New York City Police Pension Fund
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Tier 3 - Escalation

Service, vesting and disability retirement benefits, as well as survivor benefits, may be subject to annual escalation.

Full Escalation Date 
The full escalation date is calculated as follows for different retirement types:

  • Vested and Service Pensions: The first day of the month after a member would have completed 25 years of service.
  • Disability Pensions: The first day of the month following the day on which a disability retiree first becomes eligible for ODR/ADR.
  • Death Benefits: The first day of the month following the day on which a beneficiary first becomes eligible for a death benefit paid as other than a lump sum.

If a member first begins receiving benefits on the same date as the full escalation date (or the date of a member’s 25th anniversary), the Full Escalation will be calculated as a 3% increase of current annual pension, or the Cost-of-Living Index increase of current annual pension, whichever is less.

Reduction of Escalation
Reduced escalation is calculated on benefits that commence prior to a member’s 25th anniversary with the NYPD. The Full Escalation rate is reduced by 1/36th for each month the benefit starts prior to the 25th anniversary.

Deferred Benefit for Escalation – 22 years of service or less

A member who retires for Early Service or Vests with less than 20 years of credited service may choose to defer the receipt of their retirement benefits for the purpose of becoming eligible for annual escalation. The pension benefit would then be calculated as follows:

2%  x  final average salary x  each year of credited service
-less  -
50% of the Primary Social Security Benefit at age 62

If a member chooses the above option, the member will receive the escalation rate in effect at the time of collecting the benefit.

 Deferred Benefit for Escalation – Normal Service Retirement
A Normal Service retiree with less than 25 years of service may choose to defer the retirement benefit for the purpose of becoming eligible for full escalation.