Tag Archives: pension

Overtime Limits for Tier 5 and 6 Members

While the exact formula used to calculate a NYSLRS pension varies by tier and plan, your pension will be based on your service credit and final average earnings (FAE). Your FAE is the average annual earnings you received during the period when your earnings were highest (36 consecutive months for Tier 5 and 60 consecutive months for Tier 6). Your FAE can include overtime pay you earned in that period, but, for Tier 5 and 6 members, the law limits how much overtime can be used when calculating your pension.

You can still earn overtime pay beyond the limit — it just won’t be factored into your FAE. On the other hand, members aren’t required to make contributions on overtime pay that is above the limit.

overtime limits

Tier 5 Overtime Limits

The overtime limit for Tier 5 Employees’ Retirement System (ERS) members increases each calendar year by 3 percent. In 2023, the limit for Tier 5 ERS members is $22,028.01.

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

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 2023, the limit for Tier 6 ERS members is $19,729.

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

Learn More

There may be other limitations to your FAE. For example, for most members, if your earnings increase significantly during the years used in your FAE, it’s possible that some of those earnings may not be used toward your pension. The specific limits vary by tier. Visit our Final Average Earnings page for more information.

You can learn more about the overtime limits, FAE and retirement calculations in your retirement plan booklet. Find yours using our Find Your NYSLRS Retirement Plan Publication tool.

NYSLRS Membership Basics

Whether you just joined or you’re a longtime member, you likely have questions about your NYSLRS membership. What is vesting? What are final average earnings? What tier are you in, and why does it even matter?

NYSLRS Membership

Basic Concepts of NYSLRS Membership

While NYSLRS administers many different retirement plans, the core concepts of our memberships are the same. Your pension will be calculated using a preset formula based on your earnings and years of service. To better understand your NYSLRS benefits, you should become familiar with these four basic concepts:

  • Tier. Your tier is based on the date you joined NYSLRS and helps determine the benefits available to you. If you’re a new NYSLRS member, you’re likely in Tier 6. Tier 6 members joined NYSLRS on or after April 1, 2012.
  • Service Credit. Generally, you earn a year of service credit for each year you work for a participating NYSLRS employer. Part-time work is prorated. Your total service credit at retirement is a major factor in determining the amount of your pension.
  • Vesting. You become vested after you earn five years of service credit. It’s a significant milestone, because once you’re vested, you’re eligible for a NYSLRS pension when you reach retirement age, even if you leave public service.
  • Final Average Earnings. Final average earnings are the average of your earnings during the period when your pay is highest. It’s another major factor in determining the amount of your pension.

Your NYSLRS Pension and Other Benefits

As a NYSLRS member, you are part of a defined benefit retirement plan. This means your NYSLRS pension will be a lifetime benefit based on your final average earnings and service credit, not on the contributions you make toward your retirement.

Your NYSLRS membership also provides other important benefits, including:

More Information

We want to make sure you have the information you’ll need to plan for your retirement and make critical decisions about your future. Here are some resources available to you:

Retirement Online is the quickest way to access account information such as your tier, retirement plan and estimated total service credit. If you don’t already have one, sign up for a Retirement Online account now.

Explore the NYSLRS website to learn more about your NYSLRS membership. Our Welcome New Members page explains more about the benefits that are available to you. Your retirement plan publication offers a comprehensive overview of your benefits, and you can find it with our Find Your NYSLRS Retirement Plan Publication tool.

If you have questions about your account or your NYSLRS benefits, please message us using our secure contact form.

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 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 improvements to your existing benefits. Understanding these milestones and when they occur will help you better plan your career and retirement.

Your milestones depend on your tier and your retirement 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 or in your annual statement, you’re in this plan.

ERS Tier 6 milestones

Major Milestones for Tier 6

Here are some 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 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 fewer 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 more than 20 years of service, your benefit will equal 1.75 percent of your FAE for each year of service.
  • Then, for each year of service beyond 20 years, you will receive an additional 2 percent of your FAE.

Note: The law limits the final average earnings of all members who joined on or after June 17, 1971. For example, for most members, if your earnings increase significantly during the years used in your FAE, it’s possible that some of those earnings may not be used toward your pension. The specific limits vary by tier. Visit our Final Average Earnings page for more information.

The amount of your pension also depends on several factors, including your years of service credit and your age when you retire. Most members can estimate your pension in Retirement Online and enter different retirement dates to see how those choices would affect your benefit. As of April 9, 2022, Tier 5 and 6 members only need five years of service credit to be vested. If you are a Tier 5 or 6 member with between five and ten years of service credit, you can contact us to request a benefit estimate.

ERS Tier 6 Special Plans

Some public employees, such as corrections officers or deputy sheriffs, are in special retirement plans and can receive a pension after completing 20 or 25 years of service, regardless of age. If you are not in the Article 15 retirement plan described above, you should read your retirement plan publication to learn about your plan’s milestones.

Our Find Your NYSLRS Retirement Plan Publication tool can help. To use it, you just need to know your retirement plan code. You can find your code in the ‘My Account Summary’ section of your Retirement Online account homepage or on the second page of your latest Member Annual Statement. You can also use the new tool to search for your plan publication by retirement system, tier and occupation type (uniformed or non-uniformed).

What is a Defined Benefit Plan?

As a NYSLRS member, you are enrolled in a defined benefit plan, also known as a traditional pension plan.

How a Defined Benefit Plan Works

Defined benefit pension plans provide a specified payment amount at retirement. If you are vested and retire from NYSLRS, 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. Your individual contributions to NYSLRS will not affect the pension you receive when you retire.

Defined benefit plans are supported by contributions from both members and employers. With defined benefit plans, retirement assets are pooled and the investment risk is shared. These plans are usually administered by professional managers, whose long-term investment strategies help to reduce the impact of market turmoil. NYSLRS employs an experienced group of investment managers.

The biggest contributor to your pension plan is the New York State Common Retirement Fund. Over the past 20 years, the Fund’s investment returns have covered 75 percent of the cost of pensions.

understand your defined benefit plan

Defined Contribution Plans — And Their Risks

Defined benefit plans are often confused with 401(k)-style retirement savings plans, which are known as defined contribution plans.

With a defined contribution plan, the employee, the employer or both make contributions to an individual retirement account for the employee, and the money in the account is invested. In most cases, the employee decides how and where the money is invested (or the plan may offer pre-packaged investment options). At retirement, the employee will be able to draw from the accumulated value of contributions and investment returns, minus any fees.

The amount of money the employee has at retirement depends on the investment returns of the individual account. So, market downturns, especially near retirement, can negatively affect the value of the benefit. Employees depending on defined contribution plans run the risk of outliving their savings.

NYSLRS’ Defined Benefit Plans

NYSLRS administers more than 300 retirement plan combinations, but all of them are defined benefit plans and share certain features. NYSLRS plans:

  • Provide a guaranteed benefit for life;
  • Offer a pension based on final average earnings and years of service;
  • Provide a right to pension benefits (vesting) with five years of service credit;
  • Build a cost-of-living adjustment (COLA) into pensions to help offset the effect of inflation; and
  • Include disability retirement and death benefits.

We strongly encourage you to review your retirement plan publication for a complete description of your benefits. To find your retirement plan publication, visit our Find Your NYSLRS Retirement Plan Publication page and follow the steps listed.

Advantages of Defined Benefit Plans

Defined benefit plans provide important advantages for state and local government employers. For one, offering these plans makes it easier to recruit and retain qualified employees, particularly police officers, fire fighters and teachers. Employers can also reduce the risk of employee turnover, which could help cut training costs and improve productivity.

Defined benefit plans also help support state and local economies, because they provide a steady, reliable stream of retirement income for many retirees across New York and the nation.

Read more about the advantages of defined benefit plans.

Left Public Employment? Don’t Forget to File for Retirement

If you expect to leave public employment before retirement age, or if you’ve already left, take note of this important information about your NYSLRS pension.

Once you become a vested NYSLRS member, you’re eligible for a NYSLRS pension even if you leave public employment before retirement age. Vesting is automatic but receiving retirement benefits is not. You’ll need to apply for your pension. But when should you apply?

Filing for Retirement If You Have Left Public Employment

Most NYSLRS members can begin collecting their pension as early as age 55. If you file for your retirement benefit between age 55 and your full NYSLRS retirement age, you may face a permanent benefit reduction. Full retirement age for a NYSLRS pension is 62 or 63, depending on your plan and tier.

retirement age for full benefits if you left public employment

Waiting longer than your full retirement age, however, could cost you a lot of money.

If you aren’t working for a NYSLRS participating employer, your NYSLRS pension will not increase after your full retirement age. Pension benefits are not retroactive, and you will not be able to recover the monthly pension payments that you would have received if you retired at full retirement age.

How Social Security and NYSLRS Rules Differ

NYSLRS and Social Security are different systems with different milestones. You can collect Social Security retirement benefits as early as age 62. If you delay taking Social Security, your benefit amount will continue to increase 8 percent per year until you reach age 70 (for those born in 1943 or later).

But if you wait until you’re 70 to apply for your NYSLRS pension, you’ll miss out on years of NYSLRS benefit payments.

The information above applies only to members who leave public employment before their full retirement age.

(In most cases, if you are still working for a participating public employer in New York State, your pension amount will continue to increase, even if you work past your retirement age.)

Steps You Can Take

Your retirement may be years or even decades in the future. Here are a few steps you can take to help you keep track of your NYSLRS pension if you leave public employment:

  • Estimate your NYSLRS pension at different ages using the benefit calculator in Retirement Online.
  • Create a plan for retirement, taking into account the milestones above.
  • Review your plan periodically and update it as necessary.
  • Keep your contact information up to date using Retirement Online.
  • Contact NYSLRS if you have questions about your benefits.

Welcome, New Members

Welcome new members to the New York State and Local Retirement System (NYSLRS).

What is NYSLRS? NYSLRS administers retirement benefits for New York State employees and municipal and non-teaching school district employees outside of New York City. With nearly 1.2 million members, retirees and beneficiaries, NYSLRS is one of the largest public retirement systems in the nation.

NYSLRS is here to help you plan a financially secure retirement. Retirement may seem like a distant concern, but decisions you make now will have a big impact on your post-work life. Here are a few things you should do now as a new member:

Checklist for New Members

new members checklist

Learn About Defined Benefit Plans

Your NYSLRS pension is a defined benefit plan. This means that, once you are eligible and apply for retirement, you are guaranteed a monthly pension payment for the rest of your life. The amount of your payments will be calculated using a formula set by State law.

Defined benefit plans should not be confused with 401(k)-style retirement savings plans, which are known as defined contribution plans. The value of these plans is limited to the contributions made to an individual’s account and the investment returns on those contributions. And, unlike your NYSLRS pension, these plans do not guarantee a lifetime benefit.

While a 401(k)-style retirement savings plan can supplement a pension and Social Security benefits, it does not provide the same level of financial security as a defined benefit plan.

Sign Up for Retirement Online

If you haven’t already, sign up for a Retirement Online account. You can use Retirement Online to look up your estimated total service credit, name a beneficiary for your death benefit, purchase past service credit and more. This online tool will be an important resource throughout your career, especially as you plan for retirement when you can use our benefit calculator to estimate your pension.

Find Your Retirement Plan Publication

Your retirement plan publication is an essential resource that provides comprehensive information about your NYSLRS benefits. You can look up your specific plan using our Find Your NYSLRS Retirement Plan Publication tool. All you need is your benefit plan code and Tier, which you can find in Retirement Online.

Designate a Beneficiary

Your retirement plan provides you with a death benefit, so it’s important that you designate a beneficiary or beneficiaries. You can designate a beneficiary or beneficiaries through Retirement Online or by mailing us a Designation of Beneficiary form (RS5127).

Understand Service Credit

Your NYSLRS pension will be based on factors such as your tierretirement planage at retirementfinal average earnings and your service credit. You’ll earn one year of service credit for every year of full-time employment with a participating employer. Part-time employment is prorated. If you worked for a public employer or served in the U.S. armed forces before you were a member of NYSLRS, you may be eligible to receive credit for that past service. Because it is a major factor in calculating a NYSLRS pension, additional service credit would increase your pension in most cases. You can request this service through Retirement Online or by mailing us a Request to Purchase Service Credit (Including any Military Service) form (RS5042).

Start Saving for Retirement

Your pension is only one part of a secure financial future. It’s a good idea to save additional money for retirement. Healthy retirement savings will give you more flexibility to do the things you want to do in retirement. They also can be a hedge against inflation and a source of cash in an emergency. You don’t want to wait to start saving; the sooner you do, the more time your money has to grow.

More Information

Visit our Welcome New Members page for more information about NYSLRS and your benefits.

Public Pensions Give Economic Boost to Small Towns, Rural Areas

Small towns and rural areas in New York and across the United States get an important economic boost from public pensions, a recent study concludes.

Public Pensions Give Economic Boost to Small Towns and Rural Areas Across New York

Why Public Pensions Give an Economic Boost

Because of their smaller economies, less-populated counties benefit more from pension dollars than larger, urban counties, according to Fortifying Main Street: The Economic Benefit Of Public Pension Dollars In Rural America.

In many small towns and rural communities, the report notes, school districts and local governments are the largest employers. Those public employees typically remain in their communities after retirement, and the authors attribute the economic boosts they found to pension dollars spent locally on goods and services.

Across New York State, public pensions were responsible for 1.6 percent of gross domestic product (GDP) in 2018. (GDP, the total value of goods and services produced during a specific period, is a common gauge of economic activity.) However, during the same period:

  • Wyoming County in western New York, where a handful of villages dot a rural landscape, saw public pensions generate 4.6 percent of GDP.
  • Hamilton County, with fewer than 5,000 people, received an economic boost from public pensions that accounted for 6.3 percent of GDP.

The study’s findings are in line with data showing the impact NYSLRS retirees have on local economies and other studies about the economic benefits of pensions.

Notes on the Data

Fortifying Main Street, which was released in July by the National Institute on Retirement Security (NIRS), examines pension data from 2,922 counties in 43 states. Based on criteria used by the federal Office of Budget Management, it divides counties into three main categories: metropolitan, small-town (or micropolitan) and rural. The study also analyzes data from counties that are home to the state capital, because these places tend to have higher numbers of public retirees. In Albany County, public pensions generated 2.7 percent of GDP.

Hamilton County is the only county in New York defined as rural in the study, but 16 counties, including Wyoming County, fit the “small town” criteria. You can read the full report on the NIRS website.

The study uses pensions paid by NYSLRS, the New York State Teachers’ Retirement System, the Teachers’ Retirement System of New York City and the New York City Employees’ Retirement System in its data for New York State.

Snapshot of NYSLRS Retirees

NYSLRS was providing pension benefits to 507,923 retirees and beneficiaries as of March 31, 2022.

Nearly 79 percent of NYSLRS retirees and beneficiaries — some 399,628 — live right here in New York State, and they can be found in every region and county. The Capital District, for instance, is home to more than 64,000 retirees and beneficiaries, with roughly the same number living on Long Island.

These New York retirees live in our communities, and their pension money flows right back into our neighborhoods. Retirees in New York pay local property and sales taxes, and their spending supports local businesses, stimulates the economy and generates thousands of jobs.

NYSLRS Retirees in the United States

NYSLRS Retirees in the United States

NYSLRS retirees can also be found in every state. Florida, not surprisingly, is the number two choice after New York, with nearly 39,885 calling the Sunshine State home. North Carolina is third, with 10,011 retirees, followed by New Jersey, with 8,302. North Dakota has the fewest, with only 20 retirees and beneficiaries. Another 646 live outside the United States.

Learn More

Extensive information about our retirees and members, the Common Retirement Fund and Fund investments can be found in our latest Annual Comprehensive Financial Report. This report, published each fall, has a wealth of information about the Retirement System, its investments, strategies and financial position. It also provides details about NYSLRS’ nearly 1.2 million members, retirees and beneficiaries.

Where in New York are NYSLRS Retirees?

NYSLRS retirees tend to stay in New York, where their pensions are exempt from State and local income taxes. In fact, 79 percent of NYSLRS’ 507,923 retirees and beneficiaries lived in the State as of March 31, 2022. And more than half of them lived in just ten of New York’s 62 counties.

So where in New York do these retirees call home? Well, there are a lot of NYSLRS retirees and beneficiaries on Long Island. Suffolk and Nassau counties are home to more than 64,000 recipients of NYSLRS retirement benefits, with annual pension payments of nearly $2.4 billion. But that shouldn’t be surprising. Suffolk and Nassau counties have the largest and third largest number of pension benefit recipients, respectively, of all the counties in the State outside of New York City by population. (The City, which has its own retirement systems for municipal employees, police and firefighters, had 24,061 residents who were NYSLRS retirees and beneficiaries.)

NYSLRS retirees in New York

Erie County, which includes Buffalo, ranked number two among counties in the number of NYSLRS retirees, with more than 33,000. Albany County, home to the State capital, ranked fourth with more than 20,000. Monroe, Westchester, Onondaga, Saratoga, Dutchess and Oneida counties round out the top ten.

All told, retirees and beneficiaries in the top ten counties received $6.5 billion in NYSLRS retirement benefits in 2021-2022.

Hamilton County had the fewest NYSLRS benefit recipients. But in this sparsely populated county in the heart of the Adirondacks, those 505 retirees represent about 10 percent of the county’s population. During fiscal year 2021-2022, $11.5 million in NYSLRS retirement benefits was paid to Hamilton County residents.

NYSLRS Retirees Across the United States and Around the Globe

Outside of New York, Florida remained the top choice for NYSLRS retirees, with 39,885 benefit recipients. North Carolina (10,011), New Jersey (8,302) and South Carolina (7,285) were also popular.

There were 646 NYSLRS benefit recipients living outside the United States as of March 31, 2022. These retirees and beneficiaries live throughout the world, with the most common countries being:

  • Canada: 164
  • Israel: 56
  • United Kingdom: 36
  • Italy: 31
  • Jamaica: 31

Whether you retire close to home or move away, you’ll always be a part of NYSLRS. 

Estimate Your Pension in Retirement Online

How much will your pension be?

Fortunately, it is now easier than ever to find out. Most NYSLRS members can create their own pension estimate in minutes using Retirement Online.

Retirement Online estimate is based on the most up-to-date account information we have on file for you. You can enter different retirement dates to see how those choices would affect your benefit. When you’re done, you can print your pension estimate or save it for future reference.

estimate your pension in Retirement Online

How to Create Your Pension Estimate

Before you can use the pension calculator, you will need a Retirement Online account. Once you sign in, go to the My Account Summary section of your account homepage and click the “Estimate my Pension Benefit” button.

You can enter an estimated retirement date (or retirement age), your current salary and expected annual salary increases. You can also include any service credit you plan to purchase and anticipated lump sum payment for unused vacation. If you add the birthdate for a beneficiary, you’ll also see the estimated monthly payment you would receive if you were to choose a pension payment option that provides a benefit for a survivor.

Any pension estimate you generate with the online calculator would be an approximation of your potential benefit; it is not a guarantee that you’ll receive a certain amount when you retire.

As of April 9, 2022, Tier 5 and 6 members only need five years of service credit to be vested. If you are a Tier 5 or 6 member with between five and ten years of service credit, you can contact us to request a benefit estimate.

Alternative Ways to Get an Estimate

While more than 90 percent of NYSLRS members (most Tier 3 through 6 members) can use the benefit calculator, some members should have NYSLRS generate their benefit estimate. For example, if you recently transferred your membership to NYSLRS or are covered under certain special plans, it would be better if NYSLRS created an estimate for you.

The system will notify you if your estimate cannot be completed using Retirement Online’s estimate tool. Please contact us to request a pension estimate if you receive this notification. Also, if you are in Tiers 1 through 4, you can still use the Quick Calculator on the NYSLRS website. The Quick Calculator generates estimates based on information you provide.