Tag Archives: benefit reduction

Tier 3 & 4 Members: When Is The Right Time To Retire?

Tier 3 and 4 members qualify for retirement benefits after they’ve earned five years of credited service. Once you’re vested, you have a right to a NYSLRS retirement benefit — even if you leave public employment. Though guaranteed, the size of that benefit can vary.

Three Reasons to Keep Working

  1. Age 55 is the earliest that Tier 3 and 4 members can claim their benefits. However, unless you have 30 years of service, a significant penalty for such an early retirement is imposed — a 27-percent reduction. The longer you wait to retire, the greater your benefit will be. At age 62, you can retire with your full benefits.
  2. Your final average salary (FAS) is a significant factor in the calculation of your pension benefit. Since working longer usually means a higher FAS, continued public employment can increase your pension.
  3. The other part of your retirement calculation is your service credit. More service credit obviously earns you a larger pension benefit, but after 20 years, it also gets you a better pension formula. For Tier 3 and 4 members, the formula for the first 20 years is FAS × 1.66% × years of service; between 20 and 30 years, the formula becomes FAS × 2.00% × years of service.

When is the Right Time to Retire?

If You’re Not Working, Here’s Something to Consider

Everyone’s situation is unique. For example, if you’re vested, you no longer work for a public employer and you don’t think you will again, retiring at 55 might make sense. When you do the math, full benefits at age 62 will take 19 years to match the money you’d have received retiring at age 55 — even with the reduction.

Tools To Help Make Your Decision

Here are two ways to decide what makes sense for you:

  1. Our online retirement benefit calculator allows most members to estimate their benefit with different retirement dates, FAS and service credit totals. By changing each variable, you can see the impact it may have on your benefit.
  2. If you’re a Tier 3 or 4 member with five or more years of service credit, you can request an estimate based on your actual salary and service reported to date. If you’re age 50 or older, we can include additional, projected service credit based on a date of retirement up to five years in the future.

To request your estimate, contact our Call Center toll-free at 1-866-805-0990 or 518-474-7736 in the Albany, New York area. You can also send us a Request for Estimate (RS6030) form.

This post has focused on Tier 3 and 4 members. To see how early retirement affects members in other tiers, visit our About Benefit Reductions page.

How Retirement Age Can Affect Your NYSLRS Retirement Benefit

Only you can decide when it’s the right time to retire from public service, but keep in mind that your age at retirement can affect your retirement benefit. If you’re a New York State and Local Retirement System (NYSLRS) member in a regular retirement plan, you can retire with full benefits at the age specified by your plan. You have the option to retire as early as age 55, but you’d receive a permanently reduced benefit.

Full Retirement Ages

Most retirement plans have an age requirement you’d have to meet to retire with full benefits. For Employees’ Retirement System (ERS) members in Tiers 2, 3, 4 and 5 and Police and Fire Retirement System (PFRS) members in Tiers 2, 3, 5 and 6, the full retirement age is 62. ERS Tier 6 members can retire with full benefits at age 63. PFRS Tier 6 members who have left the payroll are eligible to apply for their benefit at age 63.

Service Credit Exceptions

For some retirement plans, if you have a certain amount of service credit, benefit reductions don’t apply to you. Benefit reductions don’t apply to ERS Tier 2, 3 or 4 members who retire between 55 and 62 with 30 or more years of service credit. Tier 5 Uniformed Court Officers and Peace Officers employed by the Unified Court System with 30 or more years of service can also retire between 55 and 62 with an unreduced benefit.

Retirement benefits for all other ERS Tier 5 and Tier 6 members and PFRS Tier 2, 3, 5 and 6 members not in a special 20- or 25-year plan will be reduced for early retirement — even if they have 30 years of service credit.

Benefit Reductions

If you’re thinking about retiring early, it’s important to know that the benefit reductions are prorated by month, so the closer you are to your full retirement age, the less the reduction will be. It’s also important to know that once you retire with a reduced benefit, that reduction is permanent.

The following tables break down the reductions by membership tiers:

ERS Tiers 2, 3 and 4 / PFRS Tiers 2, 3 (Article 11), 5 and 6

Age at Retirement Percentage of Reduction
62 0
61 6.00
60 12.00
59 15.00
58 18.00
57 21.00
56 24.00
55 27.00

ERS Tier 3 State Correction Officers and
Security Hospital Treatment Assistants (SHTA)

Age at Retirement Percentage of Reduction
62 0
61 6.67
60 13.33
59 16.67
58 20.00
57 23.33
56 26.67
55 30.00

ERS Tier 5

Age at Retirement Percentage of Reduction
62 0
61 6.67
60 13.33
59 18.33
58 23.33
57 28.33
56 33.33
55 38.33

ERS Tier 6

Age at Retirement Percentage of Reduction
63 0
62 6.50
61 13.00
60 19.50
59 26.00
58 32.50
57 39.00
56 45.50
55 52.00

Contact us if you have any questions about benefit reductions or any other retirement-related topics. Please be sure to review your online retirement plan booklet for a full description of the benefits you’re entitled to as well as the reductions and restrictions you should be aware of.