(A) In lieu of terminating employment and accepting a service retirement allowance under the system, any Tier 1 member who has reached age 50 and who has completed ten years of credited service or who has completed not less than 23 years and not more than 30 years of credited service and who is eligible to receive a service retirement allowance may elect to participate in the deferred retirement option plan and defer the receipt of benefits in accordance with the provisions of this section.
(B) The election to participate in the DROP shall be exercised not later than the attainment of 30 years of credited service or such right of election shall be forfeited.
(C) The duration of participation in the DROP shall be specified and shall not exceed a number of years which, when added to the number of years of credited service, exceeds a total of 33 years. In any event, the total participation in the DROP shall not exceed eight years, and participation will end if the member is terminated for just cause.
(D) A member may participate in the DROP only once, and, after commencement in the DROP, he or she shall never have the right to be a contributing member of the system again.
(E) Upon the effective date of the commencement of participation in the DROP, membership in the system shall terminate and neither employee nor employer contributions shall be payable. For purposes of this section, compensation and credited service shall remain as they existed on the effective date of commencement of participation in the DROP, except as otherwise provided in this subchapter. The monthly retirement benefits that would have been payable, had the member elected to cease employment and receive a service retirement allowance, shall be paid into the DROP account. These deferred benefits shall earn interest as provided in division (F) below. Upon termination of employment, deferred benefits shall be payable as provided in division (H) below.
(F) Tier 1 members who entered the DROP prior to July 16, 2009, will have the option of directing some or all of their deferred benefits into an interest-bearing account with an 8% fixed rate of return. Tier 1 members who enter the DROP on or after July 16, 2009 will have the option of directing some or all of their deferred benefits into an interest-bearing account with a 6% fixed rate of return. Upon separation from employment, Tier 1 members who elect to keep their deferred benefits in the system shall retain the fixed rate of return which was applicable to their deferred benefits during their time of participation in the DROP. The administration and frequency of said option shall be determined by the Board. Any deferred benefits not directed into the fixed-rate account shall remain in a variable-rate account and shall earn interest at a rate set by the Board. Such interest shall be weighted and credited on a pro-rata basis by the Board to each individual account balance in the DROP account on an annual or other basis as determined by the Board.
(G) The DROP account shall not be subject to any fees, charges, etc., of any kind for any purpose.
(H) Upon termination of employment, a participant in the DROP shall receive, at his or her option, a lump sum payment from the DROP account equal to the payments to the DROP account, plus earned interest, or a true annuity based upon his or her account balance, or the participant may elect any other method of payment if approved by the Board. The monthly benefits that were being paid into the DROP account during the period of participation shall begin being paid to the retiree.
(I) If a participant dies during the period of participation in the DROP, a lump sum payment equal to his or her account balance shall paid to his or her beneficiary or, if none, to his or her estate; in addition, normal survivor benefits payable to the survivors of retirees shall be payable. If a participant terminates employment prior to the end of the specified period of participation, he or she shall receive, at his or her option, a lump sum payment from the DROP account equal to the payments to the DROP account, plus earned interest, or a true annuity based upon the participant's account balance, or he or she may elect any other method of payment if approved by the Board. The monthly benefits that were being paid into the DROP account during the period of participation shall begin being paid to the retiree.
(J) If employment is not terminated at the end of the period specified for participation, payments into the DROP account shall cease and no further interest shall be earned or credited to the individual account in the DROP account for the duration of employment past the end of the period specified for participation. Payment from the DROP account shall not be made until employment is terminated, nor shall the monthly benefits being paid into the DROP account during the period of participation be payable to the member until he or she terminates employment. Upon termination of employment, a member shall receive, at his or her option, a lump sum payment from the DROP account equal to the payments to the DROP account, plus interest earned by the individual account, or a true annuity based upon the member's account balance, or he or she may elect any other method of payment if approved by the Board.
(1) If a member becomes disabled after the period of participation in the DROP but while still an employee and his or her employment is terminated because of said disability, the member shall receive, at his or her option, a lump sum payment from the DROP account equal to the payments to the DROP account, plus earned interest, or a true annuity based upon his or her account balance, or the member may elect any other method of payment if approved by the Board. The monthly benefits that were being paid into the DROP account during the period of participation shall begin being paid to the retiree.
(2) If a member dies after the period of participation in the DROP but while still an employee, a lump sum payment equal to his or her account balance shall be paid to his or her beneficiary or, if none, to his or her estate; in addition, normal survivor benefits payable to survivors of retirees shall be payable.
(K) If a member of the Employees Retirement Plan transferred to this plan and subsequently participates in the DROP plan of this plan, any DROP benefit being held for the member in the Employees Retirement Plan may be transferred from the Employees Retirement Plan to this plan. The DROP benefit so transferred shall not be subject to the rate of return that is applied to other DROP accounts in this plan. Instead the net investment earnings or losses experienced by this plan shall be applied to the transferred DROP benefit.
(Ord. O-2010-30, passed 7-21-10; Am. Ord. O-2011-26, passed 9-7- 11; Am. Ord. O-2016-07, passed 5- 18-16; Am. Ord. O-2019-08, passed 3-20-19)