Access To Drop Funds Reminder!
You don’t have to wait to collect your DROP funds from Deferred Compensation. If you rolled over, or plan to roll over, your DROP funds into the City’s Deferred Compensation Plan, you are eligible to take distribution of those funds without tax penalty, if you are at least age 50. This also applies to distributions taken directly from LAFPP.
The tax code was changed in 2016 to eliminate the 10% tax penalty on funds withdrawn before age 59½. You should keep in mind that you may incur a tax liability upon distribution.
We recommend that you consult with your tax and/or financial advisor if you have any questions regarding your personal situation.