New York State Common Retirement Fund’s Emerging Manager Program

The New York State Common Retirement Fund (the Fund) can owe much of its high performance to its investment strategy, but another lesser-known investment approach that helps the Fund is its Emerging Manager Program. This program gives newer and smaller investment managers – people or firms who make investments on behalf of clients – the opportunity to invest for the Fund. And as you’ll see in this video, The Fund’s emerging managers deliver solid results.

The Emerging Manager Program: A Diverse Approach to Investing

The Fund’s Emerging Manager program started 20 years ago, when it granted almost $50 million to the public equity Emerging Manager platform. Today, in 2014, the Fund has provided $1.6 billion to that platform. The Fund is one of the few state pension funds in the country that features an emerging manager program across all major asset classes (private equity, public equity, hedge funds and real estate).

The goal of the program is to invest some of the Fund’s assets with smaller, newer managers, most of which are minority- and women-owned firms. By investing with emerging managers, who tend to focus on the smaller ends of the market, the Fund’s investment portfolio becomes more diverse, and ultimately, more sustainable. In turn, the emerging managers gain the capital and experience they need to become larger, best-in-class investment managers.

At this year’s emerging manager conference, Comptroller Thomas P. DiNapoli summed up the benefit of the Fund’s Emerging Manager Program. “When you look at our program, and the success of it, and the overall strength of the Fund, it’s proof that expanding opportunities and access, to women-owned firms, to firms of color, to emerging managers – it’s not only the right approach, but it’s certainly the best approach.”

Visit the Division of Pension Investment & Cash Management on our website for more information on the Fund and the Emerging Manager Program.

What Makes Up Your NYSLRS Pension?

Many factors go into the calculation of your NYSLRS pension, but there are three core components that help us determine what your pension will be. They are:

  • Your NYSLRS retirement plan
  • Your Final Average Salary (FAS)
  • Your service credit

We use this information to calculate your retirement benefit – but how does each part fit into that calculation?

Your NYSLRS Retirement Plan

When you first joined NYSLRS, in either the Employees’ Retirement System (ERS) or the Police and Fire Retirement System (PFRS), you were assigned to a tier. In most cases, if you know your System and tier, you can identify your NYSLRS retirement plan.

Your NYSLRS retirement plan determines the formula we would use to calculate your NYSLRS pension. It also defines, based on your tier and Retirement System, a minimum amount of time you need to work and earn service credit in order to be eligible for retirement. Some retirement plans have more requirements than others, so you should refer to your plan publication for more information.

Final Average Salary (FAS)

At NYSLRS, a Final Average Salary (FAS) is the average of the wages a member earned during a set period of time when his or her earnings were the highest. If you are an ERS or PFRS member in Tiers 1 through 5, we would calculate your FAS using a three-year period; for members in ERS and PFRS Tier 6, we’d use a five-year period. Some PFRS members, if their employer offers it, may be eligible for a one-year period. We will use your FAS, in combination with your age at retirement and your total amount of service credit, to calculate your NYSLRS pension.

There are some restrictions as to what can and can’t be included in a member’s FAS. For instance, for ERS Tier 3, 4 and 5 members, if the earnings in any year included in the FAS period exceed the average of the previous two years of earnings by more than 10 percent, the amount in excess of 10 percent is excluded from the computation.

For ERS and PFRS Tier 1 members, if your date of membership is 6/17/71 or later, the wages* in any 12-month period cannot exceed the earnings in the previous 12-month period by more than 20 percent. Any amount in excess of this will be excluded.

Other FAS limitations you should be aware of include the following:

  • For Tier 2 ERS and PFRS and Tier 3 PFRS members covered by Article 11, the FAS is based on the highest average of wages earned during any three consecutive years. Earnings in any year included in the period cannot exceed the average of the previous two years by more than 20 percent. Any amount in excess of this will be excluded.
  • For Tier 3 PFRS members covered by Article 14, the FAS is based on the highest average of wages* earned during any three consecutive years. Earnings in any year included in the period cannot exceed the average of the previous two years by more than 10 percent. Any amount over the 10 percent limit will be excluded.
  • For Tier 5 PFRS members covered by Article 22, the FAS is based on the highest average of wages earned during any three consecutive years. Earnings in any year included in the period cannot exceed the average of the previous two years by more than 20 percent.
  • For Tier 6 ERS and PFRS members, the FAS is based on the highest average of wages* earned during any five consecutive years. Earnings in any year included in the period cannot exceed the average of the previous four years by more than 10 percent.

You can find out what earnings go into your FAS by checking the Final Average Salary page on our website or your plan publication. Our publication, Your Retirement Benefits, also features examples on how we’ll determine your FAS.

Service Credit

As a NYSLRS member, by working for an employer who participates with NYSLRS, you earn service credit over the course of your career. For most members who work full-time, it takes 260 workdays per year to equal one year of service credit. Members who work a part-time schedule or in educational settings can refer to their plan publication to see how their service credit is calculated.

Your NYSLRS pension will be directly related to your service credit. Your NYSLRS retirement plan may require you to earn a specific amount of service credit in order to receive your full NYSLRS pension. In other cases, if you retire with less service credit and don’t meet the age requirements of your NYSLRS retirement plan, your NYSLRS pension will be reduced.

Planning Ahead for Your NYSLRS Pension

As you get closer to retirement age, keep an eye on your service credit and FAS. Make sure we have an accurate record of your public employment history so you receive the service credit you’re entitled to. You can check the total amount of service credit you’ve earned in your latest Member Annual Statement. Also, take some time to look into the FAS information for your NYSLRS retirement plan to be aware of any FAS limits.

If you have questions, or want to find out more detailed information about what makes up your NYSLRS pension, please contact us.

 

*Wages include regular salary, overtime, and recurring longevity payments earned within the period used to determine final average salary.

Retirement Planning — Start Thinking Outside The Box

Even though your retirement planning is helping you get ready for your last day of work, take the time to start thinking about what your life will be like after retirement. Will your financial situation be stable once you start receiving your pension, or will you need to supplement your income with your personal savings or Social Security? What will your health insurance situation be like when you are no longer working? These are important questions to ask before you file for retirement, and it’s the perfect time to start finding answers.

Preparing for Retirement: Part Four – Plan Outside the Box

The Preparing for Retirement 7-part video series discusses the main aspects of retirement planning to help NYSLRS members nearing retirement make good, informed decisions for the future. In Part Four – Plan Outside the Box, you’ll hear about other aspects of retirement planning you may be overlooking. By making sure your post-retirement financial situation is secure, you can be better prepared for the future.

Important Links for Retirement Planning

Where to Find More Retirement Planning Information

If you are close to retirement and have more questions, consider scheduling an appointment to meet with an information representative at one of NYSLRS’ consultation sites in New York State. Don’t forget to check back for the rest of the Preparing for Retirement video series, which includes retirement planning topics like:

Countdown To Retirement — The Last 18 Months

After taking the time to plan and get informed about your NYSLRS retirement benefits, you’ve decided you’re ready to retire. There are important things you need to do in the final months leading up to your retirement date. Our Countdown to Retirement series will help you remember what to do and when.

At 18 Months Out

When you are within 18 months of your planned retirement date, you should request a NYSLRS retirement estimate. This estimate contains information about your retirement benefits and the approximate amount of what your retirement benefit could be under different payment options.

To get your NYSLRS retirement estimate, send us a completed Request for Estimate form. Make sure you include the following on the form:

  • Planned retirement date
  • Name and birth date of your intended beneficiary
  • Public employment history

Your NYSLRS Retirement Estimate

When you receive your NYSLRS retirement estimate, you can expect to see your:

Having your NYSLRS retirement estimate also allows you to see how your pension could be affected by an outstanding loan balance or if you purchase additional service credit. By finding this information out now, you can avoid any surprises when you finally retire.

The NYSLRS retirement estimate is based on the information we have on file for you, so once you receive your estimate, make sure that it’s accurate and report any errors to us as soon as possible. Also keep in mind that if you receive your estimate, and decide that you are not ready to retire, you can request a new one whenever your situation changes.

Counting Down

Your planned retirement date will be around the corner before you know it. Check back for more Countdown to Retirement posts on pre-retirement issues, reviewing other retirement income, and preparing a post-retirement budget.

The New York Common Retirement Fund – A Long Term Track Record of Investment Success

The New York State Common Retirement Fund (the Fund), has a solid track record of exceptional long-term market performance. The Fund’s historical success is principally due to a sound investment strategy that is based on the Fund’s asset allocation and diversification.

The objective of the Fund, which is the third largest public pension fund in the country, is to achieve long-term growth, while meeting the cash flow needs to pay benefits to the New York State and Local Retirement System (NYSLRS)’s 422,405 retirees and beneficiaries and to meet the needs of future retirees. To accomplish this, New York State Comptroller Thomas P. DiNapoli has implemented a diversified investment strategy designed to meet current funding needs and future growth requirements while controlling risk.

How Pensions are Funded

The Fund’s assets come from three main sources: member contributions, employer contributions and investment earnings. Over the last 20 years, from April 1, 1993 through March 31, 2013, 80 cents of every dollar paid in benefits has come from investment earnings.

The Fund’s Investment Strategy Is The Key

Investments are made in a well-balanced variety of assets classes, which include global equity, domestic equity, core fixed income, real estate, private equity and absolute return strategies portfolios as well as Treasury Inflation Protected Securities.

The sound investment framework provided by the Fund’s asset allocation and diversification strategy enabled it to generate a 13.02 percent rate of return on its investments during the 2013-14 fiscal year. As of March 31, 2014, the Fund was valued at $176.2 billion. Since 2009, the Fund has seen five consecutive years of investment earnings growth. Prior to the recession, in fiscal year 2006-07, the value of the Fund was $154.6 billion.

For more detailed information on the Fund, visit the Division of Pension Investment and Cash Management.

Comptroller DiNapoli Addresses America’s Retirement Security Crisis

Many Americans At Risk of Retiring With a Lower Standard of Living

Depending on the household, Americans face a “staggering” national retirement savings shortfall that’s between $6.8 and $14 trillion. That was the message New York State Comptroller Thomas P. DiNapoli delivered during a June 17 Retirement Summit at The New School’s Schwartz Center for Economic Policy Analysis. As Comptroller DiNapoli notes in this video, retirement insecurity is among the most important and pressing social and economic challenges Americans now face.

The New York State Common Retirement Fund, now valued at $176.2 billion, is one of the best funded State retirement plans in the country. At the summit, Comptroller DiNapoli reiterated that well-funded and well-managed defined benefit plans like those of the New York State & Local Retirement System are affordable and sustainable for the long term and serve as an example of how a good pension plan can work, and not just for public employees. Americans nonetheless face what he calls a “staggering” crisis of retirement insecurity.

Retirement Statistics Tell The Story

Comptroller DiNapoli pointed out the following sobering statistics:

How to Address A Complex and Growing Problem?

According to the Comptroller, though recently proposed initiatives, such as Senator Tom Harkin’s Retirement Fund s Act and President Barack Obama’s MyRA, are encouraging, it’s unlikely that any comprehensive federal legislation is going to be passed anytime soon. Comptroller DiNapoli believes that any proposed solution to this problem, whether at the state or federal level, must include a vehicle that provides ease of enrollment, protects principal, has low cost fees and provides for some level of guaranteed income in retirement. “The one thing we can’t do,” he stressed, “is stand still.”

Retirement Planning – Getting Your NYSLRS Retirement Estimate

When it comes to retirement planning, it’s vital to get informed about your NYSLRS retirement plan, but also to make sure your records with NYSLRS are up to date. Keeping your records current, like your public employment history or who your beneficiary should be, helps us provide you with more accurate information about your retirement benefit. One way we do this is with a NYSLRS retirement estimate, an essential step of retirement planning. The NYSLRS retirement estimate provides you with an estimation of what your pension could be based on a retirement date of your choosing and the information we have on file for you.

Preparing for Retirement: Part Three – Request a NYSLRS Retirement Estimate

The Preparing for Retirement 7-part video series discusses the main aspects of retirement planning to help NYSLRS members nearing retirement make good, informed decisions for the future. In Part Three – Request an Estimate, you’ll learn what form you need to fill out to request a NYSLRS retirement estimate and what information you’ll receive about your estimated benefits. As you’ll see in the following video, having a NYSLRS retirement estimate can help you decide how ready you are retirement.

Important Links for Retirement Planning

Where to Find More Retirement Planning Information

If you are close to retirement and have more questions, consider scheduling an appointment to meet with an information representative at one of NYSLRS’ consultation sites in New York State. Don’t forget to check back for the rest of the Preparing for Retirement video series, which includes retirement planning topics like:

  • Personal financial planning during retirement
  • How divorce may affect your pension
  • Filing your retirement application
  • Choosing the option of how your pension will be paid

How Divorce Affects Your NYSLRS Benefit

If you get divorced you should be aware that, in a decision called Majauskas v. Majauskas, the New York State Court of Appeals determined that retirement benefits earned during a marriage are marital property, which means that, in the event of a divorce, your ex-spouse may be entitled to a share of your benefit.

Here are some ways the division of your retirement benefit can take place:

  • Your ex-spouse could receive a portion of your pension
  • Your ex-spouse could be named a beneficiary of any pre-retirement death benefit payable
  • You may need to choose a retirement option that on your death, provides a monthly benefit to your ex-spouse
  • Your ex-spouse could receive a portion of your Cost-of-Living Adjustment

However, the division of your retirement benefit needs to be in the form of a domestic relations order (DRO ) — a court order that gives us specific instructions on how your benefits should be distributed. Once we approve your DRO, it must be signed by a trial court judge and entered with the appropriate court clerk. We require a certified copy of the signed DRO and a copy of your judgment of divorce prior to implementing the terms of the DRO. Payments will start when your retirement benefit is calculated and finalized, and will be retroactive to your date of retirement if we receive the DRO and judgment of divorce before your retirement benefit is finalized.

Remember — a DRO is not to be confused with a judgment of divorce or separation agreement. It is not the same. The DRO is a separate court document which, once accepted by NYSLRS, is legally binding on us. Please read our Guide to Domestic Relations Orders before you finalize your divorce.

Significantly, the DRO won’t distribute any portion of your pension until you actually retire, die or terminate your NYSLRS membership.

Drafting Your NYSLRS DRO

The parties may draft their own DRO or create one using our DRO template. Submissions received using the NYSLRS’ template are given priority review. Please fill out the template completely. Once you have created a proposed DRO, please print a copy and submit it, along with a copy of your judgment of divorce, to our NYSLRS Matrimonial Bureau for review.

Our Matrimonial Bureau will provide an interpretation of your proposed DRO before you submit the draft DRO to the court. If the DRO cannot be implemented by NYSLRS, you will have a chance to make revisions.

Still have some questions? Our Divorce and Your Benefits FAQs may be helpful. Otherwise, you can always email us at dro@osc.state.ny.us.

The Top 5 Retirement Myths And Their Impact On Your Benefit

NYSLRS Members Would Be Wise to Avoid These Misconceptions

Retirement laws and procedures can be confusing. Sometimes even a small misunderstanding can have a big impact on your benefit. That’s why we feel it’s important to correct certain misconceptions that NYSLRS members have had over the years. The following are five of the most common myths:


Myth #1 My NYSLRS loan has gone into default and I have already paid taxes on it, so that means my loan has been satisfied and I no longer need to repay it.

Fact Not only does your loan still need to be repaid, but it continues to accrue interest. Since you cannot pay off your loan once you retire, an outstanding loan at retirement will permanently reduce your benefit. However, it does not prohibit you from filing for or receiving your pension.


Myth #2 I am required to contribute toward my pension. When I retire, my benefit will be based on what I have contributed to NYSLRS.

Fact Your member contributions are not a factor in the calculation of your pension. Your pension is based primarily on your service credit and the salary you earned when you were an active member. Other factors that may play a role in the calculation include your retirement plan and your age at retirement. In addition, if you have any outstanding loan balance when you retire, it will permanently reduce your retirement benefit.


Myth #3 I cannot collect my pension until I start receiving Social Security.

Fact You can collect your pension as soon as you meet the eligibility requirements of your retirement plan. Most members in regular retirement plans can retire as early as age 55. You should check the eligibility requirements for your tier when planning for your retirement.


Myth #4 If I am vested, off payroll and no longer working for a public employer, NYSLRS will automatically start paying me my pension as soon as I meet eligibility requirements.

Fact Since only you can decide when retirement is right for you, in order to begin collecting your pension benefits, you must file an Application for Service Retirement (RS6037).


Myth #5 I recently applied for retirement by giving my employer the paperwork.

Fact Giving your employer your retirement paperwork does not mean that you have filed for retirement and will receive your benefits. To apply for your NYSLRS benefits, you must file your retirement application form with the Office of the State Comptroller. For a form to be considered as “filed with the Comptroller,” it must be received by our Albany office, one of our consultation sites, or another office of the State Comptroller.


Have a concern that wasn’t covered? You can always email us from the Contact Us page of our website.

The Fund – Strength Through Strategy

The New York State Common Retirement Fund (the Fund) holds assets in trust for all NYSLRS members and retirees. As trustee, State Comptroller Thomas P. DiNapoli is accountable for the performance and management of the Fund and ensures that investment policies and practices adhere to the highest levels of ethical conduct and transparency. Comptroller DiNapoli seeks the input of a wide-range of internal and external advisors to determine the best allocation of assets and investment choices for the Fund.

The Fund also relies on an extensive network of outside advisors, consultants and legal counsel to provide the Comptroller with independent advice and oversight of all investment decisions. Outside advisors and internal investment staff are part of the chain of approval that must sign off on all investment decisions before they reach the Comptroller for final approval.

An independent review released in February 2013 found that the Fund is one of the most transparently and ethically managed public pension funds in the country. The review also found that the Fund is well run, invests effectively on behalf of its members and operates with industry-leading openness.

Vicki Fuller is the Chief Investment Officer of the Fund, and as she notes in this video, the Fund has remained strong for the NYSLRS members and retirees who depend on it. The consistent performance of the Fund can be attributed to a long-term investment strategy and asset allocation policy that balances a maximum level of return with an appropriate level of investment risk.

For more detailed information on the Fund, visit the Division of Pension Investment and Cash Management.

For extensive historical data and detailed information about how the Fund is managed, visit the Comprehensive Annual Financial Reports section of our website.