Eligible Police and Fire Retirement System members can choose to receive a reduced lifetime retirement benefit in exchange for a one-time lump sum payment. The lump sum payment is made when your retirement benefit is finalized.
To be eligible to choose a partial lump sum payment (PLS), you must:
- Retire under a special 20- or 25-year plan;
- Retire on or after April 1, 2008;
- Have been eligible to retire with a service retirement benefit for at least one year prior to your date of retirement; and
- Retire with a service retirement (not a disability retirement).*
Choosing a Lump Sum Payment
When you file for retirement, if you are eligible for PLS, we will send you a special Option Election Form so you can choose a PLS payment along with the standard retirement option you want for your continuing lifetime benefit.
Lump Sum Payment Amounts
If you file for retirement after being eligible to retire for at least one year, you can choose to receive a lump sum payment equal to a specific percentage of the value of your retirement benefit, as shown below. 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 will be calculated based on your reduced Single Life Allowance.
|Years You’ve Been Eligible to Retire||Available PLS Payment Options*|
|2||5 or 10%|
|3||5, 10 or 15%|
|4||5, 10, 15 or 20%|
|5 or more||5, 10, 15, 20 or 25%|
|*A percentage of the value of your 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.
For More Information
For more information, including the taxability of a PLS payment, please refer to our publication, Partial Lump Sum Payment at Retirement.
*If you receive a PLS payment under a service retirement benefit and are later approved for a disability retirement benefit, the PLS payment must be repaid if you convert to the disability benefit. Additionally, severe tax consequences may apply in some situations.