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Partial Lump Sum Payment at Retirement — For Eligible Police and Fire Retirement System Members

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What is a Partial Lump Sum Payment?

Chapter 735 (Laws of 2006), effective April 1, 2008, allows certain Police and Fire Retirement System members, who are covered by 20- or 25-year retirement plans and have been eligible to retire for at least one year, to receive a partial lump sum payment (PLS) at retirement. If you choose a PLS, you will also receive a reduced lifetime monthly benefit based on the standard retirement option you choose. The reduction in your monthly benefit depends on the amount of your lump sum payment.

A PLS distribution is made as a single payment when we finalize your retirement benefit. If you decide to take advantage of a PLS, you cannot change your mind once 30 days after the end of your retirement month have elapsed. You cannot repay the lump sum amount in the future to increase your monthly service retirement benefit.

Future cost-of-living adjustments (COLAs) will be based on the amount of your reduced lifetime benefit. The lump sum payment is excluded from the COLA calculation.


To be eligible to choose a partial lump sum payment (PLS), you must be a member of the Police and Fire Retirement System and:

  • Covered by a plan that allows for retirement after 20 or 25 years of creditable service, regardless of age;
  • Eligible to retire with a service retirement benefit for at least one year prior to your date of retirement;
  • Retire after April 1, 2008;
  • Retire with a service retirement (not a disability retirement). If you file for both service and disability retirement benefits, we will pay your full service retirement benefit until a disability determination is made. If you are approved for a disability benefit but choose a service retirement, we will then make a PLS distribution. If you receive a PLS distribution under a service retirement benefit and later convert to a disability retirement, you must repay the PLS distribution.

Note: If your retirement benefit must be distributed according to the provisions of a Domestic Relations Order, we must review the court order and make a determination regarding payment of this benefit.

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PLS Payment Amounts

A partial lump sum (PLS) payment is a percentage of the actuarial value of your retirement benefit at the time you retire. The chart below outlines the various percentages available to you based on the number of years you have been eligible to retire. Your Single Life Allowance will be reduced by the same percentage as the PLS option you have chosen. If you choose a different option, that option amount will be calculated based on your reduced Single Life Allowance.

Years You’ve Been Eligible to Retire Available PLS Payment Options*
*A percentage of the value of your retirement benefit.
1 5%
2 5 or 10%
3 5, 10 or 15%
4 5, 10, 15 or 20%
5 or more 5, 10, 15, 20 or 25%

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Receiving Your PLS Payment

You can have the partial lump sum (PLS) payment made to you or you can have all or any portion paid in a direct rollover to an Individual Retirement Annuity (IRA) (traditional or Roth) or other eligible plan that accepts rollovers.

If you choose to have a PLS payment made directly to you:

  • The payment will be subject to federal income tax in the year the payment is made and a tax form 1099-R will be issued the following January.
  • We will withhold 20 percent of the taxable amount for federal income taxes.
  • If you are less than 50 years old at the end of the calendar year in which payment is made, the payment may be subject to an additional tax of 10 percent for early distribution from a qualified retirement plan.
  • A rollover to a traditional or Roth IRA is still possible if completed within 60 days of receiving payment.

If you choose a direct rollover to a traditional IRA or other eligible plan:

  • The payment will not be subject to federal income tax in the year the payment is made. A tax form 1099-R will be issued the following January showing that this distribution is not taxable.
  • Taxes will be deferred until you withdraw the funds from the IRA or other eligible plan.
  • No federal income tax will be withheld from the payment.

If you choose a direct rollover to a Roth IRA:

  • The payment will be subject to federal income tax in the year the payment is made and a tax form 1099-R will be issued the following January.
  • You may elect to have federal income tax of 20 percent withheld from the payment.

You may wish to contact a tax advisor to determine if a PLS is right for you.

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Choosing a PLS Payment

When you file for retirement, if you are eligible for a partial lump sum (PLS), we will send you a special Option Election Form so you can choose a PLS as well as the standard option for your monthly benefit. This form must be filed with us by the end of the month in which you retire.

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How Much Will I Receive?

You can estimate your lump sum payment amount by following these steps:

  1. Determine your Single Life Allowance Option (Option 0). If you are covered under Section 384 or 384-d, your Option 0 benefit is generally 50 percent of your final average salary (FAS). Our Benefit Projection Calculator can help you determine your Option 0 benefit.
  2. Find your age at retirement on the chart below (round to the nearest age) and determine your Lump Sum Factor. If your age is not on the chart, you can use our benefit projection calculator.
  3. Multiply:
    Option 0 Benefit (Step 1) × Lump Sum Factor (Step 2) × 5, 10, 15, 20 or 25 percent = the PLS Amount
  4. Calculate your reduced continuing lifetime Single Life Allowance (Option 0) benefit.
    If You Select a PLS Payment of Multiply Your Original Option 0 Benefit by
    5% 95%
    10% 90%
    15% 85%
    20% 80%
    25% 75%


Age at Retirement: 49 years, seven months

Retirement Plan: Section 384-d (benefit equals 50 percent of FAS with 20 years of creditable service)

FAS: $60,000

Date of Retirement: February 28, 2014

Date First Eligible to Retire: February 28, 2009

  1. Determine the Option 0 Benefit: $60,000 (FAS) × 50% = $30,000
  2. Find the Lump Sum Factor on the chart: Rounded Age at Retirement = 50, Lump Sum Factor = 12.133
  3. Determine PLS Payment Amount:
    Original Single Life Allowance (Option 0) × Lump Sum Factor × Percentage of Retirement Benefit Value = PLS Payment Amount
    $30,000 × 12.133 × 5% = $18,200
    $30,000 × 12.133 × 10% = $36,399
    $30,000 × 12.133 × 15% = $54,599
    $30,000 × 12.133 × 20% = $72,798
    $30,000 × 12.133 × 25% = $90,998
  4. Determine reduced Annual Single Life Allowance:
    PLS Payment Option Original Single Life Allowance (Option 0) × Percentage of Remaining Benefit = Reduced Annual Single Life Allowance
    5% $30,000 × 95% = $28,500
    10% $30,000 × 90% = $27,000
    15% $30,000 × 85% = $25,500
    20% $30,000 × 80% = $24,000
    25% $30,000 × 75% = $22,500

You do not need to choose the reduced Option 0 as your option. You may choose from any of the standard options. The amount of each standard option will be based on the reduced Option 0 amount.

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Lump Sum Factor Chart

Age at Retirement Lump Sum Factor
40 12.974
41 12.911
42 12.843
43 12.769
44 12.689
45 12.603
46 12.511
47 12.430
48 12.337
49 12.237
50 12.133
51 12.029
52 11.928
53 11.829
54 11.722
55 11.601
56 11.464
57 11.321
58 11.171
59 11.011
60 10.839
61 10.656
62 10.463

Lump Sum Factors are effective for the period April 1, 2013 through March 31, 2014.

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For More Information

  • Use our Benefit Projection Calculator to help you decide if a Partial Lump Sum (PLS) Payment Option is right for you. You may also find our PLS Frequently Asked Questions helpful.
  • Email us.
  • Contact our Call Center toll-free at 1-866-805-0990 or 518-474-7736 in the Albany, New York area.
  • Fax us at 518-402-4433.
  • Make an appointment to meet with an Information Representative at any of our consultation sites throughout the State. A list of our locations is available from your employer, our website or our Call Center.
  • Write to us at:

    New York State and Local Retirement System

    110 State Street

    Albany, New York 12244-0001.

VO1750 (Rev. 1/14) © 2014 New York State and Local Police and Fire Retirement System

This publication provides a general summary of membership benefits, rights and responsibilities, and is not a substitute for any New York State or federal law. For specific information about your benefits, please contact us.

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