AR DROP FAQs

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Three Pay Out Options

Lump-sum cash distribution: State and federal taxes will be due on the full amount in the taxable year in which you receive the payment.
Annuity payment: You can receive a monthly payment. There are three options and this selection is irrevocable.
Lump-sum Rollover to a qualified plan: The most flexible option that is available as it allows for the combination of the other options. A 403(b) plan is such a qualified plan. No taxation occurs until you begin taking income from this qualified plan.

Arkansas Teacher DROP Frequently Asked Questions

Q 1: Who is eligible for T-DROP?

A: Anyone in the Arkansas Teacher Retirement System (ATRS) who is a covered employee with 28 years of service can elect to enter the T-DROP.

Q 2: How long can I participate in T-DROP?

A: Up to 10 years.

Q 3: When do the monies in T-DROP become available to me?

A: Upon separation from service.

Q 4: Does the money in T-DROP earn interest?

A: Yes. Currently the accounts earn between 2% and 6%.

Q 5: If I participate in T-DROP program, will I continue to receive cost-of-living adjustments to my ATRS retirement annuity?

A: Cost-of-living adjustments are unaffected by your decision.

Q 6: If I choose to participate in T-DROP, will I continue to contribute to ATRS?

A: No. The 6% you are currently paying into ATRS can be redirected as you wish.

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Important Notice about Purchasing an Annuity From Us

To help the government fight the funding of terrorism and money-laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who purchases certain annuity products. What this means for you: When you purchase certain annuity products from us, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may ask to see your driver's license or other identifying documents.

Securities and investment advisory services are offered by VALIC Financial Advisors, Inc., member FINRA, SIPC and an SEC-registered investment advisor.

VALIC represents The Variable Annuity Life Insurance Company and its subsidiaries, VALIC Financial Advisors, Inc. and VALIC Retirement Services Company.

This information is general in nature and may be subject to change. Neither VALIC nor its financial advisors or other representatives give legal or tax advice. Applicable laws and regulations are complex and subject to change. Any tax statements in this material are not intended to suggest the avoidance of U.S. federal, state or local tax penalties. For legal or tax advice concerning your situation, consult your attorney or professional tax advisor.