Human Resource Services

Deferred Retirement Option Program (DROP)

 

Employees reaching normal retirement date, age 62, or 30 years of service at any age, may retire and have their FRS benefits accumulate in DROP and earn interest while continuing to work for a FRS employer for up to five years. (Special Risk normal retirement date is age 55, or 25 years of special risk service, whichever comes first.) When the designated DROP period ends, the employee must terminate employment. He or she will receive payment of the accumulated DROP benefits and then monthly FRS retirement pension benefits will begin.

A few exceptions exist to the normal retirement eligibility criteria. The exception that occurs most frequently involves employees completing 30 years of service before reaching age 57. When this happens, they may defer DROP and elect to participate anytime until they reach age 57, then, at age 57, the 12-month window begins.

Another exception to the standard regulation applies when an employee has gained 30 or more years of creditable service only from buying back eligible prior service and/or military time. In this instance, they can defer enrolling in DROP until they have completed 30 years of actual service and are at least 57 years old.

Employees who meet either of the above exceptions may defer participating in DROP until they naturally reach normal eligibility. Then, upon reaching the normal eligibility criteria, they have 12 months in which to decide whether to participate in DROP. Employees' maximum program participation is reduced each month that passes during this 12-month span. After the 12 months from date of normal eligibility has passed, they no longer are eligible to enroll in DROP. Employees covered by Special Risk should contact the University Retirement Office for exceptions.

Twelve-month employees enrolling in DROP may elect to receive a lump-sum annual leave payment (up to the established policy limits—240 hours for USPS; 352 hours for certain TEAMS employees and faculty) when entering DROP. If employees elect this option, their annual leave payments are added to the calculation of monthly retirement benefits. As a second option, employees may wait to receive payment for accrued annual leave when they leave the university. In this case, the payment is not included in your pension calculation. A third option would be a combination of the two.

If an employee chooses the first or third options, he or she should coordinate the processing of annual leave payment with his or her departmental payroll administrator to ensure that it is processed timely so as to be included for DROP.

Because DROP is complex, you are encouraged to schedule a one-on-one retirement counseling session with a university retirement specialist. Contact University Retirement at 392-2477, or retirement@ufl.edu.