Deferred Retirement Option Plan (DROP)
DROP is an optional program that allows you, once you meet eligibility requirements, to freeze your regular monthly retirement benefit and have it deposited into a separate account, while still working and drawing a salary from a TRSL-reporting agency or school.
In our ongoing efforts to conserve resources, quarterly DROP/ILSB statements
are available exclusively online through TRSL's Member Access. Paper statements will no longer be mailed.
Is DROP right for you?
DROP gives you the opportunity to build a savings nest egg on a tax-deferred basis, but it may not be a good idea to participate. Here are some reasons why:
DROP participation period
- DROP freezes the average of your three highest years of salary, consecutively earned, at the pre-DROP level. So if you anticipate a significant salary increase during or after DROP and can increase your final average compensation (FAC), you may wish to do so and not enter DROP.
- If you intend to work more than three years after what would be the end of your DROP participation, you may reach 100 percent accrual, which would allow you to take home a benefit almost equal to your salary before retirement.
- Continuing to work could make you eligible for a retirement benefit based upon a higher accrual rate.
You can participate in DROP for up to two or three years, depending on eligibility. The period of time you can participate in DROP starts from the day you are first eligible for the program, so knowing when you're eligible to participate is crucial if you don’t want to lose participation time.
Eligibility requirements for DROP are based upon the retirement plan to which you belong. Read our DROP Handbook
for your plan's eligibility requirements.
Options upon completing DROP
At the end of your DROP participation, you can either continue working, or you can terminate employment and officially retire. After you end participation in DROP and terminate employment, you may begin withdrawing from your DROP account.
Need more information?
DROP Interest Rates