Updated October 8, 2026. Quick answer: A Baltimore Fire and Police Employees’ Retirement System member hired on or after July 1, 2010 can retire with 25 years of service or at age 55 with 15 years. The allowance is 2.5% of average final compensation for each of the first 20 years and 2% after that. Six payment options exist, and the choice becomes permanent 30 days after retirement. DROP 2 pays 5.5% interest on a deferred account. A refund of contributions ends the deferred vested benefit and carries 20% federal withholding unless rolled over.
Which members this page covers
This page works from documents published by the Fire and Police Employees’ Retirement System of Baltimore (F&P). The Summary says the plan “was established on July 1, 1962 as a defined benefit pension plan covering all uniformed employees of the Baltimore City Fire and Police Departments”, and that “F&P does not cover civilian employees of those departments”. The City’s separate civilian system is on Baltimore ERS retirement decisions.
The figures are for non-grandfathered members, meaning an F&P entry date on or after July 1, 2010: “You are not grandfathered if your F&P entry date is on or after July 1, 2010”. The new member pamphlet is written for the same group. Grandfathered members have different ages, a shorter averaging period and an older DROP, which are not worked through here. The purchase figures come from a pamphlet for people who joined on or after July 1, 2019.
When a pension can start and what early costs
A non-grandfathered member reaches normal retirement by either path: “Have 25 or more years of service credit with at least 15 years as a contributing F&P member”; or “Have attained age 55 and have 15 or more years of service credit as a contributing F&P member”. Early retirement is open to those who “Have 20 years of service credit with at least 10 years as a contributing F&P member, regardless of your age”, or “Have attained age 50 with at least 10 years of service credit as a contributing F&P member”, and the benefit is “reduced by the percentage for each year your early service retirement date precedes your normal service retirement eligibility date”. The Summary lists reduction bands, shown below, joined in the source by the word plus, so a plan estimate shows how they combine.
| How far ahead of the normal date | Reduction listed by F&P |
|---|---|
| Up to 5 years early | 6.5% per year |
| 6 to 10 years early | 4.5% per year |
| 11 to 15 years early | 1/4% per year |
| 16 or more years early | 1/6% per year |
A member who leaves short of both tests has a third route. The pamphlet says that, short of those, “you may nevertheless be eligible to receive a Deferred Vested benefit after acquiring 10 or more years of service as a contributing F&P member, upon attaining age 60”. “Purchased and transferred service cannot be used to meet the 10-year requirement except for purchase of prior F&P contributing service”.
How the allowance is figured
“Your normal service retirement allowance is equal to 2.5% of your average final compensation (AFC) multiplied by your first 20 years of credited service, plus 2% of AFC multiplied by your years of credited service over 20 years”. For a non-grandfathered member, AFC is “the average of 24 consecutive months during which your earnable compensation was highest”.
A computed example from an assumed $90,000 average final compensation and an assumed 25 years of service, not an F&P figure: 2.5% of $90,000 for the first 20 years is a computed $45,000, and 2% of $90,000 for the 5 years over 20 is a computed $9,000. Together that is a computed $54,000 a year, or a computed $4,500 a month if split into an assumed 12 payments. The plan’s own estimate is the number to rely on.
The election: six payment options
“When you apply for retirement, you may select from six retirement payment options”. “The Maximum Option provides the greatest monthly amount to you”. Apart from the Reserve Guarantee, the lower options are “calculated based on joint ages (your age and your beneficiary’s age)”.
| Option | What the member receives | What a survivor receives |
|---|---|---|
| Maximum | The greatest monthly amount | 50% of the monthly allowance to an eligible spouse until death or remarriage before age 70, or to children under age 22 |
| Reserve Guarantee | Lower than Maximum | Any unpaid balance of a calculated present value as a lump sum to the beneficiary |
| 100% Joint-and-Survivor | Lower than Maximum | The same monthly benefit continues for life |
| 50% Joint-and-Survivor | Lower than Maximum | One-half of the monthly benefit continues for life |
| Pop-Up 100% Joint-and-Survivor | Lower than Maximum, rising to Maximum if the beneficiary dies first | The same monthly benefit continues for life |
| Pop-Up 50% Joint-and-Survivor | Lower than Maximum, rising to Maximum if the beneficiary dies first | One-half of the monthly benefit continues for life |
The documents read do not give the size of any reduction. The Summary’s tip is “Request an estimate of your retirement benefit 6 months prior to your retirement date”, and the Checklist says the plan will provide “an estimate of your maximum retirement benefit and optional survivor benefit payment amounts”. For the general trade-off see single-life versus joint-and-survivor pension.
What each option does for a survivor
Under Maximum, the spouse test is specific: “Your spouse is eligible if you were married at least one year prior to your retirement date or, if you were not married for 1 year prior to your retirement date, at least 5 years prior to your date of death”. The Reserve Guarantee “guarantees that, if you die before receiving monthly payments that add up to the calculated present value of your total retirement allowance based on your life expectancy, the remaining balance will be paid in a one-time, lump-sum payment to your designated beneficiary”. “You may change your beneficiary at any time after retirement”. “Your beneficiary will not be eligible for health insurance coverage”.
A computed example from assumed figures, not F&P figures: if Maximum pays an assumed $4,500 a month, 50% of it is a computed $2,250 for an eligible spouse. An assumed reduced $4,000 under the 100% option leaves a survivor a computed $4,000, and an assumed reduced $4,250 under the 50% option leaves a computed $2,125. The reduced amounts are invented because no reduction is published. See survivor benefit with a government pension.
What is irrevocable, and the deadlines
Filing has a window: “The F&P law requires that you file an application for service retirement no more than 90 days and no less than 30 days before your desired retirement date”. Benefits start on a fixed date: “service retirement benefits begin on the first day of the month following your termination date from employment”. On the lock on the choice: “Thirty days after you retire, your retirement option election becomes permanent and you cannot make any changes”. “With the exception of the Reserve Guarantee Option, you may not change your beneficiary after 30 days of your retirement effective date”.
Beneficiary forms matter earlier. To keep a spouse eligible for the non-line-of-duty death benefit, F&P says “you must name him or her only as your sole primary beneficiary”.
DROP 2: working past eligibility with a deferred account
Eligibility, per the Summary: “Non-grandfathered members who acquire 25 years or more of credited service as a contributing F&P member (including up to a maximum of 3 years of pre-employment military service) are eligible to participate in DROP 2 earning interest at 5.5%”. Staying in has rules: “You must remain in DROP 2 for a minimum of 1 year”; and “Maximum single term of 3 consecutive years”. Entry: “A member must file an application for participation in DROP 2 no less than 30 days and no more than 90 days prior to the DROP 2 start date”.
The account holds “DROP 2 Benefit (annual maximum retirement benefit calculated as of DROP 2 start date) not to exceed 3 years”, plus “DROP 2 Contributions (contributions deposited during the DROP 2 participation period)”, with “Interest credited at 5.5% per year until date of termination from employment”. A computed example from an assumed $54,000 annual DROP 2 benefit, not an F&P figure: three years of it is a computed $162,000 before contributions and interest. “Your DROP 2 account is not paid if you are awarded line-of-duty disability retirement or line-of-duty death benefits”. A member can leave early on an anniversary, but the Summary says “You may not participate again in DROP 2”.
A member who retires during the term receives a “normal service retirement allowance calculated as of your DROP 2 start date” plus the “balance in your DROP 2 account”. Waiting longer after the term changes the formula, and the rules differ by department: for Fire Department members the fully refreshed version applies when you retire “5 or more years following completion of your DROP 2 participation period”, while the Summary says “Police Department participants do not have a recovery rate to replace service credits not earned during the DROP 2 participation period”. The plan’s estimate matters most here.
Taking the DROP 2 account: annuity, lump sum or rollover
The election form says “I can elect to receive the balance of my DROP/DROP 2 account as either an annuity payable in the same form as my retirement benefit or as a lump sum payment that can be paid to me or that I can rollover to a financial institution”. “You may not split your DROP or DROP 2 account by taking a portion as a lump-sum and a portion as an annuity”. The election form states “THIS FORM MUST BE SIGNED IN THE PRESENCE OF A NOTARY”.
Annuity: “This option will provide you with an increased lifetime annual retirement allowance”, and “The DROP or DROP 2 annuity will be included in survivorship benefits paid to your eligible beneficiary”. Lump sum: “This option is a one-time payment of your entire distribution paid directly to you”; on tax the Summary says “the taxable amount of the distribution that is paid to you directly will be subject to a mandatory 20% federal income tax withholding, and a mandatory 7.75% State of Maryland income tax withholding, as applicable”. Rollover: a member can “rollover all or part of your distribution to an IRA or qualified employer plan”, and the form states that “most of my DROP/DROP 2 account is taxable”. The Summary adds for lump sums: “If you are under age 50 at the time of distribution, you will be taxed an additional 10% federal income tax penalty for early distribution on the taxable amount paid to you”.
The Checklist warns that “interest on your DROP or DROP 2 account stops accruing when you terminate F&P-covered employment”.
A computed example from an assumed $10,000 taxable amount paid directly to a Maryland resident, not an F&P figure: 20% federal withholding is a computed $2,000 and 7.75% Maryland withholding is a computed $775, leaving a computed $7,225 in cash. Withholding is not the final tax. See 20% withholding on a pension lump sum.
Leaving before retirement: refund or leave it
The Summary describes the refund this way: “If you terminate employment before attaining retirement eligibility, you may receive a one-time, lump-sum refund of your accumulated contributions with interest, upon completion of a Withdrawal Election form”. “You may elect to have the refund paid directly to you or as a rollover to a financial institution or qualified plan”.
The form spells out what a refund gives up: “I am withdrawing any pending disability retirement applications and waiving any right to receive a deferred vested retirement benefit upon reaching 60 years of age based on my current membership”. The alternative is the deferred vested path: “Deferred vested retirement benefits payments may begin following your reaching age 60 provided that your accumulated contributions remain in your F&P account”. See pension refund versus leaving it.
On tax, the Summary says “the taxable amount is subject to a mandatory 20% federal income tax withholding, and a mandatory 7.75% State of Maryland income tax withholding”. “The distribution is taxed in the year you receive it unless, within 60 days, you roll it over to a financial institution or employer plan that accepts rollovers”. The withholding arithmetic in the example above applies equally to a refund.
A refund takes paperwork: “Your form is not valid unless it is both signed and notarized”. State tax is on Maryland retirement taxes and does Maryland tax pensions.
Buying or transferring service
For members who joined on or after July 1, 2019, the purchases pamphlet sets the conditions: “You must file an application with F&P within 1 year of your F&P entry date”. The limits are “10 years of uniformed service” or “5 years of civilian service”. The price is “your salary as of your F&P entry date” multiplied by “10% for former City service OR 20% for former non-Baltimore City service” multiplied by “the number of years or part of a year of service transferred”.
A computed example from an assumed $60,000 entry salary and an assumed 2 years of service, not F&P figures: former City service costs 10% of $60,000 times 2, a computed $12,000, and former non-City service at 20% costs a computed $24,000. Final payment must be made before the earlier of “Ten (10) years from your F&P entry date” or “Your F&P retirement date”. See the pension buyback calculator.
Increases after retirement
The Summary says “post-retirement benefit increases are fixed based on the attained age of the retiree or beneficiary as of the June 30 determination date”. A retiree at 55 or older but under 65 “will receive a 1% increase payable the following January”; at 65 or older, “will receive a 2% increase payable the following January”. A computed example from an assumed $4,500 monthly allowance, not an F&P figure: 1% adds a computed $45 a month and 2% adds a computed $90.
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 F&P’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”. F&P’s own forms describe the same 20% federal withholding on amounts paid to the member and the rollover alternative. 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” if the employee separated from service during or after the year they attained age 50 or 25 years of service under the plan, whichever is earlier. 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.
What this page could not settle
- The documents read do not state how much any lower payment option reduces the monthly benefit, only that it depends on joint ages.
- The documents read do not say whether a spouse must consent to a choice other than a survivor option.
- The Summary heads its deferred vested paragraph with a July 1, 2025 entry date, while the pamphlet for members joining on and after July 1, 2010 describes the same 10-year and age 60 test; the documents read do not reconcile the two.
- F&P’s lump-sum wording refers to the 10% early distribution tax for those under age 50, while the IRS list above includes exceptions for separation at age 55 or later and for qualified public safety employees; confirm with a tax preparer which applies.
- How DROP 2 contributions are credited and how interest compounds are not shown, and the police and fire thresholds were not reconciled line by line.
- Grandfathered members, the original DROP at 8.25%, disability and line-of-duty death benefits, and purchase rules for members who joined before July 1, 2019 were not worked through.
- Article 22 of the Baltimore City Code, which the Summary says governs, was not read directly.
Common mistakes
- Treating the payment option as changeable; the Summary says it becomes permanent 30 days after the retirement effective date.
- Naming a beneficiary on the Reserve Guarantee and expecting a survivor pension; it pays a lump-sum balance, not a monthly benefit.
- Taking a refund without weighing what it ends; the withdrawal form waives the deferred vested benefit and pending disability applications.
- Expecting a DROP 2 lump sum or a refund check in full; 20% federal and, for Maryland residents, 7.75% state withholding apply to the taxable amount paid to the member.
- Assuming a DROP 2 account can be split; the Summary says it cannot be taken partly as a lump sum and partly as an annuity.
- Missing the 30 to 90 day filing window for retirement or DROP 2.
Related on this site: Maryland retirement taxes, does Maryland tax pensions, Baltimore ERS retirement decisions, Maryland MSRPS 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.
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Answer againSources
- Fire and Police Employees’ Retirement System of Baltimore, Welcome to the Fire and Police Employees’ Retirement System, new member pamphlet for persons becoming members on and after July 1, 2010 (revision marked Rev. 4/25): https://www.bcfpers.org/wp-content/uploads/2025/09/Welcome-to-the-FP-New-Member-Pamphlet-_Revised-5-8-25_With-Address.pdf
- Fire and Police Employees’ Retirement System of Baltimore, Retirement Checklist (revision marked Rev. 2/25): https://www.bcfpers.org/wp-content/uploads/2025/09/Retirement-Checklist-Rev.4-30-25_Final-With-Address.pdf
- Fire and Police Employees’ Retirement System of Baltimore, Withdrawal Election Form (form FRM092 version 3.00, dated 09/04/2025): https://www.bcfpers.org/wp-content/uploads/2025/09/Withdrawal-Election-Form-092_Rev-9-25.pdf
- Fire and Police Employees’ Retirement System of Baltimore, Deferred Retirement Option Plan Account Election Form (form FRM010 version 2.00, dated 09/12/2017): https://www.bcfpers.org/wp-content/uploads/2021/07/FP-FRM-010-Deferred-Retirement-Option-Plan-2-DROP-2-Account-Election.pdf
- Fire and Police Employees’ Retirement System of Baltimore, Purchases and Transfers of Service, pamphlet for persons becoming members on or after July 1, 2019: https://www.bcfpers.org/wp-content/uploads/2025/09/Purchases-And-Transfers-of-Service-Pamphlet-4-2-25-Final.pdf
- Fire and Police Employees’ Retirement System of Baltimore, Summary of Benefits (revision marked Rev. 4/25, website file updated 2/24/26): https://www.bcfpers.org/wp-content/uploads/2026/02/FP_Summary-of-Benefits_-Updated_2-24-26.pdf
- 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.