Tag Archives: PFRS

Power of Attorney

Power of AttorneyThe NYSLRS Special Durable Power of Attorney form allows you to designate someone else to act on your behalf regarding retirement benefit transactions. The person you designate, referred to as an “agent,” could be your spouse, another family member or a trusted friend.

Why is this important? Under normal circumstances, NYSLRS won’t release your benefit information to anyone else without your permission — even to your spouse. With a power of attorney (POA) on file, we would be able to discuss your benefits with the agent you appointed.

The NYSLRS POA form is specific to retirement transactions and meets all New York State legal requirements. You may want to designate a power of attorney in case of emergency, hospitalization or unexpected illness, but you don’t have to wait until something happens before you file a NYSLRS POA form.

What Can Your Agent Do?

The NYSLRS form is for a “durable” POA, which means the person you designate can act for you if you become incapacitated. But the NYSLRS POA form only covers Retirement System transactions. It does not authorize your agent to make health care decisions for you or make changes to your Deferred Compensation plan.

Your agent can get account-specific information about your benefits by phone, email or mail. Your agent can request copies of documents in your retirement file or update your address or phone number. If you are still an active member, your agent can also take out a NYSLRS loan or file a retirement application for you. If you are retired, the agent can change the amount of taxes withheld from your pension.

Special Authority

If you use NYSLRS POA form, and your agent is your spouse, domestic partner, parent or child, they will have “gifting authority.” That means they can direct deposit money into a joint bank account, designate or change your death benefit beneficiaries, or choose a retirement payment option that provides for a beneficiary after your death.

If you wish to assign gifting authority to an agent who is not your spouse, domestic partner, parent or child, you must indicate that you want your agent to have the ability to designate him or herself as a beneficiary. This can be done in the “Modifications” section of the NYSLRS POA form.

Find Out More

A power of attorney is a powerful document. Once you appoint someone, that person may act on your behalf with or without your consent. We strongly urge you to consult an attorney before you execute this document.

You can also find information on the Power of Attorney page on our website.

What is a Defined Benefit Plan?

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

Your pension is based on a preset formula that takes into account your salary and years of service. It will not be based on your individual contributions to the Retirement System.

If you retire with a NYSLRS pension, you will receive a monthly pension payment for the rest of your life.

Defined Contribution Plans

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

With a defined contribution plan, the employer, employee or both make contributions to an individual retirement account, and the money in the account is invested. In most cases, it is the responsibility of the employee to make investment decisions, or the plan may offer pre-packaged investment options. At retirement, the employee will have an account that includes the accumulated value of contributions and investment returns, minus any fees.

The amount of money the employee has at retirement is dependent on the investment returns of the individual account, so market downturns, especially near retirement, can affect the value of the benefit. The employee also can run the risk of outliving their savings.

defined benefit plan

NYSLRS’s Defined Benefit Plans

NYSLRS actually administers more than 300 retirement plans, but all are defined benefit plans and share certain features. NYSLRS plans:

  • Provide a guaranteed lifetime retirement benefit;
  • Offer a pension that is based on final average salary and years of service;
  • Provide a right to pension benefits (vesting) with five years of service credit (ten for Tier 5 and 6 members);
  • Build a cost-of-living adjustment (COLA) into pensions to help offset the effect of inflation; and
  • Include disability and death benefits.

To find out details about your own NYSLRS plan, check your retirement plan booklet. You can find a copy on the Publications page of our website.

Countdown to Retirement — Final Three Months

Once you decide to retire and begin preparing, the final months leading up to your retirement date go by quickly. Previously, we discussed the steps to take when you’re four to six months away from retirement. As we wrap up our Countdown to Retirement, let’s take a look at what you should be doing in the final three months.

Final Three Months: Filing for Retirement

You need to file an Application for Service Retirement (RS6037) with us 15–90 days before your retirement date. You can download the form from our website or pick up a physical copy at one of our consultation sites. Make sure to fill out the application completely and have it notarized.

If you send the form by “Certified Mail — Return Receipt Requested,” we will consider your application filed on the date it was mailed. Please don’t give your application to your employer; send it directly to NYSLRS.

Next Steps

Once we receive your application, we’ll mail you a confirmation letter. If you’ve received an estimate from us within the past 18 months, we will include three forms with the letter:

  • Use the W-4P form to decide how much you want withheld from your pension benefit for federal taxes.
  • Use the Direct Deposit Enrollment Application (RS6370) to receive your pension benefit payments electronically, right in your bank account.
  • Use the option election form to choose how you want your pension benefit paid and whether you would like to leave a lifetime pension to a beneficiary when you die.

If you haven’t received an estimate, we will just send you the W-4P and Direct Deposit Enrollment Application forms. We will begin processing your estimate, and once it’s complete, we will send it to you along with an option election form.

final three months

Choosing Your Pension Payment Option

Select a payment option based on your most recent estimate. All of the options provide a monthly benefit for life, and some provide payments to a designated beneficiary when you die. You must file this form by the last day of the month in which you retire (unless otherwise notified).

Make Sure You’re Prepared

As your retirement date draws near, think about scheduling an appointment at one of our consultation sites. A consultation is not required, but our information representatives can answer any questions you have, help you complete the paperwork and notarize your retirement application. You can also contact us if you have questions.

Computer System Upgrades This Spring

From April 19 through mid-May, NYSLRS will conduct a series of computer system upgrades to improve the services available to our customers.

Throughout the upgrade period, you will be able to conduct business with NYSLRS by email, mail and phone, but not through Retirement Online.
system upgrades

  • If you need to apply for a loan during the upgrade period, you can fill out a loan application and mail it to our office. Visit our Loans page for links to the applications and more information.
  • If you need to update your beneficiaries, fill out the Designation of Beneficiary form (RS5127). If you mail it to us “Certified Mail — Return Receipt Requested,” we will consider it as having been filed on the date it was mailed. Your beneficiaries will be updated in our system shortly after the upgrade is completed.
  • We will continue to process requests for income verification letters promptly.
  • Your monthly pension payments will not be affected.

For the latest information about the upgrade, please visit our Contact Us page. If you have any questions, please contact our Call Center at 1-866-805-0990 (518-474-7736 in the Albany, NY area), or email them using our secure contact form.

Countdown to Retirement — Four to Six Months Out

Once you decide to retire and begin preparing, the final months leading up to your retirement date go by quickly. Previously, we discussed the steps to take when you’re eight months away from retirement. As we continue our Countdown to Retirement, let’s take a look at what you should be doing four to six months out.

Six Months: Post-Retirement Budget

At 18 months out, we suggested requesting a NYSLRS retirement estimate. You should have that estimate by now and, with it, a much better idea of what your retirement benefit could be. Now, you can prepare a post-retirement budget and make decisions about your goals and how you want to spend your money in retirement.

We offer worksheets to help you prepare a post-retirement budget on our website. For a more realistic budget, keep track of your current spending for a month or two to get an idea of your expenses. Be sure to factor in periodic expenses, such as car insurance and taxes.

Countdown to Retirement: 4 to 6 months out

Four Months: Proof of Your Birth Date

We will need proof of your date of birth before we can pay you any benefits. You won’t need to send it in until you submit your retirement application, but now is a good time to make sure you have what you need. We’ll accept any of these documents as proof:

  • Birth certificate;
  • Baptismal certificate;
  • Certificate of Release or Discharge from Active Duty (DD-214);
  • New York State driver’s license issued on or after January 1, 2005;
  • Passport; or
  • Naturalization papers.

In most cases, a photocopy is acceptable. If you do send us the original, we will return it to you.

It’s a good idea to look for proof of your birth date sooner rather than later, in case you need to arrange to get a replacement. Also, if you’re thinking about choosing a pension payment option that provides a lifetime benefit to a beneficiary, we will need proof of your beneficiary’s birth date too.

Counting Down

Your planned retirement date is just a few months away. As you approach three months away from retirement, check back for the final post of our Countdown to Retirement series on filing your Application for Service Retirement (RS6037) and other forms. If you have any questions as you prepare for retirement, please contact us.

Becoming Vested

What does it mean to be a vested NYSLRS member?

You become vested after you earn sufficient service credit to be eligible for a pension, even if you leave public employment before retirement. Becoming vested is a crucial milestone in your NYSLRS membership.

When Will I Be Vested?

The amount of service credit you need to be vested depends on your tier. If you’re in Tier 5 or 6, you need ten years of service to be vested. If you’re in another tier (Tier 1, 2, 3 or 4), you’re vested once you earn five years of service credit.

vesting requirements

If you work part-time, it will take you longer to become vested. For example, if you work half-time, you earn six months of credit toward vesting for each year on the job. (For more information, read our recent blog about part-time service credit.)

If you purchase credit for previous public service or military service, that credit can help you become vested.

What You Need to Do

Vesting is automatic. You do not need to file any paperwork to become vested.

If you are vested, you will need to file a retirement application at least 15, but no more than 90, days before you can receive a pension. Most NYSLRS members are eligible to collect a pension as early as age 55, but benefits may be permanently reduced if you retire before you reach your plan’s full retirement age.

Visit our website to learn more about vesting.

Countdown to Retirement — Eight Months Out

Once you decide to retire and begin preparing, the final months leading up to your retirement date go by quickly. Previously, we discussed the steps to take when you’re 12 months away from retirement. As we continue our Countdown to Retirement series, let’s take a look at what you should be doing eight months out.

Eight Months Out: Review Retirement Income

Some experts say that you need 80 percent of your pre-retirement income to maintain your standard of living once you stop working. There’s a good chance that your NYSLRS pension alone won’t provide that level of income. With retirement lasting 20 years, 25 years or even longer, it’s important to have a plan in place for the extra income you’ll need.

That’s why, at least eight months before your planned retirement date, you should start reviewing any other income you’ll have available. Some common sources include:

Check out our Straight Talk About Financial Planning for Your Retirement publication for monthly income and expense worksheets to help you assess your retirement finances.
Countdown to Retirement - Eight Months Out

Counting Down

Your planned retirement date is less than a year away. As the day gets closer, check out the rest of our Countdown to Retirement series for posts covering your retirement budget, what we accept as proof of your date of birth, what to do after you’ve filed your Application for Service Retirement (RS6037) and more.

Taxes and Your NYSLRS Pension

Tax season is coming.

The Internal Revenue Service (IRS) will begin accepting tax returns later this month. In late January, NYSLRS will mail tax information to retirees (and some members and beneficiaries) so they can file their taxes.

1099-Rs

NYSLRS pensions are not subject to New York State income taxes, but they are subject to federal taxes. By January 31, we’ll mail 1099-R tax forms to nearly half a million retirees and beneficiaries. We also mail 1099-Rs to beneficiaries who received taxable income from NYSLRS in 2018, members who have taken taxable NYSLRS loans or have defaulted on their loans, and those who ended their membership and withdrew their contributions in 2018.

A 1099-R shows:

  • The total benefit paid to you in a calendar year.
  • The taxable amount of your benefit.
  • The amount of taxes withheld from your benefit.

If you don’t get your 1099-R by the second week of February, you can request a reprint. This year, reprints will be available for calendar years 2016, 2017 and 2018.

1099-R Interactive Tutorial

1099-r tax form tutorial screenshot

Understanding your 1099-R Tutorial

If you have questions about the information on the form, we feature an interactive 1099-R tutorial on our website. It walks you through a sample 1099-R and offers a short explanation of specific boxes on the form.

Changing Your Federal Tax Withholdings

Because federal tax law was revised for 2018, you may discover that you had too little or too much withheld. You can change your federal tax withholding at any time by sending us a W-4P form. (A handy tutorial about the W-4P  walks you through the steps on filling it out.)

W4-P Tax form tutorial screenshot

Understanding your W-4P Form Tutorial

We offer a federal tax withholding calculator. Enter a marital status and a number of exemptions into the calculator to see how much we would withhold based on current tax tables.

For more information, please visit the Taxes and Your Pension page on our website.

NYSLRS’ Special Retirement Plans

NYSLRSCertain PFRS and ERS members are under Special Retirement Plans 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.

Popular Blog Posts of 2018

Before we say goodbye to 2018, let’s take a look back at a few of the year’s most popular blog posts.

most popular posts of 2018

NYSLRS Basics: Final Average Salary

For NYSLRS members, the formulas used to calculate our pension benefits are based on two main factors: service credit and final average salary. While service credit is fairly straightforward — it’s generally the years of service you’ve spent working for a participating employer — what is a final average salary (FAS)?

Will Your Retirement Age Affect Your Benefit?

Some special plans allow NYSLRS members to retire after 20 or 25 years with no pension reduction. However, most of us have a choice to make: wait until the full retirement age specified by their plans or retire as early as age 55. It’s an important decision; those who retire early may receive a permanently reduced pension benefit.

Federal Withholding and Your Pension

Retirees: While your NYSLRS pension is not taxed by New York State, it is still subject to federal income tax. If your tax bill is larger than expected, or if you’ve been getting a hefty tax refund regularly, you may want to adjust the federal withholding from your NYSLRS pension. Follow these step-by-step instructions.

NYSLRS — One Tier at a Time: ERS Tiers 3 & 4

Many Tier 3 and 4 members of the Employees’ Retirement System (ERS) are eligible to retire under the same retirement plan, so we often think about them together. According to our most recent numbers, the combined tiers make up nearly 60 percent of ERS members — by far the largest segment. Here is a quick look at the benefits these members may receive before and after retirement.

Age Milestones for Retirement Planning

Even with a defined-benefit plan like you receive through NYSLRS, retirement planning is not a one-time task. Whether you’re reviewing your NYSLRS benefits or other retirement matters (like Medicare coverage or required minimum distributions), there are important considerations at almost every age leading up to retirement — and even in the years that follow.