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How Your Tier 6 Contribution Rate Can Change

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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 change 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 on April 1, the beginning of the State’s fiscal year. Once your rate is determined for a given fiscal year, it doesn’t change for the rest of that fiscal year.

Recently enacted legislation is lowering contribution rates for some Tier 6 members, for up to two years. Read about it in our blog post, Overtime Pay Temporarily Excluded From Tier 6 Contribution Rates.

How Your Tier 6 Contribution Rate is Calculated

Tier 6 contribution rates are based on what you earn during a State fiscal year, from April 1 through March 31. The minimum rate is 3 percent of your earnings, and the maximum is 6 percent. Your contribution rate is calculated by NYSLRS based on the earnings reported by your employer.

If you are a Tier 6 member with three or more years of membership in NYSLRS, your rates are based on your earnings from the last completed fiscal year. We provide rates to your employer in March, a few weeks before they need to apply any rate changes for the Tier 6 employees at your organization. For example, the contribution rate being provided to your employer in March 2023 is based on earnings for the fiscal year that ended March 2022 (so, what you earned from April 1, 2021 through March 31, 2022).

This video will help explain how your contribution rate is determined:

If you are a new NYSLRS member, during your first three years of membership your contribution rate is based on an estimated annual wage that your employer provided when you were enrolled as a new member.

Learn More

The amount you contribute to the Retirement System will not affect the amount of your pension. A NYSLRS pension is a defined-benefit plan. Under this type of plan, once you are eligible for a pension and apply for retirement, you will receive a monthly payment for the rest of your life. The amount of your pension will be calculated using a formula based on your retirement plan, years of service and final average earnings. You can learn more about your pension by reading your retirement plan publication. Use our Find Your NYSLRS Retirement Plan Publication tool to find yours.

Overtime Pay Temporarily Excluded From Tier 6 Contribution Rates

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April 2022 legislation temporarily changes how Tier 6 contribution rates are calculated.

As a Tier 6 member, your contribution rate is based on your past earnings and can change from year to year. Usually, Tier 6 contribution rates are calculated using a member’s base pay, which includes regular earnings, holiday pay and longevity pay. Overtime pay (up to a certain limit) is also included in the calculation of the contribution rate.

The legislation removes overtime earned from April 1, 2020 through March 31, 2022 from the Tier 6 contribution rate calculation. For some Tier 6 members, this has resulted in lower contribution rates for up to two years. The lower rates affect earnings that are being paid from April 1, 2022 through March 31, 2024.

Although overtime is temporarily removed from the calculation of Tier 6 contribution rates, your contribution rate is still applied to all your pensionable earnings, including overtime. 

Our video Understanding Your Tier 6 Contributions helps explain how your contribution rate is determined.

contribution rates

Who is Affected by the Rate Change?

The temporary exclusion of overtime affects Tier 6 members who:

  • Earned overtime from April 1, 2020 through March 31, 2022; and
  • Make mandatory contributions toward their retirement (most Tier 6 members do).

The rate decrease does not apply to:

  • Members who are already paying the minimum rate of 3 percent;
  • Members who did not earn overtime during the COVID pandemic; and
  • New members whose rate is based on an estimated wage rather than actual earnings.

If you are a Tier 6 member who is affected by the legislation, we worked with employers to review your past earnings and to determine whether your rate should be lowered. Members who should have contributed at a lower rate beginning April 1, 2022 received a refund. The rate that will be applied to your earnings from April 1, 2023 to March 31, 2024 already takes the legislation into account.