What Is the 2nd Election?
The 2nd Election is your one-time opportunity to change retirement plans during your active FRS career. Make an informed decision with free, unbiased help from the FRS. (See "Questions? Speak With a Financial Planner.") Please do not let an outside salesperson talk you into using your 2nd Election.
  • You must be actively employed, earning salary and service credit, in an FRS-covered position at the time your 2nd Election is received by the FRS Plan Choice Administrator. For example, if your last day of work in an FRS-covered position is March 1 (whether you terminated voluntarily or were forced to terminate FRS-covered employment), your 2nd Election must be received by the FRS Plan Choice Administrator prior to 4:00 p.m. ET on March 1. If you are on an unpaid leave of absence or if you are an employee of an educational institution on a summer break, you cannot use your 2nd Election until you return to work.
  • If you are currently enrolled in the Investment Plan or the Hybrid Option, there could be an out-of-pocket cost to you to change to the Pension Plan.
  • After you make a 2nd Election, that decision is final and you cannot change retirement plans again during your FRS career.1
  • Once your 2nd Election is finalized, you must remain in the plan you changed to until your FRS-covered employment ends and you retire.2

1 If it is subsequently determined that you were not eligible to make a 2nd Election, your election will be considered invalid and will be reversed.

2 Your decision is final unless, on or before 4:00 p.m. ET on the last business day of the election effective month, you notify the MyFRS Financial Guidance Line that you wish to cancel your election.

How the 2nd Election works when you change from the Pension Plan to the Investment Plan. The present value of your Pension Plan benefit will become your opening account balance in the Investment Plan. The present value calculation is an actuarial determination of your service credit and is not a total of your employee and employer contributions paid to the Pension Plan. Your present value calculation is not broken out into employee or employer contributions.

This transfer amount will be "locked in" the 1st of the month following the day your 2nd Election request form is received or your online request is confirmed by the FRS Plan Choice Administrator.

Your starting Investment Plan balance will indicate zero employee and employer contributions. As new contributions are deposited in your account, they will be designated as employee and employer contributions.

How it affects vesting. Your opening Investment Plan account balance will vest (become yours) once you have a total of 8 years of combined service credit under both FRS plans.1,2 If your employment ends and you take any distribution from the Investment Plan before you complete 8 years of service, you could forfeit the amount you transferred from the Pension Plan. Money contributed to your Investment Plan account after your transfer will vest once you've completed 1 year of combined FRS-covered employment. If you already completed 1 year of service before completing the 2nd Election, your new Investment Plan contributions will be 100% vested.

What you need to do when you make your 2nd Election. When you change to the Investment Plan, you will need to select among the available investment funds. If you don't choose any funds, a Retirement Date Fund will be chosen for you based on your current age and membership class. Before selecting any investment funds or making an election, review the fund profiles, the Investment Fund Summary, and the Annual Fee Disclosure Statement posted in the "Investment Funds" section on MyFRS.com.

1 If you were first hired before July 1, 2011, you will vest in the Pension Plan after you have 6 years of FRS-covered service.

2 You are always fully vested in your own contributions, as long as you remain enrolled in your current plan. How your employee contributions are distributed or refunded to you depends on a number of factors, especially if you use your 2nd Election to change plans. Call the MyFRS Financial Guidance Line for more information.

How the 2nd Election works when you change from the Investment Plan to the Pension Plan. To change to the Pension Plan, you have to "buy in" using your Investment Plan balance and possibly your own money from another source (which can include funds rolled over from another qualified retirement plan). Your buy-in cost is calculated as of the 1st of the month following the day your 2nd Election request form is received by the FRS Plan Choice Administrator. If you have previous Pension Plan service, the buy-in cost is a present-value calculation using all your FRS-covered service. This is called a return accumulated benefit obligation, or return ABO. If you do not have previous Pension Plan service, the buy-in cost is the total cost to provide a Pension Plan benefit up to the time of your buy-in. This is called an actuarial accrued liability. The buy-in cost increases monthly.

  • If your Investment Plan balance doesn't cover your buy-in cost, you will receive a notification letter stating the amount you owe. Your payment will be due within 60 days.
  • If your Investment Plan balance is greater than your buy-in cost, the surplus will remain in the Investment Plan. You will continue to manage your Investment Plan account as you did before, but this money will not be available to you until you retire and begin receiving your Pension Plan benefit.

How it affects vesting. You will be vested in the Pension Plan upon completing 8 years of service.1,2 The years of service you completed while in the Investment Plan will count toward this vesting requirement.

What you need to do after you make your 2nd Election.

  • If your Investment Plan balance doesn't cover your buy-in cost, you will receive a notification letter stating the amount you owe. You will need to make the payment within 60 days to complete your 2nd Election.
  • If your Investment Plan balance is greater than your buy-in cost, the surplus will remain in the Investment Plan. You will continue to manage your Investment Plan account as you did before, but this money will not be available to you until you retire and begin receiving your Pension Plan benefit.

1 If you were first hired before July 1, 2011, you will vest in the Pension Plan after you have 6 years of FRS-covered service.

2 You are always fully vested in your own contributions, as long as you remain enrolled in your current plan. How your employee contributions are distributed or refunded to you depends on a number of factors, especially if you use your 2nd Election to change plans. Call the MyFRS Financial Guidance Line for more information.

Is a 2nd Election right for you? This document explains the 2nd Election in detail.

Side-by-side plan comparison chart. View this chart for a side-by-side comparison of the Investment Plan and the Pension Plan.

Making an uninformed decision can have long-term financial implications. Call the MyFRS Financial Guidance Line at 1-866-446-9377, Option 2 (TRS 711) to speak with an experienced, unbiased financial planner. Planners can answer your questions about your retirement goals and choosing an FRS retirement plan, and there is no cost to you.

Select Compare to use the 2nd Election Choice Service tool and get a personalized estimate of your benefit under each plan.

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