Tag Archives: Service credit

NYSLRS Membership Basics

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Whether you’re a new member or have been part of the Retirement System for years, you’re sure to have questions about your NYSLRS membership. What is vesting? Final average earnings? Maybe you’re wondering what tier you’re in or why that even matters. While NYSLRS administers many different retirement plans, the core concepts of a NYSLRS membership remain the same. Here are the basics.

Your NYSLRS Membership Basics

Four Things to Understand About Your NYSLRS Membership

When learning about 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. 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 to reach because once you become vested, you’ll be eligible for a NYSLRS pension when you reach retirement age, even if you leave public service.
  • Final Average Earnings. Final average earnings is the average of your earnings during a period when your pay is highest. It’s another major factor in determining the amount of your pension.

Once you understand these basics, it can make learning more about your NYSLRS membership and benefits easier and help you get ahead on your retirement planning.

Your NYSLRS Pension and Other Benefits

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

NYSLRS also provides other important benefits for its members, including:

Where to Get More Information

We want to provide you with the information you’ll need to plan for your retirement and make critical decisions about your future. Here are the 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. Sign up for a Retirement Online account if you don’t already have one.

If you have questions about your NYSLRS membership or benefits, you can find answers on our NYSLRS website. You can find different webpages, such as our Understanding Your NYSLRS Benefits page, that explain what benefits and services are available to you. Reading your retirement plan publication is a great way to get a comprehensive understanding of your benefits. Go to our Publications page to find your retirement plan and other helpful information.

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

Becoming Vested

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Becoming vested is a crucial milestone in your NYSLRS membership.

You become vested after you earn enough years of service credit. Once you’re vested, you have earned the right to receive a retirement benefit, even if you leave public employment before retirement.

New Legislation Changes Vesting Requirements for Tier 5 and 6 Members

As of April 9, 2022, Tier 5 and 6 members only need five years of service credit to be vested. This affects members of both the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS). Previously, Tier 5 and 6 members needed 10 years of service to be eligible for a service retirement benefit (the new legislation does not change eligibility for disability retirement benefits that are established by your retirement plan).

Becoming Vested - New Legislation Changes Requirements for Tier 5 and 6 Members

You can sign in to your Retirement Online account to view your total estimated service credit. Over the next few months, we will update members’ accounts to reflect any changes to vesting status as a result of these new vesting requirements. If your total estimated service credit in Retirement Online is more than five years, rest assured, you are considered vested and your vesting status will be changed to “Yes.” This will be done by NYSLRS and there is no need to contact us.

In addition, we are working to update the pension estimate tool in Retirement Online. Until vesting status updates are made to the tool, pension estimates produced in Retirement Online will not accurately reflect the vesting status of members impacted by the new legislation.

Effective immediately, if you are a Tier 5 or 6 member with five or more years of service and you meet the minimum age requirements for your retirement plan, you can apply for a service retirement benefit if you wish. We are updating our online services to enable Tier 5 and 6 members to apply for retirement through Retirement Online. In the meantime, you may file for retirement using our paper application. If you have between five and 10 years of service credit and you have questions about filing for retirement, please contact us.

This legislation did not change Tier 5 or 6 benefit rules such as how long you must contribute, your pension benefit calculation, your full retirement age, reductions to retire early or the cost to purchase previous service. However, additional new legislation may affect contribution rates for some Tier 6 members. Information about this legislation will be posted on our blog when it becomes available.

Tier 5 and 6 members who left public employment with five or more years of service and did not withdraw their membership are now considered to be vested.

Tier 5 and 6 members who leave public employment with more than five years of service but less than 10 years, as of April 9, 2022, now have the option to either apply for a retirement benefit once you reach retirement age or withdraw your contributions. You cannot withdraw your contributions once you have 10 years of service. As a reminder, once you withdraw your contributions, you end your membership with NYSLRS and are no longer eligible for a retirement benefit.

If you were a Tier 5 or 6 member and have been off the payroll for more than seven years prior to April 9, 2022, your membership is considered withdrawn and terminated. You would need to return to payroll and reinstate your withdrawn membership in order to be eligible for five-year vesting.

All Members — When Will I Be Vested?

NYSLRS members in Tier 2, 3, 4, 5 and 6 need five years of service credit to be vested.

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.

If you purchase credit for previous service or military service, that credit can be used toward vesting.

What You Need to Do

Vesting is automatic. You do not need to file any paperwork to become vested. To find out if you’re vested, you can sign in to your Retirement Online account and find your total estimated service credit in the ‘My Account Summary’ section. Again, if your total estimated service credit in Retirement Online is listed as more than five years, you are considered vested.

Vested members will need to apply for a service retirement benefit in order to receive a pension. Applications must be submitted within 15 – 90 days before the date you wish to retire (you must be eligible to retire on the date you choose).

Most NYSLRS members are eligible to collect a pension as early as age 55, but, depending on your tier and retirement plan, benefits may be reduced if you retire before your full retirement age.

You can estimate your pension benefit based on the salary and service information we have on file for you. From your Retirement Online account, under ‘My Account Summary’ click “Estimate my Pension Benefit.”

Retirement Planning: Questions to Ask Yourself

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retirement planning - things to think aboutAfter months or years of retirement planning, you’re probably looking forward to the day when you apply for your NYSLRS pension. But before you retire, there are a few questions you should ask yourself. After all, by filing for retirement, you’re making critical decisions about your financial future. And once you’ve retired, some of those decisions will be irrevocable. Whether your planned retirement date is just around the corner or a few years off, asking these questions now could help you avoid costly mistakes.

Do I have all the service credit I think I have?

Under some retirement plans, service milestones (20 years, 30 years, reaching full retirement age) can have a big impact on the amount of your benefit. If you’re aiming for one of these milestones, but retire just short of reaching it, your pension will be less than you might be expecting. To make sure you have enough service credit on your planned retirement date, sign in to Retirement Online to check the most up-to-date estimate of your total service credit.

Do I have previous service credit I want to purchase?

You may be able to buy credit for previous public employment or military service, which in most cases would increase your pension.  

If you are planning to purchase service credit, including military service, you should do that as soon as possible, especially since you can’t purchase service credit after you retire. You can apply for additional credit in Retirement Online or by submitting a Request to Purchase Service Credit form (RS5042). You may also wish to read our publication Service Credit for Tier 2 Through 6.

Do I have a balance on a NYSLRS loan?

If you have an outstanding balance on a NYSLRS loan, you should pay it off before you retire. If you retire with an outstanding loan, your pension will be permanently reduced.

While Employees’ Retirement System members may repay their loan after retiring, they must pay back the full amount of the outstanding balance that was due at retirement in one lump-sum payment. Once the loan has been repaid, their pension benefit will be increased from that point going forward, but it will not be adjusted retroactively back to their date of retirement.

You can use your Retirement Online account to check your loan balance, make a lump-sum payment or increase your payment amount. For more information, visit our Loans page.

Retirement Planning Resources

The more you know about retirement and the retirement process, the better off you’ll be. Here are some resources that can help with your retirement planning:

How Full-Time and Part-Time Service Credit Works

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Service credit plays a vital part in your pension calculation and your eligibility for other NYSLRS benefits. As a NYSLRS member, you earn service credit by working for an employer who participates in the Retirement System. Your paid public employment is creditable. You would not, however, earn credit for any period when you are not receiving a salary, such as an unpaid leave of absence. You would earn credit for both full-time and part-time employment, but if you work part-time, the service you earn is pro-rated.

Earning Service Credit When You Work Full Time

When you work on a full-time, continuous basis throughout your career, we’ll calculate your total service credit from your date of employment up until the date you leave paid employment. Most full-time workers earn a year of service credit for working 260 workdays a year. For a full-time, 12-month employee, 260 workdays equal a full year. (If you work in an educational setting, you can read about earning service credit in our blog post, How School Employees Earn NYSLRS Service Credit.)

Earning Service Credit When You Work Part Time

Your service credit is prorated if you work part time. Part-time employment is credited as the lesser of:

the number of days worked ÷ 260 days

or

your reported annual salary ÷ (the State’s hourly minimum wage × 2,000)

You can think of it like this: let’s say you work 130 days in a year. If a year’s worth of service credit is earned for working 260 days full time, you’d earn half a year (0.5) of service credit for your part-time work.

How Part-Time Service Credit Works

Check Your Service Credit in Retirement Online

Retirement Online is the fastest way to check your current total estimated service credit. Once you sign in, go to the ‘My Account Summary’ section of your Account Homepage and look under “Account Information.”

You can also use Retirement Online to request credit for public employment from before you joined NYSLRS. If you’re eligible to purchase previous service credit, it’s a good idea to file your request as early in your career as possible because:

  • Records we need to verify your service will be more readily available.
  • If there is a cost, it will be less expensive than if you wait to purchase credit before retirement.
  • Your retirement benefit will be processed more quickly if your service credit request has been reviewed or processed prior to retirement.

For more information, please read our publication Service Credit for Tiers 2 through 6. You may also wish to refer to your specific retirement plan booklet, available on our Publications page.

NYSLRS – One Tier at a Time: PFRS Tier 6

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When you join the New York State and Local Retirement System (NYSLRS), you’re assigned 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). Your tier determines such things as your eligibility for benefits, the calculation of those benefits, death benefit coverage and whether you need to contribute toward your benefits.

Our series, NYSLRS – One Tier at a Time, walks through each tier to give you a quick look at the benefits in both ERS and PFRS. Today’s post looks at PFRS Tier 6. Anyone who joined PFRS on or after April 1, 2012 is in Tier 6. Tier 6 members currently make up almost 40 percent of PFRS membership, totaling 13,956 members, making it the second largest tier in PFRS.

About Regular Plans and Special Plans

Under a regular plan, you need to reach certain age and service requirements to receive your NYSLRS pension. If you’re covered by a special plan, there is no age requirement, and you can receive your pension after completing 20 or 25 years of service.

Nearly 80 percent of PFRS members are in plans covered under Sections 384, 384-d, 384-e or 384-f of the Retirement and Social Security Law. Read our Police and Fire Retirement System blog post for information about different PFRS plans.

Check out the graphic below for the basic retirement information for PFRS Tier 6 members.

PFRS Tier 6

Where to Find PFRS Tier 6 Information

If you’re a PFRS Tier 6 member, please find your retirement plan publication from the list below for more details about your benefits. If you’re not sure what retirement plan you’re in, you can find that information in the My Account Summary section of your Retirement Online account. You can also check your Member Annual Statement, ask your employer or email us using our secure contact form.

For special plans under miscellaneous titles, please visit our Publications page. Check out other posts in the PFRS series:

Overtime Limits for Tier 5 and 6 Members

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The formula used to calculate a NYSLRS pension varies by tier and plan, but your credited service and final average earnings (FAE) are the main factors. You earn service credit for paid service with participating employers, and you also may purchase credit for previous public employment. Your FAE is the average wage you earned 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 earn during that period, but for Tier 5 and 6 members there are limits to how much overtime can be used to calculate your pension.

You can still earn overtime pay beyond the limit — it just won’t be used in your FAE. Members also aren’t required to make contributions on overtime pay that is above the limit.

Overtime Limits for Tier 5 and 6 Members

Tier 5 Overtime Limits

The overtime limit for Tier 5 Employees’ Retirement System (ERS) members increases each calendar year by 3 percent. In 2022, the limit for Tier 5 ERS members is $21,386.41.

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 2022, the limit for Tier 6 ERS members is $18,233.

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

Learn More

Find more information about the overtime limit, FAE and retirement calculations in your retirement plan booklet, available on our Publications page.

NYSLRS – One Tier at a Time: ERS Tier 5

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When you joined the New York State and Local Retirement System (NYSLRS), you were assigned 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). Each tier has a different benefit structure established by State Law. Our series, NYSLRS – One Tier at a Time, walks through each tier to give you a quick look at the benefits in both ERS and PFRS.

Today’s post looks at ERS Tier 5, which covers ERS members who joined from January 1, 2010 through March 31, 2012. There were 37,114 ERS Tier 5 members — 5.8 percent of all ERS members — as of March 31, 2021.

ERS Tier 5 Information

ERS Tier 5 Membership Milestones

ERS Tier 5 members need ten years of service credit to become vested, which means they’ll be eligible for a lifetime pension when they retire.

When a Tier 5 member can retire is based on whether they are in the regular retirement plan (Article 15) or a special plan. Most Tier 5 members are in the regular plan, which means they can retire as early as age 55, but if they retire before age 62, their benefit will be reduced.

Tier 5 members in special plans, such as sheriffs and correction officers, can retire with 20 or 25 years of service (depending on their retirement plan), regardless of age, without penalty.

See your plan booklet (listed below) for details.

The Final Average Earnings (FAE)

An ERS Tier 5 member’s final average earnings is the average of their earnings in the three highest-paid consecutive years of employment. Earnings in any year included in the period cannot exceed the average earnings of the previous two years by more than 10 percent.

Tier 5 Service Retirement Benefit

If an ERS Tier 5 member retires with less than 20 years, the benefit is 1.66 percent of their FAE for each year of service.

If a Tier 5 member in a regular plan retires with 20 to 30 years of service, the benefit is 2 percent of their FAE for each year of service. For each year of service beyond 30 years, they will receive 1.5 percent of their FAE. For example, a Tier 5 member with 35 years of service can retire at 62 with 67.5 percent of their FAE.

For Tier 5 members in special plans, the benefit is generally 50 percent of their FAE with 20 or 25 years of service, depending on their retirement plan.

Where to Find More Information

ERS Tier 5 members can find more details about their benefits in the publications listed below:

For benefit information about special plans for miscellaneous titles, please visit our Publications page. Stay tuned for more NYSLRS – One Tier at a Time posts.

NYSLRS – One Tier at a Time: ERS Tier 6

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When you join the New York State and Local Retirement System (NYSLRS), you’re assigned 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). Each tier has a different benefit structure established by New York State legislation. Our series, NYSLRS – One Tier at a Time, walks through each tier to give you a quick look at the benefits in both ERS and PFRS.

Today’s post looks at ERS Tier 6, which includes anyone who joined ERS since April 1, 2012. There were 311,469 ERS Tier 6 members as of March 31, 2021 making them the largest tier group in ERS.

ERS Tier 6

ERS Tier 6 Membership Milestones

ERS Tier 6 members need ten years of service credit to become vested. Once vested, they’re eligible for a lifetime pension benefit as early as age 55, but if they retire before the full retirement age of 63, their benefit will be reduced. Tier 6 correction officers, however, can retire with 25 years of service, regardless of age, without penalty.

The Final Average Earnings (FAE) Calculation

An ERS Tier 6 member’s final average earnings is the average of their earnings in the five highest-paid consecutive years of employment. Earnings in any year included in the period cannot exceed the average earnings of the previous four years by more than 10 percent.

Tier 6 Service Retirement Benefit

Generally, if an ERS Tier 6 member retires with less than 20 years, the benefit is 1.66 percent of their FAE for each year of service. If a member retires with exactly 20 years of service, the benefit is 1.75 percent of their FAE for each year of service (35 percent of the member’s FAE).

If a member retires with more than 20 years of service, they receive 35 percent for the first 20 years, plus 2 percent for each additional year. For example, a member with 35 years of service can retire at 63 with a pension worth 65 percent of their FAE.

Where to Find More ERS Tier 6 Information

ERS Tier 6 members can find more details about their benefits in the publications listed below:

For benefit information about special plans for other job titles, please visit our Publications page. Stay tuned for more NYSLRS – One Tier at a Time posts.

The Police and Fire Retirement System

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NYSLRS is actually two retirement systems: the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS).

PFRS, which provides retirement benefits for police officers and paid firefighters, is the smaller of the two systems, with about 32,000 active members. A third of PFRS members work for cities, while almost 19 percent work for New York State. The remainder work for towns, counties and villages.

There are five tiers in PFRS, reflecting when the members joined the system: Tiers 1, 2, 3, 5 and 6 (there is no Tier 4 in PFRS). Tier 2, which includes PFRS members who joined the Retirement System from July 31, 1973 through June 30, 2009, is the largest tier, accounting for almost 55 percent of PFRS membership.

If you joined PFRS on or after April 1, 2012, you are in Tier 6.

Ninety-eight percent of PFRS members are in special retirement plans that allow for retirement after 20 or 25 years of creditable service. If you are in one of these plans, once you have the full amount of required service, you can retire at any age.

Some PFRS members are in regular retirement plans, which require a member to reach a certain age before they are eligible for a pension.

police and fire infographic

As a PFRS member, you’ll pass a series of important milestones throughout your career. Knowing and understanding these milestones will help you better plan for your financial future.

Service Credit

Service credit is a key in determining your eligibility for a pension and other benefits, including the amount of those benefits.

Under most 20- and 25-year plans, not all public employment is creditable. Usually, police and firefighting service can be counted as special-plan service. You may also be able to use military service to help you reach 20 or 25 years. If you have questions about the service that can be used to calculate your pension, please check your retirement plan booklet or contact us.

PFRS Plan Booklets

You can find details about your NYSLRS benefits in your retirement plan booklet.

For the majority of PFRS members, that’s the Special 20- and 25-Year Plans booklet. This booklet is for PFRS Tier 2, 3, 5 and 6 members covered by Sections 384, 384-d and 384-e of the State Retirement and Social Security Law.

If you are a PFRS member who works for New York State, your booklet is based on your specific job. There are separate booklets for State Police, Forest Rangers, Regional State Park Police, State University Police and EnCon Police.

If you are not covered by one of the plan booklets listed above, you can find your booklet on our Publications page. If you’re not sure what retirement plan you’re in, you can find that information in the My Account Summary section of your Retirement Online account. You can also check your Member Annual Statement, ask your employer or email us using our secure contact form.

Welcome, New Members

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Welcome, new members of 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 more than 1.1 million members, retirees and beneficiaries, NYSLRS is one of the largest public retirement systems in the nation.

NYSLRS is here to help you plan for a financially secure retirement. Your retirement may be far in the future, but decisions you make now will have a big impact on your later years. Here are a few things you should know:

How Pensions Work

A NYSLRS pension is a defined-benefit plan. Under this type of plan, once you are eligible for a pension and apply for retirement, you will receive a monthly payment for the rest of your life. The amount of your pension will be calculated using a formula set by State law.

However, many employees in the United States, particularly in the private sector, are enrolled in 401(k)-style retirement savings plans, or have no employer-sponsored retirement savings plan. The ultimate value of a 401(k) plan is based on the contributions made to individual accounts and investment returns on those contributions.

While a 401(k)-style plan can supplement a pension and Social Security benefits, it does not provide the same level of financial security as a defined-benefit plan. Unlike your NYSLRS pension, these plans do not guarantee a lifetime benefit.

New Members Checklist

Earning Service Credit

Your NYSLRS pension will be based on factors such as your tier, retirement plan, age at retirement, final average earnings and 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. You may also be able to receive credit for previous public employment or military service, which in most cases would increase your pension.

Plan Ahead: Start Saving Now

Your pension is only one part of a financially secure future. It’s also a good idea to save additional money for retirement. Your retirement savings can be a hedge against inflation and a source of cash in an emergency. A healthy retirement account will give you more flexibility during retirement, helping ensure that you’ll be able to do the things you want to do.

State workers and some local government employees can save for retirement through the New York State Deferred Compensation Plan, which also has some tax advantages. You can start by having as little as $10 deducted from each paycheck. You can choose how your money will be invested from a variety of options. Because of how compound interest works, the earlier you start saving, the better off you’ll be.

Your Next Steps as a New NYSLRS Member

If you haven’t already, sign up for a Retirement Online account. You can use Retirement Online to conduct business with NYSLRS, including naming a beneficiary for your death benefit, updating your contact information, and looking up your retirement plan information. This online tool will be an important resource throughout your career, especially as you near retirement, when you can use our benefit calculator to estimate your pension.

More Information

You can find more information about NYSLRS and your benefits in our booklet, Membership in a Nutshell.