(a)Effective July 1, 2002, a participant who retires at least 90 days following July 1, 2002, who has then completed at least 23 years of credited service, and who is otherwise entitled to retire and receive a normal retirement benefit, shall have the opportunity to elect a back drop plan. A participant eligible for the back drop plan can elect in writing at his or her retirement to retroactively drop his or her credited service in excess of 20 years, for a period of months not exceeding 36 months immediately preceding the date of retirement, the back drop period; provided that the beginning of the back drop period may not extend past the earliest date on which the participant would have qualified for a normal retirement benefit. A participant who is not actively employed may not make a b
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(a) Effective July 1, 2002, a participant who retires at least 90 days following July 1, 2002, who has then completed at least 23 years of credited service, and who is otherwise entitled to retire and receive a normal retirement benefit, shall have the opportunity to elect a back drop plan. A participant eligible for the back drop plan can elect in writing at his or her retirement to retroactively drop his or her credited service in excess of 20 years, for a period of months not exceeding 36 months immediately preceding the date of retirement, the back drop period; provided that the beginning of the back drop period may not extend past the earliest date on which the participant would have qualified for a normal retirement benefit. A participant who is not actively employed may not make a back drop election. To be effective, a back drop election by a married participant shall be approved in writing by his or her spouse.
(b) Notwithstanding the provisions of Section 1 of Article VI of Act 1272, 1973 Regular Session (Act 1973, p. 2124), as amended, or otherwise stated herein, in effect as of the date of the participant’s retirement, any participant making the back drop election shall have his or her retirement benefits determined under Section 1, Article VI, Act 1272 or Section 45-37A-51.220 herein, as amended, as if retirement had occurred on the beginning date of the back drop period, so that for the purposes of calculating the retirement benefits, service during the back drop period shall not count as credited service and salary earned during the back drop period shall not be included in the calculation of final average salary and contribution made to the plan during the back drop period shall not otherwise be returned to the participant.
(c) Any participant who elects the back drop plan shall receive not less than 30 days or more than 90 days after his or her retirement, a lump-sum distribution equal to the monthly benefits that would have been paid during the back drop period if the participant’s retirement had occurred on the beginning date of the back drop period, calculated as provided in subsection (b) above, together with interest thereon at a percentage rate as the board may determine, annually, compounded monthly from the date on which each monthly benefit would have been paid; provided that no interest shall be paid unless the actuary retained by the board determined that sufficient funds are available to pay the interest on a cost-neutral basis.
(d) If any participant who elects the back drop plan dies before the lump-sum distribution referred to in subsection (c) is paid, the back drop election shall be null and void, unless otherwise authorized in writing by the retiree prior to retirement, and the benefits to which the participant and his or her surviving spouse, if any, are entitled shall be calculated as if the back drop election had never been made. The survivor may have the option of either receiving the lump-sum distribution and receiving a reduced monthly survivor’s benefit or electing to receive the retirement benefit due if no lump-sum distribution were paid. If the survivor receives a lump sum distribution as authorized by the retiree herein due to death of the retiree, the survivor benefit shall be reduced based on the recalculated final average salary.
(e) If any participant was receiving retirement benefits under a back drop election made in accordance with this section, then notwithstanding any provision of Section 45-37A-51.228, or otherwise herein, the benefits to which the participant’s surviving spouse is entitled shall be calculated on the basis of the retirement benefit which the participant was receiving as a result of the back drop election.
(f) The board shall have the authority to terminate the back drop plan created in this section prospectively at any time if it is determined that contributions to the system are not sufficient to pay the costs of the back drop plan; provided that no termination shall affect the rights of any participant, or the surviving spouse of a participant, who has properly made his or her back drop election as required herein, and the election shall have been approved by the board, but has not yet begun receiving benefits to which he or she would be entitled as a result of the election.
(g) The board is authorized, with approval of the governing body of the municipality primarily served by the system, to make any and all rules and regulations necessary to implement and administer the back drop plan which are not inconsistent with this section or applicable law.
(h) Purchased past service credit with the city or purchased service credit from the county, other municipality, or temporary service with the city may not be used to increase service in excess of 30 years in order to qualify for a DROP benefit under this section.
(i) Any purchased past service credit or purchased service credit shall have been applied and paid for into the system more than 10 years preceding the application for a DROP benefit for the purchased years of credited service to be included in determining the DROP benefit to which the participant may be allowed.
(j) A retiree, who has previously retired from the city and has not received a DROP benefit from the city and is rehired by the city, may qualify for a DROP benefit provided, upon rehire the employee shall work at least 36 consecutive months to be eligible for a DROP benefit.