The Chief Administrative Officer must establish Deferred Retirement Option Plans, or DROP plans, that allow any employee who is a member of a specified membership group or bargaining unit and who meets the eligibility requirements to elect to retire but continue to work. Pension payments must not be paid to the member while the member participates in the DROP Plan. When the member's participation in the DROP Plan ends, the member must stop working for the County, draw a pension benefit based on the member's credited service and earnings as of the date that the member began to participate in the DROP Plan, and receive the value of the DROP Plan payoff.
(a) DROP Plan for Group F members. "Discontinued Retirement Service Program" or "DRSP" means the DROP program for Group F members.
(1) Eligibility. A Group F member who has reached their normal retirement date may participate in the DRSP.
(2) Application requirements. An eligible employee must apply at least 60 days before the employee becomes a participant. An employee may withdraw a pending application within 2 weeks after submitting the application.
(3) Employee participation and termination. The employee's participation in the DRSP must begin on the first day of a month that begins at least 60 days, but not more than 90 days, after the employee applied and must end 3 years after the employee begins to participate or at an earlier date chosen by the employee. When the employee's participation in the program ends, the employee must stop working for the County and receive a pension benefit.
(4) Employment status. An employee who participates in the program must continue to be a member of the retirement system, earn sick and annual leave, and remain eligible to participate in health and life insurance programs.
(5) Retirement date, retirement contributions, and credited service. The retirement date of an employee who participates in the program is the date when the employee begins to participate in the DRSP, and neither the employee nor the County will make retirement contributions after that date. An employee who wishes to purchase prior service must do so before the employee's participation in the program begins. Sick leave in excess of 80 hours will be credited towards retirement at the beginning of the employee's participation.
(6) Pension benefits.
(A) Before an employee's participation begins, the employee must select a:
(i) pension payment option under Section 33-44 for the regular retirement pension payments; and
(ii) pension payment distribution option for the distribution of the employee's DRSP account.
(B) A pension benefit must not be paid to the employee while the employee participates in the program, but must be deposited in a DRSP account established for the participant by the County. The participant must receive the account balance and the County must close the account within 60 days after the employee stops participating in the program. Subject to any requirements of the Internal Revenue Code and other applicable law, the employee may roll over the account balance into an eligible retirement plan.
(C) An employee must direct the Board of Investment Trustees to allocate contributions to the employee's DRSP account to be invested in one or more of the investment funds selected by the Board. The investment fund options selected by the Board must conform to all applicable requirements of the Internal Revenue Code. An employee must allocate contributions among the investment funds in percentages of the value of the employee's DRSP account balances. An employee's direction of investment must remain in effect until the employee changes the direction. If an employee does not provide a valid direction of investment, the Board must select an appropriate investment option and invest the DRSP account balances not governed by a valid direction of investment in the investment option.
(D) After the employee's participation in the program ends, the employee's pension benefit will be based on:
(i) the employee's credited service immediately prior to the beginning of the employee's participation in the program, adjusted to include credit for unused sick leave under Section 33-41;
(ii) the employee's average final earnings, excluding earnings during the period of participation in the program; and
(iii) increases in the Consumer Price Index for All Urban Consumers (CPI-U) for the Washington-Arlington-Alexandria Core Based Statistical Area (CBSA), as published by the United States Department of Labor, Bureau of Labor Statistics, during the period of the employee’s participation that would have resulted in an increase in the employee’s pension benefit if the employee had not been participating in the program.
(7) Disability retirement. An employee may apply for disability retirement prior to the termination of the employee’s participation in the program.
(A) A DRSP participant who is eligible for a service-connected disability retirement must choose either:
(i) the retirement benefit under the DRSP and the DRSP account balance; or
(ii) the service-connected disability retirement benefit that the employee would have received if the employee had continued as an active employee and had not elected to participate in the DRSP, and no DRSP account balance.
(B) A DRSP participant who is eligible for a non-service-connected disability retirement benefit must receive the non-service-connected disability retirement benefit under Section 33-43(h), with the benefit calculated as of the member’s DRSP exit date, plus the DRSP account balance.
(C) If a DRSP participant ends participation in the program before a final decision is made on the disability retirement application, the DRSP account must not be distributed until a final decision is made.
(8) Death benefit. If an employee dies during the employee’s participation in the program, the employee’s beneficiary will receive:
(A) the death benefit that the beneficiary would have received if the employee had retired on the date on which the employee began to participate in the program, adjusted under subsection (6)(D); and
(B) the balance of the employee’s DRSP account.
(9) DRSP account distribution options. A member may have the balance of the DRSP account distributed as a lump sum or an annuity, or have some or all paid directly to an eligible retirement plan as a direct rollover distribution. To the extent feasible, as determined by the Chief Administrative Officer, a member alternatively may receive the account balance as periodic payments calculated and distributed as an addition to the member’s regular retirement benefit. If the member dies before the balance of the DRSP account is distributed, the beneficiary may receive distribution of the balance under any option described in this paragraph.
(b) DROP Plan for Group G members.
(1) Eligibility. An employee who is a member of Group G and who has met the minimum requirements for a normal retirement may participate in the DROP Plan.
(2) Application requirements. An eligible employee must apply at least 45 days before the employee becomes a participant. An employee may withdraw a pending application within 2 weeks after submitting the application.
(3) Employee participation and termination.
(A) The employee’s participation in the DROP Plan must begin on the first day of a month that begins at least 45 days, but not more than 75 days, after the employee applied.
(B) A Group G member may participate in the DROP Plan for up to 36 months. An employee who elects to stop participating before the end of the 36-month period must notify Fire and Rescue Services and the Office of Human Resources at least 60 days before stopping participation in the program.
(C) When the employee’s participation in the DROP Plan ends, the employee must stop working for the County and receive a pension benefit.
(4) Employment status. A DROP Plan participant must continue to be a member of the retirement system, earn sick and annual leave, and remain eligible to participate in health and life insurance programs for employees while the member participates in the DROP Plan.
(5) Retirement date, retirement contributions, and credited service.
(A) The retirement date of a member who participates in the DROP Plan is the date when the employee begins to participate in the DROP Plan.
(B) The member will continue to make retirement contributions to the Optional Plan or Integrated Plan while participating in the DROP Plan. The County must not make retirement contributions on behalf of the member after the date on which the member’s DROP Plan participation begins.
(C) Sick leave credited towards retirement at the beginning of the member’s participation will not be available for the member’s use after participation in the DROP Plan begins.
(D) A member who wishes to purchase prior service must do so before the member’s participation in the DROP Plan begins.
(6) Pension benefits.
(A) Before a member’s participation begins, the member irrevocably must choose a pension payment option under Section 33-44 for retirement pension payments.
(B) Pension benefits will not be paid to the member while the member participates in the DROP Plan. Pension payments that are deferred while the member participates in the DROP Plan must not include cost- of-living increases under Section 33-44 that were given to retirees and beneficiaries during the period of the member’s participation in the DROP Plan. The participant will receive the deferred pension payments when the member’s participation in the DROP Plan ends, or within 60 days after the member gives notice under paragraph (3)(B), whichever is later.
(C) After the member’s participation ends, the member’s pension benefit will be based on the member’s:
(i) credited service, including credit for unused sick leave, before the member’s participation in the DROP Plan began, adjusted to include credit for unused sick leave accrued during the period of DROP Plan participation; and
(ii) average final earnings, excluding earnings during the period of participation in the DROP Plan.
(D) The pension benefit that a member receives after the member’s participation in the DROP Plan ends must be adjusted to reflect cost-of- living adjustments under Section 33-44(c) that occurred during the period of the member’s participation in the DROP Plan, but the pension payments that are deferred during the participation period must not include cost-of-living adjustments.
(7) Disability retirement.
(A) A member may apply for disability retirement prior to the termination of the member’s participation in the DROP Plan.
(B) If the Chief Administrative Officer determines that a DROP participant is eligible for a service-connected disability retirement, the participant must elect to receive either:
(i) the retirement benefit under subsection (6)(C) and the DROP Plan payoff; or
(ii) the service-connected disability retirement benefit that the member would have received if the member had continued as an active employee and not elected to participate in the DROP Plan.
(C) A member who elects to receive a service-connected disability retirement must not receive the DROP Plan payoff.
(D) If the Chief Administrative Officer determines that a DROP participant is eligible for a non-service connected disability retirement, the participant must receive:
(i) the non-service connected disability retirement benefit provided under Section 33-43(h), with the benefit calculated as of the member’s DROP entry date; and
(ii) the DROP account balance.
(E) If a DROP participant ends participation in the program before a final decision is made on the disability retirement application, the DROP account must not be distributed until a final decision is made.
(8) Death benefit. If a member dies during the member’s participation in the DROP Plan, the member’s beneficiary will receive the greater of:
(A) the death benefit that the beneficiary would have received if the member had retired on the date on which the member began to participate in the DROP Plan, calculated to reflect cost-of-living adjustments under Section 33-44(c) that occurred during the period of DROP Plan participation, and the value of the DROP Plan payoff, not including retroactive cost-of-living adjustments to the deferred pension payments; or
(B) the service-connected death benefit that the beneficiary would have received if the member had not elected to participate in the DROP Plan, but not the DROP Plan payoff.
(9) DROP Plan payoff and distribution.
(A) DROP Plan payoff. The DROP Plan payoff must include the total of the following, accumulated over the period of the member’s participation in the DROP Plan:
(i) the member’s deferred monthly pension payments, not including any cost-of-living adjustments;
(ii) the member’s retirement contributions to the Optional Plan or Integrated Plan treated as picked-up contributions; and
(iii) for a member beginning DROP Plan participation before July 1, 2013, 8.25 percent annual interest rate credited monthly, compounded quarterly on the amount in the DROP Plan payoff during the member’s participation in the DROP Plan. For a member beginning DROP Plan participation on or after July 1, 2013, 7.5 percent annual interest credited monthly, compounded quarterly on the amount in the DROP Plan payoff during the member’s participation in the DROP plan.
(B) DROP Plan payoff distribution options. At the time that a member’s DROP Plan participation ends, the member must elect to have the DROP Plan payoff:
(i) distributed as a:
(a) lump sum payment;
(b) annuity; or
(c) direct rollover distribution, in compliance with the Internal Revenue Code, to an eligible retirement plan; or
(ii) remain in the retirement system in a DROP Plan Payoff Account and receive interest at a 4.0 percent annual rate, credited monthly, for the period of time during which the DROP Plan Payoff Account remains in the retirement system.
(C) Distribution of DROP Plan Payoff Account.
(i) A former member may elect to receive a distribution of the DROP Plan Payoff Account in a single lump sum payment or a single direct rollover distribution to an eligible retirement plan at any time, but must receive a distribution by the date required under Internal Revenue Code Section 401(a)(9)k, as amended, and the corresponding regulations.
(ii) The Chief Administrative Officer must pay the balance of the DROP Plan Payoff Account to a designated beneficiary of a former member who dies without receiving the DROP Plan Payoff Account as soon as practicable after the former member’s death.
(c) DROP Plan for Sworn Deputy Sheriffs and Uniformed Correctional Officers.
(1) Uniformed correctional officer means Correctional Officer I, Correctional Officer II, Correctional Officer III, Correctional Dietary Officer I, Correctional Dietary Officer II, Resident Supervisor I, Resident Supervisor II, Resident Supervisor III, Correctional Supervisor-Sergeant, Correctional Dietary Supervisor, Correctional Shift Commander-Lieutenant, Correctional Unit Commander-Captain, Deputy Warden, and Warden. The Director of the Department of Corrections must not begin participation in the DROP after appointment as Director.
(2) Sworn Deputy Sheriff means Deputy Sheriff I, Deputy Sheriff II, Deputy Sheriff III, Deputy Sheriff Sergeant, Deputy Sheriff Lieutenant, Deputy Sheriff Captain, Assistant Sheriff, and the Chief Deputy Sheriff (Colonel).
(3) Eligibility. A sworn deputy sheriff or uniformed correctional officer who is at least age 55 years old and has at least 15 years of credited service or is at least 46 years old and has at least 25 years of credited service may participate in the DROP. A uniformed correctional officer or sworn deputy sheriff must participate in the optional retirement plan or the integrated retirement plan as a Group E member in order to participate in the DROP.
(4) Application requirements. An eligible employee must apply at least 60 days before the employee becomes a participant. An employee may withdraw a pending application within 2 weeks after submitting the application.
(5) Employee participation and termination. The employee's participation in the DROP must begin on the first day of a month that begins at least 60 days, but not more than 90 days, after the employee applied and must end 3 years after the employee begins to participate or at an earlier date chosen by the employee. When the employee's participation in the DROP ends, the employee must stop working for the County and receive a pension benefit.
(6) Employment status. An employee who participates in the DROP must continue to be a member of the retirement system, earn sick and annual leave, and remain eligible to participate in health and life insurance programs.
(7) Retirement date, retirement contributions, and credited service. The retirement date of an employee who participates in the DROP is the date when the employee begins to participate in the DROP, and the employee must not make retirement contributions after that date. An employee who wishes to purchase prior service must do so before the employee's participation in the DROP begins. Sick leave in excess of 80 hours must be credited towards retirement at the beginning of the employee's participation.
(8) Pension benefits.
(A) Before an employee's participation begins, the employee must select a:
(i) pension payment option under Section 33-44 for the regular retirement pension payments; and
(ii) pension payment distribution option for the distribution of the employee's DROP account.
(B) A pension benefit must not be paid to the employee while the employee participates in the DROP, but must be deposited in a DROP account established for the participant by the County. The participant must receive the account balance and the County must close the account within 60 days after the employee stops participating in the DROP. Subject to any requirements of the Internal Revenue Code and other applicable law, the employee may roll over the account balance into an eligible retirement plan.
(C) An employee must direct the Board of Investment Trustees to allocate pension benefits contributed to the employee's DROP account in one or more of the investment funds selected by the Board. An employee's direction of investment must remain in effect until the employee changes the direction. An employee must select investment options in order to participate in the DROP.
(D) After the employee's participation in DROP ends, the employee's pension benefit will be based on:
(i) the employee's credited service immediately prior to the beginning of the employee's participation in the DROP, adjusted to include credit for unused sick leave under Section 33-41;
(ii) the employee's average final earnings, excluding earnings during the period of participation in the DROP; and
(iii) increases in the Consumer Price Index for All Urban Consumers (CPI-U) for the Washington-Arlington-Alexandria Core Based Statistical Area (CBSA), as published by the United States Department of Labor, Bureau of Labor Statistics, during the period of the employee’s participation that would have resulted in an increase in the employee’s pension benefit if the employee had not been participating in the DROP.
(9) Disability retirement. An employee may apply for disability retirement prior to the termination of the employee's participation in the DROP.
(A) A DROP participant who is eligible for a service-connected disability retirement must choose either:
(i) the retirement benefit under the DROP and the DROP account balance; or
(ii) the service-connected disability retirement benefit that the employee would have received if the employee had continued as an active employee and had not elected to participate in the DROP, and no DROP account balance.
(B) A DROP participant who is eligible for a non-service-connected disability retirement benefit must receive the non-service-connected disability retirement benefit under Section 33-43(h), with the benefit calculated as of the member's DROP entry date, plus the DROP account balance.
(C) If a DROP participant ends participation in the DROP before a final decision is made on the disability retirement application, the DROP account must not be distributed until a final decision is made.
(10) Death benefit. If an employee dies during the employee's participation in the DROP, the employee's beneficiary will receive:
(A) the death benefit that the beneficiary would have received if the employee had retired on the date on which the employee began to participate in the DROP, adjusted under subparagraph (7)(D); and
(B) the balance of the employee's DROP account.
(11) DROP account distribution options. A member may have the balance of the DROP account distributed as a lump sum or an annuity, or have some or all paid directly to an eligible retirement plan as a direct rollover distribution. If the member dies before the balance of the DROP account is distributed, the beneficiary may receive distribution of the balance under any option described in this paragraph as allowed under the Internal Revenue Code and applicable regulations. (1999 L.M.C., ch. 26, § 1; 2001 L.M.C., ch. 28, §§ 5, 15 and 16; 2006 L.M.C., ch. 20, § 1; 2007 L.M.C., ch. 3, § 1; 2008 L.M.C., ch. 23, § 2; 2009 L.M.C., ch. 11, § 1; 2013 L.M.C., ch. 14, § 1; 2014 L.M.C., ch. 17
, § 1; 2015 L.M.C., ch. 28
, § 1; 2018 L.M.C., ch. 3, §1; 2021 L.M.C., ch. 36
, §1; 2023 L.M.C., ch. 25, § 1.)
Editor’s noteThe effective date of the amendment made to this section by 2001 L.M.C., ch. 28, § 5, is the same effective date as 1999 L.M.C., ch. 26, § 1.