Statewide Retirement Plan: Hybrid Defined Benefit & Money Purchase Components
The Hybrid Defined Benefit and Money Purchase Components offer the retirement flexibility of both monthly, lifetime income and a lump-sum, self-directed investment account.
One Retirement, Multiple Income Streams
While enrolled, Members and their Employer make monthly payroll contributions into the larger Statewide Retirement Plan. A portion of those contributions is used to fund the Member's monthly lifetime benefit, and the rest is deposited into a self-directed investment account. Then in retirement, Members receive both a monthly benefit for life and a lump-sum investment account they can use for vacations, unexpected expenses, or whatever else life has in store.
Invest How You Want
The Money Purchase Component a self-directed investment account. Members of this Component use the tools at FPPA's recordkeeper, Fidelity Investments, to manage account balances, make investment decisions, and assign beneficiaries for their account. Members have access to a wide range of investment options, whether you are a do it yourself or a do it for me type of investor.
Retirement Eligibility
In the Hybrid Defined Benefit Component, Members are eligible for Normal Retirement once they reach 55 years of age and 25 years of service, or earlier if they meet the Rule of 80 (minimum age 50). Other options include Early Retirement (minimum five years of service, age 50) or Vested Retirement (minimum five years of service, age 55).
Money Purchase Component funds can be withdrawn when Members:
- Stop working at their department
- Become disabled
- Reach their Required Minimum Distribution age (per IRS regulations)
- Pass away, with payments then going to their beneficiary
In the Hybrid Defined Benefit Component, Members earn a 1.5% benefit per year of service. The easiest way to see your future pension benefit is to use the calculators in the Member Account Portal. Alternatively, see the charts in the Component brochure to calculate your defined benefit using your age and years of service at retirement.
To project future account balances in the Money Purchase Component, check out the tools in Fidelity's NetBenefits portal.
Every retirement is different, and the Hybrid Defined Benefit Component offers a number of features to help reach your individual goals:
- Deferred Retirement: Members who don't need their pension income right away can defer their benefit in exchange for larger payments later in life
- DROP: Members who want the flexibility of a lump sum cash account can use the Deferred Retirement Option Plan (DROP) to build a financial reserve during their final working years
- Payment Options: Members can choose to extend their pension benefit to a second lifetime for a spouse, child, or other individual
The Money Purchase Component also contains a number of tools to help Members get the most from their retirement, including:
- Monthly lifetime benefit conversion: Members can convert all or a portion of their account balance to a lifetime benefit in the Statewide Retirement Plan. Members can also complete the same conversion through an outside annuity provider
- Periodic Payments: Members may choose to receive payments over a specific timeframe or receive a certain dollar amount per payment until the account is exhausted
- Lump Sum: Members may take a lump sum withdrawal for any or all of their account funds
