Deferred Retirement Option Program

What is DROP?

The Deferred Retirement Option Program (DROP) allows eligible FRS Pension Plan members to begin accruing their retirement benefits in a trust fund while they continue to work for up to 8 years. This action frontloads the financial benefit that retirees receive upon leaving employment at the trade of a correlatingly lower lifetime pension.

You must exit employment at your chosen DROP end date and may not extend your DROP period without formal department approval. There is no penalty for leaving DROP early, however, so we recommend signing up for the entire 8 years at entry.

Eligibility

Active, vested FRS Pension Plan participants who reach normal retirement criteria are eligible to join DROP. Normal retirement is based on full years of service or age, whichever is met first.

  • If hired before July 1, 2011:
    • Must complete at least 6 years of service to become vested.
    • Once vested, much reach either age 62 or 30 years of service to retire or join DROP.
  • If hired on or after July 1, 2011:
    • Must complete at least 8 years of service to become vested.
    • Once vested, must reach either age 65 or 33 years of service to retire or join DROP.

Employees may choose to enter DROP at any time after they become eligible. The earliest you may submit your application is six months before your intended DROP entry date.

Extension of Current DROP Period

DROP participants who signed up for 5-year DROP periods before July 2023 may extend that up to 3 years with department approval. To extend your DROP:

  • Submit a DROP Extension Request to your department for approval.
  • Once that is approved, schedule an appointment with UF Benefits to complete your new DROP Election Form. We will submit it to the state for you and update your UF employment record.
  • Notify your department that your new DROP exit date has been finalized.

What happens when you enter DROP?

  • Your DROP entry date becomes your “retirement date” for the purpose of calculating your pension.
    • Any future years of service or raises will not affect your pension.
    • You are still eligible to receive raises and promotions or apply for new positions with FRS employers. 
  • You may cash out your vacation leave up to the lifetime maximum for your position.
    • If you do, the cash-out value will be added to your salary calculation for your pension, permanently increasing its value.
    • You must request this cash-out from your department HR liaison within 30 days from entering DROP.
  • You stop contributing to the FRS Pension Plan, an effective 3% raise.
  • You continue receiving the regular leave hours and benefits for your position.
  • Your ongoing employment is still based on merit, not guaranteed for your DROP period.
  • Your monthly pension begins accumulating in a tax-deferred trust fund at 4% interest.

Should I join DROP?

We recommend that all employees considering joining DROP schedule an appointment with UF Benefits to learn more about the program, receive estimates for your DROP trust fund benefit and pension based on your preferred entry date, and discuss factors you should consider when making your decision. Some of these factors include:

  • Income estimates for DROP vs. regular Pension Plan retirement.
  • Likelihood for raises or promotions in the near future.
  • Financial and emotional readiness to retire, as your exit date is irrevocably fixed once you join DROP.
  • Early vs. regular retiree health insurance options and costs, including Medicare.
  • Overall health.
  • Comfort with risk (i.e., preference between getting as much retirement money as soon as possible or banking on a long life with a higher pension).

Please note that UF benefit specialists are not certified financial planners and may not advise what an employee should choose for their retirement. Free certified financial guidance, contracted rather than commission-based, is available to UF employees through Fidelity Investments or FRS.

  • UF Fidelity Investments representatives, Gene Varela and JT Carpenter: 866-973-5022
  • FRS financial planners with Ernst & Young: 866-446-9377
  • Self-service financial estimates through FRS Online

How do I apply for DROP?

Option 1 

Apply electronically through your account at FRS Online.

  • This process is designed to take about half an hour and does not require a notary.
  • It provides you financial estimates for a range of eligible DROP entry dates.
  • The necessary employer certification of your DROP entry is automatically requested for you by FRS. 
  • The application does not save progress; you must finish it in one sitting.
  • You will need:
    • Electronic copy of your birthdate verification document (Real ID driver’s license with star in top right corner, passport, birth certificate, etc.). Taking a picture and uploading that will work.
    • Social Security numbers and contact information for beneficiaries.
    • If you are married and will be selecting a survivor pension option for your spouse:
      • Electronic copy of spouse’s birthdate verification document.
      • Electronic copy of marriage certificate.
    • If you are married and will not be selecting a survivor pension option for your spouse:
      • Completing the DROP application will generate an acknowledgment form for your spouse to sign, no notarization required.
      • Upload that signed form to your FRS Online account.

Option 2

Schedule an in-person appointment with UF Benefits to complete a hard-copy application and upload it to the state.

  • You will need:
    • Government ID for notarization.
    • Copy of your birthdate verification document (Real ID driver’s license with star in top right corner, passport, birth certificate, etc.).
    • Social Security numbers and contact information for beneficiaries.
    • If you are married and will be selecting a survivor pension option for your spouse:
      • Electronic copy of spouse’s birthdate verification document.
      • Electronic copy of marriage certificate.
    • If you are married and will not be selecting a survivor pension option for your spouse:
      • Spouse must attend the appointment and bring a government ID to complete a notarized acknowledgment.

While in DROP

You may monitor the balance of your trust fund at FRS Online or review your account with the FRS financial advisors at 866-446-9377. UF Benefits does not have access to your FRS investment accounts.

Exiting DROP

We recommend that all employees schedule an appointment with the UF Benefits team three to six months before retirement to ensure a smooth transition. Visit UFHR Ready to Retire for step-by-step guidance about the retirement process, from accessing your retirement funds to planning retiree healthcare.

There is no penalty for exiting DROP early. If you decide to do so, simply submit your retirement notice to your department and UF Benefits as soon as possible so our team can update FRS with your new exit date.

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