Police & Fire Plan and Correctional Plan Update: Actuarial Factor Changes

Actuarial factors will be updated for benefits effective on or after July 1, 2025 in the Police & Fire Plan and the Correctional Plan.

Actuarial factors are used when you:

• Retire before your full retirement age in the Correctional Plan,
• Designate a survivor option for a monthly benefit in the Police & Fire or Correctional Plan, or
• Purchase military service credit earned before public employment in the Police & Fire or Correctional Plan.

Actuarial factors may be updated when investment return assumptions, mortality rate assumptions, or plan provisions change. The new factors include these updated assumptions:

• The legislative change of the assumed rate of return from 7.5% to 7.0% and
• Updated mortality assumptions based on a recent actuarial experience study.

Retiring Soon?

The updated actuarial factors may impact your retirement decision if you are planning to:

• Retire early in the Correctional Plan.
• Select a survivor option with your benefit in the Police & Fire or Correctional Plan.

Benefits effective on or after July 1, 2025 are positively impacted by the new factors.

• Benefit begins on or after July 1, 2025: Review your myPERA account for updated estimates with benefit effective dates July 1, 2025 or later. Your next annual Personal Benefit Statement will also include updated estimates reflecting this change.
• Benefit begins before July 1, 2025: Compare your benefit estimates with a benefit effective date on or after July 1, 2025 to your estimates with a benefit effective date before July 1, 2025.

Early Retirement and the Pension Protection Act

If you retire at the Police & Fire or Correctional Plan's full retirement age, the Pension Protection Act of 2006 and Secure 2.0 allow public safety and correctional officers to reduce their taxable income by up to $3,000 annually in costs paid for qualified insurance premiums, such as health, dental, and long-term care. In other words, during the year, you will pay your insurance premiums directly to your providers; when you file your federal income taxes for that year, you will apply for the $3,000 reduction.

If you retire early, you cannot reduce your taxable income according to the Pension Protection Act and Secure 2.0. Contact a tax professional with any questions.

Note: This content was originally published in February 2025 on PERA's website and by email to impacted members.