35 IAC 2-5-11 Deferred retirement option plan (DROP) disability benefit

Sec. 11. (a) For the purposes of paying a retirement benefit calculated under the disability retirement provisions of IC 36-8-8-13.5, the member's service credit and salary are frozen on the DROP entry date. The disability benefit shall be calculated based on the member's salary and service credit in effect on the member's DROP entry date. (b) For the purposes of paying the additional amount calculated under IC 36-8-8.5-16.5, the DROP retirement date is the effective date of disability or upon the member's separation from the employer, whichever is later. (c) Pursuant to 26 U.S. Code §104, the monthly benefit related to the line of duty injury that is not determined on the basis of age, length of service, or prior contributions is nontaxable income. Benefits not related to a line of duty injury, including the DROP additional amount calculated under IC 36-8-8.5-12, are not eligible for favorable tax treatment.