- What is a Deferred Retirement Option Plan (DROP)?
A Deferred Retirement Option Plan is a plan that allows you to accumulate your monthly service retirement benefit in an interest bearing account at the Board of Pensions for up to four (4) years and continue to be employed by the City of Philadelphia.
Who is eligible for DROP?
Any [City] employee who has attained the normal retirement age of their Pension Plan and has ten (10) years of credited pension service.
How is my Service Retirement Benefit Calculated?
Your service pension is calculated based on your average final compensation and credited pension service at the date you elect to participate in DROP.
When do I elect my Survivorship Option?
Your survivorship option will be selected on the date of your DROP interview.
What happens if I become disabled while a DROP participant?
If you become disabled due to an injury that entitles you to a service-connected disability benefit, you will receive your accumulated DROP benefit and a service-connected disability pension. If your disability is non-service related you will receive your accumulated DROP benefit and a service retirement benefit.
What happens if I die while still employed with the City of Philadelphia and a DROP participant?
Your designated pension beneficiary or beneficiaries will receive a death benefit as provided by the Public Employees Retirement Code and the accumulated funds in your DROP account.
Can I elect to revoke my DROP participation?
No, once you elect to participate in DROP such participation is irrevocable.
When will my retiree health and welfare begin?
If you are eligible for the four years of retiree health and welfare coverages such coverage will begin the 1st day of the month following your formal retirement from the City of Philadelphia, not at the date of your DROP enrollment.
When can I receive the accumulated funds in my DROP account?
You become entitled to your accumulated DROP funds when you officially retire from the City of Philadelphia. Once again, you are reminded that your retirement from the City of Philadelphia must occur within four (4) years of your DROP participation date.
How will my accumulated DROP balance be paid to me?
You may elect to receive your accumulated DROP balance directly or elect to rollover your DROP balance into an IRA.
What is the tax consequence of receiving my accumulated DROP balance directly or electing to rollover the funds into an IRA?
If you elect to receive your accumulated DROP funds directly, the IRS requires a 20% federal tax withholding from your accumulated total. If you elect to rollover the accumulated DROP funds into an IRA, there will be no federal tax withheld.
How do I officially retire from the City of Philadelphia and begin to receive my accumulated DROP funds, my regular monthly service retirement benefit and any terminal leave pay I am entitled to?
You must notify your Personnel Officer of your intention to retire from City employment. your personnel office will arrange all the details of your retirement and set up your final retirement interview at the Board of Pensions.
The City of Philadelphia is an Equal Opportunity employer and does not permit discrimination based on race, ethnicity, color, sex, sexual orientation, gender identity, religion, national origin, ancestry, age, disability, marital status, source of income, familial status, genetic information or domestic or sexual violence victim status. If you believe you were discriminated against, call the Philadelphia Commission on Human Relations at 215-686-4670 or send an email to email@example.com. For more information go to: http://www.phila.gov/humanrelations