Plain English Breakdown
The effective date is unknown because the bill requires a cost-neutral actuarial analysis before becoming applicable.
Deferred Retirement Option Program for State Highway Patrol and Firefighters
This law creates an optional retirement benefit program within PERS that allows eligible state highway patrol officers and firefighters to delay their pension start date in exchange for a lump sum or monthly payments.
What This Bill Does
- Establishes the Deferred Retirement Option Program as a voluntary option within the Public Employees' Retirement System (PERS).
- Requires an actuarial analysis proving the program will be cost neutral before it can begin.
- Creates individual accounts for participants and requires annual statements showing account balances.
- Allows members to name beneficiaries who may receive funds from their program accounts if needed.
- Requires spouses, where applicable, to sign a statement agreeing they understand that benefits payable to them might be reduced by joining the program.
Who It Names or Affects
- State Highway Patrol officers in State Bargaining Unit 5
- Firefighters in State Bargaining Unit 8
- Spouses of participating members
- The Board of Administration of PERS
Terms To Know
- Deferred Retirement Option Program (DROP)
- A voluntary program that lets eligible workers delay starting their pension to receive a lump sum or monthly payments in addition to their regular retirement allowance.
- Actuarial analysis
- A mathematical study required before the program starts to determine if it will be cost neutral.
- Cost neutral
- The condition that the proposed program must meet so that costs do not exceed earnings or existing funding levels.
Limits and Unknowns
- Participants must agree to waive any claims regarding age and other discrimination in employment laws related to joining the program.
- The Legislature, with Governor approval, can suspend the program under certain circumstances, which would stop benefit growth and prevent vested rights to future benefits.
- The specific start date is not listed because it depends on completing required studies.