Visit NYSLRS at the New York State Fair

The Great New York State Fair begins on Thursday, August 27, and runs through Monday, September 7. And for each of those 12 days, you can visit NYSLRS at the Fair.

The Great New York State FairWe’ve been coming to the State Fair and camping out at the Center of Progress Building since 1999. Our information representatives – the same people you meet at our consultation sites – meet with more than 500 members and retirees each day. It’s a great opportunity to stop by and ask any questions you have about retirement or your benefits. One of the most common reasons why members will stop at our booth is to get a benefit projection. The benefit projection gives you an estimate of what your pension benefit could be at retirement.

Our info reps are also available for private one-on-one interviews and consultations. You can also pick up booklets about your retirement plan and membership or take home one of our forms.

Look for Unclaimed Funds at the Great New York State Fair

The Comptroller’s Office of Unclaimed Funds booth is another popular stop at the Center of Progress Building. Every day, the Office of Unclaimed Funds returns one million dollars to those who file claims with them. An unclaimed fund is lost or forgotten money (like from old bank or insurance accounts) that gets turned over to the state. New York State has more than $14 billion in lost money, and the Office of Unclaimed Funds is in charge of giving that money back to the correct owner. So far, the Office of Unclaimed Funds has returned almost $289 million in 2015. Keep an eye out for them opposite the NYSLRS booth – a representative will give you hands on help in searching for your lost money. And make sure you click the Unclaimed Funds link above to use the online search tool.

Almost one million people visit the State Fair every year. We hope to see you there!

Tackling Retirement Security for Working Americans

retirement-security

Many Americans are lacking access to employer-sponsored retirement plans.

America is facing a retirement security crisis. The shift away from defined benefit (DB) pensions in favor of defined contribution (DC) plans is considered a common cause. The number of workers with a DB plan decreased pdf-icon (PDF) from 67 percent to 43 percent between 1989 and 1998, while those with a DC plan rose from 33 to 57 percent during that same time. The lack of access to any sort of employer-sponsored retirement plan is another factor: 43.3 million American workers didn’t have access to an employer-sponsored retirement plan in 2013.

The unfortunate truth, though, is that many Americans just aren’t prepared to retire.

A State Solution to the Retirement Crisis?

A few weeks ago, we mentioned how AARP NY called for a state-sponsored retirement savings program to address this problem. According to AARP NY, Americans are 15 times less likely to open a retirement savings plan on their own compared to if their employer offered one. Even more startling, about 3.6 million New Yorkers working in the private sector don’t have access to any kind of employer-sponsored retirement plan.

At the federal level, creating a DC plan with automatic enrollment has been unsuccessful. The president recently asked the Department of Labor to clarify how states can move forward with state-sponsored plans. This could help states manage how to enroll employees into a 401(k), providing workers a chance to start saving for retirement.

Pensions: A Major Part of Retirement Security

Workers will need more than their Social Security and personal savings for a secure retirement. This is where more employer-sponsored retirement plans can help workers. About two thirds of working age Americans aren’t taking part in a retirement plan pdf-icon (PDF) . But even though DC plans are now more common than DB plans, that doesn’t mean they’re the best answer to providing steady retirement income. A DB plan provides a steady source of income for the pensioner’s lifetime. There’s no guarantee a DC plan will provide a retiree with enough or any income during retirement. If too many workers retire without an employer-sponsored plan, they could face levels of poverty in retirement.

Why Corporate Political Disclosure Matters

With the help of Comptroller DiNapoli, the New York State Common Retirement Fund is asking the companies it invests in to be more open about their corporate political spending. When companies spend money toward certain political causes, their shareholders may end up footing the bill. And as a shareholder in many large American companies, the Fund wants to make sure its investments are used wisely.

The Comptroller’s Efforts Toward Transparency

Election-Spending-Trend_2008-2014 Political Disclosure

In the election years from 2008 to 2014, the cost of congressional and presidential races climbed into the billions.

In 2010, the Supreme Court decided that corporations could contribute unlimited amounts of money to independent election efforts. Shareholders of these companies may not realize their money gets put toward these efforts. So, after the ruling, the Comptroller pushed for more transparency from the companies the Fund invests in.

One way he accomplishes this is through shareholder requests. These requests ask companies for a full, public report that lists their spending on:

  • Candidates
  • Political parties
  • Ballot measures
  • Any direct or indirect state and federal lobbying
  • Payments to any trade associations used for political purposes
  • Payments made to any organization that writes and endorses model legislation

This knowledge helps the Fund determine if it will still invest in these companies. Ultimately, the Fund wants to make sure its portfolio companies provide a long-term value on its investments, because that value will get passed on to its members, retirees and beneficiaries. If a company’s political spending puts that investment at risk, the Fund can withdraw as it sees fit.

The Fund’s Progress on Disclosure Agreements

The Fund has asked 52 of its portfolio companies to disclose their corporate political spending, and 26 companies have agreed to do so. Over the last year, the Fund has reached disclosure agreements with:

The Fund has taken a leadership role in corporate political disclosure, and Comptroller DiNapoli will continue to make it a priority.

NYSLRS – One Tier at a Time: ERS Tier 1

When you joined the New York State and Local Retirement System (NYSLRS), you were assigned to a tier based on the date of your membership. There are six tiers in the Employees’ Retirement System (ERS) and five in the Police and Fire Retirement System (PFRS) — so there are many different ways to determine benefits for our members. Our series, NYSLRS – One Tier at a Time, walks through each tier and gives you a quick look at the benefits members are eligible for before and at retirement.

One of our smallest tiers is ERS Tier 1, which represents 0.7 percent of NYSLRS’ total membership. Overall, there are 4,520 ERS Tier 1 members. Today’s post looks at the major Tier 1 retirement plan in ERS – the New Career Plan (Section 75-h or 75-i).
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If you’re an ERS Tier 1 member in an alternate plan, you can find your retirement plan publication below for more detailed information about your benefits:

Be on the lookout for more NYSLRS – One Tier at a Time posts. Want to learn more about the different NYSLRS retirement tiers? Check out some earlier posts in the series:

Gen X Struggling with Retirement Security

Generation X turns 50 this year and according to a survey by AARP, they may be more anxious about retirement than Baby Boomers. Gen X has been feeling the pinch for a while. They’ve seen the rise of 401(k)s replacing traditional pension plans and have the added burden of taking care of their children and aging parents. Even though Gen Xers have “more time” to plan, the biggest concern among them is not saving enough for retirement. The survey, High Anxiety: Gen X and Boomers Struggle with Stress, Savings and Security, looked at New York voters from age 35 to 69. And as the survey shows, anxiety is running high in Generation X: This lack of retirement confidence could stem from several reasons. In New York, 20 percent of working Gen Xers don’t have access to a workplace retirement savings plan. Because of this, 31 percent of Gen Xers without access aren’t confident they’ll ever retire. If their employer offered a plan, 80 percent stated they’d be likely to use it. But even out of those with access, 37 percent aren’t saving for retirement through a workplace plan. Many Gen Xers also cite their current expenses as an obstacle to saving for retirement:

  • 59 percent say they have no money left after paying for bills.
  • 56 percent are paying for their children’s education.
  • 44 percent have lost a job or taken a pay cut.
  • 44 percent have too much debt to pay off.
  • 37 percent are caring for an elderly parent or relative.

AARP Proposes State-Run Retirement Savings Program

In May, AARP reported on the findings of this survey at a retirement readiness event in Albany. “We know Boomers are worried, but the fact that Generation Xers are even more worried is cause for alarm and reflection,” said Beth Finkel, the state director of AARP in New York. “Since an uncertain financial future for New Yorkers is an uncertain financial future for the state, it is vital that these worries be addressed.” Americans are 15 times less likely to open a retirement savings plan on their own compared to if their employer offered one. To help address this and other concerns, AARP is calling for a state-sponsored retirement savings program. Deputy Comptroller Thomas Nitido represented NYSLRS at the event. He agreed that such an system could be useful, but workers would still face the challenge of finding extra money to put aside after paying bills. He also said that New York State Comptroller Thomas P. DiNapoli would prefer to see a federal solution to the retirement issue. However, that was “unlikely” given the political mood of the U.S. Congress.

Keeping the Pension Fund Funded

People are living longer, which means that recent retirees are spending more time in retirement than in previous generations. This also means that they are collecting a benefit for a longer period of time. That’s why Comptroller DiNapoli, administrator of the New York State and Local Retirement System (NYSLRS), ensures that the most accurate and current data available is used to project how long our members and retirees are expected to live. In doing so, NYSLRS lessens the risks of underfunding the benefits of its current and future retirees.

How the Pension Fund Plans Ahead

The pension fund’s assets come from member contributions, investment income, and employer contributions. Each year, NYSLRS calculates the funds it needs to pay current and future benefits. NYSLRS can’t know for certain how long a member will pay into the pension fund before retiring or how long a retiree will receive a pension. What NYSLRS can do, though, is make assumptions about each of these scenarios.

In this case, an assumption helps NYSLRS predict the expected future payments over the lifespan of its members and retirees based on their age and gender. By estimating how long NYSLRS can expect to pay its retirees, it can plan ahead and determine how much money the pension fund will need.

A New Direction on Assumptions

In August of 2014, NYSLRS’ actuary recommended a change in our mortality assumptions (pdf-icon PDF) based on the completion of a much anticipated study and report from the Society of Actuaries. This new approach to creating these assumptions considers the age and gender of members and retirees, and also their birth year. Birth years provide a more accurate way of looking at life expectancy as not all generational groups share the same life expectancy. A baby boomer who retires at age 62 may live until a certain age, but that doesn’t mean a millennial retiring at 62 will live until the same age. Using more realistic models of life expectancy gives NYSLRS a better understanding of what benefits to pay out over time.

NYSLRS can expect to pay out more benefits in the future as its retirees live longer, but it won’t come as a surprise. By planning ahead, NYSLRS is making sure the benefits you worked for will be there for you during retirement.

New Report Questions Retirement Readiness of U.S. Workforce

Fewer Americans are participating in employer-sponsored defined benefit and defined contribution plans. In fact, according to a recent report from the New School’s Schwartz Center for Economic Policy Analysis, from 1999 through 2011, 53 percent of working Americans were not enrolled in a retirement plan at work — down from 61 percent. When you add in people who did not participate in a plan offered to them or who were not working, 68 percent of working-age people (25-64) did not participate in an employer-sponsored plan.

According to the report, because of these low retirement plan enrollment numbers, 55% of U.S. households nearing retirement may have to rely on Social Security income exclusively for financial survival in retirement.

The Dwindling Number of Defined Benefit Plan Participants Fare Best

The report, entitled Are U.S. Workers Ready for Retirement? Trends in Plan Sponsorship, Participation and Preparedness, was released in April and co-authored by Theresa Ghilarducci, a nationally recognized expert in retirement security. It found that of working-age Americans with an employer-sponsored retirement plan available to them, only 16 percent had a defined benefit plan, while 63 percent had a defined contribution plan such as a 401(k).

In a comparison of net worth, the households who are enrolled in a defined benefit pension plan fare the best, with a median net worth of $116,973, compared to $107,250 for those in a defined contribution plan, and $4,450 for those without an employer-sponsored plan of any kind.

Regrettably, as bleak and discouraging as this picture is, things could still be worse.

Too Many Future Retirees Face the Possibility of Poverty

According to the report, 33 percent of current workers aged 55 to 64 are likely to be poor or near-poor in retirement based on their current levels of retirement savings and total assets. While a sizable share of the retiree population will be at risk of living in poverty in all states, workers in Massachusetts and Virginia are more likely to enjoy a secure retirement than their counterparts nationally, with only 22 percent of workers 55 to 64 likely to be at-risk for a poor standard of living in retirement.

It’s a much more troubling story here in New York where 32 percent of near-retirement workers may experience poverty or near-poverty in retirement based on their current savings levels.

Comptroller DiNapoli’s Position On Retirement Security

New York State Comptroller Thomas P. DiNapoli, the administrator of the New York State and Local Retirement System (NYSLRS), has long addressed the topic of retirement security and said that policy makers and the community-at-large should be directing their energies to ensure retirement security for everyone, including workers in the private sector.

Comptroller DiNapoli discusses this issue in remarks he delivered last June during a Retirement Summit at the Schwartz Center.

NYSLRS – One Tier at a Time: ERS Tier 2

When you joined the New York State and Local Retirement System (NYSLRS), you were assigned to a tier based on the date of your membership. There are six tiers in the Employees’ Retirement System (ERS) and five in the Police and Fire Retirement System (PFRS) – so there are many different ways to determine benefits for our members. Our series, NYSLRS – One Tier at a Time, walks through each tier and gives you a quick look at the benefits members are eligible for before and at retirement.

NYSLRS created Tier 2 on July 1, 1973, marking the first time NYSLRS created any new member group. Today’s post looks at one of the major Tier 2 retirement plans in ERS. ERS Tier 2 as a whole represents less than one percent of NYSLRS’ total membership.

ERS-Tier-2-Benefits_001aIf you’re an ERS Tier 2 member in an alternate plan, you can find your retirement plan publication below for more detailed information about your benefits:

Be on the lookout for more NYSLRS – One Tier at a Time posts. Next time, we’ll take a look at another ERS tier. Want to learn more about the different NYSLRS retirement tiers? Check out some earlier posts in the series:

Retirees: Know Your Post-Retirement Earnings Limit

forjuly1As a New York State and Local Retirement System (NYSLRS) retiree, it’s possible to work a public job after retirement and receive your pension, but there are limits to your post-retirement earnings. If you’re self-employed, work for a private employer, work for another state, or work for the federal government, you don’t have to worry about post-retirement earnings. You can earn as much as you want in your new job and still collect your full NYSLRS benefit.

But if you collect a NYSLRS pension and want to return to work in the public sector, there are two sections of the Retirement & Social Security Law (RSSL) you have to comply with that deal with post-retirement earnings.

Section 212

Under Section 212 of the RSSL, you may earn up to the annual amount set by law. The limit for 2015 is $30,000. Typically, your earnings are not limited in the year you reach age 65.

However, if you are under the age of 65 and earn more than the Section 212 limit during a calendar year, you may:

  • Pay back NYSLRS an amount equal to the retirement benefit you received after you reached the mandated limit. If you continue to work, your retirement benefit will be suspended.

OR

  • Rejoin NYSLRS, in which case your retirement benefit will stop.

Section 211

If you return to work and earn more than the Section 212 limit, your pension will be suspended unless your public employer requests a Section 211 approval for you. This will allow you to continue receiving your retirement benefit without reduction.

Section 211 approvals are given for a fixed period of time, normally up to two years.

If you earn more than the Section 212 limit and do not get Section 211 approval, your benefit will be reduced or suspended.

If you have questions about working after retirement, please read our publication, What If I Work After Retirement? (VO1648).

Dual Membership in NYSLRS

As a New York State and Local Retirement System (NYSLRS) member, you’re either part of the Employees’ Retirement System (ERS) or the Police and Fire Retirement System (PFRS). In some cases, however, it’s possible to have a dual membership, or be a member of both systems. As of last year, 3,392 members had memberships in both ERS and PFRS.

How Does Dual Membership Work?

You can be a member of more than one retirement system if you hold a different position in each system. Let’s say you work as a fire fighter—this would mean that you’re already a member of PFRS. One day, you decide to take on a part-time job as a bus driver for your local school district. Your school district participates in ERS, so you’re eligible for ERS membership. After you fill out the membership application, you’re now an ERS member, while at the same time being a PFRS member.

As a member of both systems, you’d have separate membership accounts in those systems. Let’s look again at our fire-fighting bus driver example. While working as a fire fighter, you’d make any required contributions and earn service credit toward your PFRS pension. The PFRS contributions and service credit wouldn’t go toward your ERS pension. The same goes when you’d work as a bus driver—your required contributions and earned service credit would go toward your ERS pension and not PFRS.

There are other implications to dual membership as well. Assuming you met the service credit and age requirements, you could retire from both systems. You’d need to file a separate retirement application for ERS and PFRS, and we’d work on calculating each pension. We’d calculate your ERS pension using the final average salary (FAS) you earned while working as a bus driver. We’d then use the FAS you earned as a fire fighter to calculate your PFRS pension.

And, since you’d have an ERS pension and a PFRS pension, you would need to choose a beneficiary for each in the event of your death.

Dual membership in NYSLRS is nothing fancy—just make sure to follow your retirement plan in each system.

If you have any questions about dual membership, please contact us.