mctoe

DROP and Interest

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Does anyone know if interest must be credited to DROP money? Or is based on the plan document/agreement?

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In the case of a governmental plan, it would be based on the plan document, except to the extent that applicable state law would require crediting of interest. Of course, since the idea behind DROP is to encourage people to stay beyond when they could otherwise receive retirement benefits, not crediting interest could undercut that goal.

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