The Florida Deferred Compensation Plan is the supplemental retirement plan for employees of the State of Florida—established under Internal Revenue Code (IRC) Section 457b. The Plan supplements any retirement benefits offered by the Florida Retirement System (FRS) and the Social Security Administration (SSA). Participants may defer a portion of their income, through a payroll deduction each pay period, to be invested and sheltered from taxation until withdrawn after separation of service.
No, Participants continue to earn creditable service towards the FRS and continue to pay into the SSA each pay period.
The Plan is not limited by the Open Enrollment Period, and eligible employees may enroll in the Plan at any time of the year*.
*Processing of paperwork and IRS limitations will determine the exact date deferrals will start after enrollment has been initiated.
The Florida Deferred Compensation Plan is offered to all State of Florida employees, including OPS employees and employees of the State University System, the State Board of Administration, the Division of Rehab and Liquidation, Special Districts*, and Water Management Districts*.
*Subject to employer participation.
The Florida Deferred Compensation Plan has three Investment Providers and an online self-directed brokerage option. The Plan offers three types of investments: Fixed Accounts, Target Date Funds, and Mutual Funds. The Bureau of Deferred Compensation publishes the Quarterly Performance Report* that presents the historical rates of return and expense ratios for all investment products available in the Plan. This report compares the performance and fees and should be reviewed before enrollment in the Plan.
*If you would like to receive this report by mail, please contact the Bureau of Deferred Compensation.
Participants may select more than one Investment Provider with contributions split between them. Participants may transfer between Investment Providers at any time without penalty. Additionally, Participants have the option of stopping contributions and leaving their balance with one Provider, while enrolling with and contributing to another.
The minimum contribution is $20 per monthly pay period or $10 per bi-weekly pay period. Contributions cannot exceed 80% of a Participant’s paycheck. For 2022, the limit for Participants under age 50 is $20,500. For Participants ages 50+, the limit is $27,000. Some Participants may be eligible for Standard Catch-Up, allowing a limit of $41,000 for three consecutive years. Contact the Bureau of Deferred Compensation for more details.
Yes, Participants may stop*, restart, decrease, or increase contributions at any time. There are deadlines for making changes to contribution amounts, which are based on payroll warrant date deadlines. Please consult the Bureau of Deferred Compensation for more information about warrant date deadlines.
*Stopping a contribution to the Plan does not cancel or close the account and balances must remain in the Plan until separation from service.
Standard Catch-Up is an IRS provision that provides an increased annual contribution limit as retirement approaches. Participants may become eligible for Standard Catch-Up three years before their normal retirement age and may participate in Standard Catch-Up for a period of up to three consecutive years. Standard Catch-Up eligibility can be determined by contacting the Bureau of Deferred Compensation.
Yes, assets from eligible pre-tax retirement accounts (e.g. 401(k), 403(b), 457(b), DROP, FRS Investment Plan, or Traditional IRA) may be rolled into the Plan. Contact your Investment Provider to request the Rollover Into/Out of Florida Plan Form to begin this process.
Accrued leave payments may be invested into the Plan—provided the annual contribution limit is not exceeded. Accrued leave payments are subject to Social Security and Medicare taxes. The portion of your payment held for Social Security and Medicare taxes is considered taxable income and will be subject to Federal Income Tax. The State Payroll System uses a formula that satisfies these tax requirements and calculates the maximum possible deferral. The amount deferred will not be subject to Federal Income Tax.
A mandatory 20% Federal Income Tax will be withheld from lump sum distributions, partial distributions, and any distribution with less than a 10-year payout. The distributions will be reported as ordinary income in the year received and the Investment Provider will provide you with a 1099 Form stating the proper amount of income to include on a Federal Tax Return.
The Investment Provider will withhold the mandatory 20% for Federal Income Taxes for lump sum distributions, partial distributions, and those with less than a 10-year payout. Additional taxes can be withheld if necessary. Please contact your Investment Provider if you wish to increase the amount of your withholding.
There may also be a 10% penalty if you are taking a distribution from your DROP 401a assets that have been rolled into the Deferred Compensation Plan if you are under the age of 59 ½. Exceptions to this 10% penalty are for:
1) Separation from service in or after the year you turn 55 (or age 50 for eligible public safety employees).
2) Distributions that are made at any age as part of substantially equal periodic payments (made at least annually) until you reach 59 ½, at which time you may change distribution methods. Please contact a tax advisor or call the FRS Guidance Line at 1-866-446-9377 (Option 2) for additional information.
No, Participants are not required to take or move an account balance once leaving employment. Funds remain in the Deferred Compensation Plan and continue benefiting from tax-deferred growth. Participants will continue with the ability to change asset allocations.
A Participant is required to receive distributions on April 1st of the calendar year following the year of reaching age 70½*, then every year thereafter. However, if a Participant is still employed by the State of Florida when they turn 70½, they are not required to begin a distribution and can continue to make contributions into the Plan. Please see your tax advisor for additional information.
*The SECURE Act may impact certain employees. Please contact your Investment Provider for moreinformation.
The amount and type of risk varies from one investment to another. As with any investment, there is always the possibility that you could lose your principal unless you are invested in a Fixed Account. Some products are guaranteed against loss of principal. It is important that you understand the risks involved in your investment choices, and you may wish to consult an investment advisor to help you understand the risks involved in your investment options and your own tolerance for the various types of risk.
The Department of Financial Services analyzes the financial condition of the investments on a quarterly basis. All assets of the Plan are held in trust for the exclusive benefit of Participants and their beneficiaries. The State of Florida owns such assets and the Chief Financial Officer of Florida acts as Trustee, while the Participants and their beneficiaries hold the equitable interest. This trust fund is, by definition, not subject to the claims against and the creditors of the State of Florida.
Participants have the option to designate both Primary and Contingent beneficiaries* to receive the account balance upon death. If any Primary Beneficiaries predecease the Participant, that portion will go to any Contingent Beneficiaries. If both Primary and Contingent Beneficiaries predecease the Participant, or in the absence of any selected beneficiaries, the account becomes part of the deceased Participant’s estate. Beneficiaries may elect to receive a one-time lump sum distribution, partial distribution, or receive payments for the remainder of their life or another specified period.
*Participants can make or update beneficiary designations at any time; however, it is recommended to designate them as soon as possible, preferably at enrollment.
This website is intended to provide information about the State of Florida's Government Employees Deferred Compensation Plan. It is not intended as investment, legal, or accounting advice. If investment advice or other expert assistance is required, the services of a competent professional should be sought. For changes to your account, go to your investment provider('s) website and log in using the ID and password you created for that investment company.