A. Eligibility. Effective January 1, 2001, members of the Reading Police Department, who 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. Members of the Reading Police Department hired after December 31, 2011, shall not be eligible for or permitted to participate in the DROP program. [Amended 9-14-2015 by Ord. No. 47-2015]
B. Written election. An eligible member 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 form shall include an irrevocable notice to the City, by the member, that the member shall resign from employment with the City of Reading Police Department effective on a specific date not more than 60 months from the effective date of the DROP option. In addition, and consistent with the member’s resignation date, all retirement documents required by the Board Administrator must be filed and presented to the 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 nor will the member's compensation change 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 fund. The average monthly pay of the member for pension calculation purposes shall remain as it existed on the effective date of commencement of participation 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 member shall increase only as a result of cost-of-living adjustments in effect on the effective date of the member's participation in the DROP, or by applicable cost-of-living adjustments granted thereafter. During the period the member participates in the DROP, such member shall contribute to the fund an amount equal to 5% of his salary or wages per month. However, members who made an election to participate in the DROP prior to January 1, 2012, shall not be required to make mandatory contributions to the fund during the period such members participate in the DROP. [Amended 9-14-2015 by Ord. No. 47-2015]
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 a separate DROP account established to receive the member's monthly pension payments. 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 form, 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 deferred retirement option account shall be paid to the member in a 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 a disabled member who is 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 provisions in this subsection, if an officer 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 officer shall be required to resign.
H. Death. If a DROP member dies before the DROP account balance is paid, the member's legal beneficiary shall have the same rights as the member to withdraw the account balance.
I. The DROP shall not be available to an elected official, except for an official first elected prior to September 18, 2009.
J. Except as may be required by applicable law, or otherwise noted in the Plan, any amendments to this § 62-417 shall be consistent with the provisions covering deferred retirement options plans set forth in any 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. [Amended 9-14-2015 by Ord. No. 47-2015]