Lump Sum PayoutCames across this. Think it was mentioned this thread.
Big tax implication so investigate thoroughly. www.osc.state.ny.us/retire/publications/vo1750.php#chartPLS Payment Amounts
A PLS payment is a percentage of the actuarial value of your retirement benefit at the time you retire. The amount of the percentages available to you depends on when you retire.
If you file for retirement after being eligible to retire for one year:
•You can choose to receive a PLS payment equal to 5 percent of the value of your benefit.
•Your continuing lifetime benefit will be reduced by 5 percent.
If you file for retirement after being eligible to retire for two years:
•You can choose to receive a PLS payment of either 5 or 10 percent of the value of your benefit.
•Your continuing lifetime benefit will be reduced by either 5 or 10 percent, depending on the percentage you choose.
If you file for retirement after being eligible to retire for three or more years:
•You can choose to receive a PLS payment of 5, 10 or 15 percent of the value of your benefit.
•Your continuing lifetime benefit will be reduced by the percentage you choose.
How Much Will I Receive?
You can estimate your lump sum payment amount by following these steps:
1.Determine your Single Life Allowance Option (Option 0). If you are covered under Section 384 or 384-d, your Option 0 benefit is generally 50 percent of your final average salary (FAS). Our Benefit Projection Calculator can help you determine your Option 0 benefit.
2.Find your age at retirement on the chart below (round to the nearest age) and determine your Lump Sum Factor. If your age is not on the chart, you can use our benefit projection calculator.
3.Multiply:
Option 0 Benefit (Step 1) ×
Lump Sum Factor (Step 2) ×
5, 10 or 15 percent = the PLS Amount.
4.Calculate your reduced continuing lifetime Single Life Allowance (Option 0) benefit.
•If you chose a 5 percent Lump Sum Payment, multiply your original Option 0 amount by 95 percent.
•If you chose a 10 percent Lump Sum Payment, multiply your original Option 0 amount by 90 percent.
•If you chose a 15 percent Lump Sum Payment, multiply your original Option 0 amount by 85 percent.
Example:
Age at Retirement: 49 years, seven months
Retirement Plan: Section 384-d (benefit equals 50 percent of FAS with 20 years of creditable service)
FAS: $60,000
Date of Retirement: July 1, 2013
Date First Eligible to Retire: July 1, 2010
1.Determine the Option 0 Benefit:
$60,000 (FAS) × 50% = $30,000
2.Find the Lump Sum Factor on the chart:
Rounded Age at Retirement = 50,
Lump Sum Factor = 12.133
3.Multiply to Determine PLS Amount:
$30,000 × 12.133 × 5% = $18,200;
$30,000 × 12.133 × 10% = $36,399;
$30,000 × 12.133 × 15% = $54,599
4.Reduced Annual Single Life Allowance:
5% PLS = $28,500 ($30,000 × 95%);
10% PLS = $27,000 ($30,000 × 90%);
15% PLS = $25,500 ($30,000 × 85%)
You do not need to choose the reduced Option 0 as your option. You may choose from any of the standard options. The amount of each standard option will be based on the reduced Option 0 amount.
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Lump Sum Factor Chart
Age at Retirement Lump Sum Factor
40 12.974
41 12.911
42 12.843
43 12.769
44 12.689
45 12.603
46 12.511
47 12.430
48 12.337
49 12.237
50 12.133
51 12.029
52 11.928
53 11.829
54 11.722
55 11.601
56 11.464
57 11.321
58 11.171
59 11.011
60 10.839
61 10.656
62 10.463
Lump Sum Factors are effective for the period April 1, 2013 through
March 31, 2014.
Eligibility
To be eligible to choose a PLS, you must be a member of the Police and Fire Retirement System and:
•Covered by a plan that allows for retirement after 20 or 25 years of creditable service, regardless of age;
•Eligible to retire with a service retirement benefit for at least one year prior to your date of retirement;
•Retire after April 1, 2008;
•Retire with a service retirement (not a disability retirement). If you file for both service and disability retirement benefits, we will pay your full service retirement benefit until a disability determination is made. If you are approved for a disability benefit but choose a service retirement, we will then make a PLS distribution. If you receive a PLS distribution under a service retirement benefit and later convert to a disability retirement, you must repay the PLS distribution.
Note: If your retirement benefit must be distributed according to the provisions of a Domestic Relations Order, we must review the court order and make a determination regarding payment of this benefit.
