§ 2-73. Deferred retirement option plan.

(a)

A deferred retirement option plan ("DROP") is hereby created.

(b)

Eligibility to participate in the DROP is limited to tier one members and is based upon eligibility for normal service retirement with twenty (20) years of service, regardless of age. Tier two and tier three members are not entitled to participate in the DROP.

(c)

Employees with more than twenty (20) years of service shall be eligible to participate in the DROP.

(d)

The maximum period of DROP participation is sixty (60) months. Participation in DROP is not a guarantee of continued employment.

(e)

Upon entry into the DROP, the member's average monthly earnings and accrued benefits shall be calculated. No change in the plan benefits made subsequent to entry into the DROP shall apply to the member unless otherwise applicable to retired members. Members shall choose any applicable survivorship benefit option at the time of entry into the DROP.

(f)

Payment shall be made into the employee's DROP account as if the employee had terminated employment with the city in an amount determined by the employee's selection of the payment option.

(g)

An employee's account in the DROP program shall earn or lose interest, based on the actual investment returns, whether positive or negative, earned by the plan.

(h)

An employee shall terminate service with the city at the conclusion of the sixty (60) month DROP.

(i)

Interest on a member's DROP account shall be calculated annually and evidenced on the annual statements issued by the Plan actuary.

(j)

Upon termination of service with the city, an employee may receive payment within sixty (60) days of the member requesting payment or may defer payment until a time not later than the latest date authorized by Section 401(a)(9) of the Internal Revenue Code at the option of the member.

(k)

Payments from the DROP may be received as a lump sum, installment payments, plan-to-plan rollover, or a combination of payment options; provided, however, that at all times, the DROP shall be subject to the minimum distribution provisions of the Internal Revenue Code.

(l)

No payment may be made from the DROP until the employee actually separates from service with the city.

(m)

If an employee shall die during participation in the DROP, the employee shall be treated as any other retired member in the plan who dies prior to retirement.

(n)

Upon commencement of participation in the DROP, the member shall no longer be eligible for disability retirement from the pension plan. If a member becomes disabled during the DROP period, the member shall be treated as if he/she retired on the day prior to the date of disability.

(o)

A DROP participant shall be deemed retired for all purposes in this plan. In all other respects, a DROP participant shall be deemed an active employee until separated from city service.

(p)

The board may promulgate uniform administrative rules for the implementation and application of the DROP.

(Ord. No. 06O-05-134, § 5, 6-12-06; Ord. No. 15O-03-107, § 6, 4-13-15)

Editor's note

Ord. No. 06O-05-134, § 8, adopted June 12, 2006 states that the provisions of § 2-73 shall become effective October 1, 2006.