Tag Archives: New York State & Local Retirement System

A Message from NYSLRS About the Coronavirus (COVID-19)

The coronavirus (COVID-19) has disrupted our daily lives in ways large and small. As New York and the rest of the nation work on treatment and containment of this virus, many New Yorkers are concerned about what the future will bring.

The New York State and Local Retirement System (NYSLRS) wants to assure retirees and members who rely on the state pension fund for fiscal security that it is well positioned to weather the volatility in the financial markets. Your retirement benefits are secure and you will continue to receive your pension payments.

Retirees: Please Sign Up for Direct Deposit

As NYSLRS closely monitors the public health measures being taken to prevent the community transmission of the coronavirus, there are circumstances that could arise that impact the delivery of pension checks, particularly the ability of retirees to go to the bank to deposit them.

NYSLRS strongly urges retirees to consider signing up for direct deposit, instead of receiving a monthly pension by check via mail delivery. The vast majority of our retirees have their retirement and Social Security benefits deposited directly into their checking or savings account. Direct deposit is quick and safe. To enroll in direct deposit, complete the Electronic Funds Transfer Direct Deposit Enrollment Application (RS6370).

Planning for an Unplanned Retirement

Know Your Benefits

As a NYSLRS member, you’re entitled to benefits that may help. Most vested members can begin collecting a lifetime pension as early as age 55, though your benefit may be permanently reduced if you retire before full retirement age. (Full retirement age for NYSLRS members is either 62 or 63, depending on your tier. Full retirement age for Social Security benefits depends on your year of birth.)

If you can no longer do your job because of a physical and mental condition, you may be eligible for a Social Security Disability, or a NYSLRS disability benefit if your disability is permanent.

You may also want to look into Workers’ Compensation if you are injured on the job or Unemployment Insurance if you have been laid off from a position.

Other Ways to Plan for the Unexpected

Doing your homework is important. The more you understand the potential benefits available to you, the better you can estimate your income if you are forced to retire early. Unfortunately, the numbers you come up with may not be enough when dealing with an unplanned retirement.

But one potential source of income can make a big difference: retirement savings. Your savings could help you get by until you are eligible to collect your NYSLRS pension or another retirement benefit. If you are not saving for retirement, consider starting now. And if you are saving, consider increasing your savings. It could become a lifeline if the unexpected happens.

New York State employees and some municipal employees can also save for retirement through the New York State Deferred Compensation Plan. Ask your employer if you are eligible.

For more information about the benefits offered by your NYSLRS retirement plan, visit our website to read your plan publication.

Retirement and Your Credit Score

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Throughout your working years, you strived to maintain good credit. But if you’re retired, or about to retire, is a good credit score that important? The answer is yes, according to many financial experts. You don’t want to be burdened with debt in your retirement years, but you may need to get a car loan or refinance a mortgage. A good credit score will assure you can borrow the money at a decent interest rate.

But your credit score can affect you even if you don’t borrow money. A bad credit score could prevent you from landing a job or renting an apartment. It could even force you to pay higher insurance premiums.

Fortunately, maintaining a good credit score is not that difficult. In most cases, it’s a matter of continuing what you’ve already been doing.

How to Maintain a Good Credit Score

Pay your bills on time. Your payment history accounts for about a third of your credit score.
Don’t max out your credit cards. The ratio of debt to available credit is also a big factor. If all your credit cards have balances near the limit, your credit score will suffer.
Don’t close credit card accounts you’ve had for a long time. These accounts show your long history of being responsible with credit, helping to boost your score.
Check credit reports. Even if you’re doing everything right, misinformation in the files of credit rating companies can hurt your credit. (And, no, requesting a credit report will not hurt your credit score.)

Things like age and salary are not part of the credit score equation, so being retired does not hurt your score. However, lenders do take income into account when you apply for a loan, so you may find it harder to borrow after retirement, even if you have good credit.

Checking Credit Reports

Under federal law, the three nationwide credit reporting companies are required to provide you with a free credit report once every 12 months. But you must request it. You can do it online at www.annualcreditreport.com or by calling 1-877-322-8228. (AnnualCreditReport, a website maintained by the three major credit reporting agencies, is the only free-credit-report site authorized by the federal government. Beware of impostor sites.)

NYSLRS’ Special Retirement Plans

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NYSLRS manages more than 300 retirement plan combinations for its members, which are described in more than 50 plan booklets. But, for all that complexity, they breakdown into just two main types: regular plans and special plans. Under a regular plan, you need to reach certain age and service requirements to receive a pension. For instance, if you’re a Tier 4 member in the Employees’ Retirement System (ERS) with a regular plan, you’re eligible for a benefit when you turn 55 and have five or more years of service credit. Most of our ERS members are in regular plans.

Special plans are a little different. With special plans, NYSLRS members can receive a pension after completing 20 or 25 years of service. There is no age requirement; you can retire at any age once you have the full amount of required service credit. Both ERS and the Police and Fire Retirement System (PFRS) have special plans.

Special Plans for Special Services to the State

As of March 31, 2018, seven percent of active ERS members and 98 percent of active PFRS members are in special plans. These members fill roles such as:

Police officer;
Firefighter;
Correction officer;
Sheriffs undersheriff, and deputy sheriff; and
Security hospital treatment assistant.

Public employees in jobs like these face dangers and difficulties throughout their careers. They fight fires, patrol our neighborhoods, assist ill patients and more. We’d like to take this opportunity to thank them for the challenging, sometimes life-threatening work they do each day.

If you’d like to learn more about your retirement plan, please visit the Publications page of our website and review your plan publication. If you’re not sure which booklet covers your benefits, you can check your Member Annual Statement, ask your employer or send us an email using our secure contact form.

Retirement Planning Tip: Required Minimum Distributions

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If you have tax-deferred retirement savings (such as certain 457(b) plans offered by NYS Deferred Comp), you will eventually have to start withdrawing that money. After you turn 70½, you’ll be subject to a federal law requiring that you withdraw a certain amount from your account each year. If you don’t make the required withdrawals, called Required Minimum Distributions (RMDs), you could face significant penalties.

RMDs are never eligible for rollover into other retirement accounts. You must take out the money and pay the taxes.

Calculating the Distribution

The RMD amount must be calculated annually. It’s based on the account’s balance at the end of the previous calendar year and the life expectancy of you and your beneficiary. Check out AARP’s Required Minimum Distribution Calculator for an easy way to determine your required distributions. Many retirement plan administrators, including the New York State Deferred Compensation Plan, will inform you of your RMD amount, but it’s your responsibility to take the required distribution.

Potential Penalty

If you don’t take the required distribution, or if you withdraw less than the required amount, you may have to pay a 50 percent tax on the amount that was not distributed. (You must report the undistributed amount on your federal tax return and file IRS Form 5329.)

The IRS may waive the penalty if you can show that your failure was due to a “reasonable error” or that you have taken steps to correct the situation. You can find information about requesting a waiver on page 8 of the Form 5329 instructions.

What Accounts Require Minimum Distributions?

Most retirement accounts you’re familiar with require these annual withdrawals:

457(b) plans
IRAs (traditional, SEP and SIMPLE)
401(k) plans
403(b) plans
Profit-sharing plans
Money purchase plans

Since contributions to Roth IRAs have already been taxed, the IRS does not require distributions from Roth IRAs at any age.

As with most things investment-related, a lot depends on your particular circumstances. If you have questions, contact your financial advisor or your plan administrator.

Firefighters Deserve A Salute Every Day

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Recognizing Firefighters

It’s National Fire Prevention Week this week and, while attention is properly focused on promoting fire prevention, we also think it’s a great time to recognize all the firefighters who are members of the New York State and Local Retirement System (NYSLRS).

Of the 533,415 members in NYSLRS, 32,470 are in the Police and Fire Retirement System (PFRS). More than 6,000 of these brave men and women are firefighters.

NYSLRS Membership and Firefighters

All firefighters working for participating employers are PFRS members. With that membership comes a variety of benefits, including certain death and disability benefits as well as a pension. As firefighters and other PFRS members progress through their careers they become eligible for these benefits. For example, from day one, PFRS members are covered by job-related death and disability benefits. However, with ten years of service credit, most members are also eligible for a non-job-related disability benefit.

In addition, most PFRS employers offer their employees special retirement plans. A special plan lets members retire after completing 20 or 25 years of credited service in specific job titles rather than reaching a certain age. Most firefighters — and, in fact, nearly 80 percent of all PFRS members (25,784) — are enrolled in a set of special 20- and 25-year plans. Whether members need 20 or 25 years depends on their retirement plan.

Firefighters are Heroes

To the members of the New York State Professional Fire Fighters Association, the Firemen’s Association of the State of New York and the New York State Association of Fire Chiefs; to the county fire marshals, supervising fire marshals, fire marshals, assistant fire marshals, assistant chief fire marshals and chief fire marshals: Thank you for your service to New York and its citizens. We are grateful for the valuable service you provide all of us.

Spending Changes in Retirement

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Just like starting your first job, getting married or having kids, retirement will change your life. Some changes are small, like sleeping in or shopping during regular business hours. Others, however, are significant and worth examining ahead of time… like how much you’ll be spending in retirement each month or each year.

An Employee Benefit Research Institute (EBRI) study offers some good news for prospective retirees. Household spending generally drops at the beginning of retirement — by 5.5 percent in the first two years, and by 12.5 percent in the third and fourth years. (Although, nearly 46 percent of households actually spend more in the first two years of retirement.)

Analysis from the Bureau of Labor Statistics in the U.S. Department of Labor seems to support the research from EBRI. In “A closer look at spending patterns of older Americans,” the author analyzed data from the 2014 Consumer Expenditure Survey, and she also found a progressive drop in spending as age increases. (Income declines with age as well.)

While data supporting EBRI’s study is helpful, it turns out that the highlight of the Consumer Expenditure Survey results is a detailed look at how the things we spend our money on change as we grow older.

As interesting as that is, it’s just a general look at how older Americans are managing their money. What really matters is: How will you spend your money once you retire?

Prepare a Post-Retirement Budget

Like a fiduciary choir, financial advisors all sing the same refrain: Start young; save and invest regularly to meet your financial goals. If you do, the switch from saving to spending in retirement can be easy.

But, in order to make that transition, you need a budget.

The first step toward a post-retirement budget is a review of what you spend now. For a few months, track how you spend your money. Don’t forget to include periodic costs, like car insurance payments or property taxes. By looking at your current spending patterns, you can get an idea of how you’ll spend money come retirement.

Then, consider your current monthly income, and estimate your post-retirement income. If your post-retirement income is less than your current income, you might want to plan to adjust your expenses or even consider changing your retirement date.

We have monthly expense and income worksheets to help with this exercise. You can print them out and start planning ahead for post-retirement spending.

Monthly Worksheets (PDF)

For those of you who carry smart phones, Forbes put together a list of popular apps for tracking your daily spending. All of them are free, though some do sell extra features. Many of them can automatically pull in information from your bank and credit card accounts, but if you’d rather avoid that exposure or if you use cash regularly, you may prefer an app that lets users enter transactions manually.

Creditable Service for Police & Fire Members

What Credit Counts Towards Retirement?

The public service that can be used toward your 20 or 25 years is determined by the specific retirement plan under which you’re covered. Check your retirement plan booklet for details.

There are booklets for state police , forest rangers , regional state park police , state university police , EnCon police and members covered under Sections 384, 384-d and 384-e of Retirement and Social Security Law (RSSL). More plan booklets are available on our Publications page.

The most common PFRS plan, which covers nearly 50 percent of PFRS members, was established by Section 384-e of RSSL. With this plan, you earn creditable service:

As a firefighter or police officer under the 384-e plan;
As a member or officer of the New York State Police; or
In the military, as specified by law.

In the 384-e retirement plan, civilian service, as well as service as a sheriff, corrections officer or volunteer firefighter, is not creditable.

creditable service for police and fire retirement system members

Transferring Membership or Purchasing Service Credit — Contact Us First

If you have worked for multiple New York State public employers and are unsure if all of your service is creditable towards your 20 or 25 year plan, contact us before transferring membership or purchasing service credit . Please note: the public service that can be used toward your 20 or 25 years is determined by legislation and differs among plans offered to PFRS members. You should also be sure to request an estimate from us well before your planned date of retirement if there is any question about your creditable service.

Get an Estimate

PFRS members should request an estimate from us as early as 18 months before you plan to retire. It’s the best way to make sure you have all the credit you’re entitled to. Simply fill out and return a Request for Estimate (RS6030) form.

Health Care Costs Can Be Steep in Retirement

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As you plan for your retirement, you may be forgetting one important thing – health care.

NYSLRS does not provide health care coverage for its retirees, and we’re not the experts on this subject. But we do offer advice to members about retirement planning, and how you’ll pay for health care coverage and out-of-pocket medical expenses should be an important consideration as you approach retirement.

Know the Health Care Cost Facts

Medicare premiums, deductibles, co-payments and prescription drug costs all add up. And those expenditures are likely to rise because health costs have been increasing faster than the rate of inflation and people spend more on medical expenses as they age.

Recent reports indicate a typical 65-year-old retiring in 2018 would spend well over $100,000 to cover medical costs over the course of retirement. What’s more, most NYSLRS members can retire as early as 55. That means you may spend a longer time in retirement than the average retiree, and you may not be eligible for Medicare for years.

couple working on their budget together

What You Can Do To Prepare

Before you can budget for retirement medical costs, you’ll need to do your homework. Start by talking to your employer about the health care options available to you after your retire and get an estimate of how much you will need to pay. You should also familiarize yourself with Medicare’s options, benefits and costs.

Once you get an idea of what your monthly health care might be, you can start planning how to pay for it. You may have to increase your retirement savings. If you’re a state employee, or a municipal employee covered by the New York State Health Insurance Program (NYSHIP), you may be able to get credit for unused sick leave that can reduce your NYSHIP premium. This program is managed by the New York State Department of Civil Service, not NYSLRS. Their Planning for Retirement booklet provides some good information.

Getting Credit for Your Military Service

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If you served in the U.S. Armed Forces, you may be eligible to buy back up to three years of active service credit. Because service credit is a factor in calculating a NYSLRS pension, in most cases buying military service credit will increase your pension.

Military Service Credit

To be eligible, veterans must:

Have been honorably discharged;
Have at least five years of credited service in the Retirement System;
Have not received credit for this service in any other public retirement system in New York State; and
Apply for and purchase military service credit before they retire.

How to Apply for Military Service Credit

To apply and request a cost for military service credit:

1. Fax your name, contact information and a copy of your DD-214 to 518-486-6405 or 518-402-7799;

2. Mail a letter with your name and contact information, and a photocopy of your DD-214, to:
Military Service Unit
110 State Street
Albany, NY 12244-0001

If after reviewing your application we determine you are eligible, we will send you a letter that will tell you how much credit you are eligible to purchase and the cost. Most members in Tier 1, 2, 3 or 4 can use our online benefit projection calculator to see how the credit would impact your pension. Tier 5 and 6 members can get that information by calling 1-866-805-0990, or using our secure email form (www.emailNYSLRS.com).

For more information, visit the Military Service Credit page on our website.

New York Retirement News

News from the New York State and Local Retirement System