HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab 18_11/02/2009Public Safety Pension Officer
DROP Process
1. Employee completes DROP application an DROP Acknowledgement
(Finance)
2. Finance calculates the numbers and provides to Actuary and Pension
Coordinator
3. Member chooses benefit options (the Actuary will provide the form and the
employee will sign; goes before Pension Board with retirement DROP
application)
4. DROP Application and amount of benefit is placed before Pension Board and
approved by Board of Trustees
5. Actuary provides calculation information to Salem Trust, who is charged with
establishing the necessary account for the funds to be invested in.
6. When the employee finishes his/her DROP period, and upon his/her termination
of employment with the Village, the employee chooses to roll the funds collected
from the DROP account balance into an annuity, 3-year installments, or a lump
sum (Application for Distribution of DROP Balance -FINANCE)
7. Payment process is handled via Salem Trust.
Four Required Forms:
1. Application for Pension Benefits
2. DROP Acknowledgement
3. Application for Distribution of DROP Balance
4. Special Tax Notice (to be given to employee by HR at Exit Interview)
DROP Considerations:
• Accounting for the Monthly DROP deposits (Handled by Salem Trust)
• Crediting of Interest on an Annual Basis (the interest crediting provided by
Ordinance is annual based on actuarial evaluation. DROP members will get only
one credit for interest annually based on the net return for the Plan)
• Creation of DROP Statements (Pension Board will need to determine how
frequently they want to provide DROP members with statements -quarterly,
semi-annual or annual