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.
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 removed overtime earned from April 1, 2020 through March 31, 2022, from the Tier 6 contribution rate calculation. For some Tier 6 members, this means lower contribution rates for up to two years, including this coming State fiscal year. 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.
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.