Police / Firefighters Retirement System Provisions
The earliest date at which a police officer and firefighter can receive full benefits is called the normal retirement date. The normal retirement date is the first day of the month coincident with or following completion of 20 years of continuous service or attainment of age 55 with 10 years of continuous service. There is no mandatory retirement date; employees may work past their normal retirement date and continue to accrue additional benefits.
A police officer member who exercises normal retirement is entitled to receive a benefit payable monthly equal to 3.5% of the average monthly earnings for the highest three consecutive years of compensation multiplied by the member’s years of continuous service subject to a maximum of 84%.
A firefighter member who exercises normal retirement is entitled to receive a benefit payable monthly equal to 3.4% of the average monthly earnings for the highest two consecutive years of compensation multiplied by the member’s years of continuous service subject to a maximum annual benefit amount. The maximum annual benefit amount is the lesser of:
- 90% of average monthly earnings, and
- $100,000.00 (such $100,000.00 shall increase by 2% on each October 1st for purposes of determining this maximum at the time of retirement).
Members separating from service receive a monthly supplement per whole year of service which is $10.50 for firefighter participants and $20.00 for police officer participants.
A member may be eligible for early retirement after attainment of age 50 with 10 years of continuous service. Members so qualifying may receive benefits under one of the following two options:
- The benefits can be deferred until the member's normal retirement date, in which case the benefit will be calculated the same as discussed above under normal retirement.
- The member may take a reduced benefit, which may start any time prior to the normal retirement date. The reduction factor is 3/12 of 1% for each month prior to the normal retirement date.
Active employees under a disability retirement shall be entitled to receive a retirement benefit equal to 75% of the member's average monthly earnings or accrued benefit if the disability occurred in service. The monthly benefit for a nonservice-incurred disability is equal to the normal benefit accrued by a member with 10 years of service as of the date of the disability. Such benefit is payable from the first day of disability. Disability benefits are paid until the earlier of death or recovery from disability.
Preretirement Death Benefit
If an active employee dies from a service-incurred death, a lump-sum payment of $5,000 is paid to the beneficiaries. In addition, the surviving spouse receives a monthly benefit until death, equal to 75% of the average monthly earnings. An additional 7½% of the average monthly earnings is paid for each minor child, but in no event does the amount paid to the spouse and children exceed 90% of the member's average monthly earnings. The payments to the children ends upon the earlier of death, marriage, attainment of age 18, or age 22 if the child is a full-time student in an accredited school.
If an active employee dies from a non-service incurred cause and has less than one year of continuous service, a single payment of $2,500 is paid to the beneficiaries. If the employee has more than one year of continuous service, a single payment of $5,000 is paid to the beneficiaries. If the employee has five or more years of service, the surviving spouse will receive a monthly pension equal to 65% of the employee's accrued pension. An additional 7½% of the average monthly earnings is paid for each minor child, but in no event does the amount paid to the spouse and children exceed 50% of the member's average monthly earnings. Payments to the children end upon the earlier of death, marriage, attainment of age 18, or age 22 if the child is a full-time student in an accredited school.
If an employee terminates employment and is not eligible for any other benefits under the system, he is entitled to the following:
- With less than 10 years of continuous service, a refund of the member contribution is made plus 3% annual interest, or
- With 10 or more years of continuous service, the pension accrued to the date of termination, payable commencing at his or her normal retirement date or at the member's option, lump-sum refund of the member contribution is made plus 3% annual interest.
Deferred Retirement Option Plan
The Deferred Retirement Option Plan (DROP) is available to active plan members who are eligible for normal retirement. Upon electing to participate in the DROP, members are considered to have retired for purposes of the pension plan but continue to remain in active employment with the City. The member's normal retirement benefit is calculated as if the member had actually retired on the date of DROP participation, using continuous service and average monthly earnings as of that date. DROP participants are no longer eligible for disability or preretirement death benefits from the plan.
Instead of paying the benefit to the member, a DROP account is established and the benefit is deposited in the account each month; these deposits continue to accumulate during the remainder of the member's employment. The DROP account may remain a commingled part of the pension plan or may be self-directed with an established retirement corporation. City and employee contributions cease when a member elects to participate in the DROP. Member's benefits are eligible for cost-of-living increases during DROP participation.
During the period of DROP participation, the member's DROP account is credited quarterly with investment earnings at the same rate that is earned on the total pension fund or as self-directed, if applicable. In addition, each member's account is charged with a portion of the administrative expenses. The maximum period of DROP participation is seven years. If a member continues to remain in employment more than seven years, no further deposits will be made to the member's account and investment earnings will cease to be posted. Administrative expenses will continue to be charged. There is no taxation of benefits during the period of DROP participation.
Upon termination of employment, members may elect to receive their funds from the DROP account in a lump sum, annual installments or monthly annuity distributions. New legislation changed the required commencement of benefits at age 72 to 73 for individuals who attain the age of 72 after December 31, 2022, and age 73 before January 2033. For individuals who attain the age of 74 after December 31, 2032, the applicable age is 75.
Cost of Living Adjustment
Police officer participants eligible to receive normal retirement benefits at the time they leave employment of the City, are eligible to receive a 2% cost-of-living adjustment every year after the first year of retirement. Retirements before October 1, 2001 receive a 3% cost of living adjustment every two years.
Firefighter participants eligible to receive normal retirement benefits and have 22 or more years of continuous service (or 20 years if retired prior to December 9, 2008), are eligible for an increased benefit of 3% each year once they have attained the age of 52 or have been retired one year, whichever comes later. Participants with 21 years of continuous service are eligible for the cost-of-living adjustment after two years and with 20 years of continuous service are eligible after three years. Benefits payable for service-related death and disability benefits are increased by 3% each year starting with the date they would have attained age 52. No increases apply to nonservice related death or disability benefits unless they complete 20 years of continuous service prior to their death or disability. For the portion of service earned on or after April 14, 2015 the benefit will be increased by 2.5%.