Florida’s DROP, or Deferred Retirement Option Program, is a program that allows some state employees to retire without terminating employment. Some municipalities, such as the City of Lakeland, also offer DROP.

Generally, DROP works by freezing contributions to the employee’s pension plan. Funds then accumulate in a separate DROP account. When the DROP period ends, the employee must terminate employment. They then receive their DROP funds as a lump sum and their pension under the normal pension payout schedule. Terms, conditions, and eligibility for state and municipal DROP participation vary and can be complex. We recommend consulting with one of our Financial Advisors before deciding whether or not to participate in DROP.

Let Your Financial Advisor at Allen & Company Help You Understand Your Retirement Savings Options

Understanding employee benefits is critical to developing a sound and comprehensive retirement plan. With the array of choices available to many state and municipal employees, such as pension plans, 401(a) accounts and DROP, it is imperative to have accurate and current knowledge of the advantages of each type of account. There can also be tax ramifications for the different retirement options.

Allen & Company’s team of Financial Advisors is well versed in state and municipal retirement savings options and can provide the guidance you need to make an informed decision. That fits with your retirement goals.

Florida Retirement System’s Deferred Retirement Option Program

The Florida Retirement System (FRS) DROP option allows employees who are active in an eligible retirement plan to retire without terminating their employment for up to 5 years (8 years for teachers under certain circumstances) while retirement benefits accumulate and earn interest. Further details on DROP are available on the Florida Retirement System’s website at myFRS.com.

City of Lakeland’s Deferred Retirement Option Program

The City of Lakeland offers a DROP option similar to FRS. The City’s DROP option allows an employee to retire under the City of Lakeland’s Employee Pension Plan and begin accumulating retirement benefits, without terminating employment, for up to 60 months. Terms, eligibility, and conditions may vary based on the employee’s position and the department in which he or she works.