NY A05737

Creates a Deferred Retirement Option Plan (DROP) allowing state police officers with 20 years of creditable service to defer retirement benefits while continuing employment for 12-36 months.

Deferred monthly retirement benefits accrue interest at 1.5% annually and are held by the retirement system until the DROP period ends, at which point members receive the total amount plus interest.

Members may elect to receive deferred DROP benefits as a lump sum, direct rollover to another eligible retirement plan, or partial lump sum with rollover of remaining benefits.

If a member dies, becomes disabled, or fails to complete the elected DROP period, the DROP election is voided and standard death or disability benefits apply based on salary and service during the DROP period.

The act expires five years after enactment, though members who elected DROP before expiration may complete their full elected period; estimated past service cost is approximately $392 million as a one-time payment.