Tag Archives: NYSLRS pension

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).

Retirement Planning vs. Reality

As we sit down to plan our retirement, we ask ourselves some tough questions: Am I saving enough? Am I ready for the lifestyle change? Do I need to tighten my budget now or will I need to in retirement?

These questions are all aimed at helping us answer one central question: When is the right time to retire?

According to recent Gallup research, there is often a significant gap between the age we plan to retire and how old we are when we actually do.

Retirement Survey

Gallup’s April 2016 survey asked workers, “At what age do you expect to retire?” And, it asked retirees, “At what age did you retire?”

On average, there is a significant gap between the percent of workers who plan to retire within a certain age range and the percent of retirees who actually did. For example, 31 percent of workers intend to retire at age 68 or older. However, only 12 percent of retirees actually do. And, only 23 percent of workers think they’ll retire before age 62. Nevertheless, 36 percent of retirees ended up doing so. On average, Americans expect to retire at age 66, but actually retire at age 61.  That means a significant number of us may be underestimating how many years our retirement savings need to last.

Age and Your NYSLRS Pension

Regular readers may recall that most NYSLRS retirement plans have a minimum age requirement to retire with a full benefit. However, once you are vested, you are generally able to retire as early as age 55.

An early retirement may come with a significant — and permanent — benefit reduction, though. So, if you plan to retire with a full benefit at age 62 (or 63 for Tier 6 members), but end up retiring early instead, your pension will be less than you planned.

Retirement Planning

NYSLRS has several resources to help you make your retirement plans and stay on target. We distribute your Member Annual Statement (MAS) between May and July. It contains valuable information to help you understand your benefits and plan for the future, including: your earnings, your service credit total and up to three pension projections based on your specific details. You can also check out our Preparing for Retirement — A Checklist and 5 Step Plan for Retirement pages on our website. Our Life Changes: How Do I Prepare to Retire? publication offers a step–by–step guide to the retirement process, a list of available resources and some key factors to consider as you plan.

If you have any questions about your retirement plan, we’re glad to help. Email us using our secure email form, which allows us to safely contact you about your personal account information.

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.

NYSLRS Retirees Build a Stronger New York

NYSLRS pension benefit can provide security and peace of mind in retirement. What some retirees might not realize about their lifetime benefit is the effect it has on the local economy. During 2014 alone, NYSLRS retirees were responsible for $12 billion in economic activity in New York State. By buying local goods and services, NYSLRS retirees help existing companies grow, create opportunities for new businesses, and help foster an environment that helps companies create job opportunities.

NYSLRS Retirees in New York

Of the 430,308 current NYSLRS retirees and beneficiaries, 78 percent of them live in New York State. These retirees make up 2.8 percent of the general population, but their impact on the State economy is considerable:

  • Retiree Spending Creates Jobs, Supports Local Business. NYSLRS retirees spend a larger than average share of their income on industries that benefitted local businesses, such as health care, restaurants and entertainment. These industries can expect more growth in the coming decades with NYSLRS retirees as part of their customer base. As a result of this spending, NYSLRS retirees were also responsible for an estimated 60,400 jobs.
  • Retirees Pay Billions in Taxes. In 2014, NYSLRS retirees paid $1.6 billion in real property taxes, which is five percent of the total collected in New York. These taxes help support New York schools, roads and government services. Also, spending by NYSLRS retirees and beneficiaries generated an estimated $514 million in state and local sales tax.

After spending their careers working in State and local governments, the university system, public authorities and schools, NYSLRS retirees continue to help New York’s Main Streets grow and develop. The benefits of a NYSLRS pension aren’t just felt by retirees, but also by local businesses and communities. As the number of NYSLRS retirees continues to grow, the investment they make in communities across New York State will also continue to grow.