Retirement and D.R.O.P.
If you are considering retiring in the near future, and you have questions regarding the current plan you are in (Pension or Investment) we encourage you to call the MYFRS Financial Guidance Line at 1-866-446-9377. You will also need to contact Risk Management (671-6910) to schedule an appointment to complete the necessary paperwork.
If you are permanently and totally disabled and unable to work you may qualify for Disability Retirement. Please contact Risk Management (671-6910) to schedule an appointment.
PAYROLL RETIREMENT INFORMATION
- This information is designed to answer questions you may have in regard to final sick leave/vacation payments. If you have any questions after reading this information, please do not hesitate to contact the Payroll Department, 671-7562.
TERMINAL VACATION LEAVE PAYMENT (12 MONTH EMPLOYEES ONLY)
- Full-time, 12 month employees, who have completed 12 calendar months of employment, may be eligible for Terminal Vacation Payment upon termination of employment.
- Terminal Vacation Payment is limited to a maximum of 60 days (480 hours) and is paid at the current hourly rate of pay at the time of retirement/resignation.
- Employees who are discharged by the Board for cause, are not eligible for Terminal Vacation Payment.
- Terminal Vacation Payments will automatically be processed for eligible employees.
TERMINAL SICK LEAVE PAYMENT
- Full-time employees who have completed 10-12 years of employment in a sick leave earning position, may be eligible for Terminal Sick Leave Payment, paid at 50%, upon termination of employment.
- Full-time employees who have begun their 13th year of employment or beyond in a sick leave earning position, may be eligible for Terminal Sick Leave Payment, paid at 100%, upon retirement or termination of employment.
- There is no maximum to the number of sick leave hours that can be paid.
- Non-Administrative full-time employees will be paid by multiplying their eligible sick leave hours by their current hourly rate of pay at the time of retirement or termination.
- Adminstrators' hours earned prior to 07/01/2004 will be paid out at your current hourly rate of pay at the time of retirement or termination. Each year thereafter, the balance of sick leave hours remaining each year will be calculated at that year's hourly rate of pay.
- Terminal Sick leave payments will not include sick leave transferred to Marion County for employees hired after 06/30/1984.
- Employees who are discharged by the Board for cause, are not eligible for Terminal Sick Leave Payment.
- Terminal Sick Leave Payments will automatically be processed for employees who are retiring.
- Terminating Employees- A Terminal Pay Application must be completed and returned to the Payroll Department prior to termination for all eligible employees who request Terminal Sick Leave Payment.
ALL TERMINAL LEAVE PAYMENTS (VACATION AND/OR LEAVE)
- It is mandatory that Vacation and Sick Leave Terminal Payments with a value of $1,000.00 or more, be sheltered into the District's IRS approved 401(a)/403(b) Special Pay Plan.
- Distribution of any, or all, of the money sheltered in the Special Pay Plan is available upon termination of employment.
- Distributions from the Special Pay Plan become taxable income in the year received.
- Federal Income tax withholding is required by the IRS, but no FICA or Medicare tax is ever paid, saving the employee 7.65% of the amount sheltered.
- There is no 10% IRS penalty if the employee is at least age 55 in the year of separation from employment.
- Vacation and/or Sick Leave Terminal Payments less than $1,000.00 will be direct deposited into the bank account on file with the Payroll Department.
ARE YOU THINKING ABOUT RETIRING?
- If you are planning on retiring in the near future, the following information may assist you in your decision-making.
- If you retire from the Marion County School Board you have the option to continue your health insurance coverage through payroll deduction from your retirement check. You also will receive $5.00 “per year of service” per month as a subsidy towards your insurance from the Division of Retirement. (Example: If you have 30 years of service you would receive 30 X $5.00 = $150.00 towards insurance per month.) Maximum subsidy is $150.00.
- As a retiree of Marion County School Board, you have the option of continuing your health insurance if you are eligible for: 1) regular retirement, 2) regular disability retirement, 3) illness-in-the-line-of-duty disability retirement, or 4) early retirement and receive a retirement check from the State. If you choose to leave the Marion County School Board and defer your retirement, you will be offered COBRA benefits. Please contact the Benefit Section if you have any questions.
EFFECTIVE: January 1, 2022
RETIREE HEALTH INSURANCE RATES Basic Plan 1 Basic Plan 2 Mid-Plan 3 High Plan 4 Blue Medicare SINGLE 606.73 658.65 754.02 952.97
FAMILY 1628.20 1479.74 1918.14 2423.97 None
- Retirees have an option to change (go on a self pay plan directly with the insurance company) their base life insurance benefit at the time of retirement. This conversion rate is based on age at the time of retirement. However, the School Board has made it possible for retirees to purchase a $20,000 life insurance policy for a rate of $23.00 per month (rate as of 01-01-2022) for employees under age 65. Over age 65 you may purchase a $10,000 policy for $11.50 per month (rate as of 01-01-2022).
- All paperwork should be processed with the Benefits Section prior to your retirement date. If you have any questions please call 671-6910.
DEFERRED RETIREMENT OPTION PROGRAM (D.R.O.P.)
We are hopeful that the following information may answer some of your questions regarding the D.R.O.P. program. We encourage you to contact the Benefits Section/Risk Management if you need additional information.
WHAT IS D.R.O.P.?
- The Deferred Retirement Option Program (D.R.O.P.), is a program which began July 1, 1998, and allows you to retire and begin accumulating your retirement benefits, without terminating employment, for up to 60 months from the date you first reach normal retirement. While participating in D.R.O.P., your monthly retirement benefits remain in the FRS Trust Fund, earning tax deferred interest, while you continue to work (but you do not earn additional service credit for retirement). When your D.R.O.P. participation ends, you must terminate all employment with FRS employers. At that time, you will receive payment of the accumulated D.R.O.P. benefits, and begin receiving your monthly retirement benefit (in the same amount as determined at retirement, plus annual cost-of-living increases). For many, this is the “best of both worlds”, providing both a guaranteed lifetime benefit and a lump sum to be invested by the member after D.R.O.P. ends.
WHEN CAN I BEGIN D.R.O.P.?
- You may begin D.R.O.P. participation in the month you reach your normal retirement date based upon your age, or in the month after the month you reach your normal retirement date based upon your years of service. If you reach your normal retirement date based on your years of service before age 57 or reach your normal retirement date while holding an elected term of office, you may qualify to defer your D.R.O.P. participation to a future date.
- The Division of Retirement will need to receive your election to participate in D.R.O.P. and the dates you have chosen to participate in D.R.O.P. no later than 12 months after you reach your normal retirement date (or after the date permitted under one of the D.R.O.P. deferral exceptions).
- Effective July 1, 2001, instructional personnel only, as defined in s.1012.01(2) F.S., will not be subject to the 12-month time limit in which FRS members may elect to participate in the D.R.O.P. This provision allows these members to join the D.R.O.P. at any time after they reach their normal retirement date. Other D.R.O.P. provisions remain the same.
HOW MUCH INTEREST WILL MY D.R.O.P. ACCOUNT EARN?
- D.R.O.P. accounts earn interest compounded monthly at an effective annual rate of 1.3%. No interest is earned on benefits on deposit for less than one month or after the month in which you terminate employment.
WILL I RECEIVE THE HEALTH INSURANCE SUBSIDY (HIS) WHILE I AM PARTICIPATING IN D.R.O.P.?
- No, however, you will be eligible to start receiving the HIS at the conclusion of D.R.O.P., provided you apply for it and meet the eligibility requirements.
WHO IS ENTITLED TO MY D.R.O.P. BENEFITS IF I SHOULD DIE WHILE PARTICIPATING IN D.R.O.P.?
- Your FRS designated beneficiary is eligible to receive all accumulated D.R.O.P. benefits and, if you chose option 2, 3 or 4, a continuing monthly benefit.
WHAT HAPPENS WHEN D.R.O.P. ENDS?
- You and your FRS employer must verify termination of your employment. Upon verification, you will begin receiving your FRS monthly retirement benefits and distribution of your D.R.O.P. account. Your D.R.O.P. account does not earn interest after your D.R.O.P. participation ends. Your D.R.O.P. account will be paid to you in one of three ways: (1) a lump sum payment, (2) a direct rollover, or (3) a combined partial lump sum payment and rollover.
- Within 60 days after D.R.O.P. ends, your D.R.O.P. assets will be distributed in the manner you specify, if you do not specify a distribution method within that 60-day period, you will be issued a lump sum payment, less applicable taxes.
AM I GUARANTEED EMPLOYMENT IF I AM ENROLLED IN D.R.O.P.?
- No, your employment status is not changed by D.R.O.P. participation. You may quit or your employer may terminate you in the same manner as before D.R.O.P. participation.
CAN I CHANGE MY OPTION FACTOR OR PURCHASE ADDITIONAL SERVICE CREDIT WHILE PARTICIPATING IN D.R.O.P.?
- No, once your participation in D.R.O.P. begins, your retirement is final, and you cannot add service credit or change retirement options, or change the type of retirement you chose to retire under.