For those of you that were interested in entering the DROP, you might not want to give up so quickly because of the decrease in interest rates. The rate reduction from 6.5% to 1.3% initiated by the Florida Legislature as of July 1 does not necessarily make the obsolete. Certainly, it lowers the earnings, but, the biggest part of the DROP sum is not interest, but simply your pension payments accruing each month in the DROP account.

There seems to be some misunderstanding about these numbers. It appears that those of you choosing to enter the DROP on or after July 1 will earn the lower 1.3% interest rate on your pension payments. If you are already in the DROP, and once you begin the DROP, you will NOT have to make the 3% employee contributions!

Florida Retirement System. You may participate in the Deferred Retirement Option Program (DROP) once you have reached normal retirement age or date.

Your DROP amount will not decrease by 70%, only the interest earned will. As we discussed on our web page, there is no magic to DROP, the bulk of the DROP benefit is simply your own pension being returned to you after the 5 years. When you enter the DROP, you technically retire and begin to receive your pension. Fundamentals Of Electric Circuits 5th Edition Solution Manual. Since you are going to continue to work, instead of the pension checks coming to you each month, those checks are deposited in your “DROP account”, and interest is then added to it. The monthly amount going into your DROP is determined by the same calculation as your pension, which is: Years of service, multiplied by service credit (3% for special risk, or 1.6% for regular members.

The result is then multiplied by your Average Final Compensation, which is the 5 years of your highest earnings. Schneider Pl7 Junior. For example, you have worked 30 years, and average of your highest five years of compensation (your AFC) is $50,000. Your calculation is 30 times 1.6%, times $50,000, or a pension of 48% of $50,000, or $24,000 per year – so you would receive $2,000 per month into your DROP account.