Updated October 8, 2026. Quick answer: A Detroit Police and Fire Retirement System member retiring under the Combined Plan chooses a straight life pension or one of the joint and survivor options (100%, 75%, 50% or 25%) or a cash refund annuity. The FAQ says the choice cannot change once the first pension check is cashed or 180 days pass, whichever comes first. Retiring members can withdraw annuity savings in a lump sum, which reduces the pension. Eligible members may instead elect the irrevocable DROP, which sends 75% of the monthly pension into an account.
Which members and documents this page covers
This page works from four documents of the Police and Fire Retirement System of the City of Detroit (PFRS), read in October 2026: the Combined Plan document (cover: “Effective July 1, 2014”), the DROP decision guide, the Prepare for Retirement page and the Frequently Asked Questions page. The sources cover Detroit police officers and fire fighters in the post-bankruptcy system, and the DROP guide names five groups of eligible members: four associations and the non-union executives of the two departments.
Two membership layers matter. “If you hired before July 1, 2014 you may have two retirement plans. The Legacy Plan which has its own rules and the Hybrid plan which is applicable to all those that have hired on or after July 1, 2014.” The Combined Plan therefore has a Component II (Legacy) and a Component I (Hybrid), and each section below says which one a rule belongs to. City general employees are on a separate system, covered at Detroit General Retirement System decisions. State tax questions are at Michigan retirement taxes and does Michigan tax pensions.
When a pension can start, and how to apply
Legacy members: “You may retire when you have at least 25 years of credited service regardless of age. DPOA and Fire equivalents need at least 20 years.” Hybrid members: “You may retire at age 50 with 25 years to receive an unreduced benefit.”
A Hybrid member who leaves earlier can still have a pension: “Once you have 10 years of service you are entitled to a vested pension at age 62.” The Combined Plan adds that the member “may begin receiving a Retirement Allowance following his Attainment of Age fifty-five, actuarially reduced for early commencement”. Legacy vesting uses a separate age and service test set out in the FAQ.
The application path begins with a service check and benefit estimate, then notice to city payroll and a retirement interview with RSCD Member Services, where the member brings documents including “Proof of birth for your beneficiary” and “Your marriage license (if applicable)”.
How the pension is figured
The FAQ gives one formula for all pensions: “Years of Credited Service X Multiplier X Average Final Compensation” For Component I, the Combined Plan sets the allowance at “two percent (2%) of the Member’s Average Final Compensation” for each year of “Credited Service earned after June 30, 2014”. For the frozen Legacy plan, listed in the FAQ as “Hired on or after 1-1-69 (Frozen Plan)”, the FAQ says: “Your multiplier is 2.50% for the first 25 years of credited service and 2.10% for years beyond 25 to a maximum of 35 years of service.”
Two computed examples from an assumed average final compensation of $60,000, not PFRS figures. Component I: 2% of $60,000 times an assumed 10 years of service after June 30, 2014 is a computed $12,000 a year, or $1,000 a month. Legacy: 2.50% times 25 years is a computed 62.5% of average final compensation, which on the same assumed $60,000 is $37,500 a year. The actual average final compensation and multiplier come from the bargaining agreement, so the System’s benefit estimate is the figure to rely on.
The election: straight life or a survivor option
The Combined Plan lets a member take a Straight Life allowance or a reduced allowance in one of these forms: a “Cash Refund Annuity” (Option One), a “Joint and One Hundred Percent Survivor Allowance” (Option Two), a “Joint and Seventy-Five Percent Survivor Allowance” (Option A), a “Joint and Fifty Percent Survivor Allowance” (Option Three) or a “Joint and Twenty-Five Percent Survivor Allowance” (Option B).
Option One pays unreturned contributions to a beneficiary: if the retiree dies early, “the difference between said Accumulated Mandatory Employee Contributions and the aggregate amount of annuity payments already received, shall be paid in a single lump sum to a Beneficiary”. Under the joint and survivor options, Section 8.2 pays any shortfall of allowances against contributions in one sum to the person the retiree nominated if both die early.
Each survivor option comes in a standard form and a pop-up form, under which the allowance steps back up to the straight life amount if the beneficiary dies first. The FAQ says who pays for that protection: “The cost for this option is borne by the retiree or his/her beneficiary.”
The FAQ publishes four illustrations for a member and option beneficiary who are both age 60, with a straight life allowance of $1,000 a month. The table adds a computed survivor payment at each stated percentage. It is one age pair, not a rate table.
| Form of payment | Monthly pension in the FAQ illustration | What a survivor receives |
|---|---|---|
| Straight life | $1,000 (the starting figure in the illustration) | Payable throughout the member’s life; the pages read describe no continuance |
| Joint and 100% survivor with pop-up | $820.40, which is a computed $179.60 less | 100% of the reduced amount, a computed $820.40 a month |
| Joint and 75% survivor with pop-up | $858.97, which is a computed $141.03 less | 75% of the reduced amount, a computed $644.23 a month |
| Joint and 50% survivor with pop-up | $901.34, which is a computed $98.66 less | 50% of the reduced amount, a computed $450.67 a month |
| Joint and 25% survivor with pop-up | $948.11, which is a computed $51.89 less | 25% of the reduced amount, a computed $237.03 a month |
| Option One cash refund annuity | A reduced allowance; no figure is published in the pages read | Unreturned post-July 2014 mandatory contributions go to the beneficiary in one payment |
Computed from the published reduced figures, not PFRS survivor rates: a 100% option at $820.40 leaves a survivor $820.40, while a 25% option at $948.11 leaves $237.03. The smaller survivor share costs less pension today, the tradeoff discussed at single-life versus joint-and-survivor pension and survivor benefit with a government pension.
What is irrevocable and when the deadline falls
The Combined Plan’s window for electing a form runs “Until the date the first Retirement Allowance payment check is issued”. The FAQ states the cutoff differently: “You cannot change your election or your option beneficiary after you’ve cashed your first pension check or 180 days have passed, whichever comes first.” Because the two are not identical, confirm the cutoff at the retirement interview.
Under Component II the plan lets a retiree switch a survivor option to straight life if the beneficiary dies first. On cost, the plan says: “The actuarial cost of the change in benefit shall be borne by the Member who seeks change in his option election.” Whether a spouse must consent to a choice other than a joint and survivor option is not stated in the pages read, so ask the System before signing.
The annuity savings account: lump sum or monthly annuity
The plan has a mandatory pension and a voluntary annuity piece. For Component I the plan says: “Voluntary Employee Contributions shall be made to the Retirement System on an after-tax basis.”
When a Hybrid member can take the money: “You may only withdraw from your Component I Annuity Plan if you are separated from service (retirement/resignation/termination/layoff) with the City, or upon converting from a duty/non-duty disability retirement to a service retirement.”
At retirement there are two directions. The FAQ says a retiree may choose to annuitize all or part of the annuity balance and receive a monthly annuity included in the pension check. The alternative is a lump sum, and the FAQ warns: “When you retire, if you withdraw or have already withdrawn your accumulated Defined Contribution Plan (Annuity Savings Fund) in a lump sum, your total retirement allowance will be reduced.”
The Combined Plan says Component I voluntary amounts “shall be paid to the Member in a lump sum payment or in equal monthly installments for a period not to exceed three years”, or the member can take their actuarial equivalent as an added annuity on the allowance. Under Component II, a member with the required service “shall be allowed to withdraw either a portion or the full amount of his or her Accumulated Contributions, one time only, whether or not the Member retires”, and the election must be made “prior to the receipt of his or her first retirement benefit check”. The plan reduces the annuity part of the allowance proportionally. Hardship access is closed: “Hardship withdrawals from the annuity plan are not permitted.”
DROP: the Deferred Retirement Option Plan
DROP lets a member keep working while the pension is frozen and a share of it accumulates in an account. “Once you elect to participate in the DROP Program, your election is irrevocable, and you stop accruing Service Credits for all plans.” “You cannot retroactively elect to DROP.” The guide says a member is eligible “after you become eligible for a 20 or 25 year service retirement allowance”.
On the election date, “75% of the amount of your monthly pension (including applicable escalator increases) that you would have received from the System had you actually retired on your DROP election date is instead paid into your individual DROP account”. The member’s own contributions stop.
A computed example from an assumed $4,000 monthly pension, not a PFRS figure: 75% of $4,000 is a computed $3,000 a month allocated to the DROP account. If that continued for an assumed 5 years of 12 months, the deposits would total a computed $180,000 before any earnings or fees. The pages read do not say what happens to the remaining 25% during DROP participation.
The FAQ states the time limit: “A Member shall be entitled to participate in the DROP program for a maximum of five years unless extended by Collective Bargaining and approved by the Bankruptcy Court.”
On leaving City employment, the member receives, at the member’s option, “either a lump sum payment from the DROP Account equal to the amount then credited to the DROP Account or an annuity based upon the amount credited to his or her DROP Account”. The guide adds that the member may leave the money in the account or “directly roll over your DROP to an IRA”. The member also receives 100% of the frozen pension, with annual escalator amounts, as if retired on the election date. During DROP, access is closed: the FAQ answers no to a hardship withdrawal and no to a loan from the DROP account.
Leaving before retirement: refund or leave it
Component I: “If a Member ceases employment with the City before becoming eligible for a Retirement Allowance under Section 5.1 or 5.2 or a disability Retirement Allowance pursuant to Section 5.3 or 5.4, the Member may elect to receive distribution of the Accumulated Mandatory Employee Contributions made to the Retirement System by such Member.” Payment may be made “in a lump sum payment or in equal monthly installments for a period not to exceed three years”.
A member who leaves with enough service may still draw a pension later. The FAQ says: “If you have at least 10 years of credited service you can retire at age 62. You may be eligible for an early retirement at age 55.” A refund also carries a repayment rule for a returning employee: “If you previously withdrew your mandatory contributions, they must be repaid within 2 years of re-employment otherwise that time is not eligible to count towards vesting.”
For Legacy members whose membership ends other than by retirement, death or becoming a beneficiary, the Combined Plan says the member “shall be paid the Accumulated Contributions standing to the credit of his or her individual account in the Annuity Savings Fund, such payment to be made within ninety days after such termination of membership”. A member who is eligible for retirement has a way out, because the Board of Trustees, “on the written petition of such Member filed within one year from his or her separation from service and prior to the withdrawal of his or her Accumulated Contributions in the Annuity Savings Fund, shall grant such Member service retirement benefits”. See pension refund versus leaving it and 20% withholding on a pension lump sum.
If the member dies before retiring
On beneficiaries, the FAQ says: “You may name any person as your beneficiary.” Under the Combined Plan, a Component I member’s mandatory contributions at death before retirement “shall be paid to the Beneficiary nominated in a written designation duly executed by the Member and filed with the Board”.
The FAQ says that if a member with “at least 10 years of vesting service” dies from non-duty causes, the surviving spouse receives an allowance computed as if the member had retired the day before death and elected a joint and 100% survivor allowance naming the spouse. Duty-related deaths carry a different benefit, stated as fractions of maximum pay, which is not worked through here.
Cost-of-living increases
The FAQ says: “Retirees hired after 1969 receive an annual cost of living adjustment of 1.0125%, based upon the original retirement amount or compounded, depending on the bargaining unit.” “Retiree’s with a Hybrid Retirement Plan, post June 30, 2014, may get a 1% COLA, depending on the funding status of the plan.” The Combined Plan words the Component I rule as discretionary: the Board “may determine that the annual Retirement Allowance of a Member shall be increased by a factor of one percent (1.0%)”.
A computed example from an assumed $2,000 monthly pension, not a PFRS figure: 1% of $2,000 is a computed $20, giving a computed $2,020 after one adjustment.
Service credit and buying time
The first service credit rule in the pages read is military leave: “you will be given service time credit as if your service was uninterrupted”, if the member returns to City service within the legal period. Appendix E of the Combined Plan also lets certain members claim or purchase pre-employment military service credit if they do so before July 1, 2014: members of DFFA, DPCOA and DPLSA up to thirty-six months, and DPOA members up to three years. Component II requires a person who withdrew contributions and becomes a member again on or before June 30, 2014 to redeposit them. The pages read describe no purchase window open after those dates.
What the IRS adds on tax
A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of the Police and Fire Retirement System of Detroit’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. The DROP guide says a DROP account can be directly rolled over to an IRA, and the Combined Plan has an article titled “Direct Rollovers”. Ask the System which of its payments are eligible rollover distributions before electing one. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.
On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan”. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.
Where the sources disagree
The documents differ on points the System should confirm for a given member. On DROP length, the FAQ and the Combined Plan say five years, while the DROP guide says allocations are “currently limited to five (5) years for DFFA and 10 years for DPOA, DPLSA and DPCOA”. On DROP investment, the guide describes a “stable value, group annuity contract product with VOYA that provides a credited rate of interest set once each year by VOYA”; the Combined Plan names a different administrator and an earnings formula. On the annuity, the FAQ asks “Do I keep earning interest on my Annuity Savings Account if I leave it at the Retirement System upon separation?” and answers no, which the pages read do not reconcile with the Combined Plan allowing certain Legacy retirees to “leave the Annuity in the Retirement System collecting regular annuity interest”.
What this page could not settle
- The pages read do not give the actuarial factors behind the reduced options.
- The pages read do not state whether a spouse must consent to a choice other than a joint and survivor option.
- The pages read do not state what happens to the other 25% of the monthly pension during DROP.
- The Combined Plan copy read is the version effective July 1, 2014; later amendments, if any, were not read.
- The pages read describe no purchase of service credit other than the military credit and redeposit rules that ended in 2014.
- Bargaining agreements, disability retirement, retiree health benefits and the forms themselves were not read.
Common mistakes
- Treating the survivor option as changeable later; the FAQ says it is fixed once the first pension check is cashed or 180 days pass, whichever comes first.
- Withdrawing the annuity at retirement without checking the effect; the FAQ says the total retirement allowance will be reduced.
- Electing DROP without projections; the election is irrevocable and service credit stops accruing in all plans.
- Taking a refund and returning later without checking the repayment rule for vesting credit.
Related on this site: Michigan retirement taxes, does Michigan tax pensions, Detroit General Retirement System decisions, Michigan MPSERS retirement decisions, pension refund versus leaving it, single-life versus joint-and-survivor pension, survivor benefit with a government pension, 20% withholding on a pension lump sum and public pension retirement decisions by system.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare vetted advisors for public pension decisions
If your portfolio is $250,000 or more, this connects you (free, with no obligation to hire anyone) with 2 to 3 vetted advisors.
Before you start, what actually happens. The matching service is run by WiserAdvisor, an independent advisor-matching company. It opens on their site, asks for your ZIP code and a few questions, and matches you with 2 to 3 vetted advisors. It is free to you.
WiserAdvisor states the service is built for portfolios of $250,000 and above. By submitting, you consent to emails, phone calls and text messages from WiserAdvisor and up to three advisors, so expect to be contacted. Clear Money Guide may earn a referral payment for a qualifying completed form, whether or not you ever hire anyone.
Opens on WiserAdvisor’s site in a new tab.
See how an advisor weighs a pension election
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment through this service, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- Police and Fire Retirement System of the City of Detroit, Combined Plan for the Police and Fire Retirement System of the City of Detroit, Michigan (Effective July 1, 2014, Component I and Component II): https://detroitmi.gov/sites/detroitmi.localhost/files/migrated_docs/emergency-manager-reports/COMBINED%20PLAN%20_%20Police%20and%20Fire%20Retirement%20Systems.pdf
- Retirement Systems of Detroit, PFRS DROP: Guidelines for Making the DROP Decision (member resources web page, read October 2026): https://www.rscd.org/member_resources/drop.php
- Retirement Systems of Detroit, PFRS Prepare for Retirement (member resources web page, read October 2026): https://www.rscd.org/member_resources/prepare_for_retirement.php
- Retirement Systems of Detroit, PFRS Frequently Asked Questions (member resources web page, read October 2026): https://www.rscd.org/member_resources/frequently_asked_questions.php
- IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
- IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558
Sources: the primary documents linked above, read on October 8, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.