HB305 Summary

• Reestablishes the Deferred Retirement Option Plan (DROP) for members of the Teachers' Retirement System and Employees' Retirement System, removing the April 1, 2011 cutoff date that previously prohibited new participants.

• Removes limits on interest paid to DROP accounts, allowing interest to be calculated at the same rate as active member accounts based on the lesser of two percent or two-year U.S. Treasury note yields.

• Requires DROP participants to have at least 25 years of creditable service, be at least 55 years of age (52 for state police), and be eligible for service retirement; participation limited to one time for 3-5 years.

• Specifies that sixty percent of the monthly retirement allowance is paid into the DROP account during participation, with the balance deferred until completion; participants may continue to receive salary cost-of-living adjustments and increases.

• Becomes effective on the first day of the third month following passage and approval by the Governor.