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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.

Stopping Pension Fraud

Stopping Pension Fraud is a top priority of Comptroller Thomas P. DiNapoliSince taking office, New York State Comptroller Thomas P. DiNapoli has battled public corruption. One of his top priorities is to protect the New York State and Local Retirement System (NYSLRS) from pension scammers.

Under the direction of Comptroller DiNapoli, NYSLRS has put in place a system of safeguards designed to prevent and identify potential incidents of pension fraud. One such safeguard uses data analytics to uncover and stop improper payments.

Post-Retirement Employment Violations

Our investigative efforts include a focus on post-retirement employment. New York State law restricts the amount of money public sector retirees can earn if they return to public service employment after retirement. The law permits public sector retirees under the age of 65 to earn up to $30,000 per year from public employment before their pension benefits are suspended.

As of this March, our review of post-retirement employment cases have uncovered more than $700,000 in benefit payments subject to recovery. For example, a former Newburgh City Fire Chief, who double-dipped by collecting $95,000 in pension payments while still working as fire chief, was federally convicted.

The “Muscle” in the Pension Fraud Fight

In some cases, the pension fraud NYSLRS uncovers gets referred to Comptroller DiNapoli’s wider umbrella program to root out public corruption and fraud involving public funds. The Comptroller’s aggressive initiative included partnering with federal, state and local prosecutors and law enforcement statewide, including DiNapoli’s groundbreaking “Operation Integrity” task force with Attorney General Schneiderman. To date, Comptroller DiNapoli’s various partnerships have garnered more than 130 arrests and $30 million in ordered recoveries.

NYSLRS’ partnership with DiNapoli’s “Operation Integrity” has resulted in the investigation, prosecution and recovery of stolen pension payments, exposing $2.75 million in pension fraud in recent years.

Here are some recent cases where pension scammers have been thwarted:

Comptroller DiNapoli and NYSLRS will not tolerate pension fraud. These arrests and convictions serve as warnings to those who might steal pension benefits: if you think you can steal the hard-earned benefits of NYSLRS members and retirees, you are gravely mistaken. When fraud is identified, Comptroller DiNapoli will work with law enforcement to hold the pension scammers accountable. The clear message to anyone who tries to defraud our pension system is that you will be found, and you will pay.

If you suspect someone of pension fraud, call the Comptroller’s toll-free Fraud Hotline at 1-888-672-4555, file a complaint online at investigations@osc.state.ny.us, or mail a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

How NYSLRS Retirees Contribute to New York’s Economy

Public pensions play an important role in our state’s economic health. The pensions NYSLRS retirees earn flow back into their communities in the form of property and sales tax payments, and local purchases. When public retirees stay in New York, they help stimulate and grow local economies.

NYSLRS Retirees Who Call New York Home

As of March 31, 2016, there are 440,943 NYSLRS retirees and beneficiaries. Seventy-eight percent of them – 345,643 – continue to live in New York. Suffolk County is home to the largest number of NYSLRS retirees and beneficiaries. More than $1 billion in pension benefits went to the 33,290 individuals who live there. Erie County has the second largest number of benefit recipients (29,029), who received $701.5 million.

NYSLRS Retirees Contribute

The Economic Impact of NYSLRS Retirees

NYSLRS retirees are patrons of local business and services, and they pay state and local taxes. By spending their retirement income locally, they help fuel the economic engines of their communities. In fact, a study by the National Institute for Retirement Security (NIRS) found that state and local pensions in New York State supported 215,867 jobs, driving $35.3 billion in total economic output and $8.1 billion in federal, state, and local tax revenues.

New York mirrored the NIRS report’s results across the rest of America. Nationally, retiree spending of pension benefits in 2014 generated $1.2 trillion in total economic output, supporting some 7.1 million jobs across the U.S.

The NIRS report suggests that a stable and secure pension benefit that won’t run out enables retirees to pay for their basic needs like housing, food, medicine and clothing. It’s good for the economy when retirees are self-sufficient and regularly spend their pension income. They spend that money on goods and services in the local community. They purchase food, clothing, and medicine at local stores, pay housing costs, and may even make larger purchases like computer equipment or a car. These purchases combine to create a steady economic ripple effect. Retirees with inadequate 401(k) savings who might be fearful of running out of savings tend to hold back on spending. This reduced spending stunts economic growth, which already is predicted to drop by one-third as the U.S. population ages.

NYSLRS Retirees Pay Their Share of Taxes

NYSLRS retirees live throughout the different regions of New York, but they only make up 2.9 percent of the general population. In some cases, they pay a larger share of property taxes. For instance, in the Capital District, retirees make up 5 percent of the population yet they pay 8.7 percent of the property taxes, which totals $218 million. In the North Country, retirees make up 4.3 percent of the population and pay 6.8 percent of the property taxes ($55 million). 

Retirees Build a Strong New York

After a career in public service, NYSLRS retirees continue to contribute to their communities and the State. Their pensions are a sound investment in New York’s future. Public pensions don’t just benefit those who receive them, but they pay dividends to local businesses, support local communities, and create jobs. As the number of NYSLRS retirees grows, it’s likely they will continue to help build a strong New York.

What is the CAFR?

Last week, we published the latest Comprehensive Annual Financial Report (CAFR). This annual report gives a clear view about how both NYSLRS and the New York State Common Retirement Fund (Fund) are managed. This year’s CAFR covers our last State fiscal year, from April 1, 2015 through March 31, 2016.

The CAFR and Transparency

Each year when the CAFR is prepared, we strive to make sure the data is accurate, complete, and clear. For example, the financial section was prepared in keeping with accounting principles established by the Governmental Accounting Standards Board, and reporting requirements outlined by the Government Finance Officers Association of the United States and Canada. These principles set standards for financial accounting and reporting. By following them, we can see how we compare with other government entities using the same standards, ensure our data is consistent between accounting periods, and provide reliable financial statements to the public.

Comptroller DiNapoli is responsible for the Fund’s management. He ensures that investment policies and practices follow the highest levels of ethical conduct and transparency. The CAFR aids in transparency by providing historical data and extensive detail about the Fund’s audited assets, liabilities, investments, and transactions.

The CAFR provides many facts and figures about both NYSLRS and the Fund. Here are some statistics from the past fiscal year:

  • As of April 1, 2016, there were a total of 647,399 NYSLRS members; 612,294 in the Employees’ Retirement System (ERS) and 35,105 in the Police and Fire Retirement System (PFRS).
  • As of April 1, 2016, there were 440,943 NYSLRS retirees, 78 percent of whom live in New York.
  • As of April 1, 2016, there were a total of 3,040 participating NYSLRS employers.
  • The largest holdings in the Fund’s portfolio include:
    • Apple, Inc.
    • General Electric Company
    • AT&T, Inc.
    • Exxon Mobil Corp.
    • Microsoft Corp.
  • The Fund has invested approximately $9 billion with minority- and women-owned business enterprises since Comptroller DiNapoli took office in 2007.

This fact sheet (PDF) summarizes many other NYSLRS statistics you’ll find in the new CAFR. You can also find back issues of the CAFR on our website.

A Quick Look at the NYS Common Retirement Fund

Comptroller Thomas P. DiNapoli is the trustee of the Common Retirement Fund, which is the third largest public pension fund in the country. The Fund’s assets come from three main sources: member contributions, employer contributions, and investment returns. The Fund has two main goals:

  • Provide the means to pay benefits to NYSLRS’ participants; and
  • Minimize employer contributions through an investment program designed to protect and enhance the long-term value of the assets.

Over the last 20 years, 79 percent of benefits have been funded from investment returns. When you retire from NYSLRS, your monthly pension benefit—and the benefits of many others—will be drawn from this fund. Ethical management and a long-term, diversified investment strategy has made NYSLRS one of the best managed and funded plans in the nation.
Common Retirement Fund Assets

Strategic Long-Term Investments

The Fund’s investment program is designed to weather the ups and downs of an increasingly volatile global market. Our long-term target allocation for our investment portfolio is 22 percent in fixed income assets (bonds and Treasury Inflation Protected Securities [TIPS]) and 78 percent in equities, which includes:

  • Domestic and international public equities
  • Real estate
  • Real assets
  • Absolute return strategies
  • Mortgages
  • Private equity investments
  • Opportunistic funds

A diversified investment strategy helps us meet the funding needs for our current and future retirees while also helping to control risk.

The Fund is Well-Managed

An independent review of the Fund commended Comptroller DiNapoli and NYSLRS for strong policies and ethical management. By adhering to the highest standards of accountability and transparency, our members, retirees, and beneficiaries can be confident the Fund is being managed wisely.

NYSLRS Basics: Member Contributions

As a NYSLRS member, you may be making or have made contributions as part of your membership. When you make contributions, a percentage of your salary joins a pool of money called the Common Retirement Fund (the Fund). The Fund is also made up of employer contributions and investment income. By investing contributions, the Fund helps to meet its obligation of paying out benefits to past, present and future retirees.

What this means for you is that you, and other members like you, are all doing your part to fund your future retirement.

Types of Member Contributions

If you belong to a contributory retirement plan, you make required contributions. This means you must make contributions for the length of time listed in your retirement plan. Some members may contribute for only part or all their public service careers. If you belong to a non-contributory plan, this means you aren’t required to make contributions. Instead, you could make voluntary contributions over the course of your career, if your plan allows it. This would provide you with an annuity in addition to your pension when you retire.

(Check out the “Contributing Toward Your Retirement” section in your specific retirement plan publication to see what contributions you make.)

contributions-ers-pfrs-tiers-3-6

Withdrawing Your Member Contributions

What happens to your contributions if you leave public employment? One option is to take your contributions with you. If you have less than ten years of service credit or aren’t vested, you can withdraw your contributions plus the interest they’ve earned. However, withdrawing your contributions also terminates your membership with NYSLRS. Once your membership ends, you won’t be eligible for a retirement benefit.

Another option is to leave your contributions where they are. After all, if you leave public employment, there’s a chance you may return as well. If you do, then your contributions will be waiting for you when you rejoin NYSLRS. If you don’t return to public service, aren’t vested, and have been off the public payroll for seven years, by law we must terminate your membership. Any contributions left will stop accruing interest.

If you have ten or more years of service credit, you can’t withdraw your contributions from NYSLRS. In that situation, if you’re vested before you leave public employment, you can apply for a retirement benefit at a later date (age 55 for most members).

(Read our publication “What If I Leave Public Employment?” for more information, particularly the taxability of withdrawing your contributions.)

If you have questions, visit our website to learn more about member contributions. Want to read more NYSLRS Basics? Check out our earlier posts on:

The Common Retirement Fund: Invested In New York

As the third largest public pension fund in the country, the New York Common Retirement Fund (Fund) is in an excellent position to help strengthen the New York economy. One way it accomplishes this is by investing in New York businesses. Like all of the Fund’s investments, businesses are evaluated on their potential to earn a solid return for the Fund. Under New York State Comptroller Thomas P. DiNapoli’s direction, the Fund uses several programs to invest in New York businesses:

  • The In-State Private Equity Investment Program
  • The New York Business Development Corporation (NYBDC)
  • The New York Credit Small Business Investment Company (SBIC) Fund

By making money available through these programs, the Fund supports local businesses and creates jobs across the state.
The Fund—Invested in New York

The In-State Private Equity Investment Program

With the In-State Program, the Fund looks for companies in need of expansion capital. Businesses use the Fund’s investment to expand their operations and hire workers. The Fund has invested $820 million in over 300 New York businesses, with almost $325 million returned on exited investments. The companies in the In-State Program have also created or kept more than 4,500 jobs around the state.

The New York Business Development Corporation (NYBDC)

The Fund works with NYBDC to provide loans to small businesses in New York. These loans help small businesses buy property and equipment, expand, or start up. They also help create or retain almost 9,000 jobs each year. By borrowing from NYBDC, small businesses can receive lending terms that are often more favorable than other lending terms. Since the Fund partnered with NYBDC, they’ve loaned $362 million to 1,082 small businesses.

Invested in New York — Comptroller DiNapoli at Versa-Tel

Since teaming up with New York Business Development Corporation in 2007 to offer small business loans to returning military veterans, the New York State Common Retirement Fund has made nearly $1.5 million in loans to military veterans. On Veterans Day, Comptroller DiNapoli visited Versa-Tel, a veteran-owned telecommunications company based in Long Island, which received one of those loans.

The New York Credit Small Business Investment Company (SBIC) Fund

Last week, State Comptroller DiNapoli introduced a program that will make $200 million available for in-state investing. The SBIC fund offers credit financing to eligible New York companies, which provides another way to help smaller businesses expand their operations. The Fund is one of the first public funds to offer state-focused credit financing.

The Fund has New York’s best interests in mind by investing in local businesses and the result is two-fold: New York businesses receive the financing they need to succeed, and the Fund receives solid returns that get passed on to its members and retirees.

NYSLRS Retirees Help Power New York’s Economy

At the 2015 annual meeting of the Retired Public Employees Association of New York, State Comptroller Thomas P. DiNapoli told association members that “a public pension is not only good for you and your family, it’s good for New York State.” He added that “you are part of the economic engine in many of our communities.”

The administrator of the New York State & Local Retirement System (NYSLRS) and trustee of the New York State Common Retirement Fund, State Comptroller DiNapoli also noted that, of NYSLRS’ 430,308 retirees, 78 percent of them — 337,406 — have chosen to live in New York.

NYSLRS-Retirees-Build-a-Stronger-NY

Click for full-sized version (PDF)

This is important, the State Comptroller explained, because the pension money paid to retired state and local public employees’ flows directly back into our communities, stimulating and growing our local economies.

During calendar year 2014, NYSLRS retirees were responsible for $12 billion in economic activity in New York State.

NYSLRS Retirees Build a Stronger New York

NYSLRS pension benefit can provide security and peace of mind in retirement. What some retirees might not realize about their lifetime benefit is the effect it has on the local economy. During 2014 alone, NYSLRS retirees were responsible for $12 billion in economic activity in New York State. By buying local goods and services, NYSLRS retirees help existing companies grow, create opportunities for new businesses, and help foster an environment that helps companies create job opportunities.

NYSLRS Retirees in New York

Of the 430,308 current NYSLRS retirees and beneficiaries, 78 percent of them live in New York State. These retirees make up 2.8 percent of the general population, but their impact on the State economy is considerable:

  • Retiree Spending Creates Jobs, Supports Local Business. NYSLRS retirees spend a larger than average share of their income on industries that benefitted local businesses, such as health care, restaurants and entertainment. These industries can expect more growth in the coming decades with NYSLRS retirees as part of their customer base. As a result of this spending, NYSLRS retirees were also responsible for an estimated 60,400 jobs.
  • Retirees Pay Billions in Taxes. In 2014, NYSLRS retirees paid $1.6 billion in real property taxes, which is five percent of the total collected in New York. These taxes help support New York schools, roads and government services. Also, spending by NYSLRS retirees and beneficiaries generated an estimated $514 million in state and local sales tax.

After spending their careers working in State and local governments, the university system, public authorities and schools, NYSLRS retirees continue to help New York’s Main Streets grow and develop. The benefits of a NYSLRS pension aren’t just felt by retirees, but also by local businesses and communities. As the number of NYSLRS retirees continues to grow, the investment they make in communities across New York State will also continue to grow.

Tackling Retirement Security for Working Americans

retirement-security

Many Americans are lacking access to employer-sponsored retirement plans.

America is facing a retirement security crisis. The shift away from defined benefit (DB) pensions in favor of defined contribution (DC) plans is considered a common cause. The number of workers with a DB plan decreased pdf-icon (PDF) from 67 percent to 43 percent between 1989 and 1998, while those with a DC plan rose from 33 to 57 percent during that same time. The lack of access to any sort of employer-sponsored retirement plan is another factor: 43.3 million American workers didn’t have access to an employer-sponsored retirement plan in 2013.

The unfortunate truth, though, is that many Americans just aren’t prepared to retire.

A State Solution to the Retirement Crisis?

A few weeks ago, we mentioned how AARP NY called for a state-sponsored retirement savings program to address this problem. According to AARP NY, Americans are 15 times less likely to open a retirement savings plan on their own compared to if their employer offered one. Even more startling, about 3.6 million New Yorkers working in the private sector don’t have access to any kind of employer-sponsored retirement plan.

At the federal level, creating a DC plan with automatic enrollment has been unsuccessful. The president recently asked the Department of Labor to clarify how states can move forward with state-sponsored plans. This could help states manage how to enroll employees into a 401(k), providing workers a chance to start saving for retirement.

Pensions: A Major Part of Retirement Security

Workers will need more than their Social Security and personal savings for a secure retirement. This is where more employer-sponsored retirement plans can help workers. About two thirds of working age Americans aren’t taking part in a retirement plan pdf-icon (PDF) . But even though DC plans are now more common than DB plans, that doesn’t mean they’re the best answer to providing steady retirement income. A DB plan provides a steady source of income for the pensioner’s lifetime. There’s no guarantee a DC plan will provide a retiree with enough or any income during retirement. If too many workers retire without an employer-sponsored plan, they could face levels of poverty in retirement.