Frequently Asked Questions

What types of transactions appear in my DROP account?

Any debit or credit transaction that affects the balance of your DROP account should appear as a line item in your account, together with the date of the transaction and the resulting account balance.

Examples of the transactions that debit (decrease) the balance of your account would be:

  • Monthly Distribution – an amount paid to you each month from your DROP account
  • Lump Sum Distribution – a non-periodic payment from your DROP account
  • Rollover – an amount rolled from your DROP account to another tax qualified plan
  • Early Withdrawal – an amount paid to you from your DROP account that is subject to an early withdrawal penalty

Examples of the transactions that credit (increase) the balance of your account would be:

  • Deposit – a monthly deposit of your CPERS pension amount during active DROP participation
  • Interest – monthly interest earned on your DROP balance
  • Supplemental Funding – a one-time deposit of severance payments and/or separation benefits

Why are there no interest postings to my DROP account?

Most likely you are enrolled in DROP and are still employed with your CPERS member employer. Interest is not credited until you actually terminate employment and retire. Once retired, your interest will be credited and posted retroactively back to the commencement of your DROP participation.

What is the current year’s DROP interest rate?

For calendar year 2024, the DROP interest rate has been certified by CPERS' actuary to be 4.2% (yield).

How is the DROP interest rate determined?

The DROP interest rate is certified each year by the Retirement System’s actuary, based on the geometric average of the most recent five years of investment returns for fiscal years ending September 30th. Each year a new investment rate of return enters the five year average, and the oldest rate drops out.

Is the DROP interest compounded?

Yes, the DROP interest is compounded monthly to yield the actuarially computed rate.

What if the DROP interest rate calculation results in a negative interest rate?

Your DROP account deposits and credited interest will not be reduced in the event of a negative DROP interest rate, but will be treated as if the interest rate were zero in that calendar year.

Who do I contact regarding a lump sum withdrawal or a rollover of my DROP funds?

To request a withdrawal or rollover of DROP account funds, please contact CPERS at (225) 389-3272 and you will be directed to a staff member who can help you.

Two seniors looking over retirement information.
History of DROP Interest Rates
Graph of DROP interest rates
click to enlarge