DROP - OPERS

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What is a DROP? • Back DROPs are inherently more costly, because the Back DROP Plan Sponsor assumes the risk. Decisions are always in the member’s favor. 4
The PLOP Alternative • PLOP stands for “Partial Lump Sum Option” • Members can take part of the monthly benefit in a lump sum. • Future benefits are reduced to account for the lump sum already received. • Like a traditional DROP, a PLOP provides a lump sum at retirement. • Unlike a DROP, it is easy to design a cost neutral PLOP. 5
Page 1 and 2: MEMORANDUM OHIO PUBLIC EMPLOYEES RE
Page 3 and 4: Deferred Retirement Option Plans DR
Page 5: What is a DROP? • Both types of D
Page 9 and 10: DROPs and Cost Neutrality A common
Page 11 and 12: DROP Operation • Upon satisfactio
Page 13 and 14: DROP Variations • DROP account is
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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