Why is the NYCPPF (Police) the Only One?

The NYC Police Pension Fund (NYCPPF) uses a definition of final average salary (FAS) for Tier 3 members that is different from other NYS/NYC pension systems.   As many are aware, FAS is a critical component of a pension calculation.  For Tier 3 Enhanced members, NYCPPF defines FAS on a five (5) calendar year basis while other pension systems define FAS as during any five (5) consecutive years.  For example, FDNY Tier 3 Enhanced members are able to use any consecutive year period and are not limited to calendar years.  Depending on when a person retires and when overtime is earned (not paid) could make a difference in the FAS calculation.  As shown below, the NYCPPF is the only pension system that limits FAS to calendar years when compared to other pension systems and similar Tiers.  See related blog post for further definitions of FAS: Part 2: Are FDNY & NYPD Pensions Equal?

Pension System & Tier

Limited to Calendar Year (Yes or No)

NYCPPF Tier 3 Original

Yes
NYCPPF Tier 3 Enhanced

Yes

NYCFPF (Fire) Tier 3 Enhanced

No
NYCFPF (Fire) Tier 3 Modified

No

NYCERS Tier 6 Basic

No
NYCERS Tier 6 Special

No

TRSNYC (Teachers) Tier 6

No
NYS Tier 6 ERS

No

NYS Tier 6 PFRS

No

 

2 replies
    • Peter Thomann, EA, CFP®, CDFA®
      Peter Thomann, EA, CFP®, CDFA® says:

      Not sure what you mean by “additional tax”, this post is about the definition of FAS. FAS is not a tax issue. The police unions should be asking the NYCPPF where in NYS/NYC pension law does it specifically state FAS is based on a calendar year for members of NYCPPF Tier 3. .

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