Category Archives: Pension System

News and information about the Pension System

Protecting the Pension System

Since taking office, New York State Comptroller Thomas P. DiNapoli has fought against the abuse of public funds. One of his top priorities is to protect the New York State and Local Retirement System (NYSLRS) from pension scammers. With the help of New York State Attorney General Eric Schneiderman, DiNapoli has restored $6 million to the pension system.

Earlier this year, they charged a Polk County, Florida woman with the theft of $120,000 from the pension system. The woman didn’t notify NYSLRS about her uncle’s death, and took out the pension benefits paid to his bank account for 12 years.

“Attorney General Schneiderman and I will continue our partnership to protect public money, including the retirement funds that so many New Yorkers depend upon,” DiNapoli said.

Here are some other pension scamming cases from May:

Defendant Accused of Stealing Deceased Mother’s Benefits

A New Jersey woman allegedly stole over $162,000 in pension benefits. According to the Comptroller and Attorney General’s Office, she failed to notify NYSLRS of her mother’s death. As a result, she continued to receive her mother’s benefits for six years even though her mother didn’t list her as a beneficiary.

If convicted, she could face up to five to 15 years in state prison.

Man Accused Of Stealing Deceased Godfather’s Retirement Benefits

A New Jersey man allegedly stole $78,000 in pension benefits payable to his godfather. When his godfather died in 2003, his godfather’s wife collected the benefits until her death in 2006. The man did not notify NYSLRS of their deaths, and used his power of attorney to access their bank account. He withdrew the pension benefits for six years.

If convicted, he could face up to five to 15 years in state prison.

Double-Dipping Retiree Owes Almost Half a Million Dollars

A retired police officer will repay $456,647 to NYSLRS. From 1996 to 2012, the retiree received a pension while earning a full-time salary at a public community college. Even though he knew of the retiree earnings limit, he exceeded it and didn’t report his public income to the state.

The retiree forfeited all future pension payments he would have earned, and will use them to pay back his debt.

If you want to learn more about how Comptroller DiNapoli safeguards public funds, visit the Comptroller’s Fighting Public Corruption page.

How Elected & Appointed Officials Report Time Worked

Regulation requires elected & appointed officials to keep track of their time

Source: Wikipedia Photo: UpstateNYer CC BY-SA 3.0

As an elected or appointed official, the time you work for your public employer gets reported to us as paid service, and we use that data to determine your service credit towards retirement. However, some elected and appointed officials usually don’t work a fixed schedule or have preset hours like other NYSLRS members, so determining the time they’ve worked is a little bit more involved. In recognition of Election Day and the new terms and appointments that will result of it, let’s take a look at the member responsibilities of our elected and appointed officials.

The Record of Activities

Elected and appointed officials have been required to record and submit a record of work-related activities (ROA) to their employers since 1976. The ROA is a daily detail of hours worked and duties performed by the official, including official duties performed outside normal business hours. Activities can include attending an employer-sponsored event, addressing constituent concerns and responding to an emergency. Activities that would not be considered work-related include time attending electoral and campaign events, time spent socializing after town board meetings, attendance at a candidates forum, and on-call time.

To help ensure that elected and appointed officials receive appropriate service credit, changes and additions to the process of reporting elected and appointed official went into effect in August 2009. Elected or appointed officials who do not participate in a time and attendance system that tracks or verifies their actual work hours now must prepare a record of their work-related activities for three consecutive months within 150 days of the start of a new term or appointment.

The old requirements stated that elected and appointed officials only had to prepare a one-month ROA of time worked, or that they were required to submit their ROAs to a legislative body. Now they’re specifically required to submit the ROA to the clerk of the legislative body and others for their review. The ROA enables their employer to provide us with accurate information about the days they’ve worked so that their retirement service credit will be correct.

For more detailed information about the reporting of elected and appointed officials, feel free to visit our website at http://www.osc.state.ny.us/retire/members/member_elected_appointed/index.php

New AARP Study Finds More Than 25% of New York Baby Boomers Aren’t Confident They’ll Ever Retire

According to the findings of a new American Association for Retired Persons (AARP) report, 27 percent of individuals who are 50 years-of-age or older and currently working in New York State are not confident they will ever be able to retire. More than half of those surveyed say their retirement will be delayed for financial reasons, and 26 percent said they do not have any access to a retirement savings plan through their employer. What’s most alarming is that out of those confident they will retire, 60 percent said they’d be likely to leave New York after retiring.

“Retirement security is eroding day by day,” said New York State Comptroller Thomas P. DiNapoli, one of the panelists at last month’s Boomer Flight Conference sponsored by AARP and City and State in Albany. “Failure to act now will only make the problem worse for the baby boomers and the generations to follow.”

Watch more of the Comptroller’s remarks from the Boomer Flight Conference.

Boomers Help Stimulate the New York Economy

AARP reported that baby boomers retired from New York’s workforce would deliver $179 billion a year to the state’s economy. According to research done by AARP and Oxford Economics, the total economic impact of New York’s 50 and older is nearly $600 billion, supporting 53 percent of the state’s jobs and 44 percent of the state taxes. But AARP also revealed that if 60% of working boomers headed out of state, they would carry with them over $105 billion annually.

New York may still have a chance at retaining the boomer population, if improvements are made. Out of those surveyed by AARP, the following said they’d be more likely to stay in New York as they age if the following areas were improved:

  • Health (77 percent)
  • Housing (70 percent)
  • Transportation (66 percent)
  • Jobs for older residents (61 percent)

“Without a long-term strategy on retirement security,” DiNapoli continued, “we risk condemning an increasing percentage of hardworking New Yorkers and Americans to poverty in their senior years.”

2014 State of the 50+ in New York State (Full report, PDF)

The New York Common Retirement Fund – A Long Term Track Record of Investment Success

The New York State Common Retirement Fund (the Fund), has a solid track record of exceptional long-term market performance. The Fund’s historical success is principally due to a sound investment strategy that is based on the Fund’s asset allocation and diversification.

The objective of the Fund, which is the third largest public pension fund in the country, is to achieve long-term growth, while meeting the cash flow needs to pay benefits to the New York State and Local Retirement System (NYSLRS)’s 422,405 retirees and beneficiaries and to meet the needs of future retirees. To accomplish this, New York State Comptroller Thomas P. DiNapoli has implemented a diversified investment strategy designed to meet current funding needs and future growth requirements while controlling risk.

How Pensions are Funded

The Fund’s assets come from three main sources: member contributions, employer contributions and investment earnings. Over the last 20 years, from April 1, 1993 through March 31, 2013, 80 cents of every dollar paid in benefits has come from investment earnings.

The Fund’s Investment Strategy Is The Key

Investments are made in a well-balanced variety of assets classes, which include global equity, domestic equity, core fixed income, real estate, private equity and absolute return strategies portfolios as well as Treasury Inflation Protected Securities.

The sound investment framework provided by the Fund’s asset allocation and diversification strategy enabled it to generate a 13.02 percent rate of return on its investments during the 2013-14 fiscal year. As of March 31, 2014, the Fund was valued at $176.2 billion. Since 2009, the Fund has seen five consecutive years of investment earnings growth. Prior to the recession, in fiscal year 2006-07, the value of the Fund was $154.6 billion.

For more detailed information on the Fund, visit the Division of Pension Investment and Cash Management.

The Fund – Strength Through Strategy

The New York State Common Retirement Fund (the Fund) holds assets in trust for all NYSLRS members and retirees. As trustee, State Comptroller Thomas P. DiNapoli is accountable for the performance and management of the Fund and ensures that investment policies and practices adhere to the highest levels of ethical conduct and transparency. Comptroller DiNapoli seeks the input of a wide-range of internal and external advisors to determine the best allocation of assets and investment choices for the Fund.

The Fund also relies on an extensive network of outside advisors, consultants and legal counsel to provide the Comptroller with independent advice and oversight of all investment decisions. Outside advisors and internal investment staff are part of the chain of approval that must sign off on all investment decisions before they reach the Comptroller for final approval.

An independent review released in February 2013 found that the Fund is one of the most transparently and ethically managed public pension funds in the country. The review also found that the Fund is well run, invests effectively on behalf of its members and operates with industry-leading openness.

Vicki Fuller is the Chief Investment Officer of the Fund, and as she notes in this video, the Fund has remained strong for the NYSLRS members and retirees who depend on it. The consistent performance of the Fund can be attributed to a long-term investment strategy and asset allocation policy that balances a maximum level of return with an appropriate level of investment risk.

For more detailed information on the Fund, visit the Division of Pension Investment and Cash Management.

For extensive historical data and detailed information about how the Fund is managed, visit the Comprehensive Annual Financial Reports section of our website.

Choosing the Option of How Your Pension Will Be Paid

When It Comes to Retirement, This Could Be One of The Most Important Financial Decisions You’ll Make

Getting ready to retire? If you are a New York State & Local Retirement System member (NYSLRS), one of the most important things you’ll do is to decide how your retirement benefit will be paid. You do that by choosing a pension payment option.

Choose the Pension Payment Option That Will Best Meet Your Needs

There are several options from which to choose and all of them provide you with a monthly benefit for life. You may elect to have your retirement benefit paid to you as a Single Life Allowance (Option 0). This will provide you with the maximum amount payable during your lifetime, with nothing payable to your beneficiaries upon death. Or, you may elect to receive a smaller monthly benefit to provide for a possible payment to a designated beneficiary after your death.

Since choosing an option is not a decision to be made lightly, you may want to consider the following:

Does your beneficiary have other income?

Is your beneficiary receiving his or her own pension? How much Social Security benefits does he or she get? Does your beneficiary have an Individual Retirement Account or a Deferred Compensation Plan?

Do you have life insurance coverage?

Remember to factor in payments from any life insurance you may have. They can help your beneficiary make ends meet.

What are your financial obligations?

List the monthly expenses your beneficiary might have if you die. Is there a mortgage payment, car loan, other loans or obligations? Excluding your pension, will your beneficiary’s income be enough to cover all the expenses?

Answering these three questions will help you determine which option best meets your needs. You may want to consult your retirement plan booklet to help you with your choice. You may also want to consult with a financial advisor before making your option selection.

One Other Important Thing to Remember…

You must file your Option Election Form before the first day of the month following your retirement date. Though you have up to 30 days after your pension benefit becomes payable to change your selection, once the deadline has passed, you cannot change your option.

(If you are a disability retiree, you may change your option selection up to 30 days after your disability application is approved, or up to 30 days after your retirement date, whichever is later.)

Infographic showing size of NYSLRS in three groups: ERS, PFRS, and Pensioners.

A Quick Look at NYSLRS, One of America’s Largest Pension Systems

An Important Historical Footnote

NYSLRS’ membership ledger (1921) showing Thomas Cantwell as the first entry.

NYSLRS’ membership ledger (1921).

Thomas Cantwell’s name might not ring a bell for the average New Yorker, but his place in New York history was cemented long before he passed away on July 20, 1931 at the age of 91.

Born on December 18, 1839, Cantwell worked for the New York State Insurance Fund from 1890 through 1916, after which he became a file clerk for the New York State Office of the State Comptroller, retiring on July 1, 1921. At the time of his retirement, he earned $2,400 per year, which is the equivalent of $31,410 today. His retirement benefits amounted to $1,076 per year, or $14,435 today.

As you’ve guessed by now, Cantwell was the first member of The New York State and Local Retirement System (NYSLRS) and his membership marked the start of a timeline that has stretched more than 90 years.

Key Facts and Figures about NYSLRS Today

Picture of the first NYS Comptroller and the current NYS Comptroller Thomas P DiNapoli

New York’s first State Comptroller, Samuel Jones (1797), pictured left, and New York’s current State Comptroller, Thomas P. DiNapoli (2014), pictured right.

One of the America’s largest pension systems, NYSLRS is comprised of the Employees’ Retirement System (ERS), which was established in 1921 and currently has more than 612,294 members, and the Police and Fire Retirement System (PFRS), which was created in 1966 and has more than 35,100.

The fiduciary and administrative head of the pension system is New York State Comptroller Thomas P. DiNapoli. The Comptroller acts solely in the best interests of the System’s members and retirees and ensures that the 346 different benefit programs offered by NYSLRS are managed properly and effectively.

ERS provides service and disability retirement benefits, as well as death benefits to employees of participating public employers in non-teaching positions, exclusive of New York City. This includes uniformed services personnel, such as correction officers and sheriffs.

PFRS provides service and disability retirement benefits, as well as death benefits to police officers and firefighters who work for participating public employers, exclusive of New York City.

In addition to members, there are more than 440,900 pensioners and beneficiaries in the System bringing the total to more than 1,088,342 participants, as of March 31, 2016.

NYSLRS’ Core Purpose Remains

NYSLRS’ mission hasn’t changed since the days when Mr. Cantwell was working. Whether we’re talking about that inaugural class of 1921 or the more than one million members and retirees of today, NYSLRS seeks to fulfill New York State’s promise of secure retirement benefits to enable members, retirees and beneficiaries to plan for a more financially secure retirement. Perhaps most important of all, as a NYSLRS member or retiree, your pension system benefits are guaranteed under the New York State Constitution.

Defined Benefit Plans like NYSLRS Work

Fewer workers today have access to a retirement plan that provides specific benefit payments when they retire. Many workers have had their traditional pension plans replaced by 401K-style plans, which has been discussed in New York. Let’s take a breath and consider why defined benefit plans like the New York State and Local Retirement System (NYSLRS) work.

For more than 90 years, NYSLRS has done what a pension system is supposed to do, provide retirement security for our members. Our pension system is among the best funded and best run in America. With a solid 2012-13 annual return of 10.38 percent, the New York State Common Retirement Fund is now valued at more than $160 billion. And despite the market’s recent volatility, the Fund remains well positioned for the future.

As Comptroller Thomas P. DiNapoli notes in this video, NYSLRS is as strong as it’s ever been and serves as a powerful counterweight to the arguments that public pension systems are unsustainable.