San Diego County supervisors are proposing a new perk for retirement-age public safety employees: a Deferred Retirement Option Program, or DROP, that would allow some workers to start drawing their pensions while they are still on the county payroll. Supporters say it could help stabilize chronically short-staffed departments, while critics brand it taxpayer-funded “double-dipping.” The Board of Supervisors introduced an ordinance at its Jan. 13 meeting that would apply to eligible staff in the sheriff’s, district attorney’s and probation offices and, if approved at a second reading, would launch the program in March.
As reported by The San Diego Union-Tribune, supervisors moved quickly to introduce the ordinance yesterday and scheduled a second reading for Jan. 28 as part of an effort to retain experienced employees on the job.
How the DROP Would Work
The draft ordinance and negotiated letters of understanding spell out the mechanics. Participation would be voluntary and capped at a maximum of three years. During that time, an employee’s monthly retirement benefit would be deposited into a DROP account while the employee remains on the payroll.
The Letters of Understanding state that DROP accounts would earn no interest, employee retirement contributions would continue with 75% deposited into the DROP account, and employer contributions would be retained by the retirement system rather than diverted to the DROP account. Those program terms are described in the county’s attachments and staff materials.
County staff also laid out projected payroll impacts and implementation costs. The county estimates total payroll could be about $0.7 million higher in year one and roughly $15.5 million higher after five years, with larger increases over a decade. One-time PeopleSoft payroll updates are pegged at roughly $150,000, with about $100,000 per year in ongoing administration.
SDCERA’s actuarial work was completed last month and, according to county paperwork, concluded that the negotiated design meets the statutory cost-neutrality test required for DROP. As described in the county’s staff report, the package would become operative if adopted on schedule.
Support, Opposition and Past Lessons
The Deputy Sheriffs’ Association and other safety unions have been lobbying for DROP and argue the incentive will keep veteran deputies in place and cut recruiting, training and overtime costs. The association says that push began in 2023, and its negotiations page includes the DROP letters and related materials.
Critics and some fiscal watchdogs, however, point to earlier local DROP programs and warn about the optics and possible payroll pressures. The history of municipal DROPs in the region, which reporters and prior studies have tied to large long-term costs in some cases, has made the measure politically contentious.
As The San Diego Union-Tribune noted, proponents including county supervisors and union leaders say retaining experience will save taxpayers money, while opponents are calling for careful monitoring of payroll impacts and benefits accounting.
Legal Check
State law requires any county DROP governed by the County Employees Retirement Law of 1937 (CERL) to be cost-neutral to the retirement system. The statute referenced by county staff is set out in California Government Code Section 31770.4. That test focuses on employer contributions, actuarial accrued liability and the present value of benefits, which is why the county sought and relied on an actuarial determination before moving the ordinance forward.
What to Watch Next
The immediate next step is the Board’s Jan. 28 consideration of the ordinance and, if adopted, the county’s stated plan to have DROP go into effect on March 20 while payroll systems are updated and enrollment procedures are rolled out. Watch for the second-reading vote, any last-minute changes to the Letters of Understanding, and SDCERA’s follow-up administrative work to implement the new enrollment and payout mechanics.
