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Rising Star for the NYPD Sergeant, Lieutenant, and Captain Exam -> 2023 Lieutenant exam -> TIER 3 RETIREMENT CALCULATOR
Post Info TOPIC: TIER 3 RETIREMENT CALCULATOR
3100MOS


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TIER 3 RETIREMENT CALCULATOR
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Below is a Tier 3 Retirement Calculator based off of the charts/calculators used in the book "The Road to NYPD Retirement" by Peter Thomann.  Formulas match the charts exactly and are in attached excel allowing you to plug in numbers and plan ahead for your retirement.  Your Tier 3 pension is based off of 50% of your Final Average Salary (FAS) at 20 years completed, plus any escalation you may receive based off of service over 22 years.  There still seems to be lots of confusion on the Tier 3 pension system and I hope this helps a bit.  There is also a box for "Retention Bonus" which is rank specific and calculated based off of the top step.  Your union should know the exact "Retention Bonus" amount currently, which applies to 2 of your Top 3 years.      

*Note - Escalation is specific to Tier 3 and is very different than COLA.  Escalation, which applies to your entire pension amount, varies by year determined by the Office of the Actuary, but your escalation "rate" is calculated by years of service.  At 22 years, you begin to gain a percentage point every month you remain employed, reaching 1% after 23 years completed, 2% after 24 years completed, and the maximum of 3% after 25 years completed.  Your escalation, which applies to your entire pension amount, is calculated each year and will be "up to" your escalation rate, determined by the NYC Office of the Actuary.  If your rate is 2.0%, but the Office of the Actuary sets the escalation rate at 1.7% that year, you will receive 1.7% on your entire pension.  On the other hand, if they set the rate at 2.8% that year, you will receive 2.0%.  The average escalation over the last 30 years is 2.21%.  Calculator will also factor in Social Security Offset, which is estimated to be a $15,000 reduction in your annual pension, taking effect at age 62.  See calculator below allowing you to plug in numbers as well as link below explaining NYC Tier 3 Pension.      

 

 

 

Tier-3-SPD-20260630.pdf



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NauseousPBBN


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Not sure if I missed it, but I don't see calculation for the 2 year lookback on the first year of your 3 year average. (Its 5 years total)

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3100MOS


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The Governor has signed Chapters 55 and 56 of the Laws of 2024, which, among other things, increases the pension for Police Officers who serve at least 25 years in rank, and repeals the five year final average salary in Tier 3.

All Tier 3 members who separate service on or after April 20, 2024 will have their benefit calculated utilizing the average wages earned during any three consecutive years which provide the highest average wage. Wages exceeding 110% of the prior two year averages are excluded from the computation of final average salary.

 

Pension News - New York City Police Pension Fund



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speedyx


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So you still need the 2 prior years for the 3 year FAS to figure out what the max number can be. So for example if you retire at 20 and year 16 and 17 you make 150k and then year 18 you make 200k, only 165k is pensionable(only can be 10% more that is pensionable). Lets say you make 200k year 19 and 20 as well. Year 19, 181k is pensionable and year 20 199k is pensionable which would make your FAS 181k. 

 

Also if the CPI surpass' the 3%, whatever it goes over gets carried till it can be used(like roll over minutes). So 2022 when the CPI was around 8%, 5% would be carried over till it can be applied. (Confirmed by the head of the Pension Fund).

 

Other then that, the spreadsheet looks great! Thank you for putting in the time to make it. Defiantly will give guys a good ballpark where they are at or what they need to aim to be at.



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NauseousPBBN


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You copied and pasted exactly what I said. Wages exceeding prior two years...To find the salary of Year One you need to look back two. So its really best of 5. Prior to this change it actually was best of 9.

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Rising Star for the NYPD Sergeant, Lieutenant, and Captain Exam -> 2023 Lieutenant exam -> TIER 3 RETIREMENT CALCULATOR
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