DROP (Deferred Retirement Option Program)
What is this service?
DROP is an optional, voluntary program that allows you to have your retirement benefits deposited in a special investment account and cease making contributions to the Pension Trust while you continue to work in your current position. This alternative retirement program is only available for Tier 1 members.
Tier 1 Members can participate in DROP only one time and for a maximum of five years. Retirement benefits are determined as of the date a Tier 1 Member enters DROP. A DROP account is set up for each participant with a third party administrator. DROP retirement funds cannot be withdrawn until retirement from County service and there are no provisions for emergency or hardship withdrawals under DROP.
To be eligible to participate in DROP, you must be 1) eligible for a service retirement under the Pension Trust and 2) you must be at least age 50, and 3) you must have a minimum of 5 years service credit. You must also be currently employed in one of the following County Bargaining Units:
- Miscellaneous Members: 01, 02, 04, 05, 07, 08, 09, 10, 11, 12, 13, 14, 17, 21 or 22
- Safety Members: 03, 07, 10, 14, 15 or 16
- Probation Officer Members: 07, 08 or 09
To learn more about the DROP please contact our office or refer to Article 26 of the Retirement Plan.
Frequently Asked Questions
DROP, or the Deferred Retirement Option Program, is a means by which Tier 1 Members may retire from the Pension Trust and have their benefit paid into a DROP account established in their name.
What is my status as County Employee during my participation in DROP?
During your participation in DROP, you continue as an employee of the County with all the rights and benefits associated with such employment EXCEPT you no longer are an active Member of the Pension Trust.
What is my status in the Pension Trust once I enter into a DROP Agreement?
You will become a DROP participant.
What is my status after my DROP participation ends?
Upon conclusion of your DROP participation and termination from County employment, you become a Retired Participant.
What happens to my Employee Additional Contributions?
At the time you enter DROP, you will make an election regarding the distribution of your Additional Contribution Account.
What is the procedure to apply for DROP?
To apply for DROP you will need to complete the following:
1. Application for the Deferred Retirement Option Program (DROP)
2. Pension Trust Service Retirement Application
3. Participant Enrollment 401(a) Application for DROP Account.
These documents should be submitted to the Pension Trust Office no later than the 3rd Friday PRIOR to that month’s Board Meeting to guarantee inclusion on that month’s Board of Trustees agenda.
What other documents will I need to provide?
You will need to provide certified copies of (or the originals) of the following:
1. Your Birth Certificate
2. Your Spouse’s or, if not married, your Beneficiary’s Birth Certificate
3. Marriage Certification (with spouse's maiden name as applicable) to tie back to the birth certificate (we will not keep these documents but we do need to review them to verify age and eligibility)
4. If you become divorced during your County employment or membership in the Pension Trust, please provide copies of the complete Final Judgment including your full settlement.
5. A copy of your most recent estimate from Social Security showing your estimated benefit at age 62.
What if I want to take back my DROP election?
You can do so any time prior to the Board approval of your application to participate in DROP by submitting a written letter of revocation to the Pension Trust Board of Trustees. But, if you do not revoke your election, you are thereafter bound by that election.
What happens if I marry while I’m in DROP?
The marriage will be deemed to be a marriage occurring after retirement.
What happens if I get a divorce or become legally separated while I'm in DROP?
The amount in your DROP account may be community property. Your former spouse may claim that the DROP account should be divided along with your other community property. We cannot advise you on this. You should instead seek the advice of a qualified family law specialist.
What happens if I'm promoted while in DROP?
The amount of your retirement benefit, both the amount credited to your DROP account and the amount you eventually receive as a monthly retirement allowance, will not reflect your promotion. So, if you think a promotion for you is likely, you may want to consider the financial impact of delaying your entry into DROP until after your promotion.
What happens if I'm demoted while in DROP?
The amount of your retirement benefit, both the amount credited to your DROP account and the amount you eventually receive as a monthly retirement allowance, will not be reduced by any reduction in your pay that accompanies the demotion.
What happens if I'm disabled, whether for industrial or non-industrial reasons, while I'm in DROP?
Board approval of a disability retirement automatically terminates your participation in DROP. The amount of your monthly disability retirement benefit will be the monthly amount then being credited to your DROP account. You will also have to elect a distribution option for your DROP account.
What happens if I die while in DROP?
For purposes of your DROP account, you will be treated as if you had died after retirement. Your DROP beneficiary will be able to select from several DROP distribution options. If you were married when you entered DROP and you remained married your surviving spouse will be eligible for post-retirement benefits, provided all of the conditions for those benefits are met.
When do I choose a beneficiary for my DROP account?
This is very important. You must choose a beneficiary for your DROP account when you enter DROP. BUT PLEASE REMEMBER that circumstances change. You may get a divorce or marry; a loved one may pass away. So you should from time to time make sure that the person named as your DROP beneficiary is the person you want named. This is a frequently overlooked issue, and overlooking it may have some very unfortunate consequences for you and yours.
Will I pay contributions into the retirement system while I'm in DROP?
No, your contributions will cease upon your entry into DROP.
Will I be able to take a loan from my DROP account?
No, you cannot take a loan from your DROP account.
When I terminate participation in DROP, do I have to retire at that time?
Yes. When you terminate participation from DROP, you must also retire from County employment.
Will the amounts in my DROP account receive any cost-of-living adjustments?
While in DROP, you will receive the same adjustments as any similarly situated retiree.
What is the effective date of my DROP participation?
You are not in DROP until the first of the month following the date the Board approves your fully completed DROP application.
While in DROP, will I receive credit for retirement benefit calculation purposes for the time in DROP? What happens to my accumulated contributions?
Service credits are determined as of the time you enter DROP and no additional credit will be given for any time while you are in DROP. Once you enter DROP, you are no longer entitled, in the event you terminate county service, to withdraw your accumulated contributions; instead you are only entitled to receive your monthly retirement allowance and the balance in your DROP account. If you select Option 1 when you enter DROP, the annuity portion of the monthly payment into your DROP account will be credited against your accumulated contributions for Option 1 purposes. Interest during this period will not be added to your accumulated contributions.
Will DROP prevent me from establishing reciprocity with a prior agency?
No, you may establish reciprocity with a prior agency. However, you must do so before you become a DROP participant. Your final average salary at the time you enter DROP will be provided to the prior agency.
What are my options when I leave DROP?
At the time you leave DROP, you will have to choose between (1) a lump sum payment of the balance in your DROP account, (2) monthly installment payments, or (3) a rollover to an IRA or to another employer’s qualified retirement plan or some combination of these three options. When you are nearing the end of your DROP participation period, we strongly suggest that you contact a Retirement Program Specialist at the pension trust office for further information on the payout options available and that you take this information to your personal financial advisor. There may be significant income tax ramifications to your choice. It is important to make your choice with care.
Will DROP prevent me from establishing reciprocity with a future agency?
Yes, because you must retire when you leave DROP, you will not be able to go to another agency and establish reciprocity for the future.
What is my effective date of retirement for purposes of reciprocity?
Upon termination of your DROP participation.
As a DROP participant, what final compensation will be used for purposes of Reciprocity?
The same Final Compensation used to calculate the amount of your DROP allowance at the beginning of your DROP participation will be used (and reported to reciprocal agencies) for purposes of Reciprocity.