Monthly Archives: February 2016

How an Unpaid NYSLRS Loan Can Affect Your Pension

As a NYSLRS member, if you have contributions on file with us, you may be able to take out a loan against them. However, you need to be cautious about this decision. If you retire with an outstanding loan balance, you cannot pay off your loan after you retire. In order to recover the funds that weren’t paid back before you retired, your pension benefit will be permanently reduced.

The amount of your pension reduction is based on three things:

  • Your age at retirement
  • Your loan balance at retirement
  • The type of your retirement (regular service or disability)

Outstanding Loan Balances & Permanent Pension Reductions for 2016

The permanent reduction you receive will be based on your retirement date. So, if you had retired in 2015 with an outstanding loan balance, the permanent reduction would be different than if you retire in 2016. Here are some loan reduction examples if you retire in 2016 with an outstanding loan:
2016 Unpaid Loan Reductions

How to Avoid a Permanent Pension Benefit Reduction

To avoid a permanent reduction, you can increase the amount of your loan payments so your loan is paid in full before you retire. Though loans are repaid through regular payroll deductions, you can make additional payments or pay your loan in full at any time. There are no prepayment penalties. You can also pay off your loan in a lump sum when you retire (before your effective date of retirement). If you wish to pay off your loan, we will tell you what the payoff will be at that time.

Make your check or money order payable to NYSLRS, write “loan payment” and your retirement registration number or the last four digits of your Social Security number on your check, and include your contact information in your cover letter to us. We will apply the payment to your loan and send you an acknowledgment letter. Payments should be mailed to:

NYSLRS
Attn: Accounts Receivable Unit
110 State Street
Albany, NY 12244

If you have any questions about loans or reductions, please visit our Loans page.

Death Benefits For ERS Members

Among the most important benefits a NYSLRS membership provides are death benefits. When you’re covered by a death benefit, your beneficiary may receive a payment on your behalf at your death.

Death benefits can vary by tier and retirement plan, so for the purpose of today’s post, let’s focus our attention on the Employees’ Retirement System (ERS) Tier 2, 3, 4, 5 and 6 members in regular plans. (If you’re in a special 20- or 25-year plan or are a Tier 1 member, please review your plan publication to learn more about your death benefits.)

The Ordinary Death Benefit

You’re eligible for the ordinary death benefit when you have one year of service credit. Your beneficiary would receive this benefit if you died while working for a public employer.

  • After one year of service, the ordinary death benefit is equal to your last year’s salary.
  • After two years of service, the benefit equals two times your last year’s salary.
  • After three or more years of service, the benefit equals three times your last year’s salary.

Post Retirement Death Benefits ERS Regular-Plans

The Post-Retirement Death Benefit

Your beneficiary may also be eligible for a post-retirement death benefit if you retire directly from your employer’s payroll or within one year of leaving covered employment.

  • During your first year of retirement, the post-retirement death benefit is 50 percent of your ordinary death benefit payable at retirement.
  • During your second year of retirement, the benefit is 25 percent of your ordinary death benefit.
  • During your third year and thereafter, the benefit is 10 percent of the ordinary death benefit that would have been payable at age 60 (if any) or at retirement, whichever was earlier.

There may be other death benefits available in your retirement plan. Please read the Death Benefit section in your plan publication for more information. If you have any questions about death benefits, please email us using our secure email form.