Tag Archives: Tier 3

NYSLRS’ Membership by Tier

NYSLRS, comprised of the Employees’ Retirement System (ERS) and Police and Fire Retirement System (PFRS), had 652,324 members as of March 31, 2017. Our members are State, local government and school district employees from across New York, including 617,143 in ERS and 35,181 in PFRS. Eighty-one percent of our members are active, which means they were on a public payroll as of March 31.

As new public employees come on board and more Tier 3 and 4 members reach retirement age, Tier 6 is expected to represent the majority of NYSLRS members in a few years.

Tier 6 includes members who joined NYSLRS since April 1, 2012. In just five years, they’ve grown to more than 174,000 members, making up 26.7 percent of total membership.

Here’s a look at our membership by Tier, as of March 31:
NYSLRS' Membership
Tier 1: NYSLRS’ oldest tier, whose members first joined the system before July 1, 1973 (July 31 for PFRS members). Tier 1 now represents only one half of 1 percent of our membership. There are only 54 Tier 1 PFRS members remaining.

Tier 2: With 29,186 members, Tier 2 represents 4.5 percent of membership. More than 87 percent of Tier 2 members are in PFRS.

Tier 3&4: Tiers 3 and 4, which have similar retirement plans, represented nearly 90 percent of membership just seven years ago. The 392,699 Tier 3 and 4 members now make up 60 percent of the total. (Note: There is no Tier 4 in PFRS.)

Tier 5: Tier 5 covers members who joined in a period of a little over two years (January 2010 through March 2012). With 53,118 members, Tier 5 now represents 8.1 percent of membership.

Tier 6: This tier covers both ERS and PFRS members who joined since April 1, 2012. Its ranks have grown by nearly 29 percent over the past year.

Debt and Retirement

If you’re planning to retire in the near future, it’s a good idea to take inventory of the debts you owe. Why start your next life chapter burdened with debt and interest payments?

A high priority should be any loans you have taken from NYSLRS. You cannot pay off your loan after you retire. If you have an outstanding balance when you retire, it will permanently reduce your pension. For example, if a 60-year-old Tier 3 or 4 member of the Employees’ Retirement System retires this year owing $10,000, the annual reduction would be $560.50. And that reduction would continue even if the total reduction exceeds the amount owed. What’s more, at least part of the balance would be subject to federal taxes. Learn more about paying of a NYSLRS loan.
Debt and Retirement — How a NYSLRS Loan could affect your retirement
Another priority is paying off credit cards. The average American household with credit card debt owes more than $16,000 and pays about $1,300 a year in interest, according to a recent analysis of federal data.

Fortunately, getting a handle on your credit card debt has gotten easier. A recent federal law requires credit card statements to carry a “Minimum Payment Warning.” This tells you how long it will take, and how much it will cost, to pay off your balance if you only make minimum payments. It also tells you how much you need to pay each month to pay off the balance in three years.

If you have more than one credit card balance, most financial advisers recommend you pay as much as you can on the card with the highest interest. Pay at least the minimum, preferably more, on lower-interest cards until the high-interest card is paid off. But some advisers say it might be better to pay off the card with the smallest balance first. That will give you a sense of accomplishment, which could make the process seem less daunting.

Mortgage balances make up two-thirds of the $12.6 trillion in U.S. household debt. But should you strive to pay off your mortgage before you retire? Financial advisers differ on that question, so do your research to consider all the factors.

Read more about debt and retirement in our publication Straight Talk About Financial Planning For Your Retirement.