1.

Pension Plan

The FRS Pension Plan is the traditional retirement plan offered by the government and operates similarly to the federal Social Security System. In this plan, a government employee accumulates a lump sum of money throughout their career and, upon retirement, receives a monthly check for the rest of their life. However, the check ends when they pass away unless a spousal benefit was chosen at retirement. In this case, the checks end when the spouse passes away. In both cases, much like the Social Security System, the money is controlled by the government with no beneficiary option.

2.

Investment Plan

The FRS Investment Plan offers employees the opportunity to make investment decisions from options offered by the government. These options range from conservative to aggressive, and include bond funds, growth funds, and target date funds.

In this plan, the employee has options at to where their funds are invested, and, at retirement, the funds can be left in the Investment Plan or rolled over tax-free to an Individual Retirement Account. Additionally, much like a private corporation 401K plan, when the employee passes away, the remaining funds can be passed on to their beneficiary.

3.

DROP

In the government's Deferred Retirement Option Program (DROP), the employee declares that they are entering DROP; however, as a general rule, they can work up to eight more years and continue receiving a paycheck. A Deferred Retirement Option Program (DROP) participant concludes their participation in DROP when they terminate their employment and officially retire, which can occur anytime during those eight years.

There are many nuances within DROP that government employees are not unaware of. Most of our clients have been surprised when they found out the true options available to them. Talk to us before entering DROP...you will be glad you did!

4.

Getting the Data

Call our office and schedule an appointment to meet with us. We will contact the right people and get you all the facts so you can make an fully informed decision about your financial future.