What to Know When Leaving Public Employment

There may come a time when you leave public employment. Even though you’d no longer work for a New York public employer, you’d still be a NYSLRS member. If you ever leave public employment, you should be aware of the effect it could have on your membership and benefits.

What Happens to My Contributions If I Leave Public Employment?

If you have less than ten years of service credit, you may end your membership and request a refund of your contributions by filing a Withdrawal Application (RS5014) pdf-icon.

If you are not vested (eligible for a retirement benefit) and do not withdraw your contributions, they will continue to earn 5 percent interest for seven years. After seven years, if you are still off the public payroll, your membership will automatically end and your contributions will be deposited into a non-interest-bearing account. Your contributions will not be automatically refunded.
Leave Public Employment

How Will Leaving Public Employment Affect My Death Benefits?

If you have at least ten years of service credit, 50 percent of your death benefit may still be payable if you die after leaving public employment. If you have less than ten years of service credit, the 50% death benefit is only available to you if you die within one year of leaving public service.

How Can I Pay Back My Outstanding Loans?

If you have any outstanding NYSLRS loans when you leave the public payroll, you must make payments directly to NYSLRS at least once every three months. You must repay your loan within five years of the date it was issued or you will default on the loan. Please note: since you will be required to pay ordinary income tax and possibly an additional 10 percent penalty on the taxable portion of the loan, defaulting on a loan carries considerable tax consequences.You also won’t be eligible to take a NYSLRS loan once you are off the public payroll.

How Can I Stay Informed About My Membership If I Leave Public Employment?

If you leave public employment, but haven’t ended your NYSLRS membership, you’ll still:

You’ll also need to keep your membership information updated. This includes information like:

Read our publication Life Changes: What if I Leave Public Employment? (VO1800) for more information.

Your Checklist to Apply for Retirement

After months of planning and preparation, you’re ready to apply for retirement. To get your pension benefit, you need to send in a NYSLRS retirement application. Let’s look at what you should include with the form to help make the retirement process go more smoothly.

Filling Out the Retirement Application

Unless you’re filing for a disability retirement, you’ll need to fill out the Application for Service Retirement (RS6037). Some items to keep in mind when you fill out the form:

  • Know your registration number. You can find this number on your most recent Member Annual Statement or retirement estimate.
  • Know your past employment. Please list your public employment history, including military service and any memberships in other New York public retirement systems. This helps ensure you receive the proper credit for your public service.
  • Include your beneficiary’s information. This isn’t an official designation, but will help us provide you with the pension payment options available to you.
  • See a notary. The form must be filled out completely and signed by a notary public.

Applying for Retirement

Proof of Birth

Make sure we also have proof of your birth date. You can send it with your retirement application or before or after, but pension benefits cannot be paid without it. We’ll accept photocopies of the following as proof:

Other Forms to Consider

You’ll need to choose your payment option before your pension is payable. Option election forms are available on our website, but we will also send you a form after we process your retirement application. If you choose an option that would provide a pension benefit to a beneficiary upon your death, you must provide us with proof of your beneficiary’s birth date.

Your NYSLRS pension isn’t subject to New York State income tax, but it is subject to federal tax. You can fill out a W-4P form to tell us what amount you want withheld from your monthly benefit. You can change your federal withholding status at any time. We don’t withhold other states’ income taxes. Visit the Retired Public Employees Association’s website to see if your benefit will be taxed in another state.

You can enroll in our direct deposit program at the same time you file for retirement. Just fill out a Direct Deposit Enrollment Application (RS6370) and return it to us. Once your final retirement benefit amount is determined, your payments will be directly deposited into the account you specified on your enrollment application. Direct deposit is the fastest and most secure way for you to receive your pension benefits. We will send you information on your direct deposit payment amount including deductions, and will inform you when the amount changes.

If you’re divorced and your ex-spouse is entitled to part of your pension, you should send us a copy of your Domestic Relations Order (DRO) as soon as possible. We cannot finalize your pension until we have reviewed your DRO and calculated the required distribution of your benefit. The DRO gives us specific instructions on how your benefits should be divided. For more detailed information, please read our Guide to Domestic Relations Orders.

If you have other questions about applying for retirement, read our publication, Life Changes: How Do I Prepare to Retire?

NYSLRS’ Top Five Retirement Myths from 2015

Retirement Myths vs FactsFrom the day you become a NYSLRS member to the day you retire, you’re exposed to all sorts of retirement information. Unfortunately, sometimes what you learn can get jumbled along the way. We want to help clear up some common misconceptions we’ve heard from members and retirees over the past year. Here are the top five retirement myths from 2015:


Myth #1 “I’ll receive the full amount of my monthly retirement benefit when my payments start.”

Fact For the first few months of retirement, most NYSLRS retirees will receive partial payments while we finish calculating their final benefit. (We need to collect accurate service and salary information from their employers, a process that can take some time.) The partial payments are based on their most recent NYSLRS retirement estimate and usually make up 90 – 95 percent of their final benefit. Partial payments are paid by check and mailed to the address we have on file for the retiree.


Myth #2 “Family members always receive death benefits.”

Fact With the exception of accidental death benefits, NYSLRS members may name any person, trust, or organization as their beneficiary to receive death benefits. It doesn’t have to be a family member. Accidental death benefit recipients are outlined in the law.


Myth #3 “I can’t collect my pension until I start receiving Social Security.”

Fact Members can apply for retirement as soon as they meet the eligibility requirements of their retirement plan.


Myth #4 “NYSLRS manages my retiree health insurance.”

Fact NYSLRS does not administer health insurance programs for its retirees. We deduct premiums from a retiree’s monthly retirement benefit to pay for their health insurance if we’re told to do so by their former employer.

(If you have questions about your health insurance coverage or premium deductions, please contact your former employer. If you retired from a New York State agency, you can contact the New York State Department of Civil Service.)


Myth #5 “NYSLRS decides when there’s a retirement incentive.”

Fact This isn’t the case. The New York State Legislature (not NYSLRS) enacts retirement incentive programs. Incentives are approved by both houses and signed into law by the Governor. NYSLRS administers programs that are signed into law.


Check out your plan publication to learn more about your benefits. You can also visit our website for more information.

NYSLRS’ Partial Lump Sum Payments

When you retire, you’ll choose a payment option for your monthly lifetime benefit. Eligible NYSLRS members may also choose to receive a partial lump sum payment. The payment, which you’ll receive when we finish calculating your pension benefit, is a percentage of the actuarial value of your retirement benefit at the time you retire. By accepting this one-time lump sum payment, your lifetime monthly benefit will be permanently reduced.

Who is Eligible for the Partial Lump Sum Payment?

If you’re a Police and Fire Retirement System (PFRS) member covered by a special 20- or 25-year plan, you may be eligible to choose this payment. Certain Employees’ Retirement System (ERS) members (sheriffs, undersheriffs, deputy sheriffs, and county correction officers) are eligible if their employer offers this benefit. (Read the other eligibility requirements for PFRS members and ERS members.)

Partial Lump Sum PaymentsHow the Partial Lump Sum Payment Works

The percentage amounts you can choose from depend on how long you’ve been eligible to retire. You can choose a lump sum payment that equals 5, 10, 15, 20 or 25 percent of the value of your retirement benefit.

The payment can be made directly to you, or you can also have it paid in a direct rollover to an Individual Retirement Annuity or other plan that accepts rollovers. Before you decide, you may want to speak with a tax advisor to see if the partial lump sum payment is right for you. Certain partial lump sum distributions could be subject to federal income tax.

How Do I Choose the Partial Lump Sum?

If you’re eligible for the partial lump sum, we’ll send you a special option election form when you file for retirement. You can use this form to choose both the partial lump sum and the payment option you want for your continuing lifetime monthly benefit.

Please read Partial Lump Sum (PLS) Payment at Retirement – For Eligible Retirement System Members for more information.

Earning NYSLRS Service Credit as a School Employee

In an earlier post, we talked about how full-time and part-time service credit works for NYSLRS members. We mentioned how earning NYSLRS service credit for workers in an educational setting can be a little different, so we want to take this time to elaborate on that.

While most New York teachers are in a separate retirement system from NYSLRS, there are NYSLRS members working in New York schools in other roles. They work according to the school year, which could be only 10 or 11 months long. So how do we determine service credit for them?

Earning NYSLRS Service Credit When You Work Full-Time

If you’re a school employee who works full-time, you receive one year of service per school year. Generally, a full-time 10-month school year requires at least 180 days worked in any school year. Depending on your employer, your full-time academic schedule could require a minimum of 200 or 170 days.

Earning NYSLRS Service Credit When You Work Part-Time

Part-time school employees earn service credit based on the number of days they worked. Depending on the length of your school year, you’d earn service credit the following ways:

For institutional teachers

Number of days worked ÷ 200 days

For all BOCES and school district employees, as well as teachers working at New York State schools for the deaf and blind

Number of days works ÷ 180 days

For college employees

Number of days worked ÷ 170 days

Check Your Member Annual Statement

From May to July, we’ll send out this year’s Member Annual Statements. (Members who work an academic schedule usually receive statements first.) For most members, your statement will show how much service credit you’ve earned for the past fiscal year (April 1, 2015 – March 31, 2016). It will also show your total service credit as of March 31, 2016. Make sure to look it over to see how much service credit you’ve earned over your career.

For more information on service credit, read our booklet, Service Credit for Tiers 2 through 6 (VO1854), or your own retirement plan publication.

Planning Around Your Retirement Date

Retirement is a big decision, and one important factor to plan for is the day you choose to retire. When you’re eligible and ready to retire, you can select any day as your retirement date. You can even choose a weekend or a holiday. Generally, your retirement date is the first day you don’t work. It could also be the first day you don’t get paid by your employer (for example, if you use accruals before your retirement date).

Another thing to keep in mind when choosing your retirement date is when you’ll receive your first benefit payment. Once we receive your retirement application, we begin the process of gathering service and salary information from your employer to come up with your final benefit amount. Most retirees are eligible to receive partial monthly pension payments while we work on calculating their final benefits.

Planning for your Retirement Date

Partial Payments

We base your partial payments on your most recent NYSLRS retirement estimate. These monthly payments provide 90 to 95 percent of what your final pension benefit amount is estimated to be. You’ll continue to receive partial payments until we finalize your benefit. Partial payments are mailed to the address we have on file for you.

This is where your retirement date comes in. The month you retire determines when partial payments will start, not the day. If you retire in March and are eligible to receive partial payments, your first partial payment would be mailed on the first business day of May. It doesn’t matter if your retirement date is March 1 or March 31: your payment will go out on the first business day of May. You can enroll in our Direct Deposit Program at the same time you file for retirement. As soon as we are able to, your payments will be directly deposited into your account.

Keep this in mind before you settle on a date. You may need to set some money aside, as it could be five to eight weeks before your first partial payment arrives. Many retirees retire on the last day of a pay period (so final payment information is available from their employer sooner) toward the end of the month to minimize the number of weeks before they receive their first partial payment.

Filing for Retirement

Once you have a day in mind, when should you apply for retirement? You must file your retirement application with us 15 to 90 days before your retirement date. If you’re over age 70 at retirement, or if you are no longer actively employed by a public employer, you don’t have to wait the 15 days. The application is also available from your employer or can be found on our website by clicking the link above.

Would you like to read more about applying for retirement and what comes after? Read the Applying for Your Service Retirement Benefit and After You Retire sections in these publications:

You may also want to visit one of our consultation sites.

Reporting a Member’s or Retiree’s Death to NYSLRS

If a NYSLRS member dies, whether it’s before or after retirement, the member’s survivors will need to report the death to us as soon as possible. The sooner we receive this information, the sooner we can begin the process of paying out potential benefits to beneficiaries. Survivors can report a death to us by email, by mail or by phone. They will need to send us a certified copy of the member’s death certificate regardless of how they notify us.

How Survivors Can Report A Death

Survivors can use our secure email form to report a member’s death. When filling out the required fields in the form, they should:

  • Enter the deceased member’s NYSLRS information into the required fields of the form. (If they don’t know the retirement or registration number, we will accept a Social Security number.)
  • Enter their own address and daytime phone number in the Comment section in case we need to reach them for more information.

To report a death by mail, survivors should send us a completed Notification of Death (RS6082) form.

Reporting a Member or Retiree’s DeathTo report a death by phone, survivors can call us toll-free at 1-866-805-0990, or locally within the Albany, NY area at 518-474-7736. Once they reach the call menu of our automated call service, they’ll press “3” to report the death of a member or retiree, and then press “1.” Their call will be transferred to a customer service representative. Survivors will be asked for the following information when they call:

  • The deceased member’s retirement, registration, or Social Security number
  • The date of death

What Happens Next

Once we receive a death certificate, we will send beneficiaries or certified representatives (guardians, powers of attorney, executors) information about death benefits or continuing retirement benefits. We will also send them forms to complete. Beneficiaries should be aware that it could take 11 to 13 weeks for us to receive a certified copy of the death certificate and to process required forms.

We can accept reports of a member’s or retiree’s death from anyone, but we can only mail information about death benefits and continuing retirement benefits to named beneficiaries or their certified representatives.

If a member is retired when he or she dies, we will stop the payment of any outgoing pension benefits. Survivors should be aware that any uncashed pension checks in a deceased member’s name must be returned to us. We will automatically reclaim any direct deposit payments that went out after a member’s death.

If you’re a retiree, consider reading our publication, Getting Your Affairs in Order and A Guide for Your Survivors (VO1874). This publication includes valuable planning information for you, as well as guidance for your beneficiaries.

ERS Tiers 1 and 2: The New Career Plan

Did you become a member of the Employees’ Retirement System (ERS) before July 1, 1973? If you’re still working in public service, you’re one of the 3,508 active members in Tier 1. If you joined after July 1, 1973 but before July 27, 1976, then you’re one of 4,127 active members in Tier 2.

Most ERS Tier 1 and Tier 2 members are in the New Career Plan (Section 75-h or 75-i). Currently, 96 percent of active Tier 1 members and almost 95 percent of active Tier 2 members are covered by this plan. Here’s a quick look at the benefits in the New Career Plan:

Benefit Eligibility

Tier 1

  • Members must be at least age 55 to be eligible to collect a retirement benefit.
  • There are no minimum service requirements — they may collect full benefits at age 55.

New Career Plan — ERS Tier 1

Tier 2

  • Members must have five years of service and be at least age 55 to be eligible to collect a retirement benefit.
  • The full benefit age is 62.
  • Almost 95 percent of active Tier 2 members are covered by the New Career Plan (Section 75-h or 75-i).

New Career Plan — ERS Tier 2

Final Average Salary

Final average salary (FAS) is the average of the wages earned in the three highest consecutive years of employment. For Tier 1 members who joined NYSLRS June 17, 1971 or later, each year used in the FAS calculation is limited to no more than 20 percent above the previous year’s earnings. For Tier 2 members, each year of earnings is limited to no more than 20 percent above the average of the previous two years’ earnings.

Benefit Calculations

  • For Tier 1 and 2 members, the benefit is 1.66 percent of the FAS for each year of service if the member retires with less than 20 years. If the member retires with 20 or more years of service, the benefit is 2 percent of the FAS for each year of service.
  • Tier 1 members and Tier 2 members with 30 or more years of service can retire as early as age 55 with no reduction in benefits.
  • Both Tier 1 and Tier 2 members who worked continuously from April 1, 1999 through October 1, 2000 receive an extra month of service credit for each year of credited service they have at retirement, up to a maximum of 24 additional months.

If you have questions about the New Career Plan, please read the Tier 1 plan publication or the Tier 2 plan publication. You can find other plan publications on our website.

How Full-Time and Part-Time Service Credit Works

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 with the Retirement System. All your paid public employment is creditable. If you work full-time or part-time, you’re earning service credit, just at different rates.

Earning Service Credit When You Work Full-Time

Earning Service CreditWhen you work on a full-time, continuous basis, we’ll calculate your service credit from your date of employment up until the date you leave paid employment. For most full-time workers, you’d earn a year of service credit for working a total of 260 work days in a year. For a full-time 12-month employee, a total of 260 work days constitutes a full year. For our members who work for school districts, a full time 10-month academic year can be 180 work days. (If you work in an educational setting, we’ll cover more about that in a future blog post.) Also, you wouldn’t earn service credit during leaves of absence without pay or for any period of time you’re not receiving salary.

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)

Or you can think of it like this: let’s say you only worked 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.

Check Your Member Annual Statement

From May to July, we’ll send out this year’s Member Annual Statements. For most members, your statement will show how much service credit you’ve earned over the past fiscal year (April 1, 2015 – March 31, 2016). It will also show your total service credit as of March 31, 2016. Make sure to look it over to see how much service credit you’ve earned over your career.

For more detailed information about service credit, please refer to your specific retirement plan publication.

Overtime and Limits for Tier 5 and 6 Members

We base your NYSLRS pension on your years of credited service and your final average salary (FAS). FAS is the average of the wages you earned during 36 consecutive months (60 consecutive months for Tier 6 members) when your earnings were highest. The calculation of your FAS can include overtime pay that you’ve earned during the FAS period.

Tier 5 and Tier 6 members have limits on how much overtime can be included in their FAS calculation. Overtime pay that exceeds these limits cannot be used in a Tier 5 or 6 member’s FAS calculation.  Therefore, members and employers are not required to make pension contributions on overtime pay that exceeds the annual limit.

Your employer should not report any overtime pay in excess of this cap to NYSLRS as it cannot be used in a member’s final average salary calculation. Each year, NYSLRS publishes the maximum overtime pay that should be reported and reminds employers not to report overtime earnings that exceed the limit.

Tier 5 Overtime Limits

The overtime limit for Tier 5 began in 2010 at $15,000 and increases each calendar year by three percent. This year, the overtime limit for ERS Tier 5 members is $17,910.78. In 2017, the overtime limit for ERS Tier 5 members will be $18,448.11. For PFRS Tier 5 members, overtime is limited to 15 percent of a member’s regular earnings.

Tier 5 & 6 overtime limits

Tier 6 Overtime Limits

For ERS Tier 6 members, the overtime limit is based on the State’s fiscal year (April 1 – March 31). From April 1, 2015 – March 31, 2016, the overtime limit for ERS Tier 6 members is $15,608. From April 1, 2016 – March 31, 2017, that limit will increase to $15,721. The fiscal year limit is adjusted for inflation based on the annual Consumer Price Index (CPI). The overtime limit for PFRS Tier 6 members is limited to 15 percent of a member’s regular earnings.

Please visit our website if you have questions about Tier 5 overtime limits or Tier 6 overtime limits.