Pension Protection Act Provisions for Public Safety Employees

Information Sheet for Public Safety Officers (pdf)

HELPS Provision for RETIRED Public Safety Officers

HELPS allows retired or permanently disabled public safety officers to elect an amount to be deducted from their TMRS benefit payment to pay for health care or long-term care insurance premiums. The amount a retired officer excludes from taxable income on his or her tax return may not exceed $3,000 in one year.
If a retired (or retiring) officer wishes to make this election, the amount is directly transferred by TMRS to an insurer. To qualify for this program, an employee had to have separated from service as a “public safety officer,” defined by law as:

• Individuals involved in crime and juvenile delinquency control or reduction, or enforcement of the criminal laws (including juvenile delinquency), including but not limited to police, corrections, probation, parole, and judicial officers.
• Professional firefighters
• Officially recognized or designated:
  • Public employee members of a rescue squad or ambulance crew
• Chaplains of fire departments and police departments

TMRS mailed forms in December 2007 to retirees who have been identified as public safety officers. Retirees will need to have their city certify their status as public safety officers at the time of separation. Their ability to use this benefit will depend on this certification.

If the retiree is in a health plan administered by the city, TMRS will coordinate payments through the city. If retirees are in a separate plan, TMRS will coordinate payments with that plan. The Application for Insurance Premium Deductions for Retired Public Safety Officers is available here and also in the Forms & Publications section of the TMRS Website.

If you are retiring fron an eligible position and wish to use this benefit, you will need to complete the above form and have your city certify your eligibilty.

Tax Waiver for Public Safety Employees Who Receive a Lump-Sum Payment

In 2006, federal tax law was changed to permit public safety employees who separate from service in the year they reach age 50, or later, to waive the 10% IRS penalty on lump sum distributions. Under previous law, all employees could separate at age 55 or older and waive the penalty. To qualify, TMRS members must separate from service in the year they turn 50 or later, and be serving as a public safety employee when they leave city employment. Then, if they choose to receive a Partial Lump Sum Distribution at retirement OR choose to receive a refund of their deposits after they separate from service, they may not have to pay the 10% IRS penalty.

The definition of “public safety employee” is limited to those employees who provide police protection, firefighting services, or emergency medical services. Note that the definition is more restrictive than the public safety officer definition used for the HELPS provision above.

Refund and retirement applications are being revised to include a checkbox for public safety employees. If an employee has indicated that they were a public safety employee, a certification form will be mailed to the city to certify the status of the employee at the time of separation.

Forms are also available in the Forms & Publications section of the TMRS Website.

Consult with a tax advisor or the Internal Revenue Service to determine eligibility for these provisions. When in doubt, call TMRS.