If You Retire . . .
At retirement, you may be eligible for an allowance from the System. This section of the overview explains:

• The eligibility requirements for retirement
• When your contributions are refunded
• How to calculate your service retirement allowance
• How you receive your DROP account
• When your allowance may be adjusted for changes in the cost-of-living
• How to become a Special Consultant or Special Advisor
• The benefits paid to your spouse and dependent children if you die during service retirement

Reaching Service Retirement Eligibility
You are eligible for service retirement when you reach age 55 or when you complete 20 years of service. No more than 90 days before you plan to retire, you should submit a written application for retirement to the Board of Trustees.

Retirement is required at age 65. However, if you receive permission from the Board of Trustees, you may continue your employment beyond age 65. For more information about continued employment past age 65, you can contact The Police Retirement System office at 241 0800.

Receiving Your Contributions at Service Retirement
When you retire, the System will refund your contributions to you without interest in a lump sum. You will receive this refund in addition to your monthly service retirement allowance. You can expect to receive your contributions in a lump sum within 60 days after your retirement.

Calculating Your Service Retirement Allowance
If you do not enter DROP, your service retirement allowance is based on your average final compensation and your years of service at retirement. If you enter DROP, your service retirement allowance is based on your average final compensation and your years of service when you enter DROP plus any compensation and service after DROP ends and you reenter the System. Your years of service are counted in years and months. You receive one month of service for each full and partial month you are a member. If you earn any years of service on or after August 11, 1999, the System uses the following formula to calculate your service retirement allowance:

Service Retirement Allowance Formula

*The maximum service retirement allowance available from the System is 75% of your average final compensation.

Note that if you entered DROP on or before October 1, 2001 and you reenter the System on or after October 1, 2001, your specific circumstances will determine your benefit. If you reenter the System on or after October 1, 2001 for at least two full years, your benefit is calculated based on the above formula and your pre and post DROP service. If you reenter the System for less than two years, your benefit will be calculated based on a combination of your pre DROP benefit and your post DROP benefit calculated based on the above formula. You should discuss your specific circumstances with the System’s Administrative Director.

The following special definition of average final compensation will apply to you if you participated in DROP on or before October 1, 2001 and you reenter the System after your DROP participation ends:

If you earn two or more years of service beginning on or after October 1, 2001, your average final compensation is the average of your earnable compensation during your last two years of service as a Police Officer.

If you earn fewer than two years of service beginning on or after October 1, 2001 because of your death or disability, your average final compensation is the average of your earnable compensation during your last two years of service (including service prior to October 1, 2001).

If you earn less than two years of service beginning on or after October 1, 2001 for reasons other than your death or disability, your average final compensation will be determined in two parts. For years of service earned before you participated in DROP and before October 1, 2001, it is the average of your earnable compensation during your last three years of service as a Police Officer (including service prior to October 1, 2001). For years of service earned on or after October 1, 2001 it is the average of your earnable compensation during your last two years of service as a Police Officer (including service prior to October 1, 2001).

Example: No DROP

Date of Retirement 1/1/2002
“Earnable Compensation” from 1/1/2001-12/31/2001: $36,000
“Earnable Compensation” from 1/1/2000-12/31/2000: $35,000
Years of Service 31
Average Final Compensation = ($35,000 + $36,000) ? 2 = $35,500

Service Retirement Allowance

Example: DROP Entry after 10/1/2001 without Reentry

Date of Retirement 11/1/2003
Date of DROP Entry 11/1/2001
“Earnable Compensation” from 11/1/2000-10/31/2001: $34,000
“Earnable Compensation” from 11/1/1999-10/31/2000: $33,000
Years of Service at 11/1/2001 28
Average Final Compensation = ($33,000 + $34,000) ? 2 = $33,500

Service Retirement Allowance

For more specific information about your service retirement allowance, including minimums, maximums, cost-of-living and other adjustments, see Section 86.251, 86.253, 86.255 and 86.256 RSMo.

Payment of Your DROP Account
If you participated in DROP, your monthly service retirement allowance (calculated as of the date you entered DROP) will become payable to you when you retire, along with a lump sum equal to your contributions without interest. In addition, your DROP account will be payable. You can elect to have your DROP account paid in a lump sum or to receive it as a series of monthly installments over 10 years. Payments begin upon retirement. The DROP account will be adjusted for the fund’s investment performance until it is fully paid out. If payment is made in a lump sum, it will be an “eligible rollover distribution.” If payments are made in installments, interest credited during the installment period will be paid in a lump sum at the end of the installment period. The payment of interest will be an “eligible rollover distribution”. (See “Direct Rollover Option” on page 16.)

Cost-of-Living Adjustments
Your allowance may be adjusted during your retirement to reflect changes in the U.S. Consumer Price Index (CPI). These cost-of-living adjustments are made each October beginning with the second October after your retirement. Depending on the most recent CPI, your allowance may be increased by 1% to 3%. The maximum cumulative increase to your allowance is 30%. If the CPI goes down, your allowance can be decreased. The decrease will never be less than 3% for any one year, and your allowance will never be decreased to less than your original calculated allowance amount.

The service retirement allowance for deferred retirement option (DROP) members is not adjusted for changes in the cost-of-living until after you actually retire.

If you die while you are an active member (but not in the line of duty) and after you reach age 55 or have 20 years of service or if you die while receiving a service retirement allowance, the monthly death benefits paid to your spouse will be adjusted as explained above. The 30% cumulative maximum adjustment includes adjustments during your lifetime as well as adjustments to your surviving spouse’s benefit after your death.

Becoming a Special Consultant or Special Advisor
Special Consultants
Retirees and surviving spouses whose monthly service retirement allowance or survivor benefit is less than $650 per month (effective August 18, 1999) are eligible to become Special Consultants and receive a minimum monthly retirement benefit of $650. To become a Special Consultant, you must apply to the Board of Trustees. As a Special Consultant, the Board may ask for your advice on retirement issues.

Special Consultants receive the greater of the $650 minimum monthly benefit or their original service retirement allowance (or survivor benefit), adjusted for changes in the cost-of-living. See page 22 of this handbook for information about these adjustments.

For information about applying to be a Special Consultant, contact The Police Retirement System office at 241 0800.

Special Advisors
Effective July 1, 1994, any retired member age 60 or older can become a Special Advisor to the Board of Trustees on retirement issues. Effective October 1, 1999, any surviving spouse age 60 or older can become a Special Advisor. To become a Special Advisor, you must apply to the Board of Trustees. As a Special Advisor, the Board may ask you to share your opinions on matters such as retirement and aging. For your services, you will be paid an additional $10 per month for each full year over age 60. For example, a Special Advisor who is age 68 would receive an additional $80 per month: 8 years x $10 = $80. The System pays this Special Advisor monthly benefit in addition to all other payable allowances. For information on applying to be a Special Advisor, contact The Police Retirement System office at 241-0800.

Death After Service Retirement
If You Die after receiving a service retirement allowance, then ...

If you die after payment of your service retirement allowance begins, your surviving spouse will receive a monthly benefit equal to 40% of your average final compensation. This benefit will be paid in monthly installments until your spouse dies or remarries, whichever occurs first. The System will pay an additional 15% of your average final compensation for each of up to three of your dependent children. This additional benefit is also paid in monthly installments. (Your spouse may also be eligible to receive cost-of-living adjustments. For more information about these adjustments, see page 22 of this handbook.)

If you do not have a surviving spouse, your dependent children will receive the benefit that would have been paid to the spouse (40% of your average final compensation plus 15% per dependent child, up to three). Each of your dependent children will receive a share of this benefit. (However, if at any time there is only one dependent child, he or she will receive half of the spouse's benefit amount plus the additional 15% child’s benefit.) Your dependent children will receive this benefit in monthly installments.

If you have a DROP account, and you die before receiving the full amount in your DROP account, the remaining account balance will be paid to your surviving spouse in a lump sum. The surviving spouse’s lump sum is an “eligible rollover distribution.” (See “Direct Rollover Option” on page 16.) Otherwise:

• If you do not have a surviving spouse, your dependent children will receive equal shares;
• If you have no dependent children, your mother or father (if dependent on you for support) will receive the payment;
• If you have no dependent mother or father, payment will be made to your beneficiary.
• If no beneficiary is then living, payment will be made to your estate.

In no event will the total amount paid to you and your beneficiaries be less than your accumulated contributions.

For more information about service retirement death benefits for your spouse and dependent children and/or dependent parents, see Section 86.283 and 86.251 RSMo (DROP).