Since that put Paysinger well over the annual IRS limit, and would put the city’s general fund on the hook for a huge one time charge, the DROP payment is plugged into a formula that, for accounting purposes, spreads the lump sum over the retiree’s expected life span and determines how much of his monthly check should come from the pension plan and how much must be paid from the general fund.

Source: Los Angeles Times December 16, 2018 12:02 UTC