A deferred retirement option plan, or DROP, is a way for an employee who would otherwise be eligible to retire to keep working. ... This allows the employee to start earning some retirement benefits, while the employer gets to retain the employee's services (without further increasing that employee's pension payout) 

Rather than having those additional years of service included in future benefit calculations, the employer places a lump sum of money into a separate account for each year the employee remains on the job. This account earns interest if you're still reporting to work.