Tag Archives: FAS

Welcome New Members

Welcome to new members of the New York State and Local Retirement System (NYSLRS).

NYSLRS is here to help you plan for a financially secure retirement. Your retirement may be far in the future, but decisions you make now will have a big impact on your later years. Here are a few things you should know:

How Pensions Work

A NYSLRS pension is a defined benefit plan. Under this type of plan, once you are eligible for a pension and apply for retirement, you will receive a monthly payment for your lifetime. Your pension benefits are determined by a preset formula set by law. However, many employees in the United States, particularly in the private sector, are enrolled in 401(k)-style plans. The ultimate value of a 401(k) plan is based on the contributions made and investment returns. While 401(k) plans and other individual retirement accounts are a way to supplement your pension and Social Security payments, they do not provide the same level of security as defined benefit plans. Unlike your pension, these plans do not guarantee a lifetime benefit. Learn more about how pensions work.

New Members Checklist

Service Credit

Your NYSLRS pension will be based on factors such as your tier, retirement plan, age at retirement, final average salary, and service credit. One year of full-time employment with a participating employer is equal to a one year of service credit. Part-time employment is prorated. You may also be able to buy service credit for previous public employment or military service, which in most cases would increase your pension.

Start Saving Now

Because having a defined benefit pension plan is only one part of building a financially secure future, it’s essential that you save additional money for retirement. State workers and employees of participating local governments can take advantage of the New York State Deferred Compensation Plan. You can start by having as little as $10 deducted from each paycheck. You may choose how your money will be invested from a variety of options. Because of how compound interest works, the earlier you start saving, the better off you’ll be.

More Information

You’ll find more information in our booklet Membership in a Nutshell. We also publish booklets about specific retirement plans. If you know which system you’re in (Employees’ Retirement System or Police and Fire Retirement System) and your tier, you should be able to find your plan. If you are not sure what plan you’re in, ask your employer.

Overtime Limits for Tier 5 and 6 Members

The exact formula used in calculating your NYSLRS pension varies by tier and plan, but your credited service and final average salary (FAS) are the core variables. You earn service credit for paid service with participating employers and you also may claim it for some previous public service. FAS is the average wage you earned during the time period when your earnings were highest (36 consecutive months for Tier 5 and 60 consecutive months for Tier 6).

Your FAS can include overtime pay that you earned during the FAS period. However, for Tier 5 and 6 members, there are limits to how much overtime can be used to calculate your pension.

Members and employers aren’t required to make contributions on overtime pay above the limit, and your employer shouldn’t report overtime above the ceiling to us. While you can earn overtime beyond the limit, anything over will not count toward your FAS or your retirement benefit.

Tier 5 Overtime Limits

For Tier 5 Employees’ Retirement System (ERS) members, the limit changes each calendar year. The overtime ceiling for Tier 5 increases each calendar year by 3 percent. This year, the overtime ceiling for Tier 5 ERS members is $18,448.11. In 2018, it will be $19,001.55. For Police and Fire Retirement System (PFRS) members, the overtime limit is 15 percent of your regular earnings each calendar year.

Tier 5 & 6 Overtime Limits

Tier 6 Overtime Limits

For Tier 6 ERS members, the cap follows the fiscal year (April 1 through March 31), not the calendar year. For 2016-2017, the limit is $15,721. Come April that will increase to $16,048. The limit is adjusted for inflation based on the annual Consumer Price Index (CPI). The overtime ceiling for Tier 6 PFRS members is 15 percent of your regular earnings each calendar year.

Find more information about the overtime limit, FAS and retirement calculations in your plan booklet, available on our Publications page.

NYSLRS’ Top Five Retirement Myths from 2016

Retirement Myths vs FactsWith two retirement systems, six tiers and 346 retirement plan combinations, it’s quite possible that the NYSLRS benefit information your coworker is talking about may not apply to you. That’s why, periodically, we like to clear up some common misconceptions we hear from members and retirees. Here are our top five retirement myths from 2016.


Myth #1  “NYSLRS can change the rules determining pension contributions and retirement benefits.

Fact  We can’t. The contributions you make and the benefits you enjoy are dictated by law — as passed by the Legislature and signed by the Governor. NYSLRS administers these programs.

This is also true for retirement incentives; the decision to offer an incentive comes from the Legislature and the Governor. Individual employers, like your town or police department, may decide to offer their own incentives to employees, but these do not affect a member’s NYSLRS pension benefits.


Myth #2  “Your final average salary (FAS) is based on the years immediately preceding your retirement

Fact  While the number of years used to calculate your FAS varies by tier and plan, they aren’t limited to your final years of employment. We look at your entire employment history while you were a member of NYSLRS to find the consecutive years when you earned the most, and those years are used in the calculation for your FAS. For more information, visit our website.


Myth #3  “NYSLRS membership ends when you stop working for a NYSLRS participating employer.

Fact  Even when you leave public employment before you’re eligible to retire, you’re still a NYSLRS member. If you’re vested, you will be eligible for a pension benefit once you reach the retirement age specified by your plan. If you’re not vested, your contributions stay with NYSLRS and continue to earn 5 percent interest for seven years. If you leave public employment with less than 10 years of service, you can end your NYSLRS membership and request a refund of your retirement contributions.

What else happens when you leave public employment? Check out your plan publication to learn more about your benefits. You can also visit our website for more information.


Myth #4  “You can’t make extra payments to pay off a NYSLRS loan faster.

Fact  You can make additional payments or pay your loan in full at any time, with no prepayment penalties. For the payoff balance on your loan, call our automated phone service (1-866-805-0990 or 518-474-7736 in the Albany, New York area and press 3 for members; then 1 or 2 for the Employees’ Retirement System or the Police and Fire Retirement System; and then 1 for loan services). For more information, visit Loans: Getting One and Paying it Back.


Myth #5  “If Call Center lines are busy, there’s no way to get benefit information.

Fact  Even when the Call Center phone lines are busy, our automated phone system can help members and retirees with a number of tasks 24 hours a day, seven days a week.

Press 3 for Member Services, which includes current loan balance and application status information.

Press 4 for Retiree/Beneficiary Services, which includes COLA eligibility and federal tax withholding information.

Press 6 for Other Services, which includes requesting forms by fax.

Another way to get benefit information is to visit the Contact Us page on our website, which has answers to many commonly asked questions. You can also email us using our secure email form.


Avoid the myths — get the latest news about NYSLRS, your benefits and preparing for retirement with ENews, our monthly email newsletter. Sign up today, and recommend E-News to a friend.

Tier 3 & 4 Members: When Is The Right Time To Retire?

Tier 3 and 4 members qualify for retirement benefits after they’ve earned five years of credited service. Once you’re vested, you have a right to a NYSLRS retirement benefit — even if you leave public employment. Though guaranteed, the size of that benefit can vary.

Three Reasons to Keep Working

  1. Age 55 is the earliest that Tier 3 and 4 members can claim their benefits. However, unless you have 30 years of service, a significant penalty for such an early retirement is imposed — a 27-percent reduction. The longer you wait to retire, the greater your benefit will be. At age 62, you can retire with your full benefits.
  2. Your final average salary (FAS) is a significant factor in the calculation of your pension benefit. Since working longer usually means a higher FAS, continued public employment can increase your pension.
  3. The other part of your retirement calculation is your service credit. More service credit obviously earns you a larger pension benefit, but after 20 years, it also gets you a better pension formula. For Tier 3 and 4 members, the formula for the first 20 years is FAS × 1.66% × years of service; between 20 and 30 years, the formula becomes FAS × 2.00% × years of service.

When is the Right Time to Retire?

If You’re Not Working, Here’s Something to Consider

Everyone’s situation is unique. For example, if you’re vested, you no longer work for a public employer and you don’t think you will again, retiring at 55 might make sense. When you do the math, full benefits at age 62 will take 19 years to match the money you’d have received retiring at age 55 — even with the reduction.

Tools To Help Make Your Decision

Here are two ways to decide what makes sense for you:

  1. Our online retirement benefit calculator allows most members to estimate their benefit with different retirement dates, FAS and service credit totals. By changing each variable, you can see the impact it may have on your benefit.
  2. If you’re a Tier 3 or 4 member with five or more years of service credit, you can request an estimate based on your actual salary and service reported to date. If you’re age 50 or older, we can include additional, projected service credit based on a date of retirement up to five years in the future.

To request your estimate, contact our Call Center toll-free at 1-866-805-0990 or 518-474-7736 in the Albany, New York area. You can also send us a Request for Estimate (RS6030) form.

This post has focused on Tier 3 and 4 members. To see how early retirement affects members in other tiers, visit our About Benefit Reductions page.

What to Know About ERS Tier 6

Employees’ Retirement System (ERS) members who join NYSLRS on or after April 1, 2012 are in Tier 6. There are currently 129,359 ERS Tier 6 members who make up 21.1 percent of ERS membership.

ERS Tier 6 Membership Milestones

ERS Tier 6 members need 10 years of service credit to be vested. That means they are eligible to receive a service retirement benefit as early as age 55. The full retirement benefit age is 63, but they can retire between 55 and 63, with a reduced benefit. Tier 6 correction officers, however, can retire with 25 years of service, regardless of age.
ERS Tier 6 benefits

The Final Average Salary (FAS) Calculation

A member’s final average salary is the average of the wages earned in the five highest consecutive years of employment. For ERS Tier 6 members, each year’s compensation used in the final average salary calculation is limited to no more than 10 percent above the average of the previous four years.

Tier 6 Service Retirement Benefit

Generally, the benefit is 1.66 percent of their final average salary for each year of service if the member retires with less than 20 years. If a member retires with 20 years of service, the benefit is 1.75 percent of their final average salary for each year of service, or 35 percent.

If a member retires with more than 20 years of service, they receive 35 percent for the first 20 years, plus 2 percent of their final average salary for each year of service over 20 years.

If you’re an ERS Tier 6 member, you can find out more about your benefits by reading one of the plan publications listed below:

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.

ERS Tiers 1 and 2: The New Career Plan

Did you become a member of the Employees’ Retirement System (ERS) before July 1, 1973? If you’re still working in public service, you’re one of the 3,508 active members in Tier 1. If you joined after July 1, 1973 but before July 27, 1976, then you’re one of 4,127 active members in Tier 2.

Most ERS Tier 1 and Tier 2 members are in the New Career Plan (Section 75-h or 75-i). Currently, 96 percent of active Tier 1 members and almost 95 percent of active Tier 2 members are covered by this plan. Here’s a quick look at the benefits in the New Career Plan:

Benefit Eligibility

Tier 1

  • Members must be at least age 55 to be eligible to collect a retirement benefit.
  • There are no minimum service requirements — they may collect full benefits at age 55.

New Career Plan — ERS Tier 1

Tier 2

  • Members must have five years of service and be at least age 55 to be eligible to collect a retirement benefit.
  • The full benefit age is 62.
  • Almost 95 percent of active Tier 2 members are covered by the New Career Plan (Section 75-h or 75-i).

New Career Plan — ERS Tier 2

Final Average Salary

Final average salary (FAS) is the average of the wages earned in the three highest consecutive years of employment. For Tier 1 members who joined NYSLRS June 17, 1971 or later, each year used in the FAS calculation is limited to no more than 20 percent above the previous year’s earnings. For Tier 2 members, each year of earnings is limited to no more than 20 percent above the average of the previous two years’ earnings.

Benefit Calculations

  • For Tier 1 and 2 members, the benefit is 1.66 percent of the FAS for each year of service if the member retires with less than 20 years. If the member retires with 20 or more years of service, the benefit is 2 percent of the FAS for each year of service.
  • Tier 1 members and Tier 2 members with 30 or more years of service can retire as early as age 55 with no reduction in benefits.
  • Both Tier 1 and Tier 2 members who worked continuously from April 1, 1999 through October 1, 2000 receive an extra month of service credit for each year of credited service they have at retirement, up to a maximum of 24 additional months.

If you have questions about the New Career Plan, please read the Tier 1 plan publication or the Tier 2 plan publication. You can find other plan publications on our website.

Overtime and Limits for Tier 5 and 6 Members

We base your NYSLRS pension on your years of credited service and your final average salary (FAS). FAS is the average of the wages you earned during 36 consecutive months (60 consecutive months for Tier 6 members) when your earnings were highest. The calculation of your FAS can include overtime pay that you’ve earned during the FAS period.

Tier 5 and Tier 6 members have limits on how much overtime can be included in their FAS calculation. Overtime pay that exceeds these limits cannot be used in a Tier 5 or 6 member’s FAS calculation.  Therefore, members and employers are not required to make pension contributions on overtime pay that exceeds the annual limit.

Your employer should not report any overtime pay in excess of this cap to NYSLRS as it cannot be used in a member’s final average salary calculation. Each year, NYSLRS publishes the maximum overtime pay that should be reported and reminds employers not to report overtime earnings that exceed the limit.

Tier 5 Overtime Limits

The overtime limit for Tier 5 began in 2010 at $15,000 and increases each calendar year by three percent. This year, the overtime limit for ERS Tier 5 members is $17,910.78. In 2017, the overtime limit for ERS Tier 5 members will be $18,448.11. For PFRS Tier 5 members, overtime is limited to 15 percent of a member’s regular earnings.

Tier 5 & 6 overtime limits

Tier 6 Overtime Limits

For ERS Tier 6 members, the overtime limit is based on the State’s fiscal year (April 1 – March 31). From April 1, 2015 – March 31, 2016, the overtime limit for ERS Tier 6 members is $15,608. From April 1, 2016 – March 31, 2017, that limit will increase to $15,721. The fiscal year limit is adjusted for inflation based on the annual Consumer Price Index (CPI). The overtime limit for PFRS Tier 6 members is limited to 15 percent of a member’s regular earnings.

Please visit our website if you have questions about Tier 5 overtime limits or Tier 6 overtime limits.

NYSLRS Basics: Understanding Your Final Average Salary

As a NYSLRS member, you have a defined benefit pension plan. With a defined benefit plan, you’ll receive a lifetime pension benefit based on a formula set by law that uses service credit and final average salary as part of the pension calculation. You’re probably familiar with service credit – it’s the years of service you earn while working with a participating employer. But what is a final average salary?

When we calculate your pension, we look at a specific set of years when your earnings were highest. We take the average of these earnings to create your final average salary. For most members, your final average salary is based on the years just before you retire. However, the years of earnings we use to calculate your final average salary may not match up to a calendar year or the New York fiscal year. For the purposes of calculating your final average salary, each “year” represents earnings during a time that equals one full-time year of service credit.

Types of Final Average Salary

Your tier and plan determines how we calculate your final average salary:NYSLRS Basics: Understanding your Final Average Salary

  • Three-Year Final Average Salary: for all members in Tier 1, 2, 3, 4, and 5.
  • Five-Year Final Average Salary: for all members in Tier 6.
  • One-Year Final Average Salary: only for members in the Police and Fire Retirement System (PFRS). This benefit must be adopted by your employer. It’s not available to PFRS members covered by Article 14 and generally not available to PFRS Tier 6 members.

Find out more about how the final average salary is calculated and the limits for each membership tier on our website.

Want to read more NYSLRS Basics? Check out our posts on when you can retire and choosing your pension payment option.

NYSLRS Basics: Pension Payment Options

When you retire, you need to decide how we’ll pay out your retirement benefit. You do that by choosing a pension payment option. Each payment option provides you with a monthly benefit for life. Nine of our payment options let you receive a smaller benefit so you can provide for a beneficiary when you die. There is also an option that pays you the largest amount of your benefit, but pays nothing to a beneficiary.

Read the full descriptions of our payment options on our website.

Payment options

Filing Your Option Election Form

When you’ve decided which payment option you’d like, you need to file an option election form. You must file before the first day of the month following your retirement date. If you file on time, you have 30 days before you receive your first benefit payment to change your payment option. If you miss this deadline, we’re required by law to process your benefit based on the basic retirement benefit listed in your plan. (The Single Life Allowance (Option 0) is the basic retirement benefit for some plans, while the Cash Refund — Contributions (Option ½) is the basic retirement benefit for others. Check your retirement plan publication to see what your options are.)

What To Consider When Choosing A Payment Option

Choosing your payment option is a big decision. Once the 30-day deadline has passed, you can’t change your payment option. Here are some questions to ask yourself:

  • Do you want a payment made to one or more beneficiaries after your death?
  • Do you know about your beneficiary’s future income in retirement? Will your beneficiary receive their own pension? How much will they receive from Social Security benefits or other retirement savings accounts?
  • Do you have life insurance coverage? Life insurance payments could help your beneficiary make ends meet.
  • What are your financial obligations? Will your beneficiary have enough income to cover expenses if you die?

The answers to these questions can help you decide which option meets your needs. If you have any questions, email us from our website.

Would you like to read more NYSLRS Basics posts? Check out our earlier post on when you can retire.