As promised, City Council on Thursday introduced a bill that will preserve the controversial DROP retirement perk for all city workers, including the Council members themselves.
In a press release, Council President Anna C. Verna said a compromise bill will eliminate DROP's cost, while avoiding costly litigation that is sure to follow if the prized benefit is denied city workers. That bill would shift the guaranteed 4.5 percent interest rate on DROP funds to the U.S. Treasury rate, saving an estimated $1 million a year, and push back DROP eligibility to two years after workers reach retirement age.
"I know there has been immense pressure to eliminate the DROP because of its cost,” which has been estimated to be at least $100 million since its inception in 1999, Council President Verna said. “The bill introduced today preserves DROP as an option. It is designed to eliminate its cost for all employees in currently open pension plans who are not yet eligible to retire. My colleagues and I believe this is the better approach, but we look forward to exploring the alternatives at the scheduled hearing on the bill.”
A hearing is scheduled for June 8.