Gov. Robert Bentley on Thursday signed into law a bill that ends the Deferred Retirement Option Program, or DROP, with an amendment that allows teachers and public employees who have already applied to enter the program.

The DROP program has allowed teachers and state employees to continue working after they reach retirement age and to draw from their retirement accounts. Bentley proposed dropping it in his State of the State address last month, and Republicans have said it is a “luxury” program Alabama cannot afford during a time of budget cuts and proration.
“The DROP program has overly taxed our retirement system, and Alabama taxpayers cannot afford to sustain the continued high cost of this program any longer,” Bentley said. “By signing into law the repeal of this program, we are one step closer to balancing the budget and ensuring essential government services are funded.”
Opponents of ending the program have said it helps recruit and retain good teachers. Democrats had sought a compromise that would have allowed the program to continue with some cuts that would save the state money.
“I appreciate the hard work of the Legislature in bringing this bill up for debate and getting it to me so quickly to sign. Both the leadership in the House and Senate are to be commended for their dedication to ending this expensive program and saving our taxpayers millions of dollars.”
Earlier in the day, Bentley had sent the bill back to the Legislature seeking its passage with an executive amendment attached.

The amendment eliminates any retroactive application of the DROP bill by permitting enrollment in DROP by those employees who have already filed their applications and have already fulfilled all eligibility requirements.

“In consultation with the House and Senate leadership, I am sending SB 72 back to the Legislature unsigned with an executive amendment attached,” Bentley said. “Doing so will avoid protracted litigation expense and will offer further clarification on the eligibility participation. I fully expect the Legislature to pass this bill with the executive amendment attached.”