join NYSLRS

Join NYSLRS

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Most State and municipal employees are required to join the New York State and Local Retirement System (NYSLRS) when they are hired. But for some employees, membership is optional, meaning you are not automatically enrolled. To join NYSLRS, you must submit a membership application to your employer, who will then enroll you in NYSLRS. It’s important to understand the valuable benefits of NYSLRS membership and why you should join as soon as possible.

join NYSLRS

Whose Membership is Optional or Mandatory

Membership is optional if:

  • You work less than 12 months per year, including 10-month school employees working full-time;
  • You work less than 30 hours per week or less than the number of hours for full-time employment, as established by your employer for your position;
  • You are in a temporary or provisional position (under Civil Service Law); or
  • Your annual compensation is less than New York State’s minimum wage multiplied by 2,000 hours.

Membership is mandatory if:

  • You are in a permanent, full-time, 12-month position of an employer who participates in NYSLRS; and
  • You are in a full- or part-time position covered by the Police and Fire Retirement System (PFRS), such as police officers and firefighters.

If you aren’t sure whether you’re a member, your employer should be able to let you know. Contact us if you have questions.

Benefits of Joining NYSLRS

NYSLRS is one of the largest retirement systems in the world, administering benefits for more than 1.2 million members, retirees and beneficiaries.

If you aren’t sure whether to join NYSLRS, here are the advantages:

  • Your NYSLRS pension is a defined benefit plan. When you retire, you will receive a monthly pension payment for the rest of your life. Once you reach retirement age, you can retire with as few as five years of service credit (part-time service is pro-rated).
  • You can request additional service credit for your public employment before joining NYSLRS or if you served in the U.S. Armed Forces and received an honorable discharge from active military duty.
  • You can transfer service if you are still a member of another public retirement system in New York State.
  • You can reinstate service if you withdrew your membership in NYSLRS or another public retirement system in New York State.
  • You can take a loan against your retirement contributions once you meet eligibility requirements.
  • NYSLRS retirement plans provide death and disability retirement benefits.

Nearly 3,000 employers participate in NYSLRS, allowing you to continue your membership if you take a job at another New York State public employer. And if you decide to leave public employment before you have ten years of service credit, you can withdraw your contributions plus interest or roll over your contributions into another retirement savings plan.

NYSLRS Membership Basics

Once you join and become a NYSLRS member:

Don’t Delay Joining

It’s important to join NYSLRS at the start of your employment. If you don’t join right away, you can purchase service credit for your public employment from before you became a member, but it will cost more—6% of your earnings plus interest rather than contributing a percentage based on your earnings. Also, while you can request previous service credit and pay for the cost at any time, you must earn two years of service credit as a NYSLRS member before your purchased service can be credited.

Get Credit for All Your Public Service

Because service credit is a major factor in calculating your pension benefit, it’s important to make sure you get credit for all your public service. Once you join NYSLRS, you should request any additional service as early in your career as possible.

  • NYSLRS will need time to request records from your previous employer or retirement system.
  • The sooner you purchase your credit, the less it will generally cost.
  • Requesting early gives you time to pay for additional service.

Your request will be reviewed to determine your eligibility. We will send you a letter with the amount of service credit you are eligible to receive if you choose to purchase it, the cost and payment options. There are certain situations where purchasing additional service credit will not increase your pension. For more information, read about whether should you purchase additional service credit.

National Retirement Security Month

National Retirement Security Month

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October is National Retirement Security Month. It’s a time to consider the importance of saving and to think about potential sources of income in retirement. Financial security doesn’t just happen—it takes preparation and time. Even if retirement seems far off, it’s never too early to start planning.

National Retirement Security Month

NYSLRS and Retirement Security

Check out these blog posts to learn more about how your NYSLRS pension and other sources of retirement income can provide retirement security.

Your NYSLRS Pension—A Defined Benefit Plan

As a NYSLRS member, you are enrolled in a defined benefit plan, also known as a traditional pension plan. When you retire, you will receive a monthly pension payment for the rest of your life. Your pension will be calculated using a preset formula based on your earnings and years of service—it will not be based on the individual contributions you paid into the system.

The 3-Legged Stool Approach to Retirement Confidence

Your NYSLRS pension is a good reason to be optimistic about your finances in retirement. But there is more to a financially secure retirement than having a pension. Think of retirement security as a three-legged stool. Each leg is a source of income to help support you when your working days are done.

Compounding: Use Time to Grow Your Money More

If you want to improve your chances of a financially secure retirement, your plan should include retirement savings. It’s important to start saving early so your money has time to grow. When you invest your savings in an individual retirement account (IRA) or a 401(k)-style retirement savings plan, you earn a return on your investment, and those returns are compounded.

Deferred Compensation: Another Source of Retirement Income

For greater financial stability and flexibility, you may want to invest in a deferred compensation savings plan. The New York State Deferred compensation plans are voluntary retirement savings plans like a 401(k), created for New York State employees and employees of other participating public employers.

Debt and Retirement

As you get close to retirement, it’s a good idea to take inventory of any debt you owe. Paying down your debt—including any NYSLRS loans—will help avoid a pension reduction and can give you more flexibility in retirement.

Use Retirement Online for a Pension or Mortgage Verification Letter

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For certain business transactions, such as applying for a mortgage or housing, you may be asked to provide proof of your NYSLRS pension income or the balance of your NYSLRS account. With Retirement Online, you can get your own verification letter in just a couple quick steps.

If you don’t have an account or for help signing in to an existing account, check out our Retirement Online tools and tips for step-by-step instructions to register, reset your password, unlock your account and more.

Use Retirement Online for a Pension or Mortgage Verification Letter

Pension Income Verification Letter for Retirees

As a retiree, you may need a letter showing proof of your pension income for housing or as part of an application for the Home Energy Assistance Program (HEAP).

Retirement Online is the fastest way to get a pension income verification letter. 

A confirmation message will appear. Click OK, and your letter will open in a pop-up box, ready for you to print or save.

Mortgage Verification Letter for Members

Members (not yet retired) who are applying for a mortgage may need to show a lender the balance of their member contributions and information about their NYSLRS account.   

Retirement Online is the quickest way to get a letter for your mortgage lender. 

A confirmation message will appear. Click OK, and your letter will open in a pop-up box, ready for you to print or save.

The letter will show your account summary, including the current balance of your contributions, and if you have a loan, the date of your last loan and current loan balance.

Other Ways to Get a Verification Letter

By Phone

You can use our automated phone service to request a verification letter without speaking to a customer service representative.

Call 866-805-0990, then:

  • Retirees: Press 2, then press 6, then press 5.
  • Members: Press 2, then press 6, then press 6 again.

Please note, to access the self-service menus, you will be asked to enter the last four digits of your Social Security number and your date of birth. We need this information to verify that you are a NYSLRS member and that the services you request from our automated information line are available to you.

For more information about what you can access or request 24/7, visit the Automated Phone Service page for members or the Automated Phone Service page for retirees.

By Email

You can also request a letter using our secure contact form.

  • Retirees: From the Topic dropdown, select Income/Pension Verification Letter.
  • Members: From the Topic dropdown, select Income/Mortgage Verification Letter.

In the Question field, be sure to include any information you need in the letter.

Please note, due to a high volume of email requests, our response time is temporarily more than 5–7 business days.

Requesting Additional Service Credit

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Service credit is a major factor in calculating your NYSLRS pension. You earn one year of service credit for each year of full-time employment with a participating employer. (Read about how you earn service credit when you work part-time or how school employees earn service credit). You may also be able to request additional service credit if you worked for your current or another public employer before joining NYSLRS, or if you served in the U.S. Armed Forces and received an honorable discharge from active military duty. In most cases, you have to purchase additional service credit, but it will usually increase your pension.*

You should request additional service credit as early in your career as possible, and you must do so before retirement. The sooner you purchase your credit, the less it will generally cost.

*There are certain situations where additional service credit may not increase your pension. For example, special retirement plans for police officers and firefighters allow retirement after 20 or 25 years of service regardless of age, but not all types of public employment count toward the 20 or 25 years in these plans. Contact us if you have questions.

How to Request Additional Service Credit

You can request additional service credit in Retirement Online.

  • Sign in to Retirement Online.
  • Look under My Account Summary.
  • Click Manage My Service Credit Purchases button.
  • Click Request Additional Service Credit link.

Service Credit for Previous Public Employment

Additional service credit includes work for an employer who later joined NYSLRS or for public employment before you became a NYSLRS member.

Example:
You worked at the town library while going to school and, as a part-time employee, you chose not to join NYSLRS. When you graduated and took a full-time job at the Town Supervisor’s office, you were required to join NYSLRS. You can request credit for the part-time service at the library.

When you apply:

  • Enter the name of the employer and the approximate dates you worked there.
  • Upload any proof you may have of your previous service. We will also reach out to your former employer, but you can expedite the process by providing payroll records such as W-2 forms or pay stubs when you submit your request.

You must have two years of service credit before additional service can be credited to you.

Military Service Credit

If you served in the U.S. armed forces, you may be eligible to purchase credit toward your retirement for your military service, regardless of whether your military service was before or after you joined NYSLRS.

There are different sections of the law that allow credit for military service. The amount of military service credit you can receive, and the cost (if any), will vary depending on which section of the law allows the credit. Reserve and National Guard service may qualify if it’s considered active duty.

When applying online:

  • Enter the branch of military in the field for employer and the dates of your service.
  • Upload a copy of your Certificate of Release or Discharge from Active Duty (DD-214) or an official document showing the dates of active duty service, the branch of military and the type of discharge (to receive credit for military service, you must have received an honorable discharge).

For certain military service, you must have five years of service credit before you can apply. 

Reinstating or Transferring Membership

There may be other ways to increase your retirement service credit. If you had a previous membership in a New York State public retirement system and it was terminated, you may be able to reinstate your membership. If you still have an active membership in another public retirement system in New York State but you are no longer working for the employer that participates in that retirement system, you may be able to transfer your membership to NYSLRS.

For More Information

For more information, visit our Get Credit for All Your Public Service page or read our publication, Service Credit for Tiers 2 through 6 (VO1854).

Taxes and Your NYSLRS Loan

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If you’re thinking about borrowing against your retirement contributions, it’s important to understand whether your NYSLRS loan will be subject to taxes before you apply. Once you submit a loan application and we issue a check, you cannot return an uncashed check, and the loan fee is nonrefundable.

Determining the Taxability of Your NYSLRS Loan

When you apply for a NYSLRS loan, all your existing NYSLRS loans and any loans against other retirement plans will be used in calculating the taxability of a new NYSLRS loan. If you participate in another retirement plan offered through your employer, you must disclose existing loans and the contribution balances for the following types of plans:

  • Deferred compensation plan (457)
  • Tax sheltered annuity plan (403-b)
  • Qualified annuity plan (403-a)
  • Qualified trust (401)

If You Have Existing NYSLRS Loans

If you have one or more NYSLRS loans and are considering another loan, you’ll have two options:

  1. Multiple loans. With multiple loans, you would take out a new loan in addition to your existing loan(s). Each loan would have separate 5-year terms and minimum payments. The minimum payments for all your loans would be combined into one total repayment amount, which would be higher than the minimum payment for a refinanced loan. However, your total minimum payment would decrease as you pay off each loan.
  2. Refinance your existing loan. With refinancing, your new loan would be consolidated with the balance of your existing loan(s) into a single loan for the entire amount. The total loan amount would be spread over a new 5-year term with one minimum payment, which would be lower than the total minimum payment for multiple loans. However, refinancing would increase how much of your loan is considered a taxable distribution, which would either subject the loan to federal taxes or significantly reduce the amount of the loan to avoid any tax implications.

Understanding the Impact on Your Taxes

While a NYSLRS loan is exempt from New York State and local income taxes, it may be subject to federal taxes. If your loan exceeds certain limits, the Internal Revenue Service (IRS) will consider all or part of it as a “deemed distribution from a qualified retirement plan.” In other words, you will have to claim all or part of your loan as taxable income when you file your taxes the next year.

NYSLRS is also required to withhold a percentage of the loan for federal taxes, which will reduce the amount you receive. The tax withholding depends on your citizenship, so the loan application asks if you are a U.S. citizen, resident alien or non-resident alien. However, the amount withheld may not cover the total amount you will owe the IRS. For example, if you take a taxable loan before you turn 59½, the IRS may charge an additional 10 percent tax penalty.

If you take a taxable loan, we’ll mail a 1099-R by January 31 of the following year to file with your taxes.

Remember: Even if a portion of your loan goes to the IRS, you’ll still have to repay the entire amount, plus interest, to NYSLRS.

We recommend that you speak to a tax advisor or a NYSLRS customer service representative before taking a taxable loan. For more information about taking a loan from NYSLRS, visit our Loans: Applying and Repaying page.

Ready to Apply for a NYSLRS Loan?

Taxes and Your NYSLRS LoanRetirement Online is the fastest and most convenient way to apply for a NYSLRS loan. When you use Retirement Online, NYSLRS receives your application immediately and can process your loan more quickly. Retirement Online will also let you know how much you can borrow, your repayment options and whether your loan is taxable.

If you don’t have an account or for help signing in to an existing account, check out our Retirement Online tools and tips for step-by-step instructions to register, reset your password, unlock your account and more.

Applying for a NYSLRS Loan in Retirement Online

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If you are eligible to borrow against your retirement contributions, Retirement Online is the fastest and most convenient way to apply for a NYSLRS loan.

Eligibility is based on your tier. Generally, you’ll need to be on the payroll of a participating employer, have at least one year of service credit and have the required minimum contributions in your account. (Note: Retirees are not eligible for NYSLRS loans.)

Applying for a NYSLRS Loan in Retirement Online

Retirement Online is the Fastest Way to Apply

When you use Retirement Online, NYSLRS receives your application immediately and can process your loan more quickly.

To get started:

If you don’t have an account or for help signing in to an existing account, check out our Retirement Online tools and tips for step-by-step instructions to register, reset your password, unlock your account and more.

As you work your way through the online application, you’ll see:

  • How much you are eligible to borrow with or without tax implications;
  • The minimum repayment amount; and
  • The expected payoff date.

For Tier 3–6 members, there’s a service charge of $45, which is deducted from your loan check when it is issued.

The current interest rate, which is fixed for the term of your loan, is 5 percent.

NYSLRS loans are exempt from New York State and local income taxes. However, a NYSLRS loan would be subject to federal taxes if it exceeds certain limits. Retirement Online will show you the maximum you can borrow without tax implications.

If you apply for a loan and already have one or more existing loans, you’ll have two options:

  1. Multiple loans. With multiple loans, you would take out a new loan in addition to your existing loan(s). Each loan would have separate 5-year terms and minimum payments. The minimum payments for all your loans would be combined into one total repayment amount, which would be higher than the minimum payment for a refinanced loan. However, your total minimum payment would decrease as you pay off each loan.
  2. Refinance your existing loan. With refinancing, your new loan would be consolidated with the balance of your existing loan(s) into a single loan for the entire amount. The total loan amount would be spread over a new 5-year term with one minimum payment, which would be lower than the total minimum payment for multiple loans. However, refinancing would increase how much of your loan is considered a taxable distribution. To avoid any tax implications when refinancing, the amount of your new loan would be significantly less than taking out multiple loans.

When Will I Receive My Loan Check?

NYSLRS mails loan checks once a week. To check the status of your loan application:

If your case status is Closed before close of business on Wednesday, your check will be in the mail that Friday.

You will also receive a confirmation letter when your loan case is complete. In your Retirement Online account, click the Find Documents link to search for correspondence.

Repaying Your NYSLRS Loan

Loan payments are deducted from your paycheck. After you receive your loan check, you should review your pay stub to confirm that your employer has started payroll deductions and is deducting the correct repayment amount.

If you choose to repay the minimum amount, the payment may increase periodically to ensure you repay the loan within the required 5-year period.

You can increase your payroll deduction amount, make additional payments or pay your loan in full at any time with no prepayment penalties. Repaying your loan sooner will reduce the total amount of interest you’ll pay on the loan. 

Retirement Online is the fastest and most convenient way to manage your loan payments.

If you go off payroll, you must continue to make loan payments directly to NYSLRS and pay off your loan within the 5-year period. Otherwise, you will default on your loan. For more information, read our blog post about making loan payments if you leave public employment.

Retiring With an Outstanding NYSLRS Loan

If you retire with an outstanding loan, your pension will be permanently reduced. In most cases, you’ll need to report at least some portion of the loan balance as income to the Internal Revenue Service (IRS). If you retire before age 59½, the IRS may also charge an additional 10 percent penalty.

If you are close to retirement, use Retirement Online to check your loan balance and make sure you’re on track to repay your loan before you retire.

Note: Employees’ Retirement System (ERS) members can repay their loan after retiring. If you choose to pay back your loan after you retire, you must pay the full amount of the outstanding balance that was due when you retired in a single lump sum payment. Following full repayment, the reduction would be removed, and your pension benefit would increase going forward—the adjustment would not be retroactive to your date of retirement.

For More Information

For more information about NYSLRS loans, visit our Loans: Applying and Repaying page.

Divorce and Your Other NYSLRS Benefits—Part 2

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divorce and your other nyslrs benefitsWe’ve written about how divorce may affect your pension. However, divorce can also impact your other retirement benefits.

If your ex-spouse will receive a share of your pension and other retirement benefits, NYSLRS must have an approved Domestic Relations Order (DRO) on file. A DRO is a court order specifying how benefits should be divided. It’s important to complete and file the DRO with NYSLRS well before your retirement date to avoid changes or delays in payments. Questions about the consequences of not filing a DRO on time should be addressed to an attorney.

Death Benefits and Your Beneficiaries

As of July 7, 2008, beneficiary designations for certain death benefits are automatically revoked when a divorce, annulment or judicial separation becomes final.

Ordinary Death Benefit

If you die in active service (before retiring), your beneficiaries may be entitled to an ordinary death benefit.

Accidental Death Benefit

If you die as a result of an on-the-job accident, an accidental death benefit may be payable to certain beneficiaries. The beneficiaries of this benefit are designated by law, and only those beneficiaries may receive this benefit—even if there is a DRO.

Post-Retirement Death Benefit

If you die after retiring, you may be covered by a post-retirement death benefit, which provides a one-time, lump sum payment to your beneficiaries.

Your Beneficiaries

If you are divorced, it is especially important to review your beneficiary designations to ensure your benefits will be distributed according to your wishes and your divorce agreement.  

If your ex-spouse is awarded a portion of your death benefits, a DRO will specify how much your ex-spouse will receive and direct you to name your ex-spouse as a beneficiary. You should update your beneficiaries and choose additional beneficiaries for the remainder of any benefits. However, if you do not update your beneficiary designations or if your beneficiary designations conflict with the terms of the DRO, the DRO will take precedence.

Retirement Online is the fastest and most convenient way to view and update your beneficiaries.

For more information about death benefit beneficiaries, read our blog post—Your Death Benefit Beneficiaries. Or, if you are retired or planning to retire soon, read Can You Change Your Beneficiary After You Retire?

Loans

Eligible NYSLRS members may take out a NYLSRS loan against their retirement contributions. However, even if you are eligible, a DRO may be written to prohibit you from taking future loans.

If you retire with an outstanding loan balance, your pension will be reduced. The ex-spouse’s share of the pension will also be reduced unless the DRO specifically states the ex-spouse’s share should be calculated without reference to outstanding loans.

Contribution Refunds

Occasionally, NYSLRS may refund a member’s contributions because of a tier reinstatement, membership withdrawal or membership transfer. Some members are eligible to make voluntary contributions and withdraw them as excess contributions. Generally, if a DRO doesn’t mention a contribution refund, the member will receive the full amount.

For More Divorce Information

Visit our Divorce and Your Benefits page for more information, including how divorce can affect your service credit, disability benefits or annual cost-of-living adjustment.

Divorce and Your Pension

Divorce and Your Pension—Part 1

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In New York State, pensions and retirement benefits earned during the marriage may be marital property and can be divided when a marriage ends. Divorce can affect your pension and other retirement benefits in the following ways:

  • Your ex-spouse may be entitled to a portion of your pension.
  • You may be required to name your ex-spouse as the beneficiary of any death benefit.
  • You may be required to choose a pension payment option that provides a continuing benefit to your ex-spouse when you die.
  • Your ex-spouse may be entitled to a portion of your cost-of-living adjustment (COLA).

How Your Pension Can Be Divided in a Divorce

The most common method for dividing pension benefits is known as the Majauskas Formula, which gets its name from a case decided by the State Court of Appeals. This formula gives your ex-spouse one-half of the portion of your pension earned during the marriage.

How the Majauskas Formula Works

Dividing Your Pension in a Divorce - the Majauskas Formula

Example of the Majauskas Formula

Dividing Your Pension in a Divorce - Example of the Majauskas Formula

Other Ways to Divide Pension Benefits

The Majauskas formula is not the only way to divide pension benefits. Other ways include using:

  • A hypothetical retirement benefit. NYSLRS can calculate a hypothetical pension using your final average earnings and service credit as of a specific date and then determine the ex-spouse’s share based on the terms of the divorce.
  • A flat percentage. Your ex-spouse can receive a percentage of your pension other than the percentage derived from the Majauskas formula.
  • A flat dollar amount. This option is commonly used if you retired and already receive monthly pension payments.

Formalizing the Division of Your Pension After a Divorce

Once you finalize the terms of your divorce, a judge issues a final judgment of divorce. If your ex-spouse will receive a share of your pension and other retirement benefits, a Domestic Relations Order (DRO) is needed. A DRO is a court order specifying how benefits should be divided.

NYSLRS must have an approved DRO on file to make pension payments to an ex-spouse—we cannot pay an ex-spouse based solely on a judgment of divorce or settlement agreement.  It’s important to complete and file the DRO with NYSLRS well before the your retirement date to avoid changes or delays in payments. Questions about the consequences of not filing a DRO on time should be addressed to an attorney.

If your ex-spouse is not awarded a portion of your pension benefits, NYSLRS does not need a DRO.

Drafting and Filing a DRO

Draft a DRO After a Divorce

Draft a DRO. NYSLRS offers an online DRO template, which was developed with guidance from NYSLRS’ legal counsel. It generates a customized DRO based on the information entered about the terms of the divorce. While its use is not required, DROs prepared using the NYSLRS template receive priority review.

Get Your DRO Approved

Get Your DRO Approved. A Supreme Court judge must sign the DRO and enter it as an official court document.

Submit Your DRO to NYSLRS

Submit Your DRO to NYSLRS. NYSLRS requires a certified copy of the signed DRO as well as proof of divorce, such as a copy of the judgment of divorce. NYSLRS legal staff will review the DRO and determine whether it complies with New York State Retirement and Social Security Law and applicable policies and procedures.

All Parties Notified

All Parties Notified. NYSLRS will send a letter to all parties notifying them whether the DRO has been accepted or rejected. If the DRO is rejected, the letter will explain why. The DRO must be amended, approved and resubmitted to NYSLRS.


For More Information

For more information about how your pension may be affected and for additional guidance on DROs, visit our Divorce and Your Benefits webpage. Also, read our blog post about how divorce may affect your other NYSLRS benefits.