A member’s start date with the City of Chicago determines that person’s “Tier” for the purpose of retirement benefits. A member who started working for the CPD prior to January 1, 2011 is considered a “Tier 1” participant and a member who started working for the CPD on or after January 1, 2011 is considered a “Tier 2” participant in the pension fund pursuant to Article 5 of the Illinois Pension Code. Every sworn police officer employed by the CPD contributes 9% of his or her salary, including duty availability, to the pension fund. This contribution is the same for both Tier 1 and Tier 2 members of the fund. The employee contribution is divided as follows:
In addition, every sworn police officer contributes $2.50 per month to defray the cost of the ordinary death benefit.
The City of Chicago is required to contribute an actuarial determined amount to the Fund that is 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. Beginning in tax levy year 2020 the actuarial determined contribution is updated annually and is documented in the Fund’s annual actuarial report.
A police officer who started working for the CPD prior to January 1, 2011 is considered a “Tier 1” participant in the pension fund pursuant to Article 5 of the Illinois Pension Code.
Any participant having at least 20 years of service shall receive an annuity equal to 50% of the final average salary, plus an additional 2.5% of average salary for each year of service or fraction thereof beyond 20 years of service, however the annuity may not exceed 75% of such average salary. The final average salary is the highest 4 consecutive years of the last 10 years of service. A participant may withdraw with 20 years of service regardless of age. The annuity payment will begin when the participant reaches 50 years of age and has withdrawn from service. This service is reduced by any lost time at date of withdrawal. Note: If the Tier 1 member terminates before age 50 and does not apply for their annuity by their 50th birthday, then payment will begin when the member applies for retirement.
Active participants who are required to withdraw from service at the mandatory retirement age of 65 and have at least 10 but less than 20 years of service credit may elect to receive an annuity equal to 30% of their final average salary for the first 10 years of service plus 2% of their final average salary for each completed year of service or fraction thereof in excess of 10, but not to exceed a maximum of 48% of final average salary. The final average salary is the highest 4 consecutive years of the last 10 years of service. A participant whose retirement annuity is calculated under this section shall qualify for cost of living adjustment (COLA) increases.
A participant who withdraws from service with at least 10 but less than 20 years of service may receive a money purchase annuity equal to the sum of accumulated age and service contributions (7% of your pensionable salary) plus 10% of the city age and service contributions for each completed year of service after the first 10 years. The sum of the contributions is divided by a factor that is determined by the participant’s age at date of retirement and then converted into an annuity. The participant may also elect to receive a refund of contributions including 1.5% interest before turning 50 years old.
Tier 1 participants retiring with at least 20 years of service will receive an increase of 3% based on their originally granted annuity beginning on the later of; the 1st of the month after the participant reaches age 55, 1st of the month after the participant has been retired at least one year, or on 1/1/2023 with the signing of Public Act 103-0582. This annuity shall be increased by an additional 3% of the originally granted annuity each January 1st thereafter continuing for their lifetime.
A police officer who started working for the CPD on or after January 1, 2011 is considered a “Tier 2” participant in the pension fund pursuant to Article 5 of the Illinois Pension Code.
Tier 2 participants who have withdrawn from service, reached age 50 or more, and have 10 or more years of service, shall receive a Tier 2 Monthly Retirement Annuity. The calculation of a Monthly Retirement Annuity is equal to 2.5% of average salary for each year of service, subject to an annuity reduction factor of one-half of 1% for each month that the participant’s age at retirement is under age 55. The average salary is the highest 8 consecutive years of salary of the last 10 years of service. This service is reduced by any lost time at date of withdrawal. Monthly retirement annuities shall not exceed 75% of average salary. For Tier 2 participants, the annual salary starting January 1, 2011 shall not exceed $106,800; however, that amount shall be increased annually by the lesser of 3% including all previous adjustments or 1⁄2 of the annual unadjusted percentage increase (but not less than zero) in the Consumer Price Index-All Urban Customers (CPI-U) for the 12 months ending with the September preceding each November 1st including all previous adjustments. The annual salary cap for 2024 is $125,773.73.
The monthly annuity of a Tier 2 participant shall be increased on the January 1st occurring on or after the participant reaches age 60, or the 1st anniversary of the annuity start date. This annuity shall be increased each January 1st thereafter. Each annual increase shall be calculated at 3% or one-half of the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12-month period ending with the September preceding each November 1, whichever is less, of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-u decreases, then the annuity shall not be increased.
An active participant in the PABF who has served with the CPD for at least 3 years, may be eligible to purchase service credit for various purposes for under state law for service prior to becoming a member or subsequent thereto for time periods specified in the statute.
An active participant in the PABF may be eligible to purchase service credit for prior service with Illinois municipal law enforcement agencies, as a law enforcement officer with any agency of the US government, and other certain law enforcement agencies as the statute permits. An active participant who was hired prior to the bill’s effective date, August 11, 2009, had until August 11, 2010 to make a formal application in order to satisfy the one year deadline. An active participant who became a member of the Fund after the effective date, August 11, 2009, may apply for credit within 2 years after his or her hire date and must provide the statutorily required contributions to the Fund within 5 years after the date of application.
Prior to Employment with CPD (40 ILCS 5/5-214.3)
Active participants who served in the Armed Forces of the United States prior to employment with the CPD may be eligible to purchase up to 2 years of service credits, in 1 month increments, for pension purposes. Interest is charged to purchase these credits. Please contact the Fund’s calculations group at benefits@chipabf.org or 312-235-4597 for more information.
While on Leave of Absence from CPD (40 ILCS 5/5 -212)
Active participants who served in the Armed Forces of the United States while on leave of absence from the CPD may be eligible to purchase service time for annuity purposes prior to retirement. To receive credit, the participants must pay into the Fund the same amount that would have been deducted from their salary had they been active officers. Interest is not charged to purchase these credits.
The PABF is a reciprocal fund with the Firemen’s Annuity and Benefit Fund of Chicago (FABF). Active participants may transfer contributions earned in the FABF to the PABF for the purpose of annuity service credit. The participant must apply to the PABF and provide payment of all statutorily required contributions.
Active members are eligible to apply for duty, occupational or ordinary disability benefits after their medical time expires and they are removed from the CPD payroll due to a medical leave of absence. While on disability, participants are treated as though they are still active members for retirement and dependent annuity purposes pursuant to the Illinois Pension Code. When members begin receiving a disability benefit, they must comply with Board policies and statutory requirements related to the benefit. Failure to comply may result in suspension and/or termination of a disability benefit.
Duty disability may be awarded if a member becomes disabled as the result of an injury incurred in the performance of an act of duty. 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 in the ordinary course of a workday qualify as injuries occurring in the performance of an act of duty. A duty disability benefit award is 75% of the member’s salary at the time the disability is allowed unless the disability resulted from any physical defect or mental disorder or any disease which existed at the time the injury was sustained. In those cases, the duty disability benefit shall be limited to 50% of the member’s salary. This benefit also entitles the member to a child’s disability benefit of $100 per month for each natural or legally adopted, unmarried child under the age of 18 years old. If a member is receiving a duty disability benefit and believes his or her disability is of such a nature as to render the member totally disabled for any service of a remunerative character, that member may apply for a total and permanent disability benefit. This benefit is 75% of the member’s salary at the time of removal from the police department payroll. The duty disability benefit award is tax-free. Also, the City of Chicago will provide the member with free medical insurance coverage from the time he or she is awarded disability benefits. Any officer in receipt of a duty disability benefit is eligible to receive this benefit until such time he or she is found fit for duty, or until age 65 under the mandatory retirement rules of the department, at which time the officer would be eligible to apply for their pension.
Occupational disease disability (heart) may be awarded to a member who has suffered a heart attack or any other disabling heart disease. The member must have at least 10 years of service in order to be eligible for this benefit. An occupational disease disability award is 65% of the member’s salary at the time the disability occurs. This benefit also entitles the recipient to a child’s disability benefit of $100 per month for each natural or legally adopted, unmarried child under the age of 18 years old.
The occupational disease disability benefit award is tax-free. Also, the City of Chicago will provide the member with free medical insurance coverage when he or she is awarded occupational disability benefits.
Any member in receipt of an occupational disease disability benefit is eligible to receive this benefit until such time he or she is found fit for duty, or until age 65 under the mandatory retirement rules of the department, at which time the officer would be eligible to apply for his or her pension.
Ordinary disability benefits may be awarded to a member who becomes disabled as the result of any cause other than duty or occupational disease disabilities. The ordinary disability benefit award is 50% of the officer’s salary at the time disability occurs. Officers awarded an ordinary disability benefit are eligible for 1 year for every 4 years of service, with the maximum amount being 5 years. If awarded ordinary disability, there are no eligible children’s benefits available. Unlike the other categories of disability benefits, ordinary disability benefit payments are taxable by the federal government. Also, the City of Chicago Benefits Office will offer health insurance at a cost for members receiving ordinary disability benefits. Should the member choose the health insurance coverage, he or she will be required to make those premium payments directly to the Benefits Office.
Participants receiving disability benefits shall be examined at least once a year, or longer periods as determined by the Board, by a Board appointed physician. However, the Board has the right to request an examination of any disability participant as deemed necessary.
In cases where the Board requests an applicant to get a second opinion, the applicant must select a physician from a list of qualified licensed and practicing physicians who specialize in the various medical areas related to duty injuries and illnesses, as established by the Board. The Board may require other evidence of disability.
As part of the re-examination process, all disability participants who are working outside of CPD must submit a job description. When a disability ceases, the Board shall discontinue payment of the benefit.