Volume 5: Issue 1
Issue Date: April 2006

Member Personal Forecast Statements Coming Soon

Beginning in April, all active FRS members of the Pension Plan and Investment Plan with at least 12 months of FRS service will receive an updated Personal Forecast Statement. FRS members who are retired, in DROP, or have less than 12 months of service when the Personal Forecast Statement is generated will not receive a Statement. We have asked Financial Engines to again provide these Statements to give FRS members information on their projected FRS and Social Security benefits, plus any other retirement plans they have added through the online Personal Advisor Service.

The Statement is primarily intended to help FRS members understand if their projected FRS and Social Security benefits will provide a total retirement income of 70 percent or more of their projected annual salary at normal retirement, and if not, how much additional income through other sources such as a 457, 403(b), 401(k) or IRAs they may need. The Statement only projects FRS and Social Security income based on our FRS records and service. If the member has other sources of income, they will not be reflected in the Statement, unless they have been entered through the online Personal Advisor Service. The Statement also communicates their MyFRS.com PIN and basic information about their FRS plan options.

To take full advantage of the Statement, FRS members should call the toll-free MyFRS Financial Guidance Line and speak to one of the financial planners provided free of charge to help all FRS members (Pension Plan and Investment Plan). They may also go online at MyFRS.com to explore the Personal Advisor Service, Second Election Choice Service and other retirement planning information using their PIN.

The Personal Forecast Statements will be mailed over a period of 5-6 weeks in lots of 100,000 per week, so not all of your employees will receive their Statement at the same time.

FRS members who are within 5 years of reaching the normal retirement requirements of the FRS will receive a slightly different Statement than those members who are farther from retirement.

The Personal Forecast Statement is different than the Member Annual Statement (MAS) mailed annually to FRS Pension Plan members. The Personal Forecast is designed to go beyond strictly projecting FRS Pension Plan benefits by including a projected Social Security benefit. Additionally, the Personal Forecast Statement shows retirement income in todays dollars using the same convention as is used in the annual Social Security Statement received from the federal government. The estimated benefits shown on the Pension Plan MAS are not adjusted for inflation (i.e., they are in future dollars). Therefore, the estimated benefit amounts shown on the Personal Forecast will not match the estimated benefit amounts shown on the MAS.
back to top

Investment Plan Distribution and Reemployment Provisions

Senate Bill 1446 (Chapter 2005-253, Laws of Florida), passed during the 2005 Legislative session and effective on July 1, 2005 made changes to the distribution and reemployment provisions for the Investment Plan. The attached information grid on these provisions may help you in determining when former Investment Plan members may receive a distribution of their account balance and the conditions under which they may return to FRS-covered employment. If you have questions concerning the reemployment provisions, please call the Employer Assistance Line toll-free at 1-866-377-2121, option 1.
back to top

Excessive Fund Trading Policy Reminder

In November 2003, the State Board of Administration of Florida (SBA) implemented a policy to prevent excessive short-term trading within the FRS Investment Plan. The policy was mailed to all Investment Plan members, and is available to members online at MyFRS.com or by calling the toll-free MyFRS Financial Guidance Line.

A minimum seven-day holding period applies to any non-exempt transfers into international or global stock funds within the Investment Plan. Additionally, multiple round-trips in and out of any investment fund totaling $75,000 or more within a 30-day period could lead to restrictions on a members ability to make future fund transfers.

Effective March 9, 2006, some aspects of the policy were clarified and updated, which may affect an Investment Plan members trades. We are encouraging all Investment Plan members to review the new updated policy online at MyFRS.com.
back to top

Reporting of Employee Termination Dates

Please remember that if you have employees who have terminated employment with your agency you should report their termination date on the monthly payroll to the Division of Retirement. Employees in the FRS Investment Plan will not be able to receive a distribution of any vested account balance unless a termination date is on file.

As the end of the school year approaches, school districts will undoubtedly have a number of employees terminating employment with their agency. Employees who have their contract terminated at the end of the school year and are rehired at the beginning of the next school year should have a termination date reported on the last salary reported for this school year. The re-hire date should then be reported on the first salary reported for the next school year. For example, if the employees contract termination date is June 15, 2006, the termination date of June 15, 2006 should be reported on the June retirement report (sent on or before July 10th). If the employee enters into a new employment contract on August 15, 2006, the re-hire date of August 15, 2006 should be reported on the August payroll reported on or before September 8, 2006.

If you have questions about the payroll reporting process, please contact the Contributions Section of the Division of Retirement toll-free at 1-877-377-1266 or if a local call 488-6011.
back to top

Annual Investment Report

The annual investment report from the State Board of Administration has been released and shows that both the FRS Pension Plan and Investment Plan are in good shape. A copy of the Executive Directors Report will be included in the Personal Forecast Statement mailing. A full copy of the report may be seen online at www.SBAFLA.com, and click 2004-2005 SBA Investment Report on the Home page.
back to top

Keep Addresses Current

Please encourage your employees to update their mailing addresses to ensure they receive all informational material concerning their FRS benefits, including Member Annual Statements and Personal Forecast Statements. This employee address information will be updated in our database once received on your monthly payroll file. Without a current address on file your employees could be missing important retirement account and benefit information.

If you have questions about reporting address changes or any other payroll reporting process, please contact the Division of Retirement Contributions Section by email at contributions@dms.myflorida.com or by telephone toll-free at 1-877-377-1266 or within the Tallahassee area at 488-6011.
back to top

IRS Limit Monitoring

The Internal Revenue Code places limits on employee and employer contributions to defined contribution retirement plan accounts. These limits must be monitored carefully in order to comply with the revenue code. The FRS Investment Plan Administrator, CitiStreet, monitors the contributions limits for participants in the FRS Investment Plan. If employees are making additional contributions to other defined contribution accounts, including 457(b), 403(b), 401(k), 415 and 402(g) accounts, the contributions for these plans should be reported to the Division of Retirement as part of your regular monthly payroll file. Monitoring these contribution limits is an important part of maintaining the special tax status of the FRS.

The year end contribution results for those FRS agencies who have reported contribution data on supplemental retirement plans was completed by CitiStreet in February. Notification letters are being distributed to those agencies once completed.
back to top

IRS Tax Filing Forms in the Mail

The Division of Retirement mailed the 1099-R forms to all Pension Plan retirees in January. If your Pension Plan retirees have not received their form, they should contact the Retired Payroll Section of the Division toll-free at 1-888-377-7687 or if a local call, at 488-4742, and a duplicate form will be processed. Since a duplicate form takes 5 business days to process, the retiree should request the duplicate well in advance of their tax filing deadline.

In addition to 1099 forms sent by the Division to Pension Plan retirees and Investment Plan retirees receiving an HIS benefit, CitiStreet has issued 1099-R forms to FRS Investment Plan members who took a distribution during the 2005 tax year. If your former Investment Plan members have not received their form, they should contact CitiStreet to request a duplicate be processed. Likewise, they should allow sufficient time for processing and receipt prior to their tax filing deadline.
back to top

Important Enrollment Deadlines!

All enrollment forms must be mailed directly to the FRS Plan Choice Administrator, CitiStreet. To be considered timely filed, CitiStreet who must receive all forms by 4pm ET on the last business day of an employee's deadline month.

The table below lists the FRS new employee retirement plan enrollment deadlines for the next 12 months.