work for a non-FRS-participating employer, your benefit will be frozen and remain in the Pension Plan until you're eligible for early or normal retirement. Your benefit will remain frozen and won't increase in value until you start receiving your benefit payments. However, if you begin working for an FRS employer again, your previous service credit will count toward vesting and future benefits for which you may become eligible.
     
If you're not vested when you leave FRS-covered employment, you won't receive any benefit from the Pension Plan (except for a refund of employee contributions - see below). Any employer contributions made on your behalf will be forfeited, unless you return to work for an FRS-participating employer in the future and become vested.
 
You are always fully vested in your own contributions.* This means that if you terminate employment prior to meeting the vesting requirements of the Pension Plan, you will be entitled to a refund of your employee contributions. However, taking such a refund may not be a sound financial decision because, if you return to FRS-covered employment at a later date and wish to restore all service associated with the refund, you will be required to purchase back the refunded service plus interest.
 
*You are always fully vested in your own contributions, as long as you remain enrolled in your current plan. How your employee contributions are distributed or refunded to you depends on a number of factors, especially if you use your 2nd Election to change plans. Call the MyFRS Financial Guidance Line for more information.
 
 
 
If you leave employment with your FRS-participating employer and begin working for another FRS-participating employer, you will remain in the plan you have selected and continue to participate in the Investment Plan. You will continue to receive contributions to your account and receive any investment earnings on your account balance.

If you're vested when you leave FRS-covered employment and go to work for a non-FRS-participating employer, you can:
 
  • Leave the balance of your account in the Investment Plan, invested until you withdraw it;
  • Roll your account balance over to an Individual Retirement Account (IRA) or to the plan of your new employer, if that plan accepts rollovers**; or
  • Have your account balance paid to you. You'll have to pay taxes on this amount in the year during which it's paid to you. See the Taxability of Benefit section for more information.**

If you're not vested when you leave FRS-covered employment, you won't receive any benefit from the Investment Plan (except for a refund of employee contributions - see below). Any employer contributions made on your behalf will be placed in a suspense account for 5 years and will accrue interest earnings. If you return to FRS-covered employment within 5 years, you will regain control of the funds in the suspense account and again begin to accrue a benefit in your Investment Plan account. If you do not return to FRS-covered employment prior to the end of the 5-year period, your account will be forfeited.

If you transfer Pension Plan accrued benefits to the Investment Plan and you terminate employment before completing the Pension Plan's 8-year vesting requirement (6 years if enrolled in the FRS prior to July 1, 2011), the amount you transferred will be placed in a suspense account for 5 years, where it will accrue interest earnings. If you do not return to FRS-covered employment within 5 years, this amount will be forfeited.

You are always fully vested in your own contributions.* This means that if you terminate employment prior to meeting the vesting requirements of the Investment Plan, you will be entitled to a refund of your employee contributions. However, taking such a refund may not be a sound financial decision because you will forfeit any unvested employer contributions and service credit associated with the service and be declared a retiree.**

*You are always fully vested in your own contributions, as long as you remain enrolled in your current plan. How your employee contributions are distributed or refunded to you depends on a number of factors, especially if you use your 2nd Election to change plans. Call the MyFRS Financial Guidance Line for more information.
**If you take any distribution from your Investment Plan account (including a rollover) you will be considered a retiree. Effective July 1, 2017, retirees of the Investment Plan, State University System Optional Retirement Program (SUSORP), Senior Management Service Optional Annuity Program (SMSOAP), and State Community College System Optional Retirement Program (SCCSORP) are eligible for renewed membership in the Investment Plan, SUSORP, or SCCSORP. You must be employed in an FRS-covered position on or after July 1, 2017 in order to gain renewed membership. It is important to note this provision does not afford renewed membership retroactively for the period of July 1, 2010 to June 30, 2017, nor does it grant disability benefits for renewed members. Different termination requirements and reemployment limitations apply if you retired prior to July 1, 2010.