The FRS Investment Plan is similar to a 401(k) plan. Members own all employee contributions and earnings in their Investment Plan account after completing 1 year of service. Employee contributions are immediately vested. The Investment Plan is designed primarily for employees who want greater control over their retirement plan and who want flexibility in how their benefit is paid at retirement.
The Investment Plan is known as a “defined contribution” plan. That’s because contributions — the employee’s and the employer’s — to the Plan are defined by law. The benefit, however, is not defined. The benefit the member ultimately receives from the Plan will depend on how much is contributed to the member’s account, the performance of investments over time, and the impact of account fees and expenses. When a member is ready to withdraw money, they will have a variety of payout options to choose from.
For more information about the Investment Plan, and to compare it with the Pension Plan, visit the New Hire page and ChooseMyFRSplan.com.