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What is the Florida Retirement System Investment Plan Hybrid Option?

ret_plan_limitsIf you wish to switch to the FRS Plan Hybrid Option, there is no charge. However, you must be vested with the Florida Retirement System. If you were a member of the Florida Retirement System prior to July 1, 2011, you must have 6 years of creditable service to be vested. If you were a member after July 1, 2011, you must have 8 years of creditable service to be vested.

So what is the FRS plan hybrid option? The FRS Investment Plan Hybrid option allows you to participate in the Florida Retirement System pension plan, which is a defined benefit pension plan and it also allows you to participate in the Florida Retirement System investment plan, which is a defined contribution plan. Please read our article on the difference between a defined benefit plan and defined contribution plan. http://www.myfrsanswers.com/defined-frs-benefit-retirement-plans-vs-defined-contribution-retirement-plans/

By choosing the FRS plan hybrid option, the Florida Retirement System will freeze your current FRS pension plan benefit and will direct future contributions to the investment plan. You are not able to move the frozen pension plan into the investment plan once you have elected this option.

Once you retire from the Florida Retirement System, you will receive a promised benefit under the FRS pension plan and you will have the ability to take a lump sum from the investment plan if so desired. Please keep in mind that with the Investment Plan, investment risk is handed over to you. Distributions from the investment plan will be subject to income tax and possible IRS penalties depending on your age.