Retirement law can be confusing. Sometimes a small misunderstanding can have a big impact on your benefit. That’s why it’s important to correct some common retirement myths. Here are the top five:
Retirement Myth #1
My NYSLRS loan has gone into default, but I’ve already paid taxes on it. That means I no longer need to repay it.
You still need to repay your loan. In fact, it continues to accrue interest until you do. And, if you haven’t paid back your loan by the time you retire, your pension amount will be reduced.
Retirement Myth #2
I am required to contribute toward my retirement. When I do retire, my benefit will be based on what I contributed.
Your required member contributions aren’t a factor in the calculation of your pension. Your pension is based primarily on your service credit and the salary you earn while working for public employers. Your retirement plan and, in most cases, your age at retirement are also factors.
Retirement Myth #3
I can’t collect my pension until I start receiving Social Security.
You can collect your pension as soon as you meet the eligibility requirements of your retirement plan. Most members can retire as early as age 55, though there may be a permanent reduction in your benefit if you retire before full retirement age (62 or 63 depending on your tier). You should check the eligibility requirements for your plan and tier when you’re planning for retirement.
Retirement Myth #4
If I am vested (have enough service to be eligible for a pension benefit) and no longer working for a public employer, NYSLRS will automatically start paying my pension as soon as I’m eligible.
Only you can decide when it’s time to retire. You must file an Application for Service Retirement (RS6037) to begin collecting your pension benefits.
Retirement Myth #5
I recently applied for retirement by giving my employer the paperwork.
Giving your employer your NYSLRS forms does not mean that you have filed for retirement. To receive your NYSLRS pension, you must file your retirement application with the Office of the State Comptroller. Your application, or any form, is “filed with the Comptroller,” when it’s received by our Albany office or one of our consultation sites.
Have a concern that wasn’t covered? Visit our Contact Us page for more answers. If you have account-specific questions, you can also send us a message through our secure email form.
Is it true that for every $1000 outstanding loan balance there is a reduction of only $48.95 annually at age 55?
Yes, currently, ERS members retiring at age 55 will see a $48.95 annual reduction in benefits for each $1,000 of loan balance outstanding at retirement. This is a lifetime reduction.
You should know that if you retire with an outstanding loan, you may be required to pay income tax on some or all of the outstanding balance. And if you are under age 59½, the IRS may charge you an additional 10 percent tax penalty.
If you have questions about your particular situation, please email our customer service representatives using our secure email form. One of our representatives will review your account and respond to your questions. Filling out the secure form allows us to safely contact you about your personal account information.
Can you tell me if there is the rule of 80?
Meaning your age and time of service adds up to 80 or more, and one would be eligible for early retirement without penalty.
No, NYSLRS plans do not have a “rule of 80.” Unless you are in a special 20- or 25-year plan that allows for retirement after 20 or 25 years, regardless of age, you must be at least 55 years old to receive a NYSLRS pension.
Full retirement age (when members can retire without a reduction for early retirement) is 62 (63 for Tier 6 members). Benefit reductions do not apply to ERS Tier 2, 3 or 4 members who retire between 55 and 62 with 30 or more years of service credit.
For information about your particular situation, we recommend that you email our customer service representatives through our secure email form. One of them will review your account and respond to your questions. Filling out the secure form allows us to safely contact you about your personal account information.
If I retire at age 56 with 24 1/2 years how much will my monthly pension be?
Your monthly pension depends on your plan and your tier. Most members are in plans that allow them to retire as early as age 55, but there is usually a permanent early-retirement reduction if you retire before age 62.
Most members can use our Benefit Projection Calculator (see first link below). The calculator provides estimates based on information you enter. By changing each variable (date of retirement, average salary, beneficiary information), you can see the impact it would have on your pension benefit.
For account-specific information about your plan, please email our customer service representatives using our secure email form (see second link below). One of our representatives will review your account and respond to your questions. Filling out the secure form allows us to safely contact you about your personal account information.
Perhaps a general article related to : How is un-used leave (sick, personal, Vac, Holiday) treated in retirement. Sick leave is the one with the most confusion I think. Some say use it up before you retire, some say that if you retire with 1000 hours on the books your health insurance is covered for life…and everything in-between.
Thank you for the suggestion. To your point, some NYSLRS employers do choose to offer a sick leave credit benefit, which allows some members to convert unused, unpaid sick leave into extra service credit. Last year, we covered how that works.
However, to be clear, NYSLRS doesn’t administer health insurance programs for its members or retirees. Whether you work for New York State or another public employer, your employer’s health benefits administrator (HBA) should be able to answer your questions about health care in retirement.
I have still not received my payment stub for 8/31.
I have direct deposit and expect to receive a statement detailing payments and deductions.
NYSLRS doesn’t send out payment statements for every deposit. You’ll only receive one if something about your payment changes.
You can see a breakdown of your most recent payment through Retirement Online. Retirement Online is a convenient and secure way to review your benefits and conduct transactions. Click here to learn more and register for Retirement Online.
For questions about your direct deposits, you can email our customer service representatives using our secure email form. One of our representatives will review your account and respond to your questions. Filling out the secure form allows us to safely contact you about your personal account information.
If I retire with 200 days of sick time, how does this effect my retirement ?
Thank you for your comment. We’ll be contacting you soon via email to address the particulars of your question.