Your pension is a percentage of one pay figure. This lesson is about that figure: what goes into it, which months count, and what the new law signed on September 28, 2026 changed.
The short answer. If you’re in Tier 2 and you came on between July 1, 2000 and June 30, 2009, a new state law changed how your final salary is figured. Retire on or after September 28, 2026 and the Police Pension Fund now uses the highest of three numbers: your pensionable pay in your last 12 months, the average of your last 36 months, or the average of your best three calendar years in a row.
Before the law, members hired on or after July 1, 2000 got one number: the last 12 months. The new rule is a comparison, so it can raise your salary base or leave it where it was. It can’t lower it.
From Chapter 312 of the Laws of 2026 (bill S7808A), signed September 28, 2026, and the Police Pension Fund’s Tier 2 booklet, June 2026, p.16. Links to both are at the bottom of this page.
The Fund calls it your final average salary. We’ll call it your salary base: the one pay figure your pension is worked out from.
In Tier 2, 20 years of service pays 50% of that figure. Each year after 20 adds one-sixtieth of what you earn that year (Tier 2 booklet, June 2026, p.19). So the salary base sets the size of the check for the rest of your life, and a higher base means a higher check every month.
The city’s Chief Actuary counted about 9,007 active members in the covered group, with an average of 19.0 years of service when it counted them (Fiscal Note 2026-13, dated February 10, 2026). So for a lot of them, this law lands right around the 20-year mark.
The Fund uses whichever is highest. The 36-month number counts back from the day you retire, while the three-year number uses whole calendar years, so when your pay is rising, either one can come out on top. That is why all three get tested.
Limits still apply to every one of them. Your last 12 months can’t count for more than 120% of the 12 months before them. In the two averages, no single year can count for more than 120% of the average of the two years before it (Tier 2 booklet, pp.16-17). Chapter 312 didn’t change those limits.
These numbers are invented to show how the comparison works. They are not anyone’s pay and not a forecast. Say a member retires with exactly 20 years, none of the 120% limits come into play, and:
| Pay figure (illustration) | Amount |
|---|---|
| Last 12 months | $150,000 |
| Average of last 36 months | $155,000 |
| Average of best three calendar years in a row | $160,000 |
Under the old rule, a post-2000 hire’s base was the last 12 months, $150,000, and the 50% part of the pension came to $75,000 a year. Under Chapter 312 the base is the highest of the three, $160,000, and the 50% part comes to $80,000 a year. Flip the numbers so the last 12 months are the highest, and nothing changes.
For the group as a whole, the Chief Actuary assumed the average salary base would rise by about a quarter of one percent. So for many members the change will be small or nothing. It matters most for anyone whose overtime peaked a few years before retirement, or whose last year came in lighter than the ones before it.
The Tier 2 booklet lists pensionable earnings as base salary, overtime, night differential, holiday pay, worked vacation, portal to portal and allowable longevity (p.11). Its final average salary section (p.16) prints a shorter list that leaves out holiday pay and portal to portal. The booklet doesn’t say why, so ask the Fund which list it uses for your salary base.
Three things never count: your uniform allowance, Fair Labor Standards Act (FLSA) payments, and excluded longevity (p.17). So a salary base worked out from your W-2 total will come out too high.
Chapter 312 didn’t add any new kind of pay. It only changed which months are measured.
Longevity pay is its own question. The booklets have separate rules for which longevity payments count toward your salary base, and part of how those rules apply at retirement is not settled in the booklet’s wording. We don’t guess at it. Ask the Police Pension Fund how your longevity is counted for the date you plan to go.
Not even the Fund. When you file, a retirement processor gives you a pension estimate, and the booklet calls it “only an estimate” (p.16). Overtime, night differential and worked vacation you earn between that estimate and your actual retirement date get added when your pension is finalized, and any difference is paid to you as one back payment.
So the useful thing to do now is not to hunt for an exact number. It is to know which of the three figures is likely to be highest for you, and why.
The free NYPD calculator does this comparison for you. Type the month you came on, and if you’re in the covered group, boxes appear for your best three calendar years and your last 36 months next to your last 12 months. It figures the pension on the highest. It’s still an estimate: the Fund’s worksheet is the one that counts.
The law itself, the votes and the signing are covered in more detail in our post NYPD Tier 2A (S7808A) Signed Into Law: What It Changes.
Where a planner fits is after that: once you know which number is yours, what it does to your 457, your other savings and the years before Social Security. The pension is the floor the rest of the plan sits on.
Sources: NY Senate, S7808A bill text and actions (signed Chapter 312, September 28, 2026); NY Assembly, S07808 record with Fiscal Note 2026-13; Governor’s office, signing announcement, September 28, 2026; Retirement and Social Security Law §443 (the published text had not yet added subdivision i when the law was signed); RSSL §512 (Tier 3 salary base); NYC Police Pension Fund, Tier 2 Summary Plan Description, June 2026, pp.11, 16, 17 and 19. The June 2026 booklet was printed before the law and still shows the old rule for post-2000 hires.
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Educational only. Not investment advice. Sirmium Capital LLC is a New York state-registered investment adviser and is not registered with the SEC. Confirm every figure and date with the New York City Police Pension Fund before acting.