Tag Archives: retirement

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:

Where in New York are NYSLRS Retirees?

NYSLRS retirees tend to stay in New York, where their pensions are exempt from State and local income taxes. In fact, 78 percent of NYSLRS 452,455 retirees and beneficiaries lived in the State as of March 31, 2017. And half of them lived in just ten of New York’s 62 counties.

So where in New York do these retirees call home? Well, there are a lot of NYSLRS retirees and beneficiaries on Long Island. Suffolk and Nassau counties are home to more than 57,000 recipients of NYSLRS retirement benefits, with annual pension payments exceeding $1.8 billion. But that shouldn’t be surprising. Suffolk and Nassau counties are, respectively, the largest and third largest counties in the State outside of New York City.Erie County, which includes Buffalo, ranks No. 2 in the number of NYSLRS retirees, with nearly 30,000. Albany County, home to the State Capital, ranks fourth with more than 18,000. Monroe, Westchester, Onondaga, Saratoga, Dutchess and Orange counties round out the Top Ten.

This distribution is easy to understand. The Top Ten counties for retirees include nine of the ten most populous New York counties outside of New York City. (The City, which has its own retirement system for municipal employees, police and firefighters, has about 22,000 NYSLRS retirees and beneficiaries living in its five counties.)

All told, NYSLRS retirees received $5 billion in retirement benefits in the Top Ten counties, and $9.1 billion statewide.

Hamilton County had the fewest NYSLRS benefit recipients. But in this sparsely populated county in the heart of the Adirondacks, those 435 retirees represent nearly 10 percent of the county population. $8.6 million in retirement benefits were paid to NYSLRS retirees in Hamilton County during fiscal year 2016-2017.

Outside of New York, Florida remained the top choice for NYSLRS retirees, with more than 36,000 benefit recipients. North Carolina (8,693), New Jersey (7,466) and South Carolina (5,620) were also popular. There were 690 NYSLRS recipients living outside the United States as of March 31, 2017.

Age Milestones for Retirement Planning

Age Milestones for Retirement PlanningWhether you’re 22 or 52, you should be planning for retirement.

NYSLRS retirement benefits are based on tier status, years of service, and average salary. Age is also an important number, and not just the age when you plan to retire. Here are some age milestones to keep in mind while planning for your retirement.

Under 50: It’s never too early to start saving for retirement. Even modest savings can add up over time as investment returns grow and interest compounds.

50: The Age 50 and Over Catch-Up provision allows you to save more pre-tax dollars in a retirement account starting in the calendar year in which you turn 50.

55: The earliest age most NYSLRS members can retire. (Does not apply to members in special retirement plans.) Your pension may be permanently reduced if you retire at 55.

59½: The age you can draw down money from a tax-deferred retirement savings plan, such as an IRA, without facing a potential federal tax penalty. (The penalty does not apply to New York State Deferred Compensation savings if you are retired or have left public service.)

62: Full service retirement age for Tiers 2, 3, 4 and 5 and PFRS Tier 6. Earliest age you can begin collecting a Social Security pension, but the benefit would be reduced. For more information, read When to Start Receiving Retirement Benefits.

63: Full retirement age for ERS Tier 6 members.

65: Age most people are eligible for Medicare benefits.

66: Full Social Security retirement age if you were born from 1943 through 1954. Add two months for each year from 1955 through 1959.

67: Full Social Security age if you were born in 1960 or later.

70: If you do not take your Social Security benefit at full retirement age, your benefit will increase each year until you reach age 70. Delaying Social Security after 70 will not increase your benefit.

70½: If you have tax-deferred retirement savings and are no longer working, you must begin withdrawing some of this money after you turn 70½.

One Last Number: Having a rough idea of your life expectancy is essential to retirement planning.

For more information about retirement planning, read our publication Straight Talk About Financial Planning For Your Retirement.

Know Your Benefits: Disability Retirements

Many of us dream about retirement, but not one of us pictures leaving the workplace because we can’t perform our duties anymore. Yet the truth is debilitating medical conditions do happen. Though we hope you never have to use them, NYSLRS members have certain benefits available should you become permanently disabled from performing the duties of your job.

This post is an overview of common disability benefits and how to file for them. It is important to review your retirement plan booklet for specific benefit and eligibility information, and contact us with any questions you have, before you file an application.

Disability Retirements

Benefits

Most members are eligible for what’s called an ordinary disability retirement benefit. Usually, it provides whichever is greater:

  1. 66 percent of your final average salary (FAS) for each year of credited service; or
  2. 66 percent of your FAS for each year of credited service, plus 1.66 percent of your FAS for each year of service you might have earned before age 60, up to one-third of your FAS.

To qualify for an Article 15 disability retirement benefit, you must have at least ten years of credited service, unless your disability results from an accident you sustain on the job. If your disability results from an on-the-job accident, not due to your own willful negligence, there is no minimum service requirement.

Some members have plans that may provide an accidental disability retirement benefit. The benefit amount varies depending on your system (Employees Retirement System or Police and Fire Retirement System), tier and plan. It’s a lifetime benefit, but may be reduced by amounts received from workers’ compensation or Social Security. There is no minimum service requirement for an accidental disability retirement.

“Accident” has a special meaning when used in connection with Retirement System disability benefits. Whether an incident is an “accident” is determined on a case by case basis, using court decisions for guidance.

Members of the Police and Fire Retirement System as well as some members of the Employees Retirement System, such as sheriffs and correctional officers, may be entitled to a performance-of-duty disability benefit. The benefit amount and eligibility requirements vary depending on your system, tier and plan.

Filing

You, your employer, or someone you authorize may file a disability application on your behalf. If you think you might be eligible for a disability retirement, you may want to file your application sooner, rather than later, because there are strict filing deadlines that must be met. If you meet the requirements for a service retirement too, you can apply for both at the same time. If your disability application is approved, you will be able to choose which benefit you accept.

World Trade Center Presumption

If you participated in World Trade Center rescue, recovery or clean-up operations, you may be eligible to apply for a benefit under the World Trade Center Presumption Law. The deadline for members to file a notice with NYSLRS has been extended to September 11, 2018.

Resources/More Information

For specific benefit and eligibility information, be sure to read your retirement plan booklet on our Publications page. Also, check out our Disability Retirements page and our VO1802 Life Changes: Applying for Disability Retirement booklet. You can reach our Call Center by email using our secure contact form or toll-free at 1-866-805-0990 (518-474-7736 in the Albany, New York area).

Know Your Benefits: Leaving Public Employment

It may never come up, but, you should know what would happen with your NYSLRS membership and benefits if you ever leave public employment. Even if you no longer work for a New York public employer, you’d still be a NYSLRS member. Depending on your circumstances, that membership may come with certain benefits and responsibilities.

What Happens to My Contributions If I Leave Public Employment?

If you have less than ten years of service credit, you can end your membership and request a refund of your contributions by filing a Withdrawal Application (RS5014).

If you have not earned enough service credit to be vested (eligible for a retirement benefit) and don’t withdraw your contributions, they will continue to earn 5 percent interest for seven years. At that point, if you are still off the public payroll, by law, your membership ends automatically, and your contributions will be deposited into a non-interest-bearing account. (Your contributions are not automatically refunded.)

If you are vested, your contributions will remain on deposit with NYSLRS, and when you reach retirement age, you’ll be eligible to apply for a retirement benefit.

Leaving Public Employment

How Will Leaving Public Employment Affect My Death Benefits?

If you have at least ten years of service credit before you leave, 50 percent of your death benefit may still be payable when you die. With less than ten years of service credit, the 50 percent death benefit is only payable if you die within one year of leaving public service.

How Can I Pay Back My Outstanding Loans?

If you have an outstanding NYSLRS loan, you must still make payments directly to NYSLRS at least once every three months. You must repay your loan within five years of the date it was issued, or you will default on the loan. Defaulting on a loan may carry considerable tax consequences: You’ll need to pay ordinary income tax and possibly an additional 10 percent penalty on the taxable portion of the loan. Once you’ve left public employment, you aren’t eligible to take a NYSLRS loan.

How Can I Stay Informed About My Membership If I Leave Public Employment?

If you leave public employment, but haven’t ended your NYSLRS membership, you’ll still:

Beyond staying informed, you’ll need to keep your membership information up to date:

  • Keep your beneficiary information current, and
  • Let us know about any name or address changes (for either you or your beneficiaries).

Finally, it’s your responsibility to file an Application for Service Retirement (RS6037) when you are eligible to retire — we will not pay out a retirement benefit unless you apply for it.

For more information, read our Life Changes: What if I Leave Public Employment? (VO1800) publication.

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.

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.