§ 5-1-302. DEFERRED RETIREMENT OPTION PROGRAM — FIRE.

(a)

Definitions .

(1)

In this section the following words have the meanings indicated.

(2)

"DROP allowance" means the annual pension contributed to the DROP account for each full year, and prorated for each half year, if applicable, of the DROP period.

(3)

"DROP period" means the period of time selected in accordance with subsection (c) of this section for participation in the DROP program.

(4)

"DROP program" means the deferred retirement option program for members.

(5)

"DROP service" means:

(i)

Qualifying service;

(ii)

Other jurisdictional service outside Baltimore County;

(iii)

Transfer service within Baltimore County; and

(iv)

Minus the length of the DROP period selected by a member.

(6)

(i)

"Member" means a Group 4 member in active service who is on pay schedule V or pay schedule VIII of the county classification and compensation plan.

(ii)

"Member" does not include a Group 4 member who begins service after July 1, 2007.

(7)

(i)

"Qualifying service" means:

1.

Membership service on pay schedule V or pay schedule VIII;

2.

Retirement system membership credit for accumulated unused sick leave;

3.

Creditable military service;

4.

Other jurisdictional service outside Baltimore County for members who are in active service on or before December 31, 2003; and

5.

Transfer service within Baltimore County for members who are in active service on or before December 31, 2003.

(ii)

"Qualifying service" does not include:

1.

Other jurisdictional service outside Baltimore County for members who begin active service after December 31, 2003; and

2.

Transfer service within Baltimore County for members who begin active service after December 31, 2003.

(b)

Participation . A member may elect to participate in the DROP program if the member has 32 years or more of qualifying service and selects a DROP period provided for in this section.

(c)

Selection of DROP period. Subject to the time limitations in subsection (d) of this section, a member may select from the following DROP periods:

(1)

3 years if the member has 32 years of qualifying service;

(2)

3, 3 ½, or 4 years if the member has 33 years or more of qualifying service; or

(3)

3, 3 ½, 4, 4 ½, or 5 years if the member has 34 years or more of qualifying service.

(d)

Retirement dates. Retirements under the DROP program may begin on or after:

(1)

July 1, 2004 for not more than a 3 year DROP period;

(2)

July 1, 2005 for not more than a 4 year DROP period; or

(3)

July 1, 2006 for up to a 5 year DROP period.

(e)

DROP account. A DROP account for a member shall be established as of the member's retirement and election to participate in the DROP program, and shall consist of the following:

(1)

The member's DROP allowance for each year and prorated half year, if applicable, of the DROP period selected by the retiring member adjusted in accordance with subsections (g), (h), and (i) of this section;

(2)

Contributions to the retirement system made by a member during the DROP period; and

(3)

Interest earned on both the member's DROP allowance and the member's contributions during the DROP period, based on the administrative procedures currently used to determine the member's accumulated contributions, except that the interest rate used shall be the greater of:

(i)

The rate of return on the actuarial value of assets for the employees' retirement system for the preceding calendar year minus 50 basis points; or

(ii)

The regular rate of interest (5% per annum) for the employees' retirement system.

(f)

DROP account options. A member may choose to:

(1)

Receive the DROP account accumulation in a single lump sum; or

(2)

Roll the DROP account over into an eligible retirement plan as defined in § 402(c)(8)(b) of the Internal Revenue Code.

(g)

Cost-of-living adjustment. On the date that a post-retirement increase is granted under § 5-1-235 of this title that is at least twelve (12) months after the beginning date of the DROP period, DROP allowances credited to the DROP account and paid on actual retirement shall be increased for retirement system cost of living adjustments as if the member had retired at the beginning of the DROP period.

(h)

Average final compensation. For the purpose of calculating the member's DROP and retirement allowances under this section, average final compensation shall be:

(1)

Based upon the member's DROP service; and

(2)

Determined as if the member had retired at the beginning of the DROP period.

(i)

DROP allowance. Notwithstanding any other provision of law, the DROP allowance shall be 74% of the member's average final compensation for 29 years DROP service plus additional accruals in accordance with § 5-1-217 of this title.

(j)

Annualized retirement allowance. In addition to the proceeds of the DROP account, a member who retires under the DROP program will receive an annualized retirement allowance, paid monthly, equal to the member's annual DROP allowance, adjusted as provided for in subsection (k) of this section.

(k)

Allowance subject to reduction.

(1)

The retirement allowances provided under this section shall be equal to the DROP allowance, increased for applicable retirement system cost of living adjustment, and subject to reduction based upon the option selected by the retiring member under § 5-1-231 of this title.

(2)

The reduction under § 5-1-231 of this title shall be based on the ages of the member and the designated beneficiary, if any, on the actual retirement date.

(Bill No. 118-03, § 1, 12-19-2003; Bill No. 48-07, § 2, 7-1-2007; Bill No. 30-10, § 2, 7-1-2010)