Tag Archives: know your benefits

Knowing Your Retirement Plan is the Key to Retirement Planning

Information is the key to being fully prepared for your retirement years. The single most important thing you can do to achieve this goal is to know what NYSLRS retirement plan you’re in. Once you know that, the next thing you must do is understand the benefits your plan provides.

Your retirement plan booklet covers things like how long you’ll need to work in order to receive a pension, how your pension amount is determined, and what kind of death and disability benefits may be available to you. You can find a copy of your plan booklet on our Publications page.

But here’s the challenge: NYSLRS manages 335 retirement plan combinations, which are described in 51 plan booklets. How do you figure out which is yours?  The information below should help.

Two Key Questions

To get started, you need to answer two questions.

Question One: Which retirement system are you in? NYSLRS is made up of two different systems:

  • The Employees’ Retirement System (ERS), which is for public employees in non-teaching positions. It also includes some law enforcement personnel, such as correction officers, sheriffs and sheriffs’ deputies.
  • The Police and Fire Retirement System (PFRS), which is for paid firefighters and police officers, including SUNY police, State Park police, Encon officers and State Forest Rangers

Question Two: Which tier are you in? There are six tiers in ERS and five tiers in PFRS. Your tier, based on when you joined NYSLRS, determines such things as when you become eligible for benefits and how much you contribute. You can find your Tier on page 2 of your Member Annual Statement (MAS) or you can check the NYSLRS website.

For many members, knowing your retirement system and tier are enough. But for other members, especially those in law enforcement, it may help to have your retirement plan number as well. The plan number indicates the section of Retirement and Social Security Law the plan is based on. For example, Plan A15 indicates that you are covered by Article 15. You can find your plan number on page 4 of your MAS, in the Salary Information section.
Member Annual Statement example

Roughly three-quarters of all ERS members are covered by Article 15; they just need to know their tier to find the correct booklet.

State police , SUNY police , State Encon Officers , State Park Police and Forest Rangers each have their own plan booklet, which can be found in the PFRS section of the Publications page. That’s also where you’ll find the Special 20- and 25-Year Plans , which cover officers in most municipal police departments. (Members in these special plans should see 384, 384-d or 384-e listed in the plan information in their MAS.)

If you are still unsure which retirement plan booklet covers your benefits, you can send us an email using our secure contact form , or you can ask your employer.

Retirement Plan Booklet

Take the Time to Understand Your Retirement Plan

It cannot be stated enough how important it is to read your plan publication to learn all you can about your benefits. It is the key to solid retirement planning. Remember, no one has a more vested stake in your retirement than you do.

Your Checklist to Apply for Retirement

After months of planning and preparation, you’re ready to apply for retirement. To get your NYSLRS  pension benefit, you need to send in an application. Let’s look at what you should include with the form to help make the retirement process go more smoothly.

Filling Out the Retirement Application

Unless you’re filing for a disability retirement, you’ll need to fill out the Application for Service Retirement (RS6037). As you fill out the form, make sure you:

  • Know your registration number. You can find it on your most recent Member Annual Statement or retirement estimate.
  • Know your past employment. To help ensure you receive the proper credit for your public service, please list your public employment history. Include any military service and memberships in other New York public retirement systems.
  • Include your beneficiary’s information. You won’t make an official beneficiary designation with this form, but including these details will help us give you specific amounts for the pension payment options  that offer a lifetime benefit for a beneficiary.
  • See a notary. The form must be filled out completely and signed by a notary public.

Proof of Birth

Make sure we have proof of your birth date. You can send it with your retirement application or before or after, but we cannot pay pension benefits without it. We accept photocopies of the following as proof:

Other Forms

Option Election

You’ll need to choose your pension payment option, or how you want your pension paid. Option election forms are available on our website, but we will also send you a form after we process your application. If you choose an option that provides your beneficiary a lifetime pension benefit when you die, you must provide proof of your beneficiary’s birth date.

Federal Income Tax Withholding

Your NYSLRS pension isn’t subject to New York State income tax, but it is subject to federal tax. You can fill out a W-4P form  any time to tell us how much to withhold from your monthly benefit. We don’t withhold income tax for other states. Visit the Retired Public Employees Association’s website to see whether your benefit will be taxed in another state.

Direct Deposit

Direct deposit is the fastest and most secure way to receive your pension benefits. You can enroll in our direct deposit program when you file for retirement. Just fill out a Direct Deposit Enrollment Application (RS6370), and return it to us.

Domestic Relations Order

If an ex-spouse is entitled to part of your pension, you should send us a copy of your domestic relations order (DRO) as soon as possible. The DRO gives us specific instructions on how to divide your benefits. We cannot finalize your pension until we review it and calculate the court-mandated distribution of your benefit. For more detailed information, please read our Guide to Domestic Relations Orders.

Questions

If you have other questions about applying for retirement, read our publication, Life Changes: How Do I Prepare to Retire? or contact us.

Know Your Benefits: Your NYSLRS Pension

Generally, three main components determine your NYSLRS pension: your retirement plan, your final average salary (FAS) and your total service credit.

Your Retirement Plan

NYSLRS retirement plans are established by law. Your plan lays out the formula we’ll use to calculate your pension as well as eligibility requirements. It’s important to read your plan booklet, which you can find on our Publications page.  If you aren’t certain what retirement plan you’re in, check your Member Annual Statement or ask your employer.

NYSLRS Pension Chart

Final Average Salary

Your FAS is the average of your earnings during the set period of time when they were the highest. For ERS and PFRS members in Tiers 1 through 5, that period is three consecutive years; for Tier 6 members, it’s five consecutive years. Some PFRS members may be eligible for a one-year period, if their employer offers it. We will use your FAS, age at retirement, total service credit and the formula from your retirement plan to calculate your NYSLRS pension.

Generally, the earnings we can use for your FAS include regular salary, overtime and recurring longevity payments earned within the period. Some payments you receive won’t count toward your FAS, even when you receive them in the FAS period. The specifics vary by tier, and are listed in your retirement plan booklet.

In most cases, the law also limits how much your pensionable earnings can increase from year to year in the FAS period. Earnings above this cap will not count toward your pension.

Our Your Retirement Benefits publications, (ERS and PFRS), provide the limits for each tier and examples of how we’ll determine your FAS.

Service Credit

Service credit is credit for time spent working for a participating public employer. For most members who work full-time, 260 workdays equals one year of service credit. Members who work part-time or in educational settings can refer to their retirement plan publication for their service credit calculation.

Service credit is a factor in the calculation of your NYSLRS pension. Generally, the more credit you have, the higher your pension will be. Some special plans (usually for police officers, firefighters or correction officers) let you retire at any age once you’ve earned 20 or 25 years of service credit. In other plans, if you retire without enough service credit and don’t meet the age requirements of your retirement plan, your pension will be reduced.

Planning Ahead for Your NYSLRS Pension

As you get closer to retirement age, keep an eye on your service credit and FAS. Make sure we have an accurate record of your public employment history. You can sign in to Retirement Online or check your latest Member Annual Statement to see the total amount of service credit you’ve earned. You may also want to take a look at our budgeting worksheet or try our Benefit Projector Calculator as you plan for your retirement.

If you have questions, or want to find out more information about what makes up your NYSLRS pension, please contact us.

Will Your Retirement Age Affect Your Benefit?

Only you can decide when it’s time to retire, but you should know that your age at retirement can affect your pension benefit. Some New York State and Local Retirement System (NYSLRS) members are in special plans that allow for retirement after a certain number of years, regardless of age (for example, police officers, firefighters, correction officers or sheriffs). But for most members, you can retire with full benefits at the age specified by your plan. Most members can choose to retire as early as age 55, but if you do, you may receive a permanently reduced pension benefit.

Full Retirement Ages

Most retirement plans have an age requirement to retire with full benefits. For Employees’ Retirement System (ERS) members in Tiers 2, 3, 4 and 5 and Police and Fire Retirement System (PFRS) members in Tiers 2, 3, 5 and 6, the full retirement age is 62. For ERS Tier 6 members, it’s 63. PFRS Tier 6 members who have left their PFRS employer are eligible for their benefits at age 63.

Service Credit Exceptions

In some retirement plans, members with a certain amount of service credit can retire at age 55 without being subject to benefit reductions. Benefit reductions don’t apply to ERS Tier 2, 3 or 4 members who have 30 or more years of service credit and Tier 2, 3, 4 and 5 Uniformed Court Officers and Peace Officers employed by the Unified Court System who have 30 or more years of service.

Benefit Reductions

Retirement benefits for all other ERS Tier 5 and Tier 6 members, and PFRS Tier 2, 3, 5 and 6 members not in a special 20- or 25-year plan, will be reduced for early retirement — even if they have 30 years of service credit.

These benefit reductions are prorated by month, so the closer you are to your full retirement age, the less the reduction will be. Once you retire with a reduced benefit, that reduction is permanent.

Here’s a look at how reductions break down by membership tier:

Contact us if you have any questions about benefit reductions or any other retirement-related topics. Please review your retirement plan booklet for a full description of the benefits you’re entitled to as well as any reductions and restrictions.

Divorce and Your Other Benefits

We’ve written here before about how divorce affects your NYSLRS pension, what a DRO is and why it’s required. However, NYSLRS members have other benefits besides their pensions. Divorce and DROs may affect some of them as well.

Ordinary Death Benefit

As with your pension, a DRO may direct you to designate your ex-spouse as a beneficiary for some portion of your ordinary death benefit. You should file the DRO with NYSLRS as soon as it’s officially accepted by the court.  We will prepare a custom beneficiary form that complies with the DRO.  Also be sure to choose additional beneficiaries for any remainder of the benefit and submit your changes to NYSLRS.

Post-Retirement Ordinary Death Benefit

Most Tier 2, 3, 4 or 5 members of the Employees Retirement System (ERS) are covered by a post-retirement ordinary death benefit. A DRO may direct you to designate your ex-spouse as a beneficiary for some portion of the benefit. Similarly, you should file the DRO with NYSLRS as soon as it’s officially accepted by the court, and be sure to contact us to choose additional beneficiaries as allowed by the DRO.

Loans

NYSLRS members who meet eligibility requirements can borrow a certain percentage of their contribution balance. DROs may be written to prohibit members from taking future loans.

Outstanding loan balances at retirement permanently reduce retirees’ pension benefits. As a result, unless a DRO specifically provides that the ex-spouse’s share of the pension be calculated without reference to outstanding loans, the ex-spouse’s portion will also be reduced if a NYSLRS loan is not paid off before retirement.

Refunds

Occasionally, NYSLRS may refund a member’s contributions because of a tier reinstatement, membership withdrawal, membership transfer or excess contributions. If the member is divorced and NYSLRS has a DRO on file, the DRO will determine whether a portion of the refund must go to the ex-spouse. Generally, if the DRO doesn’t mention a contributions refund, the member receives the full amount.

NOTE: A divorce, annulment or judicial separation revokes a member’s prior designation of a former spouse as beneficiary of certain death benefits and retirement options, except as provided by the express terms of the judgment or decree, or a DRO. So, if you have gone through a divorce, annulment or judicial separation and you do NOT have a DRO, and you wish to retain your former spouse as a beneficiary, you must resubmit your beneficiary designation to NYSLRS. The easiest way to do this is by using Retirement Online, our secure, self-service web application. You can also submit a Designation of Beneficiary form.

Can I Change My Beneficiary After I Retire?

That depends. Some beneficiary decisions are irrevocable, while others can be changed at any time.

Some options, such as Five Year and Ten Year Certain, allow you to change your beneficiary after you retire. But if you choose an option that provides a lifetime benefit to a survivor, you cannot change your beneficiary even if your beneficiary dies before you do. For details, visit the Payment Option Descriptions page on our website.

But there are other possible death benefits for which NYSLRS retirees can name beneficiaries. Available death benefits and eligibility requirements vary by tier and retirement plan. You can find your retirement plan information on our Publications page.

NYSLRS retirees may have up to three types of death benefits that could provide a benefit for a beneficiary: pension payment option, survivor's benefit, and post-retirement death benefit.

When you retire, you must choose a payment option for your NYSLRS pension. If your choice is Single Life Allowance, there is no pension beneficiary. But other payment options provide a reduced monthly benefit in exchange for a possible payment to a beneficiary after the retiree’s death.

If you were employed by New York State, you may be eligible for a survivor’s benefit of up to $3,000. You do not need to sign up for this benefit; you are automatically enrolled if you are eligible. If you choose a pension payment option with a beneficiary, that person will also be the beneficiary for your survivor’s benefit. If your beneficiary dies before you do, you may select someone else as beneficiary for the survivor’s benefit. If you choose the Single Life Allowance option, you must name a beneficiary for your survivor’s benefit, and you may change this designation at any time.

What about after Retirement?

You may also be eligible for a post-retirement death benefit, which would be a percentage of the death benefit that was payable at retirement. (This benefit is generally not available to Tier 1 members or members in special retirement plans that allow for retirement after 20 or 25 years of service, regardless of age.) The beneficiary of your post-retirement death benefit does not have to be the same as your pension payment-option beneficiary. And you can change the beneficiary designation for your death benefit at any time.

The easiest way to check and update your beneficiary information for the post-retirement death benefit is with Retirement Online. You can also change your beneficiary by submitting a Designation of Beneficiary (RS5127) form.

Divorced? Some things to consider

Please note: If you are divorced, you may be required to choose a retirement option that provides continuing benefits to your ex-spouse after your death. Also, the beneficiary designation for certain benefits, including the survivor’s benefit, can be revoked when a divorce becomes final. For more information, please read the publication Divorce and Your Benefits on our website.

Top Five Pre-Retirement Goals for NYSLRS Members in 2018

January is a great time to set goals for the coming year. And setting pre-retirement goals is crucial in planning for a successful retirement. Here are five goals to consider for 2018:

Plan ahead for retirement

1. Choose a sensible savings plan that works for you.There are several ways to save for retirement, including starting a deferred compensation plan like the New York State Deferred Compensation Plan. An important part of developing a savings plan is to start early. The sooner you start saving, the more time your money has to grow. Check out our Weekly Investment Plan chart to see how a weekly investment can grow by age 65.

2. Track your expenses and income. Tracking your current expenses for a month or two will give you a better idea of how much you’re likely to spend in retirement and how much you’ll need to supplement your pension. Use the expense and income worksheets on our website to create a retirement budget. Be sure to include periodic expenses, such as car insurance and property taxes.

3. Request a pension estimate. If you’re within 18 months of your anticipated retirement date, it’s a good idea to request an estimate of what your retirement benefit will be. You can do this by sending us an email using our secure contact form or by calling 1-866-805-0990 (518-474-7736 in the Albany, NY area). If you are not certain that you’ve received credit for all your public service in New York State, you can submit a Request for Estimate form (RS6030) and be sure to provide detailed information about your public employment in section eight of the form. If your planned retirement date is farther away, you may want to use our online Benefit Calculator. This estimates your pension based on information you provide, so have your Member Annual Statement handy before you start, or sign in to your Retirement Online account to check your current service credit.

4. Pay off any NYSLRS loans. An outstanding loan balance at retirement will permanently reduce your NYSLRS retirement benefit. You cannot make loan payments after you retire, and the pension reduction does not go away after we recover the balance of the loan. Visit the Loans page on our website for information about making additional payments or increasing your loan payment amount.

5. Consider seeking the advice of a financial planner. Financial planners don’t manage your money, but can help you assess your present financial condition and develop a practical plan to meet your specific goals and needs. Also consider doing your own research by seeking Do-It-Yourself financial planning guides on the web.

If you ever have any retirement-related questions, please contact us.

How To Keep Your NYSLRS Records Up-to-date

Whether you joined NYSLRS  recently or are preparing to retire, accurate records are essential. To make sure that your records are ready when you are, it’s important to check and update your NYSLRS account details. Here’s how:

  • Sign in to Retirement Online. It’s a convenient and secure way to review your records for personal details, contact information, designated beneficiaries and more. In many cases, you can use Retirement Online to make changes instead of sending forms through the mail or calling NYSLRS.
  • Review your Member Annual Statement (MAS). Each summer, your MAS offers an overview of your retirement account. Check it over carefully to make sure your date of birth, date of membership, service credit, earnings and other details are correct.

Be sure to contact us if you find any information that’s missing or incorrect. Get in touch right away:

  • When your mailing address changes. This is especially important if you leave public service before you’re eligible for retirement. With your correct address on file, we’ll be able to keep you informed about your benefits. The fastest and easiest way to update your address is to sign in to Retirement Online and make the change, or you can send us a completed Change of Address form (RS5512), though this process will take longer.
  • When you find a date-of-birth error. If your date of birth is wrong on any paperwork that we send you, we need to know. Please send us a photocopy of documentation showing your correct date of birth (such as a copy of your birth certificate). You can attach it to an email using our secure contact form, or write to our Member and Employer Services Bureau Registration Unit at 110 State Street, 5th Floor, Albany NY 12244-0001.
  • When you change your name. You can change your name in our records by submitting a Name Change Notice form (RS5483). If a court order was necessary for your name change, you’ll need to include a copy of the order.
  • When you want to select or change your beneficiaries. Sign in to Retirement Online and click Update My Beneficiaries. Retirement Online is the fastest way to get the job done. But, you can also complete a Designation of Beneficiary form (RS5127) and send it to us.

 

Popular Blog Posts of 2017

As we wrap up another year, let’s take a look back at the most popular New York Retirement News posts of 2017.

Happy New Year — Top Posts of 2017

  1. NYSLRS – One Tier at a Time: ERS Tiers 3 & 4
    When you join the New York State and Local Retirement System (NYSLRS), you’re assigned a tier based on the date of your membership. Members of Employees’ Retirement System (ERS) Tiers 3 and 4 represent nearly two-thirds of our membership, and their retirement plans are similar. Many are nearing retirement. This blog, part of a series, is an overview of ERS Tier 3 and 4 retirement benefits.
  1. Tier 3 & 4 Members: When Is The Right Time To Retire?
    If you’re in ERS Tier 3 or 4, you can retire as early as age 55. But working a few more years could have a big impact on the amount of your pension. Here are some factors to consider before you opt for an early retirement.
  1. $15 Billion in Lost Money. Could Some Of It Be Yours? Find Out.
    Is it possible you left money in an old bank account? Maybe you lost track of a security deposit, insurance payout, stock dividend or mutual fund? Could there be a distant relative who left bonds in your name?
  1. Taxes and Your NYSLRS Retirement Benefit
    Your NYSLRS retirement benefit isn’t subject to New York State or local income taxes, but it is subject to federal income tax. Before you retire, take some time to think about how taxes could affect your retirement planning.
  1. How Much Will My Pension Be?
    For anyone thinking about retirement, one big question looms: How much money will I have to live on after I stop working? Your NYSLRS pension is a lifetime benefit. Having a good idea of what that monthly amount will be is essential to effective retirement planning. Fortunately, we offer tools to help you estimate your future pension.

Retirement on the Horizon? Here Are a Few Things to Think About

Things to think aboutYou’re probably looking forward to the day when you file your application for a NYSLRS pension. But before you retire, there are a few questions you should ask yourself. After all, by filing for retirement, you’re making critical decisions about your financial future. And once you’ve retired, some of those decisions will be irrevocable. Whether your planned retirement date is just around the corner or a few years off, this checklist could help you avoid costly mistakes.

Do I have all the service credit I think I have?
Under some retirement plans, service milestones (20 years, 30 years, full retirement age) can have a big impact on the amount of your benefit. If you’re aiming for one of these milestones, but retire just short of reaching it, your pension will take a big hit. To make sure you have enough service credit on your planned retirement date, sign in to Retirement Online to see how much service credit you currently have. You can also file a Request for Estimate form or talk with an information representative at our Contact Center (1-866-805-0990 or 518-474-7736 in the Albany, New York area).

Do I have previous service credit I want to purchase?
You may be able to buy credit for previous public employment or military service, which in most cases would increase your pension. But you can’t purchase service credit after you retire. You can use the “Information about Your Public Employment” section of the Request for Estimate form to request credit for previous public and military service. Read our booklet, Service Credit for Tiers 2 through 6, for more information.

Do you have a balance on a NYSLRS loan?
You cannot pay off your NYSLRS loan after you retire. If you retire with an outstanding balance, your pension will be permanently reduced. You can check your loan balance with Retirement Online or through our automated phone system. Call the toll-free number (above), then press 3 for members, 1 or 2 for the Employees’ Retirement System or the Police and Fire Retirement System, and 1 for loan services. If your retirement is still a few years away, you can increase your payroll deductions or send in extra payments to pay off your loan.

Am I ready to retire?
Are you really ready? The fact that you can retire doesn’t necessarily mean you should. Am I financially prepared? Am I psychologically ready for retirement? These are questions you’ll have to answer for yourself, but there are resources available: