§ 78-150. Deferred retirement option plan (DROP).

(a)

There is hereby created a deferred retirement option ("DROP") plan.

(b)

Any member of the City of Starke Police Officers' Retirement System is eligible to enter the DROP on or after the first day of the month following the member's attaining age 55 with ten years of credited service, or upon attaining 25 years of credited service, regardless of age.

(c)

The maximum participation in the DROP shall be 60 months.

(d)

Upon entering the DROP, the employee shall not receive any additional creditable service for pension purposes. Additionally, the amount of final average salary for calculation of pension benefits shall be determined as of the date of entering the DROP. No payment shall be made for accrued unused leave upon entering the DROP, nor shall the amount of accrued unpaid leave be used in the calculation in the amount of pension benefits.

(e)

Election of optional form of retirement benefit payment. Upon entering the DROP, the member must elect an optional form of retirement benefit payment. Once the election is made, it may not be changed.

(f)

Contributions. Upon the effective date of the member's commencement of participation in the DROP, the member's contribution shall be discontinued.

(g)

Irrevocable resignations. The city police officers' retirement system shall promulgate the appropriate administrative forms for administering the DROP, which forms must include, at a minimum, an irrevocable resignation from employment from the city, which is effective no more than five years from the date of entry into the DROP. The resignation is irrevocable, except for an elected chief of police. Prior to the effective date of resignation of the chief of police, he or she may elect to revoke their resignation and remain as chief of police. A DROP member may actually separate from service prior to the expiration of the five-year period. After the five-year period a DROP member may not continue in the employment of the city in a position in which membership in the city police officers' retirement system is mandatory. A DROP member may participate in the DROP only once.

(h)

Limitation or disqualification for other benefits. Upon commencement of participation in the DROP, the member shall not be eligible for disability or pre-retirement death benefits.

(i)

Payments to DROP account. The monthly retirement benefits that would have been payable had the member elected to cease employment and not join the DROP, shall be credited to the member's DROP account. The money in all participants' DROP accounts will be commingled with all other assets of the fund, but separate accountings shall be made.

(j)

The member's DROP account shall be credited with interest in an amount equal to 50 percent of the net (gross return minus investment expense) yearly interest earned by the retirement system for the preceding fiscal year, up to a maximum of four percent. If the net interest earned is in excess of eight percent, the excess will remain in the retirement system. If the net interest earned by the retirement system is zero percent or less, the member's DROP account will not be credited with interest, nor will it be debited with any investment losses.

(k)

Administrative costs. DROP members will be assessed an administrative cost for the administration of the DROP account. The amount of the administrative fee to be charged will be in the sole discretion of the board of trustees.

(l)

Loss to DROP account balance. DROP member's principal balance will be decreased if an accrued loss results over the total DROP period as a result of administrative expenses.

(m)

Distribution.

(1)

Upon termination of a DROP member's employment with the city from a position that is covered by the city police officers' retirement system the retirement benefits payable to the member or the member's beneficiary (if the member selected an optional form of retirement benefits which provides for payment to the beneficiary) shall be paid to the member, or, if the member is deceased, to the member's designated beneficiary, or, if no surviving designated beneficiary, to the member's estate and shall no longer be credited to the member's DROP account. Provided however, upon the chief of police exiting DROP, the retirement benefits payable to the chief of police or the chief of police's beneficiary (if the chief of police selected an optional form of retirement benefits which provides for payment to the beneficiary) shall be paid to the chief of police, or, if the chief of police is deceased, to the chief of police's designated beneficiary, or, if no surviving designated beneficiary, to the chief of police's estate and shall no longer be credited to the chief of police's DROP account.

(2)

Upon termination of a DROP member's employment with the city from a position that is covered by the city police officers' retirement system, the balance credited to the participant's DROP account shall be payable either to the participant or as a direct rollover into any qualified plan that accepts rollovers. Provided however, upon the chief of police exiting DROP, the balance credited to the chief of police's DROP account shall be payable either to the chief of police or as a direct rollover into any qualified plan that accepts rollovers. All distributions must comply with the internal revenue code and regulations promulgated thereunder.

(n)

DROP payments in the event of death. If a DROP member dies before his or her account balance is paid in full, the member's surviving designated beneficiary, or if there is no surviving designated beneficiary, the member's estate, shall have the same rights as a member to elect and receive the same benefit options as available to retired members. DROP payments to the beneficiary or estate shall be in addition to any retirement benefits payable to the designated beneficiary.

(o)

Administrative rules and regulations. The board of trustees shall have authority to promulgate administrative rules and regulations for the carrying out of the DROP.

( Ord. No. 2013-0681, § 2, 1-15-2013 ; Ord. No. 2017-0480 , § 2, 9-26-2017)