Department of Management Services

FRS Investment Plan

In the FRS Investment Plan, you and your employer make a monthly contribution for your retirement based on your salary and membership class. You decide how to invest your account balance in various investment funds the plan offers.

The FRS Investment Plan offers:

  • Flexibility -  You choose how to invest the money among 22 investment funds, including 11 funds spread across five asset classes, and 11 retirement date funds that are mixtures of various asset classes. A Self-Directed Brokerage Account is also available.
  • Portability -  After one year of service, you can take the vested value of your contributions with you when you leave the state or you can leave your funds in the Investment Plan. If you request a distribution of your contributions, you may continue to defer taxes by rolling over your account balance into an Individual Retirement Account (IRA) or another employers' qualified retirement plan, or you can receive a cash payment. If you receive a distribution, regardless of a rollover or cash payment, you will be considered retired regardless of your age. At the time you receive a distribution you are retired under the FRS and will be subject to the laws and rules governing such retirees. You may be able to receive future retirement benefits if you return to employment with a FRS participating employer.

 

How Much is Contributed?

As a member of the FRS Investment Plan, you contribute 3 percent of your gross monthly salary on a pre-tax basis to help fund your FRS Investment Plan account. The state also contributes a percentage of your gross monthly salary based on your membership class. The following chart shows the total percentage of your gross monthly salary that is contributed into your FRS Investment Plan account monthly based on your membership class (includes 3 percent paid by you and an additional contribution paid by your employer).

Rates for Elected Officers
Elected Officers Rate
Legislators 9.38%
Governor, Lt. Governor, Cabinet Officers 9.38%
State Attorney, Public Defenders 9.38%
Justices, Judges 13.23%
County Elected Officers 11.34%

  

Rates for Employment Class
Employment Class Rate
Regular 6.30%
Special Risk 14.00%
Special Risk Administrative Support 7.95%
Senior Management Service 7.67%

  

How Your Savings Grows?

In the FRS Investment Plan, your savings grow over time. Say you earn $50,000 per year and you are a Regular Class member, a total of 6.3 percent of your salary is contributed to the FRS Investment Plan from both employee and employer contributions. In this example, let's also assume your pay stays steady over the time periods shown and you earn a 6 percent return (please note that this is for illustrative purposes only and your actual earnings may be higher or lower depending on the market) on your investments each year you work for the state.

The following chart shows your expected value of your FRS Investment Plan account after 10, 20 and 30 years of service:

Example of Expected Value Over Time
10 Years of Service $43,018.31
20 Years of Service $121,285.67
30 Years of Service $263,685.09

   

Your Benefit

You may choose periodic withdrawals or use all or part of your account balance to buy a guaranteed lifetime benefit like those available from the FRS Pension Plan, roll your fund over to another qualified account, receive a lump-sum distribution or a combination of these methods. Note that if you withdraw money from the plan before age 59 ½, tax penalties may apply. Also, if you take a distribution, you will be considered a retiree regardless of your age.

 

Online Resources

Visit the MyFRS.com website to view details on the FRS Investment Plan. From the home page, click FRS Programs and then Investment Plan. This site also includes calculators and access to workshops, to help you understand your retirement options and ensure that you are making the best choice for your future. Click Investment Funds to view all of the investment fund options.

You also may view the FRS Investment Plan's summary plan description (Adobe PDF Document).