NYPD Tier 3 members are prohibited by statute from retiring with an account shortage.
To rectify shortages of $20 or more, the Fund will auto-enroll you in a repayment plan.
The first payment will be deducted from your salary check on August 26, 2016. Each payment can be anywhere from $20 to $200 per one pay period depending upon how much you earned.
In lieu of salary deductions, you may send or hand deliver a copy of the letter the Pension Section sends to you with a certified check or money order made payable to the Police Pension Fund, attention Membership Services, at 233 Broadway, 25th Floor, New York, New York 10279.
To avoid having arrears deducted from your paycheck, a lump sum check must be received by the Fund on or before August 16, 2016. Alternatively, you may request, in a notarized writing, to be removed from the arrears program, in which case the shortage will remain and continue to grow by the statutory interest rate of 5% per annum.
A review of your pension account will indicate if there is currently a shortage. As you are aware, Tier 3 members are required to contribute 3% of pensionable earnings to the Member Contribution Account Fund (“MCAF”). The required amount is then calculated as the 3% contribution, plus 5% statutory interest. MCAF shortages can occur for any number of reasons, including: transfers from other retirement systems; the purchase of prior service; delays in contract settlements; or an administrative delay in beginning member pension contributions. Moreover, due to a pay period lag, all members will see minor shortages. When pension contributions are made through a member’s bi-weekly salary check, the contributions are actually for the two weeks prior; however, due to the system design of the interest calculation, the interest is for the dates of the paycheck. This results in a one week interest shortage for all members. In the course of a member’s career, this shortage does not substantially accumulate and does not result in a shortage at retirement. Tier 3 members should be aware, however, that a small shortage will likely always be present.
If you have any questions regarding this matter, please contact Membership Services at (212) 693-5850.
