UNDERSTANDING YOUR RETIREMENT BENEFITS UNDER …

1 9/21/20171 Erin Rock, SecretaryUNDERSTANDING your RETIREMENT BENEFITS UNDER THE FRS PENSION PLANFor FRS Members Enrolled Prior to July 1, 2011 PENSION PLAN MEMBER HANDBOOK2 DIVISION OF RETIREMENT9/21/20172 RETIREMENT GUIDES3 DIVISION OF OF RETIREMENT9/21/20173 DISCLAIMERIf questions of interpretation arise as a result of the attempt to make RETIREMENT provisions easy to understand, Chapter 121, Florida Statutes; Chapter 60S, Florida Administrative Code; and the Internal Revenue Code shall remain the final OF RETIREMENTFRS HISTORY FRS created in December 1970 (TRS/SCOERS Merger) Only one plan FRS Pension Plan Employee contributions required Employee Non Contributory System (Jan. 1, 1975 June 30, 2011) Three percent Employee Contributions effective July 1, 2011 FRS Investment Plan offered beginning July 1, 20026 DIVISION OF RETIREMENT9/21/20174 THE TWO FRS PLANSP ension PlanInvestment PlanEY Financial PlannersMy FRS Financial Guidance Line (866) OF RETIREMENTPlan Choice GuidanceFree, unbiased financial planning and counseling services Chat live with EY Financial PlannerAccess financial planning tools and resources7 ELIGIBILITY FOR A FUTURE BENEFIT UNDER THE FRS PENSION PLAN Occurs when you become a vested member.

2 Vested member means you have met the years of service required to be eligible to receive a futurebenefit UNDER the OF RETIREMENT89/21/20175 VESTING FRS PENSION PLAN Members enrolled prior to July 1, 2001: Seven, eight or 10 year vesting Members enrolled on July 1, 2001 though June 30, 2011: Six year vesting Members enrolled on or after July 1, 2011: Eight year vesting Member Handbook Page 269 DIVISION OF RETIREMENTNORMAL RETIREMENT DATE Is when you are first eligible to receive an unreduced RETIREMENT benefit; and Is also when you are eligible to participate in the Deferred RETIREMENT Option Program (DROP). DIVISION OF RETIREMENT109/21/20176 NORMAL RETIREMENT DATE All Service Classes; except Special Risk Age 62 or 30 years of service whichever occurs first. Special Risk Class Service Age 55 or 25 years of Special Risk Class Service whichever occurs first; or Combined total of 25 years of Special Risk Class service and military service purchased UNDER the Wartime Military Service provisions and age 52.

3 Member Handbook Page 4311 NORMAL RETIREMENT DATE If reaching your Normal RETIREMENT date by age, your Normal RETIREMENT date would be the first of the month you turn that age. If reaching your Normal RETIREMENT date by years of service, your Normal RETIREMENT date would be the first of the month following the month you attain the years of service. Service RETIREMENT and DROP begin dates are always the first of the OF RETIREMENT129/21/20177 NORMAL RETIREMENT DATE DROP K 12 Instructional Personnel, may enter DROP at Normal RETIREMENT or at anytime after reaching Normal RETIREMENT and participate for a full 60 months. All others, unless you are eligible to defer your 60 month DROP participation period, your 60 month DROP participation period starts at your Normal RETIREMENT date. 12 month election windowDIVISION OF RETIREMENT13 WHO CAN DEFER THEIR 60 MONTH DROP PARTICIPATION PERIOD? Special Risk Class Normal RETIREMENT by years of service prior to age 52 All other Classes Normal RETIREMENT by years of service prior to age 57 12 month election window14 DIVISION OF RETIREMENT10/8/20178 WHO CAN DEFER THEIR 60 MONTH DROP PARTICIPATION PERIOD?

4 DIVISION OF RETIREMENT Elected Officials May defer DROP entry until the next term of office but can only participate in DROP for 60 months or the length of that term of office whichever is less. DROP Guide Page 1615 WHAT IS DROP? Retiring UNDER the FRS Pension Plan upon entering DROP but delaying termination of employment for up to 60 months. During DROP participation period, you monthly RETIREMENT BENEFITS accrue in your DROP account on a tax deferred basis. Salaries earned while in DROP are not subject to the three percent employee contributions. DROP accrual earns interest Effective annual yield percent. Cost of Living Adjustment (COLA).DIVISION OF RETIREMENT9/21/20179 UPON TERMINATION OF DROPDROP accumulation is paid in one of three ways: Lump sum payment, with 20 percent withheld for federal income taxes; Direct rollover to an eligible RETIREMENT plan; or Combined partial lump sum payment and direct DROP termination packet is mailed three months prior to your DROP ending date (Forms DP Term & DP PAYT).

5 17 DIVISION OF RETIREMENTTHE BENEFIT CALCULATION FORMULA= Option 1 Gross Annual Benefit at Normal RetirementDivide by 12 = Gross Monthly Option 1 BenefitYears of ServiceX% Value per YearXAverage Final CompensationDIVISION OF RETIREMENT1810/13/201710 YEARS OF SERVICEIs the total of all years and parts of years you worked in a covered position with an FRS employer plus any optional service credit that you OF RETIREMENT19 OPTIONAL SERVICE Refunded Service Leave of Absence Form FR 28 Wartime Military Service Provision Only members enrolled prior to Jan. 1, 1987, are eligible DD 214 In State/Out of State Service Form FR 30 or DD 214 Member Handbook Page 33 Form PRO 1209/21/201711 ACCRUAL VALUE PER YEAR OF Class ServiceAge 62 or 30 years = 63 or 31 years = 64 or 32 years = 65 or 33 years = Management Service Class = Risk Class ServiceService earned on or after July 1, 1974 = earned prior to July 1, 1974 = Officers Class ServiceJudges and Justices = others = OF RETIREMENT21 AVERAGE FINAL COMPENSATION (AFC) Average of your highest five fiscal years of salary.

6 Fiscal Year is July 1 through June 30 Statute allows up to 500 hours of lump sum annual leave payout to be used in the calculation of the AFC but subject to agency limitations. State agency employment limits on lump sum annual leave payout as follows: Career Service employees Up to 240 hours of lump sum annual leave. Senior Management and Select Exempt employees Up to hours 480 of lump sum annual leave Consult your Agency's Human Resource OF RETIREMENT229/21/201712 AVERAGE FINAL COMPENSATION (AFC)23 Fiscal YearService CreditSalary Used in $15, ($15, service credit) = $30, which is in the highest five and therefore $15, earned in this .50 of a fiscal year will be used in the AFC . $29, $ $27, $26, $12, year salary of $25, times the percentage needed to make a full five fiscal years of salary = .50 service credit. $25,000 X .50 = $12,500 to be used in the years $137, ($137, ) = AFC = $27, Calculation of member retiring effective Jan. 1, 2017 Middle of fiscal yearBENEFIT FORMULA CALCULATION24 Years of Service X % Value/Year XAverage Final $25, Gross Annual Option 1 Benefit of $12, by 12= Gross Monthly Option 1 Benefit of $1, with all Regular Class Service at Normal RETIREMENT :DIVISION OF RETIREMENT9/21/201713 BENEFIT FORMULA CALCULATIONM ember with all Special Risk Class Service at Normal RETIREMENT :DIVISION OF RETIREMENTY ears of Service X % Value/Year XAverage Final $25, Gross Annual Option 1 Benefit of $18, by 12= Gross Monthly Option 1 Benefit of $1, FORMULA CALCULATION26 Member with Regular and Special Risk Class Service at Normal RETIREMENT both classes of service.

7 Years of Service X % Value per yearXAFC Option 1 Annual Benefit25 years Special Risk $25, $18, years Regular Class $25, $2, years Total Option 1 Annual Benefit Amount $20, by 12 to get Monthly Option 1 Benefit $1, OF RETIREMENT9/21/201714 EARLY RETIREMENTS ervice RETIREMENT before Normal RETIREMENT Date Benefit Reduced five percent for each year UNDER Normal RETIREMENT age or proportional share thereof. Special Risk Class Reduced from age 55. All other Classes Reduced from age OF RETIREMENT27 BENEFIT PAYMENT OPTIONS Option 1: Lifetime monthly benefit to you. Option 2:Provides a reduced monthly benefit payment to you for your lifetime. If you die 10 years or more after RETIREMENT , no BENEFITS are payable to your beneficiary. However, if you die within 10 years (120 months) of your effective RETIREMENT date, your beneficiary will receive a monthly benefit payment in the same amount you were receiving for the balance of the 120 month period (including any period of DROP participation).

8 No further BENEFITS are then payable. Beneficiary can be OF RETIREMENT289/21/201715 BENEFIT PAYMENT OPTIONS To be eligible for an Option 3 or 4 benefit payment option, beneficiary must be a qualified joint annuitant. your spouse. your parent, grandparent, or a person for whom you are the legal guardian, claimed as a dependent on your federal income tax. your natural or legally adopted child who is either UNDER age 25 or is physically or mentally disabled and incapable of self support (regardless of age).DIVISION OF RETIREMENT29 BENEFIT PAYMENT OPTIONS Option 3:Provides a reduced monthly benefit payment to you for your lifetime and a continuing benefit to your joint annuitant. No further BENEFITS are payable after both you and your joint annuitant die. Option 4:Lifetime monthly benefit to you. Upon the death of either you or your joint annuitant, the monthly benefit is reduced to 2/3 of the benefit payable while both were living. DIVISION OF RETIREMENT309/21/201716 COST OF LIVING ADJUSTMENT (COLA)Retirees (including DROP participants) receive a COLA in their July benefit each year.

9 All service earned through June 2011 receives a 3% COLA Service earned July 2011 and after 0% COLAF ormula:Years of service through June 2011 divided by Years of service at RETIREMENT X 3%.Example: 26/30 X 3% = OF RETIREMENT31 APPLICATION FOR RETIREMENT Apply up to six months prior Service RETIREMENT Form FR 11 DROP DROP RETIREMENT Application Form DP 11 Notice of Election to Participate in DROP and Resignation of Employment Form DP ELEDIVISION OF RETIREMENT329/21/201717 OTHER ITEMS REQUIRED TO COMPLETE APPLICATION Form FRS 11o Option Selection Form Form SA 1 Spousal Acknowledgement Form Birth Date Verification member and for Joint annuitant if you selected Option 3 or 4 (See BVR 1 Form) Copy of registeredMarriage Certificate if you selected benefit payment option 3 or 4 and listed your spouse as your joint annuitant33 DIVISION OF RETIREMENTFORMS ON WEBSITE: DIVISION OF RETIREMENT349/21/201718 THE RETIREE PACKETR eceived just prior to receipt of your first benefit check Form W 4P Tax Withholding Certificate for Pension Payment Form DFS A1 26R, Direct Deposit Authorization Form HIS 1, Health Insurance Certification for Pension Plan Members DIVISION OF RETIREMENT35 REEMPLOYMENT AFTER RETIREMENTD uring the first six calendar monthsof RETIREMENT or following your DROP termination date, you may not work for any FRS employer.

10 If you do, you will void your RETIREMENT and you will have to pay back any BENEFITS received including your DROP payoutDuring the 7th 12thcalendar months of RETIREMENT or following your DROP termination date, if your return to work for an FRS employer you must suspend your RETIREMENT benefit for the months you OF RETIREMENT369/21/201719 REEMPLOYMENT AFTER RETIREMENTR enewed Membership Closed effective 07/01 FRS Pension Plan retiree initially reemployed with an FRS participating employer on or after July 1, 2010, is not eligible to participate in any state administered RETIREMENT system. DIVISION OF RETIREMENT37 IMPORTANT NOTICEF orfeiture of BENEFITS as defined by Florida Statutes (5) or you commit a specified offense prior to RETIREMENT or while participating in DROP and you were either: Convicted by a court of competent jurisdiction; or Terminated from employment as a result of admitting to the commission of a specified offenseYou will forfeit ALL of your RETIREMENT rights and BENEFITS !