A Deferred Retirement Option Plan (DROP) shall be adopted and administered by the
Retirement Board. Participation in the DROP shall be limited to five years. The five-year
participation period shall be measured from actual retirement of the Participant.
Upon entering the DROP, a Participant shall elect whether the earnings credited to
the Participant's DROP account shall be either the actual net investment return realized
by the Plan (determined quarterly) or four percent per annum. Thereafter, on or before
December 1st of each year, Participants shall make an annual irrevocable investment
election for the following calendar year between the actual net investment return
realized by the Plan or four percent per annum. Investment elections shall be in writing
and submitted to the Retirement Board. If a Participant fails to timely submit a written
investment election to the Retirement Board, the default investment election for the
Participant's DROP account will be four percent per annum. The DROP shall contain
such other terms and conditions as the Retirement Board deems necessary and appropriate
for proper administration of the DROP.
Net investment return is determined monthly by comparing the value of the assets in
the fund on the first valuation date (i.e., the first day of the month) to the value
of the fund assets on the second valuation date (i.e., the last day of the month).
Results are geometrically linked, continuously, after the first month. A weighted
average allocation method is used to account for contributions into and payments from
the fund. The weighted portion of such contributions and payments is a fraction, the
numerator of which is the number of days in the valuation period, minus the number
of days in the valuation period which begin prior to the applicable contribution date
and minus the number of days in the valuation period which begin after the applicable
payment date, and the denominator of which is the number of days in the valuation
period.
