Are there any income tax consequences to my entering DROP?

Yes. The distribution of your DROP account is subject to federal and state tax laws in effect at the time you receive your distribution. You may defer income taxes by rolling over 100 percent of your taxable DROP account proceeds into a tax-qualified plan or to an IRA. We encourage you to consult with your personal tax advisor both before you enter DROP and before you exit DROP.

What is the Windfall Elimination Provision?

If you are eligible to receive a Social Security benefit, it may be reduced by your service pension benefit due to the Windfall Elimination Provision. The amount of the reduction depends on your earnings and number of years in jobs in which you paid Social Security taxes, and the year you are age 62 or become disabled. Please contact the Social Security Administration at (800) 772-1213 or visit their Web site at www.ssa.gov if you have questions.