When
Normal retirement
Vested Pension Plan members who have reached their normal retirement date. You can begin in the month you reach your normal retirement date by age, or the month after the month you reach it by service. Renewed members and Investment Plan members are not eligible.
DROP Guide (2026), p. 5, When can I begin DROP participation?; Handbook (2026), p. 42, DROP FAQ 1-3; F.S. 121.091(13)(a)How long
96 months
K-12 instructional staff: up to 24 more, through June 30, 2029.
Handbook (2026), p. 40; DROP Guide (2026), p. 3; Handbook (2026), p. 40 and note 8; DROP Guide (2026), p. 15, DROP Extension FormsInterest
4% a year
Effective annual rate, compounded monthly on the prior month's accumulated balance. Benefits on deposit for less than one month, or after DROP ends, earn no interest.
DROP Guide (2026), p. 6, How much interest will my DROP account earn?; Handbook (2026), p. 43, DROP FAQ 7; DROP Guide (2026), pp. 6-7, How much interest will my DROP account earn?How it works
DROP lets you effectively retire while delaying termination: your monthly benefits accumulate in the FRS Trust Fund, earning tax-deferred interest, while you keep working and earning a salary but no additional service credit. Handbook (2026), p. 40, The Deferred Retirement Option Program (DROP); DROP Guide (2026), p. 3, What is the DROP?
Your monthly benefit is the amount determined when DROP started, based on your service and salary then, plus annual COLAs. Once DROP begins you cannot add service credit, change options, or change the type of retirement. Handbook (2026), p. 40; DROP Guide (2026), p. 17, Can I change my option selection or buy additional service credit while in the DROP?
DROP participants are not subject to the 3% employee contributions. Seminar slides (Sept. 24, 2025), slide 13; Handbook (2026), p. 23, Contributions
There is no penalty for delaying DROP entry and participating for the full 96 months after you reach normal retirement. DROP Guide (2026), p. 17, When do I have to enter the DROP?
K-12 instructional personnel employed by a district school board, the Florida School for the Deaf and the Blind, or a developmental research school may extend DROP up to 24 more calendar months, if the employer authorizes it and the Division approves. They must end extended DROP on the last day of the school year and stay in an eligible position throughout. The provision expires June 30, 2029. K-12 administrative personnel whose DROP termination date falls before the end of the school year may be authorized to extend to the end of that school year. Handbook (2026), p. 40 and note 8; DROP Guide (2026), p. 15, DROP Extension Forms; Handbook (2026), p. 40; DROP Guide (2026), p. 15
Our projection
A member enrolled before July 1, 2011, 60 with 30 years (15 before July 1, 2011) and a $50,000 AFC, enters DROP July 1, 2026. Option 1 is $2,000.00 a month, with a 1.5% COLA. Load it in the calculator
| In DROP for | Benefits paid in | Interest | Balance |
|---|---|---|---|
| 60 monthsends July 1, 2031 | $123,654 | $12,575 | $136,230 |
| 96 monthsends July 1, 2034 | $202,388 | $34,236 | $236,624 |
After 96 months the COLA has raised the monthly benefit to $2,219.69, which is then paid for life after you leave.
The DROP Guide gives the interest rate, compounding and COLA rules, but no worked DROP balance. FRS computes the official accrual and sends a summary.
We credit each month's benefit, compound 4% a year monthly on the prior balance, and apply the July COLA (prorated the first year).
What would settle it: An FRS DROP estimate or DROP accrual summary.
Interest over the years
| Interest credited | Rate a year |
|---|---|
| Through June 30, 2011F.S. 121.091(13)(c)1.a. | 6.5% |
| July 1, 2011 to June 30, 2023DROP Guide (2026), p. 6, note 1; F.S. 121.091(13)(c)1.b.(I) | 1.3% |
| From July 1, 2023DROP Guide (2026), p. 6, How much interest will my DROP account earn?; Handbook (2026), p. 43, DROP FAQ 7 | 4% |
The SPD's footnote says DROP participants with a begin date before June 30, 2023 earned 1.3%. The DROP Guide says members with a begin date before, on, or after July 1, 2011, through June 30, 2023, earned 1.30%. F.S. 121.091(13)(c)1. sets the rate by when interest accrues: 6.5% before July 1, 2011, 1.3% from then through June 30, 2023, and 4% from July 1, 2023.
We use the statute's schedule by month, which the DROP Guide matches. Anyone entering DROP now earns 4%.
Pension Plan SPD (July 1, 2026), p. 7, note 7; DROP Guide (2026), p. 6, note 1; F.S. 121.091(13)(c)1.
The COLA in DROP
Your DROP benefit gets the July COLA; the first one is prorated if you have been in DROP less than a year. FRS's example: 30 years, 20 before July 1, 2011, gives a 2% COLA. Entering DROP January 1, 2024, the first, in July 1, 2024, is 1%.
DROP Guide (2026), p. 7, Will my FRS benefits receive a COLA while I am in the DROP?; DROP Guide (2026), p. 7, Will my FRS benefits receive a COLA while I am in the DROP?Applying and cancelling
You may apply no earlier than six months before your normal retirement date; the Division must receive the application by the last calendar day before the month you intend to begin. DROP Guide (2026), p. 6, When should I apply for the DROP? A written cancellation must reach the Division by the end of the first month of DROP. After that DROP cannot be canceled; retirement is final at the end of the first month. DROP Guide (2026), p. 23, Can I cancel my DROP application?; Seminar slides (Sept. 24, 2025), slide 18
When DROP ends
When DROP ends you must terminate all FRS employment. The accumulation is paid as a lump sum (20% withheld for federal tax), a direct rollover, or a partial lump sum plus rollover. With no choice within 60 days, the Division pays a lump sum. DROP Guide (2026), pp. 9-10, What happens when my DROP participation ends?
If you do not terminate at the end of DROP, your retirement application is voided and DROP is retroactively canceled; your employer pays to restore your service credit. Handbook (2026), p. 42, DROP FAQ 6
A lump-sum annual leave payment (up to 500 hours) taken when you enter DROP can be included in your benefit; one taken when DROP ends is not. DROP Guide (2026), p. 8, What about my lump-sum annual leave payment?
Taxes on the payout
A lump-sum DROP payment is taxed as income in the year paid, with 20% withheld; you may owe more in a higher bracket, and an extra 10% unless you leave DROP in or after the year you reach 55. A direct rollover defers the tax. DROP Guide (2026), p. 11, How will my DROP benefits be taxed?
While you're in DROP
DROP participants are not eligible for disability retirement or in-line-of-duty death benefits. Handbook (2026), p. 44, DROP FAQ 12-13
No HIS while in DROP, and DROP years earn no HIS credit. HIS can start after DROP ends, retroactive at most six months. DROP Guide (2026), p. 25, Am I eligible to receive the HIS benefit while I am in the DROP?
You may change FRS employers in DROP, but a gap of one calendar month or more ends DROP participation. DROP Guide (2026), p. 18, Can I change FRS employers while in the DROP?
If you die in DROP, your designated beneficiary receives the DROP accumulation; under Option 2, 3 or 4 a monthly benefit also continues by the option's terms (Option 2's 120 months start when DROP begins). DROP Guide (2026), p. 22, Who is entitled to my DROP benefits if I die while participating in the program?
The facts
- DROP (the Deferred Retirement Option Program) lets you retire on paper and keep working. Your monthly benefits build up in the FRS Trust Fund with interest while you earn a salary but no more service credit.Handbook (2026), p. 40, The Deferred Retirement Option Program (DROP)
- You can join DROP once you are vested and at your normal retirement date: the month you reach it by age, or the month after you reach it by service.DROP Guide (2026), p. 5, When can I begin DROP participation?
- There is no penalty for waiting to enter DROP; you can still stay the full 96 months.DROP Guide (2026), p. 17, When do I have to enter the DROP?
- DROP lasts up to 96 calendar months. K-12 instructional staff may extend up to 24 more months with employer authorization and Division approval, ending on the last day of the school year. That extension expires June 30, 2029.Handbook (2026), p. 40 and note 8
- DROP accounts earn 4.00% a year, compounded monthly. Benefits on deposit less than a month, or after DROP ends, earn no interest.DROP Guide (2026), pp. 6-7, How much interest will my DROP account earn?
- Your DROP benefit gets the July COLA. Example: 30 years with 20 before July 1, 2011 gives a 2.0% COLA; entering Jan. 1, 2024, the first (July 2024) is halved to 1.0%.DROP Guide (2026), p. 7
- Your benefit, service credit and option are fixed when DROP starts. You cannot buy service or change options in DROP.DROP Guide (2026), p. 17
- You pay no 3% employee contribution while in DROP.Seminar slides (Sept. 24, 2025), slide 13
- You can apply up to six months before your normal retirement date. You can cancel only in writing by the end of the first DROP month.DROP Guide (2026), p. 6; p. 23
- When DROP ends you must leave all FRS employment. The balance is paid as a lump sum (20% withheld), a direct rollover, or both. With no choice within 60 days, you get a lump sum.DROP Guide (2026), pp. 9-10
- If you do not leave at the end of DROP, your retirement is voided and DROP is canceled back to the start.Handbook (2026), p. 42, DROP FAQ 6
- An annual leave payout taken when you enter DROP can count in your benefit; one taken when DROP ends cannot.DROP Guide (2026), p. 8
- In DROP you cannot get disability retirement, your survivors cannot get in-line-of-duty benefits, and you get no HIS until you leave.Handbook (2026), p. 44, DROP FAQ 12-14
- DROP is a Pension Plan feature. Investment Plan members, including Hybrid Option members, cannot join.Handbook (2026), p. 42, DROP FAQ 2; Investment Plan SPD (2026), p. 16
Next: working after retirement or taxes.
Questions
What is the FRS DROP?
DROP lets you effectively retire while delaying termination: your monthly benefits accumulate in the FRS Trust Fund, earning tax-deferred interest, while you keep working and earning a salary but no additional service credit.
Who can join DROP?
Vested Pension Plan members who have reached their normal retirement date. You can begin in the month you reach your normal retirement date by age, or the month after the month you reach it by service. Renewed members and Investment Plan members are not eligible.
How long can I stay in DROP?
Up to 96 months. K-12 instructional personnel employed by a district school board, the Florida School for the Deaf and the Blind, or a developmental research school may extend DROP up to 24 more calendar months, if the employer authorizes it and the Division approves. They must end extended DROP on the last day of the school year and stay in an eligible position throughout. The provision expires June 30, 2029.
How much interest does DROP earn?
4% a year now. Effective annual rate, compounded monthly on the prior month's accumulated balance. Benefits on deposit for less than one month, or after DROP ends, earn no interest.
What happens when DROP ends?
When DROP ends you must terminate all FRS employment. The accumulation is paid as a lump sum (20% withheld for federal tax), a direct rollover, or a partial lump sum plus rollover. With no choice within 60 days, the Division pays a lump sum.
Source: FRS Pension Plan Member Handbook, 2026 Edition, pp. 23, 40, 42, 43, 44. Also: DROP Guide (2026), pp. 3, 5, 6-7, 8, 9-10, 11, 15, 17, 18, 22, 23, 25; Seminar slides (Sept. 24, 2025), slides 13, 18; Investment Plan SPD (2026), p. 16; F.S. 121.091. Last reviewed .