Payment of Benefits
San Diego Municipal Code § 24.1407
in effect§24.1407 Payment of Benefits
(a) When a Member simultaneously leaves DROP and leaves City employment:
(1) the Member will begin receiving his or her monthly retirement allowance, as determined under this Division;
(2) the Member will begin receiving the annual supplemental benefit in accordance with Division 15, to the extent the Member is eligible, based upon the Member’s Service Credit on the day he or she entered DROP; and
(3) the Member will be entitled to receive the amounts credited to his or her DROP Account as of the day the Member left DROP.
(b) A Member may receive the amounts in his or her DROP Account in any of the following benefit forms:
(1) a single lump sum distribution of all amounts credited to the Member’s DROP Account;
(2) equal monthly payments over 240 months starting with the date the Member leaves DROP and retires; or
(3) any other benefit form approved by the Board, subject to applicable provisions of the Internal Revenue Code.
(c) The following rules govern the payment of benefits under this Division:
(1) No COLA, Annual Supplemental Benefit or later similar adjustment will be made with respect to any benefit payable under subsection (b).
(2) Each form of benefit paid must be the Actuarial Equivalent of the amount credited to the Member’s DROP Account at the end of his or her DROP period. Where appropriate, the Annuity will be calculated using the Member’s age and, if the Member elected a joint and survivor option, the age of the Beneficiary at the end of the DROP period.
(3) Each form of benefit paid must equal the amount credited to the Member’s DROP Account, including interest credited to that account after the Member retires. If amounts remain credited to the Member’s DROP Account after the Member’s death, the System will pay the remaining amounts to the Member’s Beneficiary in the form selected by the Member before his or her death. If the Member did not select a form, the Beneficiary may elect to be paid under any of the benefit forms provided in subsection (b).
(d) The System will credit the DROP Accounts of retired Members as follows:
(1) If a Member or Beneficiary receives a benefit in a form other than a single, lump-sum distribution of the entire DROP Account, the value of his or her DROP Account will be credited with interest quarterly and reduced by the amount of distributions.
(2) The interest rate credited to the DROP Account under subsection (d)(1) may not exceed the higher of the following:
(A) 5%, or
(B) the interest rate the Board is using to credit DROP Accounts on the date the Member is first eligible to receive distributions from his or her DROP Account.
(Amended 6-18-2002 by O–19071 N.S.)
(Amended 6-10-2014 by O-20376 N.S.; effective 7-10-2014.)
Source: City of San Diego Office of the City Clerk, San Diego Municipal Code and City Charter (docs.sandiego.gov PDFs)URL: https://docs.sandiego.gov/municode/MuniCodeChapter02/Ch02Art04Division14.pdf#page=5Fetched: 10/28/2026