Code of Alabama
Part 1 - Firemen's and Policemen's Pension and Relief System.
Section 45-37A-51.08 - Retroactive Deferred Retirement Option Plan.

(a) A member who retires at least 90 days following the effective date of this section, who has then completed at least 26 years, but less than 30 years, of credited service, and who is otherwise entitled to retire and receive a monthly retirement allowance under the supplemental pension system, shall have the opportunity to elect a Back DROP plan. A member eligible for the Back DROP plan may elect, in writing at his or her retirement to retroactively drop his or her credited service in excess of 23 years, for a period of months not exceeding 36 months immediately preceding the date of retirement, the Back DROP period. A member who is not actively employed may not make a Back DROP election to be effective, a Back DROP election by a married member shall be approved in writing by his or her spouse.
(b) Notwithstanding subsection (a) and subsection (d) of Section 45-37A-51.07 in effect as of the date of the member’s retirement, any member making the Back DROP election shall have his or her retirement benefits determined under subsection (a) and subsection (d) of Section 45-37A-51.07 as if retirement had occurred on the beginning date of the Back DROP period, so that for purposes of calculating 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 the member's final average salary.
(c) Any member who makes the Back DROP election 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 such member's retirement had occurred on the beginning date of the Back DROP Period, calculated as provided in subsection (a) of Section 45-37A-51.07, together with interest thereon at such percentage rate as the board may determine annually, compounded monthly from the date on which each monthly benefit would have been paid; provided, however, that no interest shall be paid until or unless the actuary retained by the board determines that sufficient funds are available to pay such interest on a cost neutral basis. The Back DROP election shall be binding on the member, his or her children, and spouse. The Back DROP election shall be irrevocable on the date of the member's retirement.
(d) If any member who elects the Back DROP plan dies before the date of his or her retirement, the Back DROP election shall be null, void, and of no force and effect, and the benefits to which the member or his or her surviving spouse or children, if any, are entitled shall be calculated as if such Back DROP election had never been made.
(e) Once a member who has made a Back DROP election in accordance with this section retires, then, notwithstanding, any other provision of subsection (c) of Section 45-37A-51.07, the benefits to which such member's surviving spouse or children are entitled shall be calculated on the basis of the retirement benefit which the member was receiving as a result of having made his or her Back DROP election and shall have no rights to any benefits calculated on the basis of any greater final average salary.
(f) The board shall have the authority to terminate the Back DROP plan in this section if the board, in its sole discretion, determines that the payments to the fund are not sufficient to pay the costs of the Back DROP plan. No such termination shall affect the rights of any member, or the member's surviving spouse or children, where such member has properly made his or her Back DROP election as required herein, but has not yet begun receiving benefits to which he or she would be entitled as a result of such election.
(g) The board is authorized, with the 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 that are not inconsistent with this section or applicable law.

Structure Code of Alabama