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Police Officers and Firefighters Pension Summary

Administered by TIAA-CREF

Introduction
Helpful Links
Eligibility
Service Credit
Benefits

Examples
Definitions

Introduction

The Pension Program for police officers and firefighters was developed to provide benefits for Purdue staff comparable to those available in Indiana for municipal police and fire personnel. The program is essential to attract and maintain the quality police officers and firefighters charged with protecting the University community. Questions concerning the Police Officers and Firefighters Pension Plan can be directed to Purdue Benefits by email or by phone at 765-494-1685.

Helpful Links Eligibility

All regular, full-time police officers and firefighters are required to participate in the plan upon employment.

Each member will make contributions to the plan each pay period. The amount is fixed at three percent of the base salary established for non-probationary patrol officers at each campus. Contributions will be made on a pre-tax basis. Participation will continue as long as the member is employed as a police officer/firefighter.

Service Credit

Service credit is awarded based on years and months of service as a Purdue police officer or firefighter. Police officers and firefighters who elected to participate on the effective date of the plan (July 1, 1990) were credited for service prior to the effective date.

Should a member transfer to a non-eligible position or terminate employment and later rejoin the police or fire department, prior service credit may be restored. This can occur only if their break in service is less than their prior credited service. If member contributions were withdrawn, repayment plus interest must be made.

Up to six months of service will be credited to the member for each continuous period during which the member performs no duties due to vacation, illness, incapacity, military leave or an employer approved leave. However, when the member returns to work following one of these leaves, all contributions from this time period will need to be made-up. Please contact Staff Benefits at 494-1680 to make arrangements. Additional service credit is given for individuals who qualify for long-term disability (see Disability Provisions below).

Benefits

There are three benefit provisions to the program; (1) supplemental pension plan, (2) a supplemental disability plan, and (3) survivor income benefits. These programs are in addition to retirement, life insurance, long-term disability and other insurance programs available to regular employees of Purdue University.

  • Supplemental Pension Benefits

The purpose of the pension benefits is to provide retirement benefits, which would allow members to retire from these professions and pursue other career opportunities. The plan is designed to target retirement at age 55 with twenty years of service.

The Police Officers and Firefighters Pension is a defined benefit plan. This means that the pension is calculated by using a formula based upon years of service, age, and the pension available for the Defined Benefit plan and/or the Defined Contribution plan.

  • Some specific provisions relating to the pension benefits are:

The purpose of the supplemental pension benefit is to provide retirement benefits, which would allow members to retire from these professions and pursue other career opportunities. The plan is designed to target retirement at age 55 with twenty years of service.

The Police Officers and Firefighters Pension is a defined benefit plan. This means that the pension is calculated by using a formula based upon years of service, age, and the pension available for the Defined Benefit plan and/or the Defined Contribution plan.

Some specific provisions relating to the pension benefit are:

  1. Pension benefits for members supplement the retirement benefits available through the Defined Benefit plan and/or the Defined Contribution plan.
  2. A member is eligible to receive normal retirement benefits under this plan after completing 20 years of service and attainment of age 55.

    The normal retirement benefit is 50 percent of the base salary of a non-probationary police officer at each campus on the date of retirement. Each additional year of service beyond 20 entitles the member to an additional two percent to be added to the pension benefit formula. The maximum benefit for pension calculations is 74 percent.

    The member's retirement benefit will be offset by benefits available from the Defined Benefit plan and/or the Defined Contribution plan. If a member was credited with contributions to a Defined Benefit plan and/or the Defined Contribution plan while employed in some capacity other than a police officer or firefighter, those contributions and years of service are not used in calculating the offset of retirement income. The PERF savings account annuity is also excluded in determining the benefit payable from the plan.

    The method used in determining offsetting benefits will be a single life annuity with a five-year guarantee payable by the Defined Benefit plan and/or the Defined Contribution plan at age 55 or later. Members may elect to receive a return of their contributions plus interest in lieu of retirement benefits. For the purpose of calculating the Defined Contribution benefits, the offset will be figured as a TIAA annuity payment with CREF accumulations transferred to TIAA.

    It is important to note that the member is not required to begin drawing Defined Benefits or to settle Defined Contribution contracts. However, the amounts deemed payable from these plans would be used to offset the benefits paid by the pension program. Continued University employment could provide additional retirement benefits from the Defined Benefit or Defined Contribution programs.

  3. Only members who have participated in the plan for ten years or more are eligible to draw a pension benefit. Members with ten years of service as a police officer or firefighter will be vested.

    Early retirement is possible for vested members who retire prior to obtaining 20 years of service. Members will receive a benefit, at age 55, that is reduced by 2.5 percent for each year under 20.

    If a member terminates before vesting occurs, the contributions withheld from pay during the years of participation will be, upon request, refunded with interest.

    After a member retires, benefits provided by this plan will be adjusted annually for the cost of living using the Consumer Price Index (CPI) with benefit increases or decreases capped at three percent per year. Adjustments will be made each July 1.

  • Disability Provisions
  1. Members participate in the University's Long-Term Disability (LTD) program. Additionally, bi-weekly paid members can elect to participate in the University's Short Term Disability program.

  2. Members who qualify for LTD will receive service credit under the pension plan to the member's early retirement date, but not in excess of 20 years. The non-probationary police officer's salary at the time of disability will be used in the calculation of pension benefits.

  3. Members who are unable to perform the duties of their occupation but do not meet the requirements for total and permanent disability under the University's LTD program will be protected in the event they pursue other gainful employment. In these cases, an amount will be paid in concert with new wages to ensure the member receives at least 65 percent of their base salary prior to disability. This provision is included to facilitate a return to work, although no benefits will be payable unless the member is gainfully employed. These LTD benefits are payable until age 65 or when retirement benefits are available from Police Officers and Firefighters Pension Plan, whichever is earlier.

  • Survivor Benefits

Member not Eligible for a Retirement Pension

  1. If a member dies before becoming eligible for a pension benefit (younger than age 55 or fewer than 10 years of creditable service), a survivor benefit is payable through an insurance type program.

  2. Survivor benefits will be provided to the spouse for life and dependent children to age 19.

  3. The table below shows the annual survivor benefits based on years of service under the plan. Benefits are calculated as a percent of the member's base salary at the time of death.

Survivor Benefit Schedule
Years of Service Spouse Benefit* Total Children Benefit
Less than 12 15.0% 5.0%
> 12 but < 14 18.0 6.0
> 14 but < 16 21.0 7.0
> 16 but < 18 24.0 8.0
> 18 but < 20 27.0 9.0
> 20 but < 22 30.0 10.0
> 22 but < 24 32.4 10.8
> 24 but < 26 34.8 11.6
> 26 but < 28 37.2 12.4
> 28 but < 30 39.6 13.2
> 30 but < 32 42.0 14.0
32 or More 44.4 14.8

*to a maximum benefit at $2,500 per month

  1. In the event no survivor benefits are payable, the member's estate shall receive the member's contributions plus interest.
  2. The survivor's benefits are paid in addition to those available from the University's basic and optional term life insurance program. Social Security benefits may also be available.

Survivor Benefit: Member Eligible for a Pension

  1. If a member dies who is over the age of 55 with 10 or more years of creditable service, survivor benefits are paid from the pension plan.

  2. If a single member dies on or after the date on which the age and service requirement for pension benefits are met, his/her beneficiaries will be entitled to the member's contributions plus interest or a lump sum of the present value of the lifetime monthly pension the member would have received had the member retired on the day before death
  3. If a married member dies having satisfied the age and service requirements for retirement benefits from the pension plan, the surviving spouse will be entitled to receive a lifetime income equal to the survivor pension the spouse would have received if the member's pension had commenced the day before death. Surviving spouses may elect to receive a refund of the member's contributions plus interest in lieu of a survivor pension.
  • Administration
  • Contract with TIAA

    Purdue has arranged for TIAA to serve as the administrator of the payments made into and from the Police Officers and Firefighters pension plan. TIAA handles benefit payments, prepares and files reports to the Internal Revenue Service, and issues 1099Rs for individual income tax reporting. TIAA also has the pension expertise to provide advice and counsel on legal requirements and modifications necessary to maintain a plan of this nature.

    Copies of the formal plan document are available for inspection in Human Resource Services — Staff Benefits, the Physical Facilities' Safety and Security office, or the Human Resource offices at the regional campuses.

    Go to Police/Fire Plan Document

  • Enrollment

    A Wage Assignment Form must be completed by each eligible plan participant to become a member. Participants should also designate their beneficiary/ies as part of enrollment. Members are encouraged to keep beneficiary information up to date when changes occur.

  • Annual Report of Estimated Benefits

Each year, an individualized statement will be prepared for each member. A projection of the benefit payment, based upon the member's current status and some standardized assumptions, will be included as well as a brief summary of this plan's other benefit provisions.

  • To Initiate Benefit Payments

Members planning retirement should notify Staff Benefits approximately 30 days prior to the scheduled retirement date.

Staff Benefits is responsible for assisting members in initiating benefit payments. Help in estimating retirement income and completing pension applications is available by scheduling an appointment.

  • Official Retiree Status:

Police officers / fire fighters who have 20 years as a member of the plan and terminate in good standing shall qualify as an official retiree of the university.

Examples of Pension Benefit

To illustrate the way in which the pension component of this program works, some examples are provided.

These calculations are based upon the 2003-2004 West Lafayette non-probationary police officer's base salary of $44,401.

  • Example #1 “Normal Retirement”

    John Purdue has served as a police officer for 20 years and turns 55 years old during this year. Although he does not plan to begin his Defined Benefit retirement yet, an estimate based on a single life option was made to determine the Police and Fire pension. Mr. Purdue is eligible for a Police/Fire pension benefit of $22,201 (base salary of $44,401 x 50%), which comes from a combination of his Defined Benefit and the Police/Fire pension.

Benefit Distribution:

Defined Benefit pension $6,375
Police/Fire $15,826
Total Benefit $22,201


  • Example # 2 “More than 20 years”

    Purdue Pete began working as a firefighter at the age of 23. When he reaches the age of 55, he will be credited with 32 years of service. He will be eligible for the maximum benefit allowance. Mr. Pete intends to take another position at Purdue, so an estimate based on a single life option was made to determine the Police and Fire Pension. He is eligible for a Police/Fire pension benefit of $32,857 (base salary of $44,401 x 74%), which comes from a combination of his Defined Benefit and the Police/Fire pension.

Benefit Distribution:

Defined Benefit pension $14,784
Police/Fire $18,073
Total Benefit $32,857


  • Example # 3 “Less than 20 years”

    Betty Boilermaker came to Purdue to start a second career at age 45. Her intention is to retire at 60. Although she has not served the full 20 years required to draw a “normal retirement”, she is entitled to a benefit prorated for her years of service. She is eligible for a Police/Fire pension benefit of $16,650 (base salary of $44,401 x 37.5%), which comes from a combination of her Defined Benefit and the Police/Fire pension.

Benefit Distribution:

Defined Benefit pension $6,930
Police/Fire $9,720
Total Benefit $16,650


  • Example #4 “Future Retirement”

    Officer Rowdy is currently 31 years of age, and by 2027 at age 55 will have 24 years and two months of service. However, he may continue working and receive credit for additional years of service. Projecting the salary of a non-probationary patrol officer's salary at 2 percent per year, benefits projections show the difference in benefits for an additional five years of service.

  1. Age 55 Benefit (year 2027) — Officer Rowdy is eligible for a Police/Fire pension benefit of $45,918 (base salary of 78,225 x 58.7%), which comes from a combination of his Defined Benefit and the Police/Fire pension.

    Benefit Distribution:

  2. Defined Benefit pension $13,536
    Police/Fire $32,382
    Total Benefit



    $45,918
  3. Age 60 Benefit (year 2032) — Officer Rowdy is eligible for a Police/Fire pension benefit of $61,938 (base salary of $90,685 x 68.3%), which comes from a combination of his Defined Benefit and the Police/Fire pension.

    Benefit Distribution:

    Defined Benefit pension $27,449
    Police/Fire $34,489
    Total Benefit $61,938



Definitions

Annuity: a fixed income amount payable over the entire lifetime of a member (and/or spouse, depending upon the option declared at retirement).

Early retirement: a pension is payable after a member, aged 55 or beyond, has served as a police officer or firefighter for at least 10 years, but less than 20 years.

Effective date: July 1, 1990 is the plan's effective date.

Base salary: the salary of a non-probationary police officer in effect on the date the member retires, terminates employment as a police officer / firefighter, or is disabled. This benchmark salary is used to determine pension benefits.

Joint survivor annuity: the pension benefit option, which provides income for the member and a spouse as long as the member and/or their spouse live. Normal retirement date: the first day of the month after which a member reaches age 55 and has completed at least 20 years of creditable service Member: a police officer or firefighter who is a participant in the plan and is entitled to benefits.

Normal retirement benefit: the amount of pension benefits payable to members who retire with 20 years of service on or after age 55. This amount is equal to 50 percent of the non-probationary police officer salary in effect when the member retires.

Single life annuity: the pension benefit option, which provides income for the member as long as he/she lives, but provides no survivor payments.

Disability: due to sickness or accidental bodily injury, the employee is unable to perform all of the material and substantial duties of their occupation for a period not to exceed 12 months. Thereafter, disability applies when the individual is unable to perform all of the material and substantial duties of their own occupation or any other occupation for which they are reasonably fitted by training, education, experience, age, physical and mental capacity.

Vested: after 10 years of creditable service, a member is vested, or entitled to draw a pension benefit after reaching the age of 55.

Gainful employment: working 40 hours per week in an occupation for which earnings are at least at the federal minimum wage level. Formal documentation of earnings must be submitted, such as pay stubs or W-2 forms.