DROP - OPERS

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Conditions Leading to DROP • Plan includes maximum benefit (100% of pay). Can act as a benefit enhancement. • Want to induce people to work longer • More choices are better • Everyone else has one 10
DROP Variations • DROP account is credited with payments for up to a maximum number of (e.g., 5) years. • Sometimes a minimum number of years in DROP is required, but what happens if a person DROPs and then does not stay the minimum? • Some provide a maximum DROP participation period. What happens if a person overstays the maximum? • DROP account is frozen after a cut off date. • DROP interest credited at a fixed rate (e.g., 7%). • Variable rates or self-directed accounts may be feasible. 11
Page 1 and 2: MEMORANDUM OHIO PUBLIC EMPLOYEES RE
Page 3 and 4: Deferred Retirement Option Plans DR
Page 5 and 6: What is a DROP? • Both types of D
Page 7 and 8: The PLOP Alternative • PLOP stand
Page 9 and 10: DROPs and Cost Neutrality A common
Page 11: DROP Operation • Upon satisfactio
Page 15 and 16: Potential Benefits to Members • D
Page 17 and 18: Possible Disadvantages for Members
Page 19 and 20: Disadvantages for Plan Sponsors •
Page 21 and 22: Cost Neutral • Current contributi
Page 23 and 24: Actuarially Cost Neutral This impli
Page 25 and 26: Gray Cases • It is not always pos
Page 27 and 28: DROP Conclusions • If a DROP has
Page 29 and 30: Other Design Issues • Death or di
Page 31 and 32: DROP Valuations • In order to eva
Page 33 and 34: #2 - State Plan - Forward DROP Samp
Page 35 and 36: Sample DROP Plans #4 - State Genera

DROP - OPERS

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