DROP is an optional program that allows you 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. If you are considering entering DROP, it is critical to know when you are first eligible to participate in DROP; otherwise you risk losing participation time. Please review the information below and in the DROP Handbook to learn more.
Is DROP right for you?
DROP gives you the opportunity to build a savings nest egg on a tax-deferred basis, but for some members, participating in DROP might not be the best financial decision. Here are some things to consider:
- Future raises. Any raises you may receive in the future from promotions or job changes will not be reflected in your regular monthly retirement because it was calculated and "frozen" at the time you entered DROP. If you anticipate a signifi cant salary increase during or after your DROP participation, you may not want to participate in DROP.
- Service credit. Working longer without participating in DROP could increase your retirement benefit. If you intend to work more than three or five years after what would be the end of your DROP participation, you may not want to enter the program. You may work long enough to earn 100% of your average salary; however, by entering DROP this is not possible.
- Higher benefit factor. Continuing to work could make you eligible for a retirement benefit based upon a higher accrual rate.
- Get an estimate. TRSL recommends that you complete a Benefit Estimate Request (Form 10) to see if DROP is right for you.
You can participate in DROP for up to three years, starting on the date you first become eligible to enter the program. Your participation period cannot extend beyond three years. Knowing the date you become eligible to participate is crucial if you don’t want to lose participation time.
Eligibility requirements for DROP are based upon the retirement plan you are in and when you first became a member of one of Louisiana's four state public retirement systems (TRSL, State Employees, School Employees, or State Police). 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