New York City Police Pension Fund
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Tier 2 - Retirement Benefits

GUIDE TO PENSION OPTIONS

A.  Before You Decide
Before the New York City Police Pension Fund (NYCPPF) finalizes your pension, you (the retiree) may either choose a pension option or the Maximum Retirement Allowance. Choosing the Maximum Retirement Allowance means that all pension benefits will cease on your death. Choosing an option provides for a beneficiary or beneficiaries after your death.

If you want to provide continuing income to a beneficiary, you need to know the cost of the option, which depends on your age, and the age of your beneficiary(ies), as of your retirement date.

If you want the Maximum Retirement Allowance, but also wish to provide for a beneficiary, you could explore commercial insurance policies or annuities.

Before making your decision, read this guide carefully. If you have questions, you may call the NYCPPF Pension Payroll staff at (212) 693-6888.

B.  No Option (Maximum Retirement Allowance)
The Maximum Retirement Allowance is the highest pension to which you are entitled by law. If you choose the Maximum Retirement Allowance, your pension will cease on your death, and no pension payment may then be made to any beneficiary.

C.  Pension Options (Reduced* Retirement Allowances)

  • Option 1 - Return of Pension Reserve** (available to Tier I members only):
    Under Option 1 - Return of Pension Reserve you receive a reduced* pension during retirement. On your death, your beneficiary or beneficiaries receive the balance of your Pension Reserve in one lump sum.

    Any Tier I retiree whose life expectancy could be short should consider choosing
    Option 1 - Return of Pension Reserve.

    This option guarantees your pension for life, no matter how long you live, even if you outlive your Pension Reserve. If your death occurs after your Pension Reserve has been depleted, your pension ceases, and no pension payments can be made to your beneficiary. You may designate more than one beneficiary, and beneficiaries may be changed at any time.   

    * "Reduced" means "reduced compared to the Maximum Retirement Allowance."
    ** The Pension Reserve is the amount New York City sets aside for your pension.

  • Option 2 - 100% Joint and Survivor:
    Under Option 2 - 100% Joint and Survivor, you receive a reduced* pension during retirement, and your designated beneficiary receives 100% of your total monthly benefit under Option 2 for the rest of his/her life. Only one beneficiary may be named (date of birth proof is required), and that beneficiary may not be changed.

    If your beneficiary predeceases you:
    • Your pension payments continue unchanged.
    • You may not designate another beneficiary.
    • On your death, all pension payments cease.

    [Note:  Option 4 - 2 below is the same as Option 2 - 100% Joint and Survivor, except that Option 4 - 2 enables you to receive the Maximum Retirement Allowance should your beneficiary predecease you.]

  • Option 3 - 50% Joint and Survivor:
    Under Option 3 - 50% Joint and Survivor, you receive a reduced* pension during retirement, and your designated beneficiary receives 50% of your total monthly benefit under Option 3 for the rest of his/her life. Only one beneficiary may be named (date of birth proof required), and that beneficiary may not be changed.

    If your beneficiary predeceases you:
    • Your pension payments continue unchanged.
    • You may not designate another beneficiary.
    • On your death, all pension payments cease.

    [Note:  Option 4 - 3 below has the same beneficiary and payment structure as Option 3 -    50% Joint and Survivor, except that Option 4 - 3 enables you to receive the Maximum    Retirement Allowance should your beneficiary predecease you.]

  • Option 4 - Lump Sum:  
    Under Option 4 - Lump Sum you receive a reduced* pension during retirement, and you designate up front a specific amount (the lump sum) that your beneficiary or beneficiaries will receive. The amount your pension is reduced depends on your age at retirement and how much you wish to set aside (specified in increments of $1,000) for your beneficiary or beneficiaries. You may designate more than one beneficiary, and beneficiaries may be changed at any time.

  •  Option 4 - Annuity:
    With Option 4 - Annuity, you specify up front the annual amount you wish your beneficiary to receive for life upon your death. Your reduced* pension allowance during retirement is calculated based on the annual amount you specify. Only one beneficiary may be named (date of birth proof is required), and that beneficiary may not be changed.           

    [Note:  Option 4 - 4 below is the same as Option 4 - Annuity, except that Option 4 - 4 enables you to receive the Maximum Retirement Allowance should your beneficiary predecease you.]

    * "Reduced" means "reduced compared to the Maximum Retirement Allowance."                     

  • Option 4 - 2 (same as Option 2, but with the "pop-up" feature):
    The payment and beneficiary structure of Option 4 - 2 is the same as Option 2, but with one important difference. That difference occurs if the beneficiary predeceases the retiree. If that happens under Option 4 - 2, your retirement allowance "pops up" to become the Maximum Retirement Allowance, and it remains at that level for life.

  • Option 4 - 3 (same as Option 3, but with the "pop-up" feature):
    The payment and beneficiary structure of Option 4 - 3 is the same as Option 3, but with one important difference. That difference occurs if the beneficiary predeceases the retiree. If that happens under Option 4 - 3, your pension "pops up" to become the Maximum Retirement Allowance, and it remains at that level for life.

  • Option 4 - 4 (same as Option 4 - Annuity, but with the "pop-up" feature):
    The payment and beneficiary structure of Option 4 - 4 is the same as Option 4 - Annuity, but with one important difference. That difference occurs if the beneficiary predeceases the retiree. If that happens under Option 4 - 4, your pension "pops up" to become the Maximum Retirement Allowance, and it remains at that level for life.

  • Option 5:  5-Year Certain:
    Under Option 5: 5-Year Certain, you receive a reduced pension during retirement, and your pension is paid to you (the retiree) for life. If you die sooner than 5 years from your retirement date, your pension continues to be paid to your beneficiary or beneficiaries until the 5th anniversary of your retirement, on which date pension payments cease. 

  • Option 6:  10-Year Certain:
    Under Option 6: 10-Year Certain, you receive a reduced retirement allowance during retirement, and it is paid to you (the retiree) for life. If you die sooner than 10 years from your retirement date, your pension continues to be paid to your beneficiary or beneficiaries until the10th anniversary of your retirement, on which date pension payments cease.

Options At A Glance:

 Your Decision
Payment to Retiree
Beneficiary Info.
Payment to Beneficiary
Maximum Retirement Allowance
Max. Retirement Allowance
No beneficiary
Not applicable
Option 1 – Return of Pension Reserve**
Reduced* retirement allowance
Multiple beneficiaries permitted; beneficiary change allowed at any time
Lump sum payment of balance of Pension Reserve** (if Reserve is not depleted)
Option 2: 100% Joint and Survivor
Reduced* retirement allowance is unchanged if beneficiary predeceases retiree
Single beneficiary with date of birth proof; beneficiary change not permitted
Retirement allowance is unchanged and is paid for life34
Option 3: 50% Joint and Survivor
Reduced* retirement allowance, which is unchanged if beneficiary predeceases retiree
Single beneficiary with date of birth proof; beneficiary change not permitted
Retirement allowance is reduced 50%, and is paid for life
Option 4: Lump Sum
Reduced* retirement allowance
Multiple beneficiaries permitted; beneficiary change allowed at any time
Payment of the specified lump sum amount
Option 4: Annuity
Reduced* retirement allowance, which is unchanged if beneficiary predeceases retiree
Single beneficiary with date of birth proof; beneficiary change not permitted
Lifetime allowance based on the annuity amount specified
Option 4 – 2: 100% Joint and Survivor with Pop-up Reduced* retirement allowance "pops up" to Maximum Allowance if beneficiary predeceases retiree Single beneficiary with date of birth proof; beneficiary change not permitted
Retirement allowance is unchanged and is paid for life
Option 4 – 3: 50% Joint and Survivor with Pop-up Reduced* retirement allowance "pops up" to Maximum Allowance if beneficiary predeceases retiree Single beneficiary with date of birth proof; beneficiary change not permitted
Retirement allowance is reduced 50%, and is paid for life
Option 4 – 4: Annuity with Pop-up Reduced* retirement allowance "pops up" to Maximum Allowance if beneficiary predeceases retiree Single beneficiary with date of birth proof; beneficiary change not permitted
Lifetime monthly payments, which are based on the annuity amount specified
Option 5: 5-Year Certain
Reduced* retirement allowance Multiple beneficiaries permitted; beneficiary change allowed at any time
Monthly allowance is unchanged, but 5 years after the retirement date, payments cease
Option 6: 10-Year Certain
Reduced* retirement allowance Multiple beneficiaries permitted; beneficiary change allowed at any time
Monthly allowance is unchanged, but 10 years after the retirement date, payments cease

* “Reduced” means “reduced compared to the Maximum Retirement Allowance.”
** The Pension Reserve is the amount New York City sets aside for your pension.