Updated October 7, 2026. Quick answer: A City of Miami police officer or fire fighter retiring under the Fire Fighters’ and Police Officers’ Retirement Trust (FIPO) chooses among Options 1 to 6 for how the pension is paid and how a survivor is covered. Members eligible for service retirement can also use a Forward DROP (up to 7 years for police, 4 and a half for fire) or a Back DROP (1 to 7 years, paid as a lump sum with 3% interest). Leaving early means choosing between withdrawing contributions (a flat 20% is deducted and membership ends), a direct rollover, or leaving them in the Trust. The Summary Plan Description read does not say whether an option can be changed later.
Tampa city general employees belong to a separate city fund with its own rules: Tampa general employees retirement decisions.
What this page covers and what it does not
This page works from two documents from the City of Miami Fire Fighters’ and Police Officers’ Retirement Trust (FIPO): its Summary Plan Description and a short memo on its cost-of-living allowance, both read on October 7, 2026. Any figure here is FIPO’s, or the IRS’s where stated, or is labeled as a computed example from assumed inputs.
The group covered is active City of Miami police officers and fire fighters. The Summary says “If you are a police officer or a fire fighter employed by the City of Miami, you shall become a member of the City of Miami Fire Fighters’ and Police Officers’ Retirement Trust on the first date of employment”. It is undated, and it speaks of FIPO’s rules in general terms, so it does not replace the City Code provisions behind it, which this page did not read. For taxes after retirement see Florida retirement taxes and does Florida tax pensions.
When a pension can start and how to apply
The Summary names several routes. For service retirement, “Any member in service who has 10 or more years of creditable service may take a retirement upon the attainment of normal retirement age”. The same document defines the age: “Retirement Age shall be 50”. For police officers, a member “may elect service retirement on the basis of his/her combined age and creditable service equaling sixty-four (64) points or more”, the Rule of 64. For fire fighters the same test is set at “sixty-eight (68) points or more”, the Rule of 68. For early retirement, “If you have at least twenty (20) years of creditable service, you can retire before normal retirement age”. “Your benefit will be reduced however, to reflect the longer period of time over which your benefits will be paid.”
Filing has a window: “When you decide to retire, you must make an appointment to complete a retirement application with the Pension Office.” “The appointment must be at least 10 days prior to your desired retirement date and no more than 90 days from the desired retirement date.” The retirement date should be fixed first.
What the pension pays
The Summary explains that the benefit is “based on your average final compensation when you retire and your length of creditable service”. It defines average final compensation as “the average of the highest 1 year of membership service”. For a member eligible under Service, Rule of 64 or Rule of 68 retirement, “the monthly benefit you can receive is the sum of creditable years of service under 15 years times 3.0% plus creditable years of service over 15 years times 3.5%”. “The total percentage is then multiplied times the last or highest one-year average pensionable compensation.”
It also describes caps: for a member eligible by September 30, 2010, “your benefit will be capped at 100%”, while for a member who had not reached eligibility by that date, “your pension benefit will be capped at $120,000.00 per year”.
A computed example from an assumed 20 years of service and an assumed $100,000 average final compensation, not FIPO figures: 15 years at 3.0% plus 5 years at 3.5% is a computed 62.5%, and 62.5% of $100,000 is a computed $62,500 a year, or about $5,208 a month. The caps above and the member’s own record decide the real figure.
Retiring early
The Summary lets a member with 20 years retire before the normal age, with a smaller benefit: the percentage is multiplied by “the actuarial reduction for early retirement which is approximately 5% per year up to age 50”. Its own illustration: “you take early retirement at age 40, you have 10 years to age 50, your reduction will be 50%”. The Summary gives no table, so use the Pension Office’s estimate.
A computed example from an assumed $4,000 monthly benefit and an assumed 4 years short of age 50, not FIPO figures: about 5% a year for 4 years is a computed 20%, leaving a computed $3,200 a month.
The election: Options 1 through 6
At retirement, “you will have the choice of receiving your benefit payments under one of several different payment options”. The table puts the Summary’s descriptions side by side. For Options 1 to 4, the reduction is not published in the pages read; Options 6 A to 6 D are stated in the table.
| Option | What the member receives | What a survivor receives |
|---|---|---|
| Option 1 | A reduced monthly benefit | If the member dies before receiving the value of own contributions plus credited interest, the beneficiary receives the remaining balance |
| Option 2 | A reduced benefit; the reduction depends on the member’s age and the beneficiary’s age | The beneficiary continues to receive the same benefit for life; nothing further if the beneficiary dies first |
| Option 3 | A reduced benefit; the reduction is based on both ages | The beneficiary receives one half of the benefit for life; nothing further if the beneficiary dies first |
| Option 4 | Specific amounts during life and specific amounts at death, if the Board of Trustees approves | As set in the approved request; actuarial value no greater than the normal benefit |
| Option 6 A | One half of the normal benefit, after withdrawing own contributions plus credited interest | Payments guaranteed for 12 months, then nothing further |
| Option 6 B | The normal benefit plus an additional 5% | Payments guaranteed for 12 months, then nothing further |
| Option 6 C | The normal benefit | The spouse receives 40% of the benefit for life |
| Option 6 D | The normal benefit | If death comes before 10 years of the allowance, the beneficiary receives the same allowance for the rest of the 10 years |
Compare survivor mechanics on single-life versus joint-and-survivor pension and survivor benefit with a government pension.
What each option does for a survivor
Option 2 is the full continuance, and the Summary ties its price to ages: “The amount of the reduction will depend upon your age and the age of your beneficiary”. For Option 2, the Summary warns “If your beneficiary predeceases you, no additional benefits will be paid after your death”; Option 3 carries the same warning, so the beneficiary’s age and health change what the survivor part is worth. In the 6 series, Option 6 A pays one half of the normal benefit after the member takes out own contributions, with payments guaranteed for 12 months; Option 6 B adds 5% with the same 12 month guarantee; Option 6 C leaves the spouse 40%; and Option 6 D guarantees a 10 year period.
A computed example from an assumed $4,000 monthly benefit, not a FIPO figure (the reductions for Options 2 and 3 are unpublished): under Option 3, an assumed reduced $4,000 leaves a beneficiary one half, a computed $2,000 a month. Under Option 6 C, 40% of $4,000 is a computed $1,600 a month for the spouse. Under Option 6 B, an additional 5% of $4,000 is a computed $200, for a computed $4,200 a month, but only 12 months are guaranteed. Under Option 6 A the member would get half, a computed $2,000 a month.
What is irrevocable, and what happens after death
In the pages read, the Summary does not say when the election becomes final or whether a beneficiary can be changed, so ask the Pension Office in writing before filing. What it does say is that “any payments after your death will depend on the option you chose when you retired”. “If you did not select a payment option which provided continuing payments after your death, no additional benefits will be paid from the plan.”
It adds “you are considered retired if you are in the DROP”. If a member dies before retiring, “you will be considered to have retired on the date of death and a payment of 40% of the calculated benefit will be paid to your spouse during the lifetime of such spouse” (for a member already eligible to retire).
DROP: the Forward and Back programs
DROP is a deferred retirement option program. “It is a program where a member, upon retiring, can elect to defer his/her monthly benefit into a DROP account and continue to work for the City receiving his normal compensation.” “Any member eligible for a Service Retirement, Rule of 64 Retirement (Police) or Rule of 68 Retirement (Fire) is eligible to participate in both the Forward DROP and the Back DROP.”
The Forward DROP is chosen when applying, and the Summary limits the time: “You can participate in the Forward DROP for a period not to exceed a total of 7 years for Police Officers and 4 ½ years for Fire Fighters.” The pages read do not state the interest or investment credit on a Forward DROP account, or how it is paid out.
The Back DROP works backwards from retirement. “Members are eligible to elect the Back DROP option after completing one year of creditable service following their retirement eligibility date.” “A Back DROP election must be made within 10 years of the date of retirement eligibility.” “A member can elect a minimum Back DROP period of 1 year and a maximum of 7 years.” “a member who elects the Back DROP will receive a lump sum payment equal to the accumulation of monthly retirement benefit payments that he/she would have received during the period you Back DROP for thru the actual date of separation, plus interest at the rate of 3% per year, compounded annually.”
A computed example from an assumed $5,000 monthly benefit and an assumed Back DROP period of 3 years, not FIPO figures: 36 payments of $5,000 is a computed $180,000 before the 3% interest. Confirm payout and rollover treatment with the Pension Office.
Lump sums and rollover
The Summary describes lump sums in three places: the Back DROP payment, the Option 6 A withdrawal of contributions, and the death benefits. It does not describe a general partial lump sum at retirement. Tax on a lump sum paid to a member is covered below and on 20% withholding on a pension lump sum. The general framework for choosing between cash and monthly income is on pension lump sum versus monthly annuity break-even.
Separately, the Summary says that “Your vacation and earned time balances can be rolled over into an IRA by transferring them to the Fire and Police Pension Trust Fund”, and that the “election to rollover must be made in the calendar year prior to ceasing City employment”.
Leaving before retirement: leave contributions, withdraw, roll over, or vest
For a member whose employment ends before retirement eligibility, the Summary lists the choices. Leaving the money in: “you may opt to leave your accumulated contributions in the Trust Fund retaining, therefore, membership in the Fund”. “Your contributions will continue to earn interest at a rate of 4% for a period of 3 years.” “you will remain as a member absent from service and may resume your membership if you return to work within 3 years.”
Vested rights are separate. A member who is not entitled to retire and has “completed at least 10 years of creditable service at the time of separation” may “elect to become a member not in service with a vested retirement which will mature and begin to be paid upon subsequent attainment of age 50”. If such a member withdraws before age 50, “the member not in service will be paid the amount of his/her accumulated contributions at the time he/she ceased to be a city employee, plus interest accumulated during the first three (3) years after leaving City employment”.
More on weighing a refund is on pension refund versus leaving it.
Taking a refund: what it ends, and what is withheld
Withdrawing: “you can elect to withdraw your contributions to the retirement trust, together with accumulated interest.” “A flat 20% for taxes will be deducted and IRS early distribution penalty may apply.” “If you withdraw your contributions, you are not entitled to any benefits from the retirement trust and your membership in the Plan will terminate.” The rollover alternative: “you can elect to rollover your contributions to the retirement trust together with accumulated interest into an IRA or any qualified retirement plan.” “This option will defer taxes and early distribution penalty.”
A computed example from an assumed $10,000 withdrawal, not a FIPO figure: a flat 20% is a computed $2,000, leaving a computed $8,000 in cash, and the withheld part is not the same as the final tax or any penalty. The Summary does not say whether the 20% is the federal withholding the IRS describes below or a different deduction, so confirm with the Pension Office.
Returning to City service and buying service credit
A member who leaves and returns can restore credit. The Summary says that “If when you terminated you had at least 5 years of creditable service and you come back within 3 years and are not within 5 years of normal retirement, you may elect to pay back your refunded employee contributions with interest in a lump sum or in payroll deductions prorated over a period not to exceed 5 years”.
Separate from payback, “You can purchase up to 3 years of additional service.” “The purchase can only be done at the time of retirement (entry into DROP).” “The cost per year will be the actuarially determined present value based on the member’s final average compensation used to calculate the member’s retirement benefit.” No price is published; the Pension Office supplies it. The pension buyback calculator shows the break-even logic.
The Summary also describes credit for military service, with conditions, which this page does not cover.
Cost-of-living adjustments
“After you have been retired 4 years and are at least 50 years of age you may qualify to receive a Cost-of-Living Allowance (COLA) benefit from the Fund’s excess interest earnings.” “The COLA benefit table is based on creditable years of service and years of retirement.” “It is payable based on the option selected.”
FIPO’s own COLA memo, which is printed in capital letters and so is paraphrased here rather than quoted, says that no specific COLA amount is guaranteed and that the amount depends on available resources. It also says the City contributes a minimum amount to the COLA fund, and that if the memo and the City Code differ, the Code is the final authority.
The two documents give different waiting rules. The Summary says “retired 4 years and are at least 50 years of age”, while the memo says a retiree must have been retired for four full years after age 46. This page cannot say which governs a given retiree.
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 FIPO’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”. FIPO’s Summary describes the withdrawal and direct rollover the same way, including the flat 20% and the rollover exception. 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 pages read do not state how much Option 1, 2, 3 or 4 reduces the monthly benefit; they say only that it is reduced, by amounts that depend on ages.
- The pages read do not say when a payment option election becomes final or whether a beneficiary can be changed after retirement.
- The pages read do not state how a Back DROP lump sum is paid, whether it can be rolled over directly, or what a Forward DROP account earns.
- The pages read do not state spousal consent rules for choosing an option or for a refund.
- The pages read do not give a price for a service purchase beyond the method, and the Summary is undated.
- The COLA waiting rule in the Summary (4 years and age 50) and in the memo (four full years after age 46) differ in the pages read.
- The City Code sections behind the plan, the COLA chart, the benefit estimate forms and the retiree health insurance rules were not read.
Common mistakes
- Filing without fixing the retirement date first; the Summary requires the appointment at least 10 and no more than 90 days before it.
- Choosing Option 6 B for the bigger check without noting that only 12 months are guaranteed after which payments end at death.
- Withdrawing contributions without weighing what ends; the Summary says all benefits end and membership terminates.
- Treating the COLA as guaranteed; FIPO’s memo says there is no guarantee to a specific amount.
Related on this site: Florida retirement taxes, does Florida tax pensions, pension refund versus leaving it, single-life versus joint-and-survivor pension, pension buyback calculator, 20% withholding on a pension lump sum, pension lump sum versus monthly annuity break-even, survivor benefit with a government pension and public pension retirement decisions by system.
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Answer againSources
- City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, Summary Plan Description (undated, as posted on miamifipo.org): https://www.miamifipo.org/Resources/286a1d90-5772-4a31-b70a-3d03fe88e38e/SPD%20-%20Summary%20Plan%20Description.pdf
- City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, A Brief Explanation of Cost of Living Adjustments (COLA website memo, 2017 file name): https://www.miamifipo.org/Resources/1d177990-3609-4bfd-8183-c83e3f55ddb4/COLA-WEBSITE-MEMO-2017.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 7, 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.