Effective July 1, 2023, there are several major changes to the Florida Retirement System (FRS) benefits due to new state laws.
Deferred Retirement Option Program (DROP) Expansion
DROP is a pension plan program for employees who have reached normal retirement date which allows them to simultaneously earn a salary and retirement income in order to accumulate a tax-deferred lump sum payment.
DROP is being expanded as follows:
The maximum time for eligible members to participate in DROP is expanded from 5 years to 8 years. This includes those employees currently participating in DROP.
The restricted 12-month election window has been removed. Employees may enter DROP any time after becoming fully vested and reaching their normal retirement date.
The annual interest rate has tripled from 1.3% to 4%, compounded monthly, for the accrued monthly DROP benefit.
Special Risk Class Normal Retirement Date
The normal retirement date for Special Risk Class members initially enrolled on or after July 1, 2011, is changed to either 25 years of creditable service or age 55, whichever is earlier.
Health Insurance Subsidy Increase
The monthly retiree Health Insurance Subsidy is increased by 50% from $5 to $7.50 for each year of creditable service. The maximum monthly benefit is adjusted from $150 to $225 and the minimum monthly benefit is adjusted from $30 to $45. This increase includes current retirees.
Pension Plan Employer Contribution Rates
The uniform normal cost and unfunded actuarial liability contribution rates paid by employers into FRS Pension Plan accounts is increased. New Contribution Rates (pdf)
Investment Plan Employer Contribution Rates
The contribution rate paid by employers into FRS Investment Plan accounts is increased by 2% in ALL membership classes.
For detailed information on retirement, visit the Florida Retirement System (FRS) website at www.myfrs.com or call (866) 446-9377 to speak with an FRS representative.