Category Archives: Members

News for members of the New York State & Local Retirement System

Retroactive payments

Retroactive Payments and Your NYSLRS Pension

Retroactive Payments

Retroactive payments are lump sum payments you receive from your employer. These payments can be from new union contracts, arbitration awards or legal settlements that took place while you were on your employer’s payroll.

If you receive a retroactive payment from your employer, it could affect your pension benefit calculation.

How Retroactive Payments Can Affect Your Benefit

Your final average earnings (FAE) are a major factor in your pension benefit calculation. It’s the average of your three (five for Tier 6 members) highest consecutive years of earnings. For most people, their highest years of earnings come at the end of their careers.

Retroactive payments are applied to the pay periods when they were earned, not when they were paid. So, retroactive payments can increase your FAE, and therefore your pension benefit, as long as the time period in which you earned that money is part of the time period your FAE is based on.

Your employer should let us know if you receive a retroactive payment before or after you retire. If you are a State employee who receives a retroactive payment after you retire, we will recalculate your pension automatically; you do not need to notify us. You will receive correspondence from us explaining any change in your pension benefit.

If you receive a retroactive payment from a non-State employer after your pension calculation is finalized, send a letter to our Recalculation Unit in the Benefit Calculations & Disbursement Services Bureau. Please include a copy of your check stub and any correspondence you received from your employer related to the payment. Mail it to:

NYSLRS
Attn: BCDS – Recalculation Unit
110 State Street
Albany, NY 12244-0001.

You can also email and upload this information to the Retirement System through our secure contact form.

For more information about FAE, read our Final Average Earnings blog post. You can also find out specific information about your FAE by reading your retirement plan booklet, available on our Publications page.

NYSLRS Loans Using Retirement Online

Planning on taking out a NYSLRS loan? Applying online offers speed and convenience.

NYSLRS loan eligibility is based on your tier, but generally, you’ll need to be on the payroll of a participating employer, have at least one year of service and have a certain amount of contributions in your account. Retirement Online will provide the eligibility information you need as you step through the application process. (Note: retirees are not eligible for NYSLRS loans.)

Use Retirement Online to apply for a NYSLRS loan

Getting Started

Retirement Online is the fastest way to apply for a NYSLRS loan. It’s also an easy way to check your current loan balance, the amount you are eligible to borrow and more.

­­If you don’t already have an account, go to the Sign In page and click “Sign Up” under the “Customer Sign In” button. (Need help with Retirement OnlineSee this post for handy tips.)

The Application Process

Once you’ve signed in, scroll down to ‘My Account Summary.’ Under ‘I want to…’ click the green “Apply for a Loan” button and follow the prompts.

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

  • How much you can borrow;
  • The minimum repayment amount;
  • The expected payoff date; and
  • How much you can borrow without tax implications.

A service charge of $45 will be deducted from your loan check when it is issued. The current interest rate is 5.8 percent. The interest rate will remain fixed for the term of your loan.

NYSLRS loans are exempt from New York State and local income taxes. But the Internal Revenue Service (IRS) may consider all or part of a NYSLRS loan taxable in some cases – for instance, if you borrow above certain limits. The Retirement Online loan application will show you the maximum amount you can borrow without tax implications. 

If you already have a loan and you want to take another loan, you can either take multiple loans or refinance your existing loan. Taking a new loan (the multiple-loan option) minimizes your potential tax consequences. Your minimum payment will be higher, but you will pay off your loans faster than you would by refinancing. Refinancing adds the new loan amount to your existing balance and spreads the entire balance over a new five-year term. Your payment will be lower but your tax consequences may be significantly higher.

Repaying Your NYSLRS Loan

Loan payments will be deducted from your paycheck. You can choose the minimum payroll deduction, which would pay off your loan in five years, or you can pay more to pay off your loan sooner. The payment calculator in Retirement Online will provide your expected payoff date if you enter an amount higher than the minimum.

If you are having trouble making payments because of a furlough or authorized leave of absence, you can find important information in our blog post, Managing Your NYSLRS Loan Payment.

Retiring With an Outstanding NYSLRS Loan

If you retire with an outstanding loan, your pension will be reduced. You will also need to report at least a portion of the loan balance as ordinary income (subject to federal income tax) to the IRS. If you retire before age 59½, the IRS may charge an additional 10 percent penalty. If you are nearing retirement, be sure to check your loan balance. If you are not on track to repay your loan before you retire, you can increase your loan payments, make additional lump sum payments or both.

Note: Employees’ Retirement System (ERS) members may repay their loan after retiring, but they must pay the full amount (that is, the amount that was due on their retirement date) in a single lump-sum payment.

More Information

For more information about NYSLRS loans, visit our Loans page. If you need help with the Retirement Online loan application, click “Help” at the top of your account page. Then click next to ‘Requesting a Loan’ and select the step-by-step guide that best fits your situation. Retirement Online is generally available from 7:00 am to 9:30 pm on Monday, Wednesday, Thursday and Friday; from 7:00 am to 6:00 pm on Tuesday; and from 6:00 am to 11:00 pm on Saturday and Sunday.

Tier 3 & 4 Members: When Is The Right Time To Retire?

Tier 3 and 4 members in the Article 15 retirement plan 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 your pension is guaranteed, the amount of your pension depends on several factors, including when you retire. Here is some information that can help you determine the right time to retire.

Three Reasons to Keep Working

  1. Tier 3 and 4 members can claim their benefits as early as age 55, but they’ll face a significant penalty for early retirement – up to a 27 percent reduction in their pension. Early retirement reductions are prorated by month, so the penalty is reduced as you get closer to full retirement age. At 62, you can retire with full benefits. (Tier 3 and 4 Employees’ Retirement System (ERS) members who are in the Article 15 retirement plan and can retire between the ages of 55 and 62 without penalty once they have 30 years of service credit.)
  2. Your final average earnings (FAE) are a significant factor in the calculation of your pension benefit. Since working longer usually means a higher FAE, continued public employment can increase your pension.
  3. The other part of your retirement calculation is your service credit. More service credit can earn you a larger pension benefit, and, after 20 years, it also gets you a better pension formula. For Tier 3 and 4 members, if you retire with less than 20 years of service, the formula is FAE × 1.66% × years of service. Between 20 and 30 years, the formula becomes FAE × 2.00% × years of service. After 30 years of service, your pension benefit continues to increase at a rate of 1.5 percent of FAE for each year of service.

When is the Right Time to Retire infographic

 

If You’re Not Working, Here’s Something to Consider

Everyone’s situation is unique. For example, if you’re vested and no longer work for a public employer, and you don’t think you will again, taking your pension 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.

An Online Tool to Help You Make Your Decision

Most members can use Retirement Online to estimate their pensions.

A Retirement Online estimate is based on the most up-to-date information we have on file for you. You can enter different retirement dates to see how those choices would affect your benefit, which could help you determine the right time to retire. When you’re done, you can print your pension estimate or save it for future reference.

If you are unable to use our online pension calculator, please contact us to request a pension estimate.

This post has focused on Tier 3 and 4 members. To see how retirement age affects members in other tiers, visit our About Benefit Reductions page.

How School Employees Earn NYSLRS Service Credit

There are non-teachers earning NYSLRS service credit.While most New York teachers and administrators are in the New York State Teachers’ retirement system, other school employees are members of the New York State and Local Retirement System (NYSLRS). In fact, 1 out of 5 NYSLRS members works for a school district. Most work according to the school year, which could be only 10 or 11 months long. So how do we determine service credit for them?

Earning NYSLRS Service Credit When School Employees Work Full-Time

If you’re a school employee who works full-time, you receive one year of service per school year. Generally, a full-time 10-month school year requires at least 180 days worked in any school year. Depending on your employer, a full academic year can range from 170 to 200 days.

Earning NYSLRS Service Credit When School Employees Work Part-Time

The number of hours in a full-time day is set by your employer (it’s between six and eight hours). If you don’t work full-time, your employer converts the number of hours you worked into the equivalent number of full-time days. Your employer reports that number to us, and your days worked are plugged into the formulas below.

Regardless of whether you work full- or part-time, depending on the length of your school year, your service is credited in the following ways:

For all BOCES and school district employees, as well as
teachers working at New York State schools for the deaf and blind:

Number of days worked ÷ 180 days

For college employees:

Number of days worked ÷ 170 days

For institutional teachers:

Number of days worked ÷ 200 days

how to calculate part-time service credit for school employees

Because of the COVID-19 pandemic, some NYSLRS members have been furloughed from their jobs, while others have had their hours cut. Unfortunately, these work reductions affect the amount of service credit earned because you only receive service credit when you are employed and receiving a paycheck.

If you’ve been furloughed or had your hours reduced, you can use the information above to help you estimate the impact on your total service credit.

Check Your Service Credit

You can check your Retirement Online account to find your current estimated service credit total.

You can also check your Member Annual Statement, which is provided to you every summer. For most members, your statement will show how much service credit you’ve earned for the past fiscal year (April 1, 2020 – March 31, 2021). It will also show your total service credit as of March 31, 2021. Make sure to look it over to see how much service credit you’ve earned over your career. For more information about service credit, read our booklet Service Credit for Tiers 2 through 6 (VO1854) or your own retirement plan publication.

Financial Literacy and Retirement

April is Financial Literacy Month. But what is financial literacy? Basically, it’s the ability to understand and use financial skills to make wise decisions about your finances.

Financial literacy encompasses a variety of skills, but we’d like to focus on some basic skills that are relevant to planning for a successful retirement. Whether you’re just starting your career, planning on retiring soon or already retired, mastering these skills will help you and your future financial security.

financial literacy

Taking Stock of Your Finances

A good place to start building your financial literacy is by getting a handle on your current financial situation. Ask yourself some basic questions:

  • How much do you earn and spend each month?  
  • How much debt do you have?
  • Do you have any major expenses on the horizon?

If you know where you stand, you’ll be in a better position to plan for the future.

If you’re planning for retirement, you can estimate your pension by using the benefit calculator in Retirement Online. (You can also check your future Social Security benefit online.)

Creating a Budget

This financial planning tool helps you track your income and expenses. Having a budget can help you make better financial decisions, avoid debt, prepare for emergencies and save money.

If you don’t know how to get started, here are some tips on creating a budget. If you plan to retire soon, you can use our worksheet to create a post-retirement budget.  

Understanding Interest Rates

Interest is great if you’re on the receiving end, but not so great if you are paying it. Unfortunately, consumers can pay very high interest rates on credit. The average interest rate on a new credit card account is nearly 18 percent, and many consumers pay 20 percent or more on their credit cards.

If you have credit card debt, and only pay the minimum each month, you’ll make little progress on reducing the balance while the interest you pay every month adds up. For example, if you owed $1,000 on a credit card with an 18 percent interest rate, and made payments of $40 a month, it would take you 71 months to pay off and your total interest cost would be nearly $500. On the other hand, if you paid $100 a month, it would be paid off in half the time and your total interest would be about $160.

Managing Debt

Debt is not necessarily bad, but it can easily derail your financial plans if you’re not careful. Credit cards pose a particular risk because they are so easy to use, but you can learn strategies to avoid credit card debt.

Saving

As a NYSLRS member, you’ll receive a lifetime pension that will be based on your years of service and earnings. But your personal retirement savings can be an important supplement to your pension and Social Security. It’s never too early or too late to start saving for retirement. To learn more building your savings, read our recent blog post Saving for Retirement. Is Now the Right Time?

Follow our blog for future posts on retirement savings and related topics.

How Your Tier 6 Contribution Rate Can Change

Most NYSLRS members contribute a percentage of their earnings to help fund pension benefits. For Tier 6 members (those who joined NYSLRS on or after April 1, 2012), that percentage, or contribution rate, can vary from year to year.

Tier 6 contribution rate

When Tier 6 Contribution Rates are Determined

A Tier 6 member’s contribution rate is calculated annually. New rates become effective each year on April 1, the beginning of the State’s fiscal year. Once your rate is set for a fiscal year, it will not change for the rest of that fiscal year. However, depending on your earnings, it may change the following year.

How Your Tier 6 Contribution Rate is Calculated

As a Tier 6 member, your contribution rate is based on how much you earn. Changes in your earnings may result in changes to your rate. The minimum rate is 3 percent of your earnings, and the maximum is 6 percent.

During your first three years as a NYSLRS member, your contribution rate is based on an estimated annual wage we receive from your employer. After three years, the rate is based on what you actually earned two years earlier. If you are a Tier 6 member with three or more years of membership in NYSLRS, this video will help explain how your contribution rate is determined:

See our Member Contributions page for more information.

Learn More

The amount you contribute to the Retirement System will not affect the amount of your pension. Your NYSLRS pension is a lifetime benefit based on your retirement plan, years of service and final average earnings. You can learn more about your pension by reading your plan booklet on our Publications page. For help finding the right plan book, read our blog post Knowing Your Retirement Plan is the Key to Retirement Planning.

Enhanced Death Benefit for Survivors of COVID-19 Victims

COVID-19 has resulted in tens of thousands of deaths across New York State. Sadly, the pandemic’s victims include NYSLRS members who carried out their essential duties despite personal risk.

The families of these selfless members can take some comfort in knowing that they may be eligible for enhanced death benefits. A new law provides certain beneficiaries of public employees who contract COVID-19 on the job and die from COVID-19 with an accidental death benefit.

death benefit for survivors of COVID-19 victims

Most NYSLRS members are eligible for a death benefit if they die while in service; this “ordinary death benefit” provides a member’s designated beneficiary or beneficiaries a single, lump sum payment, worth up to three years’ salary. Alternatively, an “accidental death benefit” may be available to certain beneficiaries if the member’s death is a result of an on-the-job accident. The NYSLRS accidental death benefit is a pension paid to beneficiaries that are defined in statute, first to a surviving spouse, if no spouse to dependent children, then to dependent parent(s).

Generally, the accidental death benefit is equal to 50 percent of the member’s final average salary or last year’s salary depending on the retirement plan the member is enrolled in. You can find your retirement plan information on our Publications page. In addition to the accidental death benefit, a special accidental death benefit may also be payable to a member of the New York State and Local Police and Fire Retirement System.

“This new law is an important step toward protecting public workers who are on the front lines fighting the coronavirus and helping their communities,” said New York State Comptroller Thomas P. DiNapoli. “If something happens to them, they deserve their retirement benefits and the peace of mind that their families are provided for.”  

Eligibility Requirements

A NYSLRS member’s statutory beneficiary would be eligible for the accidental death benefit if the member:

  • Worked at either their normal workplace or another assigned workplace, not their residence, as directed by their employer, on or after March 1, 2020;
  • Contracted COVID-19 within 45 days of the last day that the member reported for work;
  • Died on or before December 31, 2022; and
  • Died from COVID-19 or COVID-19 caused or contributed to their death.

The COVID-19 benefit also applies to members who were working as of March 1 but retired prior to July 1, 2020. If the retiree met the eligibility requirements, contracted COVID at work or within 45 days of last reporting to work, and died after retiring, but on or before December 31, 2020, their statutory beneficiary has the option of converting the service retirement benefit or disability retirement benefit to an accidental death benefit.

The COVID-19 benefit is available for all NYSLRS members (Employees’ Retirement System as well as Police and Fire Retirement System members), regardless of job title, or tier.

How to Claim the Benefit

When someone calls NYSLRS to report a death, they should let us know it was COVID-related. We’ll also ask for an original death certificate. We will then reach out to the beneficiary to assist them in claiming the benefit. For the COVID-19 death benefit, NYSLRS will confirm with the employer the dates that the member reported to work and request the required documentation showing COVID-19 as the cause of death. The COVID-19 death benefit will be reduced by any ordinary death benefits paid out to a beneficiary by NYSLRS.

Estimate Your Pension in Retirement Online

How much will your pension be?

Fortunately, it is now easier than ever to find out. Most NYSLRS members can create their own pension estimate in minutes using Retirement Online.

A Retirement Online estimate is based on the most up-to-date account information we have on file for you. You can enter different retirement dates to see how those choices would affect your benefit. When you’re done, you can print your pension estimate or save it for future reference.

estimate your pension in Retirement Online

How to Create Your Pension Estimate

Before you can use the new pension calculator, you will need a Retirement Online account. Once you sign in, go to the My Account Summary section of your account homepage and click the “Estimate my Pension Benefit” button.

You can enter an estimated retirement date (or retirement age), your current salary and expected annual salary increases. You can also include any service credit you plan to purchase and anticipated lump sum payment for unused vacation. If you add the birthdate for a beneficiary, you’ll also see the estimated monthly payment you would receive if you were to choose a payment option that provides a benefit for a survivor.

Any pension estimate you generate with the online calculator would be an approximation of your potential benefit; it is not a guarantee that you’ll receive a certain amount when you retire.

Alternative Ways to Get an Estimate

While more than 90 percent of NYSLRS members (most Tier 3 through 6 members) can use the new benefit calculator, some members should have NYSLRS generate their benefit estimate.

For example, if you recently transferred your membership to NYSLRS or are covered under certain special plans, it would be better if NYSLRS created an estimate for you. The system will notify you if your estimate cannot be completed using Retirement Online’s estimate tool. Please contact us to request a pension estimate if you receive this notification. Also, if you are in Tiers 1 through 4, you can still use the Quick Calculator on the NYSLRS website. The Quick Calculator generates estimates based on information you provide.

Retirement Planning: Know Your Membership Milestones

Even if your retirement is years in the future, you should be aware of certain membership milestones that may help you narrow down when to retire.

There are two types of membership milestones: those pertaining to age and those pertaining to service credit. Since most NYSLRS members reach service credit milestones first, we’ll start with them.

Service Credit Milestones

Vesting is a key retirement milestone. Once you become vested, you will be eligible for a NYSLRS pension even if you leave public employment before retirement. Members in Tiers 1-4 with at least five years of credited service are vested. (Most members in these tiers have already reached this milestone.) Tier 5 and 6 members must have ten years of credited service to be vested.

membership milestones - service credit

After reaching 20 years of service, most members will be eligible to have a higher percentage of their final average earnings included in their pension benefit. How that benefit is calculated depends on your retirement plan and tier. You can find more information in your retirement plan booklet.

Members in some special plans can retire with 20 years of service, regardless of their age. Other special plans allow for retirement after 25 years, regardless of age.

At 30 years of service, Tier 2-4 members who are at least 55 years old can retire without a pension reduction.

Age Milestones

Once you reach your full retirement age, you can retire without a pension reduction. For Tiers 2-5, the full retirement age is 62. The full retirement age for Tier 6 members is 63.

membership milestones - age

Members in regular retirement plans can retire as early as age 55, but they may face a pension reduction if they retire before their full retirement age. The closer you are to your full retirement age at retirement, the less the reduction will be.

If you would like to see what your pension would be at different ages, use Retirement Online’s pension benefit estimator.

More About NYSLRS Membership Milestones

For more information about NYSLRS milestones, please see: