Section 18-88 Benefits payable under the DROP.
Prior to the adoption of Ord. 21455 on 09/17/2012, Section 18-88 read as follows.
(a) Effective with the date of DROP participation, the
DROP member's initial normal
monthly benefit, including creditable service, optional form of payment, and highest average
salary, and the effective date of retirement shall be fixed. The beneficiary established in sections
18-96 or 18-109,
respectively, shall be the beneficiary eligible to receive any
DROP benefits payable if the DROP member dies prior to the completion of the period of DROP
participation. In the event a joint annuitant predeceases the DROP member, the DROP member
may name a beneficiary to receive accumulated DROP benefits payable. Such retirement benefit,
any annual cost of living adjustments and interest shall accrue monthly in the trust fund. Such
interest shall accrue at an effective annual rate of four (4) percent for DROP members with an
effective DROP date on or before September 1, 2012 and two (2) percent for DROP members
with an effective DROP date after September 1, 2012 compounded monthly, on the prior month's
accumulated ending balance, up to the month of the termination or date of death.
(b) The effective date of DROP participation of a DROP
member shall be the first day of the
month selected by the DROP member to begin participation in the DROP, provided such date is
properly established, with the written confirmation and the approval of the administrator, on
forms required by the administrator.
(c) Normal retirement benefits and interest thereon shall
continue to accrue in the DROP
until the established termination date of the DROP, or until the DROP member terminates
employment or dies prior to such date. Although individual DROP accounts shall not be
established, a separate accounting of each DROP members accrued benefits under the DROP
shall be calculated and provided periodically to DROP members.
(d) At the conclusion of the members DROP, the
administrator shall distribute the DROP
members total accumulated DROP benefits, subject to and in accordance with the following
(1) The administrator shall receive written verification
that such DROP member has
(2) The terminated DROP member or, if deceased, such
DROP members named beneficiary,
shall elect on forms provided by the administrator to receive payment of the DROP benefits in
accordance with one of the options listed below. For a DROP member or beneficiary who fails
to elect a method of payment within sixty (60) days of termination of the DROP, the
administrator will pay a lump sum as provided in subparagraph (I) below.
a. Lump sum. All accrued DROP benefits, plus interest, less withholding
taxes remitted to the
Internal Revenue Service, shall be paid to the DROP member or surviving beneficiary.
b. Direct rollover. All accrued DROP benefits, plus interest, shall be
paid from the DROP
directly to the custodian of an eligible retirement plan as defined in Section 402(c)(8)(B) of the
Internal Revenue Code.
c. Partial lump sum. A portion of the accrued DROP benefits, plus interest, shall
be paid to the
DROP member or surviving
less withholding taxes remitted to the Internal
Revenue Service, and the remaining DROP benefits shall be transferred directly to the custodian
of an eligible retirement plan as defined in Section 402(c)(8)(B) of the Internal Revenue Code.
The proportions shall be specified by the DROP member or surviving beneficiary.
(3) The form of payment selected by the DROP member or surviving beneficiary
with the minimum distribution requirements of Section 401(a)(9) of the Internal Revenue Code.
(4) A DROP member who fails to terminate employment at the conclusion of the
shall be deemed not to be retired, and the DROP election shall be null and void. The covered
employee shall be eligible to receive, upon termination of employment, his or her normal
retirement benefit determined immediately prior to the effective date of the DROP election,
including creditable service accumulated after the date of the DROP election, and using the
highest average salary as determined immediately prior to the effective date of the DROP
(e) The accrued benefits of any DROP member, and any
contributions accumulated under
the DROP, shall be subject to sections 18-51
, 18-100 or 18-113
(f) DROP members shall be eligible for disability retirement
benefits, as provided for in
, 18-95 or 18-108,
respectively, and shall receive the DROP benefits,
plus interest, accrued to the date of disability in accordance with the election made under
(g) A DROP member shall not be eligible for refunds as
provided for under sections 18-50
, 18-99 and 18-112
(Ord. No. 19636, § 1, 8-20-071; Ord. No. 21405, § 1, 8-20-12)