Deferred Retirement Option Program (DROP)

What DROP Is

The Deferred Retirement Option Program (DROP) lets eligible FRS Pension Plan members retire on paper while continuing to work for up to 8 years.

During this period, your monthly retirement benefit is deposited into a DROP account and earns interest:

• 6.5% annually if you entered DROP before July 1, 2011

• 4% annually if you entered on or after that date

When your DROP period ends, you must separate from employment and begin receiving your monthly pension.

Who Can Participate

You may enter DROP if:

• You are vested in the FRS Pension Plan

• You have reached your normal retirement date

• You are an active employee in an eligible FRS-defined benefit plan

Normal retirement depends on your hire date and class:

• Regular Class (pre‑2011): Age 62 with 6 years, or 30 years at any age

• Regular Class (post‑2011): Age 65 with 8 years, or 33 years at any age

• Special Risk: Earlier retirement ages and service requirements apply

Members of optional retirement programs and renewed members are not eligible.

How the Pension Plan Works

The FRS Pension Plan is a defined benefit plan, meaning your retirement income is based on a formula — not market performance. Your benefit depends on:

• Your salary

• Your years of service

• Your membership class

For service earned before July 1, 2011, benefits include a 3% annual cost‑of‑living adjustment. The plan is funded by employer contributions, and the FRS manages all investment risk.

Why This Plan Exists

The Pension Plan is designed for employees who expect to stay with FRS employers long‑term. It’s also preferred by people who want a predictable, guaranteed retirement benefit rather than managing investments themselves.

Eligibility

Most FRS employees can choose the Pension Plan except:

• SUSORP members

• Members of the closed Teachers’ Retirement System

• Members of the closed State & County Officers and Employees’ Retirement System

How the Investment Plan Works

The FRS Investment Plan is a defined contribution plan. Your benefit is based on:

• Employer and employee contributions

• Your membership class

• How your chosen investment funds perform

You control how your account is invested, and your final retirement benefit is simply the value of your account when you leave FRS employment. There is no guaranteed monthly pension, but you can use your balance to purchase a lifetime income option if you choose.

Why This Plan Exists

The Investment Plan was created for employees who:

• Expect to change jobs more often

• Prefer portability

• Want more control over their retirement money

• May not stay long enough to vest in the Pension Plan

It has been available to FRS members since 2002.

Who’s Eligible

Most FRS employees can choose the Investment Plan except:

• SUSORP members

• Members of the closed Teachers’ Retirement System

• Members of the closed State & County Officers and Employees’ Retirement System

• DROP participants (except when using it as a distribution option)