DROP will be paid into a

DROP account in lieu of

being paid to the partici-

pant. Upon separation

from City employment,

the participant will re-

ceive the DROP account

balance and begin receiv-

ing the monthly retire-

ment benefit.

The Deferred Retirement

Option Program (DROP)

allows an eligible Public

Safety Member (sworn

police officer or fire-

fighter) to defer receipt of

unreduced retirement

benefits while continuing

employment with the

City of Richmond without

loss of any other em-

ployee benefits. Eligible

members may elect to

participate in the pro-

gram for up to five (5)

years. Upon an eligible

Member's election to par-

ticipate in DROP, the

amount of creditable ser-

vice and the three-year

average final compensa-

tion becomes frozen for

purposes of determining

pension benefits. The

participant is considered

a retired Member for all

purposes related to the

Richmond Retirement

System (the System) and

does not accrue addi-

tional retirement benefits

under the System, except

for cost-of-living adjust-

ments (COLA), if applica-

ble. The monthly retire-

ment benefit under the

What Is DROP?

Frequently Asked Questions Q. How does DROP

work?

A. Once you enter DROP,

you continue your em-

ployment with the City

of Richmond and the

retirement benefits you

would have received if

you had stopped work-

ing are credited

monthly to your DROP

account. You remain eligi-

ble for promotions, pay

increases and benefits,

such as annual leave and

sick leave. You are subject

to all of the same laws and

regulations regarding em-

ployment that you were

subject to prior to entering

DROP.

Public Safety Members

Deferred Retirement

Option Program (DROP)

What’s Inside:

A Brief DROP

Overview

*

An Explanation of

Who is Eligible for

DROP and When

*

How DROP Works

with other

City Benefits

*

How to Calculate an

Estimate of Benefits

*

Applying for DROP

*

Account

Accumulation

*

Account Distribution

*

Disability Benefits

*

Death Benefits

C I T Y OF R I C H M O N D

RICHMOND RETIREMENT

SYSTEM

Q. When am I eligible to

participate in

DROP?

A. You are eligible to par-

ticipate in DROP when

you become eligible for

an unreduced benefit.

The eligibility require-

ments are as follows:

1. Defined Benefit Plan

Member- 25 years of

creditable service as a

sworn police officer or

firefighter.

2. Defined Benefit Plan

Member with the En-

hanced Option - 20

years of creditable ser-

vice as a sworn police

officer or firefighter.

3. Upon reaching normal

retirement age of 60.

Q. Can I use my unused

sick leave to meet the

service eligibility

requirement?

A. Yes. You can convert

all or a portion of your

unused sick leave to

reach the service eligi-

bility requirement. You

will receive creditable

service for 50% of your

converted unused sick

leave.

Q. How soon must I sub-

mit my application to

participate in DROP?

A. Your application must

be received in the

Retirement Office no

later than sixty (60)

days prior to your effec-

tive retirement date.

Q. Must I schedule an

appointment with a

counselor to submit

my DROP applica-

tion?

A. No. However, counsel-

ors are available to meet

with you, if requested.

tenure in DROP. How-

ever, when you exit

DROP, standard deduc-

tions such as federal and

state income taxes are

withheld. Monthly pre-

miums for health/dental

insurance coverage will

be withheld if you are

eligible for coverage

and elect to continue the

coverage. Also, court

ordered child support

payments will be de-

ducted, if applicable.

Frequently Asked Questions

Q. Will I receive a DROP

account statement?

A. Yes. You will receive an

account statement twice

a year, once after June

30 and the other after

December 31.

Q. What deductions are

withheld from my

monthly retirement

benefits?

A. Your benefit is not

subject to payroll

deductions during your

Q. What if I enter DROP

and then change my

mind?

A. Once your effective date

of retirement has passed

you may not rescind

entering into DROP.

You may only rescind

your election into DROP

prior to your effective

retirement date.

Q. How long can I elect to

stay in DROP?

DROP is an

investment tool

that allows a

retiree to

invest in

themselves

while

continuing to

work for the

City.

Page 2 Public Safety Members

A. You may elect to partici-

pate in DROP for a

maximum of five years.

If you decide to leave

City service on schedule

or at an earlier date, you

must give 60 days writ-

ten notice to the Retire-

ment Office and your

department.

Q. Will I still contribute

to the System once I

enter into DROP?

A. No. Your contributions

to the System will stop

upon you entering DROP.

Q. Can I use my unused

sick leave to increase

my monthly retirement

pension when I enter

DROP?

A. Yes. However, conversion

of your unused sick leave

will not benefit you if your

creditable service is greater

than 35 years (maximum

years used in the benefit

calculation).

Q. Will I receive a cost-

of-living adjustment

(COLA) on the monies

in my DROP account?

A. COLAs may be granted

at the discretion of City

Council during the an-

nual budget process for

the City of Richmond.

The practice has been

that COLAs are granted

July 1 for persons retired

prior to July 1 of the pre-

vious year.

DROP can help you prepare for DROP can help you prepare for DROP can help you prepare for DROP can help you prepare for

your retirement years.your retirement years.your retirement years.your retirement years.

Time and Money Time and Money Time and Money Time and Money –––– Let DROP Let DROP Let DROP Let DROP

help you to have both.help you to have both.help you to have both.help you to have both.

Q. How does the health

and dental insurance

plan work in and out

of DROP?

A. Group health and den-

tal insurance benefits

continue during DROP

at the same monthly

premium as for any

other active employee.

When a member exits

DROP, the member may

continue coverage with

the City at the retiree

rate, if eligible.

Q. Will I still have group

life insurance cover-

age during and after

DROP?

A. Yes. Your coverage

and cost sharing

arrangements will

continue during DROP

as they would for any

other active employee.

Upon exiting DROP

coverage will continue

at no cost to you. Please

refer to your Certificate

of Insurance for details.

amount allowed by the

City for your vacation and

compensatory leave not

taken while employed

with the City. However,

any unused sick leave will

be forfeited upon exiting

DROP.

Q. Can I contribute to the

City’s 457 Deferred

Compensation Plan

while in DROP?

A. Yes. Being in DROP has

no effect on participation

in the 457 Plan.

Q. What happens to my

money when I exit

DROP?

You may receive your

DROP money by rolling

your monies directly

into a qualified retire-

ment plan as defined in

Section 401(a), 401(k),

403(b), or 457 of the

Internal Revenue Ser-

vice Code, an individual

retirement account, or

an individual retire-

ment annuity. You may

also elect to receive your

DROP money in a lump

sum, less any federal

and state withholding

taxes. No funds will be

dispersed until your

Drop Distribution Elec-

tion Form is received in

the Retirement Office.

Q. What happens to my

sick leave, vacation

leave and compensa-

tory leave when I exit

DROP?

A. You will be paid up to

the maximum dollar

Frequently Asked Questions

Q. What happens to my

DROP account if I

become disabled?

A. If you become disabled

and it is non-service con-

nected, you will exit

DROP and receive your

monthly retirement bene-

fit along with your DROP

account balance. You

cannot apply for disabil-

ity retirement. If your

disability is service con-

nected, you have two

options. You may apply

for a Compensable

Disability retirement

and if you are approved,

you will forfeit your

DROP account; or you

may receive your

regular retirement

benefit as calculated

when you entered

DROP along with your

account balance.

Q. What happens to my

account balance if I

should die during the

DROP period?

Q. What happens if my

participation in the

DROP is interrupted

by military service?

A. Your DROP retirement

allowance will continue

to be deposited into

your account while you

are in the military for

the balance of the

elected term, unless you

terminate employment

with the City of Rich-

mond.

“Retirement is

wonderful if you

have two

essentials-much

to live on and

much to live for”

Author Unknown

Page 3 Public Safety Members

Build your financial Build your financial Build your financial Build your financial

nest egg with DROP.nest egg with DROP.nest egg with DROP.nest egg with DROP.

You maintain health

and dental coverage

while in DROP.

A. If your death is service-

connected, your account

balance will be forfeited

and monthly retirement

benefits will be paid to

your surviving spouse

or, if no spouse, to your

child or children under

the age of 18. If your

death is non-service

connected, your benefici-

ary will receive your

account balance and a

survivor allowance if

elected upon entering

DROP.

Phone: 804.646.5958

Fax: 804.646.5299

Website:

www.richmondgov.com/

retirement

Calculate Your Estimate of Benefits

Public Safety Members

Deferred Retirement

Option Program

Frequently Asked Questions

in the DROP Exit

Process on our website.

Your DROP exit date

should be the last work-

ing date of the month.

You will receive your

first retirement benefit

directly on the following

month’s payroll. If you

do not follow the guide-

lines, you may delay

the disbursement of

your benefits. It is

recommended that you

seek advice from your

financial planner or

tax advisor before you

elect your DROP account

distribution option

(lump-sum payment or

a direct rollover to a

qualified plan).

Q. Can I continue to

contribute to the 457

Plan after I leave

City employment?

A. No. A member cannot

contribute to the plan

after leaving the City.

Q. How do I exit from

DROP?

A. The guidelines for exit-

ing DROP are located at

www.richmondgov.com/

retirement. You must

give sixty (60) days no-

tice to the Retirement

Office and your depart-

ment of your intention

to exit DROP and you

must complete the re-

quired forms indicated

Philip R. Langham

Executive Director

Benefits Unit

Judith Nicholas

Manager

Chris Ellis

Retirement Benefits Coordinator

Trina Smith

Retirement Benefits Coordinator

Forms to complete when

exiting DROP

1. DROP Distribution

Election Form

2. Direct Deposit

Authorization Form

(Must include a voided

check or a savings deposit

slip)

3. Federal Tax Withholding

Certificate

4. State Tax Withholding

Certificate

5. Health/Dental Insurance

Deduction Authorization/

Waiver Form

To project your monthly retirement

benefit, you may choose to:

Use the Richmond Retirement System

Website Calculator at

www.richmondgov.com/retirement

or

Perform a manual calculation using

the formula cited below:

1.65% x AFC x Years of Service (maximum 35)

12 months

NOTE: There is also a pre-65 supplement of .75 percent, up to a maximum of 25

years of service. Example for a member with 25 years of service:

1.65% x AFC x 25 years = 41.25% - after age 65

.75% x AFC x 25 years = 18.75%

60.00% - before age 65

AFC = Average Final Compensation

C I T Y OF R I C H M O N D

RICHMOND RETIREMENT

SYSTEM

This brochure is intended only to provide general information regarding DROP. In the event of any conflict between the information

contained in this brochure and the provisions of Chapter 78 of the Code of the City of Richmond the provisions of the Code will govern.

= Unreduced Monthly Benefit

Richmond Retirement System

900 East Broad Street

Room 400

Richmond, Virginia 23219