Benefits
Benefit Summary for the Fire and Police
Retirement System (As of June 30, 2006)
This section provides a brief summary of the benefits
provided by the
City of Fresno Fire and Police Retirement System. For
more detailed information please refer to the Summary
Plan Description; email retire@fresno.gov;
or call the Retirement Office at (559) 621-7080 to speak
to a
Retirement
Counselor.
[click on item for quick
access]
Death | Disability | Divorce | DROP | Forms
Health & Welfare | Reciprocity | Service
Retirement | Terminating Employment
Eligible Employees
All sworn Fire, Police, and Airport Safety Personnel
who are full time permanent employees and entered City
service before August 27, 1990 are members of Tier I
of the Fire and Police Retirement System. Tier II is
composed of those sworn employees hired on or after August
27, 1990.
Service Retirement | Top
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All members of the Fire and Police System are eligible
for a service retirement if they have at least 10 years
of service (5 years for Tier II) and are at least age
50. Service retirement benefits formulas are different
for the two tiers. Tier I members have the choice between
a benefit calculated using all ranks held over an entire
career (at today’s salaries) called the Career
Rank Method, or a method which takes into account only
the final three years of actual earnings. For Tier II
the formula ramps from 2% per year at age 50 to 2.7%
at age 55. Please consult the Summary Plan Document for
details of the benefit calculations for your situation.
You may also use the appropriate benefits calculator
to estimate your retirement benefit amount.
Final Average Salary| Top
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Your final average salary (FAS) is an average of your
compensation earnable over your highest three consecutive
years using today’s pay rather than the pay you
actually earned. That value of FAS is used with the following
formula to calculate your benefit amount.
Tier I Benefit: Sum of (1) and (2)
(1) 2 3/4% of FAS times years of service before age 50,
not-to-exceed 20 years
(2) 2% of FAS times years of service after age 50, not
to exceed 10 years
Tier II Benefit:
Tier II benefits begin as 2% per year of service times
your FAS at age 50 and ramp up every quarter year to
2.7% per year of service times your FAS at age 55 and
older.
Or, you can try the Benefit Calculator for an estimate.
Before you retire, it is important that you contact
the Retirement Office to make an appointment with a retirement
counselor to discuss the options available for retirement.
Deferred Retirement Option Program
(DROP) – Employees Retirement System| Top
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A sworn employee who meets the qualifications for a
service retirement (age 50 with 10 years of service for
Tier I and age 50 with 5 years of service for Tier II)
may elect to participate in the DROP program. On entering
DROP, the employee’s accrual of retirement benefits
is frozen and his/her benefit amount is calculated. The
resulting amount plus any retirement COLAs, any available
Post Retirement Supplemental Benefit (PRSB), and interest
at the rate determined by the Board is then deposited
monthly into the employee’s DROP account while
the employee continues to work for a period up to a maximum
of 10 years.
At retirement, when the employee actually leaves City
service, the monthly amount being deposited into the
DROP account becomes the employee’s monthly retirement
benefit amount and, in addition, the employee then makes
a decision about how to take distribution of the balance
of the DROP account.
Please try the DROP
Projection Calculators for an estimate
of what DROP could mean for you.
Disability| Top
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A disability retirement is a benefit available to a
City employee who becomes unable to perform their duties
by reason of bodily injuries or sickness. There are two
types of disability retirement: ordinary (non service
connected) and service connected.
Ordinary Disability
If you become permanently disabled and are no longer
able to perform your job duties and the disability is
not job related, you may be eligible for an ordinary
disability retirement. To qualify you must have been
employed by the City for at least ten years.
If you are granted an ordinary disability retirement,
your allowance will be the highest of the following:
Service-Connected Disability
If at any time you become permanently disabled to the
point that you can no longer perform your job duties
and that disability was caused primarily by the performance
of your job, you may be eligible to receive a service
connected disability.
If you are granted a service connected disability retirement,
your allowance will be the highest of the following:
A portion of your service connected disability will
be eligible for favorable IRS tax treatment.
Contribution Rates| Top
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The basic provision for contribution rates for both
the City and the Employees are outlined in the Fresno
Municipal Code and may not be changed by the Retirement
Board. Normal or basic rates for Tier I depend upon the
employee’s age at entry into the System. Tier II
members pay a flat 9% which is provided in the Code.
The cost of cost-of-living (COLA) increases is born entirely
by the City.
Both employer and employee rates are recalculated by
the independent actuary as a component of the Annual
Actuarial Valuation Study, and the results of those calculations
are reviewed and adopted by the Fire and Police Retirement
Board at a public hearing each year.
In accordance with Fresno Municipal Code provisions,
Tier 2 employees pay a flat contribution rate of 9%.
Cost of Living Adjustment (COLA)| Top
of Page |
Tier I COLAs depend on the type of method chosen by
the employee at retirement. If the employee chose the
Career Rank method, the COLA is a recalculation of his/her
retirement based on the new salaries adopted for the
current year. If the method chosen by the retiree is
the final 3 year method, the COLA is based on the change
in the weighted mean average compensation attached to
all ranks in the department with a cap of five percent
(5%) per year. Any excess over the 5% is banked for use
in years when the COLA calculation is less than 5%.
Tier II COLAs are based on the change in the Consumer
price index (for all Urban Wage Earners and all Clerical
Workers – U.S. City Average) as provided in the
Municipal Code. Retirement staff must research the percentage
change and propose that percent to the Fire and Police
Retirement Board as the COLA to be adopted for the following
fiscal year. This procedure must be complete by the end
of April each year for implementing in January of the
following calendar year. The COLA is limited to a three
percent (3%) maximum change per year and any excess over
3% is banked for the retiree for use in a year where
the percent of CPI change is less than 3%.
Tier II retirees are eligible for a COLA in January
of the second calendar year following retirement or entry
into the DROP program.
Death Before
Retirement| Top
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Before eligible to retire
If you should die while still working and before you
have qualified to retire (10 years of service and attainment
of age 50 for Tier I and 5 years of service and age 50
for Tier II), your beneficiary will receive the following
benefit:
(1) One month’s salary for each year of service,
not-to-exceed six months.
(2) Return of contributions with interest.
While eligible for service retirement:
If you should die while still working and after you
have qualified to retire (10 years of service and attainment
of age 50 for Tier I and 5 years of service and age 50
for Tier II), your qualified beneficiary (refer to Summary
Plan Document) will receive 2/3 of the service retirement
benefit you had earned as a monthly payment for life
or may have the option to choose the benefit outlined
above. If your death is service connected your qualified
beneficiary would receive 55% of your final average salary
for a Tier I member or 50% of final average salary for
Tier II member as a lifetime benefit.
Death After Retirement| Top
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If you die after retirement and leave a qualified beneficiary,
that beneficiary will receive a benefit based upon the
option you have chosen at your retirement. Please refer
to the Summary Plan Document for an explanation of your
retirement options or call the Retirement Office (559-621-7080)
for an appointment with a Retirement Counselor who will
explain the options and show you calculations of what
each one would mean for you.
Health and Welfare| Top
of Page |
The Retirement Office is only involved with
the health care plan as a conduit to deduct the Health
care premiums
from the retiree’s monthly benefit amount and forward
those premiums to the City Health and Welfare Trust Administrator
on the retiree’s behalf.
The City of Fresno provides active sworn employees with
health care coverage through the City of Fresno Health
and Welfare Trust which covers all City of Fresno employees.
The City does not fund health coverage for retirees;
however, employees are given the option of continuing
in the City health plan after retirement at their own
expense. At age 65, the City’s health plan becomes
secondary to Medicare for those who are Medicare eligible.
Premium levels become more expensive at age 65 for those
who are not eligible for Medicare.
Health premiums are set by the Health and Welfare Board
for the Health and Welfare Trust Plan. The health and welfare premiums may be viewed on the following linked page:
HEALTHCOMP
(HEALTH & WELFARE TRUST)
Post Retirement Supplemental
Benefit (PRSB)| Top
of Page |
On August 27, 1998, the City Council adopted the Post
Retirement Supplemental Benefit (PRSB) Program which
is an arrangement among the City, the active employees,
and the retirees to share any surplus earnings of the
System. Annually, after an actuarial study has been performed,
the Fire and Police Retirement Board will review the
availability of surplus earnings in the System and determine
whether a benefit can be paid to eligible PRSB recipients.
If a surplus is declared by the Board, PRSB benefit payments
will be calculated for eligible retiree and DROP participant
recipients and payments or DROP deposits for the following
calendar year will begin in January.
Reciprocity| Top
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Reciprocity is an agreement between the City of Fresno
and the California Public Employees’ Retirement
System (PERS) which provides certain benefits to members
who move between one or more systems that have reciprocity
with PERS. Over 1,200 governmental agencies in California
have reciprocal agreements with PERS. If you have eligible
service in a reciprocal system, your CFRS contribution
rate, creditable service required to “vest,” and
benefit amount could be more favorable if you elect to
use reciprocity.
Under current law, you must begin employment with the
new reciprocal agency within 180 days after terminating
employment with the prior agency to be eligible for
reciprocity. In addition, you must leave your contributions
on deposit
with the prior agency’s system until you retire.
(Separate accounts are maintained by each individual
retirement system.)
You must retire from all systems simultaneously, at
which time you will receive benefits separately from
each system
based on that system’s formula, but all systems
will confer and will use your highest final average salary
from any of the systems. Safety employees should consult a retirement counselor
before applying for reciprocity because establishing
reciprocity may limit eligibility for benefits in the
event of a service connected disability. If you worked for a PERS-covered employer in the past
and withdrew your PERS contributions, you may be eligible
to redeposit your contributions and restore your PERS
service credit. If you would like additional information
regarding PERS-covered employment, contact PERS at
(800) 352-2238 or visit their website at: http://www.calpers.ca.gov. For more detailed information:
Reciprocity
Handbook | Reciprocity
Coordination with Other Public Retirement Systems
Divorce/Termination of Registered
Domestic Partnership | Top
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California is a community property state and retirement
benefits earned while married or in a registered domestic
partnership for any length of time are considered assets
that are divisible in a divorce action or the dissolving
of a registered domestic partnership.
If you are considering one of these actions please read
the Community
Property Guidelines and be sure to address
your retirement benefits in your settlement agreement.
Have the Retirement Office review any proposed domestic
relations order before it is submitted to the court to
insure it is written in a manner which the Retirement
Office can administer.
Please refer to the sample
domestic relations orders on the website for examples of orders which comply with
the requirements of the Retirement Office.
Terminating Employment| Top
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Withdrawal of Contributions
When you terminate employment for any reason (other
than a retirement for service or disabililty), you
may request
a refund of the retirement contributions you contributed
to the System and any interest earned.
Contributions and Interest Rollover
As an alternative to receiving a refund of contributions,
you may rollover the pre-tax portion of your account
balance to an IRA or another employer’s qualified
plan. Post-tax contributions cannot be rolled over and
will be paid to you as a separate check.
Reciprocal Systems
If you terminate employment from the City of Fresno
and begin employment within 180 days at another
government agency within California, you may
be eligible for
Reciprocity.
Refer to the Reciprocity section above for
more detailed information.
Deferred Retirement (Vesting)
You are eligible for a deferred retirement
if you have at least ten years of service
with the
City
of Fresno
for Tier I or five years of service with
the City of Fresno for Tier II. Upon termination,
Deferred
Retirement
eligibility allows you to leave your contributions
on account with CFRS and qualify for benefits
on the date
you become age-eligible. Review the vesting
section of your retirement handbook for
further details. If you are terminating employment, please contact the
Retirement Office at (559) 621-7080 for an appointment
with a benefits counselor. During this appointment you
will have an opportunity to discuss the rollover payment
method and its advantages, as well as receive the required
rollover forms.
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