§ 22-246. Deferred retirement option plan (DROP).

(a)

Effective April 1, 1997, a member will be eligible to elect to enroll in the DROP at the time he is eligible to retire under the normal age or service provisions of the plan and begin drawing immediate pension benefits as defined in section 22-241(a). Participation in the DROP cannot commence before the member is eligible to retire. Any plan member having more than 25 years of creditable service at the time the DROP becomes available will be eligible to participate in the DROP; however, a member's combined years of creditable service and years in the DROP cannot total more than 30 years. A member with 30 or more years of creditable service cannot participate in the DROP. Application for participation in the DROP will be made to the Pension Board.

(b)

The officer participating in the 1970 Supplemental Plan must determine at the time he has met the age and service requirements and is eligible to collect benefits whether he intends to participate in DROP. At that time, if he should elect to participate in DROP, he may participate for a maximum of 60 months, at the end of which time he must leave employment with the City as a police officer. Members who choose not to participate in DROP during this one-time window period shall forfeit the right to participate for the full 60-month period.

(c)

Once the DROP is entered, a member will be considered "retired" for pension purposes and cannot accrue any additional benefits under the plan, and will no longer be eligible for disability or pre-retirement death benefits. Creditable service ceases and is no longer accrued once a member enters DROP. Contributions by the member and the City normal cost contributions to the applicable pension fund on behalf of the member will cease when participation in the DROP commences. Pension benefits are calculated at the time of entry into the DROP using the earnings base and creditable service as in normal retirement benefit calculations. Any future earnings while employed by the City do not have any effect on pension benefits.

(d)

When a member commences participation in the DROP, he shall not have the right to participate again as a contributing member of the pension plan. Election in the DROP is irrevocable once DROP payments begin. Total years of participation in the DROP shall not exceed 60 months. Once the member has completed participation in DROP, he will be separated from City employment as a police officer; this separation shall be processed as a voluntary retirement.

(e)

Once the member has entered the DROP, pension payments will be "transferred" to the member's DROP account on a monthly basis. This transfer will occur at the same time pension payments are made to other retirees or beneficiaries. The transfer of pension funds into the member's DROP account will be an accounting function only. The funds will not physically be transferred. The DROP account will be an account in "bookkeeping" sense only until separation from employment as a police officer and payout of the account. All DROP accounts will remain in the pension fund for investment purposes, be administered by the Board, and earn or lose interest at the rate of return on the actuarial value of assets calculated annually as reported to the division of retirement pursuant to part IV of chapter 112, State statutes (F.S. ch. 112, pt. IV). To compensate the retirement system for the expense of administering and operating the DROP, each participating member's account shall be charged an annual administrative fee of one-quarter of one percent of the account earnings which will be deducted from the participating member's account quarterly. The administrative fee shall be reviewed annually by the Board. The board may make reasonable increases or decreases to the administrative fee by resolution. Funds are not transferable from the pension fund into any other investment vehicles. At no time during participation in the DROP will the member have access to, or be able to borrow against, any of the funds in the DROP account. Annual reports regarding the DROP account balance, earnings and losses will be made available to the member.

(f)

Payments to a DROP account shall not be considered an asset of the retirement system which may be pledged against benefit claims owed to others. Rather, these are deferred payments which have already been earned by the member and are not subject to distribution or control by the member until separation from employment as a police officer.

(g)

Upon separation from employment as a police officer, retirement benefits shall be paid to the retiree and no longer be transferred into the DROP account. Within 60 days after the end of the calendar quarter following separation from employment as a police officer with the City, the DROP account shall be payable at the retiree's option: by a direct rollover of the total amount into an eligible retirement plan, by a partial lump sum payment with the remainder being directly rolled over into an eligible retirement plan, or by payment of the entire amount in a lump sum to the retiree. Failure to designate a payment option will result in a lump sum payout. All payouts must be approved by the Board and comply with the Internal Revenue Code. Payouts, including lump sum payouts, will be made at the same time that regular pension payments are made to retirees. If a DROP participant dies while still participating in the plan or before the DROP payout is made, the designated beneficiary shall have the same rights to elect and receive the same payout options as were available to the participant.

(Code 1992, § 22-231; Ord. No. 270-G, § 1, 2-27-1997)