Annuity Options

Upon notice of your retirement, you will be required to choose the option best suited for you and your financial needs. This will be an irrevocable option. It is important that you understand the characteristics of each option so that you can select the one best suited for your particular needs.

Certain selections of options and beneficiary designations other than a surviving spouse may have adverse consequences under the Internal Revenue Code of 1986 which may cause a reduction in the amount of benefits payable. You are urged to consult your attorney or tax advisor prior to a final selection of an option.

When you make your option choice, you will sign a legal statement binding you to the option you have decided upon. Remember: this choice is binding for both you and your survivor/beneficiary, therefore, the importance of certainty cannot be overstated.*

RETIREMENT OPTION SELECTIONS

1. Life Annuity (member only) - Basic Retirement Benefit (determined by your total creditable service in the retirement system and averaged salary). This is a retirement allowance payable monthly as long as you live, but no monthly payments are made to your beneficiary. Any balance of your own deposits (including interest) remaining at your death will be paid in a lump sum to your beneficiary(ies).
2. Option I-100% Joint & Survivor Annuity - This is a retirement allowance payable monthly as long as you live. At your death, your surviving beneficiary will receive the same amount as long as he or she lives.
3. Option II-50% Joint & Survivor Annuity - This is a retirement allowance payable monthly as long as you live. At your death, your surviving beneficiary will receive one-half of that amount as long as he or she lives.
4. Option III-66 2/3 Joint & Survivor Annuity - This is a retirement allowance payable monthly as long as you live. At your death, your surviving beneficiary will receive two-thirds of that amount as long as he or she lives.
5. Option IV-Joint & 66 2/3 Last Survivor Annuity - This is a retirement allowance payable monthly as long as you live. At either your death or the death or your beneficiary, the last survivor of the two will receive two-thirds of that amount as long as he or she lives.
6. Option V-Fifteen Year Certain and Life Annuity - This is a retirement allowance payable monthly as long as you live. If your death occurs before you have received 180 payments (15 years X 12 payments), your designated beneficiary or estate will receive the remaining monthly payments in the same amount you were receiving until all 180 payments have been made. If you are still living after receiving the 180 payments, payments will continue until your death.
7. Retroactive Deferred Retirement Option Plan (RETRO DROP) - Lump Sum, with Reduced Monthly Benefit.
8. Forward Deferred Retirement Option Plan (Forward DROP) - One-time benefit whereby active police officers can choose to retire, continue working for and drawing a paycheck from APD, while their retirement annuity is deferred into a DROP account on their behalf at the retirement system.

*On each option document, the following statement will appear. "In selection of this option, I have not relied upon the Police Retirement System for legal advice, including, but not limited to, tax consequences under the Internal Revenue Code of 1986, as amended. I understand that there are legal and tax consequences in the selection of an option and I have been advised to consult my own tax and legal advisors prior to selection of this option."

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