HB 690 Summary

• Reestablishes the Deferred Retirement Option Plan (DROP) for new participants in the Teachers' Retirement System and Employees' Retirement System, effective upon passage.

• Establishes eligibility requirements: 25 years of creditable service (tier I) or 10 years (tier II), minimum age 55 (tier I) or 56 (tier II), eligible for service retirement, and annual salary not exceeding $125,000 adjusted for inflation beginning January 1, 2017.

• DROP participation periods range from 3 to 5 years in one-year increments, with members limited to one lifetime participation; salary costs, cost-of-living adjustments, and annual and sick leave accrual continue during participation.

• DROP accounts earn annual interest at the greater of 3 percent or the two-year United States Treasury note yield; participants are not subject to any fees or charges.

• Members must withdraw from active service upon DROP completion and cannot work full or part-time with their employer afterward; provides protection against forfeiture of retirement allowances and member contributions for involuntary termination, disability, or death.