Monthly Archives: April 2015

NYSLRS – One Tier at a Time: PFRS Tier 6

When you join the New York State and Local Retirement System (NYSLRS), you’re assigned 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). Each tier has a different benefit structure established by New York State legislation. Our series, NYSLRS – One Tier at a Time, walks through each tier to give you a quick look at the benefits in both ERS and PFRS.

Today’s post looks at Tier 6 in the Police and Fire Retirement System. Anyone who joined PFRS on or after April 1, 2012 is in Tier 6. PFRS Tier 6 members currently make up 8.4 percent of NYSLRS’ total membership, totaling 2,861 members, making it the second largest tier in PFRS.

Check out the graphic below for the basic retirement information for PFRS Tier 6 members.

PFRS-Tier-6-Benefits

Where to Find PFRS Tier 6 Information

If you’re a PFRS Tier 6 member, please find your retirement plan publication from the list below for more details about your benefits:

Please visit our Publications page for special plans under miscellaneous titles.

Stay tuned 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:

Earth Day, Energy Saving and Retirement

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Image Credit: NASA’s Earth Observatory

As Earth Day marks its 45th year in support of environmental protection, it’s a good time for members and retirees to think about their energy usage, and its possible added cost during retirement.

When you’re working, you may be more likely to turn off certain appliances or set your thermostat to a lower temperature while you’re out of the house. You do this to save energy and keep your utility costs low.

But, once you’ve retired, the time once spent at the office may now be spent primarily at home, resulting in an additional 40 hours of energy use a week as you use appliances, heating/cooling systems, and more. With some careful planning and changes in behavior, you can make sure your utility costs are manageable and fit your post-retirement budget.

Helpful Tips for Energy Saving

To help reduce energy consumption during retirement, we’d like to share some tips courtesy of the New York State Department of Environmental Conservation. Here are some things you can do in your home right now:

In Your Kitchen

  • Set the refrigerator temperature between 38 Farenheit (F) and 42 F
  • Set the freezer temperature between 0 F and 5 F
  • Microwave whenever you can

Washing Laundry

  • Wash and dry only full loads
  • Wash with warm water instead of hot
  • Rinse with cold water instead of warm

In Your Bathroom

  • Install a low-flow shower head
  • Reduce the volume of water in your toilet tank
  • Shut off the sink while brushing your teeth

The DEC has more tips you can use to make environmentally-responsible choices in your daily life. You can also visit the New York State Energy Research and Development Authority (NYSERDA) for information on making your home energy efficient.

NYSLRS Is Doing Its Part

Here at NYSLRS, we’re actively seeking opportunities to reduce our energy footprint and utilize renewable resources. Some of what we’ve accomplished includes:

  • Purchasing 25 percent of the energy we use from renewable sources.
  • Printing publications on paper that is at least 30 percent post-consumer waste (PCW).
  • Publishing newsletters that are now 100 percent PCW, and moving towards 100 percent PCW on all of our printed publications.
  • Moving toward using soy-based inks, rather than petroleum-based.
  • Transitioning to two-sided printing and expanding the use of environmentally friendly printers, and
  • Implementing a scanning system that has markedly reduced our paper files.

Overtime Limits and Tier 5 & 6 Members

In the New York State and Local Retirement System (NYSLRS), Tier 5 and 6 members have limits on the amount of overtime (OT) we can use in the calculation of their pension. Any OT amount in excess of these limits will get excluded from the member’s final average salary.

For Employees’ Retirement System (ERS) and Police and Fire Retirement System (PFRS) Tier 5 members and PFRS Tier 6 members, the OT limit is based on the calendar year; for ERS Tier 6 members, the limit is based on the State’s fiscal year (April 1 – March 31).

ERS Tier 5 OT Limit

The OT limit for ERS Tier 5 began in 2010 at $15,000 and increases by 3 percent each year. This year (calendar year 2015), the OT limit is $17,389.11.

PFRS Tier 5 OT Limit

In PFRS Tier 5, any overtime paid to a member in excess of 15 percent of their regular annual wages can’t be included in their final average salary calculation. This percentage doesn’t vary.

ERS Tier 6 OT Limit

The OT limit for ERS Tier 6 began in State fiscal year 2012-13 at $15,000. The limit increases each fiscal year, and is based on the Consumer Price Index on December 31 of the previous year. This fiscal year (2015-16), the OT limit is $15,608.

PFRS Tier 6 OT Limit

In PFRS Tier 6, any overtime paid to a member in excess of 15 percent of their regular annual wages can’t be included in their final average salary calculation. This percentage doesn’t vary.

Overtime-Limit

If you’d like to know more about what can or can’t be included in your retirement calculation, find your retirement plan publication on our Publications Page. If you have questions about overtime and the overtime limit, please contact us.

The Top 5 Things NYSLRS Members Need to Know About Retirement and Divorce

The most important thing you need to know is that if you divorce, your ex-spouse may be entitled to a portion of your pension or other New York State & Local Retirement System (NYSLRS) benefits. But determining how to divide retirement assets in your NYSLRS plan as a result of a divorce can be complex. Knowing these five key points can provide some clarity:

NYSLRS Requires a Domestic Relations Order (DRO)

For divorcing NYSLRS members, any division of your retirement benefits must be stated in the form of a domestic relations order (DRO) – a court order issued after a final judgment of divorce that gives us specific instructions on how your benefits should be distributed to your former spouse.

Without A DRO, NYSLRS Will Not Provide Your Ex-Spouse Any Portion of Your Pension.

The pension that you receive is a benefit held in trust by NYSLRS and you are considered the beneficiary of that trust. You cannot assign retirement benefits to another person and, because NYSLRS has no legal relationship with an ex-spouse, no payments will be made to an ex-spouse based on a separation agreement or judgment of divorce alone.

Prepare the DRO before you finish the divorce

The DRO must be signed by a trial court judge and entered with the appropriate County Clerk’s Office before it can be implemented. Our Matrimonial Bureau may review your DRO for compliance with the law before you submit the draft order to the court. This way, if the DRO does not meet the requirements, you will have a chance to make revisions.

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 to your ex-spouse 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.

Change your beneficiary designations on your retirement benefits after your divorce.

It is especially important to review your beneficiary designations to ensure your benefits will be distributed according to your wishes. Effective July 7, 2008, beneficiary designations for certain benefits are revoked when a divorce, annulment or judicial separation becomes final. Please read our Guide to Domestic Relations Orders and review our DRO FAQs before you finalize your divorce.

Contact an attorney with DRO experience

He or she can help you ensure the DRO you submit to the court fairly represents the intentions of the parties.

How Can NYSLRS Help?

We recently developed an online worksheet, which helps you create your own DRO easily in the proper format. Just enter your tier, plan, employment status and answer the questions that follow. Then, submit a copy of your proposed DRO to us for review before you submit it to the court. You can email it, along with scanned copies of your judgment of divorce, to our Matrimonial Bureau at dro@osc.state.ny.us. DRO proposals that are prepared using this form will be given priority review.

If you have any questions about divorce and your benefits, please contact our Hearing Administration & Matrimonial Bureau staff by email at dro@osc.state.ny.us, by writing to 110 State Street – Mail Drop 7-9, Albany, New York 12244, or by fax at 518-474-7794.

Understanding Your Tier 6 Contributions

In the New York State and Local Retirement System (NYSLRS), Tier 6 members make contributions based on their earnings. This means your contribution rate could change from year to year depending on how much you earned in previous years. As of April 1, 2015, there are two ways we determine the contribution rates of Tier 6 members.

For your first three years of membership, we base your contribution rate on an estimated annual wage we receive from your employer. After three years, we start using the record of your past earnings to determine your contribution rate. We call this the two-year look back.

During the two-year look back, we look back at your earnings from two years before and use that amount to determine your contribution rate for the current year. Watch the video below for more information. If you have questions about Tier 6 contributions, please contact us.


Video Transcript:

As a Tier 6 member, the contributions you make toward retirement are based on your earnings. This means your contribution rate could change from year to year depending on how much you earned in previous years.

If you’re a Tier 6 member with three or more years of membership in NYSLRS, we determine your contribution rate using a method called the two-year look back.

This means we look back at your earnings from two years before. We use those earnings to determine your contribution rate for the current year starting April first.

So, we look back to what you earned from April first to March thirty-first two years ago, and use those earnings to determine your contribution rate. This will be your contribution rate for the entire year until next April first, when we’ll do the look-back again to determine your new rate.

Remember, as a Tier 6 member, your contribution rate could change each year depending on your earnings. You may not see a change right away, but over time, you could wind up contributing more or less than you did before.

If you have any questions about Tier 6 contribution rates or your benefits, visit our website or contact us. Thanks for watching.