Tag Archives: Pension System

Celebrating 100 Years of NYSLRS

NYSLRS 100

On January 3, 1921, NYSLRS began helping New York’s public employees achieve financial security in retirement. Now – 100 years later – we continue to fulfill that promise.

NYSLRS’ Origins

Governor Alfred Smith
In 1920, Governor Al Smith signed legislation establishing the New York State Employees’ Retirement System.

In 1920, the State Commission on Pensions presented Governor Al Smith a report they’d been working on for two years. The report showed that though there were already pension plans covering 8,300 banking department employees, teachers, State hospital workers, Supreme Court and other certain judiciary employees and prison employees, 10,175 State employees were not covered. To help ensure the financial security of public employees during their retirement years, the Commission recommended that a system be established to pay benefits to State employees – and the Commission wanted a system that would always have enough money on hand to pay benefits.

On May 11, 1920, Governor Smith signed legislation creating the New York State Employees’ Retirement System. By June 30 1921, 43 retirees were drawing pensions. The total amount of their annual pensions was $17,420.16. The first disability pension benefit of $256 per year was also paid.

Still Fulfilling Our Promise After 100 Years

Today, there are more than one million members, retirees and beneficiaries in our system, and NYSLRS is one of the strongest and best funded retirement systems in the country. Last fiscal year, NYSLRS paid out $13.25 billion in retirement and death benefits.

Members of the Employees' Retirement System, 1921
Members of the Employees’ Retirement System gather on the steps of the State Education Department building in Albany, NY in 1921.

Our core mission for the last 100 years has been to provide our retirees with a secure pension through prudent asset management. This has been our promise since 1921 and will continue far into the future.

Sources: Report of the New York State Commission on Pensions, March 30, 1920; Chapter 741 of the Laws of 1920; and Report of the Actuary on the First Valuation of the Assets and Liabilities of the New York State Retirement System as of June 30, 1921.

DiNapoli Continues to Fight Against Pension Fraud

Comptroller Thomas P. DiNapoli’s efforts to prevent and stop pension fraud help protect the integrity of NYSLRS and the retirement security of its members and beneficiaries.

The Comptroller’s Office works with law enforcement and local prosecutors to help root out pension fraud. Over the last several years, these investigations have led to dozens of arrests and the recovery of millions of dollars.

DiNapoli Continues to Fight Against Pension Fraud

Recent Pension Fraud Cases

  • A Dutchess County woman failed to notify NYSLRS about her mother’s death and continued to collect her mother’s pension checks. She collected nearly $42,000 before she was caught, and pleaded guilty to petit larceny in July 2019. She was sentenced to three years’ probation and has agreed to pay full restitution.
  • A Westchester County woman kept her deceased mother’s deposited pension checks and spent the money on personal expenses, including cellphone and utility bills. The amount she stole from the retirement system totaled $60,288. She pleaded guilty to a felony grand larceny charge and was sentenced to five years’ probation. She also paid back $22,000, part of her requirement to make full restitution.
  • Two Westchester County sisters are accused of concealing their mother’s death to collect nearly $22,000 of her retirement benefits from 2013 to 2015. They’re charged with third-degree grand larceny, a felony.

Comptroller DiNapoli is also committed to fighting public corruption in state and local government. He partners with law enforcement to bring corrupt officials to justice and recoup stolen taxpayer money.

Since he took office in 2007, DiNapoli’s anti-corruption initiatives have resulted in more than 200 arrests and the recovery of $60 million in taxpayer money.

How You Can Help

The Comptroller encourages the public to report allegations of wrongdoing by:

  • Calling the toll-free Fraud Hotline at 1-888-672-4555;
  • Filing a complaint online; or
  • Mailing a complaint form to:
    Office of the State Comptroller
    Division of Investigations, 8th Floor
    110 State Street
    Albany, NY 12236.

Common Retirement Fund Earns Strong Investment Returns

The New York State Common Retirement Fund (Fund) holds retirement investments in trust for more than 1 million New York State and Local Retirement System (NYSLRS) members. In the State fiscal year ending March 31, 2018, it generated strong investment returns of 11.35 percent. The Fund ended the year with an audited value of $207.4 billion.

New York State Common Retirement Fund Value

Strong Investment Returns

Independent studies regularly confirm the financial soundness of NYSLRS. Just this year, a study by the Pew Charitable Trusts ranked NYSLRS among the best-funded state retirement systems. In fact, a new State fiscal year 2018 report from our actuary ranks NYSLRS at 98 percent funded, which puts us well above the national average of 66 percent funded.

Comptroller Thomas P. DiNapoli, trustee of the Fund, credits the growth to a long term, diversified investment strategy and solid market growth through most of the fiscal year, despite a volatile fourth quarter

Investing for Retirement Security

The Fund is the country’s third-largest public pension fund. NYSLRS provides retirement security to more than 1 million active state and local government employees, retirees and their beneficiaries. During the fiscal year that ended March 31, 2018, NYSLRS paid out $11.45 billion in retirement and death benefits. More than $9.8 billion of that went to residents of New York State, which generated local spending and provided economic support to New York businesses and communities.

Investing Responsibly

While successfully providing financial security for New York’s government workers and retirees, Comptroller DiNapoli’s has also put investment dollars to work helping New York businesses grow and addressing the long-term threat of climate change.

The In-State Private Equity Program invests in New York-based business ventures, companies and other programs that spur economic growth and create and retain jobs. Recently, Comptroller DiNapoli raised the program’s total commitments to $1.6 billion. Since 2000, it has returned $863 million on $583 million invested in 139 transactions.

And recently, the Asset Owners Disclosure Project once again named the Fund as the number one U.S. pension fund — and the third globally — for its work to address climate risk. The Fund’s portfolio includes $7 billion dedicated to sustainable investments, including $4 billion in a low emissions index that shifts stock holdings away from the biggest carbon emitters.

Transferring Your Membership

People make a lot of moves during their working lives. New towns, new jobs and, in some cases, new retirement systems.

Perhaps you were a teacher, but recently began working for New York State. Or maybe you had a job with New York City, but took a position with a municipality outside of the city. If you’ve recently joined NYSLRS and are still an active member of another public retirement system in New York State, you may be able to transfer that membership to NYSLRS.

Transferring to NYSLRS

To request a transfer to NYSLRS, contact the other system while you are still an active or vested member of that system. If you are still employed in a position covered by the other retirement system, or your membership in the other system has been terminated or withdrawn, you are not eligible to transfer.

When we receive your request to transfer from the other retirement system, we will compare your date of membership in NYSLRS with your date of membership in the other system. When the transfer is completed, your date of membership will be the earlier of the two dates. If applicable, your tier will also change.

Transferring from NYSLRS to Another Retirement System

To transfer from NYSLRS to another public pension system in New York State, you must complete and submit an Application for Transfer of Membership (RS5223).

Under certain circumstances, it may not be beneficial to transfer your membership to another retirement system. If you have any questions concerning your transfer, or if you are covered by a special plan, you should contact our Call Center toll-free at 1-866-805-0990 or 518-474-7736 in the Albany, New York area before completing the application.

Whether you are transferring in or out of NYSLRS, the transfer is effective upon receipt of your application and may be irrevocable.

You can find more information about transferring membership on our website.

Investing in a Cleaner Future

Saturday is Earth Day. Since 1970, April 22 has been set aside as a day to draw attention to environmental issues. Today, 47 years after the first Earth Day, we face perhaps the greatest threat to the planet: climate change as a result of carbon emissions.

As trustee of the New York State Common Retirement Fund (CRF), Comptroller Thomas P. DiNapoli seeks sound and sustainable investments in strategies and companies that are developing and using low-carbon technologies.Comptroller DiNapoli's Sustainable Investment Strategy

The CRF’s investments in New York-based companies such as Crystal IS in Green Island and the High Sheldon wind farm in Sheldon are examples of low-carbon investment opportunities that provide solid returns for the Fund, create jobs and generate local tax revenues, while helping promote a lower carbon economy.

As an investor, DiNapoli continually seeks improvements in environmental practices and lower carbon emissions from the companies in the CRF’s portfolio. For example, he has asked Exxon­Mobil* and other portfolio companies to explain how they can adjust their business model to meet the worldwide effort to limit global warming, and has urged the Securities and Exchange Commission to ask fossil fuel companies to explain how they are addressing climate change. The CRF has created a $2 billion public equity index that excludes or reduces investments in the worst carbon emitting corporations, and increases CRF’s investments in companies that are lower emitters. In addition, DiNapoli has increased the CRF’s total commitment to sustainable investments to $5 billion to take advantage of the growing low carbon economy.

The Comptroller’s sustainable investment strategy is crucial to the long-term health of the CRF. Addressing investment risks presented by climate change is a major part of that strategy. Rising seas, severe storms, floods and droughts are likely to disrupt the global economy. Moving toward a low carbon future reduces risk to the CRF’s investments, spurs innovation and opens new investment opportunities.

*Update: Recently, ExxonMobil agreed to implement the CRF’s shareholder request, which received landslide support from more than 62 percent of Exxon voting shareholders.

“I am pleased Exxon has agreed to undertake this important analysis,” said DiNapoli. “Climate change is one of the greatest threats to our pension fund’s long-term value. Exxon’s decision demonstrates that investors have the power to hold corporations accountable and to compel them to address our very real climate-related concerns. We will continue to monitor Exxon’s response to climate change as we urge the company, and others in the energy sector, to find ways that they can adapt to the growing lower carbon economy.”

Links:

http://www.bbc.com/news/science-environment-39329304

http://time.com/4082328/climate-change-economic-impact/

 

Stopping Pension Fraud

Stopping Pension Fraud is a top priority of Comptroller Thomas P. DiNapoliSince taking office, New York State Comptroller Thomas P. DiNapoli has battled public corruption. One of his top priorities is to protect the New York State and Local Retirement System (NYSLRS) from pension scammers.

Under the direction of Comptroller DiNapoli, NYSLRS has put in place a system of safeguards designed to prevent and identify potential incidents of pension fraud. One such safeguard uses data analytics to uncover and stop improper payments.

Post-Retirement Employment Violations

Our investigative efforts include a focus on post-retirement employment. New York State law restricts the amount of money public sector retirees can earn if they return to public service employment after retirement. The law permits public sector retirees under the age of 65 to earn up to $30,000 per year from public employment before their pension benefits are suspended.

As of this March, our review of post-retirement employment cases have uncovered more than $700,000 in benefit payments subject to recovery. For example, a former Newburgh City Fire Chief, who double-dipped by collecting $95,000 in pension payments while still working as fire chief, was federally convicted.

The “Muscle” in the Pension Fraud Fight

In some cases, the pension fraud NYSLRS uncovers gets referred to Comptroller DiNapoli’s wider umbrella program to root out public corruption and fraud involving public funds. The Comptroller’s aggressive initiative included partnering with federal, state and local prosecutors and law enforcement statewide, including DiNapoli’s groundbreaking “Operation Integrity” task force with Attorney General Schneiderman. To date, Comptroller DiNapoli’s various partnerships have garnered more than 130 arrests and $30 million in ordered recoveries.

NYSLRS’ partnership with DiNapoli’s “Operation Integrity” has resulted in the investigation, prosecution and recovery of stolen pension payments, exposing $2.75 million in pension fraud in recent years.

Here are some recent cases where pension scammers have been thwarted:

Comptroller DiNapoli and NYSLRS will not tolerate pension fraud. These arrests and convictions serve as warnings to those who might steal pension benefits: if you think you can steal the hard-earned benefits of NYSLRS members and retirees, you are gravely mistaken. When fraud is identified, Comptroller DiNapoli will work with law enforcement to hold the pension scammers accountable. The clear message to anyone who tries to defraud our pension system is that you will be found, and you will pay.

If you suspect someone of pension fraud, call the Comptroller’s toll-free Fraud Hotline at 1-888-672-4555, file a complaint online at investigations@osc.state.ny.us, or mail a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

A Quick Look at the NYS Common Retirement Fund

Comptroller Thomas P. DiNapoli is the trustee of the Common Retirement Fund, which is the third largest public pension fund in the country. The Fund’s assets come from three main sources: member contributions, employer contributions, and investment returns. The Fund has two main goals:

  • Provide the means to pay benefits to NYSLRS’ participants; and
  • Minimize employer contributions through an investment program designed to protect and enhance the long-term value of the assets.

Over the last 20 years, 79 percent of benefits have been funded from investment returns. When you retire from NYSLRS, your monthly pension benefit—and the benefits of many others—will be drawn from this fund. Ethical management and a long-term, diversified investment strategy has made NYSLRS one of the best managed and funded plans in the nation.
Common Retirement Fund Assets

Strategic Long-Term Investments

The Fund’s investment program is designed to weather the ups and downs of an increasingly volatile global market. Our long-term target allocation for our investment portfolio is 22 percent in fixed income assets (bonds and Treasury Inflation Protected Securities [TIPS]) and 78 percent in equities, which includes:

  • Domestic and international public equities
  • Real estate
  • Real assets
  • Absolute return strategies
  • Mortgages
  • Private equity investments
  • Opportunistic funds

A diversified investment strategy helps us meet the funding needs for our current and future retirees while also helping to control risk.

The Fund is Well-Managed

An independent review of the Fund commended Comptroller DiNapoli and NYSLRS for strong policies and ethical management. By adhering to the highest standards of accountability and transparency, our members, retirees, and beneficiaries can be confident the Fund is being managed wisely.

Why Corporate Political Disclosure Matters

With the help of Comptroller DiNapoli, the New York State Common Retirement Fund is asking the companies it invests in to be more open about their corporate political spending. When companies spend money toward certain political causes, their shareholders may end up footing the bill. And as a shareholder in many large American companies, the Fund wants to make sure its investments are used wisely.

The Comptroller’s Efforts Toward Transparency

Election-Spending-Trend_2008-2014 Political Disclosure

In the election years from 2008 to 2014, the cost of congressional and presidential races climbed into the billions.

In 2010, the Supreme Court decided that corporations could contribute unlimited amounts of money to independent election efforts. Shareholders of these companies may not realize their money gets put toward these efforts. So, after the ruling, the Comptroller pushed for more transparency from the companies the Fund invests in.

One way he accomplishes this is through shareholder requests. These requests ask companies for a full, public report that lists their spending on:

  • Candidates
  • Political parties
  • Ballot measures
  • Any direct or indirect state and federal lobbying
  • Payments to any trade associations used for political purposes
  • Payments made to any organization that writes and endorses model legislation

This knowledge helps the Fund determine if it will still invest in these companies. Ultimately, the Fund wants to make sure its portfolio companies provide a long-term value on its investments, because that value will get passed on to its members, retirees and beneficiaries. If a company’s political spending puts that investment at risk, the Fund can withdraw as it sees fit.

The Fund’s Progress on Disclosure Agreements

The Fund has asked 52 of its portfolio companies to disclose their corporate political spending, and 26 companies have agreed to do so. Over the last year, the Fund has reached disclosure agreements with:

The Fund has taken a leadership role in corporate political disclosure, and Comptroller DiNapoli will continue to make it a priority.

Keeping the Pension Fund Funded

People are living longer, which means that recent retirees are spending more time in retirement than in previous generations. This also means that they are collecting a benefit for a longer period of time. That’s why Comptroller DiNapoli, administrator of the New York State and Local Retirement System (NYSLRS), ensures that the most accurate and current data available is used to project how long our members and retirees are expected to live. In doing so, NYSLRS lessens the risks of underfunding the benefits of its current and future retirees.

How the Pension Fund Plans Ahead

The pension fund’s assets come from member contributions, investment income, and employer contributions. Each year, NYSLRS calculates the funds it needs to pay current and future benefits. NYSLRS can’t know for certain how long a member will pay into the pension fund before retiring or how long a retiree will receive a pension. What NYSLRS can do, though, is make assumptions about each of these scenarios.

In this case, an assumption helps NYSLRS predict the expected future payments over the lifespan of its members and retirees based on their age and gender. By estimating how long NYSLRS can expect to pay its retirees, it can plan ahead and determine how much money the pension fund will need.

A New Direction on Assumptions

In August of 2014, NYSLRS’ actuary recommended a change in our mortality assumptions (pdf-icon PDF) based on the completion of a much anticipated study and report from the Society of Actuaries. This new approach to creating these assumptions considers the age and gender of members and retirees, and also their birth year. Birth years provide a more accurate way of looking at life expectancy as not all generational groups share the same life expectancy. A baby boomer who retires at age 62 may live until a certain age, but that doesn’t mean a millennial retiring at 62 will live until the same age. Using more realistic models of life expectancy gives NYSLRS a better understanding of what benefits to pay out over time.

NYSLRS can expect to pay out more benefits in the future as its retirees live longer, but it won’t come as a surprise. By planning ahead, NYSLRS is making sure the benefits you worked for will be there for you during retirement.

NYSLRS – One Tier at a Time: ERS Tier 2

When you joined the New York State and Local Retirement System (NYSLRS), you were assigned to a tier based on the date of your membership. There are six tiers in the Employees’ Retirement System (ERS) and five in the Police and Fire Retirement System (PFRS) – so there are many different ways to determine benefits for our members. Our series, NYSLRS – One Tier at a Time, walks through each tier and gives you a quick look at the benefits members are eligible for before and at retirement.

NYSLRS created Tier 2 on July 1, 1973, marking the first time NYSLRS created any new member group. Today’s post looks at one of the major Tier 2 retirement plans in ERS. ERS Tier 2 as a whole represents less than one percent of NYSLRS’ total membership.

ERS-Tier-2-Benefits_001aIf you’re an ERS Tier 2 member in an alternate plan, you can find your retirement plan publication below for more detailed information about your benefits:

Be on the lookout for more NYSLRS – One Tier at a Time posts. Next time, we’ll take a look at another ERS tier. Want to learn more about the different NYSLRS retirement tiers? Check out some earlier posts in the series: