DROP

The Deferred Retirement Option Program, or DROP, is an option available to employees enrolled in the FRS.  This program allows employees who meet normal retirement requirements (age 62 and vested, or 30 years of service at any age) to retire and begin accumulating the monthly retirement benefits without terminating employment for up to 60 months. 

 

The monthly retirement pension remains in a holding account earning 6.5% interest compounded annually and 3% annual cost of living increases, while the employee continues to work.

 

If you wish to participate in DROP, you may make your election up to six (6) months before the date you plan to begin participation.  You must make your election within a 12-month election window that begins when you first reach your normal retirement age unless you are eligible to defer.

 

When you terminate employment or retire, the proceeds of your DROP account will be distributed to you in one of three ways; you may take a lump sum, a direct rollover, or a combined partial lump payment and rollover. 

 

 

 

Election to Defer

An employee who has completed 30 years of service before reaching age 57 may elect to defer.  The employee may then decide to begin their DROP participation at any point from the time in which they completed 30 years of service and when they reach the age of 57.  Special FRS members who have completed 25 years of service in a special risk category may elect to defer before age 52.

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