Posts tagged Deferred Retirement Option Plans

Public employers are growing increasingly skeptical of Deferred Retirement Option Plans. So-called DROP plans allow employees who would otherwise retire in a defined benefit plan to continue working. However, rather than continuing to accrue credit for their extra years of service, their pension is paid out alongside their usual salary but is credited to a separate account with a city-guaranteed interest rate. The employee typically receives the money in the account, including an agreed-upon interest amount, in a lump sum when he or she retires.  DROP plans were initially promoted as cost-neutral programs that would keep experienced employees around longer.  That optimistic outlook, however, is shifting.

Subscribe

Other AALRR Blogs

Recent Posts

Popular Categories

Contributors

Archives

Back to Page