NY A10614

Establishes a Deferred Retirement Option Plan (DROP) allowing police and fire employees with 20 years of service to defer retirement benefits while continuing employment for 12-60 months.

Deferred monthly retirement benefits accrue interest at 1.5% annually and are held by the retirement system during the DROP period, then paid in full upon completion.

Eligible members must elect DROP before participation and cannot take loans or excess contributions after entering DROP; if employment ends before the elected period expires, all DROP benefits are forfeited.

Members receive deferred payments in one of three ways upon DROP termination: lump sum payment with tax withholding, rollover to eligible retirement account, or partial lump sum with remainder rolled over.

Participating employers bear the cost of DROP benefits for their members; estimated past service cost averages approximately 150% of salary for 20-year plan participants based on actuarial analysis.