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Police and Fire Retirement System

Plan III Summary of Plan Provisions

Effective Date

Plan III became effective April 17, 1984.

Membership

Enrollment in the Plan is closed to all new police officers and firefighters. In the Spring of 1984, an open enrollment allowed Plan I and II Members to switch into Plan III.

Credited Service

Credited Service is the total period of regular full-time employment with the Municipality as a police officer or firefighter.

Break in Service

If a Member terminates employment prior to becoming eligible for a retirement benefit and subsequently is reemployed, all Credited Service accumulated prior to the date of termination will be reinstated after the Member makes a contribution to the Plan equal to the amount of the refund paid upon the earlier termination, including interest until the date of repayment.

However, the contribution must be made within two years after reemployment.

Final Average Compensation

Average compensation during the last 52 biweekly pay periods, or any two consecutive tax years, whichever is higher. Compensation means the sum of the basic hourly wage, longevity, holiday pay, shift differential and educational pay received by a Member from Anchorage.

Member Contributions

Plan III Members will make contributions not to exceed 6% of compensation. If the plan is determined to be in a significant actuarial surplus position, no Member contributions will be required.

Normal Service Retirement

Eligibility: 20 years of Credited Service.

Benefit: 2.5% of Final Average Compensation times the number of years of Credited Service.

Early Service Retirement

Eligibility: 15 years of Credited Service.

Benefit: 2.5% of Final Average Compensation times the number of years of Credited Service, payable for life. The cost-of-living adjustment is not available until 20 years total service would have been obtained.

Termination of Benefit

A Member who terminates employment before completing five years of Credited Service will receive all of the Member's contributions to the Plan plus interest at the nominal annual rate of 4% compounded bi-weekly upon request or at age 62.

A vested Member who terminates employment prior to being eligible for service retirement may elect one of the following:

  1. Withdrawal of all the Member's contributions to the Plan plus interest at the nominal annual rate of 4% compounded bi-weekly.
  2. The accrued Service Retirement Benefit beginning at the earlier of age 55 or when the Member would have completed 20 years of service.

Occupational Disability

Definition: Any injury received while performing official duties for the Municipality of Anchorage, or any heart, lung, or respiratory system illness are rebuttably presumed to be an occupational disability. Disability must occur prior to termination.

Benefit: A monthly pension of 50% of the Member's final average compensation at the time of disability. The benefit is payable for life or until the Member is capable of resuming assigned duties similar to their pre-disability assigned duties, with any police or fire department, and is offset by any other wage continuation benefits attributable to the Municipality.

Non-Occupational Disability

Eligibility: Five years of Credited Service prior to the date of disability.

Definition: Any non-occupational disability which renders a Member incapable of performing assigned duties similar to their pre-disability assigned duties. This definition excludes elective surgery not required for the preservation of the Member's health.

Benefit: A monthly pension of 25% of final average compensation if the Member retires after more than 5 years but less than 10 years of credited service. For every additional year of credited service more than 10 years up to 20 years, the benefit is increased by 2.5% of final average compensation. The benefit is payable for life or until the Member is capable of resuming duties with any police or fire department.

Occupational Death Benefit

The benefit is the greater of the following:

  1. 100% of the occupational disability benefit to which the Member would have been entitled had the Member survived with a disability. For a retired member, this amount is computed as of retirement date and increased by the COLA accrued since retirement on the benefit actually received by the retired member while alive, or,
  2. For an active member, 75% of the service retirement benefit to which the Member would have been entitled had the Member survived. For a retired member, 75% of the service retirement benefit, occupational disability benefit, or non-occupational disability benefit the member was receiving at the time of death, including the COLA accrued on the retired member's benefit at the time of death.

Where a Heart/Lung/Respiratory occupational presumption is not available, the survivor must prove that the member's death was due to an occupational cause in order to qualify for this benefit. There is no occupational presumption available subsequent to termination of employment as an active Plan III member.

Non-Occupational Death Benefit

The benefit is the greater of the following:

  1. 100% of the non-occupational disability benefit to which the Member would have been entitled had the Member survived with a disability. For a retired member, this amount is computed as of retirement date and increased by the COLA accrued since retirement on the benefit actually received by the retired member while alive, or,
  2. For an active member, 75% of the service retirement benefit to which the Member would have been entitled had the Member survived. For a retired member, 75% of the service retirement benefit, occupational disability benefit, or non-occupational disability benefit the member was receiving at the time of death, including the COLA accrued on the retired member's benefit at the time of death.

The Occupational and Non-Occupational death benefits are payable as designated by the Member to the surviving spouse or the surviving children until the surviving children reach the age of 18. The Member may designate the portion of the benefit paid to the surviving spouse and the portion paid to surviving children. The surviving spouse is entitled to receive at least 50% of the retirement benefits the Member was entitled to receive at death. In the event the participant makes no designation, then the surviving beneficiaries will receive the benefit in the following priority:

  1. surviving spouse
  2. surviving children under the age of 18
  3. disabled children, regardless of age
  4. dependent parents
  5. dependent siblings under the age of 18.

CHILDREN'S BENEFIT5% of final average compensation for each dependent child, up to 10%, is payable monthly with disability benefits and to surviving spouses with dependent children until age 18.

Cost-of-Living Adjustment

All service retirees after 20 years from date of entry, disability, and survivor's and children's benefits are subject to an annual cost-of-living adjustment equal to the lesser of 3% or 25% of the CPI. Starting 25 years from date of hire, annual COLA is limited to 6% or 50% of the CPI.

The CPI shall be the Anchorage CPI Urban Consumers Index or such other inflation index if the Anchorage CPI Urban Consumers Index ceases to exist. This adjustment is generally effective eachJuly 1.

Optional Form of Benefit

Members of Plan III may elect to participate in the Actuarial DROP program when they would otherwise be eligible for normal or early retirement. The DROP period must be between two and five years. DROP participation periods must be in full year increments. For every year served in the DROP, the member may elect to receive five percent (5%) of the monthly pension benefit calculated at the time of retirement in a lump sum form. The lump sum is computed to be actuarially equivalent to the DROP percentage of the member's monthly pension, without the value of future Cost-of-Living adjustments. The COLA on the portion of the member's monthly pension will be calculated based on the full monthly benefit without reduction for the DROP lump sum.

    • Police and Fire Retirement System
    • Director: Edward Jarvis
    • 3600 Dr. Martin Luther King Jr. Ave, Suite 207, Anchorage, AK 99507
    • 907 343-8400