Along with making employer contributions to the Police Pension Fund, the City of New York also contributes toward a portion of your employee contributions. These contributions - called Increased Take Home Pay, or ITHP - currently are equivalent to 5% of your gross salary. For example, let's assume your full employee contribution rate would ordinarily be calculated as 7.5% of pay. With ITHP in effect, you contribute 2.5% and the City of New York contributes 5%. (Effective October 1, 2000, the 2.5% amount represents the required contributions.) You may elect to waive the ITHP reduction and contribute an additional 5% of your gross salary. These contributions are in addition to your normal pension contributions and would not be subject to federal taxation as per Section 414h of the IRS code. Election of this waiver would not reduce the ITHP contributions of the City of New York.
View information that will aid you in understanding ITHP a little better (in PDF)