Category Archives: Members

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

Divorce and Your Pension

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One aspect of retirement planning some members may not consider is how a divorce may affect their pension benefit. In New York State, retirement benefits earned by NYSLRS members are considered marital property. So, if you get a divorce, a judge may award your ex-spouse part of your pension. The process for dividing retirement assets after a divorce is complicated, but here is some basic information.

Dividing Pension Benefits After a Divorce

A commonly used formula for distributing pension benefits, established by the State Court of Appeals (the Majauskas formula), provides an ex-spouse with a portion of your pension based on half of the service credit you earned while you were married.

For example, let’s say you worked in your public-sector job for 10 years before you married. Then you got married continued working in public service for another 20 years, and then divorced. After the divorce, you continued working in public service for an additional 10 years. You’d have 40 total years of service credit, but only 20 years of your service was earned during your marriage. Under the Majauskas formula, your ex-spouse would be entitled to the proceeds of half of the service credit you earned during the marriage (10 years of service), or a quarter of your pension.

Other ways to divide pension benefits include a flat dollar amount, a benefit based on a specific date or a flat percentage of the benefit.

divorce and your pension

Domestic Relations Orders

To divide your retirement benefits after a divorce, NYSLRS needs a Domestic Relations Order (DRO). This court order, issued after a final judgment of divorce, gives us specific instructions on how your benefits should be split.

If your pension benefits will be affected by divorce, your DRO should be submitted to the Retirement System before you apply for retirement. We require a certified copy of the DRO, and it must be signed by a Supreme Court judge and entered as an official court document. We also require proof of divorce, such as a copy of the judgment of divorce. Failure to submit your DRO before you retire could result in a delay of your pension payments or an overpayment to you, which would need to be recovered by NYSLRS.

Learn More

Divorce may affect other NYSLRS benefits as well. Read Divorce and Your Benefits for more information including formulas for determining an ex-spouse’s share, a template you can use to draft a DRO and how to avoid a rejected DRO.

Enhanced Death Benefit for Survivors of COVID-19 Victims

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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 members can take some comfort in knowing that if their loved one contracts COVID-19 while on the job, they may be eligible for an enhanced death benefit if their loved one dies as a result.

COVID-19

The COVID-19 Accidental Death Benefit

Most NYSLRS members’ beneficiaries 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.

For public employees who contract COVID-19 on the job and die from COVID-19, an accidental death benefit may be paid instead of the ordinary death benefit.

The NYSLRS accidental death benefit is a monthly pension benefit — not a one-time payment — paid to a surviving spouse for life. If there is no surviving spouse, the benefit can be paid to dependent children until a certain age, or if there are none, then to a dependent parent for life. Generally, the accidental death benefit is equal to 50 percent of the member’s final average earnings or last year’s salary depending on the retirement plan the member is enrolled in. (Visit our website for help finding your retirement plan publication.)

In addition to the accidental death benefit, a special accidental death benefit may also be payable to survivors of a member of the New York State and Local Police and Fire Retirement System.

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, 2024; and
  • Died from COVID-19 or COVID-19 caused or contributed to their death.

The COVID-19 benefit is available for all NYSLRS members (Employees’ Retirement System and Police and Fire Retirement System), 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.

NYSLRS – One Tier at a Time: ERS Tier 6

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When you join the New York State and Local Retirement System (NYSLRS), you’re assigned a tier based on the date of your membership. This post looks at Tier 6 members of the Employees’ Retirement System (ERS).

Your tier determines such things as your eligibility for benefits, the calculation of those benefits, death benefit coverage and whether you need to contribute toward your benefits.

ERS has six tiers. Anyone who joined ERS on or after April 1, 2012 is in Tier 6. There were 350,986 ERS Tier 6 members as of March 31, 2022. At 54 percent of membership, Tier 6 is the largest ERS tier.

Most ERS Tier 6 members (unless they are in special retirement plans) retire under the Article 15 retirement plan. Check out the graphic below for the basic retirement information for Tier 6 members in this plan.

ERS Tier 6

Membership Milestones

As of April 9, 2022, Tier 6 members only need five years of service credit to become vested. If you are a vested member in the Article 15 retirement plan, you are eligible for a lifetime pension benefit as early as age 55, but if you retire before the full retirement age of 63, your benefit will be reduced.

If you retire with fewer than 20 years, the benefit is 1.66 percent of your final average earnings (FAE) for each year of service. If you retire with exactly 20 years of service, the benefit is 1.75 percent of your FAE for each year of service (35 percent of your FAE).

If you retire with more than 20 years of service, you’ll receive 35 percent for the first 20 years, plus 2 percent for each additional year. For example, with 35 years of service you can retire at age 63 with 65 percent of your FAE.

Where to Find More ERS Tier 6 Information

For more information about ERS Tier 6 membership, find your NYSLRS retirement plan publication. It’s a comprehensive description of the benefits provided by your specific plan.

You can check your service credit total and estimate your pension using Retirement Online. Most members can use our online pension calculator to create an estimate based on the salary and service information NYSLRS has on file for them. You can enter different retirement dates to see how your choices would affect your potential benefit.

Members may not be able to use the Retirement Online calculator in certain circumstances, for example, if they have recently transferred a membership to NYSLRS, or if they are a Tier 6 member with between five and ten years of service. These members can contact us to request an estimate or use the “Quick Calculator” on our website. The Quick Calculator generates estimates based on information you provide.  

NYSLRS – One Tier at a Time: PFRS Tier 6

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When you join the New York State and Local Retirement System (NYSLRS), you’re assigned a tier based on the date of your membership. This post looks at Tier 6 members of the Police and Fire Retirement System (PFRS).

Your tier determines such things as your eligibility for benefits, the calculation of those benefits, death benefit coverage and whether you need to contribute toward your benefits.

PFRS has five tiers. Anyone who joined PFRS on or after April 1, 2012 is in Tier 6. There are 16,027 Tier 6 members, which accounts for more than 45 percent of PFRS membership, making it the second largest PFRS tier.

About Regular Plans and Special Plans

Under a regular retirement plan, you need to reach certain age and service requirements to receive your NYSLRS pension. If you’re covered by a special retirement plan, there is no age requirement, and you can receive your pension after completing 20 or 25 years of service.

Eighty percent of PFRS members are in plans covered under Sections 384, 384-d, 384-e or 384-f of the New York State Retirement and Social Security Law. Read our Police and Fire Retirement System blog post for information about different PFRS plans.

Check out the graphic below for the basic retirement information for PFRS Tier 6 members.

PFRS Tier 6

Where to Find PFRS Tier 6 Information

For more information about PFRS Tier 6 membership, find your NYSLRS retirement plan publication. It’s a comprehensive description of the benefits provided by your specific plan.

You can check your service credit total and estimate your pension using Retirement Online. Most members can use our online pension calculator to create an estimate based on the salary and service information NYSLRS has on file for them. You can enter different retirement dates to see how your choices would affect your potential benefit.

As of April 9, 2022, Tier 5 and 6 members only need five years of service credit to be vested. Tier 5 members with five or more years of service can estimate their pension benefit in Retirement Online. If you are a Tier 6 member with between five and ten years of service credit, you can contact us to request a benefit estimate.

Some Pension Payment Options Can Provide a Lifetime Benefit for a Loved One

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When you apply for a NYSLRS pension, you’ll need to choose a payment option, which determines how your retirement benefit will be paid. All options will provide you with a monthly benefit for the rest of your life. The single life allowance option pays the highest monthly benefit, but all payments stop at your death. If you choose a different option, you may be able to provide a lifetime benefit to a beneficiary.

You can apply for service retirement through Retirement Online. One of the benefits of applying online is that you’ll see a projection of your pension payment under each option before you’re asked to select one. If you submit your retirement application by mail, you’ll need to mail a paper option election form.

payment options

Joint Allowance Payment Options

In exchange for a reduction in your monthly payment, joint allowance options pay your beneficiary all or part of your pension after you die. The amount of the reduction in your pension is based on your life expectancy and the life expectancy of your beneficiary. The reduction is permanent even if your beneficiary dies before you do.

You can only choose one beneficiary under a joint allowance option, and you can’t change your beneficiary after you retire, regardless of the circumstances. If your beneficiary dies before you, all payments will stop when you die.

Pop-Up Payment Options

Like joint allowance options, pop-up options allow you to provide a lifetime payment for a beneficiary after your death. But, if your beneficiary dies before you, your future monthly payments will increase to the amount you would have been receiving had you chosen the single life allowance at retirement. (The pop-up only affects future payments. You would not be entitled to any retroactive payments.)

The monthly reduction in your benefit will be greater if you choose a pop-up option over a regular joint allowance.

Payment Options for Multiple Beneficiaries

There are options that allow you to leave a monthly payment to more than one beneficiary, and options that leave a benefit for a certain amount of time. For more information, visit our Payment Option Descriptions page.

Consider Your Decision Carefully

There are many factors that might influence your payment option choice. Your age and overall health, the age and health of your partner, and your loved one’s access to other financial resources should all be considered.

You only have 30 days after the last day of your retirement month to change your option. After that date, you cannot change your option for any reason.

An important step in retirement planning is finding out how much you can expect to receive. Most members can use Retirement Online to create a pension estimate based on the salary and service information we have on file for them. You can enter different retirement dates and beneficiaries to see how they affect your potential benefit and pension payment options. Go to the ‘My Account Summary’ section of your Retirement Online Account Homepage and click the “Estimate my Pension Benefit” button. You can also ask NYSLRS to send you a benefit estimate that calculates your pension under the various options.

Other Death Benefits

Most NYSLRS retirees are eligible for a post-retirement death benefit if they retire directly from payroll or within one year of leaving covered employment. Eligibility depends on your retirement plan and tier. If you are eligible, your beneficiary will receive a one-time, lump sum payment. The amount of the post-retirement benefit is a percentage of the death benefit available during your working years. For information about this and other potential death benefits, please visit our Death Benefits for Retirees page.

Age Milestones for Retirement Planning

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age milestones

Whether you’re 22 or 52, you should be planning for retirement. Your NYSLRS retirement benefits will be based on your tier, years of service and final average earnings. For most members, age is also an important factor in your NYSLRS benefits and it’s a factor for Social Security and retirement savings strategies as well. So, as you plan for retirement, consider these age milestones.

Age Milestones

Under 50: It’s never too early to start saving for retirement. Even modest savings can add up over time as investment returns grow and interest compounds.

50: The Age 50 and Over Catch-Up provision allows you to save more pre-tax dollars in a retirement account starting in the calendar year in which you turn 50.

55: The earliest age most NYSLRS members can begin collecting a service retirement benefit. (This does not apply to members in special retirement plans.) Your pension may be permanently reduced if you retire before your full retirement age.

59½: The age you can start withdrawing money from a tax-deferred retirement savings plan, such as an IRA, without facing a potential federal tax penalty. (The penalty does not apply to New York State Deferred Compensation Plan savings if you are retired or have left public service.)

62: Full retirement age for your NYSLRS benefit if you are in Tier 2, 3, 4 and 5 or PFRS Tier 6. Earliest age you can begin collecting a Social Security pension, but the benefit would be reduced. For more information about Social Security, read When to Start Receiving Retirement Benefits.

63: Full retirement age for your NYSLRS benefit if you are in ERS Tier 6.

65: Age most people are eligible for Medicare benefits.

66: Full retirement age for Social Security if you were born from 1943 through 1954. Add two months for each year from 1955 through 1959.

67: Full retirement age for Social Security if you were born in 1960 or later.

70: If you do not take your Social Security benefit, your benefit will increase each year until you reach age 70. Delaying Social Security after 70 will not increase your benefit.

73: Generally, if you have tax-deferred retirement savings and are no longer working, you must begin withdrawing some of this money when you reach a certain age. Under a recent change in federal law, you must start taking “minimum required distributions” at age 73. The minimum age had been 72, and the change does not affect those who turned 72 before the end of 2022. This age milestone will increase to 75 in 2033. Required minimum distributions do not apply to your NYSLRS retirement benefits.

One Last Number: Having a rough idea of your life expectancy is essential to retirement planning.

NYSLRS Membership Basics

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Whether you just joined or you’re a longtime member, you likely have questions about your NYSLRS membership. What is vesting? What are final average earnings? What tier are you in, and why does it even matter?

NYSLRS Membership

Basic Concepts of NYSLRS Membership

While NYSLRS administers many different retirement plans, the core concepts of our memberships are the same. Your pension will be calculated using a preset formula based on your earnings and years of service. To better understand your NYSLRS benefits, you should become familiar with these four basic concepts:

  • Tier. Your tier is based on the date you joined NYSLRS and helps determine the benefits available to you. If you’re a new NYSLRS member, you’re likely in Tier 6. Tier 6 members joined NYSLRS on or after April 1, 2012.
  • Service Credit. Generally, you earn a year of service credit for each year you work for a participating NYSLRS employer. Part-time work is prorated. Your total service credit at retirement is a major factor in determining the amount of your pension.
  • Vesting. You become vested after you earn five years of service credit. It’s a significant milestone, because once you’re vested, you’re eligible for a NYSLRS pension when you reach retirement age, even if you leave public service.
  • Final Average Earnings. Final average earnings are the average of your earnings during the period when your pay is highest. It’s another major factor in determining the amount of your pension.

Your NYSLRS Pension and Other Benefits

As a NYSLRS member, you are part of a defined benefit retirement plan. This means your NYSLRS pension will be a lifetime benefit based on your final average earnings and service credit, not on the contributions you make toward your retirement.

Your NYSLRS membership also provides other important benefits, including:

More Information

We want to make sure you have the information you’ll need to plan for your retirement and make critical decisions about your future. Here are some resources available to you:

Retirement Online is the quickest way to access account information such as your tier, retirement plan and estimated total service credit. If you don’t already have one, sign up for a Retirement Online account now.

Explore the NYSLRS website to learn more about your NYSLRS membership. Our Welcome New Members page explains more about the benefits that are available to you. Your retirement plan publication offers a comprehensive overview of your benefits, and you can find it with our Find Your NYSLRS Retirement Plan Publication tool.

If you have questions about your account or your NYSLRS benefits, please message us using our secure contact form.

Compounding: A Great Way for Your Money to Grow

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Financial security doesn’t just happen; it takes planning … and time. You know you can count on your pension income in retirement. But if you want to improve your chances of a financially secure retirement, you should have a retirement savings plan. The sooner you do that, the better, because it’s important to start saving and investing early so your money has time to grow.

When you invest in a retirement savings plan such as an IRA or 457(b), you earn a return on your investment, and your returns are compounded. That means your money increases in value by earning returns on both the original amount and accumulated profits. This is a little different from earning simple interest. Let’s see how they both work.

the power of compounding interest

How Simple Interest Works

In banking, simple interest is a certain percentage you are paid on the money you put in your account. With simple interest, the amount of interest you earn is based on the original (or principal) amount of the deposit.

Let’s say you opened a savings account and deposit $1,000 in January. If the bank paid 5 percent annual interest on that deposit, you’d receive five cents for every dollar in your savings account each year. At the end of one year, you’d have $1,050. That’s $50 more than the principal amount you started with. With simple interest, the interest you earn every year would still be based on the principal amount of $1,000 — no compounding.

How Compounding Works

With compounding, your initial investment plus your earnings are reinvested. If you earn the same 5 percent, with compounding, it’s applied to the full balance of your account. So, you would still have that $1,050 at the end of the first year, but by the end of the second year you’d have $1,102.50 in your account instead of $1,100.

In this example, that’s just a difference of $2.50, but, over time, compounding can mean a difference of hundreds or thousands of dollars.

If you’re thinking about boosting your personal savings for retirement, look for accounts that use compounding. For example, the New York State Deferred Compensation Plan (NYSDCP) is the 457(b) plan created for New York State employees and employees of other participating public employers in New York. The sooner you can start saving, the more time your money has to grow.

Other Sources:
How to Calculate Simple and Compound Interest

ERS Tier 6 Milestones

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If you joined the Employees’ Retirement System (ERS) on or after April 1, 2012, you are a Tier 6 member. Let’s look at the milestones you will reach over the course of your public service career and how they will affect your benefits.

Why Milestones Matter

As a NYSLRS member, you earn service credit for your paid public employment. Generally, one year of full-time work equals one year of service credit. As you earn service credit, you’ll reach career milestones that will make you eligible for certain benefits or for improvements to your existing benefits. Understanding these milestones and when they occur will help you better plan your career and retirement.

Your milestones depend on your tier and your retirement plan. Most ERS Tier 6 members are in the Article 15 retirement plan (named for a section of the New York State Retirement and Social Security Law). If you see Plan A15 listed in the ‘My Account Summary’ section of your Retirement Online account or in your annual statement, you’re in this plan.

ERS Tier 6 milestones

Major Milestones for Tier 6

Here are some important milestones for Tier 6 members in the Article 15 retirement plan:

  • With ten years of service credit, you can apply for a non-job-related disability benefit if you are permanently disabled and cannot perform your duties because of a physical or mental condition.
  • With ten years of service credit, your beneficiaries may be eligible for an out-of-service death benefit if you leave public employment and die before retirement.
  • Ten years also marks the point when you are no longer able to withdraw your membership and receive a refund of your contributions if you leave public employment.
  • You are eligible to retire once you are age 55 and have five years of service credit. However, for most Tier 6 members, there would be reductions to your benefit if you retire before age 63.
  • You can retire with full benefits at age 63.
  • If you retire with fewer than 20 years of service, your pension will equal 1.66 percent of your final average earnings (FAE) for each year of service.
  • If you retire with more than 20 years of service, your benefit will equal 1.75 percent of your FAE for each year of service.
  • Then, for each year of service beyond 20 years, you will receive an additional 2 percent of your FAE.

Note: The law limits the final average earnings of all members who joined on or after June 17, 1971. For example, for most members, if your earnings increase significantly during the years used in your FAE, it’s possible that some of those earnings may not be used toward your pension. The specific limits vary by tier. Visit our Final Average Earnings page for more information.

The amount of your pension also depends on several factors, including your years of service credit and your age when you retire. Most members can estimate your pension in Retirement Online and enter different retirement dates to see how those choices would affect your benefit. As of April 9, 2022, Tier 5 and 6 members only need five years of service credit to be vested. If you are a Tier 5 or 6 member with between five and ten years of service credit, you can contact us to request a benefit estimate.

ERS Tier 6 Special Plans

Some public employees, such as corrections officers or deputy sheriffs, are in special retirement plans and can receive a pension after completing 20 or 25 years of service, regardless of age. If you are not in the Article 15 retirement plan described above, you should read your retirement plan publication to learn about your plan’s milestones.

Our Find Your NYSLRS Retirement Plan Publication tool can help. To use it, you just need to know your retirement plan code. You can find your code in the ‘My Account Summary’ section of your Retirement Online account homepage or on the second page of your latest Member Annual Statement. You can also use the new tool to search for your plan publication by retirement system, tier and occupation type (uniformed or non-uniformed).

NYSLRS – One Tier at a Time: ERS Tiers 3 and 4

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(We know that’s two, but let us explain.) When you join the New York State and Local Retirement System (NYSLRS), you’re assigned a tier based on your date of membership. There are six tiers in the Employees’ Retirement System (ERS) and five in the Police and Fire Retirement System (PFRS). Your tier determines such things as your eligibility for benefits, the calculation of those benefits, death benefit coverage and whether you need to contribute toward your benefits.

Our series, NYSLRS – One Tier at a Time, walks through each tier and gives you a quick look at the benefits in both ERS and PFRS. Today’s post looks at ERS Tiers 3 and 4. Of our current 650,251 ERS members, 263,561 are in Tiers 3 and 4, representing 40.5 percent of ERS membership.

Most ERS Tier 3 and Tier 4 members (unless they are in special retirement plans) retire under the Article 15 retirement plan. Check out the graphic below for the basic retirement information for Tiers 3 and 4 members in this plan.

ERS Tiers 3 and 4 - Article 15

Membership Milestones for ERS Tiers 3 and 4

ERS members in Tiers 3 or 4 need five years of service credit to become vested. Once vested, they’re eligible for a lifetime pension benefit as early as age 55. However, if they retire before the full retirement age of 62 with fewer than 30 years of service credit, their benefit will be reduced. Some Tier 3 and 4 members, such as sheriffs or correction officers, can retire with 20 or 25 years of service, regardless of age and without penalty.

You can check your service credit total and estimate your pension using Retirement Online. Most members can use our online pension calculator to create an estimate based on the salary and service information NYSLRS has on file for them. You can enter different retirement dates to see how your choices would affect your potential benefit.

For more information about Tier 3 and 4 membership, find your NYSLRS retirement plan publication. It’s a comprehensive description of the benefits provided by your specific plan.