You probably have a lot on your mind right now, but one thing you don’t need to worry about is your NYSLRS pension. Despite the turmoil in the financial markets, your retirement benefits are secure.
want to assure the more than one million men and women who rely on the State
pension fund for retirement security that we are well-positioned to weather the
ongoing volatility,” said New York State Comptroller Thomas P. DiNapoli. “To
our retirees, your pensions are safe and we will continue to pay your benefits
The New York State Common Retirement Fund, which holds and invests NYSLRS assets, has long been recognized as one of best managed and best funded public pension plans in the nation. The strength of the Fund puts NYSLRS in a good position as we navigate through the current economic turmoil.
Fund’s professional managers take a conservative approach to investing and
focus on sustained, long-term results. This approach allows the Fund to capitalize
on investment opportunities in good times and cushions it against market ups
and downs. In recent months, as they recognized increased volatility in the
market, Fund managers began making adjustments to the Fund’s investment
portfolio to prepare for an expected downturn in the economy. They are actively
managing the Fund through these difficult times and are confident the markets
will ultimately recover.
Federal tax withholding and other deductions taken from your pension, such as union dues.
Health insurance premiums. (NYSLRS doesn’t administer health insurance benefits, but we deduct retiree premiums at the request of your former employer.)
Not a Tax Document
While your Retiree Annual Statement includes information about your benefit payments and tax withholding, it is not a tax document and should not be used for filing your federal income tax return. NYSLRS mailed 1099-R tax forms to retirees and beneficiaries in January.
If you need a reprint of your 2019 1099-R to file your taxes, you can order one online. Reprints will be mailed to the address we have on file for you, so if you’ve moved recently, you should check to make sure your contact information is up to date before requesting a reprint. The fastest way to check and update your address is with Retirement Online. From your account homepage, you can also let us know how you would like to receive information from NYSLRS by choosing your correspondence preference.
News & Notes, our semiannual newsletter, will be included with your Retiree Annual Statement. The newsletter will help you keep up with the latest news about NYSLRS and other topics of interest.
Your Statement provides a snapshot of your NYSLRS account as of December 31, 2019, but you can get up-to-date information by signing in to Retirement Online. If you don’t already have an account, you can learn more or register today.
NOTE: when there is a change in your net benefit amount, NYSLRS will notify you by mail or email.
As an Employees’ Retirement
System (ERS) Tier 6 member, your years of service are critical to your
benefits. As time goes by, and you earn service credit, you’ll reach a number
of career milestones. These milestones are points where you become eligible for
certain benefits or your existing benefits improve. Understanding these milestones
will help you better plan your career and retirement.
In ERS Tier 6, you reach your first milestone on your first day of membership. This milestone covers you for certain job-related death and disability benefits. (You can learn more about them in your Tier 6 retirement plan booklet.)
10 & 20 Years Make a Big Difference
For all NYSLRS members, there is one critical milestone: becoming vested. Being vested means that you have earned the right to a pension, even if you leave public employment before retirement age. ERS Tier 6 members become vested after they earn 10 years of service credit.
For most ERS Tier 6 members, another big milestone is the 20-year mark, when your retirement benefit improves significantly. If you retire with less than 20 years of service, you earn 1.66 percent of your final average salary (FAS) for each year of service. At 20 years, you receive 35% of your FAS. After 20 years, you’ll earn an additional 2 percent of your FAS for each year of service beyond 20.
ERS Tier 6 Special Plans
For ERS Tier 6 members in special plans, such as corrections officers, many of the milestones are the same. For example, you will become vested with 10 years of service credit.
But there are also major differences. Most importantly, correction officers in the special 25-year plan can retire after 25 years regardless of age. You can find more information in your retirement plan booklet.
If you became an Employees’ Retirement System (ERS) Tier 5 member when the tier began in 2010, you’ve crossed one of many milestones in your public service career. You are now vested, which means you are guaranteed a NYSLRS pension even if you leave public employment at a later date.
So, what are milestones, and how do they affect NYSLRS members
throughout their career?
Why Milestones Matter
As a NYSLRS member, you’ll cross a series of thresholds throughout
your career. These member milestones occur when you earn a certain amount of service credit. Because these milestones affect how your
pension will be calculated, a better understanding of them will help you plan
You can find
these milestones on the Membership Milestones page and in your retirement plan booklet. Most
members ERS Tier 5 members will retire under the Article 15 retirement plan. (This booklet
does not cover ERS Tier 5 members in special plans, such as deputy sheriffs and
state corrections officers, but they can also find information on the
Membership Milestones page.)
Milestones for Tier 5
The day you joined NYSLRS, you were automatically covered
by certain job-related death and disability benefits. This is the first
milestone for ERS Tier 5 members. After your first year of service, you became
eligible to borrow from your retirement contributions, and after two years you
became eligible to purchase credit for previous public service.
After becoming vested at ten years, the next big
milestone is 20 years, when your retirement benefit improves. If you retire
with less 20 years of service, your pension will equal 1.66 percent of your
final average salary (FAS) for each year of service. But with 20 to 30
years of service credit, your benefit will equal 2 percent of your FAS,
multiplied by your years of service.
For each year of service beyond 30 years, you will receive
1.5 percent of FAS.
As a NYSLRS retiree, you can work for a public employer after retirement and still receive your pension, but there may be an earnings limit on how much you can earn.
Public employers include New York State, municipalities in the State (cities, counties, etc.), school districts and public authorities. If you’re self-employed or work for a private employer, another state, or the federal government, you can collect your full NYSLRS pension no matter how much you earn. (However, earnings for most disability retirees are limited whether they work for a public or private employer. To find out your earnings limit, please contact us.)
Two sections of New York State Retirement and Social Security Law (RSSL) apply to NYSLRS service retirees who return to work in the public sector.
Section 212: Earnings Limit Increases to $35,000 in 2020
Section 212 of the RSSL allows retirees to earn up to $30,000 from public employment in calendar year 2019. Legislation signed in December 2019 increased the earnings limit to $35,000 for calendar year 2020 and future years. There is generally no earnings restriction beginning in the calendar year you turn 65. (Special rules apply to elected officials.) If you are under 65 and earn more than the Section 212 limit, you must:
Pay back, to NYSLRS, an amount equal to the retirement benefit you received after you reached the limit. And, if you continue to work, your retirement benefit will be suspended for the remainder of the calendar year.
Rejoin NYSLRS, in which case your retirement benefit will be suspended.
Section 211: Requires Employer Approval
Under Section 211, the earnings limit can be waived if your prospective employer gets prior approval. (In most cases, the New York State Department of Civil Service would be the approving agency.)
Section 211 approvals apply to a fixed period, normally up to two years. Approval is not automatic; it is based on the employer’s needs and your qualifications.
Most State and municipal employees are required to join the New York State and Local Retirement System (NYSLRS) when they are hired. But for some employees, such as part-time and seasonal workers, membership is optional. If you’re a member and you know someone who could join NYSLRS, consider sharing this piece with them.
NYSLRS is the third largest retirement system in the nation,
with more than 1.1 million members, retirees and beneficiaries. State
Comptroller Thomas P. DiNapoli administers the Retirement System and is trustee
of the New York State Common Retirement Fund, which holds and invests NYSLRS
assets. The Fund had a value of $210.5 billion as of March 31, 2019.
Why Join NYSLRS?
Joining NYSLRS will improve your chances of a secure
financial future. You’ll earn credit toward a pension that will provide monthly
payments throughout your retirement. But NYSLRS also provides other important
As a NYSLRS member, you’ll be eligible for a pension after you earn ten years of service credit. (This is called being vested.) If you work part-time, service credit is pro-rated. For example, if you work half of the hours that a full-time employee works, you’ll receive six months credit for every year you work.
Also, as a NYSLRS member you’ll be able take loans from your
contributions if you’ve earned a year of service credit and meet other
requirements. You’ll be eligible for a death benefit once you have one year of service
credit, and disability benefits after you have ten years of service credit. (If
your disability results from an on-the-job accident, not due to your own
willful negligence, there is no minimum service requirement.)
Over 3,000 employers participate in NYSLRS, allowing you to
continue to build on your benefits if you go to work for another government
employer. Your benefits also may be transferable to six other public retirement
plans in New York.
As a Tier 6 member, you’ll contribute between 3 and 6
percent of your earnings to the Retirement System. Tier 6 contribution rates
vary based on each member’s annual compensation. If you don’t join NYSLRS when
you first start working and later decide to purchase your previous service
credit, you will need to contribute 6 percent of those earnings plus interest,
even if your salary level for the prior time period would have resulted in a
lower contribution rate.
Your NYSLRS pension will be based on your service credit and
salary, not on the amount you contribute. A NYSLRS pension is a lifetime
benefit. Unlike a 401-k, there is no risk that your pension benefits will be
reduced during your retirement.
But what if you join NYSLRS and decide to leave public
service before you are vested? You won’t lose your contributions. In fact, you
can withdraw your accumulated contributions, plus interest, and roll that money
into a retirement savings plan at your new job.
If you would like to join NYSLRS or just want more information, please contact your employer’s human resources (personnel) office. You may also be interested in our booklet, Membership in a Nutshell.
For some NYSLRS members, your retirement age matters when it comes to receiving your NYSLRS retirement benefits.
Your pension will
be based largely on your years of service and final average salary, but your
age at retirement is also a factor. How age plays into the equation depends on
your tier and retirement plan.
Members in regular retirement plans can retire as early as age 55, but they may face significant pension reductions if they retire before their full retirement age. The full retirement age for members in most tiers is 62, and it’s 63 for Employees’ Retirement System (ERS) Tier 6 members and for Police and Fire Retirement System (PFRS) Tier 6 members who leave public employment before retirement age, but have enough service to receive a pension. If you joined NYSLRS on or after April 1, 2012, you are in Tier 6.
Benefit reductions are prorated by month. The closer you are to your full retirement age when you retire, the less the reduction will be. Here are some examples of how that would work.
ERS Tiers 2, 3 and 4, PFRS Tiers 2, 3 (Article 11), 5 and 6: If you retire at age 58 1/2, your pension will be permanently reduced by 16.5 percent.
ERS Tier 5: If you retire at age 58 1/2, your pension will be permanently reduced by 20.83 percent.
ERS Tier 6: If you retire at age 58 1/2, your pension will be permanently reduced by 29.5 percent.
Once you retire
with a reduced benefit, the reduction is permanent — it does not end when you reach
Tier 1 members can retire at 55 without a
benefit reduction. Benefit reductions don’t apply to ERS Tier 2, 3 or 4 members
if they retire with 30 years of service. Tier 5 Uniformed Court Officers and
Peace Officers employed by the Unified Court System can also retire between 55
and 62 without penalty if they have 30 years of service.
Understanding how age affects your NYSLRS benefits is crucial to retirement planning. To learn more, please review your retirement plan booklet on our Publications page.
Most NYSLRS members contribute a percentage of their earnings to the Retirement System. Unlike a 401k or IRA, these contributions don’t determine the amount of your pension. So how do NYSLRS contributions work?
NYSLRS retirement plans differ from defined contribution
plans, such as 401k plans. In those plans, a worker, their employer or both
contribute to an individual retirement account. The money is invested and hopefully
accumulates investment returns over time. This type of plan does not provide a
lifetime benefit, and there is the risk that the money will run out during the
worker’s retirement years.
Your NYSLRS contributions, however, don’t go into a personal
retirement account. That’s because NYSLRS is a defined benefit plan. Your
contributions go into the New York Common Retirement Fund along with employer
contributions and investment income. This pool of money pays out retirement
benefits for you and other NYSLRS members.
Once you’re vested, you’re entitled to a pension that will provide monthly payments for the rest of your life. The amount of those payments will be based on your years of service and final average salary, not on how much you contributed to the Retirement System.
How Much Do
If you joined NYSLRS since April 1, 2012, you are in Tier 6.
Tier 6 contributions range from 3 to 6 percent of earnings.
To put that into perspective, financial experts advise workers in defined contribution plans to save 10 to 15 percent of their earnings in their retirement accounts.
If you leave public employment with less than ten years of service, you can withdraw your contributions, plus interest. If you withdraw, you will not be eligible for a NYSLRS retirement benefit. If you have more than ten years of service, you cannot withdraw, but you will be entitled to a pension when you reach retirement age. But remember, you will not receive this pension automatically; you must file a retirement application before you can receive any benefits.
This COLA is a permanent annual increase to your retirement benefit. It is based on the cost-of-living index and is designed to address inflation.
How COLA is
COLA payments, subject to certain limitations, equal 50
percent of the previous year’s inflation rate, but are never less than 1
percent or more than 3 percent of your benefit. The adjustment is applied to
the first $18,000 of your Single Life Allowance, even if you selected a
different option. Once COLA payments begin, you will receive an increase to
your monthly benefit each September.
The September 2019 COLA equals 1 percent, for a maximum annual increase of $180.00, or $15.00 per month before taxes.
Eligible for a COLA?
To begin receiving COLA payments, you must be:
Age 62 or older and retired for five or more
Age 55 or older and retired for ten or more
years (uniformed employees such as police officers, firefighters and correction
officers covered by a special plan that allows for retirement, regardless of
age, after a specific number of years); or
A disability retiree for five years; or
The spouse of a deceased retiree receiving a
lifetime benefit under an option elected by the retiree. An eligible spouse is
entitled to one-half the COLA amount that would have been paid to the eligible retiree
when the retiree would have met COLA eligibility; or
A beneficiary receiving the accidental death
benefit for five or more years on behalf of a deceased Retirement System
When Will You See the Increase?
Eligible retirees will see the first 2019 COLA payment in their September pension payment. It will be available to those with direct deposit on September 27, 2019. If you receive a paper check, the COLA will be included in the check to be mailed September 30, 2019.
If you are not eligible yet, you will receive your first COLA increase in the month after you become eligible. This payment will include a prorated amount to cover the month you became eligible. After that, you will receive a COLA increase each September.
After we receive your application, we will send you a
confirmation letter, which lists your retirement date and the forms we’ve
received from you. If you don’t submit a W-4P, we’ll withhold federal taxes
based on the status “married with three dependents.” (You can change your
withholding at any time.)
If you haven’t received an estimate in the past 18 months,
you don’t need to send an option election form with your retirement
application. We’ll send you an estimate, along with an option election form,
after we receive your retirement application.
Your First Payment
Your monthly payments will be based on the salary and
service information we have on file.
We cannot send your first payment until we have proof of
your date of birth. If you can, you should submit this document with your retirement
application. (A copy of your New York driver’s license, birth certificate,
passport or naturalization papers are acceptable proofs.) If you don’t have
proof of date of birth available when you submit your retirement application,
you can email us a photocopy by attaching it to our secure contact form.
We encourage you to sign up for direct deposit,
so you’ll have safe and reliable access to your pension payments on the last
business day of each month. Paper checks are mailed on the second to
last business day of each month and may take longer to receive.
If we receive additional payroll information from your
employer, such as eligible lump sum payments, a retroactive pay increase or
lagged regular earnings, we may need to adjust your pension payment. Because of
the many variables that are often involved in verifying service and salary
details with your former employer, finalizing your retirement benefit amount
can take some time. The time this takes depends on the complexity of the circumstances.
For example, if you worked for multiple public employers, it may take longer to
pull together all your income information.
Once we have all the information we need, we’ll recalculate
your pension amount. If your payment increases, you will receive a retroactive
payment for the amount you are owed back to your date of retirement (the
difference between your initial payments and your final retirement benefit