Tag Archives: ERS

ERS Tier 3 and 4 Milestones

When you join the Employees’ Retirement System (ERS), you are assigned a tier based on your date of membership. You are in:

  • Tier 3 if you joined July 27, 1976 through August 31, 1983.
  • Tier 4 if you joined September 1, 1983 through December 31, 2009.

Let’s look at the ERS Tier 3 and 4 milestones and how they 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 increases to your existing benefits. Understanding these milestones can help you plan for retirement.

Your ERS Tier 3 and 4 milestones and pension calculation depend on your retirement plan, so it is important to familiarize yourself with the details of your plan. Most ERS Tier 3 and 4 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, you’re in this plan. For members not covered by the Article 15 retirement plan, visit our website to Find Your NYSLRS Retirement Plan Publication.

Important ERS Tier 3 and 4 Milestones

ERS Tier 3 and 4 member milestones

Here are some additional important milestones for Tier 3 and 4 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 3 and 4 members, there would be reductions to your benefit if you retire before age 62 with less than 30 years of service credit.
  • You can retire with full benefits at age 62.
    • If you retire with less 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 20 to 30 years of service, your pension will equal 2 percent of your FAE for each year of service.
    • For each year of service beyond 30 years, you will receive 1.5 percent of your FAE.

Note: When you retire, your FAE will be based on the average of your three highest consecutive years of earnings. The law limits the FAE of all members who joined on or after June 17, 1971. Read our blog post, Calculating Your Final Average Earnings, for more information, including how your FAE will be calculated and limitations.

Most members can estimate their pension in Retirement Online. You can fine tune your estimate by entering your annual earnings and expected pay increases. You can also include any service credit you plan to purchase.

ERS Tier 5 Milestones

If you joined the Employees’ Retirement System (ERS) on or after January 1, 2010, but before April 1, 2012, you are a Tier 5 member. Let’s look at the ERS Tier 5 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 increases to your existing benefits. Understanding these milestones will help you plan for retirement.

Your ERS Tier 5 milestones and pension calculation depend on your retirement plan, so it is important to familiarize yourself with the details of your plan. Most ERS Tier 5 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, you’re in this plan. For members not covered by the Article 15 retirement plan, visit our website to Find Your NYSLRS Retirement Plan Publication.

Important ERS Tier 5 Milestones

ERS Tier 5 milestones

Here are some additional important milestones for Tier 5 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 at least five years of service credit. However, for most Tier 5 members, there would be reductions to your benefit if you retire before age 62.
  • You can retire with full benefits at age 62.
    • If you retire with less 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 20 to 30 years of service, your pension will equal 2 percent of your FAE for each year of service.
    • For each year of service beyond 30 years, you will receive 1.5 percent of your FAE.

Note: When you retire, your FAE will be based on the average of your three highest consecutive years of earnings. The law limits the FAE of all members who joined on or after June 17, 1971. Read our blog post, Calculating Your Final Average Earnings, for more information, including how your FAE will be calculated and limitations.

Most members can estimate their pension in Retirement Online. You can fine tune your estimate by entering your annual earnings and expected pay increases. You can also include any service credit you plan to purchase.

ERS Tier 6 Milestones

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 ERS Tier 6 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 increases to your existing benefits. Understanding these milestones will help you plan for retirement.

Your ERS Tier 6 milestones and pension calculation depend on your retirement plan, so it is important to familiarize yourself with the details of your 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, you’re in this plan. For members not covered by the Article 15 retirement plan, visit our website to Find Your NYSLRS Retirement Plan Publication.

Important ERS Tier 6 Milestones

ERS Tier 6 milestones

Here are some additional 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 at least 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 less 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 20 years of service, your pension will equal 1.75 percent of your FAE for each year of service.
    • For each year of service beyond 20 years, you will receive 2 percent of your FAE.

Note: A new law improves your pension benefits. When you retire, your final average earnings (FAE) will be based on the average of your three highest consecutive years of earnings, the same as members in other tiers. Read our blog post, Calculating Your Final Average Earnings, for more information, including how your FAE will be calculated and limitations.

Most members can estimate their pension in Retirement Online. You can fine tune your estimate by entering your annual earnings and expected pay increases. You can also include any service credit you plan to purchase.

Overtime Pay Temporarily Excluded from Tier 6 Contribution Rates

The 2024–25 State Budget included a new law which 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 most Tier 6 members with more than three years of service, your contribution rate is based on what you actually earned in public employment two years prior. The minimum rate is 3 percent of your earnings, and the maximum is 6 percent. For more information about how your contribution rate is determined, read our blog post, How Your Tier 6 Contribution Rate Can Change, or visit our Member Contributions page.

Overtime Pay Temporarily Excluded from Tier 6 Contribution Rates

Who is Affected by the Change to Tier 6 Contribution Rates?

As a Tier 6 member, you may have your contribution rate lowered if:

  • You make mandatory contributions toward your retirement (most Tier 6 members); and
  • You earned overtime from April 1, 2022 through March 31, 2024.

The rate decrease will not apply if:

  • You already pay the minimum rate of 3 percent;
  • You did not earn overtime from April 1, 2022 to March 31, 2024; or
  • You joined NYSLRS on or after April 1, 2022. Your rate is based on an estimated wage provided by your employer when you were enrolled into NYSLRS rather than your actual earnings.

When Will Tier 6 Contribution Rates Be Updated?

We will work with employers to review your past earnings, determine whether your rate should be lowered and refund contribution overpayments if your rate is lowered.

Tier 6 is now the largest tier in NYSLRS. With more than 400,000 Tier 6 members, it will take several months to collect detailed earnings information from employers and change rates. We thank you for your patience while we make these rate adjustments.

Public Service Recognition Week

This Public Service Recognition Week, we proudly celebrate more than 695,000 members and 470,000 retirees of the New York State and Local Retirement System (NYSLRS) for their service to the people of New York State.

A Brief History of Public Service Recognition Week

This week was created in 1985 to honor those who serve our nation as federal, state, county and local government employees.

Congress officially designated the first full week of May as Public Service Recognition Week. This year, it is being celebrated May 5 through 11.

NYSLRS Members Deliver Critical Services

From the smallest village to our biggest cities, New York public employees like you provide the essential services that improve our quality of life. You work for employers such as:

  • New York State
  • Couties, Towns and Villages
  • School Districts
  • Correctional Facilities
  • Public Libraries
  • Fire and Water Districts

Whether they are protecting public health and safety, driving our children to school or clearing snow from the roads, NYSLRS members deliver the critical services New Yorkers depend on. Many NYSLRS members and retirees also give back to our state by volunteering in their communities or supporting charitable causes.

Public Service Recognition Week

Comptroller DiNapoli’s Faith in Public Service

New York State Comptroller Thomas P. DiNapoli is the administrator of NYSLRS and trustee of the Common Retirement Fund. His public service career began at 18 years old, when he won his first election to become a trustee on the Mineola Board of Education. That made him the youngest person in New York State history to be elected to public office. He is also the second longest-serving comptroller in New York State history.

Comptroller DiNapoli is understandably proud about the career path he has chosen, and he often speaks about the contributions that New York’s public employees make to their communities and their State. He encourages young people to consider a career in public service. “It’s more than a job,” he says. “It’s a career with purpose.

Overtime Limits for Tier 5 and 6 Members

Tier 5 and 6 members are subject to limits on the amount of overtime that can be included in their pension. You can earn overtime pay beyond the overtime limit, but it won’t be factored into your pension calculation. And you don’t pay member contributions on overtime pay that is above the limit.

Overtime Limits for Tier 5 and 6 Members

Tier 5 Overtime Limits

The overtime limit for Tier 5 Employees’ Retirement System (ERS) members increases each calendar year by 3 percent. In 2024, the limit for Tier 5 ERS members is $22,688.85.

For Tier 5 Police and Fire Retirement System (PFRS) members, the overtime limit is 15 percent of your regular earnings each calendar year.

For more information, visit our Overtime Limits for Tier 5 page.

Tier 6 Overtime Limits

The overtime limit for Tier 6 ERS members increases each calendar year based on the annual increase of the Consumer Price Index (CPI). In 2024, the limit for Tier 6 ERS members is $20,459.

For Tier 6 PFRS members, the overtime limit is 15 percent of your regular earnings each calendar year.

For more information, visit our Overtime and Earnings Limits for Tier 6 page.

Your Pension Benefit Calculation

Your NYSLRS pension will be based on your service credit and final average earnings (FAE). Your FAE is the average annual earnings you receive during the period when your earnings are highest (36 consecutive months for Tier 5 and 60 consecutive months for Tier 6). Your FAE will include overtime pay you earned up to each annual limit.

Your FAE may be limited in other ways. For example, for most members, if your earnings increase significantly in the years used for your FAE, some of those earnings might not count toward your pension. The specific limits depend on your tier. Visit our Final Average Earnings page for more information about this limit.

For Tier 6 members, the earnings that can be used toward your pension are also limited to the Governor’s salary.

Read Your Plan Publication

Your retirement plan publication provides specific information about the earnings that will be used to calculate your pension. Visit our website to Find Your NYSLRS Retirement Plan Publication.

Estimate Your Pension in Retirement Online

Most members can create their own pension estimate in minutes using Retirement Online. You can enter different retirement dates to see how those choices would affect your benefit. Sign in to Retirement Online and click the “Estimate my Pension Benefit” button to try it.

Applying for a NYSLRS Loan in Retirement Online

Planning on taking out a NYSLRS loan? Applying through Retirement Online is fast and convenient.

Eligibility for a NYSLRS loan is based on your tier. Generally, you’ll need to be on the payroll of a participating employer, have at least one year of service and have sufficient contributions in your account. (Note: Retirees are not eligible for NYSLRS loans.)

Applying for a NYSLRS Loan in Retirement Online

Retirement Online is the Fastest Way to Apply

When you use Retirement Online, NYSLRS receives your application immediately and can process your loan more quickly. It’s also an easy way to check the amount you are eligible to borrow, your balance on any outstanding loans, and more.

To apply:

As you work your way through the online application, you’ll see:

  • How much you are eligible to borrow;
  • The minimum repayment amount;
  • The expected payoff date; and
  • How much you can borrow without tax implications.

If you apply for a loan and you already have an existing loan (or loans), you’ll choose one of two options:

  1. Multiple loans: With multiple loans, you are taking a new loan, and each of your outstanding loans has a separate five-year due date and minimum payment. The minimum payments for each of your loans are added together for one total minimum payment. This combined minimum payment amount is higher than the minimum would be if you choose a refinanced loan, but with multiple loans, as each loan is paid off, your total minimum payment goes down.
  2. Refinance your existing loan: Refinancing your loan adds your new loan amount to your existing balance and consolidates the entire amount as one loan instead of taking separate loans. Minimum payment amounts for refinanced loans are lower than the minimum for multiple loans because when you refinance, we combine your existing loan balance with your new loan and spread out the repayment over a new five-year term. However, this increases the portion of your loan that may be considered a taxable distribution, and federal withholding can significantly reduce the loan amount that you receive.

There is a service charge of $45 that will be deducted from your loan check when it is issued. The current interest rate is 5 percent. The interest rate will remain fixed for the term of your loan.

NYSLRS loans are exempt from New York State and local income taxes. But the Internal Revenue Service (IRS) may consider all or part of a NYSLRS loan taxable – for instance, if you borrow above certain limits. The Retirement Online loan application will show you the maximum amount you can borrow without tax implications.

When Will I Receive My Loan Check?

Loan checks are mailed out from NYSLRS once a week. To check the status of your loan application:

You will also receive a confirmation letter when your loan case has been completed. You can find it in your Retirement Online account under “View Documents.”

Repaying Your NYSLRS Loan

Loan payments are deducted from your paycheck. If you choose to repay the minimum amount, your payroll deduction may be increased periodically to ensure your loan will be repaid within the required five-year repayment term. You can increase your payroll deduction amount, make additional payments or pay your loan in full at any time with no prepayment penalties. Retirement Online is the easiest way to manage your loan payments. Sign in to your account and select “Manage my Loans.”

Retiring With an Outstanding NYSLRS Loan

If you retire with an outstanding loan, your pension will be reduced. You will also need to report at least a portion of the loan balance as ordinary income (subject to federal income tax) to the IRS. If you retire before age 59½, the IRS may charge an additional 10 percent penalty. If you are nearing retirement, be sure to check your loan balance. If you are not on track to repay your loan before you retire, you can increase your loan payments, make additional lump sum payments or both in Retirement Online.

Note: Employees’ Retirement System (ERS) members may repay their loan after retiring, but they must pay the full amount (that is, the amount that was due on their retirement date) in a single lump-sum payment. Once you do, your pension benefit will increase from that point on, but it will not be adjusted retroactively back to your date of retirement.

Visit Our Website for More Information

For more information about NYSLRS loans, including what happens if you go off payroll or default on your loan, visit our Loans page. Need help with Retirement Online? See our Tools and Tips blog post.

Your Death Benefit Beneficiaries

NYSLRS retirement plans provide death benefits for beneficiaries of eligible members who die before retiring. If you are retired, your beneficiaries may be entitled to a post-retirement death benefit.

It’s important to name beneficiaries and review them periodically. Life circumstances sometimes change, and the beneficiary you named before might not be the one you would choose today. For example, if you just married, you may want to update your NYSLRS account information to name your new spouse as your beneficiary.

2 Types of Beneficiaries

  • Your primary beneficiary will receive your death benefit. You can list more than one primary beneficiary. If you do, they will share the benefit equally. Or you can choose different percentages for each beneficiary to total 100 percent. (Example: John Doe, 50 percent; Jane Doe, 25 percent; and Mary Doe, 25 percent.)
  • A contingent beneficiary will only receive a benefit if all your primary beneficiaries die before you do. If you list multiple contingent beneficiaries, they will share the benefit equally unless you choose different percentages.

Special Beneficiary Designations

Your beneficiary doesn’t have to be a person. You can name a charity, a trust or your estate as your beneficiary.

Special Beneficiary Designations for Your NYSLRS Death Benefit
  • Estate. When you die, your estate is the money and property you owned. Your death benefit will be given to the executor of your estate to be distributed according to the terms of your will. You can name your estate as the primary or contingent beneficiary of your death benefit. If you name your estate as the primary beneficiary, do not name a contingent beneficiary.
  • Trust. You can name a trust as a primary or contingent beneficiary if you have a trust agreement or provided for a trust in your will. The trust itself would be your beneficiary, not the individuals for whom you established the trust. (Speak with your attorney if you’re thinking about making your trust a beneficiary.)
  • Entity. You can also name any charitable, civic, religious, educational or health-related organization as a beneficiary.
  • Minor children. If your beneficiary is under the age of 18 at the time of your death, your benefit will be paid to the child’s court-appointed guardian. You may instead choose a custodian to receive the benefit on the child’s behalf under the Uniform Transfers to Minors Act (UTMA). Custodians can be designated in Retirement Online or you can contact us for more information and the appropriate form before making this type of designation.

Keep Your Beneficiaries Up to Date

You can change your beneficiaries at any time. In addition to adding or removing them to reflect your current wishes, you should review the contact information for your named beneficiaries so we can find them when needed.

The fastest way to view or update your beneficiaries is in Retirement Online.

Find More Information

If you are not yet retired, you can read more about beneficiary designations in Life Changes: Why Should I Designate a Beneficiary?

If you are retired, you may wish to read our Can You Change Your Beneficiary After You Retire? blog post.

How Your Tier 6 Contribution Rate Can Change

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 based on your earnings. The minimum rate is 3 percent of your earnings, and the maximum is 6 percent.

Overtime Pay Temporarily Excluded from Tier 6 Contribution Rates

The 2024–25 State budget included a new law which temporarily excludes overtime pay 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.

Tier 6 contribution rates

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. We provide rates to your employer in March, a few weeks before they need to apply any rate changes.

How Your Tier 6 Contribution Rate is Calculated

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.

If you have been a member for three or more years, NYSLRS calculates your rate using the earnings reported to us by your employer from the last completed fiscal year, April 1, 2022 through March 31, 2023.

Rates are calculated using your base pay, which includes:

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

How Your NYSLRS Pension Works

The amount you contribute to the Retirement System does 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 how your pension will be calculated by reading your retirement plan publication. Use our Find Your NYSLRS Retirement Plan Publication tool to find yours.

Supplement Your NYSLRS Pension with Retirement Savings

Your NYSLRS pension can provide a significant portion of your retirement income, but it’s also a good idea to supplement your pension and Social Security with a retirement savings account.

Retirement savings can be an important financial asset when you retire. Savings can enhance your retirement lifestyle and give you the flexibility to do the things you want. Your savings can provide money for you to travel, continue your education, pursue a hobby or start a business. The money you set aside can also be a resource in case of an emergency, act as a hedge against inflation and boost your retirement confidence.

Set a Retirement Savings Goal

How much to save is a personal decision, but here are some things to consider.

Financial advisers often recommend saving 10 to 15 percent of your gross earnings throughout your career to retire comfortably. However, that advice is aimed at people with 401(k)-style defined contribution retirement plans as their main source of retirement income.

As a NYSLRS member, you’re part of a defined benefit plan, also known as a traditional pension plan. Your pension, based on your years of service and earnings, will provide a lifetime benefit. You can estimate your pension in Retirement Online to get an idea of the income it will provide in retirement.

Having a pension means you may not need to save as much as someone with only a 401(k). Use a retirement savings calculator to see how much a retirement savings plan could yield over time, or test the results of different savings amounts.

Below you can see potential savings results of someone who invests 50 dollars every two weeks over 30 years. While the stock market can be turbulent over the long term, stock market returns average about 10 percent a year.

Saving for Retirement

As you get closer to retirement, you should develop a plan to withdraw money from your retirement savings. A withdrawal plan will give you a better idea of the income you might expect from your nest egg.

Here is one possible withdrawal strategy, which was designed to provide retirement income for 20 years. Please note, if your retirement is far in the future, the money you withdraw may not have the same value that it has today. However, while inflation has been high recently, it does cycle and has been lower in the past.

Withdrawing from Retirement Savings

If you find you’ll need to save more to meet your goal, you can make adjustments to help ensure you’ll have enough savings in retirement.

Deferred Compensation – A Way to Save

State employees and many municipal employees are eligible to save for retirement through the New York State Deferred Compensation Plan. Once you’ve signed up, your retirement savings, which may be tax-deferred, depending on your plan, will be automatically deducted from your paycheck. (The Deferred Compensation Plan is not affiliated with NYSLRS.)

Check with your employer’s human resources or personnel office to see if they participate in the Deferred Compensation Plan or if they offer other savings options.

Read More About Retirement Savings

You can find more information about saving for retirement in these posts: