Retirement System Caps

[Michrehf]

Hey gang, does anyone have info on retirement caps in your departments? I have heard some dept,s have a 25year 70% cap and some have 30 years and 70%. Our Local is in negotiations on pension and I was curious about this type of system.

------------------
Michael R. Rehfeld
Firefighter
Baltimore County, Maryland
IAFF Local 1311

[Ed Shanks]

>>
Hey gang, does anyone have info on retirement caps in your departments?
<<

In Ohio, as far as I know, there is no cap. We max out at 72% with 33 years of service, but if you want to stay for 60 years you can.
(Don't chuckle too hard - the Youngstown Ohio FD had an Assistant Chief or Battalion Chief who retired a few years back with over 60 years of service!)


------------------
E-4-A
IAFF 1176
RKMC MAL

[WRENCH]

In NJ pensions are set by state law. There are several different retirement sencarios but the common one is what they call special retirement. Basicly you can retire at any age, but must have 25 acreditted pensionable years to the fire service in the PFRS , Police and Fire Retirement System. This will give you 65% of the avg of your last 3 years,AFC. You will then get 1% more for each year more up to 5 years for a max of 70% of AFC. You must retire at 65. You can work more than 30 years if not over 65 but it will not get you any more and you still must pay into the system ,currently 8.5% your share every pay, so it works out if you stay beyond 25 you are working for less money each week until you hit 30 years and it is actually costing you money to stay.by staying you will never recoup the money you keep on paying.

[mfgentili]

In Massachusetts the magic numbers for superannuation (non disability) maximum retirement benefits are:
55 years old.
32 years service.
80% of highest 3 years average salary.

For service connected disability retirement.
No age requirement.
No minimum years of service.
72% of salary at time of disability, tax free.

These represent the maximum retirement scenerios. Actual benefits for each member vary based upon available options chosen at time of retirement.


------------------
Mike Gentili
New Bedford Fire Dept.

[Michrehf]

Thanks for your replies. It is amazing how different systems are around the country. Good luck & stay safe.

------------------
Michael R. Rehfeld
Firefighter
Baltimore County, Maryland
IAFF Local 1311

[WRENCH]

TO mfgentili, good system. several questions, do you contribute, does the city contribute and at what % rates. is pension taxable , and if so on what portions. In a sencario like ours 25 years and 30 years what would your pension work out to? if you would you can either post here or e mail to wrench 1988@yahoo .com what ever your pleasure , very intresting discussion.

[mfgentili]

WRENCH,
I'll try to answer your questions the best I can.
1. Yes we do contribute anywhere from 5% to 9% into the retirement system depending on date you were hired. We do not contribute to Social Security.
2. The city also contributes matching funds to the system.
3. The pension is taxable when you start drawing benefits for a non disability retirement. For a service connected disability retirement, it is non taxable.
4. Maximum retirement benefit is 80%.

5. The benefit formula is as follows:
P x A x Y
P=Percentage based on age
A=Average 3 years highest salary
Y=Years of service

The age based percentage is:
Age:
45 = 1.5%
46 = 1.6%
47 = 1.7%
48 = 1.8%
49 = 1.9%
50 = 2.0%
51 = 2.1%
52 = 2.2%
53 = 2.3%
54 = 2.4%
55 = 2.5%

In the scenerios you describe, the benefits would depend on age.

Example 1: Age 50; Avg. salary $40,000; 25 years service.
PxAxY = (2.0 x $40,000 x 25)= $20,000 or 50%

Example 2: Age 55; Avg. salary $50,000; 30 years service.
PxAxY = (2.5 x $50,000 x 30)= $37,500 or 75%

Example 3: Age 55; Avg. salary $50,000; 34 years service.
PxAxY = (2.5 x $50,000 x 34)= $42,500 or 85%
Because of the 80% maximum benefit cap, this member would only receive $40,000.

I hope I have answered your questions and not confused you more. The system is fairly complicated and affects each member differently. There are many options to consider depending on your own financial situation. In option A you get the maximum retirement benefit but your pension stops when you die. In option B you get less but your surviving beneficiary gets the remainder of the amount you contributed to the system. In option C you get even less but your beneficiary gets 2/3 of your retirement benefits for the remainder or their life.



------------------
Mike Gentili
New Bedford Fire Dept.

[WRENCH]

Thanks Mike , its good to be able to interact with other depts. and find whose doing what, and compare notes.

Rich Meier
Cranford NJ Fire Dept