The minimum years of service credit you must accrue with the Fund in order to be eligible to receive what is referred to as a “Formula Annuity" depends on your Tier.
- Tier 1 members: You must accrue at least 20 years of service credit.
- Tier 2 members: You must accrue at least 10 years of service credit.
However, the Fund advises you work at least one full pay period past your anniversary date to ensure you have accounted for any lost time.
Yes. However, the annuity calculation is different for each tier. If you have less than 20 years of service credit with the Fund but more than 10 years of service at retirement:
- Tier 1 members are eligible to receive what is referred to as a “Money Purchase Annuity”.
- Tier 2 members are eligible for what is referred to as a “Formula Annuity".
No. If you have less than 10 years of service credit with the Fund, you are not eligible for an annuity at retirement. You will need to apply to the Fund to receive your contributions in a lump sum payment.
A member's tier determines their “Formula Annuity” calculation.
- Tier 1 members: The annuity is determined by multiplying the average of the four highest consecutive annual salaries within the last ten years of service (final average salary) by 2.5% for each year of completed service or fraction thereof. The annuity is capped at 75% of the officer's final average salary .
- Tier 2 members: The annuity is determined by multiplying the average of the eight highest consecutive annual salaries within the last ten years of service (final average salary) by 2.5% for each year of completed service. The annuity is capped at 75% of the officer’s final average salary.
If I have 19 years and 1 day of service, does that round up to 20 years of service, thereby making me eligible for the Formula Annuity?
No. If you are a Tier 1 member, you must complete 20 years of service, after all lost time is taken into consideration, before becoming eligible for a Formula Annuity.
A Money Purchase Annuity is calculated by taking the sum of your accumulated pension contributions (7% out of your pensionable salary) plus 10% of the city’s contribution toward your pension for each year or partial year of service beyond 10 years. The sum of the contributions is divided by a factor at your date of retirement (or age 50 if you terminated prior to that time) and are then converted into an annuity. A money purchase annuity only applies to Tier 1 members.
Is there a significant financial difference in my annuity if I retire with 19 years, 11 months versus retiring with 20 years?
Yes. Currently, an officer who retires after accruing 20 full years of service credit will receive a Formula Annuity of approximately $2,000 per month more than an officer who retires with only 19 years and 11 months and receives a Money Purchase Annuity. In addition, the officer receiving a Money Purchase Annuity will NOT be eligible for future cost of living annual increases. Instead, the officer will receive a refund of the amount contributed for that purpose calculated as ½% of his or her total pensionable earnings, without interest, contributed to the Fund while active.
In this situation, you will receive an annuity calculated by multiplying 30% time your average salary for the 4 highest consecutive years of the last 10 years of service, plus 2% for each completed year of service or fraction thereof in excess of 10, with a cap of 48% of your average salary.
Yes. Any lost time you incur must be deducted from your years of service credit. Please contact the Fund to request a manual review of your lost time at least 90 days BEFORE you submit your PAR form through the CLEAR system to the CPD. Once you submit your CLEAR form, you may not be able to rescind your retirement.
Your age at retirement along with your status in the City of Chicago health insurance plan determine whether you are eligible to participate in the City of Chicago health insurance for retired police officers. You will find detailed information on the Planning for Retirement page.
The contribution statements are printed and mailed by Northern Trust Bank and cannot be re-issued. The Fund can provide you with an alternative form of payment verification upon request.
Yes. Current federal law allows fund-to-fund transfer or rollover of 457 deferred compensation plan assets to this Fund to purchase service credits.
The Fund does not provide legal advice about division of marital and retirement assets. However, this Fund is subject to Qualified Illinois Domestic Relations Orders (“QILDRO”) pursuant to the Illinois Pension Code. A QILDRO may require this Fund to pay all or a portion of a participant’s retirement benefits to an “alternate payee”. An alternate payee is usually a participant’s former spouse, but may also be a current spouse, child or other dependent of the participant. Participants with questions about a QILDRO should discuss it with their attorney. The Fund has the required forms available on our website or upon request.
Pension deductions are taken only on the annual salary attached to the permanent career service rank held by the participant including payments for Duty Availability, or the salary attached to the exempt rank position held by the participant.
The Illinois Pension Code does not permit participant loans or partial withdrawals.
The Illinois Pension Code requires contributions towards a widow’s annuity regardless of your marital status while you are a member. If you do not have an eligible spouse on your retirement date, these contributions will be refunded to you.
If you are seeking a refund of your contributions, please contact the Fund and request a refund application. In addition to submitting the application for refund, you will be required to provide written confirmation from the CPD of your resignation or termination.
What if a participant dies before collecting retirement benefits equivalent to or greater than the contributions made by the participant? What happens to the contributions?
In general, retired participants will collect an amount greater than their contributions within two to three years of retirement. However, in the event a retired member dies before accumulated pension contributions are paid to him or her, the remaining contributions will be refunded to his or her spouse, children, or Estate as named in either a Will, Small Estate Affidavit, or Letters of Office. Participants should consult with their personal attorney to discuss this issue.
planning for retirement
For your convenience, a retirement benefit calculator is available on the website and Fund staff is always available to talk by phone (312) 235-4597 or email firstname.lastname@example.org with questions concerning your benefits. You may also request a detailed written estimate of benefits based on a specific anticipated date of retirement, preferably within two years of your planned retirement. Any estimates are not binding on the Fund and should not be conclusively relied upon.
Once you determine your retirement date based upon your estimated benefits as of that date, accounting for all lost time. You will need to contact the CPD Personnel Division and complete a Personnel Action Request (PAR) form, also known as the Retirement Submission Receipt. The form must be approved and signed by you and your commanding officer.
After you complete the process with the CPD, please review the Planning for Retirement page and contact the Fund at (312) 235-4596 or email email@example.com to complete an application for retirement benefits.
Your date of retirement impacts when you can expect your first annuity payment. If your last day of employment with the CPD is on or before the 15th of the month, you can expect to receive your first annuity payment approximately 6 weeks after your effective retirement date. If your last day of employment with the CPD is after the 15th of the month, you can expect to receive your first annuity payment 8-10 weeks after your effective retirement date.
The Fund cannot calculate a final benefit amount until it receives from the City of Chicago the data from your final payroll. Upon receipt of final payroll data, staff finalizes your annuity calculation and provides it to the Board for its next monthly Board meeting. The Board reviews and approves applications once a month at its regularly scheduled Board meetings, generally the third or fourth Thursday of every month. Retirement Benefits are always paid on the last business day of each month.
Retired participants who are Illinois residents do not pay state income tax on retirement income. Participants who reside in other states should consult their income tax professional to determine the taxability of benefits in their home state.
Retirement benefits are subject to federal income tax. However, participant contributions made prior to January 1, 1982 were taxed as income at the time you the participant received that payroll and are non- taxable as distributed by the Fund as retirement income. Each year a portion of retirement income will be considered non-taxable (excluded) until those contributions are exhausted. Participants receive a 1099R in January stating the amount of their taxable benefit.
If a participant paid into social security, is he or she entitled to receive social security benefits as well pension benefits?
Social Security benefits may be reduced for participants entitled to receive pensions from State and Municipal pension plans. Participants should review the Social Security Administration Windfall Elimination Provision and contact the Social Security administration to determine eligibility for benefits.
What if the spouse of a participant dies or the participant is divorced after retirement? Can participants receive a refund of the contributions made for spousal annuity?
In both scenarios, the contributions made on the spouse’s behalf are not refundable to the participant.
What if a participant becomes disabled and cannot handle their affairs while in receipt of a benefit?
If a participant becomes disabled, the Board has the ability to approve payment of benefits to the individual(s) legally authorized to care for the participant. In general, the Board will approve payment of benefits to persons legally authorized to care for the disabled participant after the Fund receives a valid executed power of attorney and a physician’s letter confirming the participant is disabled. Certain other instances may require that a Court ordered Guardianship on behalf of a participant be established.
You may change your election by completing a Form W-4P from the IRS or completing the Fund's federal and state tax withholding form which we will create and send to you. Your signature is required on any of the above mentioned options which can be mailed or faxed to the Fund. If you need the Fund to generate the withholding form for you, please contact us at 312-235-4595 or by email firstname.lastname@example.org.
How do I obtain a certified copy of a birth certificate, death certificate, divorce decree, marriage or civil union license?
In order to receive certified copies of these documents, you will need to contact the department of vital records for the county in which the event(s) took place. For those that took place in Cook County, information on how to request the documents can be found at www.cookcountyclerk.com.
An active member of PABF may be eligible for duty, occupational or ordinary disability benefits in certain circumstances.
A member is eligible to receive a disability benefit through the Fund once the member has exhausted all of his or her Chicago Police Department (CPD) medical time and CPD has removed the member from the payroll due to a medical leave of absence.
Yes. The Illinois Pension Code includes three categories of disability benefits referred to as: duty disability, occupational disease disability (Heart), and ordinary disability.
A member seeking a disability benefit should contact the PABF Disability Manager, Bob Crawford, at 312-676-0428 or by email at email@example.com to complete an application. After the application is completed, the Board’s medical management service will set up an Independent Medical Examination (IME) for the applicant.
The Board will review the completed disability application, including all supporting documents and the IME before making a decision regarding the application at a monthly Board meeting. At that time, the Board may vote to award the benefit, deny the benefit, or determine the applicant needs to appear before the Board for a full hearing on his or her application prior to making a determination of award.
It may take up to several months for a member to receive a decision on his or her application. A member should start his or her application process 2 months prior to expiring the 365 days of medical time.
If the Board grants a disability benefit, the member on disability is treated as though he or she is an active member for retirement and dependent annuity purposes pursuant to the Illinois Pension Code.
Yes. In order to continue receiving a disability benefit, the member will need to be found disabled by a physician for the Board on a yearly basis. While a member remains disabled, he or she must comply with the disability provisions within the Illinois Pension Code and adhere to the Board policies. A member’s failure to comply with either the statutory requirements or the Board policies may result in that member’s disability benefit being suspended and/or terminated.
Duty Disability: An active member is eligible to apply for a duty disability benefit if he or she becomes disabled as the result of an injury that occurred in the performance of an act of duty.
Occupational Disease Disability: An active member is eligible to apply for an occupational disease disability if the he or she has at least 10 years of service and suffers a heart attack or any other disabling heart disease.
Ordinary Disability: An active member is eligible to apply for ordinary disability benefits if he or she becomes disabled as the result of any cause other than an act of duty or occupational disease.
– If the Board determines the member’s injury occurred in the performance of an act of duty where no preexisting condition relating to the injury existed, the member may be eligible to receive disability benefits at 75% of the member’s current salary.
– If the Board determines the member’s injury occurred in the performance of an act of duty where a preexisting condition relating to the injury existed, the member may be eligible to receive disability benefits at 50% of the member’s current salary.
An act of duty is defined by statute as “any act of police duty inherently involving a special risk, not ordinarily assumed by a citizen in the ordinary walks of life…” It is important to note that there is a distinction between becoming injured while in performance of an “act of duty” and becoming injured while at work. Not all injuries sustained while working qualify as injuries occurring in the performance of an act of duty.
Duty Disability: A duty disability benefit will either be equal to 75% or 50% of the member’s salary at the time the disability is allowed. Duty disability benefit shall be payable until the policeman becomes age 63 or would have been retired by operation of law. Thereafter the policeman shall receive the annuity provided in accordance with the other provisions of the Illinois Pension Code.
Occupational Disease Disability: The occupational disease benefit shall be 65% of the salary attached to the rank of the officer at the time of their removal from the police department payroll. The occupational disease disability benefit is payable during the period of disability until the police officer attains age 63 or compulsory retirement age, whichever occurs later; thereafter the police officer shall receive the benefits provided under the other provisions of the Pension Code.
Ordinary Disability: The ordinary disability benefit shall be 50% of the officer’s salary at the time disability occurs. Officers awarded an ordinary disability benefit are eligible for 1 year of benefits for every 4 years of service, with a maximum of 5 years of benefits.
Duty Disability: A member who is awarded a duty disability benefit will also be entitled to children’s disability of $100.00 per month for each natural or legally adopted, unmarried child under the age of 18. However, the total amount of the children’s disability shall not exceed 25% of the officer’s salary.
Occupational Disease Disability: A member who is awarded an occupational disease disability benefit will also be entitled to children’s disability of $100.00 per month for each natural or legally adopted unmarried child under the age of 18. However, the total amount of the children’s disability shall not exceed 25% of the officer’s salary.
Ordinary Disability: No. There are no eligible children’s benefits with an ordinary disability award.
Duty Disability: No. A duty disability benefit is tax-free.
Occupational Disease Disability: No. An occupational disease disability benefit is tax-free.
Ordinary Disability: Yes. An ordinary disability benefit is subject to federal taxes.
Duty Disability: A member who is awarded a duty disability benefit will be provided with free medical insurance coverage by the City of Chicago from the time the disability benefits are awarded.
Occupational Disease Disability: A member who is awarded an occupational disease disability benefit will be provided with free medical insurance coverage by the City of Chicago from the time the disability benefits are awarded.
Ordinary Disability: A member who is awarded an ordinary disability benefit may continue to pay for his or her medical insurance through the City of Chicago Benefits Management Office. The member will be required to make premium payments directly to the Benefits Management Office, as there is no payroll deduction for this plan.
If my divorce settlement states my alternate payee or ex-spouse should receive a portion of my benefits, do I still need a QILDRO?
Yes, the Fund cannot pay an alternate payee or ex-spouse without a QILDRO.
Can I submit a Qualified Domestic Relations Order (QDRO) or Qualified Illinois Domestic Relations Order (QILDRO) addressed to PABF?
No, the Fund does not accept Qualified Domestic Relations Orders or Qualified Illinois Domestic Relations Orders addressed to PABF. Participants must use PABF approved QILDRO forms and Consent Form found here QILDRO.
No. The Fund cannot pay your alternate payee before you apply for and receive the benefit for which the QILDRO applies.
If you became a participating member of the Fund prior to July 1, 1999, a signed irrevocable Consent Form is required to implement the QILDRO. However, if you became a participating member after July 1, 1999, then you acknowledge the QILDRO as a condition of your employment and a Consent Form is not required to implement the QILDRO.
No. The QILDRO must be certified by the Circuit Court Clerk in order to be accepted by the Fund.
The PABF is a single employer, defined benefit pension plan. A defined benefit pension plan guarantees a specific retirement benefit amount for each participant predetermined by a formula based on the employee's earnings history, tenure of service, and age. The Fund is a qualified 401(a) plan under the Internal Revenue Code.
The plan is funded through three sources: employer contributions, employee contributions, and investment returns.
Every sworn police officer (Tier 1 & Tier 2) contributes 9% of their salary, including duty availability, to the pension fund. The employee contribution is divided as follows:
- 7% for the employee annuity
- 1.5% for the widow annuity
- 0.5% for the automatic annual increase in annuity
According to the pension code, beginning in tax levy year 2020 the City is required to contribute an actuarial determined amount to the Fund. This amount shall be equal to and no less than the normal cost to the Fund and is sufficient to bring the total assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of fiscal year 2055. The actuarial determined contribution is updated annually and is documented in the Fund’s annual actuarial report.
NEPC is the current investment consultant for the Fund. According to the pension code, an RFP (Request For Proposal) for an investment consultant shall be conducted every three years. A list of individual firms, hired by the Board of Trustees to manage investments for the Fund can be found in the Investment Section of the Fund’s website.
In compliance with state statue, the Fund's records are audited every year by an independent auditor. Mitchel Titus is the Fund's current auditor, and more than 10 years of Audited Financial Statements can be found in the Fund Records section on the Fund's website.
In accordance with the Open Meetings Act, 5 ILCS 120/2.06(g), the policy of the PABF Board allows any person to present comments before the Board. The public comment section is limited to 30 minutes overall, with each individual offered a maximum of 3 minutes to speak. It is recommended that any individual who wants to offer public comment notify the Fund’s Executive Director at least three business days prior to the meeting.
The contribution statements are printed and mailed by Northern Trust Bank and cannot be re-issued. The Fund can provide you with an alternative form of payment verification upon request.