What is D.R.O.P.? How Long Can You Participate in D.R.O.P.?

Most eligible members may participate for up to 96 months (8 years), depending on plan rules and employer approval.

Some participants may:

• Choose a shorter participation period

• Request an extension (subject to approval)

• Exit early if personal or employment circumstances change

How Does a DROP Account Grow?

While in DROP:

• Monthly retirement benefits are credited to your DROP account

• Accounts may earn interest depending on participation start date

• Cost-of-living adjustments (COLA) may apply in some cases

Your DROP balance is separate from any active salary or investment plan accounts.

What Happens When You Exit DROP?

When your DROP period ends, you typically must separate from employment and choose how to receive your accumulated DROP balance.

Common options include:

• Lump-sum payment

• Direct rollover to an IRA or retirement account

• A combination of rollover and cash distribution

Tax treatment varies depending on how funds are received.

Important Planning Considerations

DROP decisions can impact:

• Lifetime retirement income

• Taxes

• Survivor benefits

• Health insurance options

• Employment timing

• Reemployment restrictions

Because DROP elections are often difficult or irreversible, planning ahead is critical.

Need Help Understanding Your DROP Options?

You don’t have to navigate this alone.

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