Tag Archives: New Members

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.

Retirement Milestones for ERS Tier 3 and 4 Members

Knowing your member milestones can help you plan ahead for your retirement. Most Employees’ Retirement System (ERS) Tier 3 and Tier 4 members (unless they retire under special retirement plans) retire under the Article 15 retirement plan. If you’re covered by this retirement plan, you have a set of milestones that affects how your pension benefit is calculated. This also means it affects how much you’ll receive at retirement.

Here are some important things to remember:

  • You are eligible to retire once you are age 55 and have five years of service credit. There may be reductions to your benefit if certain age requirements aren’t met.
  • You can retire with full benefits at age 62. However, if you are age 55 or older with 30 or more years of service credit, you can also retire with full benefits.
  • If you retire with less than 20 years of service credit, your benefit equals 1.66 percent of your final average salary (FAS) for each year of service.
  • If you retire and have 20 to 30 years of service credit, the benefit is 2 percent of your FAS for each year of service.
  • If you retire with more than 30 years of service credit, the benefit is 2 percent of your FAS for each year of service up to 30. For each year beyond 30, you will receive 1.5 percent of your FAS.

Retirement Milestones for ERS Tier 3 and 4 Members
Please visit our website for more information about ERS member milestones and retirement plans.

Death Benefits For ERS Members

Among the most important benefits a NYSLRS membership provides are death benefits. When you’re covered by a death benefit, your beneficiary may receive a payment on your behalf at your death.

Death benefits can vary by tier and retirement plan, so for the purpose of today’s post, let’s focus our attention on the Employees’ Retirement System (ERS) Tier 2, 3, 4, 5 and 6 members in regular plans. (If you’re in a special 20- or 25-year plan or are a Tier 1 member, please review your plan publication to learn more about your death benefits.)

The Ordinary Death Benefit

You’re eligible for the ordinary death benefit when you have one year of service credit. Your beneficiary would receive this benefit if you died while working for a public employer.

  • After one year of service, the ordinary death benefit is equal to your last year’s salary.
  • After two years of service, the benefit equals two times your last year’s salary.
  • After three or more years of service, the benefit equals three times your last year’s salary.

Post Retirement Death Benefits ERS Regular-Plans

The Post-Retirement Death Benefit

Your beneficiary may also be eligible for a post-retirement death benefit if you retire directly from your employer’s payroll or within one year of leaving covered employment.

  • During your first year of retirement, the post-retirement death benefit is 50 percent of your ordinary death benefit payable at retirement.
  • During your second year of retirement, the benefit is 25 percent of your ordinary death benefit.
  • During your third year and thereafter, the benefit is 10 percent of the ordinary death benefit that would have been payable at age 60 (if any) or at retirement, whichever was earlier.

There may be other death benefits available in your retirement plan. Please read the Death Benefit section in your plan publication for more information. If you have any questions about death benefits, please email us using our secure email form.

NYSLRS Basics: Becoming Vested

What does it mean to be a vested NYSLRS member? If you’re vested, you’ve reached a major milestone in your membership. Being vested means that you’ve earned enough service credit to qualify for a pension benefit, even if you leave public employment. If you leave public employment after becoming vested, at a later date you can apply for and receive what we call a vested retirement benefit. The vested benefit is based on the service and salary earned when you were an active member with NYSLRS.

When Do I Become Vested?

The amount of service credit you need to be vested is based on what tier you’re in. If you’re a Tier 5 or 6 member, you need ten years of service to be vested. If you’re in another tier (Tier 1, 2, 3 or 4), you’re vested once you earn five years of service credit.

Applying for the Vested Benefit

For most vested members, if you leave the payroll before age 55, you’ll be eligible for a retirement benefit when you reach age 55. Tier 1 and Tier 2 members are eligible for a benefit on the first of the month following their 55th birthday. Tier 3, 4, 5 are eligible for a benefit on their 55th birthday. Employees’ Retirement System Tier 6 members are also eligible on their 55th birthday, but Police and Fire Retirement System Tier 6 members are eligible on their 63rd birthday.

Please note these are the earliest ages that you become eligible for the vested benefit. An early age reduction may apply under certain plans. Please review your retirement plan booklet to see if early age reductions apply.

Becoming Vested

Receiving your vested retirement benefit is not automatic. You must file a retirement application when you become eligible and wish to receive your benefit.

Visit our website to learn more about vesting.

Want to read more in our NYSLRS Basics series? Check out past posts on:

NYSLRS Basics: Member Contributions

As a NYSLRS member, you may be making or have made contributions as part of your membership. When you make contributions, a percentage of your salary joins a pool of money called the Common Retirement Fund (the Fund). The Fund is also made up of employer contributions and investment income. By investing contributions, the Fund helps to meet its obligation of paying out benefits to past, present and future retirees.

What this means for you is that you, and other members like you, are all doing your part to fund your future retirement.

Types of Member Contributions

If you belong to a contributory retirement plan, you make required contributions. This means you must make contributions for the length of time listed in your retirement plan. Some members may contribute for only part or all their public service careers. If you belong to a non-contributory plan, this means you aren’t required to make contributions. Instead, you could make voluntary contributions over the course of your career, if your plan allows it. This would provide you with an annuity in addition to your pension when you retire.

(Check out the “Contributing Toward Your Retirement” section in your specific retirement plan publication to see what contributions you make.)

contributions-ers-pfrs-tiers-3-6

Withdrawing Your Member Contributions

What happens to your contributions if you leave public employment? One option is to take your contributions with you. If you have less than ten years of service credit or aren’t vested, you can withdraw your contributions plus the interest they’ve earned. However, withdrawing your contributions also terminates your membership with NYSLRS. Once your membership ends, you won’t be eligible for a retirement benefit.

Another option is to leave your contributions where they are. After all, if you leave public employment, there’s a chance you may return as well. If you do, then your contributions will be waiting for you when you rejoin NYSLRS. If you don’t return to public service, aren’t vested, and have been off the public payroll for seven years, by law we must terminate your membership. Any contributions left will stop accruing interest.

If you have ten or more years of service credit, you can’t withdraw your contributions from NYSLRS. In that situation, if you’re vested before you leave public employment, you can apply for a retirement benefit at a later date (age 55 for most members).

(Read our publication “What If I Leave Public Employment?” for more information, particularly the taxability of withdrawing your contributions.)

If you have questions, visit our website to learn more about member contributions. Want to read more NYSLRS Basics? Check out our earlier posts on:

The Top 10 Blog Posts of 2015

As 2015 comes to a close, let’s look at the top 10 blog posts you shared with friends this past year:

  1. NYSLRS – One Tier at a Time: ERS Tier 1

    A One Tier at a Time feature that looked at one of our smallest plans in the Employees’ Retirement System (ERS): Tier 1.

  2. NYSLRS Retirees: 1% COLA Payment Coming September 30

    An update for eligible NYSLRS retirees about the cost-of-living adjustment they’d receive in September 2015.

  3.  Keeping the Pension Fund Funded

    How NYSLRS plans ahead to maintain the funds it needs to pay current and future benefits.

  4. Protecting the Pension System

    How Comptroller Thomas P. DiNapoli defends NYSLRS against the abuse of public funds.

  5. NYSLRS – One Tier At a Time: PFRS Tier 1

    Tier 1 may be the smallest tier in the Police and Fire Retirement System (PFRS), but it was the third most popular One Tier at a Time post to share.

  6. The NYSLRS Member Annual Statement

    Each summer, we mail out approximately 700,000 Member Annual Statements filled with personalized benefit information you need to know.

  7. NYSLRS Basics: Understanding Your Final Average Salary

    A NYSLRS Basics feature that looks at what your final average salary is and the part it plays in your pension calculation.

  8.  NYSLRS Basics: Pension Payment Options

    Choosing how we’ll pay your retirement benefit is a big decision. Which payment option best meets your needs?

  9. NYSLRS Retirees Help Power New York’s Economy

    Comptroller DiNapoli spoke to a retiree group about how the pension money paid to retirees flows directly back into our communities, stimulating and growing our local economies.

    …and, the most shared post of 2015 is:

  10. NYSLRS – One Tier At a Time: ERS Tiers 3 & 4

    Our most shared blog post is also our first One Tier at a Time post, featuring Tiers 3 & 4 in ERS.

Thanks for sharing, and Happy New Year!

Tier 6 Member Milestones

Understanding Your Benefits Can Help You Plan Ahead

If you’re a Tier 6 member, meaning you joined NYSLRS on or after April 1, 2012, it’s important to start learning about your benefits. Even though retirement seems far off, it’s never too early to start thinking ahead. You can start planning your path to retirement by finding out what milestones you’ll reach on the way.

Your Tier 6 member milestones are markers for when you earn a certain amount of service credit. You can reach some milestones within your first few months of membership. You reach others once you’ve earned 10 or more years of service credit.

Common Tier 6 Member Milestones

When you join NYSLRS, you reach your first milestone on the first day of your membership. This milestone covers you for certain job-related death and disability benefits. (You can learn more about them in your Tier 6 retirement plan publication.)

Once you reach 10 years of service credit, you hit another milestone: you become vested. This means that you will be eligible for a retirement benefit even if you leave public employment before age 55, although the benefit is reduced if it’s collected before age 63. Tier 6 members in the Employees’ Retirement System (ERS) are eligible to receive the full vested benefit at age 55. Tier 6 members in the Police and Fire Retirement System (PFRS) are eligible at age 63.

Later on, the other milestones you’ll reach will focus more on retirement.

ERS Membership Milestones

For Tier 6 members in regular plans, the biggest milestone will be when you reach 20 years of service credit. This is when you’ll have enough service credit to retire with a full benefit. As noted above, if you retire before age 63, the benefit is reduced (you must be at least 55 to apply for the vested benefit). For Tier 6 correction officers, you’ll reach this milestone when you reach 25 years of service credit. Check out some of the other milestones for ERS Tier 6 members using the graphic below, or visit our website for a more detailed listing of ERS member milestones.

ERS Tier 6 Member Milestones

PFRS Membership Milestones

Some of the milestones for PFRS Tier 6 members are similar to ERS milestones, but some milestones vary based on what retirement plan you have. Check out the graphic below, or visit our website for a more detailed listing of PFRS member milestones.

PFRS Tier 6 Member Milestones

If you have any questions about Tier 6 membership milestones or the milestones for other tiers, please email us.

A Snapshot of NYSLRS

Each year, we publish our Comprehensive Annual Financial Report (CAFR) to explain how the Common Retirement Fund is managed and provide statistics about NYSLRS’ financial activities. This allows the public to see what we do behind the scenes to make sure the Fund stays well-funded and secure for the years to come.

NYSLRS by the Numbers

Retirees-in-US_Top-States The CAFR features many figures about NYSLRS and the Fund. At the end of the 2014–15 fiscal year, the Fund was valued at $184.5 billion. Prior to the recession, in fiscal year 2006–07, the value of the Fund was at $154.6 billion. Overall membership in NYSLRS is currently at 1,073,486, with membership being comprised of 643,178 members and 430,308 retirees and beneficiaries.

Of those 430,308 NYSLRS retirees, 78 percent of them — 337,406 — have chosen to live in New York. This is important because the pension money paid to retired state and local public employees flows directly back into our communities, stimulating and growing our local economies. During 2014, NYSLRS retirees were responsible for $12 billion in economic activity in New York State.

Here are some other facts you may not be aware of:

  • The state with the fewest number of NYSLRS retirees and beneficiaries is North Dakota, which only has 18 retirees and beneficiaries.
  • Florida has 35,014 retirees and beneficiaries, coming in second place to New York;
  • The county with the most retirees and beneficiaries is Suffolk County, with a total of 32,555. Erie County comes in second with 28,342 retirees and beneficiaries, and Nassau County comes in third with 21,947. The county with the fewest retirement and beneficiaries? Hamilton County with 411.
  • There are 717 NYSLRS retirees and beneficiaries who live outside the United States.

An Award-Winning Publication

NYSLRS received a Certificate of Achievement for Excellence in Financial Reporting for the 2014 CAFR. The Certificate of Achievement is a national award recognizing excellence in the preparation of state and local government financial reports. NYSLRS has won this award for the last 11 years.

You can check out CAFRs from past years by visiting our website at http://www.osc.state.ny.us/retire/about_us/financial_statements_index.php#cafr.

How To Keep Your NYSLRS Records Up-to-date

NYSLRS specialists are here to assist you as you plan and get ready for retirement. However, if your records are incomplete or incorrect, it can cause delays later on. We need your help to make sure your personal information is correct and accurate. So whether you have just recently joined NYSLRS or have been a member for a number of years, here are some instances where you should get in touch with us right away:

  • Let us know when your mailing address changes. This is especially important if you leave public employment before becoming eligible for retirement. Having your correct address on file will help us keep you up-to-date about benefits. Just complete our Change of Address Form (RS5512) and return it to us.
  • Report any date of birth errors. Let us know if your date of birth is incorrect on any official documents or paperwork we send you. You can write to our Member & Employer Services Bureau Registration Unit, 110 State Street, 5th Floor, Albany, NY 12244-0001 to correct your date of birth, and include any supporting documentation (such as your birth certificate). You don’t need to send us an original document to prove your birthdate, but if you do, we’ll return it to you.
  • Name changes. You can change your name by submitting a Name Change Notice Form (RS5483). A signed letter requesting such a change is also acceptable. (If a court order was required for the change, a copy of the court order must be submitted.)
  • Naming or changing your beneficiary. If you wish to update your beneficiaries, you must complete a Designation of Beneficiary Form (RS5127) and send it to us. Please list all beneficiaries you wish to designate. Remember, submitting a new designation of beneficiary form replaces any previous designations you made.

You can read more about your obligations as a NYSLRS member in our publication, Membership in a Nutshell.

Choosing a Beneficiary

Here’s what to consider.

Designating a beneficiary is a choice you must make and revisit throughout your career. This decision requires some careful thought. If you die while working, the beneficiaries you choose may receive certain benefits. If you want to make a beneficiary change, make sure you’re aware of who can be named as your beneficiary.

Types of Beneficiaries

Choosing a beneficiary There are two types of beneficiaries you can name: primary and contingent. A primary beneficiary receives your death benefit. You have the option to name more than one primary beneficiary. If you chose to do this, each primary would share the benefit equally.

Example:

If you listed your spouse and child as primary beneficiaries, your family would receive:

  • Spouse: 50 percent of benefit
  • Child: 50 percent of benefit

But you can also state specific percentages of how you’d want the benefit paid out to primary beneficiaries. Just keep in mind that the percentages must add up to 100 percent. (This applies to contingent beneficiaries also.)

A contingent beneficiary only receives a benefit if all your primaries die before you. You can have primary and contingent beneficiaries, but a contingent may only get a benefit if there are no primaries to choose from. If you outlive your primary and contingent beneficiaries and haven’t named anyone new, your benefit will go to your estate.

Special Beneficiary Designations

Your beneficiary doesn’t have to be a person – you could also name your estate, trust, or an organization to receive your benefit.

  • Estate. The executor of your estate will receive your benefit to be distributed according to your will. You can make your estate a primary or contingent beneficiary, but if you name it your primary, you can’t name a contingent.
  • Trust. If you name your trust as a beneficiary, keep in mind that the trust is the beneficiary, not the individual you established the trust for. If you cancel the trust or it expires, it won’t be a valid beneficiary anymore. (You may also want to speak with your attorney if you’re thinking about making your trust a beneficiary.)
  • Organizations. You can name any charitable, civic, religious, educational or health-related entity as a beneficiary. Please provide the organization’s full name and address if you name them a beneficiary.

You can read more about beneficiaries in our publication, Life Changes: Why Should I Designate a Beneficiary?