HB475 Summary

• Creates Deferred Retirement Option Plan (DROP) for eligible teachers and state employees, allowing continued employment for 3-5 years while deferring retirement benefits into an account.

• Eligibility requires 30 years creditable service (excluding sick leave), age 57 or older (age 52 for state police), earnings under $75,000 annually with maximum 2% yearly increases, and service retirement eligibility.

• DROP account accumulates deferred monthly retirement allowance plus interest at the lesser of 2% or two-year Treasury note yield; members cannot receive cost-of-living increases while in DROP or for one year after withdrawal.

• Voluntary termination within first three years of DROP results in forfeiture of all account deposits and contributions; disability or death during participation exempts participants from forfeiture penalties.

• Members may only participate in DROP once and must retire within five years of participation period; accrual of annual and sick leave continues, and participants remain eligible for salary increases during participation.