Deferred Retirement Option Plan (DROP)

The Deferred Retirement Option Plan, known as DROP, is a voluntary program that provides eligible Members an alternative method of accruing benefits from SDCERS while employed by the City of San Diego ("City"), San Diego Unified Port District (“Port”), and San Diego County Regional Airport Authority (“Airport”), in addition to their service retirement benefit.

You must be age and service eligible for retirement before you can participate in DROP, and you also must have been 1) hired by the City before July 1, 2005; 2) hired by the Port before October 1, 2005; or 3) hired by the Airport before October 1, 2006. To participate, you must enter into an irrevocable agreement with SDCERS in which you agree to leave employment and retire within five years from the date you enter DROP.

At its November 9, 2018 meeting, the SDCERS' Board of Administration approved staff's recommendation to change the interest rates for all DROP Participation Accounts and DROP Annuities.

Effective January 1, 2019, the interest rate for DROP Participation Accounts was increased to 2.7%. DROP Participation Accounts are the accounts that Active DROP members (those still working) contribute to during their five-year maximum participation period. 

Effective January 1, 2019, the interest rate for a new DROP Annuity was increased to 3.0%. A DROP Annuity is a payment option available to DROP participants when they exit DROP. Under this payment option, retirees receive a monthly DROP payment (annuity) in addition to their monthly retirement benefit (pension). Important: This has no effect on retirees who began receiving a DROP Annuity before January 1, 2019 – the DROP Annuity rate in effect at the time the annuity disbursement begins is permanent.

Deferred Retirement Option PLAN (DROP)