Tag Archives: know your benefits

NYSLRS Basics: Special Beneficiary Designations

As a NYSLRS member, it’s important for you to name beneficiaries. When you die, your beneficiaries may be eligible to receive a death benefit. You can choose anyone you wish to receive your death benefit; it does not have to be a family member. In fact, it doesn’t even have to be a person. You can name your estate, a charity or a trust, but it helps to know how these special beneficiary designations work.

There are two main types of beneficiaries. A primary beneficiary is someone you choose to receive your benefit if you die. A contingent beneficiary would receive the benefit if the primary beneficiary dies before you. If a beneficiary dies before you, you should update your beneficiary information to ensure that your benefit is distributed according to your wishes. You can name more than one primary or contingent beneficiary.

Retirement Online is the convenient and secure way to update your beneficiaries. If you don’t already have an online account, you can learn more on our website.

Benefit Distribution

If you name more than one primary beneficiary, each will share the benefit equally. You can also have a certain percentage of the benefit paid to each beneficiary. The percentages don’t have to be equal, but they must add up to 100 percent. (For example, John Doe, 50 percent; Jane Doe, 25 percent; and Mary Doe, 25 percent). The same rule applies for multiple contingent beneficiaries.

Special Beneficiary Designations

Here are the rules pertaining to special beneficiary designations:

special beneficiary designations

Trusts

If you have executed a trust agreement or provided for a trust in your will, your trust can be your primary or contingent beneficiary. To name a trust, sign in to Retirement Online or use our Trust with Contingent Beneficiaries form (RS5127-T).  We’ll need a copy of your trust document, which you can mail to NYSLRS.

With this type of designation, the trust is the beneficiary, not the individuals who will receive the trust. If you revoke the trust or it expires, you will want to make new beneficiary designations as soon as possible to ensure benefits are paid according to your wishes.

You should talk to a lawyer if you’d like more information on trust agreements.

Estates

You may name your estate as the primary or contingent beneficiary of your death benefit. If you name your estate as your primary beneficiary, you cannot name a contingent. If a benefit is payable, the executor of your estate will distribute it according to your will.

Entities

You may name any charitable, civic, religious, educational or health-related organization as a primary or contingent beneficiary.

Minor Children

If your beneficiary is under age 18 at the time of your death, your benefit will be paid to the child’s court-appointed guardian. You may also choose a custodian to receive the benefit on the child’s behalf under the Uniform Transfers to Minors Act (UTMA). Before making this type of designation, please contact us for more information.

More Information

Please note that some of these beneficiary designations will be subject to a NYSLRS legal review.

For more information, please read our publication “Why Should I Designate a Beneficiary?” You can find your current NYSLRS beneficiaries listed in Retirement Online, or in your Member Annual Statement, which is sent out every summer.

Firefighters Deserve A Salute Every Day

Recognizing Firefighters

It’s National Fire Prevention Week this week and, while attention is properly focused on promoting fire prevention, we also think it’s a great time to recognize all the firefighters who are members of the New York State and Local Retirement System (NYSLRS).

Of the 533,415 members in NYSLRS, 32,470 are in the Police and Fire Retirement System (PFRS). More than 6,000 of these brave men and women are firefighters.

NYSLRS Firefighters data

NYSLRS Membership and Firefighters

All firefighters working for participating employers are PFRS members. With that membership comes a variety of benefits, including certain death and disability benefits as well as a pension. As firefighters and other PFRS members progress through their careers they become eligible for these benefits. For example, from day one, PFRS members are covered by job-related death and disability benefits. However, with ten years of service credit, most members are also eligible for a non-job-related disability benefit.

In addition, most PFRS employers offer their employees special retirement plans. A special plan lets members retire after completing 20 or 25 years of credited service in specific job titles rather than reaching a certain age. Most firefighters — and, in fact, nearly 80 percent of all PFRS members (25,784) — are enrolled in a set of special 20- and 25-year plans. Whether members need 20 or 25 years depends on their retirement plan.

Firefighters are Heroes

To the members of the New York State Professional Fire Fighters Association, the Firemen’s Association of the State of New York and the New York State Association of Fire Chiefs; to the county fire marshals, supervising fire marshals, fire marshals, assistant fire marshals, assistant chief fire marshals and chief fire marshals: Thank you for your service to New York and its citizens. We are grateful for the valuable service you provide all of us.

Certain Payment Options Provide a Lifetime Benefit for a Loved One

When you apply for a NYSLRS pension, you’ll be asked to pick a pension payment option. All options will provide you with a monthly benefit for the rest of your life. With the Single Life Allowance, all payments stop at your death and nothing is paid to a beneficiary.

Infographic describing pension payment options

Providing for a Beneficiary

If you’re married and need to provide for your spouse, or if you have someone else you would like to provide a lifetime pension for after you’re gone, there are payment options that let you do that.  In exchange for a reduction in your monthly payment, Joint Allowance options allow a beneficiary to collect all or part of your pension after you die. The amount of the reduction in your pension is based on your life expectancy and the life expectancy of your beneficiary. That means the younger your beneficiary, the deeper the reduction.

You can only choose one beneficiary under a Joint Allowance option, and your beneficiary selection cannot be changed after you retire, regardless of the circumstances. The benefit reduction for Joint Allowance options will continue even if your beneficiary dies before you do.

If we could predict the future, pension choices would be a lot easier. But a Pop-Up payment option is one way to hedge your bet. Like Joint Allowance options, these plans allow you to provide a lifetime payment for a beneficiary after your death. But if your beneficiary dies before you, your future monthly payments would be increased to the amount you would have been receiving had you chosen the Single Life Allowance. (The pop-up only affects future payments. You would not be entitled to any retroactive payments.)

The monthly reduction in your benefit will be greater if you choose a Pop-Up option over a regular Joint Allowance.

Find Out More

There are also options that allow you to leave a monthly payment to more than one beneficiary, and options that leave a benefit for a certain amount of time. Visit our Payment Option Descriptions page for details about all of the available payment options.

For a better idea of how these payments options would work out for you and your beneficiary, you can use our online pension projection calculator. It uses the information you enter to show how much you could expect to receive under each option. Most members who are within five years of retirement eligibility can also request a benefit projection by contacting our Call Center at 1-866-805-0990, or you can submit a Request for Estimate form (RS6030).

Top 5 Retirement Myths

retirement myths versus facts

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

mythMy NYSLRS loan has gone into default, but I’ve already paid taxes on it. That means I no longer need to repay it.

factYou 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

mythI am required to contribute toward my retirement. When I do retire, my benefit will be based on what I contributed.

fact 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

mythI can’t collect my pension until I start receiving Social Security.

fact 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

mythIf 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.

fact 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

mythI recently applied for retirement by giving my employer the paperwork.

factGiving 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.

Knowing Your Retirement Plan is the Key to Retirement Planning

Information is the key to being fully prepared for your retirement years. The single most important thing you can do to achieve this goal is to know what NYSLRS retirement plan you’re in. Once you know that, the next thing you must do is understand the benefits your plan provides.

Your retirement plan booklet covers things like how long you’ll need to work in order to receive a pension, how your pension amount is determined, and what kind of death and disability benefits may be available to you. You can find a copy of your plan booklet on our Publications page.

But here’s the challenge: NYSLRS manages 335 retirement plan combinations, which are described in 51 plan booklets. How do you figure out which is yours?  The information below should help.

Two Key Questions

To get started, you need to answer two questions.

Question One: Which retirement system are you in? NYSLRS is made up of two different systems:

  • The Employees’ Retirement System (ERS), which is for public employees in non-teaching positions. It also includes some law enforcement personnel, such as correction officers, sheriffs and sheriffs’ deputies.
  • The Police and Fire Retirement System (PFRS), which is for paid firefighters and police officers, including SUNY police, State Park police, Encon officers and State Forest Rangers

Question Two: Which tier are you in? There are six tiers in ERS and five tiers in PFRS. Your tier, based on when you joined NYSLRS, determines such things as when you become eligible for benefits and how much you contribute. You can find your Tier on page 2 of your Member Annual Statement (MAS) or you can check the NYSLRS website.

For many members, knowing your retirement system and tier are enough. But for other members, especially those in law enforcement, it may help to have your retirement plan number as well. The plan number indicates the section of Retirement and Social Security Law the plan is based on. For example, Plan A15 indicates that you are covered by Article 15. You can find your plan number on page 4 of your MAS, in the Salary Information section.
Member Annual Statement example

Roughly three-quarters of all ERS members are covered by Article 15; they just need to know their tier to find the correct booklet.

State police , SUNY police , State Encon Officers , State Park Police and Forest Rangers each have their own plan booklet, which can be found in the PFRS section of the Publications page. That’s also where you’ll find the Special 20- and 25-Year Plans , which cover officers in most municipal police departments. (Members in these special plans should see 384, 384-d or 384-e listed in the plan information in their MAS.)

If you are still unsure which retirement plan booklet covers your benefits, you can send us an email using our secure contact form , or you can ask your employer.

Retirement Plan Booklet

Take the Time to Understand Your Retirement Plan

It cannot be stated enough how important it is to read your plan publication to learn all you can about your benefits. It is the key to solid retirement planning. Remember, no one has a more vested stake in your retirement than you do.

Your Checklist to Apply for Retirement

After months of planning and preparation, you’re ready to apply for retirement. To get your NYSLRS  pension benefit, you need to send in an 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). As you fill out the form, make sure you:

  • Know your registration number. You can find it on your most recent Member Annual Statement or retirement estimate.
  • Know your past employment. To help ensure you receive the proper credit for your public service, please list your public employment history. Include any military service and memberships in other New York public retirement systems.
  • Include your beneficiary’s information. You won’t make an official beneficiary designation with this form, but including these details will help us give you specific amounts for the pension payment options  that offer a lifetime benefit for a beneficiary.
  • See a notary. The form must be filled out completely and signed by a notary public.

Proof of Birth

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

Other Forms

Option Election

You’ll need to choose your pension payment option, or how you want your pension paid. Option election forms are available on our website, but we will also send you a form after we process your application. If you choose an option that provides your beneficiary a lifetime pension benefit when you die, you must provide proof of your beneficiary’s birth date.

Federal Income Tax Withholding

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  any time to tell us how much to withhold from your monthly benefit. We don’t withhold income tax for other states. Visit the Retired Public Employees Association’s website to see whether your benefit will be taxed in another state.

Direct Deposit

Direct deposit is the fastest and most secure way to receive your pension benefits. You can enroll in our direct deposit program when you file for retirement. Just fill out a Direct Deposit Enrollment Application (RS6370), and return it to us.

Domestic Relations Order

If an 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. The DRO gives us specific instructions on how to divide your benefits. We cannot finalize your pension until we review it and calculate the court-mandated distribution of your benefit. For more detailed information, please read our Guide to Domestic Relations Orders.

Questions

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

Know Your Benefits: Your NYSLRS Pension

Generally, three main components determine your NYSLRS pension: your retirement plan, your final average salary (FAS) and your total service credit.

Your Retirement Plan

NYSLRS retirement plans are established by law. Your plan lays out the formula we’ll use to calculate your pension as well as eligibility requirements. It’s important to read your plan booklet, which you can find on our Publications page.  If you aren’t certain what retirement plan you’re in, check your Member Annual Statement or ask your employer.

NYSLRS Pension Chart

Final Average Salary

Your FAS is the average of your earnings during the set period of time when they were the highest. For ERS and PFRS members in Tiers 1 through 5, that period is three consecutive years; for Tier 6 members, it’s five consecutive years. Some PFRS members may be eligible for a one-year period, if their employer offers it. We will use your FAS, age at retirement, total service credit and the formula from your retirement plan to calculate your NYSLRS pension.

Generally, the earnings we can use for your FAS include regular salary, overtime and recurring longevity payments earned within the period. Some payments you receive won’t count toward your FAS, even when you receive them in the FAS period. The specifics vary by tier, and are listed in your retirement plan booklet.

In most cases, the law also limits how much your pensionable earnings can increase from year to year in the FAS period. Earnings above this cap will not count toward your pension.

Our Your Retirement Benefits publications, (ERS and PFRS), provide the limits for each tier and examples of how we’ll determine your FAS.

Service Credit

Service credit is credit for time spent working for a participating public employer. For most members who work full-time, 260 workdays equals one year of service credit. Members who work part-time or in educational settings can refer to their retirement plan publication for their service credit calculation.

Service credit is a factor in the calculation of your NYSLRS pension. Generally, the more credit you have, the higher your pension will be. Some special plans (usually for police officers, firefighters or correction officers) let you retire at any age once you’ve earned 20 or 25 years of service credit. In other plans, if you retire without enough service credit and don’t meet the age requirements of your retirement plan, your pension will be reduced.

Planning Ahead for Your NYSLRS Pension

As you get closer to retirement age, keep an eye on your service credit and FAS. Make sure we have an accurate record of your public employment history. You can sign in to Retirement Online or check your latest Member Annual Statement to see the total amount of service credit you’ve earned. You may also want to take a look at our budgeting worksheet or try our Benefit Projector Calculator as you plan for your retirement.

If you have questions, or want to find out more information about what makes up your NYSLRS pension, please contact us.

Will Your Retirement Age Affect Your Benefit?

Only you can decide when it’s time to retire, but you should know that your age at retirement can affect your pension benefit. Some New York State and Local Retirement System (NYSLRS) members are in special plans that allow for retirement after a certain number of years, regardless of age (for example, police officers, firefighters, correction officers or sheriffs). But for most members, you can retire with full benefits at the age specified by your plan. Most members can choose to retire as early as age 55, but if you do, you may receive a permanently reduced pension benefit.

Full Retirement Ages

Most retirement plans have an age requirement 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. For ERS Tier 6 members, it’s 63. PFRS Tier 6 members who have left their PFRS employer are eligible for their benefits at age 63.

Service Credit Exceptions

In some retirement plans, members with a certain amount of service credit can retire at age 55 without being subject to benefit reductions. Benefit reductions don’t apply to ERS Tier 2, 3 or 4 members who have 30 or more years of service credit and Tier 2, 3, 4 and 5 Uniformed Court Officers and Peace Officers employed by the Unified Court System who have 30 or more years of service.

Benefit Reductions

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.

These benefit reductions are prorated by month, so the closer you are to your full retirement age, the less the reduction will be. Once you retire with a reduced benefit, that reduction is permanent.

Here’s a look at how reductions break down by membership tier:

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

Divorce and Your Other Benefits

We’ve written here before about how divorce affects your NYSLRS pension, what a DRO is and why it’s required. However, NYSLRS members have other benefits besides their pensions. Divorce and DROs may affect some of them as well.

Ordinary Death Benefit

As with your pension, a DRO may direct you to designate your ex-spouse as a beneficiary for some portion of your ordinary death benefit. You should file the DRO with NYSLRS as soon as it’s officially accepted by the court.  We will prepare a custom beneficiary form that complies with the DRO.  Also be sure to choose additional beneficiaries for any remainder of the benefit and submit your changes to NYSLRS.

Post-Retirement Ordinary Death Benefit

Most Tier 2, 3, 4 or 5 members of the Employees Retirement System (ERS) are covered by a post-retirement ordinary death benefit. A DRO may direct you to designate your ex-spouse as a beneficiary for some portion of the benefit. Similarly, you should file the DRO with NYSLRS as soon as it’s officially accepted by the court, and be sure to contact us to choose additional beneficiaries as allowed by the DRO.

Loans

NYSLRS members who meet eligibility requirements can borrow a certain percentage of their contribution balance. DROs may be written to prohibit members from taking future loans.

Outstanding loan balances at retirement permanently reduce retirees’ pension benefits. As a result, unless a DRO specifically provides that the ex-spouse’s share of the pension be calculated without reference to outstanding loans, the ex-spouse’s portion will also be reduced if a NYSLRS loan is not paid off before retirement.

Refunds

Occasionally, NYSLRS may refund a member’s contributions because of a tier reinstatement, membership withdrawal, membership transfer or excess contributions. If the member is divorced and NYSLRS has a DRO on file, the DRO will determine whether a portion of the refund must go to the ex-spouse. Generally, if the DRO doesn’t mention a contributions refund, the member receives the full amount.

NOTE: A divorce, annulment or judicial separation revokes a member’s prior designation of a former spouse as beneficiary of certain death benefits and retirement options, except as provided by the express terms of the judgment or decree, or a DRO. So, if you have gone through a divorce, annulment or judicial separation and you do NOT have a DRO, and you wish to retain your former spouse as a beneficiary, you must resubmit your beneficiary designation to NYSLRS. The easiest way to do this is by using Retirement Online, our secure, self-service web application. You can also submit a Designation of Beneficiary form.

Can I Change My Beneficiary After I Retire?

That depends. Some beneficiary decisions are irrevocable, while others can be changed at any time.

Some options, such as Five Year and Ten Year Certain, allow you to change your beneficiary after you retire. But if you choose an option that provides a lifetime benefit to a survivor, you cannot change your beneficiary even if your beneficiary dies before you do. For details, visit the Payment Option Descriptions page on our website.

But there are other possible death benefits for which NYSLRS retirees can name beneficiaries. Available death benefits and eligibility requirements vary by tier and retirement plan. You can find your retirement plan information on our Publications page.

NYSLRS retirees may have up to three types of death benefits that could provide a benefit for a beneficiary: pension payment option, survivor's benefit, and post-retirement death benefit.

When you retire, you must choose a payment option for your NYSLRS pension. If your choice is Single Life Allowance, there is no pension beneficiary. But other payment options provide a reduced monthly benefit in exchange for a possible payment to a beneficiary after the retiree’s death.

If you were employed by New York State, you may be eligible for a survivor’s benefit of up to $3,000. You do not need to sign up for this benefit; you are automatically enrolled if you are eligible. If you choose a pension payment option with a beneficiary, that person will also be the beneficiary for your survivor’s benefit. If your beneficiary dies before you do, you may select someone else as beneficiary for the survivor’s benefit. If you choose the Single Life Allowance option, you must name a beneficiary for your survivor’s benefit, and you may change this designation at any time.

What about after Retirement?

You may also be eligible for a post-retirement death benefit, which would be a percentage of the death benefit that was payable at retirement. (This benefit is generally not available to Tier 1 members or members in special retirement plans that allow for retirement after 20 or 25 years of service, regardless of age.) The beneficiary of your post-retirement death benefit does not have to be the same as your pension payment-option beneficiary. And you can change the beneficiary designation for your death benefit at any time.

The easiest way to check and update your beneficiary information for the post-retirement death benefit is with Retirement Online. You can also change your beneficiary by submitting a Designation of Beneficiary (RS5127) form.

Divorced? Some things to consider

Please note: If you are divorced, you may be required to choose a retirement option that provides continuing benefits to your ex-spouse after your death. Also, the beneficiary designation for certain benefits, including the survivor’s benefit, can be revoked when a divorce becomes final. For more information, please read the publication Divorce and Your Benefits on our website.