HB503 Summary

• Establishes a Deferred Retirement Option Plan (DROP) for teachers in the Teachers' Retirement System and state employees in the Employees' Retirement System, allowing eligible members to continue employment while deferring retirement benefits.

• Requires participants to have at least 30 years of creditable service, be at least 57 years old (52 for state police), earn less than $75,000 annually with maximum 2% annual increases, and be eligible for service retirement.

• Allows DROP participation in 3-5 year increments, with monthly retirement allowances paid into a DROP account earning interest at the lesser of 2% or two-year U.S. Treasury note yields; participants may only participate once and must retire at the end of their election period.

• Imposes forfeiture of all DROP account funds for voluntary termination within the first three years, but waives forfeiture if participation is interrupted by disability or death.

• Permits sick leave conversion upon withdrawal to recalculate retirement benefits, prohibits service credit purchases during DROP, allows continued salary increases and leave accrual, and becomes effective on the first day of the third month following passage.