After You Retire

We’ve written a lot about preparing for retirement — how you should purchase any credit for past service, get a pension estimate, prepare a retirement budget, and more. But, what about after you retire? “So long, NYSLRS! Just keep the monthly payments coming.” Is that it?

Not exactly.

Sign Up for Retirement Online

We recently launched the new Retirement Online, a secure site that allows you to check important NYSLRS information, like the deductions from your latest payment and a summary of your benefits. You can also view or update beneficiaries and generate income verification letters right from your computer.

To access Retirement Online, visit the NYSLRS home page, then click “Register” or “Sign In.”

If You Move, Let Us Know

The United States Postal Service usually won’t forward pension checks to another address. (You may want to sign up for our direct deposit program.) But, pension payments aside, there are other things you’ll want from us once you retire. If we have your correct address on file, you’ll be sure to receive:

  • Your 1099-R form. Your pension isn’t taxed by New York State, but it is subject to federal income tax.
  • Your Retiree Annual Statement. It’s a helpful reference that spells out the benefits, credits and deductions you receive each year.
  • Any official notifications.
  • Your Retiree Notes

The fastest way to update your address is through Retirement Online. You can also mail a signed letter (with your name, old address, new address, date of change and retirement registration number) to:

NYSLRS
Attn: Pension Services
110 State Street
Albany, NY 12244-0001

Keep Your Beneficiaries Current

Reviewing your beneficiary designations periodically is important. By keeping them up to date, you ensure that any post-retirement death benefit will be distributed to your loved ones according to your wishes. You can use Retirement Online to change your death benefit beneficiaries at any time. Or, contact our Call Center, and we will send you the necessary form. If you aren’t retired yet, submit a Designation of Beneficiary form (RS5127).

Keep Your Loved Ones Informed

Your family or friends have to know to notify us when you die, so we can pay out any benefits to your designated beneficiaries. They can phone our Call Center or notify us by mail. Either way, we will also need a certified copy of your death certificate. You and your loved ones can find more information in our Getting Your Affairs in Order and a Guide for Survivors (VO1874) publication.

Life Changes: A Guide for Retirees (VO1705)

Check out this publication for information about other benefits you may be entitled to and the services we offer retirees.

See You at the Fair

The Great New York State FairThe 177th Great New York State Fair opens next week and NYSLRS will be there.

The 13-day celebration of everything New York kicks off on Wednesday, August 23 and runs through Monday, September 4 (Labor Day). Our information representatives will be at the fairgrounds, as they have been for the past 20 years, to help members and retirees with their retirement planning and benefit questions. In the past, many NYSLRS members have stopped by the booth to get a benefit projection. You’ll also be also be able to pick up retirement plan brochures and forms or have a consultation with one of our information representatives.

The NYSLRS booth will be in the Center of Progress Building, building 6 on the State Fair map, near the Main Gate. Once inside, you can find us against the wall on the east side.

Find Unclaimed Funds at the State Fair

OSC’s Office of Unclaimed Funds booth will be in the same building, just across from the NYSLRS booth. An unclaimed fund is lost or forgotten money, perhaps in old bank account or insurance policy that has been turned over to the State. See if any of that money might be yours. So far this year,  State Comptroller Thomas P. DiNapoli and the Office of Unclaimed Funds has returned more than $250 million.

The Retired Public Employees Association (RPEA) will also have a booth in the Center of Progress Building.

Special State Fair Days

Wednesday, August 23

  • Preview Day — $1 admission

Friday, August 25

  • Pride Day — LGBT choirs, parade

Monday, August 28

  • Law Enforcement Day — Free admission for law enforcement personnel and corrections officers
  • Senior Citizen’s Day — Free admission for senior citizens (60+)

Tuesday, August 29

  • Comptroller DiNapoli Visits the Fair — He manages the $197 Billion State Pension Fund and is the administrator of NYSLRS. He’ll be stopping by NYSLRS’s booth during the day.
  • Fire & Rescue Day — Free admission for active and retired members of fire departments and emergency services organizations
  • Senior Citizen’s Day — Free admission for senior citizens (60+)

Wednesday, August 30

  • Women’s Day

Thursday, August 31

  • Armed Forces Day — Free admission for active duty or veterans

Note: ID required for free admissions listed above. For details, check out the complete schedule of Special Fair Days.

Four Facts about Divorce and Your Pension

Courts consider pensions marital property. So, if you file for divorce, a judge may award your ex-spouse part of your pension or other NYSLRS benefits. The process for dividing retirement assets after a divorce can be complex. Here are four things you need to know:

1. NYSLRS Requires a DRO

To divide your NYSLRS benefits, we need a domestic relations order (DRO). This court order, issued after a final judgment of divorce, gives us specific instructions on how your benefits should be distributed. NYSLRS provides on online fillable DRO that complies with the plan’s requirements for implementation. You are not required to use the online form; however, the System will give priority review to these DROs since the language is pre-approved.

2. A Judge has to Approve Your DRO

Before we can implement a DRO, a trial court judge must review and sign it, and you need to file it with the appropriate County Clerk’s Office. That can be a lengthy process; our Matrimonial Bureau can check 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.

Once a judge does sign off, we’ll need a certified copy of the DRO and your judgment of divorce. We start payments to your ex-spouse once we’ve calculated and finalized your retirement benefit. If we receive the DRO and judgment before we finalize your retirement benefit, we’ll make retroactive payments back to your date of retirement.

3. Some Beneficiary Designations are Revoked

Reviewing your beneficiary designations periodically is always important, but after a divorce, it’s essential to make sure your benefits will be distributed according to your wishes. As of 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.

4. Contact an Attorney with DRO Experience

This last one is not a fact, but it’s a good idea. A lawyer, who’s worked with DROs previously, can help ensure the DRO you submit to the court fairly represents the intentions of both parties.

How Can NYSLRS Help?

We developed an online template  that makes it easier to create a properly formatted DRO. Just enter your tier, plan and employment status, and answer the questions that follow.

To submit your proposed DRO for review, email it, along with scanned copies of your judgment of divorce, to our Matrimonial Bureau at dro@osc.state.ny.us. For DRO proposals prepared using our online worksheet, the review process is simplified and we can complete our review faster.

If you have any questions about divorce and your benefits, please contact our Hearing Administration and Matrimonial Bureau staff.

Email: dro@osc.state.ny.us

Address:
NYSLRS 110 State Street
Mail Drop 7-9
Albany, New York 12244

Sunshine on the Retirement Savings Horizon

Headlines in recent years offer a stormy retirement forecast: “Americans Get a Grade C in Retirement Readiness,” “More Than Four in Ten Households Wrong About Retirement Readiness,” “The Shockingly Small Amount Americans Have in Retirement Savings.”

Unfortunately, research and statistics tend to back up these dire warnings. According to the Pew Charitable Trusts, a significant portion of Americans — 42 percent — lack access to an employer-sponsored retirement plan such as a 401(k), 403(b) or 457(b). Among those whose employers do offer a plan, only 49 percent actually participate.

In fact, research from the Federal Reserve suggests that 28 percent of people who haven’t retired yet have no retirement savings whatsoever. So, it’s not surprising that a report from the Schwartz Center for Economic Policy Analysis predicts that the “number of 65-year-olds per year who are poor or near poor will increase by 146 percent between 2013 and 2022.”

The Good News

There is promising news about retirement, though, if you look for it. Americans — particularly Millennials (those born 1979 through 1996) — are starting to save for retirement much sooner than previous generations. According to the TransAmerica Center for Retirement Studies, Millennials begin to put away for retirement at a median age of 22. Generation X workers waited until 27, and Baby Boomers didn’t start until age 35.

Sunshine on the Retirement Savings Horizon

Perhaps this earlier focus on saving is responsible for other good news. For example, Fidelity Investments reports record 401(k) balances in 2016: $92,500 at the end of the fourth quarter, which is up $4,300 from 2015. And, earlier this year, the Employee Benefit Research Institute found that 55.4 percent of investors — more than ever before — are maxing out their individual retirement account (IRA) contributions.

That said …

Americans do have a retirement problem. New York State Comptroller Thomas P. DiNapoli speaks regularly about the need for policies at the state and federal levels of government to ensure retirement security for everyone, including workers in the private sector.

As individuals, the solution is simple: We need to save, and we need to start early. NYSLRS members have the rare advantage of a well-funded, defined-benefit pension. However, your pension and Social Security benefits are only part of a well-rounded financial plan. Consider contributing to a New York State Deferred Compensation Plan (NYSDCP) account. NYSDCP is a voluntary retirement savings plan — similar to private sector 401(k) or 403(b) plans — created for employees of New York State and other participating employers. If you work for a local government employer, please check with your human resources administrator to find out what savings plans are available to you.

What Unused Sick Leave Might Mean For You at Retirement

If you’ve accumulated unused, unpaid sick leave, you may be able to use it toward your NYSLRS pension benefit.

New York State employees are eligible for this benefit. You also may be eligible if your employer has adopted Section 41(j) for the Employees’ Retirement System (ERS), or 341(j) for the Police and Fire Retirement System (PFRS), of Retirement and Social Security Law. Not sure? Ask your employer or check your Member Annual Statement.

Here’s How It Works

Your additional service credit is determined by dividing your total unused, unpaid sick leave days by 260. Most ERS members can get credit for up to 165 days (7½ months) of unused sick leave. The benefit is capped at 100 days (4½ months) for most Tier 6 members. State employees in certain negotiating units may be able to use 200 days (about nine months). Those extra “months” would be used in calculating your retirement benefit.

Also, depending on your employer, your unused sick leave may be used to cover some health insurance costs during your retirement. Please check with your employer for information about health insurance.

Restrictions

Unused sick leave cannot be used to reach NYSLRS retirement milestones. Let’s say you have 19½ years of service credit. At 20 years, your pension calculation would improve substantially. You also have 130 days of unused sick leave. Can you add the six months of sick leave credit to get you to 20 years? No. Retirement law does not permit it. You’ll have to work those extra six months to get the 20-year benefit rate, though sick leave credits can still be used in your final pension calculation.

Also, credit for unused sick can’t be used to:

  • Qualify for vesting
  • Reach a minimum retirement age
  • Increase your pension beyond the maximum allowed under your retirement plan
  • Meet the service credit requirement for a special 20- or 25-year plan

Check your retirement plan booklet for more information.

Tier 6 Benefits – A Closer Look

Tier 6 members (those who joined NYSLRS since April 1, 2012) are eligible for a lifetime pension benefit with 10 years of credited service. And that pension can replace a portion of your salary throughout your retirement.

Your NYSLRS pension will be based on your Final Average Salary (FAS) and the number of years you work in public service. FAS is the average of the five highest-paid consecutive years. For most members, those higher-paid years come at the end of their careers. Since retirement is still some years in the future for most of you, we won’t focus on the dollar amount of your FAS today. But we can look at what percentage of that salary would be replaced by your pension if you continue in the system until retirement age.

For Tier 6 members of the Employees’ Retirement System (ERS), the benefit is 1.66 percent of your FAS for each year you work, up to 20 years. (Benefit calculations for members of the Police and Fire Retirement System vary based on plan.) At 20 years, the benefit equals 1.75 percent per year (for a total of 35 percent). After 20 years, the benefit grows by 2 percent per year.

Financial advisers say you will need to replace between 70 to 80 percent of your salary to maintain your lifestyle during retirement. Let’s see how we can get there.
Tier 6 Salary Replacement
NYSLRS Pension: Say you begin your career at age 30 and work until your full retirement age of 63. That’s 33 years of Service Credit. You’ll get 35 percent of your FAS for the first 20 years, plus 26 percent for the last 13 years, for a total benefit that would replace 61 percent of your salary. If you started at age 25, and continue till 63, you’d get 71 percent of your FAS. If you didn’t start till age 35, you’d still get 51 percent at 63.

Social Security: You also should factor in Social Security. We know, you may have heard that Social Security might not be there for you, but the situation isn’t that dire. According to the Social Security Administration, under current law, payroll taxes will cover about 79 percent of benefits by 2034. Social Security now replaces about 36 percent of the wages of a typical worker who retires at full retirement age. So even if benefits take a hit – and that’s a big IF – Social Security might still replace around 25 to 30 percent of a typical worker’s pay.

Savings: Retirement savings can also replace a portion of your income. How much, of course, depends on how much you save. The key is to start saving early so your money has time to grow. If you haven’t already looked into the New York State Deferred Compensation Program, please consider doing so now.

Retirement Fund Enjoys Strong Investment Returns

The New York State Common Retirement Fund (Fund) earned an estimated 11.42 percent on investments during the State fiscal year ending March 31, 2017, exceeding the long-term expected rate of return of 7 percent. The Fund ended the year with an estimated value of $192 billion.

Comptroller Thomas P. DiNapoli, Trustee of the Fund, credited the growth to a diversified investment strategy and strong returns on investments, particularly in the fourth quarter. Domestic and non-U.S. equities (stocks) performed particularly well, with an overall return of 17 percent. The return on real estate investments was nearly 11 percent. All returns are estimates, pending audited data that will be available later this year.

NYS Common Retirement Fund return on investments Fiscal Year 2017

The financial soundness of the New York State and Local Retirement System (NYSLRS) has been confirmed by two independent studies. A report by S&P Global Ratings ranked NYSLRS as the third best funded state pension system in the country for 2015. Only South Dakota and Wisconsin ranked higher. A study by the Pew Charitable Trusts also showed NYSLRS in the top three nationwide.

The Fund is the third-largest public pension fund in the country. NYSLRS provides retirement security to more than one million active state and local government employees, retirees and their beneficiaries. During the fiscal year that ended March 31, 2016, NYSLRS paid out $10.9 billion in retirement and death benefits. More than $8.6 billion was paid to residents of New York State, which generated local spending and provided economic support New York businesses and communities.

Women and Retirement

Saving for retirement is important for everyone, but it’s especially important for women. Women tend to live longer than men, but they may not spend as many years in the workforce and they may not earn as much. Because of this, women tend to lag behind men when it comes to retirement savings.

On average, a 65-year-old man can expect to live to be about 83, while a 65-year-old woman can expect to live to nearly 86, according to data from the Social Security Administration. That means a woman’s savings need to stretch that much further. But in a survey released in March by the Transamerica Center for Retirement Studies, women reported far lower retirement savings than men. The median savings for women was only $34,000, compared with $115,000 for men.

Women and Retirement

The survey also found that the percentage of women who had no retirement savings was higher than the percentage for men. Women also tended to be less confident about their ability to retire in comfort, according to the survey of over 4,000 U.S. workers.

Here are some things you can do to make sure you’re on track:

  • Start saving for retirement, if you haven’t already. Make regular, consistent additions to your savings.
  • If you’re already saving, increase the amount you save. Even a small increase will make a difference over time. (Try adding 1 percent of your salary, then bump it up next time you get a raise.)
  • Educate yourself about retirement savings and investments.
  • Learn more about your NYSLRS retirement benefits. There is a lot of good information in your Member Annual Statement. You may also wish to read the NYSLRS publication How Do I Prepare to Retire?
  • Learn more about your Social Security
  • If you are close to retirement, make a retirement budget.
  • Talk to a financial adviser.
  • Make a retirement plan. Write it down. And revisit it periodically.

A defined benefit plan, such as the NYSLRS retirement benefit, provides a monthly pension payment for life. But, savings are still important as a supplement to a pension and Social Security, a hedge against inflation and a resource in an emergency.

 

Choosing Your Pension Payment Option

When you retire from NYSLRS, you’ll need to decide how you want to receive your pension benefit.

You’ll have several options. All of them provide a monthly benefit for life. Some also provide a limited benefit for one or more beneficiaries after you die. Others let you pass on a monthly lifetime pension to a single beneficiary. Each option pays a different amount, depending on your age at retirement, your beneficiary’s age and other factors.

Pension Payment Option

That’s a lot to think about, so let’s make this clearer with an example. Meet Jane. Jane plans to retire at age 60, and she has a husband, a granddaughter and a grandson who are financially dependent on her. First, Jane needs to decide whether she wants to leave a benefit to someone after she dies. She does.

That eliminates the Single-Life Allowance option. While it pays the highest monthly benefit, all payments stop when you die.

Jane considers naming her grandchildren as beneficiaries to help pay for their college education.

The Five Year Certain and Ten Year Certain options don’t reduce her pension much, and they allow her to name more than one beneficiary. If Jane dies within five or ten years of retirement, her grandkids would split her normal benefit amount for the rest of that period.

However, the Five and Ten Year options wouldn’t be lifetime benefits. Since her husband doesn’t have his own pension, she’ll leave him her pension and look into a tax-deferred college savings plan for her grandkids instead.

There are a few options that leave a lifetime benefit:

The Joint Allowance — Full and Joint Allowance — Half options continue paying all or half of the retiree’s normal benefit amount to the beneficiary for life.

The Pop-Up/Joint Allowance — Full and Pop-Up/Joint Allowance — Half options also continue the retiree’s normal benefit. They reduce the pension a little more, but they have an advantage: If a retiree outlives his or her beneficiary, the retiree’s monthly payment will “pop up” to the maximum payable under the Single-Life Allowance option.

As you plan for your own retirement, you may also want to consider questions, like:

  • Do you qualify for a death benefit?
  • Do you have life insurance?
  • Do you have a mortgage or unpaid loans that will have to be paid if you die?

These and other factors can significantly impact your retirement planning.

To find out more about pension payment options, check your retirement plan booklet on our Publications page. You can also try our Benefit Calculator, which allows most members to estimate their benefits under the different payment options. For tips on developing a financial strategy that works for you, take a look through Straight Talk about Financial Planning for Your Retirement.