Increased Take Home Pay (ITHP)
The City makes employer contributions to the FD Pension Fund and also pays a portion of employee contributions to both the Original Plan or Improved Benefits Plan. These contributions, called Increased Take-Home Pay (ITHP), currently equal 5% of your gross salary. For example, assume your full employee contribution rate (see chart) is 7.5% of gross pay. With ITHP, you contribute 2.5% (the minimum required contribution) and the City contributes the other 5%.
Members of the Improved benefits Plan may waive the ITHP reduction and contribute at the full employee rate. These additional contributions are covered by section 414h of the IRS code. Although this lowers the take-home pay during employment, it results in a greater annual retirement payout (annuity) or lump-sum return of any excess. Assume again that your full employee rate is 7.5% of pay, and you waive the ITHP reduction. While you contribute 7.5% of your pay, your employer continues to make ITHP contributions equal to 5% of your pay. You may withdraw any contributions in excess of your minimum required contributions at any time. Note: If you had previously submitted an ITHP Waiver Form at any time, you do not need to submit it again in order to have this ITHP automatically deposited into your pension accounts. What Is Your Contribution Rate? In order to finance your pension at retirement, a contribution rate into the pension system based upon your age (see chart) at the time you are appointed is required. This required or “actual†contribution rate is made up of contributions from the City and the individual firefighter from date of appointment through the member’s 20th anniversary.
PriorFebruary 28, 2003, the City was paying 2.5% of the “actual†rate. The City now contributes 5%. With the reduction of your contribution rate, you will enjoy more “increased take-home pay†(ITHP) in your check. Note: Required contributions by firefighters are based upon total earnings (base pay, OT, night shift, other differentials, holiday pay, longevity, etc. AGE - RATE % 20 years old – 8.05
21 years old – 7.85
22 years old – 7.65
23 years old – 7.50
24 years old – 7.30
25 years old – 7.15
26 years old – 6.95
27 years old – 6.80
28 years old – 6.65
29 years old – 6.45
30 years old – 6.30
31 years old – 6.15
32 years old – 6.00
33 years old – 5.85
34 years old – 5.65
35 years old – 5.50
36 years old – 5.35
37 years old – 5.20
38 years old – 5.05
39 years old – 4.90
40 years old – 4.75 Back To Top
50% Indicator: Voluntary Employee Contributions Improved Benefits Plan Members may make additional contributions equal to 50% of the certified rate of their required employee contributions (see ITHP above), on a voluntary basis. Because these contributions are not covered by Section 414h of the IRS code, they are subject to immediate federal income taxation. If these contributions are not withdrawn before retirement, they will provide you with an additional annual retirement payout or a lump-sum payment. Back To Top
Forms for ITHP Waiver and 50% Indicator They can be printed by clicking on the links below. |
