Updated October 22, 2026. Quick answer: The 2026 LOPFI Member Handbook lets an active paid member with 28 years, or 20 years and age 55, enter DROP for up to ten years. 75% of the monthly benefit (72% for 20 to under 28 years) goes into a DROP account that earns 6% interest, and the member then ends employment and takes the full benefit plus any COLA.
What this covers
The handbook has a section headed “DEFERRED RETIREMENT OPTION PLAN (DROP)”. This page quotes it. For the wider choices, see Arkansas LOPFI retirement decisions and public pension retirement decisions. For the general idea, see how DROP plans work in general.
What the handbook says
Each row is the handbook’s own wording.
| Topic | What the handbook says |
|---|---|
| Who can enter | “The Deferred Retirement Option Plan (DROP) allows any active LOPFI-covered paid service Member who has at least 28 years of paid service credit or who has at least 20 years of paid service credit and is at least age 55, to accumulate a portion of their retirement benefit in a separate account, without terminating employment.” |
| What counts as service | “For purposes of DROP, total service credit shall not include purchased service credit.” “However, military service credit earned under ACA 24-10-502 (USERRA) shall count towards the total service credit.” “Act 829 of 2015 allows up to 36 months of actual LOPFI volunteer service credit to be used toward DROP eligibility.” |
| 28 or more years: what goes into the account | “For Members who have at least 28 years of service credit before electing to participate in DROP, 75% of the Member’s monthly benefit is placed into the Member’s DROP account.” |
| 20 to under 28 years: what goes into the account | “Members who have at least 20 years of service credit, but less than 28 years of service credit, and are at least age 55 before electing to participate in DROP, 72% of the Member’s monthly benefit is placed into the Member’s DROP account.” |
| Interest | “The Member’s DROP account balance earns 6% annual interest that is awarded based on the average balance in the Member’s DROP account.” |
| How long | “The Member may remain in DROP up to a maximum of ten (10) years.” |
| During DROP | “No further service credit accrual (paid or volunteer) is permitted upon enrollment in DROP.” “During DROP the Member contributions and employer contributions shall continue and are credited to the retirement system.” |
| COLA | “DROP participants will begin receiving a 3% compound cost of living adjustment (COLA) to their future monthly retirement benefit on July 1st once they reach year six (6) in DROP.” |
| At the end | “At the conclusion of DROP, the Member shall terminate employment and begin receiving the full monthly retirement benefit calculated at the time they entered DROP, including volunteer benefits accrued prior to DROP enrollment, plus any applicable COLA(s).” |
How the deposit works out
The handbook gives percentages, not dollar examples. These figures use an invented benefit of $4,000 a month, computed here from the printed percentages and a 120 month maximum stay, before any interest. They are not printed by LOPFI.
| Service at entry | Monthly deposit | Ten years of deposits, before interest |
|---|---|---|
| 28 or more years | computed: 75% x $4,000 = $3,000 a month | computed: 120 months x $3,000 = $360,000 |
| 20 to under 28 years, age 55 or older | computed: 72% x $4,000 = $2,880 a month | computed: 120 months x $2,880 = $345,600 |
Four ways to take the account
The handbook says “At the option of the Member, the DROP account balance can be:”.
| Choice | What the handbook says |
|---|---|
| Lump sum | “Distributed directly to the Member as a lump sum payment less applicable tax withholdings.” |
| Rollover | “Rolled over to an investment entity i. e. 401(k), IRA, 457(b) etc.” |
| Monthly annuity | “The monthly DROP annuity is determined by the amount of the DROP monies being used for the annuity and the Member’s age at the time the distribution begins.” |
| Leave on account | “Any portion left on account will accrue 2% annual interest that is awarded based on the average account balance.” “DROP monies left on account must be distributed no later than April 1st of the calendar year after the attainment of age 73.” |
| Any combination | “Distributed in any combination of the four options above.” |
If a death or a disability comes first
On a DROP annuity: “if the Member dies during the DROP annuity period and before the total of the monthly DROP annuity payments equals or exceeds the original DROP account balance prior to distribution, that difference shall be paid to the Member’s survivor(s), or if none, the Member’s estate.” “If a Member becomes disabled while participating in DROP, the Member shall be treated as though they concluded DROP.”
Choices that stay with you
A DROP entrant also picks a payment option. The handbook says members may elect a benefit payment option “at the time of retirement or DROP enrollment.” Enrollment has a work cost too: “Enrollment in DROP removes the ability for a Member to change LOPFI-covered departments or employers.” Arkansas’s tax rules on pension income are on how Arkansas taxes retirement income.
Edition
This page reads the Arkansas Local Police and Fire Retirement System (LOPFI), Your guide to LOPFI benefits: 2026 Member Handbook (PDF created August 21, 2026), the file LOPFI served on 2026-10-22. It is a summary of plan provisions, so Arkansas law, the LOPFI board rules and your own LOPFI Member Portal account control over it, and LOPFI is the place to confirm your own eligibility.
Common mistakes
- Counting bought service toward the 28 or 20 years. The handbook says “total service credit shall not include purchased service credit.”
- Expecting the account to keep growing the benefit. The handbook says “No further service credit accrual (paid or volunteer) is permitted upon enrollment in DROP.”
- Leaving the balance on account forever. The handbook says “must be distributed no later than April 1st of the calendar year after the attainment of age 73.”
Related: Arkansas LOPFI retirement decisions, public pension retirement decisions, and how DROP plans work in general.
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Answer againSources
- Arkansas Local Police and Fire Retirement System (LOPFI), Your guide to LOPFI benefits: 2026 Member Handbook (PDF created August 21, 2026): www.lopfi-prb.com
- Related official page (not quoted): IRS, Topic no. 410, Pensions and annuities: www.irs.gov
- Related official page (not quoted): IRS, Topic no. 558, Additional tax on early distributions: www.irs.gov
Read from the pension system handbooks linked above on October 22, 2026. General information, not tax advice. Your own facts decide the outcome, and a pension system or a qualified professional is the right place to confirm anything consequential.