Texas HB3988 amends the deferred retirement option plan (DROP) for police and firefighters in certain municipalities, adjusting interest rates.

Texas HB3988 amends the deferred retirement option plan (DROP) for police and firefighters in certain municipalities. It sets the interest rate for DROP accounts to be reasonably equivalent to U.S. Treasury notes. The bill specifies that the balance in a DROP account will be distributed as an annuity, unless certain conditions are met. It also allows for the assignment of annuity distributions to a third party under specific conditions. The bill modifies beneficiary rules, including the automatic invalidation of a spouse's beneficiary designation upon divorce.

Texas HB3988 amends the deferred retirement option plan (DROP) for police and firefighters in certain municipalities, adjusting interest rates.

Texas HB3988 amends the deferred retirement option plan (DROP) for police and firefighters in certain municipalities. It sets the interest rate for DROP accounts to be reasonably equivalent to U.S. Treasury notes. The bill specifies that the balance in a DROP account will be distributed as an annuity, unless certain conditions are met. It also allows for the assignment of annuity distributions to a third party under specific conditions. The bill modifies beneficiary rules, including the automatic invalidation of a spouse's beneficiary designation upon divorce.