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Tier 6 Pension Benefits for Detective Investigators

For employees of any of the five NYC District Attorneys or the Special Narcotics Prosecutor who work as Detective Investigators (DI) and who join NYCERS on or after April 1, 2012, retirement benefits are now subject to Tier-6 pension legislation (Chapter 18 of the Laws of 2012). The Tier 6 legislation does not actually create a new tier but in fact imposes significant benefit reductions on existing Tier 3 and 4 benefits structures. Prior to this date, Detective Investigators were subject to Tier-2 (Article 11/NYS-RSSL) and its associated Detectives Investigator retirement plans.

For more detailed information about Tier 6, click here.

NYCERS members who are employed as DA Investigators are eligible for Tier 2 benefits and have the option of electing two special retirement plans, the 20-Year Retirement Plan and the 25-Year Retirement Plan. The 25-Year Plan became effective July 30, 1996 and the 20-Year Plan started on November 16, 2004. Both of the plans are optional for all DIA members hired prior to 2012.

As of November 16, 2004, state law created a new 20 year retirement plan for DIA members. All new and existing DIA members were eligible to elect the new 20 Year Plan within the familiar 180 day election period. Again this plan is optional.

The 20-Year Retirement Plan (2004)
The 25-Year Retirement Plan (1996)

Required Contributions

Tier 2 members have “age at entry” based required contribution rates. This is different from Tier 4 members who all have a standard 3% contribution rate without regard to age at entry in to the plan (for the basic Tier 4 “62/5” benefit).

As Tier 2 members, DIA members are entitled to a 2% ITHP offset against the full rate. This lowers their required rate. The member, however, can chose to pay the full rate. This will create an excess in his/her account and will increase his/her retirement benefit.

A member can also choose to reduce his/her contribution by his her social security deductions but this will produce a deficit in the member’s account and will reduce his/her retirement benefit.

25 Year DIA Retirement Plan requires a contribution rate equal to the rate paid by NYPD police officers enrolled in a 25 year plan in Tier 2. This rate applies to all service rendered on or after 7/1/1997. NYCERS is requiring a CPP contribution rate for all service prior to 7/1/1997. This generally creates a deficit for pre-1997 service, but not always.

20 Year DAI Plan requires a contribution rate paid by NYPD police officers enrolled in a 20 year plan inTier 2. This rate applies to all service after 6/30/2004. These rates are higher than the 25 year rates.

If the DIA member had not elected the 25 Year Plan before 2004 and then elected the 20 Year Plan, it appears that NYCERS is requiring a CPP rate for all service prior to 6/30/2004.

If the member had previously elected the 25 Year DAI Retirement Plan and then the 20 Year Plan, it appears that NYCERS is using the 25 year rate instead of the CPP rate for the post 1997-pre 2004 period when the member was in the 25 year plan.

There are several contested issues with NYCERS with respect to

•    the ITHP rate applicable to police contribution rates (NYPPD uses 2.5%)

•    contribution rates for all service credited pre July 30, 1996 and

•    non-DIA service credited or purchased before the start of work as a DA investigator.

Note: It appears that NYCERS is requiring that DIA members in the two plans file their retirement applications 30 days before retirement. The law does not require 30 day notice and NYCERS has no authority to impose a 30 day notice. This has the effect of denying the benefit, if the 30 day notice is not satisfied. To deny benefits, NYCERS must have specific authority to do so. (see Doctors Council decision). But there doesn’t seem to be any way to stop NYCERS from doing whatever they want to do.

JOHN MURPHY
, Pension consultant

Vested Retirement Benefits:

25 Year DIA Retirement Plan
(15 or more years of any credited service but less than 25)

The benefit equals the sum of:

  1. 2.2% times the number of years of service times the member’s final average salary (3 year average earnings with 10% annual cap).
  2. An annuity/reduction for any excess/deficit in regular and ITHP contributions: total amount divided by an annuity factor (this is not specifically stated in the statute but is SOP for all other Tier 2 benefits)

Note: this plan includes the 2 year service enhancement covering Tier 2 members.

 

20 Years DIA Retirement Plan
(5 or more years of DAI credited service but less than 20)

The benefit equals the sum of:

  1. 2.5% times the number of years of DIA service times the member’s final average salary (3 year average earnings with 10% annual cap).
  2. An annuity/reduction for any excess/deficit in regular and ITHP contributions: total amount divided by an annuity factor (this is not specifically stated in the statute but is SOP for all other Tier 2 benefits)

Note: this plan does not include the 2-year service enhancement.