Short answer: you can't join the TRS of Alabama DROP. It was a Tier 1-only plan, and RSA stopped taking applications on March 24, 2011. If you were in it, this page explains how your DROP money is paid and how work after DROP is counted. Everyone else can look at PLOP, the partial lump sum that's open now. Handbook pp. 27-28, Deferred Retirement Option Plan (DROP) Tier 1 Only; Ala. Code § 16-25-150(b), (c), (f), 16-25-151
What it was
Deferred Retirement Option Plan, Tier 1 only. TRS of Alabama stopped accepting DROP applications on March 24, 2011 (Act 2011-27). It required 25 years (excluding sick leave), age 55 and service-retirement eligibility; participation was 3 to 5 years. Time in DROP is not creditable service; service after DROP earns a second, separate benefit (AFS on post-DROP service only, x 2.0125%). DROP balances are paid only after termination; no state income tax on the distribution. Handbook pp. 27-28, Deferred Retirement Option Plan (DROP) Tier 1 Only; Ala. Code § 16-25-150(b), (c), (f), 16-25-151
If you kept working after DROP
- Time in DROP isn't service credit.
- The benefit for work after DROP uses the formula on the new service only: average final salary for that service × years and months × 2.0125%. It is paid under the same option chosen at DROP entry, which can't be changed. Handbook p. 27
- Sick leave: the first benefit can count no more sick days than were certified at DROP entry. Sick days earned after DROP count toward the second benefit. Handbook p. 27
- If a member dies during the work after DROP, no preretirement death benefit is paid, but the $15,000 group term life benefit is payable for full-time employees. Handbook p. 27 See survivor benefits.
- Former DROP members can't take PLOP. Handbook pp. 24-25, Partial Lump Sum Option Plan (PLOP); Ala. Code § 16-25-14(j)(5)
Getting your DROP money
Nothing is paid from a DROP account until you leave employment. DROP accounts stop earning interest 90 days after you leave, and payment usually comes within 30 days of the final contribution. Handbook p. 28, Distribution of DROP Account
You can take the DROP balance as a lump sum, less the required 20% federal withholding and with no Alabama income tax, or roll all or part of it to an IRA, another eligible plan, a 403(b), or a 457(b) such as RSA-1. Handbook p. 28, Distribution of DROP Account How the lump sum is taxed is on the taxes page.
Going back to work
A former DROP participant who left can be rehired by an RSA employer (TRS of Alabama or ERS). The new service earns a separate benefit under the post-DROP rules. Handbook p. 28, Reemployment with the RSA after Withdrawal from Service If you're retired and thinking of part-time work instead, read working after retirement.
To estimate a regular TRS of Alabama benefit (without DROP), use the calculator.
From the sources
- TRS of Alabama's DROP (Deferred Retirement Option Plan) was for Tier 1 only and closed to new applications on March 24, 2011. Members already in it follow the old rules; years worked after DROP earn a second, separate benefit.Handbook pp. 27-28; Ala. Code § 16-25-150(f)
Questions
Can I join DROP now?
No. TRS of Alabama stopped accepting DROP applications on March 24, 2011.
Was DROP ever open to Tier 2?
No. DROP was for Tier 1 members only, and it closed before Tier 2 began in 2013.
I was in DROP. Can I take PLOP?
No. The handbook says former DROP participants can't choose the Partial Lump Sum Option Plan.
When is my DROP account paid?
Only after you leave employment. Tell TRS of Alabama how you want it paid; payment usually comes within 30 days of the final contribution, and the account stops earning interest 90 days after you leave.
I kept working after DROP. Do my years add up?
No. Time in DROP isn't service credit, and the years after DROP earn a second, separate benefit figured on that service alone.
Source: TRS Member Handbook, July 2026 edition (back cover "7-2026"), pp. 24-25, 27-28, 27, 28. Also: Code of Alabama Title 16, Ch. 25 and 25A. Last reviewed .