Deferred Retirement Option Program

Special Note 11/2002: In spite of the rumor mill, please rest assured that the DROP is safely in place for your future! "Early out" is a false rumor. DROP is contractual, and WILL happen.

Baltimore County's Deferred Retirement Option Program (DROP) was successfully negotiated for our membership during the 2000-2001 session. DROP is a win-win situation which provides a means for our members to retire with a reduced monthly allowance in exchange for a lump sum distribution from the retirement plan. Several factors could influence the final calculation:

1. Negotiated pay increases, COLA's, Longevity Steps, and Promotions.

2. Retiree COLA's

The date when you elect to start DROP (you must be in DROP for one full year, including the entire month of July, to receive a COLA).

COLA's are based on the CPI.

3. The date you elect to start the DROP to maximize your average final compensation (Highest 12 consecutive months) ... taking into account pay raises and 27-pay periods 3, 4, or 5 years ago.

4. Interest earned (whichever is greater:)

A. Minimum of 5%

B. One half of a percent less than the rate of return for the prior year.

The County has established a Deferred Retirement Option Program (DROP) for Pay Schedule V employees on July 1, 2001, with the first retirements under the Program possible on or after July 1, 2004 (three-year DROP); July 1, 2005 (up to four-year DROP); and July 1, 2006 (up to five-year DROP).

In order to be eligible to select the DROP, a retiring member must have at least 32 years of service with Baltimore County on Pay Schedule V, including retirement system credit for accumulated unused sick leave and military service. The length of the DROP a member may elect will be determined according to the following table:

Years of Eligible Service Length of the DROP

32 or more years 3 years
33 or more years 3, 3-½, or 4 years
34 or more years 3, 3-½, 4, 4-½, or 5 years

Retirement allowances credited to the DROP account, and paid after retirement, will be calculated according to the following enhanced formula:

The length of the DROP period (3 to 5 years) is selected by the employee.
"DROP Service" equals service at retirement (including retirement credit for accumulated unused sick leave and military service) minus the length of the DROP period.
Average Final Compensation is determined as if the member had retired at the beginning of the DROP period.
The DROP Retiree Allowance equals 74% of the Average Final Compensation for 29 years DROP service, plus 2% of Average Final Compensation for each additional year of service.

Retirement allowances credited to the DROP account will be increased for retirement system COLAs just as if the member had retired at the beginning of the DROP. The retirement allowance paid upon actual retirement will include retirement system COLAs provided during the period of the DROP.

Member contributions to the Retirement System made during the period of the DROP will be credited to the member’s DROP account.

The DROP account will be credited with interest each June 30, based on the administrative procedures currently used to determine the member’s accumulated contributions, except that the interest rate used will be the greater of (a) the rate of return on the actuarial value of assets for the prior calendar year, minus 50 basis points; or (b) the regular rate of interest (5% per annum).

The DROP accumulation may be paid to the member in a single lump sum, or may be rolled over into an eligible plan such as an IRA, at the member’s choosing.

*Please contact the Captain Ross Mickle to discuss an ESTIMATE of your expected retirement benefits through DROP.

E-mail the Local
Michael K. Day Sr., President BCPFFA
52 Scott Adam Road, Cockeysville, MD 21030-3282
410-683-1311 ~ 410-666-0156 (fax)

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BALTIMORE COUNTY PROFESSIONAL FIRE FIGHTERS ASSOCIATION

D.R.O.P.

BALTIMORE COUNTY
PROFESSIONAL FIRE FIGHTERS ASSOCIATION