A Deferred Retirement Option Plan (DROP) is established effective April 1, 1997 Sample Clauses

A Deferred Retirement Option Plan (DROP) is established effective April 1, 1997. DROP provides an alternative form of benefit accrual while allowing a Member to continue working for City. During the DROP period, a DROP Member retains all rights, privileges and benefits of being an active City employee, except as specifically modified in the DROP Plan (SDMC Chapter 2, Article 4, Division 14), and is subject to the same terms and conditions of employment including disciplinary actions up to and including termination. The Member continues to be eligible for the active employee Flex Benefits Program for the classification and is not eligible for “retireehealth benefits until the Member terminates City employment. Under DROP, a monthly service retirement allowance along with any COLA increases, Supplemental Benefit checks and any adjustments to such payments applicable to retirements effective on the date the Member entered the DROP are credited to the member’s DROP Account in the SDCERS Trust Fund. These SDCERS benefits are calculated as if the Member were retiring on the date the Member enters the DROP. The Member’s contributions to the Retirement System cease. The Member and City each contribute 3.05% of the Member’s Base Compensation, as defined in Municipal Code section 24.0103, each pay period that the Member participates in the DROP. The Member’s contribution is made on a pre-tax basis pursuant to Internal Revenue Code section 414(h)(2). These amounts are credited to the Member’s DROP Account in the SDCERS Trust Account and are distributed to the DROP participant upon termination of employment. No withdrawals may be made from the DROP Account until the Member terminates City employment. Interest is credited to the Member’s DROP account at a rate determined by the SDCERS Board. The Member is 100% vested in their DROP Account from its inception. A DROP participant who becomes disabled may apply for conversion of their deferred retirement allowance to a disability retirement allowance calculated at the date of entry into the DROP, and the employee will retain all of the DROP and matching contributions. A Member who participates in DROP irrevocably designates a specificconsecutive period of months for participation, not to exceed 60 months. The Member must terminate City service at the end of the designated period. At the completion of the DROP period, and after the Member terminates City employment, the DROP account will be distributed as a lump sum, or in any other manner permitted by the IRS as soon as those options are developed by...