Relating to certain deferred retirement option plan benefits under public retirement systems for police and firefighters in certain municipalities.

HB 3988 changes how police and firefighters in certain Texas municipalities receive Deferred Retirement Option Plan (DROP) benefits. It requires that DROP account balances be distributed as an annuity (monthly or annually) starting after retirement or September 1, 2017 - whichever is later. The bill specifies that interest for annuity calculations must use a U.S. Treasury note rate for amounts as of September 1, 2017, but excludes interest on amounts added after that date. Additionally, it allows participants to choose a lump-sum payment at any time (including at retirement) and provides hardship withdrawals that reduce future annuity payments.