Items of Interest - New York City Police Pension Fund

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	NYPD Operations Order #12, issued 3/20/08 OPERATIONS ORDER SUBJECT: Change to the Police Pension Fund’s loan procedures The Police Pension Fund has launched a new pension management system; Comprehensive Officer Pension System (C.O.P.S.). In conjunction with the system’s rollout, the Police Pension Fund has updated its loan procedures to comply with existing IRS regulations regarding loan tracking and taxability. Effective immediately, all new loans with a repayment schedule of five years (130 payments) or less will be treated as separate loans for purposes of repayment, tax liability and tracking. The minimum repayment for all new loans will be subject to a minimum repayment of 2% of the member’s bi-weekly gross salary. In the case where a member takes out more than one loan, each individual loan will be subject to a minimum repayment of 2% of their bi-weekly gross. Members will be limited to a total of ten outstanding loans at any given time with no more than two loans given in any 12 month period. Loans repaid with a term greater than five years (130 payments) will be combined together and the member will be subject to only one loan repayment. Existing loans will not be combined with any new loans and will continue with the minimum repayment at the time the loan was originally taken. Taxability calculations for pension loans stay the same. Outstanding principal is now calculated as the total outstanding principal of all active loans, including any loans taken from the Deferred Compensation Plan. LOAN EXAMPLE: A member with a prior outstanding loan of $34,997 requests a new loan of $15,000 to be repaid in 5 years. This new loan (Loan #2) will have a term of 130 payments of $ 127.15 to cover interest and principal on this $15,000. Upon the start of the repayment of the second loan this member will now have two outstanding pension loans and will be making the following two bi-weekly loan payments: Loan #1: $135.98 with 326 payments remaining and an outstanding principal of $34,997 Loan #2: $127.15 with 130 payments remaining and an outstanding principal of $15,000 The sum of the bi-weekly loan payments is $263.13 and the cumulative outstanding loan principal is $49,997. * Note: It is recommended that members consult with a Police Pension Fund Loan Counselor as to the taxability of any particular loan. It is also recommended that members consult with their professional tax advisor on issues of income taxability. See the Police Pension Fund Web site for more information: http://www.nyc.gov/html/nycppf/home.html Allowable Retiree Income Increased (212 Waiver) Effective January, 2007, retirees can earn up to $30,000 a year in the New York State public employment while still collecting their full pension. This has been increased from $27,500 a year. Retiree Income Limitation This law allows retirees, aged 65 or older, who have public employment in New York State, to forgo any earnings limitation. The previous age criteria was 70 years of age. Death Gamble for Tier II Members As of December 3, 2002, Tier II members (hired on/after 7/1/73) with a minimum period of allowable police service (20 years) are now covered by the death gamble coverage while in active service. Designated beneficiaries will receive the actuarial value of the pension reserve in a lump sum or in periodic payments. Variable Supplement Fund (VSF) “DROP” In addition to the pension VSF payment, there will now be an active VSF payment for members who qualify. This is VSF money that a member would have gotten if he or she had retired after twenty years of allowable police service. Active members will have the VSF banked for them with a 20th anniversary date of January 1, 2002 or after. This money will be sent out December 15 if you retire prior to November 1 of the same year. If a member retires in the month of November, their check will be mailed December 31. In those cases when a retiree retires in the month of December he/she will receive their VSF in December of the following year. Transferred Prior Service Settlement Former members of the New York City Employees Retirement System (NYCERS) as Housing or Transit Police Officers who properly transferred prior state time to NYCERS, and were active members of NYPD on May 1, 1995, will now receive up front service credit for that time. Chapter 646 of the Laws of 1999 — Amendment Any member, who purchases service credit under this law and where the previous retirement system membership is based on certain designated law enforcement service, such service shall be credited as “allowable” up front police service. For this purpose, such service shall include: i. Uniformed service including police department, fire department, corrections department, or sanitation department of the City of New York or the State of New York or any agency or political subdivision thereof (including NYCERS, Police and Fire); or ii. Service as a peace officer as specified in §2.10 of the CPL; or iii. Service in the title of sheriff, deputy sheriff, marshal, district attorney investigator, or other State law enforcement positions. Chapter 552 of the Laws of 2000 — Amendment Any member, who purchases service credit under this law and where the previous retirement system membership is based on certain designated law enforcement service, shall have such service credited as “allowable” up front police service. For this purpose, such service shall include: i. Uniformed service including police department, fire department, corrections department, or sanitation department of the City of New York or the State of New York or any agency or political subdivision thereof (including NYCERS, Police and Fire); or ii. Service as a peace officer as specified in §2.10 of the CPL; or iii. Service in the title of sheriff, deputy sheriff, marshal, district attorney investigator, or other State law enforcement positions Chapter 173 of the Laws of 2008—** Chapter 173 of the Laws of 2008 revokes a member's prior designation of a spouse as beneficiary of certain death benefits, such as the pre-retirement death benefit, lump sum options and guarantee period options upon the entry of a final judgment or decree of divorce, annulment or judicial separation, except as provided by the express terms of a domestic relations order. Please contact the System's Legal Department for further information.