Tag Archives: Vested

Tier 6 Benefits – A Closer Look

Tier 6 members (those who joined NYSLRS since April 1, 2012) are eligible for a lifetime pension benefit with 10 years of credited service. And that pension can replace a portion of your salary throughout your retirement.

Your NYSLRS pension will be based on your Final Average Salary (FAS) and the number of years you work in public service. FAS is the average of the five highest-paid consecutive years. For most members, those higher-paid years come at the end of their careers. Since retirement is still some years in the future for most of you, we won’t focus on the dollar amount of your FAS today. But we can look at what percentage of that salary would be replaced by your pension if you continue in the system until retirement age.

For Tier 6 members of the Employees’ Retirement System (ERS), the benefit is 1.66 percent of your FAS for each year you work, up to 20 years. (Benefit calculations for members of the Police and Fire Retirement System vary based on plan.) At 20 years, the benefit equals 1.75 percent per year (for a total of 35 percent). After 20 years, the benefit grows by 2 percent per year.

Financial advisers say you will need to replace between 70 to 80 percent of your salary to maintain your lifestyle during retirement. Let’s see how we can get there.
Tier 6 Salary Replacement
NYSLRS Pension: Say you begin your career at age 30 and work until your full retirement age of 63. That’s 33 years of Service Credit. You’ll get 35 percent of your FAS for the first 20 years, plus 26 percent for the last 13 years, for a total benefit that would replace 61 percent of your salary. If you started at age 25, and continue till 63, you’d get 71 percent of your FAS. If you didn’t start till age 35, you’d still get 51 percent at 63.

Social Security: You also should factor in Social Security. We know, you may have heard that Social Security might not be there for you, but the situation isn’t that dire. According to the Social Security Administration, under current law, payroll taxes will cover about 79 percent of benefits by 2034. Social Security now replaces about 36 percent of the wages of a typical worker who retires at full retirement age. So even if benefits take a hit – and that’s a big IF – Social Security might still replace around 25 to 30 percent of a typical worker’s pay.

Savings: Retirement savings can also replace a portion of your income. How much, of course, depends on how much you save. The key is to start saving early so your money has time to grow. If you haven’t already looked into the New York State Deferred Compensation Program, please consider doing so now.

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 When Leaving Public Employment

There may come a time when you leave public employment. Even though you’d no longer work for a New York public employer, you’d still be a NYSLRS member. If you ever leave public employment, you should be aware of the effect it could have on your membership and benefits.

What Happens to My Contributions If I Leave Public Employment?

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

If you are not vested (eligible for a retirement benefit) and do not withdraw your contributions, they will continue to earn 5 percent interest for seven years. After seven years, if you are still off the public payroll, your membership will automatically end and your contributions will be deposited into a non-interest-bearing account. Your contributions will not be automatically refunded.
Leave Public Employment

How Will Leaving Public Employment Affect My Death Benefits?

If you have at least ten years of service credit, 50 percent of your death benefit may still be payable if you die after leaving public employment. If you have less than ten years of service credit, the 50% death benefit is only available to you if you die within one year of leaving public service.

How Can I Pay Back My Outstanding Loans?

If you have any outstanding NYSLRS loans when you leave the public payroll, you must 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. Please note: since you will be required to pay ordinary income tax and possibly an additional 10 percent penalty on the taxable portion of the loan, defaulting on a loan carries considerable tax consequences.You also won’t be eligible to take a NYSLRS loan once you are off the public payroll.

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:

You’ll also need to keep your membership information updated. This includes information like:

Read our publication Life Changes: What if I Leave Public Employment? (VO1800) for more information.

Planning Around Your Retirement Date

Retirement is a big decision, and one important factor to plan for is the day you choose to retire. When you’re eligible and ready to retire, you can select any day as your retirement date. You can even choose a weekend or a holiday. Generally, your retirement date is the first day you don’t work. It could also be the first day you don’t get paid by your employer (for example, if you use accruals before your retirement date).

Another thing to keep in mind when choosing your retirement date is when you’ll receive your first benefit payment. Once we receive your retirement application, we begin the process of gathering service and salary information from your employer to come up with your final benefit amount. Most retirees are eligible to receive partial monthly pension payments while we work on calculating their final benefits.

Planning for your Retirement Date

Partial Payments

We base your partial payments on your most recent NYSLRS retirement estimate. These monthly payments provide 90 to 95 percent of what your final pension benefit amount is estimated to be. You’ll continue to receive partial payments until we finalize your benefit. Partial payments are mailed to the address we have on file for you.

This is where your retirement date comes in. The month you retire determines when partial payments will start, not the day. If you retire in March and are eligible to receive partial payments, your first partial payment would be mailed on the first business day of May. It doesn’t matter if your retirement date is March 1 or March 31: your payment will go out on the first business day of May. You can enroll in our Direct Deposit Program at the same time you file for retirement. As soon as we are able to, your payments will be directly deposited into your account.

Keep this in mind before you settle on a date. You may need to set some money aside, as it could be five to eight weeks before your first partial payment arrives. Many retirees retire on the last day of a pay period (so final payment information is available from their employer sooner) toward the end of the month to minimize the number of weeks before they receive their first partial payment.

Filing for Retirement

Once you have a day in mind, when should you apply for retirement? You must file your retirement application with us 15 to 90 days before your retirement date. If you’re over age 70 at retirement, or if you are no longer actively employed by a public employer, you don’t have to wait the 15 days. The application is also available from your employer or can be found on our website by clicking the link above.

Would you like to read more about applying for retirement and what comes after? Read the Applying for Your Service Retirement Benefit and After You Retire sections in these publications:

You may also want to visit one of our consultation sites.

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.

Retirement Milestones for ERS Tier 3 and 4 Members

Knowing your member milestones can help you plan ahead for your retirement. Most Employees’ Retirement System (ERS) Tier 3 and Tier 4 members (unless they retire under special retirement plans) retire under the Article 15 retirement plan. If you’re covered by this retirement plan, you have a set of milestones that affects how your pension benefit is calculated. This also means it affects how much you’ll receive at retirement.

Here are some important things to remember:

  • You are eligible to retire once you are age 55 and have five years of service credit. There may be reductions to your benefit if certain age requirements aren’t met.
  • You can retire with full benefits at age 62. However, if you are age 55 or older with 30 or more years of service credit, you can also retire with full benefits.
  • If you retire with less than 20 years of service credit, your benefit equals 1.66 percent of your final average salary (FAS) for each year of service.
  • If you retire and have 20 to 30 years of service credit, the benefit is 2 percent of your FAS for each year of service.
  • If you retire with more than 30 years of service credit, the benefit is 2 percent of your FAS for each year of service up to 30. For each year beyond 30, you will receive 1.5 percent of your FAS.

Retirement Milestones for ERS Tier 3 and 4 Members
Please visit our website for more information about ERS member milestones and retirement plans.

NYSLRS Basics: Becoming Vested

What does it mean to be a vested NYSLRS member? If you’re vested, you’ve reached a major milestone in your membership. Being vested means that you’ve earned enough service credit to qualify for a pension benefit, even if you leave public employment. If you leave public employment after becoming vested, at a later date you can apply for and receive what we call a vested retirement benefit. The vested benefit is based on the service and salary earned when you were an active member with NYSLRS.

When Do I Become Vested?

The amount of service credit you need to be vested is based on what tier you’re in. If you’re a Tier 5 or 6 member, you need ten years of service to be vested. If you’re in another tier (Tier 1, 2, 3 or 4), you’re vested once you earn five years of service credit.

Applying for the Vested Benefit

For most vested members, if you leave the payroll before age 55, you’ll be eligible for a retirement benefit when you reach age 55. Tier 1 and Tier 2 members are eligible for a benefit on the first of the month following their 55th birthday. Tier 3, 4, 5 are eligible for a benefit on their 55th birthday. Employees’ Retirement System Tier 6 members are also eligible on their 55th birthday, but Police and Fire Retirement System Tier 6 members are eligible on their 63rd birthday.

Please note these are the earliest ages that you become eligible for the vested benefit. An early age reduction may apply under certain plans. Please review your retirement plan booklet to see if early age reductions apply.

Becoming Vested

Receiving your vested retirement benefit is not automatic. You must file a retirement application when you become eligible and wish to receive your benefit.

Visit our website to learn more about vesting.

Want to read more in our NYSLRS Basics series? Check out past posts on:

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: