Florida Retirement System Options





Q 1: What does  DROP stand for?

A: Deferred Retirement Option Program (DROP). 


Q 2: Who is eligible to participate in DROP?

A: Employees who retire from the Florida Retirement System (FRS), Teachers’ Retirement System (TRS) or State and County Officers and Employees’ Retirement System (SCOERS) and continue to work for up to five years (K-12 instructional employees may be eligible to participate for up to eight years depending on the school district’s policy). FRS retirement benefits are held in trust by FRS, earning interest.


Q 3: What are highlights of a DROP account?

A: FRS, TRS and SCOERS enrolled employees are eligible to enroll in DROP at the normal retirement date. FRS retirement benefits are deposited into a trust account.


Q 4: Are employer benefits available during DROP?

A: Your employer/employee relationship is not changed by DROP, but you’re considered to be retired from FRS. During DROP you have: no penalty for termination of employment during the DROP period; no guarantee of your continued employment; no death-in-the-line-of-duty benefits; and no disability benefits.


Q 5: How much will a DROP account earn?

A: Monthly retirement benefits earn 6.5% annual interest compounded monthly. You’ll receive annual cost-of-living increases. Health Insurance Subsidy (HIS) is available at the conclusion of DROP.


Q 6: When can I enroll in DROP and for what time period?

A: DROP eligibility begins when the normal retirement date is reached. The maximum DROP period extends for 60 months following your normal retirement date (K-12 instructional employees may be eligible to participate for up to 96 months depending on the school district’s policy).


Q 7: When do I have to make an election to participate?

A: Election is made up to six months before you reach normal retirement age, but no later than the last working day of the month you want to start. Election must be made within 12 months after the start of the DROP participation period. If the election is made after the participation period has begun, the maximum DROP participation will be reduced for each month the election is delayed.


Q 8: Are there DROP exceptions?

A: Yes. Non-instructional employees who have 30 years of service, but are not yet 57 years of age have an election window to elect DROP: anytime from the date you complete 30 years of service to the month in which you attain age 57; or 12 months from the first of the month in which you reach age 57.

Effective July 1, 2001, instructional personnel may enter DROP and participate for the full 60 months: anytime after attainment of 30 years of service regardless of age; or anytime after you reach age 62 if you have at least six years of service.

Effective June 1, 2003, each school district may allow K-12 instructional personnel to participate in DROP for up to 96 months. Visit the FRS Web site for additional information about this extension.

Members of certain plans may have different retirement dates.


Q 9: What happens to your sick-leave balance at DROP?

A: Sick-leave balances are paid in accordance with Florida law and employer policy, subject to the 401(a) terminal pay calculation (if applicable).


Q 10: What happens if you die or become disabled during the DROP period?

A: Upon your death, your FRS beneficiary receives accumulated DROP benefits. If you selected option 2, 3 or 4, monthly benefits will be paid to your beneficiary. Survivors are not eligible for FRS in-line-of-duty death benefits. Eligibility for FRS disability benefits ends upon entering DROP.


Q 11: What happens if you change your mind?

A: Upon entering DROP, you cannot change: years of service credit; option selection; FRS retirement date; or maximum date of resignation.


Q 12: How is my DROP account distributed?

A: You have options regarding the distribution of your DROP account: lump-sum cash payment; rollover to a tax-qualified plan; partial lump-sum cash payment and rollover.


Q 13: What are my tax-deferred rollover options?

A: Eligible retirement plans include:

• IRAs (Individual Retirement Accounts or Annuities);

• tax-qualified retirement plans [401(a), 401(k) and 403(a)]*;

• 403(b) arrangements;

• 457(b) plans of governmental employers.*

*If the plan allows such rollovers.


Q 14: What happens when the DROP period ends and my employment has been terminated?

A: When the DROP period or your employment terminate, you must apply for HIS and remain off all FRS employer payrolls for at least one calendar month unless continuation is pre-approved by your employer. During the subsequent 11 months, you must suspend your retirement benefits for any month you are employed by an FRS employer unless you are re-employed under FRS as a substitute or hourly, non-contractual teacher, food-service worker or transportation worker for up to 780 hours of employment during the 2 – 11 month period. After one full year, you may be re-employed in any position.