House of Representatives

SB 1036

PSPRS; deferred retirement option plan

Sponsors: Senator Cirillo

dp	Committee on Retirement and Government Operations
dp	Caucus and COW
x	As Transmitted to the Governor

SB 1036 modifies the eligibility and participation section of the Deferred Retirement Option Plan (DROP) for members in the Public Safety Retirement System (PSPRS).

History

Laws 2000, Chapter 340, established a pilot DROP program for PSPRS members that terminates June 30, 2006. DROP’s are designed to give members an additional option at normal retirement. A member is required to designate a period, a beneficiary, agree to cease to accrue benefits during the period and terminate employment at the end of the period. The benefits credited to the DROP account are paid-out upon termination as a lump sum.

Provisions

· Specifies that the date a member elects to participate in DROP is when the member ceases to accrue benefits.

· Prescribes the member’s effective date of participation as the first day of the month following the date the member elects to participate.

· Establishes additional outcomes that occur when a member fails to terminate employment on completion of the designated DROP participation period, including:

1) The DROP participation account will not be credited with the monthly amount and that amount will not be paid directly to the member.

2) The payment of a monthly retirement allowance will not be paid until the member terminates employment and is payable at the same time a pension amount is paid on retirement.

3) The member does not acquire any further credited service in the system.

· Makes technical and conforming changes.

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45th Legislature

First Regular Session 2 May 2, 2001

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