A. Eligibility. Effective January 1, 2006, members of the Department of Fire and Rescue that have not retired prior to the implementation of the DROP program may enter into the DROP on the first day of any month following completion of 20 years of credited service.
B. Written election. Any member of the Department of Fire and Rescue electing to participate in the DROP must complete and execute a “drop option form” prepared by the City of Reading Finance Department, which shall evidence the member’s participation in the DROP. The form must be signed by the member and notarized and submitted to the City of Reading Finance Department, prior to the date on which the member wishes the DROP option to be effective. The DROP option notice shall include an irrevocable notice to the City, by the member, that the member shall resign from employment with the Department of Fire and Rescue effective on a specific date not more than 60 months from the effective date of the DROP option. In addition, all retirement documents required by the Firemen’s Pension Fund must be filed and presented to the Pension Board for approval of retirement and payment of pension. Once a retirement application has been approved by the Board it is irrevocable.
C. Limitation on pension accrual. After the effective date of the DROP option, the member shall no longer earn or accrue additional years of continuous service for pension purposes.
D. Benefit calculation. For all retirement fund purposes, continuous service of a member participating in the DROP shall remain as it existed on the effective date of commencement of participation in the DROP. Service thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the Reading Firemen's Pension Fund. The average monthly pay of the member for pension calculation purposes shall remain as it existed on the effective date of commencement of participating in the DROP. Earnings or increases in earnings thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the pension fund. The pension benefit payable to the members shall increase only as a result of the cost-of-living adjustments in effect on the effective date of the member's participation in the DROP, or applicable cost-of-living adjustments granted thereafter.
E. Payments to DROP account. The monthly retirement benefits that would have been payable had the member elected to cease employment and receive a normal retirement benefit shall, upon the member commencing participation in the DROP, be paid into the separate DROP account established to receive the member's monthly pension payments. The fund shall maintain the account. Such DROP account shall be credited with interest in a manner prescribed by the Board.
F. Payout. Upon the termination date set forth in the member's drop option notice or, such date as the member withdraws or is terminated from the DROP program, the retirement benefits payable to the member or the member's beneficiary, if applicable, shall be paid to the member or beneficiary and shall no longer be paid to the member's deferred retirement option account. Within 30 days following termination of a member's employment pursuant to their participating in the DROP program, the balances in the member's DROP account shall be paid to the member in the single lump sum payment or, at the member's option, in any fashion permitted by law.
G. Disability during DROP. If a member becomes temporarily disabled during his participation in DROP, his participation freezes and the time period while on disability does not count towards the five-year participation limit. Upon return to duty, membership in DROP shall resume, continuing with the remaining time left in the five-year membership period. The member shall receive disability pay in the same amount as disabled firefighters that are not participating in DROP. In no event shall a member on temporary disability have the ability to draw from his DROP account. However, notwithstanding any other provision in this subsection, if a firefighter is disabled and has not returned to work as of the date of his required resignation, then such resignation shall take precedence over all other provisions herein and said firefighter shall be required to resign.
H. Death. If a DROP member dies before the DROP account balance is paid in full, the participant member's legal beneficiary shall have the same rights as the member to withdraw the account balance.
I. Individual DROP investment account. The Firemen's Pension Board may, at its discretion, select a third party to provide a mutual fund or other investment option(s), recordkeeping and reporting to the members and the Board. All investment and administrative costs shall be charged against the individual DROP investment account of the member.
J. Limitation of eligible members. There shall be a limit of 10 bargaining unit members eligible to opt into the DROP on an annual basis. In the event that more than 10 bargaining unit members opt to participate in the program in any given year, eligibility for the 10 available slots shall be determined exclusively by seniority.
K. The DROP shall not be available to an elected official, except for an official first elected prior to September 18,2009.
L. Amendment. Any amendments to the DROP ordinance shall be consistent with the provisions covering deferred retirement option plans set forth in the applicable collective bargaining agreement and shall be binding upon all future DROP members and upon all DROP members who have balances in their deferred retirement option accounts.