Retroactive Payments and Your NYSLRS Pension Benefit

Retroactive payments are lump sum payments you receive from your employer. These can be from newly negotiated union contracts, like the one ratified on December 14 by Public Employees Federation (PEF) union members. Retroactive payments can also be from arbitration awards or legal settlements.

Your final average salary (FAS) is a major factor in your pension benefit calculation. Your FAS is the average of your three (five for Tier 6 members) highest consecutive years of earnings. How do retroactive payments affect your final average salary?

How Retroactive Payments Can Affect Your Benefit

When we calculate your FAS at retirement, retroactive payments are applied to the pay periods when they were earned, not when they were paid. In general, retroactive payments can increase your FAS as long as the time period in which you earned that money is part of your FAS.

For example, state employees who are members of PEF received a retroactive payment this month for salary earned since April 1, 2016. If you are one of these PEF members, we would apply the lump sum payment over the time frame when it was earned (State fiscal year April 1, 2016 through March 31, 2017). If that State fiscal year falls within your highest three (five for Tier 6) consecutive years of earnings, the retroactive payment you received in March should increase your FAS.

Your employer should let us know if you receive a retroactive payment before or after you retire. If you are a State employee who received a PEF retroactive payment after you retired, we will recalculate your pension benefit amount automatically; you do not need to notify us. If you receive a retroactive payment from a non-state employer after your pension benefit calculation is finalized, send a letter to our Recalculation Unit in the Benefit Calculations & Disbursement Services Bureau. Please include a copy of your check stub and/or any correspondence you received from your employer. You may also email and upload this information to the Retirement System through our secure contact form.

For more information about FAS, read our Understanding Your Final Average Salary blog post. You can also find out specific information about your FAS by reading your retirement plan booklet, available on our Publications page.

8 thoughts on “Retroactive Payments and Your NYSLRS Pension Benefit

  1. Mitchell Bock

    i retired in Feb. 2016 There was a two percent raise that I am waiting for april 2015 to Feb 2016. When will this be adjusted for in my FAS. M Bock

    Reply
    1. NYSLRS

      For account-specific details (such as how long your pension recalculation might take), please email our customer service representatives using our secure email form. One of our representatives will review your account to address your questions. Filling out the secure form allows us to safely contact you about your personal account information. Please allow five to seven business days for a response.

      Reply
  2. Vee

    I retired May 2016, we were still under an old contract for the past 6 (now 7) years – so once this new contract goes into effect, you are saying I will get the retro money from these years? I hope so, that would be wonderful!

    Reply
    1. NYSLRS

      It depends on your contact and when you retired. Retroactive payment from newly negotiated union contracts come from your employer.

      The example used in this blog post is about employees who are in the Public Employees Federation (PEF) union. If you were a PEF member before you retired, you may have recently received a payment covering your earnings from April 1, 2016 through your date of retirement. Last summer, you may have received a retroactive payment covering your earnings from April 1, 2015 through March 31, 2016. For PEF members, pension NYSLRS benefits will automatically be recalculated if these retroactive payments will affect the pension amount.

      If you were not a member of PEF, please contact your union or your previous employer to find out if you are owed any retroactive money.

      Reply
  3. Noreen

    Does the retroactive pay also affect the amount of sick pay that accumulated and is used towards health insurance payment? I retired in August 2017, and the contract was settled for the period from April1, 2017.

    Reply
    1. NYSLRS

      Unfortunately, NYSLRS doesn’t administer health insurance programs for its members or retirees.

      If you retired from New York State, you may need to contact New York State Civil Service. You could also try contacting the health benefits administrator at the employer you retired from.

      Reply
    1. NYSLRS

      Possibly. The example used in this blog post is about employees who are in the Public Employees Federation (PEF) union. If you were a PEF member before you left State service, you may have recently received a retroactive payment covering your earnings from April 1, 2016, through your last date worked. Last summer, you may have received a payment covering your earnings from April 1, 2015, through March 31, 2016.

      If you retired last October and were a PEF member, NYSLRS will automatically recalculate your pension benefit if these retroactive payments will affect the pension amount.

      If you were not a member of PEF, please contact your union or your previous employer to find out whether you are owed any retroactive money.

      If you have questions about your NYSLRS account, we suggest you email one of our customer service representatives using our secure email form. They will be able to review your account to address your questions. Filling out the secure form allows us to safely contact you about your personal account information. Please allow five to seven business days for a response.

      Reply

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