FRS Pension Plan members choose one of four pension payout options on Form FRS 11o before receiving the first monthly payment. The election becomes permanent once a payment is cashed or deposited, or when DROP participation begins. This guide isn’t tax, legal, or investment advice and doesn’t replace a conversation with a Florida-licensed planner.
This election is different from choosing between the Pension Plan and Investment Plan. Our FRS Pension Plan and Investment Plan comparison explains that earlier decision.
The payout election determines what the Pension Plan pays during retirement. It also determines whether payments may continue after the member dies.
What are the four FRS pension payout options?
The four FRS pension payout options distribute one lifetime benefit differently. Options 1 and 2 cover the member’s lifetime. Options 3 and 4 also provide continuing payments for a qualifying joint annuitant.
| Option | Payment during the member’s lifetime | What happens after death |
|---|---|---|
| Option 1 | Pays the maximum retirement benefit during the member’s lifetime | Monthly payments stop. A beneficiary receives only member contributions exceeding benefits already paid, if any. |
| Option 2 | Pays a decreased lifetime benefit | If the member dies during the 10-year guarantee period, the beneficiary receives the same monthly amount for the remaining period. |
| Option 3 | Pays a decreased benefit during both joint lifetimes | The same monthly amount continues for whichever person survives. |
| Option 4 | Pays a decreased benefit during both joint lifetimes | The survivor receives 66 2/3 percent of the amount paid while both people lived. |
Florida Statute 121.091(6) calls Option 1 the “maximum retirement benefit payable to the member during his or her lifetime.” The other three options are actuarially equivalent to Option 1.
That doesn’t mean their monthly payments are equal. The Division of Retirement applies actuarial tables when calculating them. The statute says the factor for Options 3 and 4 is based on the age of the member and the joint annuitant, so two households with the same pension can see different numbers.
When do pension payout options become permanent?
The election becomes permanent when a payment is cashed or deposited. Starting DROP also locks the option, according to the FRS Employer Handbook.
The handbook states:
“Once a benefit payment has been cashed or deposited, or the member begins participation in the DROP, the option selection cannot be changed.”
Members make the election on the Option Selection for FRS Members Form, FRS 11o. Retirement benefits can’t be paid until an option has been selected.
A member approaching DROP should review all four choices beforehand. Starting DROP activates the lock even before DROP participation ends. Our Pasco County FRS DROP guide covers that program separately.
How does Option 1 handle survivor benefits?
Option 1 stops monthly pension payments when the member dies. It doesn’t provide continuing monthly income for a beneficiary.
The beneficiary may receive a refund of member contributions exceeding benefits already received. That is not a lump-sum payment of the remaining pension value.
Option 1 provides the highest monthly amount during the member’s lifetime. The tradeoff is the absence of a continuing survivor payment.
A household can review that tradeoff alongside other income sources. Those may include supplemental accounts and separate survivor benefits. That is the work planners do under retirement income planning, and Pasco public employees can also review their 403(b) and 457(b) plan choices independently.
How does Option 2 work during DROP?
Option 2 provides a 10-year guarantee beginning at retirement. For DROP members, its 120 payments begin when DROP participation starts.
They don’t begin when DROP ends. The FRS handbook states:
“For members in DROP, the 120 payments begin on the first day of DROP participation, not after DROP ends.”
If the member dies inside that period, the named beneficiary collects what’s left of it. The beneficiary receives the same monthly amount for the balance of the period.
This timing can materially change how Option 2 fits a DROP decision. Time spent participating in DROP also uses part of the guarantee period.
Option 2 isn’t a lifetime survivor option. Its beneficiary protection ends when the 120-payment period ends.
How do Options 3 and 4 protect a survivor?
Options 3 and 4 continue payments after either person dies. They require the member to name a qualifying joint annuitant.
Option 3 continues the same monthly amount for the survivor. The statute makes this treatment symmetric. The payment continues whether the member or joint annuitant dies first.
Option 4 changes the payment after the first death. The survivor then receives 66 2/3 percent of the amount previously paid.
Option 4 is the only choice that automatically reduces after either death. This matters when two married FRS members both select Option 4. The handbook says both pensions reduce when either spouse dies.
Households comparing survivor income can review other programs separately. Our Social Security survivor benefits guide addresses another part of that discussion, and Social Security planning is where a planner coordinates the two.
Who qualifies as a joint annuitant?
A joint annuitant must fall within the handbook’s complete eligibility list. A member can’t simply name any preferred beneficiary.
A qualifying joint annuitant may be:
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The member’s spouse.
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The member’s natural or adopted child under age 25.
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The member’s natural or adopted child who is physically or mentally disabled and incapable of self-support, regardless of age.
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A person other than the spouse who is under age 25 and under the member’s legal guardianship, and who depends on the member for at least one-half of their support.
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The member’s parent or grandparent who depends on the member for at least one-half of their support.
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A person age 25 or older who is under the member’s legal guardianship and depends on the member for at least one-half of their support.
The dependency test is measured at retirement or at the time of the member’s death, whichever comes first.
Naming a spouse requires a copy of the marriage certificate. The member submits it with the retirement application.
A non-spouse who isn’t a child under 25 requires dependency documentation. The handbook includes a certified copy of the member’s latest signed and filed federal income tax return.
A non-spouse joint annuitant under 25 receives the member’s Option 1 amount. Payments stop at age 25 unless that person is disabled and incapable of self-support.
Does a spouse have to approve Option 1 or 2?
No, the statute requires acknowledgment rather than spousal consent. A spouse doesn’t receive veto authority over the election.
A married member choosing Option 1 or Option 2 must notify the spouse. The spouse acknowledges the election using Spousal Acknowledgment Form SA-1.
That acknowledgment confirms notice of the member’s selection. It doesn’t convert the election into a joint decision under the statute.
This distinction matters because Options 1 and 2 don’t provide lifetime joint payments. Spouses should understand what ends at death before the member’s election becomes permanent.
Can a member change the joint annuitant later?
A retired member may change a joint annuitant only twice. This applies after benefits begin under Option 3 or Option 4.
The change requires a notarized change-of-joint-annuitant form. The member must also notify the former joint annuitant in writing.
The statute is specific about whose consent matters. It says the consent of a retired member’s first designated joint annuitant isn’t required for any such change. The benefit is then actuarially readjusted, effective the first day of the month after the division receives the completed form.
Changing the person doesn’t change the selected pension option. A member already receiving Option 3 can’t switch to Option 1. The permanent option election and limited joint-annuitant changes are separate rules.
Divorce also doesn’t automatically resolve every FRS beneficiary issue. The site’s Florida beneficiary designation guide explains why Chapter 121 plans require separate attention.
What does the Division of Retirement say about pension maximization?
The Division of Retirement warns members about private alternatives marketed as “pension maximization” or “fifth option” plans. These arrangements pair Option 1 with private insurance or an annuity intended to protect another person.
The division gives this warning in the FRS Employer Handbook:
“The division has reservations about insurance and annuity programs marketed as an alternative to a continuing retirement benefit under the FRS.”
It adds that the division doesn’t support or endorse these programs. Its stated concern is that they may encourage choices contrary to a surviving spouse’s best financial interests.
The division also warns that some companies imply an FRS association. Some agents may claim the division supplied members’ names and addresses.
Those claims deserve direct verification before signing anything. Members can use our guide to check a financial planner through BrokerCheck and IAPD, and fiduciary advisor matching is built around that check rather than around a product sale.
How can a household compare the four options?
A useful comparison starts with who needs income after either death. It should also separate permanent pension terms from changeable household assumptions.
| Decision point | What to verify |
|---|---|
| Election timing | Whether the first payment or DROP participation will lock the choice |
| Member-only income | Whether Option 1’s payment structure fits the household |
| Limited guarantee | How much of Option 2’s 120-payment period remains after DROP |
| Lifetime survivor income | Whether Option 3 or Option 4 matches the intended survivor structure |
| Joint annuitant eligibility | Whether the intended person meets the complete FRS definition |
| Documentation | Whether marriage or dependency records are ready |
| Private alternatives | Whether marketing claims can be confirmed independently |
The pension election shouldn’t be confused with account beneficiary forms. It also shouldn’t be treated as the same decision as choosing an FRS plan.
A planner can compare the available options against the household’s records. That review should happen before the handbook’s permanent-election trigger.
Frequently asked questions
When must an FRS member select a pension option?
The member selects an option before receiving the first monthly payment. Retirement benefits can’t be paid until Form FRS 11o records that selection.
The option becomes permanent once a payment is cashed or deposited. Beginning DROP also makes the election permanent.
Does Option 2 restart when DROP ends?
No, Option 2’s 120-payment guarantee doesn’t restart after DROP. Its payments begin on the first day of DROP participation.
Time spent in DROP uses part of the guarantee period. Only the remaining payments continue afterward.
Can a spouse block an Option 1 election?
No, the statute doesn’t give the spouse veto authority. It requires notification and acknowledgment for Option 1 or Option 2.
The spouse completes Form SA-1 to acknowledge the election. Acknowledgment isn’t the same as consent.
Does Option 1 leave the pension balance to a beneficiary?
No, Option 1 doesn’t leave a continuing pension balance. Monthly benefits stop when the member dies.
A beneficiary receives only member contributions exceeding benefits already paid, if any. That refund isn’t a lump sum of future pension payments.
Can an Option 3 member switch to Option 4 later?
No, the selected payout option can’t change after the permanent-election trigger. A member may change the named joint annuitant only twice.
That limited change doesn’t reopen the pension option itself. The recalculated benefit remains under the option already selected.
Why does Option 4 affect two married FRS members?
Option 4 reduces the survivor’s payment after either person dies. The handbook applies that rule even when both spouses receive FRS pensions.
When both select Option 4, both benefits reduce after the first death. Each member should account for that interaction before making the election.
Compare your FRS pension payout options
Wesley Chapel Wealth Pro matches Pasco County households with independent licensed planners. Matching is free, and we don’t give financial advice ourselves.
A planner in the network can help organize the Option 1 through 4 comparison. That review can also account for DROP timing and survivor needs.
Call (813) 680-3195 to request a match. Households near USF can also review financial planning options in Temple Terrace.