Retirement Benefits Options- Tier II
OPTIONS, TIER II (ARTICLE IIA) - Tier II Article IIA - Hired between July 1, 1973 to June 30, 2009
MAXIMUM RETIREMENT ALLOWANCE
At retirement a member may elect to receive the maximum retirement allowance, which is the largest monetary benefit allowable. Payments are made throughout your lifetime and cease upon your death.
An option is a benefit you may elect to provide to a beneficiary. In doing so, you agree to accept a reduced retirement allowance during your lifetime. The option cost is based on the option selected, your age and, the age of your beneficiary(ies) at the time of your retirement. All calculations are done by the Chief Actuary of the City of New York.
NOTE: There are three options available to members of Tier II/ Article IIA. Once an option is finalized it cannot be changed (except for Option 4, Lump Sum). Options do not apply to the Variable Supplement Fund.
100% Joint and Survivor—You receive a reduced monthly lifetime allowance. This option allows the named beneficiary to receive for life, upon the death of the retiree, the same pension allowance. You can name only one beneficiary, and you may not change your beneficiary once designated.
50% Joint and Survivor—You receive a reduced monthly lifetime
allowance. This option allows the named beneficiary to receive for life, upon the death of the retiree, 50% of your reduced pension allow-
ance. You can name only one beneficiary, and you may not change your beneficiary once designated.
Lump Sum — You receive a reduced annual pension allowance for life with the provision that, upon your death, your beneficiary(ies) will receive a limited lump sum payment specified by you at the time you chose this option. You may name more than one beneficiary and you may change your beneficiary(ies) at any time. The lump sum payment may be subject to Federal tax.
Annuity — You receive a reduced annual pension allowance for life with the provision that upon your death, your beneficiary will receive an annual annuity in a specified amount. You can name only one beneficiary and may not change your beneficiary once designated.
POP-UP OPTION MODIFICATION
Under this option modification, if the named beneficiary predeceases the retiree, the retirement allowance reverts back to the maximum retirement allowance. The Pop-Up may only be applied to Option Nos. 2, 3, and 4 - Annuity. There is an extra cost for this option.
After you have filed for retirement, you will not begin receiving your full monthly retirement allowance until your retirement allowance is certified (finalized) by the Chief Actuary of the City of New York. In the interim, you will receive a partial monthly retirement allowance of approximately ninety percent (90%) of your final estimated retirement allowance.
Once your retirement allowance is certified (finalized), by the Chief Actuary of the City of New York you will begin receiving your full monthly retirement checks. Any retroactive adjustments will be included in your first full monthly retirement check.
WHERE YOUR CHECKS MAY BE SENT
Your pension check will be sent directly to your home unless you make arrangements with the Pension Fund to mail your check to your bank, or arrange to have your pension check deposited automatically with your bank by way of Electronic Funds Transfer (EFT). Change of address forms and EFT forms are available at the Police Pension Fund and on our website (www.nyc.gov/nycppf in the Forms area).
Prior to finalization you will be notified of the breakdown of the cost of the various options, if requested during the retirement process. Once a election has been made, either for an option or for the maximum pension benefit, your pension can be finalized.
Example of Option Costs for Service Retiree
Maximum Retirement Allowance: $48,026.00
No Option – Maximum Retirement Allowance
Retiree: Male Age 48
Beneficiary: Female Age 45
4A & 4A
|Maximum Retirement Allowance|
|These options are spin-offs of the other two:|
The more you desire to leave the more the option costs. You must request the cost of this option for specific amounts.
|Annual Cost of this Option Annuity**|
|cost per thousand|
|Reduced Retirement Allowance|
|Beneficiary Receives Upon Death of Retiree|
|If Beneficiary Dies First, Retiree Gets***|
If age difference is greater than 5 years, the options cost even more than those indicated.
** The cost of the option is a percentage of the maximum. It doesn’t make a difference how much the maximum is. (example: 20% of 100% = 20, 20% of 200 = 40)
*** If beneficiary dies first, then retiree cannot name a new beneficiary.
View sample option sheet