ERS Tier 6 Benefits – A Closer Look

Financial advisers say you will need to replace between 70 and 80 percent of your salary to maintain your lifestyle after retirement. Your NYSLRS pension could go a long way in helping you reach that goal, especially when combined with your Social Security benefit and your own retirement savings. Here’s a look at how Employees’ Retirement System (ERS) members in Tier 6 (who are vested once they’ve earned five years of credited service), can reach that goal. Members who joined NYSLRS since April 1, 2012 are in Tier 6.

formula for a financially secure retirement

Calculating an ERS Tier 6 Member’s Pension

Your NYSLRS pension will be based on your Final Average Earnings (FAE) and the number of years you work in public service. FAE is the average of the five highest-paid consecutive years. Note: The law limits the FAE of all members who joined on or after June 17, 1971. For example, for most members, if your earnings increase significantly through the years used in your FAE, some of those earnings may not be used toward your pension.  

Although ERS members can generally retire as early as age 55 with reduced benefits, the full retirement age for Tier 6 members is age 63.

For ERS Tier 6 members in regular plans (Article 15), the benefit is 1.66 percent of your FAE for each full year you work, up to 20 years. At 20 years, the benefit equals 1.75 percent per year for a total of 35 percent. After 20 years, the benefit grows to 2 percent per year for each additional year of service. (Benefit calculations for members of the Police and Fire Retirement System and ERS members in special plans vary based on plan.)

Say you begin your career at age 28 and work full-time until your full retirement age of 63. That’s 35 years of service credit. You’d get 35 percent of your FAE for the first 20 years, plus 30 percent for the last 15 years, for a total benefit that would replace 65 percent of your salary. If you didn’t start until age 38, you’d get 45 percent of your FAE at 63.

Examples of ERS Tier 6 Pension Calculation

So, that’s how your NYSLRS pension can help you get started with your post-retirement income. Now, let’s look at what the addition of Social Security and your own savings can do to help you reach your retirement goal.

Other Sources of Post-Retirement Income

Social Security: According to the Social Security Administration, Social Security currently replaces about 40 percent of the wages of a typical worker who retires at full retirement age. In the future, these percentages may change, but you should still factor it in to your post-retirement income.

Your 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. New York State employees and some municipal employees can participate in the New York State Deferred Compensation Plan. If you haven’t already looked into Deferred Compensation, you might consider doing so now.

9 thoughts on “ERS Tier 6 Benefits – A Closer Look

  1. M

    I left state service for a federal job because the Tier 6 is so broken. I would have preferred to stay because I loved the work and helping the public, but I couldn’t bear the burden.

    Reply
  2. Steph

    We need a massive overhaul of tier 6. It’s a joke! Why do you think younger generations are not going into education anymore?? It’s not worth it!! I’m struggling to pay my mortgage and taxes and childcare and kids and bills and yet I see my tier 4 colleagues done with paying their pension dues. It’s disgusting and an embarrassment to nys. Thinking of leaving the profession just to have a livelihood. Maybe things need to get worse in order to make things better. Can someone organize a protest or rally? We have to do something for us and future educators! It’s a civic duty.

    Reply
  3. Fix Tier 6

    I totally agree with “Concerned Citizen”, those of us who are in Tier 6 are being forced to bare the brunt of the cost of the awesome benefits that the prior tier are getting/will get. When I get to retire, I will have paid into ERS at least 30 year, yet I will still have no security that I’ll be able to live on that benefit even with my own separate retirement savings. Younger generations shouldn’t be punished for lack of foresight with what was promised to elder generations. The state and local governments are in their best financial condition in years, why isn’t that being reflected in the wages and benefits provided to it’s employees?

    Reply
    1. FIX TIER 6!!!

      Agree as well. Not only does 6 need to pay into this the WHOLE TIME we work, the % we pay goes up as our salary does. Where as 4 gets a simple 10 years at a locked 3%. That’s not right. Tier 6 (and 5 as it’s small and usually lumped in) is the largest Tier… What good is a UNION if it doesn’t represent the majority? Shorter vesting isn’t what we need. We need a small tweak on Tier 4. We need some tweaks on anyone still working on the 1-3 tiers too. They are more than set, I’m sure. Lastly, we need to make Tier 6 more friendly. Too many people retired and put a LARGE amount of work on the Tier 6 shoulders. It’s not worth it to stay like it used to be. Fix Tier 6, and then END it. Make a Tier 7 now to help spread out that burden.

      Reply
  4. Concerned citizen

    Still not good enough, tier 6 is paying for past NYS mistake. So tier 6 pays retirement benefits for all of there career, receives a lesser benefit than previous tiers and has to work longer. Why punish tier 6 for past mistakes. Just make a total overhaul from tier 4 on. 1.75 pension multiplier coupled with low pay and career payments into the pension is not good. Tier 4 and below should change. No wonder NYS is going broke, another California. Although the pension is well funded, we are taxed to oblivion. One of the highest state taxes, highest property taxes, highest county and city taxes. Move out of NYS before it’s to late!

    Reply
  5. Mark Davis

    Can anyone please ballpark me a pension for tier six doccs with 7 years of service. Approx how much per year or month would be fine.

    Reply
    1. NYSLRS

      Please call our customer service representatives at 1-866-805-0990 (or 518-474-7736 in the Albany, NY area), press 2, then follow the prompts. You can also email them using our secure email form. Filling out the secure form allows them to safely contact you about your personal account information.

      Reply
    2. jbyrd2345

      7 years ? You’re getting do-do just like I am going on 8 years , I have to work til I’m 83 years old !

      Reply

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