Tag Archives: Earnings

Tier 6 Member Contribution Rate Changes

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Most NYSLRS members contribute a percentage of their earnings toward their retirement. For Tier 6 members (those who joined NYSLRS on or after April 1, 2012), your contribution rate is based on your earnings and is subject to change each year on April 1.

The minimum contribution rate is 3 percent, and the maximum is 6 percent.

Tier 6 contribution rates

How Your Tier 6 Contribution Rate is Calculated

If you are a new Tier 6 member, your contribution rate is based on a projected annualized wage provided by your employer. For new part-time employees, your employer calculates a projected annualized wage by using your part-time rate to determine what your annual wage would be if you worked full-time.

Once you have been a member for more than two full state fiscal years, your contribution rate is calculated using actual earnings reported to us by your employer(s) from two state fiscal years prior. So, contribution rates for April 1, 2025 through March 31, 2026 are based on what you actually earned in all public employment from April 1, 2023 through March 31, 2024.

Earnings include:

Overtime Pay Temporarily Excluded from Tier 6 Contribution Rates

A new law temporarily excludes overtime pay earned from April 1, 2022 through March 31, 2024 from the calculation of Tier 6 contribution rates. This may lower contribution rates for some Tier 6 members from April 1, 2024 through March 31, 2026.

For more information, read our blog post, Overtime Pay Temporarily Excluded from Tier 6 Contribution Rates.

Contribution rates are set at the beginning of each fiscal year on April 1. If your contribution rate changes, we notify your employer in March so they can update their payroll system to withhold the proper amount.

For more information, visit our Member Contributions webpage.

Understanding Your NYSLRS Pension

NYSLRS pensions are defined benefit plans, also known as traditional pension plans. When you retire, you will receive a monthly pension payment for the rest of your life. Your pension will be calculated using a preset formula based on your earnings and years of service—it will not be based on the individual contributions you paid into the system. Member contributions support the benefits earned by current and future retirees and are an important asset of the Common Retirement Fund, which holds and invests the money used to pay NYSLRS benefits.

Find your NYSLRS retirement plan publication for comprehensive information about your retirement benefits and how your pension will be calculated.

Calculating Your Final Average Earnings

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As a NYSLRS member, you have a defined benefit plan that provides a lifetime pension when you retire. Your NYSLRS pension benefit amount will be determined by several factors, including your tier, service credit, and final average earnings (FAE).

When we calculate your pension, we find the consecutive years when your earnings were highest. These are usually your years of employment immediately before retirement, but they can be anytime in your career and do not need to match up with calendar years or fiscal years.

Update: Tier 6 Final Average Earnings Based on Highest Three Years

A new law improves the pension benefits of NYSLRS Tier 6 members. When you retire, your FAE will be based on the average of your three highest consecutive years of earnings, the same as members in other tiers.

These improvements apply to members who retire on or after:

  • April 1, 2024, for Police and Fire Retirement System (PFRS) Tier 6.
  • April 20, 2024, for Employees’ Retirement System (ERS) Tier 6.

Previously, your FAE was the average of your highest five consecutive years of earnings.

If you recently retired and the change applies to you, we have updated your pension calculation — you don’t need to contact us. The new law does not apply to members who retired before the dates above.

Understanding Final Average Earnings Limits

If your earnings increase significantly through the years used in your FAE, some of those earnings may not be used toward your pension.

Your limit depends on whether you’re an ERS or PFRS member and your tier. For most members, if the earnings in any 12-month period in your FAE exceed the average of the previous two years by more than 10 percent, the amount above 10 percent will not be included in your FAE calculation.

Calculating Your Final Average Earnings

For more information, including limits for other tiers, visit our Final Average Earnings page.

Types of Earnings Included in Your FAE

The specific types of earnings included in your FAE calculation depend on your retirement plan and tier. Please check your plan publication for details.

In most cases, your FAE will include the payments listed below, if they are earned in the FAE period. (In some cases, restrictions may apply.)

In most cases, the following payments will not be included in your FAE calculation:

  • Unused sick leave;
  • Payments made as a result of working your vacation;
  • Any form of termination pay;
  • Payments made in anticipation of retirement; and
  • Any payments made for time not worked.