Can a Person Borrow Money From Her Own FRS Investment Plan?

The FRS investment plan does not provide for cost-of-living adjustments after retirement.

The FRS investment plan does not provide for cost-of-living adjustments after retirement.

The Florida Retirement System, or FRS, is the state-operated retirement plan for all state employees, including those at public universities. The FRS offers a pension plan that provides a monthly retirement benefit based upon a number of factors, including years of service and average compensation for the five highest years of a person's salary. The FRS also offers an investment plan that allows employees to contribute to a fund that earns interest to build a nest egg for retirement. Benefits from the investment plan are only available at retirement or due to loss of employment, and employees may not borrow money from their own FRS investment plans.

FRS Investment Options

A Florida state employee who is eligible for the FRS investment plan can contribute a percentage of her salary into the investment plan. Depending on the employer or department, all or a portion of her contribution may be matched by the employer. Employee contributions are completely vested after the employee has been in the system for a year. Employees who leave the job before that year is up may forfeit some or all of the matching employer contributions.

Benefits at Retirement

Employees in the FRS investment plan are eligible to retire and begin drawing on their plans at age 59 1/2. Benefits can be paid in a lump sum or by periodic withdrawals, either on demand or in scheduled increments. If the employee retires and begins taking distribution before age 59 1/2, she may incur tax penalties for early distribution. Additionally, some or all of the funds within the account may be used to purchase an approved annuity to provide for regular retirement income.

Rolling Over

Employees who leave the job before age 59 1/2, or those who choose to accept a lump sum benefit, have the option to roll over the distribution into an individual retirement account, or IRA, or to another employer sponsored plan such as a 401(k). Once an FRS member rolls over her account, she is no longer eligible for the FRS if she returns to employment with the state of Florida.


The FRS investment plan allows employees to list one or more beneficiaries on their account. In the event that an employee were to die before distribution of the funds in the account, her listed beneficiaries would receive the distribution in a lump sum. If no beneficiaries are listed, the employee's spouse would legally be the first beneficiary, but if she doesn't have a living spouse at the time of her passing, the investment plan would need to pass through probate with the rest of her estate.


About the Author

Chris Baylor has been writing about various topics, focusing primarily on woodworking, since 2006. You can see his work in publications such as "Consumer's Digest," where he wrote the 2009 Best Buys for Power Tools and the 2013 Best Buys for Pressure Washers.

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