Monthly Archives: September 2016

What to Know About ERS Tier 5

Any Employees’ Retirement System (ERS) member who joined NYSLRS on or after January 1, 2010 but before April 1, 2012 is a member of Tier 5. There are currently 53,123 ERS Tier 5 members who make up 8.7 percent of ERS.

ERS Tier 5 Membership Milestones

As a Tier 5 member earns service credit over their career, they become eligible for certain benefits in their retirement plan. Here are some important milestones for Tier 5 members: 

ERS Tier 5 member milestones

ERS Tier 5 Contributions

Most Tier 5 members must contribute 3 percent of their salary for all their years of service, except Uniformed Court and Peace Officers employed by the Unified Court System, who must contribute 4 percent for all their years of public service. State Correction Officers contribute 3 percent for no more than 30 years.

With the exception of those retiring under special retirement plans, Tier 5 members must have 10 or more years of service to be vested (eligible for a retirement benefit). They can retire as early as age 55 with reduced benefits. The full benefit age for Tier 5 is 62.

The Final Average Salary (FAS) Calculation

The retirement benefit for Tier 5 members is 1.66 percent of their final average salary (FAS) for each year of service if the member retires with less than 20 years. FAS is the average of the wages earned in the three highest consecutive years of employment. For Tier 5 members, each year’s compensation used in the FAS calculation is limited to no more than 10 percent above the average of the previous two years.

If a Tier 5 member retires with between 20 and 30 years of service, the benefit is two percent of their FAS for each year of service. If a Tier 5 member retires with more than 30 years of service, the benefit is 1.5 percent of their FAS for each year of service over 30 years.

You can find out more info about Tier 5 retirement benefits on our website.

September COLA Increase for NYSLRS Retirees

In August, we said that eligible NYSLRS retirees could expect a cost of-living adjustment (COLA) increase on September 30. A COLA payment permanently increases your NYSLRS retirement benefit. It’s based on the cost-of-living index, and is designed to address inflation as it occurs. The September 2016 COLA increase equals 1 percent, for a maximum annual increase of $180.00, or $15.00 per month before taxes.

If you are due a COLA, you should have recently received a letter letting you know how much your 2016 increase is and how much your total benefit will be. If you receive your benefit by direct deposit (electronic fund transfer), you can expect to receive a second letter, which will describe the change to your benefit, before pension payments go out at the end of the month.

The COLA you receive from NYSLRS is not the same as the COLA you might receive from the Social Security Administration (SSA). In 2016, the SSA didn’t provide a COLA adjustment for almost 65 million Social Security recipients.

Healthcare in Retirement

There are reductions, such as health insurance, which may offset the COLA increase. NYSLRS does not administer health insurance programs for its retirees. For New York State retirees, the New York State Department of Civil Service administers the New York State Health Insurance Program (NYSHIP). If you have questions about your health insurance premiums, you can visit the Department of Civil Service’s website or call them at 1-800-833-4344 or 518-457-5754 to learn more.

If you retired from a public employer other than New York State (a county, city, town, village or school district), your former employer’s benefits administrator should be able to answer your health insurance questions.

Visit our website to learn more about COLA and your eligibility.